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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K


|    |  |                                                                                     
|--- |  | ------------------------------------------------------------------------------------
|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|    |  |                                                                                     
|    |  | For the Fiscal Year Ended June 30, 2003                                             

OR

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[  ] |  | 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          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                         |  |                    
|1228 Titan Way, Sunnyvale, California    |  | 94085              
|                                         |  |                    
|(Address of principal executive offices) |  | (Zip Code)         

Registrants telephone number, including area code (408) 737-0700

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.001 per share

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X]  NO [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

The aggregate market value of the Registrants Common Stock held by
nonaffiliates on September 12, 2003 (based upon the closing price of such stock
as of such date) was $800,293,937.



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As of September 12, 2003, 21,223,545 shares of the Registrants Common Stock
were outstanding.

Portions of the Registrants definitive Proxy Statement for the Annual Meeting
of Stockholders to be held on October 24, 2003 are incorporated by reference in
Part III of this Report.

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TABLE OF CONTENTS



|              |                                                                                               |  |  |  |  |  |  | 
|------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | Item 1. BUSINESS                                                                             
|              | Item 2. PROPERTIES                                                                           
|              | Item 3. LEGAL PROCEEDINGS                                                                    
|              | Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II      
|              | Item 5. MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS             
|              | Item 6. SELECTED CONSOLIDATED FINANCIAL DATA                                                 
|              | Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|              | Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|              | Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|              | Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|              | Item 9A. CONTROLS AND PROCEDURES                                                             
|PART III     
|              | Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                  
|              | Item 11. EXECUTIVE COMPENSATION                                                              
|              | Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|              | Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|              | Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES                                              
|PART IV      
|              | Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|EXHIBIT INDEX
|SIGNATURES   
|EXHIBIT 10.17
|EXHIBIT 21.1 
|EXHIBIT 23.1 
|EXHIBIT 31.1 
|EXHIBIT 31.2 
|EXHIBIT 32.1 
|EXHIBIT 32.2 



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TABLE OF CONTENTS

|              |  |                                                                                       |  |   
|------------- |  | ------------------------------------------------------------------------------------- |  | --
|              |  | PART I                                                                                |  |   
|Item 1.       |  | Business                                                                              |  | 4 
|Item 2.       |  | Properties                                                                            |  | 19
|Item 3.       |  | Legal Proceedings                                                                     |  | 19
|Item 4.       |  | Submission of Matters to a Vote of Security Holders                                   |  | 20
|              |  | PART II                                                                               |  |   
|Item 5.       |  | Market for the Registrants Common Stock
And Related Stockholder Matters              |  | 20
|Item 6.       |  | Selected Consolidated Financial Data                                                  |  | 21
|Item 7.       |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations |  | 22
|Item 7A.      |  | Quantitative and Qualitative Disclosures About
Market Risk                            |  | 30
|Item 8.       |  | Financial Statements and Supplementary Data                                           |  | 31
|Item 9.       |  | Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure  |  | 52
|Item 9A.      |  | Controls and Procedures                                                               |  | 52
|              |  | PART III                                                                              |  |   
|Item 10.      |  | Directors and Executive Officers of the Registrant                                    |  | 52
|Item 11.      |  | Executive Compensation                                                                |  | 52
|Item 12.      |  | Security Ownership of Certain Beneficial Owners and
Management                        |  | 52
|Item 13.      |  | Certain Relationships and Related Transactions                                        |  | 53
|Item 14.      |  | Principal Accounting Fees and Services                                                |  | 53
|              |  | PART IV                                                                               |  |   
|Item 15.      |  | Exhibits, Financial Statement Schedules, and
Reports on Form 8-K                      |  | 53
|Exhibit Index |  | 54                                                                                   
|Signatures    |  | 57                                                                                   

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements set forth or incorporated by reference in this Form 10-K, as
well as in our Annual Report to Stockholders for the year ended June 30, 2003,
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as believes,
anticipates, expects, intends, estimates and similar expressions are
intended to identify forward-looking statements, but are not the exclusive
means of identifying such statements. These statements involve risks,
uncertainties and other factors that may cause our actual results, performance
or achievements, or industry results, to be materially different from any
future results, performance or achievements, or industry results, expressed or
implied by such forward-looking statements. Such factors include, among others:
the continuation or spread of the current economic uncertainty; risks related
to international operations, including foreign currency fluctuations; the
importance of meeting customer demand for new products; competition in the
analytical instrumentation market; our ability to maintain inventories; the
importance of attracting and retaining key personnel; and our ability to
protect our proprietary information and other risk factors set forth under
Risks and Uncertainties and elsewhere in this Form 10-K. We expressly
disclaim any obligation to update or publicly release any revision to these
forward-looking statements after the date of this Form 10-K.




PART I




Item 1. BUSINESS

OVERVIEW

Dionex Corporation* designs, manufactures, markets and services analytical
instrumentation and related accessories and chemicals. The Companys products
are used to analyze chemical substances in the environment and in a broad range
of industrial and scientific applications. Since July 1, 2001, there have been
no material changes in the mode of conducting the business of the Company.

INDUSTRY SEGMENT INFORMATION

The Company operates in a single industry segment consisting of analytical
instruments and related services.



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*Unless the context otherwise requires, the terms Dionex and the Company as
used herein include Dionex Corporation, a Delaware corporation, and its
subsidiaries. Dionex was initially incorporated in California in 1980. In
1986, the Company reincorporated in Delaware.


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Dionex designs, manufactures, markets and services a range of liquid
chromatography systems, sample preparation devices and related products that
are used by chemists to separate and quantify the individual components of
complex chemical mixtures in many major industrial, research and laboratory
markets. Typically, the Companys chromatography systems consist of several
components including a specially designed liquid pumping and flow system, a
sample injection system, a separator column, post-column devices such as an
eluent suppressor, a detector and a data collection and analysis system.
Dionex offers integrated and modular systems that can be configured to meet the
particular analytical requirements of individual customers. Moreover,
individual components may be sold separately to existing customers that wish to
expand their systems.

The Companys chromatography systems are currently focused in several product
areas: ion chromatography (IC), high performance liquid chromatography (HPLC)
and capillary-/nano-LC. The Company also offers a mass spectrometer coupled
with either an IC or HPLC system. For sample preparation, the Company provides
automated solvent extraction systems. In addition, the Company develops and
manufactures columns, detectors, data collection and analysis systems for use
in liquid chromatographs. Each of these product areas is described below.

Ion Chromatography Ion Chromatography is a form of chromatography that
separates ionic (charged) molecules, usually found in water-based solutions,
and typically separates and detects them based on their electrical
conductivity. The sale of Dionex IC systems and related columns, suppressors,
detectors, automation and other products accounts for approximately tow-thirds
of the Companys revenues.

Dionex IC products are used in a wide range of analytical applications,
including environmental monitoring, quality control of pharmaceuticals,
corrosion monitoring, evaluation of raw materials, quality control of
industrial processes and products, research and development, and regulation of
the chemical composition of food, beverage and cosmetic products. Major
customers include environmental testing laboratories, life science and food
companies, chemical and petrochemical firms, power generation facilities,
electronics manufacturers, government agencies and academic institutions.

In fiscal 2003, the Company introduced the industrys first Reagent-Free IC
(RFIC) systems by combining eluent generation and advanced eluent suppression
technologies. Dionex believes RFIC simplifies ion chromatography while
increasing its sensitivity and reproducibility. RFIC also eliminates the errors
associated with manual reagent preparation.

The Company offers a complete range of systems for IC:

ICS-90 System  In fiscal 2002, the Company introduced the ICS-90 integrated IC
system. The ICS-90 is designed for routine ion analysis and provides rapid
start up times, easy operation and stable performance.

ICS-1000 System  The ICS-1000, introduced in fiscal 2003, is an integrated and
preconfigured system that performs IC separations using conductivity detection.
The system features a dual-piston pump, front panel or Chromeleon software
control. Options include column heating and in-line vacuum degassing. The
ICS-1000 provides built-in control for electrolytic suppression technology to
provide high performance and ease of use.

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ICS-1500 System  In fiscal 2003, the Company introduced the ICS-1500, a fully
integrated and preconfigured system designed to perform IC separations using
conductivity detection. The system is available with a dual-piston pump,
thermally controlled conductivity cell, column heater, and optional in-line
vacuum degassing. The system is controlled from an LCD touch pad front panel
or by Chromeleon software. Using AutoSuppression, the ICS-1500 combines
exceptional signal to noise ratios with ease of use.

ICS-2000 RFIC System  The ICS-2000, introduced in fiscal 2003, is the
industrys first totally integrated and preconfigured RFIC system designed to
perform with all types of electrolytically generated eluents for isocratic and
gradient IC separations using suppressed conductivity detection. The system is
controlled
from an LCD touch pad front panel or by Chromeleon software. RFIC technology
uses advanced eluent generation and post-column eluent suppression technology,
eliminating manual preparation of eluents and regenerants.

ICS-2500 RFIC System  The premier product in the Dionex IC family, the modular
ICS-2500 RFIC system features the EG50 eluent generator, introduced in fiscal
2003, and the SRS Self-Regenerating Suppressor. The ICS-2500 also includes a
microprocessor-controlled dual-piston pump with microbore to semiprep flow
control. Detectors available for the system include conductivity,
electrochemical, UV-Vis and photodiode array detectors, providing flexible
analytical capability. For sample introduction, the system is available with
either the AS40 or full-featured AS50 autosampler. Chromeleon software,
bundled with the ICS-2500, provides powerful data processing, control features,
audit trail, intuitive database management, and full client-server
capabilities. Together, the hardware and software offer system wellness, a
feature that automatically schedules calibration, validation, and routine
maintenance on each module. Built-in diagnostics can be prompted from the
software to help troubleshoot and track useful parameters such as absorbance
detector lamp life and column usage.

Process Instrumentation  In fiscal 1998, the Company began shipping the DX-800
continuous on-line monitoring system. The DX-800 uses industry standard
PC-based automation, similar to that used in laboratory chromatography. Major
applications for the DX-800 are in the power generation industry for the
continuous monitoring of corrosive contaminants in boiler water, the
semiconductor industry for continuous monitoring of contaminants in high purity
water, and the pharmaceutical and chemical industries for continuous monitoring
of biological and chemical synthesis processes.

