##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  ANNUAL REPORT
    PURSUANT TO SECTIONS 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    June 30, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number 0-11250
  DIONEX CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-2647429(State or other jurisdiction
    of
    Incorporation or organization)

(I.R.S. Employer
    Identification No.)1228 Titan Way,
    Sunnyvale, California

94085(Zip Code)(Address of principal executive
    offices)   Companys telephone number,
    including area code
    (408) 737-0700
  Securities registered pursuant
    to Section 12(b) of the Act:
 Common Stock, par value
    $.001 per share
  Securities registered pursuant
    to Section 12(g) of the Act: None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated filer þ
    Accelerated
    Filer o
    Non-Accelerated
    filer o  Rule 12b-2 o þ
      th




---



##### 



TABLE OF
    CONTENTS
  PART IItem 1.


Business

3Item 1A.


Risk
    Factors

12Item 2.


Properties

15Item 3.


Legal
    Proceedings

15PART IIItem 4.


Market for the
    Companys Common Stock, Related Stockholder Matters and
    Issuer Purchases of Equity Securities

15Item 5.


Selected
    Consolidated Financial Data

16Item 6.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations

17Item 7.


Quantitative and
    Qualitative Disclosures About Market Risk

23Item 8.


Financial
    Statements and Supplementary Data

25Item 9.


Changes in and
    disagreements with accountants on accounting and financial
    disclosure

47Item 9A.


Controls and
    Procedures

47Item 9B.


Other
    Information

48PART IIIItem 10.


Directors and
    Executive Officers of the Company

50Item 11.


Executive
    Compensation

50Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters

50Item 13.


Certain
    Relationships and Related Transactions

50Item 14.


Principal
    Accounting Fees and Services

50PART IVItem 15.


Exhibits. Financial
    Statement Schedules

50Signatures

51Exhibit Index

55EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




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##### Table of Contents



CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K, Form 10-K.
 PART I  Item 1.
    BUSINESS  OVERVIEW
      PRODUCTS
    AND SERVICES
        3




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##### Table of Contents



Ion Chromatography
               4




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##### Table of Contents



easy-to-use
          High Performance Liquid Chromatography
        ICS-3000 ICS-3000 ICS-3000 ICS-3000
  Capillary-/nano-LC
 5




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##### Table of Contents



WPS-3000
    Sample
    Preparation 
    The Company offers a number of solutions for sample preparation:
      Detectors
  Mass Spectrometry ICS-3000
   6




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##### Table of Contents



Automation Products
  Chromeleon Software easy-to-use,
  Autosamplers 
    The Company offers a number of autosamplers that address a
    variety of customer needs.
    ICS-3000
    WPS-3000 WPS-3000 WPS-3000
  Columns
   7




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##### Table of Contents



RP-1S,
    Eluent Suppressors 
  ICS-3000
  start-up
    Service and Other
  CUSTOMERS,
    MARKETING, AND SALES
   8




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##### Table of Contents



COMPETITION
       9




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##### Table of Contents



PATENTS
    AND LICENSES
      INTERNATIONAL
    OPERATIONS
      MANUFACTURING
    AND SUPPLIERS
   10




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##### Table of Contents



EMPLOYEES
    AVAILABLE
    INFORMATION
  Form 10-K, Form 10-Q, Form 8-K www.dionex.com
  TECHNICAL
    SUPPORT, INSTALLATION AND SERVICE
    RESEARCH
    AND PRODUCT DEVELOPMENT
   11




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##### Table of Contents



Item 1A.
    RISK
    FACTORS.  The
    continuation or spread of the current economic uncertainty in
    key markets would likely harm the Companys operating
    results.
    Foreign
    currency fluctuations and other risks related to international
    operations may adversely affect the Companys operating
    results.
    Fluctuations
    in worldwide demand for analytical instrumentation could affect
    the Companys operating results.
    Fluctuations
    in the Companys quarterly operating results may cause the
    Companys stock price to decline.
    The
    Companys results of operations and financial condition
    will suffer if the Company does not introduce new products that
    are attractive to its customers on a timely basis.
   12




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##### Table of Contents



The
    analytical instrument market is highly competitive, and the
    Companys inability to compete effectively in this market
    would adversely affect its results of operations and financial
    condition.
    The
    Company may experience difficulties with obtaining components
    from sole- or limited-source suppliers, or manufacturing delays,
    either of which could adversely affect its results of
    operations.
      The
    Companys executive officers and other key employees are
    critical to the Companys business, they may not remain
    with the Company, in the future and finding talented
    replacements would be difficult.
    The
    success of Dionexs business is dependent in part on
    protection of proprietary information and inventions. Obtaining
    and protecting the Companys proprietary products,
    processes and technologies can be difficult and
    expensive.
       13