The Companys IC systems and related accessories and software are marketed and
sold worldwide.

High Performance Liquid Chromatography HPLC is a form of chromatography that
separates a wide range of molecules, such as proteins, carbohydrates, amino
acids, and small-molecule pharmaceuticals, and quantifies the components by
measuring the amount of light that the molecules absorb or emit when exposed to
a light source. The Companys HPLC customers include life sciences companies
active in biological research, biotechnology, pharmaceutical drug discovery and
development, and other industrial companies.

The Company offers the following products for HPLC:

Summit HPLC System and Chromeleon Software  The Summit HPLC System includes
the P680 pump, introduced in fiscal 2002, that comes in both isocratic and
gradient versions, an absorbance detector (including PDA), and an autosampler
with optional

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thermal cooling. In fiscal 2003, Dionex added a new thermostated
column compartment, the TCC-100 to the Summit product line. The TCC-100
maintains stable column temperatures, improving reproducibility of peak
retention times. Chromeleon software offers full system control,
multi-instrument control (including control of other companies equipment),
validation provisions as required by 21 CFR Part 11 and many other powerful
features. The Summit HPLC System and Chromeleon are marketed and sold
worldwide.

BioLC System  The BioLC features an inert, metal-free, polyetheretherketone
(PEEK) flow path to preserve chemically unstable biomolecules. The BioLC
provides high performance dual piston pumps and detectors, including the GS50
gradient pump, the premier pump for BioLC, and a choice of electrochemical,
absorbance and photodiode array detectors. These options allow for a wide
range of applications including quantification of carbohydrates, amino acids,
proteins and peptides, nucleic acids and small biomolecules. The instrument
ships with Chromeleon chromatography software and is marketed and sold
worldwide.

Capillary-/nano-LC Capillary-/nano-LC is a form of HPLC that uses low flow
rates for analyzing sample volumes much smaller than those of traditional HPLC.
HPLC and capillary-/nano-LC sales account for over 25% of the Companys
revenues.

The Company offers the following products for capillary-/nano-HPLC:

UltiMate Capillary-/Nano-LC System  The acquisition of LC Packings in fiscal
2001 expanded the Companys product offerings to include capillary-/nano-LC
products. The UltiMate system, a dedicated microseparation system, consists of
a high-precision pump that is coupled with a proprietary method of flow
splitting to provide accurate, reproducible isocratic and gradient separations
from 40 μl/min. to 100 nL/min. The UltiMate also has a specially developed UV
detector. This detector coupled with the Companys proprietary capillary flow
cells allows the most sensitive UV detection in microcolumn separations.
Accessories for the UltiMate system include the FAMOS autosampler and the
Switchos module for use with large volume samples.

UltiMate Dual Gradient System  Introduced in fiscal 2003, the dual gradient
version of the UltiMate is offered for parallel Capillary/Nano LC separations.
The dual gradient system provides significantly increased throughput,
translating into powerful identification of peptides for pharmaceutical,
research and other applications.

In fiscal 2002, the Company added to its offerings in the micro-analysis market
by acquiring the right to manufacture and distribute the Probot microfraction
collector. The Probot allows collection or dispensation of micro samples. The
Probot also is used for precision spotting of MALDI-TOF mass spectrometer
targets.

Sample Preparation The Company offers Accelerated Solvent Extraction (ASE)
instruments for automated sample preparation. The ASE 300 and ASE 100 are
automated sample extraction instruments for large samples up to 100 mL and the
ASE 200 is for samples less than 34 mL. The ASE 200 and ASE 300 can
automatically extract 24 samples and 12 samples, respectively, while the ASE
100 is a single-sample automated extractor. Each ASE system extracts solid
samples using common solvents (the same used in traditional soxhlet techniques)
at elevated temperatures and pressures. Competitive techniques include
soxhlet, sonication, microwave extraction and supercritical fluid extraction.
The ASE 200 and 300 systems offer several advantages over other solvent based
extraction techniques including lower solvent consumption, reduced extraction
time, higher throughput

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automation and ease of use. ASE 200 and 300 systems
are used worldwide for a number of environmental, industrial and food and
beverage applications. The Company offers the Solvent Controller Module, which
automates the delivery of multiple solvents to the ASE systems, and AutoASE, an
add-on software feature which allows control of up to eight ASE systems from
one location, as well as provides methods of storage and documentation.

In fiscal 2002, the Company introduced the ASE 100, a semi-automatic extraction
system which handles one extraction at a time. The ASE 100 uses the same
technology as the ASE 200 and 300 systems. These systems are marketed
worldwide.

Detectors Detectors are used to measure the quantity of various sample
components after they have been separated in a chromatography column. Dionex
currently offers several detector products based on conductivity,
electrochemistry, absorbance (including the PDA-100 photodiode array detector),
fluorescence and refractive index absorbance. This range of detectors is
designed to meet customer requirements for analysis of organics, inorganics,
metals, amino acids, biological compounds and pharmaceuticals.

Mass Spectrometry  In fiscal 2000, the Company signed an agreement with Thermo
Electron to sell its Finnigan AQA mass spectrometer (MS) with Dionex Summit
HPLC, BioLC and high-end IC systems. In fiscal 2002, Thermo Electron
introduced the MSQ Mass Spectrometer. The agreement with Thermo Electron
allows Dionex to market LC/MS and IC/MS system using the MSQ to existing and
new customers worldwide, particularly in the pharmaceutical market, but also
for environmental testing, drug, beverage and food testing and many other
applications. The MSQ mass spectrometer is a compact, benchtop, single
quadrupole mass detector for HPLC/MS and IC/MS. The standard system is
supplied with both Electrospray (ESI) and Atmospheric Pressure Chemical
Ionization (APCI) for maximum analytical flexibility. The agreement with
Thermo Electron enables Dionex to reach chemists desiring MS capabilities who
previously were not among the Companys potential customers.

Automation Products As part of its efforts to make chemical analyses
simpler, faster and more reliable, Dionex offers a family of products that
automate sample handling, system operation and data analysis for
chromatography systems. These products include Chromeleon software and
several automated sample injection modules available for IC and HPLC
applications.

Chromeleon Software  The Company introduced in fiscal 2003 the Chromeleon 6.5
chromatography data management system. From a single user interface, Chromeleon
provides full control of over 200 LC and GC instruments from more than 20
vendors of liquid and gas chromatography systems. It is an easy-to-use,
adaptable data management system with scalable client/server architecture for
customers requiring a single workstation to site-wide deployment. Data is
organized by instrument, user, project or product. All data is stored locally
on a PC, centrally on a network server, or both. Analytical results are viewed
directly on the screen. Chromeleon also offers a complete suite of features
for regulatory compliance: security, validation, audit trails and electronic
signatures. Chromeleon provides all the features that laboratories need to
comply with GLP, GMP and 21 CFR Part 11 without losing productivity.
Chromeleon is marketed as PeakNet in Japan.

Autosamplers  The Company offers a number of autosamplers that address a
variety of customer needs.

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The AS40 Automated Sample Injection module (AS40) is a low-cost, metal-free,
rugged automated sample loading device designed especially for ion
chromatography applications. The AS40 can be used with the Companys IC
systems.

For more complex needs, the Company offers the AS50 Auto-Select Autosampler
(AS50). The AS50 is a high-performance, random vial access autosampler with
automated sample preparation which is used primarily with the BioLC and high
end RFIC systems.

For HPLC applications, the Company offers the ASI-100 Autosampler (ASI-100)
with optional thermal control for temperature-sensitive samples. The ASI-100
provides speed, simplicity, reliability and precision with an innovative
in-line split-loop injection technology. The removable carousels and
programmable needle depth allows the ASI-100 to accommodate a variety of
sample vials and sizes. The ASI-100 is marketed with our Summit product line.

For capillary-/nano-LC, the Company offers the FAMOS Micro Autosampler. The
FAMOS is a fully automated micro autosampler for sample injections from 96 or
386 well plates, PCR tubes or conventional 1.5 mil vials. The unique design
allows for automated injection of volumes ranging from 50 nanoliters to up to
5 microliters. FAMOS has a proprietary injection technique that guarantees
high performance and virtually no sample dispersion. The FAMOS is marketed
with the UltiMate Systems.

Columns The Company offers a wide variety of columns for use in IC, HPLC and
capillary-/nano-HPLC applications. A chromatography column generally consists
of a hollow cylinder packed under high pressure with a uniquely designed
separation material. The columns function is to separate various chemical
components in a sample. The Company develops and manufactures its own
ion-exchange resins and silica-based bonded phases using proprietary
processes. Dionex currently manufactures and markets a broad range of column
types designed and tested for specific applications in the liquid
chromatography market. Dionex offers a wide range of polymeric-based
ion-exchange and reversed-phase columns from microbore to semipreparative
formats. These columns are designed, developed, tested and marketed for
target applications.

Recent column introductions augment a continuing program of product
introductions. For ion chromatography, the Company introduced several
consumable products in fiscal 2003 for emerging applications; these include the
IonPac CS17 Cation-Exchange Column for aliphatic amines and the IonPac AS18
Anion-Exchange Column for routine inorganic anion determinations including
drinking water monitoring. The introduction of the CR-TC Trap Columns, which
are electrolytically regenerated for use with the Eluent Generator systems, was
an important advance in ease of use of RFIC systems for biological samples
requiring inert flow paths. Also introduced in fiscal 2003 were two important
advances in carbohydrate analysis, the CarboPac PA20 column for monosaccaride
determinations and Disposable Gold Electrodes for
amperometric detection. In fiscal 2002, the Company introduced the IonPac
Cryptand A1 Anion-Exchange Column, the high capacity IonPac CS16
Cation-Exchange Column for high-purity water, the IonPac CS12A-MS
Cation-Exchange Column for interfacing with the MSQ mass spectrometer, the
SC-CSRS Salt Converter-Cation Self-Regenerating Suppressor for linear ammonium
determinations, and the ATC-HC Trap Column.

For the HPLC market, the Company introduced the Acclaim 300 columns in fiscal
2002; this is a new line of C18 reversed-phase columns manufactured by Dionex
for the separation of proteins, peptides and other biological macromolecules.
This line of columns extends the same unique bonding chemistry developed for
the

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Acclaim 120 columns to a wide-pore silica substrate. Acclaim HPLC columns
are reversed-phase, silica-based C8 and C18 phases for use in the
pharmaceutical, nutraceutical, food, and life science separations markets.
Introduced in fiscal 2003 was the Acclaim PolarAdvantage columns, a new line of
silica-based, reversed-phase columns featuring a polar enhanced stationary
phase. These PolarAdvantage columns operate at wider chromatographic
conditions and with a broader application range compared to conventional
reversed-phase columns.

In fiscal 2003, the LC Packings division of Dionex introduced a new polymeric
Monolithic Capillary column for ultra-fast separation of proteins and
peptides. In addition, to the Monolithic Capillary Columns, the Company
offers a wide variety of micro, capillary and nano-LC columns. The columns
range in size from 75 microns to 1 millimeter internal diameter and are packed
with a variety of stationary phase materials.

Suppressors

Dionex manufactures eluent suppressors that are used to enhance detection in
ion chromatography. The Company has proprietary positions in the technology
of suppression used in ion chromatography as well as in the application of
suppression techniques. The Companys suppressors lower background
conductivity while allowing separations using high capacity columns and more
concentrated eluents (liquids used to carry a sample through a liquid
chromatography system). Dionex offers an array of suppressors that include
the Self Regenerating Suppressor (SRS), the Atlas Suppressor and the MMSIII
MicroMembrane Suppressor.

The Self Regenerating Suppressor enhances IC performance while operating with
low maintenance requirements. The SRS ULTRA provides superior performance for
all IC applications, particularly trace level ion chromatography using
hydroxide eluents and is a key component of the ICS-2500 RFIC systems.

The Atlas Suppressor provides improved sensitivity, lower noise and faster
start-up over our previous, industry leading AutoSuppression technology,
raising the bar even higher in the technology of electrolytic suppression for
IC. The Atlas suppressor is ideal for most IC applications requiring
carbonate eluents and works with our ICS-2500 systems.

The MMS III MicroMembrane Suppressor for ion chromatography, with an
innovative displacement chemical regeneration mode of operation, can be used
with all Dionex ion-exchange columns, providing ultra-low noise operation, and
is recommended for anion and cation separations using eluents containing
solvents.

Service and Other The Company also generates revenue from its Customer
Service organization through maintenance contracts, spare part sales, customer
training and sales of other products and valued-added services. (See
Technical Support, Installation and Service below.)

MARKETING AND CUSTOMERS

The Companys marketing strategy is twofold. First, in those applications
where Dionex technology is well established, the Company works to increase
demand for its chromatography systems through direct mailings, advertising in
trade publications, seminars and workshops, conferences and expositions, and
direct sales calls. Growth in these markets results from identifying new
customers in existing sales regions, extending geographic penetration and
increasing demand for the Companys products and technical support capabilities
among existing customers.

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The second component of the Companys marketing strategy is to work closely
with existing and potential customers to develop new applications. Technical
support staff assist such customers in problem definition, development of new
applications needed to solve problems and providing user training and ongoing
user support. By combining this support function with direct sales efforts,
the Company works to increase the range of applications and the potential
market for its products.

The Company currently markets and distributes its products and services through
its own sales force in the United Kingdom, Germany, Italy, France, the
Netherlands, Belgium, Switzerland, Austria, Denmark, Japan, China, Canada and
the United States. In each of these countries, the Company maintains one or
more local sales offices in order to service customers in regional markets. In
other international locations where it does not have a direct sales force, the
Company has developed a network of distributors and sales agents.

The Companys products are used extensively in environmental analysis and by
the pharmaceutical, life science, biotechnology, chemical, petrochemical, power
generation, food and beverage and electronics industries. Its customers
include a number of the largest industrial companies worldwide, as well as
government agencies, research institutions and universities. Geographically,
sales to customers outside of North America accounted for 64% of net sales in
fiscal 2003, 61% of net sales in fiscal 2002 and 60% of net sales in fiscal
2001. No single customer accounted for 10% or more of the Companys sales in
fiscal 2003, 2002 or 2001.

Demand for the Companys products is dependent upon the size of the markets for
its chromatography systems, the level of capital expenditures of the Companys
customers, the rate of economic growth in its major markets and competitive
considerations. There can be no assurances that the Companys results of
operations will not be adversely impacted by a change in any of these factors.
The Company believes that demand for its products does not exhibit any
significant seasonal pattern.

Dionex manufactures its products based upon its forecast of customer demand and
maintains inventories of completed modules in advance of receipt of firm orders
from its customers. Orders are generally placed by the customer on an
as-needed basis, and products are usually shipped within four to six weeks
after receipt of an order. Dionex does not maintain a substantial backlog, and
backlog as of any particular date may not be indicative of the Companys actual
sales in any succeeding period. The level of backlog at June 30, 2003 was
$33.0 million and at June 30, 2002 was $28.4 million.

COMPETITION

Competition in the Companys business segment is based upon the performance
capabilities of the analytical instrument, technical support and after-market
service, the manufacturers reputation as a technological leader and the
selling price. Management believes that performance capabilities are the most
important of these criteria. Customers measure system performance in terms of
sensitivity (the ability to discern minute quantities of a particular sample
component), selectivity (the ability to distinguish between similar
components), speed of analysis and the breadth of samples that the system can
effectively analyze. Management believes that Dionex enjoys a favorable
reputation in terms of performance capabilities, technical support and service.

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Companies competing with Dionex in the analytical instruments market include
Agilent Technologies, Inc., Perkin-Elmer, Inc., Shimadzu Corporation, Thermo
Instruments, Varian, Inc., Metrohm Ltd. and Waters Corporation. The Company
believes no single competitor has a dominant position in the analytical
instruments market.

The Company believes it has a substantial market share in IC. Dionex IC
systems generally compete with a number of analytical techniques used in
identifying and quantifying ionic and polar compounds. The primary sources of
competition for IC are conventional manual and automated wet chemistry
procedures and certain modified liquid chromatography systems and liquid
chromatography systems using
single column ion chromatography (SCIC) method that does not use a suppressor
device. The Companys competitors also offer products to compete in ion
analysis and chromatography using suppression technology similar to that
offered by the Company in earlier generation modules during the 1980s.
Companies competing with Dionex in IC included such vendors as Alltech
Associates, Metrohm Ltd., Shimadzu Corporation, Waters Corporation and other
smaller companies.

The Company believes it has a small but growing share in HPLC and
capillary-/nano-LC. The Companys Summit HPLC and UltiMate systems compete
directly with other manufacturers HPLC systems in traditional and
capillary-/nano- HPLC applications. Dionex believes that the Summit HPLC
system has certain benefits over competing systems, including advanced pump
technology and a high performance autosampler. The Company believes that its
UltiMate systems offer certain benefits over competing systems including the
ability to analyze minute contents of sample. The Company also believes that
its CHROMELEON software package provides competitive advantages over its
competitors software offerings.

The Companys BioLC system also competes directly with other manufacturers
HPLC systems in certain traditional HPLC applications. Dionex is a relatively
new entrant in the highly competitive HPLC and biological separations markets.
Nonetheless, management believes that its BioLC system has certain benefits
over competing systems, including a non-metallic flow path and the capability
of performing gradient ion chromatography, as well as HPLC, on a single
analytical system.

Competitors of the Company in HPLC market include such vendors as Agilent
Technologies, Inc., Shimadzu Corporation, Thermo Electron, Varian, Inc., Waters
Corporation and various smaller companies.

The Companys ASE 100, 200 and 300 systems compete directly with standard
soxhlet, sonication, supercritical fluid extraction and microwave extraction
techniques provided by other companies. Management believes that the ASE 200
and 300 systems have certain benefits compared to competing techniques,
including faster extraction time, reduced solvent usage and built-in
automation.

The Company believes that competition in the analytical instruments market will
continue to increase in the future. Many of the companies whose products
compete with those of the Company have substantially greater financial
resources and large technical staffs and sales forces at their disposal. There
can be no assurances that the Companys marketing and sales efforts will
compete successfully against such other companies in the future.

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PATENTS AND LICENSES

The Company has an extensive patent portfolio covering certain of the Companys
products. The primary benefits of patents are presently limited to the United
States and certain other foreign countries where the Companys patents have
been issued.

As a matter of Company policy, the Company vigorously protects its intellectual
property rights and seeks patent coverage on all developments that it regards
as material and patentable. However, there can be no assurances that any
patents held by the Company will not be challenged, invalidated or circumvented
or that the rights granted thereunder will provide competitive advantages to
the Company. The Companys patents, including those licensed from others,
expire on various dates through 2020. The Company believes that, while its
patent portfolio has value, no single patent or patent application is in itself
essential and that the invalidity or expiration of any single patent would not
have a material adverse effect on its business.

The Company regards its PeakNet and CHROMELEON software as proprietary and
relies on a combination of copyrights, trademarks, trade secret laws and other
proprietary rights, laws, license agreements and other restrictions on
disclosure, copying and transferring title to protect its rights to its
software products.
The Company has no patents covering its software, and existing copyright laws
afford only limited practical protection. In addition, the laws of some
foreign countries do not protect the Companys proprietary rights to the same
extent as do the laws of the United States.

INTERNATIONAL OPERATIONS

Financial information about foreign and domestic operations and export sales is
provided in Note 14 of the Notes to Consolidated Financial Statements found
elsewhere in this report.

The Company has subsidiaries in the United Kingdom, Germany, Italy, France, the
Netherlands, Belgium, Switzerland, Austria, Denmark, Japan, China and Canada.
The Companys foreign sales are affected by fluctuations in currency exchange
rates and by regulations adopted by foreign governments. Export sales are
subject to certain controls and restrictions, but the Company has not
experienced any material difficulties related to these limitations. There can
be no assurances that the Companys results of operation will not be adversely
impacted by fluctuations in currency exchange rates in the future.