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##### Table of Contents



EXECUTIVE
    OFFICERS OF THE COMPANY
    Name

Age

PositionsLukas Braunschweiler


50


President and Chief Executive
    OfficerBruce Barton


47


Vice PresidentDavid Bow


42


Vice PresidentKevin Chance


39


Vice PresidentDietrich Hauffe


47


Vice PresidentPeter Jochum


55


Vice PresidentCraig McCollam


46


Vice President and Chief Financial
    OfficerChristopher Pohl


55


Vice PresidentRene Trost


55


Vice President                  14




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##### Table of Contents



Item 2.
    PROPERTIES      Item 3.
    LEGAL
    PROCEEDINGS   PART II  Item 4.
    MARKET
    FOR THE REGISTRANTS COMMON STOCK, RELATED STOCKHOLDER
    MATTERS AND ISSUER REPURCHASES OF EQUITY
    SECURITIES  MARKET
    PRICE OF COMMON STOCK
  over-the-counter
  Fiscal 2006


Fiscal 2005Quarter

High


Low


High


LowFirst

$
54.50


$
42.90


$
56.50


$
41.81Second

$
54.00


$
47.15


$
60.08


$
54.32Third

$
61.48


$
48.19


$
61.19


$
54.20Fourth

$
61.25


$
50.06


$
56.72


$
40.00     DIVIDENDS
    ISSUER
    PURCHASES OF EQUITY SECURITIES
   15




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##### Table of Contents



TotalNumber of





MaximumShares


Additional


Number ofPurchased


Shares


Shares thatTotal


Avg.


as Part of


Authorized


May Yet BeNumber


Price


Publicly


For


Purchasedof Shares


Paid per


Announced


Purchase


Under thePeriod

Purchased


Share


Program(1)


(1)


Program(1)Apr. 1  30, 2006





$




4,479,555







872,039May 1  31, 2006


301,722



57.26



4,781,277



59,475



629,792Jun. 1  30, 2006


128,000



53.70



4,909,277



4,415



506,207     (1)
    
    The current stock repurchase program was initiated in April 2002
    with authorization to purchase 1.5 million shares plus that
    number of common shares equal to the number issued pursuant to
    employee stock plans subsequent to that date.  Item 5.
    SELECTED
    CONSOLIDATED FINANCIAL DATA    Years Ended June 30

2006


2005


2004


2003


2002(In thousands, except per share amounts)Net sales

$
291,300


$
279,317


$
258,834


$
214,909


$
182,434Cost of sales


99,857



91,754



88,944



73,273



63,740Gross profit


191,443



187,563



169,890



141,636



118,694Operating expenses:Selling, general and administrative


113,241



102,539



89,100



76,565



64,607Research and product development


22,392



20,354



19,155



16,888



15,094Total operating expenses


135,633



122,893



108,255



93,453



79,701Operating income


55,810



64,670



61,635



48,183



38,993Interest income


1,874



1,276



801



504



528Interest expense


(184
)


(176
)


(240
)


(192
)


(203
)Other income/(expense)


1,013



801



(340
)


133



1,582Write-off of a non-affiliated
    investment














(2,067
)


Income before taxes on income


58,513



66,571



61,856



46,561



40,900Taxes on income


22,820



21,081



20,481



15,133



13,292Net income

$
35,693


$
45,490


$
41,375


$
31,428


$
27,608Basic earnings per share

$
1.78


$
2.20


$
1.96


$
1.49


$
1.27Diluted earnings per share

$
1.74


$
2.13


$
1.89


$
1.45


$
1.24Shares used in computing earnings
    per share amounts:Basic


20,013



20,655



21,056



21,057



21,705Diluted


20,527



21,388



21,943



21,632



22,184  16




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##### Table of Contents



At June 30

2006


2005


2004


2003


2002(In thousands)Working capital

$
97,769


$
102,006


$
103,719


$
88,014


$
62,539Total assets


250,402



238,153



235,465



213,100



180,718Long-term debt














500



1,002Stockholders equity


185,382



183,049



183,454



159,280



131,707   Item 6.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    RESULTS
    OF OPERATIONS
    Years Ended June 30

2006


2005


2004Net sales


100.0
%


100.0
%


100.0
%Cost of sales


34.3



32.9



34.4Gross profit


65.7



67.1



65.6Operating expenses:Selling, general and administrative


38.9



36.7



34.4Research and product development


7.7



7.2



7.4Total operating expenses


46.6



43.9



41.8Operating income


19.1



23.2



23.8Interest income, net


0.6



0.4



0.2Other income/(expense)


0.3



0.2



(0.1
)Income before taxes


20.0



23.8



23.9Taxes on income


7.8



7.5



7.9Net income


12.2
%


16.3
%


16.0
%   Net Sales.
 17




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##### Table of Contents



From Fiscal 2005


From Fiscal 2004to


toFiscal 2006


Fiscal 2005Total:


4
%


8
%By geographic region:North America


4
%


6
%Europe


3
%


13
%Asia/Pacific


6
%


3
%
     From Fiscal 2005


From Fiscal 2004to


toFiscal 2006


Fiscal 2005Total:


7
%


4
%By geographic region:North America


4
%


5
%Europe


8
%


5
%Asia/Pacific


9
%


2
%
       ICS-3000
   18




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##### Table of Contents



Gross Profit. ramp-up
  Operating Expenses.
  


stock based compensation under
    SFAS 123R


4
%


expansion efforts in the
    Asia/Pacific region


3
%,


centralization initiative in North
    America and Europe


2
%


increased sales and marketing
    efforts in Europe


2
%


increased marketing costs related
    to new product introductions


1
%


favorable currency fluctuations


−2
%       Interest Income.
 19




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##### Table of Contents



Interest Expense.
  Other Income/(Expense).
  Taxes on Income.
  Stock-Based Compensation Plans.
    Earnings per Share.
  Liquidity and Capital Resources.
       20




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##### Table of Contents



Payments Due by PeriodLess Than


1-3


4-5


After 5Total


1 Year


Year


Years


YearsOperating Lease Obligations

$
17,717


$
4,505


$
6,304


$
4,054


$
2,854   EFFECT OF
    NEW ACCOUNTING STANDARDS
        CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
  Summary.
 21




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##### Table of Contents



Revenue Recognition Policy.
  and/or
      Loss Provisions on Accounts Receivable and
    Inventory.
 22




---



##### Table of Contents



first-in,
  Long-Lived Assets, Intangible Assets with Finite Lives and
    Goodwill.
  
    significant underperformance relative to historical or projected
    future operating results;
    significant negative industry or economic trends; and
    significant changes or developments in strategic technology.    Taxes on Income.
  Stock-Based Compensation.
  Item 7.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   23




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##### Table of Contents



Foreign Currency Exchange.
    Interest and Investment Income.
  Debt and Interest Expense.
 24




---



##### Table of Contents



Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA PageFINANCIAL STATEMENTSReport of
    Independent Registered Public Accounting Firm

26Consolidated
    Balance Sheets at June 30, 2006 and 2005

27Consolidated
    Statements of Income for the years ended June 30, 2006,
    2005 and 2004

28Consolidated
    Statements of Stockholders Equity and Comprehensive Income
    for the years ended June 30, 2006, 2005 and 2004

29Consolidated
    Statements of Cash Flows for the years ended June 30, 2006,
    2005 and 2004

30Notes to
    Consolidated Financial Statements

31  25




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM          Share-Based Payment
  Internal ControlIntegrated
    Framework
      26




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##### Table of Contents



DIONEX
    CORPORATION  CONSOLIDATED BALANCE SHEETS
 AT JUNE 30
  2006


2005(In thousands, except share and per share amounts)AssetsCurrent assets:Cash and equivalents

$
43,524


$
42,679Short-term investments


7,490



11,102Accounts receivable (net of
    allowance for doubtful accounts of $674 in 2006 and $953 in 2005)


63,008



55,450Inventories


27,702



26,510Deferred income taxes


9,915



9,978Prepaid expenses and other


5,791



6,364Total current assets


157,430



152,083Property, plant and equipment, net


58,700



53,914Goodwill


24,982



24,638Intangible assets, net


4,522



2,917Other assets


4,768



4,601$
250,402


$
238,153Liabilities and
    Stockholders EquityCurrent liabilities:Accounts payable

$
9,395


$
10,031Accrued liabilities


39,673



34,939Income taxes payable


7,100



1,593Accrued product warranty


3,493



3,514Total current liabilities


59,661



50,077Deferred income taxes


3,952



4,196Other long-term liabilities


1,407



831Commitments and other
    contingencies (Note 13)Stockholders equity:Preferred stock (par value
    $.001 per share; 1,000,000 shares authorized; none
    outstanding)






Common stock (par value
    $.001 per share; 80,000,000 shares authorized; shares
    outstanding: 19,624,839 in 2006 and 20,161,092 in 2005)


148,214



120,359Retained earnings


28,589



57,451Accumulated other comprehensive
    income


8,579



5,239Total stockholders equity


185,382



183,049$
250,402


$
238,153    27




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##### Table of Contents



DIONEX
    CORPORATION  CONSOLIDATED STATEMENTS OF INCOME
 YEARS ENDED JUNE 30
  2006


2005


2004(In thousands, except per share amounts)Net sales

$
291,300


$
279,317


$
258,834Cost of sales


99,857



91,754



88,944Gross profit


191,443



187,563



169,890Operating expenses:Selling, general and administrative


113,241



102,539



89,100Research and product development


22,392



20,354



19,155Total operating expenses


135,633



122,893



108,255Operating income


55,810



64,670



61,635Interest income


1,874



1,276



801Interest expense


(184
)