The Companys business is dependent upon customer demand in the countries that
it sells its products. Any fluctuations in demand for analytical
instrumentation can affect the Companys results of operations.

MANUFACTURING AND SUPPLIERS

The Company produces chemicals and resins and assembles systems and components
in its California manufacturing facilities. The Company assembles the systems
and components for its Summit HPLC system in its German manufacturing facility.
The Company assembles the systems and components for its UltiMate system in
its Dutch manufacturing facility. Dionex has developed proprietary processes
for the manufacture of polystyrene-based resins and for packing columns with
these resins. The Company believes that its resins, columns and suppressor
manufacturing know-how are critical to the performance and reliability of its
chromatography systems.

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The Company requires each employee to sign a
nondisclosure agreement to protect its proprietary processes. However, there
can be no assurances that these agreements will provide meaningful protection
or adequate remedies for the Companys proprietary processes in the event of
unauthorized use or disclosure.

The Company has emphasized a modular design for the principal subsystems of its
pumping and flow systems, sample injection systems, chromatography modules,
detectors, and control and data analysis systems. The Company believes that
this modular approach has enabled it to meet the wide range of system
configurations required by its customers while effectively managing inventory
levels.

Many components used in the Companys products, including proprietary analog
and digital circuitry, are manufactured by Dionex. Other components, including
packaging materials, integrated circuits, microprocessors, microcomputers and
certain detector and data analysis modules, are purchased from other
manufacturers. Most of the raw materials, components and supplies purchased by
the Company are available from a number of different suppliers, although a
number of items are purchased from limited or single sources of supply.

TECHNICAL SUPPORT, INSTALLATION AND SERVICE

Users of the Companys chromatography systems may require technical support
before and after the system sale to ensure that analysis problems are resolved.
Services provided before the sale are recorded in operating expenses as
incurred. Costs incurred after the sale are accrued for at the time of the
system sale. The Company offers training courses and periodically sends its
customers information on applications development. Chromatography systems sold
by the Company generally include a one-year warranty. Installation and certain
basic user training are provided to the customer, with revenue for these
services recognized at that time the services are provided. Maintenance
contracts may be purchased by customers to cover equipment no longer under
warranty. Maintenance work not performed under warranty or maintenance
contracts is performed on a time and materials basis. The Company installs and
services its products through its own field service
organization in the United Kingdom, Germany, Italy, France, the Netherlands,
Belgium, Switzerland, Austria, Denmark, Japan, China, Canada and the United
States. Installation and service in other foreign countries are typically
provided by the Companys distributors or agents.

RESEARCH AND PRODUCT DEVELOPMENT

The Companys research and product development efforts are focused on
increasing the performance of its chromatography and other products and
expanding the number of chemical compounds that can be analyzed efficiently
with its products. Research and product development expenditures were $16.9
million, $15.1 million and $14.7 million in fiscal 2003, 2002 and 2001,
respectively. The Company pursues active development programs in the areas of
system hardware, applications, computer software, suppressors, resin and column
technologies. There can be no assurances that the Companys product
development efforts will be successful or that the products developed will be
accepted by the marketplace.

ENVIRONMENTAL LAWS AND REGULATIONS

Compliance by the Company with federal, state and local environmental laws
during fiscal 2003 had no material effect upon capital expenditures, earnings
or its competitive position.

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EMPLOYEES

Dionex had 941 employees at June 30, 2003, compared with 903 employees at June
30, 2002. The Company believes that its future success depends in large part
upon its continued ability to attract and retain highly skilled employees.

RISKS AND UNCERTAINTIES

The continuation or spread of the current economic uncertainty in key markets
would likely harm our operating results.

The Company sells products in many geographical regions throughout the world.
If economic conditions in any of these regions decline or continue to decline,
the demand for our products is likely to be reduced. Despite economic
uncertainty in Europe, we showed continued growth in the European market;
however a continuation of an economic downturn in any of our major markets
would likely harm our results of operations.

Foreign currency fluctuations and other risks related to international
operations may adversely affect our operating results.

The Company derived approximately 64% of our net sales from outside North
America in fiscal 2003 and expect to continue to derive the majority of net
sales from outside North America for the foreseeable future. Most of the
Companys sales outside North America are denominated in the local currency of
its customers. As a result, the U.S. dollar value of our net sales varies with
currency rate fluctuations. Significant changes in the value of the U.S.
dollar relative to certain foreign currencies could have a material adverse
effect on our results of operations. Tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, changes in political
environments, interruptions in overseas shipments and changes in tax laws may
also impact international sales negatively.

Fluctuation in worldwide demand for analytical instrumentation could affect the
Companys operating results.

The demand for analytical instrumentation products can fluctuate depending upon
capital expenditure cycles. Most companies consider the Companys
instrumentation products capital equipment; customers may be unable to secure
the necessary capital expenditure approvals due to general economic or customer
specific conditions. Significant fluctuations in demand could harm our results
of operations.

Fluctuations in the Companys quarterly operating results may cause our stock
price to decline.

A high proportion of the Companys costs are fixed due in part to our
significant sales, research and product development and manufacturing costs.
Small declines in revenue caused by fluctuations in currency rates, worldwide
demand for analytical instrumentation or other factors could disproportionately
affect our quarterly operating results, which may in turn cause our stock price
to decline.

If the Company does not introduce new products that are attractive to our
customers on a timely basis, our products may become obsolete.

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The Companys products are highly technical in nature. As a result, many of
the Companys products must be developed months or even years in advance of the
potential need by a customer. If the Company fails to introduce new products
and enhancements as demand arises or in advance of the competition, the
Companys products are likely to become obsolete over time, which would harm
operating results. Also, if the market is not receptive to newly developed
products, the Company may be unable to recover costs of research and product
development and marketing, and may fail to achieve material components of the
business plan.

The Companys revenues depend on successfully competing for market share.

The analytical instrumentation market is highly competitive and the Company
competes with many competitors on a local and international level that are
significantly larger than Dionex and have greater resources, including larger
sales forces and technical staff. Competitors may introduce more effective and
less costly products and, in doing so, make it difficult to acquire and retain
customers. If this occurs, the Companys market share may decline and
operating results could suffer.

The Companys ability to maintain inventories and meet customer demand for our
products is critical to our operating results.

Most raw materials, components and supplies purchased by the Company are
available from a number of suppliers. However, certain items are purchased
from limited or sole source suppliers and a disruption of these sources could
adversely affect our ability to ship products as needed. A prolonged inability
to obtain certain materials or components would likely reduce product
inventory, hinder sales and harm our reputation with customers.

The Company manufacture products in three sites in Germany, the Netherlands and
the United States. Any prolonged disruption to the operations at these
facilities, whether due to labor unrest, supplier issues, damage to the
physical plants or equipments or other reasons, could also adversely affect the
results of operations.

The Companys executive officers and other key employees are critical to our
business, they may not remain with us in the future and finding talented
replacements would be difficult.

The operations of Dionex require managerial and technical expertise. Each of
the executive officers and key employees located in the United States is
employed at will and may leave the employment of the Company at any time. In
addition, our headquarters are located in Sunnyvale, California, where the
demand for qualified personnel is extremely high and is likely to remain so for
the foreseeable future. As a result, competition for personnel is intense and
the turnover rate for qualified personnel is high. The loss of any of our
executive officers or key employees could cause us to incur increased operating
expenses and divert senior management resources in searching for replacements.
An inability to hire, train and retain sufficient numbers of qualified
employees would seriously affect our ability to conduct our business.

The success of Dionexs business is dependent in part on protection of
proprietary information and inventions; but obtaining and enforcing legal
protection of the Companys proprietary products, processes and technologies
can be difficult and expensive.

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Patent and trade secret protection is important to Dionex because developing
new technologies and products is time-consuming and expensive. The Company
owns many U.S. and foreign patents and intends to apply for additional patents
to cover our technology and products. The Company may be unable to obtain
issued patents from any pending or future patent applications that it owns.
The claims allowed under any issued patents may not be sufficiently broad to
protect our technology. Third parties may seek to challenge, circumvent or
invalidate issued patents that Dionex owns.

In addition to the Companys patents, we have a vast number of unpatented
proprietary products and know-how. The measures employed by the Company to
protect this technology, such as maintaining the confidentiality of proprietary
information and relying on trade secret laws, may be inadequate.

The Company may incur significant expense in any legal proceedings to protect
its proprietary rights.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following table lists the names and positions of all current executive
officers of the Company, and their ages as of August 19, 2003. Except as noted
below, there are no other family relationships between any director or
executive officer and any other director or executive officer of the
Registrant. Executive officers serve at the discretion of the Board of
Directors.

|                      |  |     |    |           |  |                                           
|--------------------- |  | --- | -- | --------- |  | ------------------------------------------
|Name                  |  | Age |    | Positions
|                      |  |     |    |          
|A. Blaine Bowman(1)   |  |     | 57 |           |  | Chairman of the Board                     
|                      |  |     |    |           |  |                                           
|Lukas Braunschweiler  |  |     | 47 |           |  | President and Chief Executive Officer     
|                      |  |     |    |           |  |                                           
|Nebojsa Avdalovic     |  |     | 68 |           |  | Vice President                            
|                      |  |     |    |           |  |                                           
|Kevin Chance          |  |     | 36 |           |  | Vice President                            
|                      |  |     |    |           |  |                                           
|Der-Min Fan           |  |     | 53 |           |  | Vice President                            
|                      |  |     |    |           |  |                                           
|Peter Jochum          |  |     | 52 |           |  | Vice President                            
|                      |  |     |    |           |  |                                           
|Craig A. McCollam     |  |     | 43 |           |  | Vice President and
Chief
Financial Officer
|                      |  |     |    |           |  |                                           
|Brent J. Middleton(1) |  |     | 46 |           |  | Vice President                            
|                      |  |     |    |           |  |                                           
|Christopher Pohl      |  |     | 52 |           |  | Vice President                            
|                      |  |     |    |           |  |                                           
|Jeffrey Thompson      |  |     | 47 |           |  | Vice President                            



| | (1) |  | Mr. Bowman and Mr. Middleton are cousins.
| | --- |  | -----------------------------------------

Mr. Bowman has served as the Chairman of the Board since August 2002. From
1980 until August 2002, he served as the Companys President and Chief
Executive Officer and as a director of the Company. Mr. Bowman is also a
director of Molecular Devices Corporation.

Dr. Braunschweiler has served as President and Chief Executive Officer since
August 2002. Previously, he served as Group Vice-President and Head of
Laboratory and Packaging Division of Mettler-Toledo, an analytical
instrumentation company, and held a variety of management positions at
Mettler-Toledo since 1995.

Dr. Avdalovic has served as Vice President and Chief Technology Officer for the
Company since June 2001. Previously, he served as Vice President, Research and
Development for the Company since August 1990.

Mr. Chance has served as Vice President of the Chemical Analysis Business Unit
(CABU) since April 2003. From 2000 to 2003 he served as CEO of the biochemical
company Aptus Pharmaceuticals, Inc. From 1995 through 2000 he served as a
business unit general manager and other various positions at Moore Products
Company, an information technology provider now part of Siemens Industrial
Automation.

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Ms. Fan has served as Vice President, Software Engineering for the Company
since April 2000. Prior to that, she served as Director of Software
Engineering and in various other capacities since joining the Company in 1983.

Dr. Jochum has served as Vice President, Life Sciences Business Unit (LSBU)
since October 2000. Prior to that, he served as Managing Director of Dionex
Softron since joining the Company in October 1998. Prior to joining the
Company, he served as Managing Director of Softron GmbH.

Mr. McCollam has served as Vice President and Chief Financial Officer since
October 1999. Prior to that, he served as Director of Finance and Corporate
Controller since joining the Company in 1993.

Mr. Middleton has served as Vice President, Sales, Service and Corporate
Marketing for the Company since July 1997. Prior to that, he served as
Director of North American Sales and Service and in various other capacities
since joining the Company in 1985.

Mr. Pohl rejoined the Company as Vice President, Research and Development in
June 2001. From March 2000 to June 2001, Mr. Pohl served as Vice President,
Research and Development of Ciphergen Biosystems, Inc., a provider of enabling
tools for proteomics. From 1981 to 2000, he served as Vice President,
Consumables and in various other capacities for the Company.

Mr. Thompson has served as Vice President, Hardware Engineering for the Company
since May 2001. Since joining the Company in 1981, he has served as Director
of Instrument Engineering and in various other capacities.




Item 2.    PROPERTIES

The Company owns nine buildings in Sunnyvale, California, providing 252,000
square feet of space utilized for administration, marketing, sales, service,
research and product development and manufacturing. The Company also owns a
20,000 square foot building utilized for sales, service and administration in
Idstein, Germany and a 45,000 square foot building for manufacturing and
administration in Germering, Germany. The Company also owns a 32,000 square
foot building in Osaka, Japan for sales, service and administration.

The Company leases sales and service offices in: Atlanta, Georgia; Houston,
Texas; Westmont, Illinois; Marlton, New Jersey; and in the United Kingdom,
France, Italy, the Netherlands, Belgium, Switzerland, Austria, Denmark, Japan,
China and Canada. In addition, the Company leases marketing and research and
product development offices in Salt Lake City, Utah. The Company also leases
manufacturing, marketing and research and product development offices in
Amsterdam, the Netherlands. The Companys facilities are well maintained,
adequate to conduct the Companys current business and substantially utilized
by the Company.




Item 3.    LEGAL PROCEEDINGS

None.

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Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter
ended June 30, 2003.




PART II




Item 5.    MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS

MARKET PRICE OF COMMON STOCK

The Companys common stock is traded in the over-the-counter market through the
Nasdaq National Market under the symbol DNEX. The following table sets forth,
for the periods indicated, the high and low sales prices as reported by NASDAQ.

|        |  |             |       |             |  |      |       |     |  |   |       |  |  |   |       | 
|------- |  | ----------- | ----- | ----------- |  | ---- | ----- | --- |  | - | ----- |  |  | - | ----- | 
|        |  | Fiscal 2003 |       | Fiscal 2002
|        |  |             |       |            
|Quarter |  | High        |       | Low         |  | High |       | Low
|        |  |             |       |             |  |      |       |    
|First   |  | $           | 28.72 |             |  | $    | 22.04 |     |  | $ | 30.69 |  |  | $ | 24.00 | 
|Second  |  | $           | 31.72 |             |  | $    | 25.50 |     |  | $ | 27.06 |  |  | $ | 23.10 | 
|Third   |  | $           | 33.58 |             |  | $    | 29.19 |     |  | $ | 27.23 |  |  | $ | 24.00 | 
|Fourth  |  | $           | 40.50 |             |  | $    | 32.02 |     |  | $ | 26.79 |  |  | $ | 23.26 | 

As of September 12, 2003 there were 1018 holders of record of the Companys
common stock as shown on the records of its transfer agent.

DIVIDENDS

As of September 12, 2003, the Company has paid no cash dividends on its common
stock and anticipates that for the foreseeable future it will continue to
retain its earnings for use in its business.

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Item 6. SELECTED CONSOLIDATED FINANCIAL DATA

Operating Information:

|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |        |        | 
|------------------------------------------------------------------------------------- | ------------------------------------------------ | ------------------------ | ------- | ------ | ------ | ---- | ------- | ------ | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|Years ended June 30                                                                   |                                                  | 2003                     |         | 2002   |        | 2001 |         | 2000   |        | 1999
|(In thousands, except per share amounts)                                              |                                                  |                          |         |        |        |      |         |        |        |     
|Net sales                                                                             |                                                  | $                        | 214,909 |        |        | $    | 182,434 |        |        | $    | 186,757 |        |        | $ | 179,529 |        |        | $ | 172,940 |       
|Cost of sales                                                                         |                                                  |                          | 73,273  |        |        |      | 63,740  |        |        |      | 64,071  |        |        |   | 56,462  |        |        |   | 55,216  |       
|Revaluation of acquired inventory                                                     |                                                  |                          |        |        |        |      |        |        |        |      | 121     |        |        |   |        |        |        |   | 1,952   |       
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Gross profit                                                                          |                                                  |                          | 141,636 |        |        |      | 118,694 |        |        |      | 122,565 |        |        |   | 123,067 |        |        |   | 115,772 |       
|Operating expenses:                                                                   |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                      | Selling, general and administrative              |                          |         | 76,929 |        |      |         | 65,126 |        |      |         | 63,443 |        |   |         | 58,196 |        |   |         | 53,974 |       
|                                                                                      | Research and product development                 |                          |         | 16,888 |        |      |         | 15,094 |        |      |         | 14,742 |        |   |         | 14,850 |        |   |         | 14,812 |       
|                                                                                      | Write-off of in-process research
and development |                          |         |       |        |      |         |       |        |      |         | 865    |        |   |         |       |        |   |         | 4,991  |       
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                      |                                                  | Total operating expenses |         |        | 93,817 |      |         |        | 80,220 |      |         |        | 79,050 |   |         |        | 73,046 |   |         |        | 73,777 | 
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Operating income                                                                      |                                                  |                          | 47,819  |        |        |      | 38,474  |        |        |      | 43,515  |        |        |   | 50,021  |        |        |   | 41,995  |       
|Other income                                                                          |                                                  |                          | 497     |        |        |      | 2,101   |        |        |      | 3,048   |        |        |   |        |        |        |   |        |       
|Write-off of a non-affiliated
investment                                              |                                                  |                          | (2,067  | )      |        |      |        |        |        |      |        |        |        |   |        |        |        |   |        |       
|Interest income                                                                       |                                                  |                          | 504     |        |        |      | 528     |        |        |      | 850     |        |        |   | 844     |        |        |   | 917     |       
|Interest expense                                                                      |                                                  |                          | (192    | )      |        |      | (203    | )      |        |      | (353    | )      |        |   | (431    | )      |        |   | (301    | )     
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Income before taxes on income and
cumulative effect of change in
accounting principle |                                                  |                          | 46,561  |        |        |      | 40,900  |        |        |      | 47,060  |        |        |   | 50,434  |        |        |   | 42,611  |       
|Taxes on income                                                                       |                                                  |                          | 15,133  |        |        |      | 13,292  |        |        |      | 15,295  |        |        |   | 16,391  |        |        |   | 14,137  |       
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Net income before effect of
change in accounting principle                            |                                                  |                          | 31,428  |        |        |      | 27,608  |        |        |      | 31,765  |        |        |   | 34,043  |        |        |   | 28,474  |       
|Cumulative effect of change in
accounting principle, net of tax                       |                                                  |                          |        |        |        |      |        |        |        |      | 359     |        |        |   |        |        |        |   |        |       
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Net income                                                                            |                                                  | $                        | 31,428  |        |        | $    | 27,608  |        |        | $    | 31,406  |        |        | $ | 34,043  |        |        | $ | 28,474  |       
|                                                                                      |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Basic earnings per share                                                              |                                                  | $                        | 1.49    |        |        | $    | 1.27    |        |        | $    | 1.42    |        |        | $ | 1.54    |        |        | $ | 1.28    |       
|Diluted earnings per share                                                            |                                                  | $                        | 1.45    |        |        | $    | 1.24    |        |        | $    | 1.37    |        |        | $ | 1.46    |        |        | $ | 1.20    |       
|Shares used in computing earnings per
share amounts:                                  |                                                  |                          |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                      | Basic                                            |                          |         | 21,057 |        |      |         | 21,705 |        |      |         | 22,137 |        |   |         | 22,174 |        |   |         | 22,287 |       
|                                                                                      | Diluted                                          |                          |         | 21,632 |        |      |         | 22,184 |        |      |         | 22,895 |        |   |         | 23,364 |        |   |         | 23,640 |       

All share and per share amounts have been restated to reflect the two-for-one
split of the Companys common stock effective June 5, 1998. The Company has
paid no cash dividends.