(176
)


(240
)Other income/(expense)


1,013



801



(340
)Income before taxes on income


58,513



66,571



61,856Taxes on income


22,820



21,081



20,481Net income

$
35,693


$
45,490


$
41,375Basic earnings per share:

$
1.78


$
2.20


$
1.96Diluted earnings per share:

$
1.74


$
2.13


$
1.89Shares used in computing earnings
    per share:Basic


20,013



20,655



21,056Diluted


20,527



21,388



21,943    28




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##### Table of Contents



DIONEX
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY AND
 COMPREHENSIVE
    INCOME
  AccumulatedOtherCommon Stock


Retained


Comprehensive





ComprehensiveShares


Amount


Earnings


Income(Loss)


Total


Income(Dollars in thousands)Balance, June 30, 2003


20,933,913


$
77,395


$
78,774


$
3,111


$
159,280Comprehensive income, net of tax:Net income










41,375







41,375


$
41,375Foreign currency translation
    adjustments (net of tax of $1,066)














5,037



5,037



5,037Unrealized gain on securities (net
    of tax of $82)














146



146



146Comprehensive income





















$
46,558Common stock issued under employee
    benefit plans including related tax benefits


1,023,268



31,324











31,324Repurchase of common stock


(1,116,300
)


(4,776
)


(48,932
)






(53,708
)Balance, June 30, 2004


20,840,881


$
103,943


$
71,217


$
8,294


$
183,454Comprehensive income, net of tax:Net income










45,490







45,490


$
45,490Foreign currency translation
    adjustments (net of tax of $1,392)














(2,434
)


(2,434
)


(2,434
)Unrealized loss on securities (net
    of tax of $365)














(621
)


(621
)


(621
)Comprehensive income





















$
42,435Common stock issued under employee
    benefit plans including related tax benefits


676,111



23,823











23,823Repurchase of common stock


(1,355,900
)


(7,407
)


(59,256
)






(66,663
)Balance, June 30, 2005


20,161,092


$
120,359


$
57,451


$
5,239


$
183,049Comprehensive income, net of tax:Net income










35,693







35,693


$
35,693Foreign currency translation
    adjustments (net of tax of $233)














3,319



3,319



3,319Unrealized gain on securities














21



21



21Comprehensive income





















$
39,033Common stock issued under employee
    benefit plans including related tax benefits


873,324



31,573











31,573Repurchase of common stock


(1,409,577
)


(9,328
)


(64,555
)






(73,883
)Stock-based compensation






5,610











5,610Balance, June 30, 2006


19,624,839


$
148,214


$
28,589


$
8,579


$
185,382    29




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##### Table of Contents



DIONEX
    CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 YEARS ENDED JUNE 30
  2006


2005


2004(In thousands)Cash flows from operating
    activities:Net income

$
35,693


$
45,490


$
41,375Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


6,514



6,007



5,817Stock based compensation


5,572







Gain on sale of marketable
    securities






(1,188
)


Loss on disposal of fixed assets


538







Tax benefit related to stock
    option plans


(6,135
)


5,655



8,730Deferred income taxes


78



(106
)


(1,159
)Changes in assets and liabilities:Accounts receivable


(6,351
)


(2,515
)


(4,120
)Inventories


(276
)


(1,676
)


1,856Prepaid expenses and other assets


214



(1,668
)


(239
)Accounts payable


(797
)


1,882



2,504Accrued liabilities


4,615



6,278



2,214Income taxes payable


11,439



(930
)


(4,352
)Accrued product warranty


(104
)


(57
)


271Net cash provided by operating
    activities


51,000



57,172



52,897Cash flows from investing
    activities:Proceeds from sale of marketable
    securities


39,096



69,428



11,150Purchase of marketable securities


(35,050
)


(64,652
)


(19,796
)Purchase of property, plant and
    equipment


(9,742
)


(12,261
)


(4,101
)Purchase of intangible assets


(3,005
)






Acquisition, net of cash acquired






(3,500
)


(4,169
)Other


(38
)


76



141Net cash used for investing
    activities


(8,739
)


(10,909
)


(16,775
)Cash flows from financing
    activities:Net change in revolving line of
    credit






(940
)


50Principal payments on debt






(564
)


(595
)Sale of common stock


25,438



18,168



22,594Tax benefit related to stock
    option plans


6,135







Repurchase of common stock


(73,883
)


(66,663
)


(53,708
)Net cash used for financing
    activities


(42,310
)


(49,999
)