Balance sheet information:

|                     |  |      |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|-------------------- |  | ---- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|At June 30           |  | 2003 |         | 2002 |  | 2001 |         | 2000 |  | 1999
|(In thousands)       |  |      |         |      |  |      |         |      |  |     
|Working capital      |  | $    | 87,050  |      |  | $    | 62,539  |      |  | $    | 68,071  |  |  | $ | 48,390  |  |  | $ | 34,755  | 
|Total assets         |  |      | 213,100 |      |  |      | 180,718 |      |  |      | 173,682 |  |  |   | 163,153 |  |  |   | 146,674 | 
|Long-term debt       |  |      | 500     |      |  |      | 1,002   |      |  |      | 966     |  |  |   |        |  |  |   | 990     | 
|Stockholders equity |  |      | 159,280 |      |  |      | 131,707 |      |  |      | 129,858 |  |  |   | 118,442 |  |  |   | 95,738  | 

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Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table summarizes the consolidated statement of income items as a
percentage of sales.

|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |      |      | 
|--------------------------------------------------------------------------- | ------------------------------------------------ | ------------------------ | ----- | ---- | ---- | ---- | ----- | ---- | ---- |  | ----- | ---- | ---- | 
|Years ended June 30                                                         |                                                  | 2003                     |       | 2002 |      | 2001
|                                                                            |                                                  |                          |       |      |      |     
|Net sales                                                                   |                                                  |                          | 100.0 | %    |      |      | 100.0 | %    |      |  | 100.0 | %   
|Cost of sales                                                               |                                                  |                          | 34.1  |      |      |      | 34.9  |      |      |  | 34.3  |     
|Revaluation of acquired inventory                                           |                                                  |                          |      |      |      |      |      |      |      |  | 0.1   |     
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|Gross profit                                                                |                                                  |                          | 65.9  |      |      |      | 65.1  |      |      |  | 65.6  |     
|Operating expenses:                                                         |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|                                                                            | Selling, general and administrative              |                          |       | 35.8 |      |      |       | 35.7 |      |  |       | 34.0 |     
|                                                                            | Research and product development                 |                          |       | 7.9  |      |      |       | 8.3  |      |  |       | 7.9  |     
|                                                                            | Write-off of in-process research
and development |                          |       |     |      |      |       |     |      |  |       | 0.4  |     
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|                                                                            |                                                  | Total operating expenses |       |      | 43.7 |      |       |      | 44.0 |  |       |      | 42.3 | 
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|Operating income                                                            |                                                  |                          | 22.3  |      |      |      | 21.1  |      |      |  | 23.3  |     
|Interest income, net                                                        |                                                  |                          | 0.1   |      |      |      | 0.2   |      |      |  | 0.3   |     
|Write-off of a non-affiliate investment                                     |                                                  |                          | (1.0  | )    |      |      |      |      |      |  |      |     
|Other income                                                                |                                                  |                          | 0.2   |      |      |      | 1.1   |      |      |  | 1.6   |     
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|Income before taxes and cumulative
effect of change in accounting
principle |                                                  |                          | 21.6  |      |      |      | 22.4  |      |      |  | 25.2  |     
|Taxes on income                                                             |                                                  |                          | 7.0   |      |      |      | 7.3   |      |      |  | 8.2   |     
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|Net income before cumulative effect of
change in accounting principle       |                                                  |                          | 14.6  |      |      |      | 15.1  |      |      |  | 17.0  |     
|Cumulative effect of change in
accounting principle                         |                                                  |                          |      |      |      |      |      |      |      |  | 0.2   |     
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     
|Net income                                                                  |                                                  |                          | 14.6  | %    |      |      | 15.1  | %    |      |  | 16.8  | %   
|                                                                            |                                                  |                          |       |      |      |      |       |      |      |  |       |     

Net Sales and Gross ProfitIn fiscal 2003, Dionex reported sales of $214.9
million, an increase of 18% compared with the $182.4 million reported in fiscal
2002. Sales in fiscal 2001 were $186.8 million. The Company is subject to the
effects of foreign currency fluctuations that can have an impact on sales and
gross profits. Currency fluctuations increased sales by 7% in fiscal 2003 and
decreased sales by 1% in fiscal 2002 and 5% in fiscal 2001.

Sales in fiscal 2003 grew in all regions. Sales growth in our European market
was in the mid-twenties and sales in our Japanese market increased by
approximately 20%; both were aided in part by currency fluctuations. Sales in
North America grew in the high-single digits. Sales in fiscal 2002 grew in our
European and distributor markets but declined in North America and Japan due to
weak economic conditions.

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Sales outside North America accounted for 64% of net sales in fiscal 2003, 61%
in fiscal 2002 and 60% in fiscal 2001. The Company sells directly through its
sales forces in the United Kingdom, Germany, Italy, France, the Netherlands,
Belgium, Switzerland, Austria, Denmark, Japan, China, Canada and the United
States. Direct sales accounted for 92% of consolidated net sales in fiscal
2003, compared with 90% in fiscal 2002, and 88% in fiscal 2001. International
distributors and representatives in Europe, Asia and other international
markets accounted for the balance of the consolidated net sales. There were no
significant price changes during the three-year period.

Gross profit in fiscal 2003 was 65.9% compared with 65.1% in fiscal 2002 and
65.6% in fiscal 2001. Gross profit in fiscal 2003 was higher due to the effects
of favorable currency fluctuations and product mix. Gross profit in fiscal 2002
was lower due to adverse foreign currency fluctuations and product mix.

Operating ExpensesSelling, general and administrative (SG&A) expenses as a
percentage of net sales were 35.8% in fiscal 2003 compared with 35.7% in fiscal
2002 and 34.0% in fiscal 2001. SG&A expenses were $76.9 million in fiscal 2003,
an increase of 15% from $65.1 million in fiscal 2002. SG&A expenses in fiscal
2002 increased 3% from $63.4 million in fiscal 2001. The increase in SG&A
expenses in fiscal 2003 was attributable to the introduction and marketing
activities of our RFIC products, continued expansion in China, further
development of our sales and service organizations in Europe and currency
fluctuations. SG&A expenses were higher in fiscal 2002 than those in fiscal
2001 due to the inclusion of costs for the entire year of LC Packings
Nederlands B.V. and LC Packings (U.S.A.), Inc. (collectively referred to as LC
Packings). The Company anticipates that SG&A expenses will be in the range of
33% to 36% of sales in the near term.

Research and product development expenses were 7.9% of net sales in fiscal 2003
compared with 8.3% in fiscal 2002 and 7.9% in fiscal 2001. Research and product
development expenses in fiscal 2003 of $16.9 million were up $1.8 million
compared with $15.1 million in fiscal 2002. Research and development expenses
in fiscal 2002 of $15.1 million were up $400,000 compared with $14.7 million in
fiscal 2001. Although research and product development expenses decreased as a
percentage of sales in fiscal 2003 from the fiscal 2002 level, absolute dollars
increased due to our continued investments in our HPLC business. Research and
product development spending depends on both the breadth of the Companys
research and product development efforts and the stage of specific product
development projects. The Company anticipates that the level of research and
product development expenses will remain in the range of 7% to 10% of sales in
the near term.

Write-off of In-Process Research and Development AcquiredWrite-off of
in-process research and development acquired represents nonrecurring charges of
$865,000, associated with the acquisition of LC Packings in October 2000 for
technology that had not reached technological feasibility and had no
alternative future use.

The valuation of intangibles related to the acquisition was based upon
managements estimates of after-tax net cash flow using a 25% discount rate.
The valuation gave consideration to the following: (i) comprehensive due
diligence concerning all potential intangibles; (ii) the value of developed and
core technology, ensuring that the relative allocation to core technology and
in-process research and development were consistent with the contribution of
each to the final product; and (iii) the allocation to in-process research and
development based upon a calculation that only considered the efforts completed
as of the date of the transaction, and only the cash flows associated with one
generation of products currently in-process. The valuations were performed by
an independent

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valuation group and were deemed reasonable in light of all the
quantitative and qualitative information available.

The write-off of in-process research and development related to projects that
were in development, had not reached technological feasibility, had no
alternative future use and for which successful development was uncertain.

For LC Packings, three of the in-process hardware projects were to design and
build new liquid chromatography modules. Two projects were to design and build
new columns. A sixth project was a new generation of software. The columns and
software projects were completed in fiscal 2002. One hardware project was
completed in fiscal 2003; the remaining two hardware projects were combined and
will be released in fiscal 2004. At the time of the acquisition, the estimated
cost to complete these products was $1.3 million. Costs incurred by the Company
through June 30, 2003 were approximately $1.5 million. The Company anticipates
remaining costs for this product to be less than $1.0 million.

There can be no assurance that the Company will be able to complete the
development of this product on a timely basis. Failure to complete this product
could have an adverse impact on the Companys financial condition or results of
operations.

Other IncomeOther income in fiscal 2003, 2002 and 2001 of $497,000, $2.1
million and $3.0 million, respectively, primarily consisted of the gain on sale
of marketable equity securities.

Write-off of a Non-Affiliate InvestmentDuring fiscal 2003, the Company wrote
off an investment in an unaffiliated entity, PharmaSeq, Inc., in the amount of
$2.1 million. Management determined that the decline in value of the
investment, accounted for under the cost method, was other than temporary.

Interest IncomeInterest income in fiscal 2003 of $504,000 was lower than the
$528,000 reported for fiscal 2002 and the $850,000 reported in fiscal 2001. The
decrease in both periods was due to lower interest rates despite higher average
cash balances.

Interest ExpenseInterest expense in fiscal 2003 of $192,000 was lower than the
$203,000 reported in fiscal 2002 and the $353,000 reported in fiscal 2001. The
decrease in both periods was due to lower average borrowings. In fiscal 2001,
interest expense was $353,000 due to borrowings related to the acquisition of
LC Packings. In fiscal 2001, the Company capitalized $221,000 of interest
related to the construction of a building in Japan.

Taxes on IncomeThe Companys effective tax rate was 32.5% for fiscal 2003,
2002 and 2001. The Companys effective tax rate is affected by the mix of
taxable income among the various tax jurisdictions in which the Company does
business. The Company anticipates that its effective tax rate will be in the
range of 32% to 35% in the near term.

Cumulative Effect of Change in Accounting PrincipleEffective July 1, 2000, the
Company adopted Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements (SAB 101). SAB 101 outlines the basic criteria that must
be met to recognize revenue and provides guidance for disclosures related to
revenue recognition policies.

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The Companys previous policy was to recognize product installation revenue
upon shipment and to accrue product installation costs at the time revenue was
recognized. Upon adoption of SAB 101, the Company defers installation revenue
until installation has been completed and recognizes installation costs as
incurred.

The cumulative effect of the change, totaling $359,000, is shown as a one-time
charge to income in the consolidated statement of income for fiscal 2001.

Earnings per ShareDiluted earnings per share were $1.45 for fiscal 2003
compared with $1.24 for fiscal 2002 and $1.37 for fiscal 2001. The number of
shares used in computing diluted and basic earnings per share are affected by
the Companys stock repurchase program.

Liquidity and Capital ResourcesAt June 30, 2003, the Company had cash and cash
equivalents of $46.8 million. The Companys working capital was $87.1 million
at June 30, 2003, compared with $62.5 million at June 30, 2002. Working capital
increased in fiscal 2003 primarily due to the increase in cash and equivalents
and inventories offset with an increase in accrued liabilities. In addition,
the Company repurchased 722,700 shares of its common stock for $22.5 million in
fiscal 2003 under its stock repurchase program. The Company repurchased
1,333,870 shares for $34.5 million in fiscal 2002 and 361,000 shares for $10.5
million in fiscal 2001.

Cash generated by operating activities was $43.4 million in fiscal 2003,
compared with $41.8 million in fiscal 2002 and $27.3 million in fiscal 2001.
The increase
in operating cash flows in fiscal 2003 was primarily due to improvements in net
income, tax benefits related to stock option plans and accrued liabilities. The
increase in operating cash flows for fiscal 2002 was primarily due to
improvements in inventory and accounts receivable as compared with fiscal 2001,
partially offset by lower net income.

Cash used for investing activities was $6.3 million in fiscal 2003, compared
with $5.4 million in fiscal 2002 and $15.8 million in fiscal 2001. The increase
in cash used for investing activities in fiscal 2003 was primarily attributable
to a decrease in the proceeds from sales of marketable securities. Capital
expenditures in fiscal 2003 decreased by $1.1 million to $3.7 million, compared
with $4.8 million in fiscal 2002 and $7.1 million in fiscal 2001. The higher
level of capital expenditures in fiscal 2001 was due primarily to the
construction of a building in Japan. Additionally, cash used for investing
activities decreased due to a decline in cash used as part of the acquisition
of LC Packings to $2.5 million in fiscal 2002 from $12.4 million in fiscal
2001.

Cash used for financing activities was $15.6 million in fiscal 2003, compared
with $31.3 million in fiscal 2002 and $3.7 million in fiscal 2001. Financing
activities for all three years consisted primarily of common stock repurchases
as discussed above. Additionally, in connection with the construction of the
building in Japan, the Company borrowed $2.7 million in long-term borrowings in
fiscal 2001.

At June 30, 2003, the Company had outstanding borrowings of $834,000 from bank
lines of credit and $1.0 million from a foreign denominated mortgage note
payable. At June 30, 2003 bank lines of credit totaled $31.8 million. The
Company believes its cash flow from operations, its existing cash and cash
equivalents and its bank lines of credit will be adequate to meet its cash
requirements for the near term. The impact of inflation on the Companys
financial position and results of operations was not significant during any of
the periods presented.

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The following summarizes our contractual obligations at June 30, 2003, and the
effect such obligations are expected to have on our liquidity and cash flows in
future periods (in thousands):

|                              |  |                        |        |        |  |           |       |       |  |       |       |         |  |   |       |  |  |   |       | 
|----------------------------- |  | ---------------------- | ------ | ------ |  | --------- | ----- | ----- |  | ----- | ----- | ------- |  | - | ----- |  |  | - | ----- | 
|                              |  | Payments Due by Period
|                              |  |                       
|                              |  |                        |        |        |  | Less Than |       | 1-3   |  | 4-5   |       | After 5
|Contractual Obligations       |  | Total                  |        | 1 Year |  | Years     |       | Years |  | Years
|                              |  |                        |        |        |  |           |       |       |  |      
|Lines of Credit               |  | $                      | 834    |        |  | $         | 834   |       |  | $     |      |         |  | $ |      |  |  | $ |      | 
|Long Term Debt                |  |                        | 1,000  |        |  |           | 500   |       |  |       | 500   |         |  |   |      |  |  |   |      | 
|Operating Lease Obligations   |  |                        | 16,358 |        |  |           | 3,582 |       |  |       | 5,107 |         |  |   | 2,749 |  |  |   | 4,920 | 
|Other Obligations             |  |                        | 6,500  |        |  |           | 3,000 |       |  |       | 3,500 |         |  |   |      |  |  |   |      | 
|                              |  |                        |        |        |  |           |       |       |  |       |       |         |  |   |       |  |  |   |       | 
|Total Contractual
Commitments |  | $                      | 24,692 |        |  | $         | 7,916 |       |  | $     | 9,107 |         |  | $ | 2,749 |  |  | $ | 4,920 | 
|                              |  |                        |        |        |  |           |       |       |  |       |       |         |  |   |       |  |  |   |       | 

At June 30, 2003 and 2002, the Company had recorded $6.5 million and $5.7
million, respectively, of Other Obligations in its consolidated financial
statements. Other Obligations relate to the earn-out from the acquisition of LC
Packings.

AcquisitionIn October 2000, the Company purchased all of the issued and
outstanding shares of LC Packings for total consideration, including
acquisition costs, of approximately $12.4 million. In addition, the
shareholders of LC Packings had the right to receive additional purchase
consideration to be paid in varying amounts at the end of calendar years 2000
through 2004, in the event LC Packings achieved certain revenue goals. At the
end of fiscal 2003, the entire contingent purchase consideration of $13.0
million had been earned and was recorded as goodwill bringing the total
purchase price to $25.4 million. Payments of $6.5 million have been made for
the additional purchase consideration. The remaining $6.5 million will be paid
after the 2003 and 2004 calendar years.

The acquisition was accounted for by the purchase method and its results of
operations have been included in the Companys results of operations since the
date of the acquisition.

In connection with the acquisition, the Company recorded nonrecurring charges
of $865,000 in fiscal 2001 for the write-off of acquired in-process research
and development. In addition, cost of sales in fiscal 2001 included $121,000
related to the sale of acquired inventory which had been revalued as a part of
the
purchase accounting.

Risks and UncertaintiesThe Company is subject to certain risks and
uncertainties and believes that changes in any of the following areas could
have a material adverse effect on the Companys future financial position or
results of operations. Such factors include, among others: the continuation or
spread of the current economic uncertainty; risks related to international
operations, including foreign currency fluctuations; the importance of meeting
customer demand for new products; competition in the analytical instrumentation
market; our ability to maintain inventories; the importance of attracting and
retaining key personnel; and our ability to protect our proprietary
information.

Effect of New Accounting StandardsIn October 2001, the Financial Accounting
Standards Board issued SFAS No. 144, Impairment on Disposal of Long-Lived
Assets, effective for fiscal years beginning after December 31, 2001. Under
SFAS No. 144, the criteria required for classifying an asset as held-for-sale
have been significantly changed. Assets held-for-sale are stated at the lower
of their fair

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values or carrying amounts, and depreciation is no longer
recognized. In addition, the expected future operating losses from discontinued
operations will be displayed in discontinued operations in the period in which
the losses are incurred rather than as of the measurement date. More
dispositions will qualify for discontinued operations treatment in the income
statement under the new rules. The Company has determined that adoption of this
standard had no material impact on its consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure. SFAS No. 148 amends FASB Statement No.
123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends
the disclosure requirements of SFAS 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. SFAS No. 148 is effective for fiscal years ending after December 14,
2002. The Company has adopted the disclosure provisions of SFAS No. 148 for the
quarterly period beginning on January 1, 2003. The Company does not expect to
adopt the fair value based method of accounting for stock-based employee
compensation; and therefore, adoption of SFAS No. 148 is not expected to have
an impact on the financial position, results of operations or cash flows of the
Company.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. The Interpretation elaborates
on the existing disclosure requirements for most guarantees, including loan
guarantees such as standby letters of credit. It also clarifies that at the
time a company issues a guarantee, the company must recognize an initial
liability for
the fair value, or market value, of the obligations it assumes under the
guarantee and must disclose that information in its interim and annual
financial statements. The provisions related to recognizing a liability at
inception of the guarantee for the fair value of the guarantors obligations
does not apply to product warranties or to guarantees accounted for as
derivatives. The initial recognition and initial measurement provisions apply
on a prospective basis to guarantees issued or modified after December 31,
2002.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective immediately for all new variable interest entities created or
acquired after January 31, 2003. For variable interest entities created or
acquired prior to February 1, 2003, the provision of FIN 46 must be applied for
the first interim or annual period beginning after June 15, 2003. The adoption
of FIN 46 to date has not had any impact on our consolidated financial
statements.

Forward-Looking StatementsExcept for historical information contained herein,
the above discussion and the letter to stockholders contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities and Exchange Act of 1934, as amended and
the Private Securities Litigation Reform Act of 1995, and are made under the
safe harbor provisions thereof. Such statements are subject to certain risks
and uncertainties

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that could cause actual results to differ materially from
those discussed here. Such risk and uncertainties include: general economic
conditions; foreign currency fluctuations; competition from other products;
existing product obsolescence; fluctuation in worldwide demand for analytical
instrumentation; new product development, including market receptiveness, the
ability to manufacture products efficiently, on a timely basis, at a reasonable
cost and in sufficient volume; the ability to attract and retain talented
employees and other risks as described in more detail within this report.
Readers are cautioned not to place undue reliance on these forward-looking
statements that reflect managements analysis only as of the date hereof. The
Company undertakes no obligation to publicly release the results of any
revision to these forward-looking statements that may be made to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

SummaryThe preparation of consolidated financial statements requires the
Company to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. The Company evaluates its estimates on an
on-going basis, including those related to product returns and allowances, bad
debts, inventory valuation, goodwill and intangible assets, income taxes,
warranty and installation provisions, and contingencies.