(31,659
)Effect of exchange rate changes on
    cash


894



(258
)


1,389Net increase (decrease) in cash
    and equivalents


845



(3,994
)


5,852Cash and equivalents, beginning of
    year


42,679



46,673



40,821Cash and equivalents, end of year

$
43,524


$
42,679


$
46,673Supplemental disclosures of cash
    flow information:Income taxes paid

$
9,289


$
17,308


$
16,307Interest expense paid

$
71


$
94


$
177    30




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 1 / SIGNIFICANT
    ACCOUNTING POLICIES
  Organization.
  Principles of Consolidation.
  Certain Risks and Uncertainties.
      Cash Equivalents.
  Short-Term Investments.
  Inventories. first-in, work-in-process
  Property, Plant and Equipment.
  Purchased Technology and Goodwill.
 31




---



##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     Valuation of Long Lived Assets.
  Revenue Recognition.
    No. 97-2, SOP 98-9, SOP 97-2,
      Stock-Based Compensation Plans.
 32




---



##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
         Year EndedJune 30, 2006Cost of sales

$
372Selling, general and
    administrative expenses


3,832Research and product development
    expenses


1,368Tax benefit


(1,751
)$
3,821                33




---



##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Year ended


Year endedJune 30,


June 30,2005


2004Net income, as reported

$
45,490


$
41,375Less: Total stock-based employee
    compensation expense determined under fair value method for all
    awards, net of taxes


8,707



9,281Tax benefit


(2,790
)


(3,821
)Pro forma net income

$
39,573


$
35,915Earnings per share:Basic  as reported

$
2.20


$
1.96Basic  pro forma

$
1.92


$
1.71Diluted  as reported

$
2.13


$
1.89Diluted  pro forma

$
1.85


$
1.64     Years ended June 30,2006


2005


2004Volatility for options


40%



47%



49%Volatility for employee stock
    purchase plan


30%



27 - 29%



23 - 26%Risk-free interest rate for options


4 - 4.5%



3.56%



3.3%Risk-free interest rate for
    employee stock purchase plan


3.6 - 4.4 %



1.74 - 2.71%



0.98 - 1.00%Expected life of options


4.75 years



5.6 years



5.9 yearsExpected life of employee stock
    purchase plan


6 months



6 months



6 monthsExpected dividend

$
0.00


$
0.00


$
0.00     Determining
    Fair Value
  Valuation and amortization method
  Expected Term
 34




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     Expected Volatility
  Risk-Free Interest Rate
  Expected Dividend
  Common Stock Repurchases.
    Translation of Foreign Currency.
  Derivative Securities.
      Comprehensive Income.
 35




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     2006


2005


2004(In thousands)Foreign currency translation
    adjustments

$
8,605


$
5,286


$
7,720Unrealized gain(loss) on
    securities available for sale, net


(26
)


(47
)


574$
8,579


$
5,239


$
8,294
   Reclassifications.
  New Accounting Pronouncements.
      Note 2 / EARNINGS
    PER SHARE
   36




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Years Ended June 302006


2005


2004Numerator:Net income

$
35,693


$
45,490


$
41,375Denominator:Shares used to compute net income
    per common share  basic


20,013



20,655



21,056Effect of dilutive stock options


514



733



887Shares used to compute net income
    per common share  diluted


20,527



21,388



21,943Basic earnings per share

$
1.78


$
2.20


$
1.96Diluted earnings per share

$
1.74


$
2.13


$
1.89
     Note 3 / SHORT-TERM
    INVESTMENTS
  GrossCost


Unrealized Losses


Fair ValueJune 30, 2006Auction rate securities

$
7,100


$



$
7,100Corporate debt securities


415



(25
)


390$
7,515


$
(25
)

$
7,490June 30, 2005Auction rate securities

$
10,125


$



$
10,125Corporate debt securities(1)


1,013



(36
)


977$
11,138


$
(36
)

$
11,102
     (1)
    
    These investments have been in a loss position for greater than
    12 months.  held-to-maturity available-for-sale
   37




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note 4 /
    INVENTORIES    2006


2005(In thousands)Finished goods

$
13,962


$
14,032Work in process


1,840



2,257Raw materials and subassemblies


11,900



10,221$
27,702


$
26,510
     Note 5 /
    PROPERTY,
    PLANT AND EQUIPMENT, NET    2006


2005(In thousands)Land

$
23,141


$
22,975Buildings and improvements


37,364



33,075Machinery, equipment and tooling


25,579



23,050Furniture and fixtures


9,147



8,42195,231



87,521Accumulated depreciation and
    amortization


(36,531
)


(33,607
)Property, plant and equipment, net

$
58,700


$
53,914
   Note 6 /
    GOODWILL
    AND INTANGIBLE ASSETS      Balance as of June 30, 2004

$
24,675Translation adjustments and other


(37
)Balance as of June 30, 2005

$
24,638Translation adjustments and other


344Balance as of June 30, 2006

$
24,982
    38




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      As of June 30, 2006


As of June 30, 2005Carrying


Accumulated





Carrying


AccumulatedAmount


Amortization


Net


Amount


Amortization


NetPatents and trademarks

$
3,337


$
(735
)

$
2,602


$
379


$
(379
)

$
Developed technology


9,695



(8,773
)


922



9,718



(7,889
)


1,829Customer relationships


1,411



(413
)


998



1,325



(237
)


1,088Total

$
14,443


$
(9,921
)

$
4,522


$
11,422


$
(8,505
)

$
2,917           RemainingAmortizationYear Ending June 30

Expense2007

$
1,3242008


7872009


5772010


5372011


537Thereafter


760Total

$
4,522
   Note 7 /
    FINANCING
    ARRANGEMENTS     39




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
       Note 8 /
    WARRANTY      ChargedBalance





(Credited)





BalanceBeginning





to Other





Endof Year


Additions


Accounts(1)


Deductions(2)


of YearAccrued product warranty:June 30, 2006

$
3,514


$
3,810


$
134


$
(3,965
)

$
3,493June 30, 2005


3,584



3,400



(3
)


(3,467
)


3,514June 30, 2004


3,188



2,417



164



(2,185
)


3,584     (1)
    
    Effects of exchange rate changes.(2)
    
    Product warranty costs.  Note 9 /
    ACCRUED
    LIABILITIES    2006


2005(In thousands)Accrued payroll and related
    expenses

$
15,919


$
13,044Deferred revenues


15,296



12,800Other accrued liabilities


8,458



9,095$
39,673


$
34,939   Note 10 /
    STOCK
    OPTION AND PURCHASE PLANS  Stock Option Plans.
    40




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   As of June 302006


2005


2004Wtd. Avg.





Wtd. Avg.





Wtd. Avg.Exercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOptions outstanding, beginning of
    year


2,261,642


$
32.65



2,642,714


$
29.33



3,119,358


$
24.97Granted


356,650



48.23



300,050



47.70



584,500



39.87Exercised


(831,347
)


28.63



(635,998
)


26.04



(987,850
)


21.80Canceled


(50,352
)


44.21



(45,124
)


31.73



(73,292
)


29.47Options outstanding, end of year


1,736,593


$
37.43



2,261,642


$
32.65



2,642,716


$
29.33Options exercisable at year end


1,052,726


$
32.17



1,491,853


$
28.93



1,615,195


$
26.81Weighted average fair value of
    options granted during the year





$
19.38






$
22.54






$
20.39       Options Outstanding


Options ExercisableWeighted Avg.


Weighted





WeightedRemaining


Avg.





Avg.Range of

Number


Contractual


Exercise


Number


ExerciseExercise Prices

Outstanding


Life (yrs)


Price


Exercisable


Price$16.31 - 23.98


198,702



5.07


$
23.58



198,702


$
23.5823.98 - 30.81


317,861



5.20



26.42



298,236



26.4030.81 - 34.88


217,300



3.61



32.23



217,300



32.2334.88 - 39.47


330,486



7.08



39.47



206,021



39.4739.47 - 47.19


311,344



7.77



46.11



127,035



46.2847.19 - 54.86


360,900



9.07



48.54



5,432



53.89$16.31 - 54.86


1,736,593



6.61


$
37.43



1,052,726


$
32.17     Employee Stock Purchase Plan.
  Note 11 /
    EMPLOYEE
    401(K) PLAN   41




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     Note 12 /
    TAXES ON
    INCOME    Years Ended June 302006


2005


2004(In thousands)Current:Federal

$
10,599


$
10,584


$
9,439State


1,221



664



1,449Foreign


10,082



9,415



10,280Total current


21,902



20,663



21,168Deferred:Federal


(32
)


(84
)


(1,197
)State


81



82



(111
)Foreign


869



420



621Total deferred


918



418



(687
)$
22,820


$
21,081


$
20,481     Years Ended June 302006


2005


2004(In thousands)Domestic

$
47,012


$
53,918


$
45,699Foreign


11,501



12,653



16,157$
58,513


$
66,571


$
61,856  42




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Years Ended June 302005


2004(In thousands)Current deferred tax assets:Accounting accruals deductible in
    different periods for tax purposes

$
9,342


$
9,784State income tax


316



44Other


257



150Total current deferred tax assets


9.915



9,978Noncurrent deferred tax
    asset  Difference in tax basis from acquisition


1,208



1,605Noncurrent deferred tax
    liabilities:Accelerated depreciation


993



916Net unrealized gain on available
    for sale securities


3



2Excess tax basis from acquisition


1,208



1,605Accumulated translation adjustment


1,567



1,392Other


181



281Total deferred tax liabilities


3,952



4,196Net deferred tax assets

$
7,171


$
7,387     Years Ended June 302006


2005


2004Statutory Federal income tax rate


35.0
%


35.0
%


35.0
%State income taxes, net of Federal
    income tax effect


1.5



0.7



1.4Extra Territorial Income (ETI)
    benefit


(2.2
)


(2.3
)


(2.1
)Taxes on foreign income


4.3



0.5



1.1Other


0.4



(2.2
)


(2.3
)39.0
%


31.7
%


33.1
%       Note 13 /
    COMMITMENTS
    AND OTHER CONTINGENCIES   43




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
         Note 14
    / BUSINESS
    SEGMENT INFORMATION        Years Ended June 302006


2005


2004(In thousands)Products

$
254,054


$
242,581


$
227,270Installation and training services


8,945



9,218



7,127Maintenance


28,301



27,518



24,437$
291,300


$
279,317


$
258,834  44




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Years Ended June 302006


2005


2004(In thousands)Net sales to unaffiliated
    customers:United States

$
80,860


$
79,553


$
74,169Europe


91,795



88,075



77,259Japan


30,428



34,391



42,140Germany


32,145



32,107



29,514Other International


56,072



45,191



35,752Consolidated net sales

$
291,300


$
279,317


$
258,834At June 30Long-lived assets:United States

$
45,170


$
41,495


$
38,582Europe


9,170



10,010



10,771Japan


9,420



10,304



10,699Germany


27,420



22,678



23,112Other International


1,792



1,583



1,381Consolidated assets

$
92,972


$
86,070


$
84,545     Note 15 / RELATED
    PARTY TRANSACTION
   45




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##### Table of Contents



DIONEX
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note 16
    / QUARTERLY
    RESULTS OF OPERATIONS (unaudited)    QuarterFirst


Second


Third


Fourth(In thousands, except per share amounts)Fiscal 2006:Net sales

$
68,100


$
74,341


$
73,674


$
75,185Gross profit


44,330



49,812



48,548



48,753Net income


9,014



10,900



10,365



5,414Basic earnings per share


0.45



0.54



0.52



0.27Diluted earnings per share


0.44



0.53



0.50



0.27Fiscal 2005:Net sales

$
63,208


$
74,152


$
70,801


$
71,156Gross profit


41,632



49,479



47,860



48,592Net income


9,664



12,727



11,960



11,139Basic earnings per share

$
0.47


$
0.61


$
0.58


$
0.55Diluted earnings per share

$
0.45


$
0.59


$
0.56


$
0.53  46




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##### Table of Contents



Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Managements
    Evaluation of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)).
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f))
  Form 10-K,
    
    Setting up a weekly steering committee to discuss the
    Companys remediation plans and its progress related to the
    material weakness, including monitoring its fiscal 2006 internal
    control plans and status;
    Implementing the use of monthly checklists and journal entry
    logs at the Companys subsidiaries;
    Making enhancements to provide more accurate account variance
    analysis;
    Refining roles and responsibilities and segregation of duties
    among the Companys world-wide accounting personnel by,
    among other things, reviewing and approving transactions related
    to monthly financial packages, providing journal entry logs to
    corporate, analyzing local expenses and monthly reviews of
    financial packages by Corporate;
    Strengthening access controls by reviewing each
    individuals access in relation to job function; and
    Increasing formal interaction and training as well as better
    coordination to reflect appropriate segregation of duties.   47




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
   Item 9B.OTHER
    INFORMATION   48




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    Internal
    Control  Integrated Framework
      Internal Control  Integrated Framework Internal Control  Integrated
    Framework
  Share-Based
    Payment
      49




---



##### Table of Contents



PART III  Item 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT  IDENTIFICATION
    OF DIRECTORS
  Form 10-K
  IDENTIFICATION
    OF OFFICERS
    CODE OF
    ETHICS
    Item 11.
    EXECUTIVE
    COMPENSATION  Form 10-K
  Item 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K
  Item 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS  Form 10-K
  Item 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES  Form 10-K
 PART IV  Item 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  (1) Financial Statements
  Financial Statement Schedule
  Exhibits
 50




---



##### Table of Contents



SIGNATURES      By:
    /s/  Lukas
    Braunschweiler       attorney-in-fact, attorneys-in-fact,
    Signature

Title

Date/s/  Lukas
    BraunschweilerLukas
    Braunschweiler

President, Chief Executive
    Officer, and Director (Principal Executive Officer)

September 11, 2006/s/  Craig
    A. McCollamCraig
    A. McCollam

Vice President and Chief Financial
    Officer (Principal Financial and Accounting Officer)

September 11, 2006/s/  A.
    Blaine BowmanA.
    Blaine Bowman

Director

September 11, 2006/s/  David
    L. AndersonDavid
    L. Anderson

Director

September 11, 2006/s/  Rod
    McGearyRod
    McGeary

Director

September 11, 2006/s/  Riccardo
    PigliucciRiccardo
    Pigliucci

Lead Director

September 11, 2006/s/  Michael
    W. PopeMichael
    W. Pope

Director

September 11, 2006  51




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##### Table of Contents



INDEX TO
    FINANCIAL STATEMENT SCHEDULES
  PageFINANCIAL STATEMENT SCHEDULEReport of
    Independent Registered Public Accounting Firm


53Schedule II 
    Valuation and Qualifying Accounts and Reserves


54    52




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    Share-Based Payment). Form 10-K
      53




---



##### Table of Contents



SCHEDULE II
  DIONEX
    CORPORATION
  VALUATION
    AND QUALIFYING ACCOUNTS AND RESERVES
 YEARS
    ENDED JUNE 30, 2006, 2005 AND 2004
  ChargedBalance





(Credited)Beginning





to Other





Balanceof Year


Additions


Accounts(1)


Deductions(2)


End of Year(In thousands)YEAR ENDED JUNE 30, 2006:Allowance for doubtful accounts

$
953


$



$
37


$
(316
)

$
674YEAR ENDED JUNE 30, 2005:Allowance for doubtful accounts

$
760


$
350


$
(15
)

$
(142
)

$
953YEAR ENDED JUNE 30, 2004:Allowance for doubtful accounts

$
1,275


$
130


$
26


$
(671
)

$
760     (1)
    
    Effects of exchange rate changes(2)
    
    Accounts written off, net of recoveries 54




---



##### Table of Contents



EXHIBIT INDEX  ExhibitNumber

Description

Reference3.1

Restated Certificate of
    Incorporation, filed November 6, 1996

(2)3.2

Bylaws, as amended on
    July 29, 2002

(5)4.1

Stockholder Rights Agreement dated
    January 21, 1999, between the Company and Bank Boston N.A

(3)10.1

Medical Care Reimbursement Plan
    (Exhibit 10.17)

(1)10.2

Credit Agreement dated
    November 13, 2000 between Wells Fargo Bank and the Company
    (Exhibit 10.15)

(4)10.3

First amendment to Credit
    Agreement dated November 13, 2000 between Wells Fargo Bank
    and the Company

(6)10.4

Dionex Corporation 2004 Equity
    Incentive Plan (Exhibit 99.1)

(8)10.5

Form of Stock Option Agreement for
    non-employee directors (Exhibit 99.2)

(8)10.6

Form of Stock Option Agreement for
    other than non-employee directors (Exhibit 99.3)

(8)10.7

Employee Stock Participation Plan
    (Exhibit 10.13)

(7)10.8

Second amendment to Credit
    Agreement dated November 13, 2000 between Wells Fargo Bank
    and the Company (Exhibit 10.1)

(9)10.9

Change in Control Severance
    Benefit Plan (Exhibit 10.15)

(10)21.1

Subsidiaries of the Company23.1

Consent of Independent Registered
    Public Accounting Firm31.1

Certification of Chief Executive
    Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231.2

Certification of Chief Financial
    Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232.1

Certification of the Chief
    Executive Officer Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 200232.2

Certification of the Chief
    Financial Officer Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002     (1)
    Incorporated by reference to the indicated exhibit in Amendment
    No. 1 of the Companys Registration Statement on
    Form S-1
    filed December 7, 1982.(2)
    Incorporated by reference to the corresponding exhibit in the
    Companys Annual Report on
    Form 10-Q
    filed February 13, 1997.(3)
    Incorporated by reference to the corresponding exhibit in the
    Companys Quarterly Report on
    Form 10-Q
    filed February 16, 1999.(4)
    Incorporated by reference to the indicated exhibit in the
    Companys Quarterly Report on
    Form 10-Q
    filed February 14, 2001.(5)
    Incorporated by reference to the indicated Exhibit 10.17 in
    the Companys Annual Report on
    Form 10-K
    filed August 28, 2002.(6)
    Incorporated by reference to the indicated Exhibit in the
    Companys Annual Report on
    Form 10-K
    filed September 24, 2003.(7)
    Incorporated by reference to the indicated exhibit in the
    Companys Annual Report on
    Form 10-K
    filed September 10, 2004.  S-8
  (9)
    Incorporated by reference to the indicated exhibit in the
    Companys current Report on
    Form 8-K
    filed December 22, 2004.  (10)
    Incorporated by reference to the indicated exhibit in the
    Companys Quarterly Report on
    Form 10-Q
    filed May 10, 2005. 55