The Company bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates. The Company believes the
following critical accounting policies affect its more significant judgments
and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition PolicyWe derive revenue from the sale of products and
from services rendered to our customers, including installation, training and
maintenance. Generally, our products contain embedded software that is
essential to their functionality.

We recognize revenue in accordance with Staff Accounting Bulletin No. 101 and
Statement of Position 97-2, Software Revenue Recognition, (SOP 97-2), when
persuasive evidence of an arrangement exists, the product has been delivered,
the price is fixed or determinable, collection is probable and vendor specific
objective evidence exists to allocate revenue to the various elements of the
arrangement. Vendor specific objective evidence is based on the price charged
when an element is sold separately or, if not yet sold separately, when the
price is established by authorized management. Delivery is generally considered
to have occurred when shipped.

We sell our equipment through our direct sales force and through distributors
and resellers. Sales through distributors and resellers are recognized as
revenue upon sale to the distributor or reseller as these sales are considered
to be final and no right of return or price protection exists. Customer
acceptance is generally limited to performance under our published product
specifications. When additional customer acceptance conditions apply, all
revenue related to the sale is deferred until acceptance is obtained. Our
equipment typically includes a one-year

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warranty. The estimated cost of product
warranty claims is accrued at the time the sale is recognized, based on
historical experience.

Installation and training services are not considered to be essential to the
functionality of our products, and revenue related to these items is recognized
when the services are completed. We recognize maintenance fees ratably over the
period of the related maintenance contract. Maintenance consists of product
repair services, unspecified software upgrades and telephone support.

Loss Provisions on Accounts Receivable and InventoryWe maintain allowances for
doubtful accounts for estimated losses resulting from the inability of
customers to make required payments. If the financial condition of our
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required. We assess collectibility
based on a number of factors including, but not limited to, past transaction
history with the customer, the credit-worthiness of the customer, independent
credit reports, industry trends and the macro-economic environment. Sales
returns and allowances are estimates of future product returns related to
current period revenue. Material differences may result in the amount and
timing of our revenue for any period. Historically, we have not experienced
significant sales returns or bad debt losses.

We value our inventory at the lower of standard cost (which approximates costs
on a first-in, first-out basis) or market. We estimate revisions to inventory
valuations based on technical obsolescence, historical demand, projections of
future demand and industry and market conditions. If actual future demand or
market conditions are less favorable than those projected by management,
additional valuation provisions may be required. If demand or market conditions
are more favorable than projected, high margins could be realized to the extent
inventory is sold which had previously been written down.

Long-Lived Assets, Intangible Assets with Finite Lives and GoodwillWe assess
the impairment of long-lived assets, intangible assets with finite lives and
goodwill whenever events or changes in circumstances indicate that the carrying
value may not be recoverable. In addition, we assess goodwill for impairment at
least annually. Factors we consider important which could trigger an impairment
review include but are not limited to the following:



| |  |  | significant underperformance relative to historical or
projected future operating results;
| | - |  | ------------------------------------------------------------------------------------------
|
| |  |  | significant negative industry or economic trends; and                                     
|
| |  |  | significant changes or developments in strategic technology.                              

When we determine that the carrying value of long-lived assets and intangible
assets with finite lives may not be recoverable based upon the existence of one
or more of the above or other indicators, we measure any impairment based on a
projected discounted cash flow method using a discount rate determined by our
management to be commensurate with the risk inherent in our current business
model. Goodwill is tested for impairment by comparing the fair values of
related reporting units to their carrying values. As of July 1, 2001, the
Company adopted Statement of Financial Accounting Standard No. 142, Goodwill
and Other Intangible Assets (SFAS No. 142) and as a result, we ceased to
amortize approximately $13.2 million of goodwill at June 30, 2001. In lieu of
amortization, we are required to perform an impairment review at least
annually.

WarrantyProduct warranties are recorded at the time revenue is recognized for
certain product shipments based on historical experience. While the Company

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engages in extensive product quality programs and processes, our warranty
obligation is affected by product failure rates, material usage and service
costs incurred in correcting a product failure. Should actual product failure
rates, material usage or service costs differ from our previous estimates,
revisions to the estimated warranty liability would be required.

Taxes on IncomeAs part of the process of preparing our consolidated financial
statements, we are required to estimate our income taxes in each of the
jurisdictions in which we operate. This process involves estimating our actual
current tax exposure together with assessing temporary differences resulting
from differing treatment of items, such as depreciation, amortization and
inventory reserves, for tax and accounting purposes. These differences result
in deferred tax assets and liabilities, which are included within our
consolidated balance sheets. We must then assess the likelihood that our
deferred tax assets will be recovered from future taxable income and, to the
extent we believe that recovery is not likely, we must establish a valuation
allowance. In the event that actual results differ from these estimates, we may
need to revise the valuation allowance, which could materially impact our
financial position and results of operations.




Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks from fluctuations in foreign currency
exchange rates, interest rates and stock prices of marketable equity
securities. With the exception of the stock price volatility of our marketable
equity securities, we manage our exposure to these and other risks through our
regular operating and financing activities and, when appropriate, through our
hedging activities. Our policy is not to use hedges or other derivative
financial instruments for speculative purposes. We deal with a diversified
group of major financial institutions to limit the risk of nonperformance by
any one institution on any financial instrument. Separate from our financial
hedging activities, material changes in foreign exchange rates, interest rates
and, to a lesser extent, commodity prices could cause significant changes in
the costs to manufacture and deliver our products and in our customers buying
practices. We have not substantially changed our risk management practices
during fiscal 2003 and do not currently anticipate significant changes in
financial market risk exposures in the near future that would require us to
change our risk management practices.

Foreign Currency ExchangeRevenues generated from international operations are
generally denominated in foreign currencies. We enter into forward foreign
exchange contracts to hedge against fluctuations of intercompany account
balances. Market value gains and losses on these hedge contracts are
substantially offset by fluctuations in the underlying balances being hedged,
and the net financial impact is not expected to be material in future periods.
At June 30, 2003, the Company had forward exchange contracts to sell foreign
currencies totaling $19.1 million dollars, including approximately $10.6
million in Euros, $7.6 million in Japanese yen and $900,000 in Canadian
dollars. At June 30, 2002, the Company had forward exchange contracts to sell
foreign currencies totaling $16.9 million dollars, including approximately
$10.3 million in Euros, $4.8 million in Japanese yen, $593,000 in British
pounds, $469,000 in Swiss francs and $657,000 in Canadian dollars. The foreign
exchange contracts at the end of each fiscal year mature within the first
quarter of the following fiscal year. Additionally, contract values and fair
market values are the same. A sensitivity analysis assuming a hypothetical 10%
movement in foreign currency exchange rates applied to our hedging contracts
and underlying balances being hedged at June 30, 2003 and 2002,

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indicated that these market movements would not have a material effect on our
business, operating results or financial condition.

Foreign currency rate fluctuations can impact the U.S. dollar translation of
our foreign operations in our consolidated financial statements. Currency
fluctuations increased reported sales by 7% in fiscal 2003 and decreased
reported sales by 1% and 5% in fiscal 2002 and 2001, respectively.

Interest and Investment IncomeOur interest and investment income is subject to
changes in the general level of U.S. interest rates. Changes in U.S. interest
rates affect the interest earned on our cash equivalents and short-term
investments. A sensitivity analysis assuming a hypothetical 10% movement in
interest rates applied to our investment balances at June 30, 2003 and 2002,
indicated that such market movement would not have a material effect on our
business, operating results or financial condition. Actual gains or losses in
the future may differ materially from this analysis, depending on our actual
balances and changes in the timing and amount of interest rate movements.

Marketable Equity SecuritiesWe are exposed to market price risks on our
marketable equity securities. These investments are in publicly traded
companies in the laboratory analytical instruments sector. We do not attempt to
reduce or eliminate our market exposure on these securities. A 50% adverse
change in the equity price would result in an approximate $701,000 and $1.1
million decrease in the fair value of our marketable equity securities as of
June 30, 2003 and 2002, respectively.

Debt and Interest ExpenseA sensitivity analysis assuming a hypothetical 10%
movement in interest rates applied to our outstanding debt balance at June 30,
2003 and 2002, indicated that such market movement would not have a material
effect on our business, operating results or financial condition. Actual gains
or losses in the future may differ materially from this analysis, depending on
changes in the timing and amount of interest rate movements.




Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                                 |  |      |       | 
|------------------------------------------------------------------------------------------------ |  | ---- | ----- | 
|                                                                                                 |  | Page
|                                                                                                 |  |     
|FINANCIAL STATEMENTS                                                                             |  |      |       | 
|Independent Auditors Report                                                                     |  |      | 32    | 
|Consolidated Balance Sheets at June 30, 2003 and 2002                                            |  |      | 33    | 
|Consolidated Statements of Income for the years
ended June 30, 2003, 2002 and 2001               |  |      | 34    | 
|Consolidated Statements of Stockholders Equity for
the years ended June 30, 2003, 2002 and 2001 |  |      | 35    | 
|Consolidated Statements of Cash Flows for the years
ended June 30, 2003, 2002 and 2001           |  |      | 36    | 
|Notes to Consolidated Financial Statements                                                       |  |      | 37-51 | 

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INDEPENDENT AUDITORS REPORT

The Board of Directors and Stockholders, Dionex Corporation:

We have audited the accompanying consolidated balance sheets of Dionex
Corporation and its subsidiaries as of June 30, 2003 and 2002, and the related
consolidated statements of income, stockholders equity and cash flows for each
of the three years in the period ended June 30, 2003. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Dionex Corporation and its
subsidiaries at June 30, 2003 and 2002, and the results of their operations and
their cash flows for each of the three years in the period ended June 30, 2003
in conformity with accounting principles generally accepted in the United
States of America.

DELOITTE & TOUCHE LLP

San Jose, California
July 29, 2003

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CONSOLIDATED BALANCE SHEETS

|                                              |                                                                                                                                       |                            |         |        |         |   |         |        |         | 
|--------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                              |                                                                                                                                       |                            |         |       
|At June 30                                    |                                                                                                                                       | 2003                       |         | 2002  
|(In thousands, except per share amounts)      |                                                                                                                                       |                            |         |       
|ASSETS                                        |                                                                                                                                       |                            |         |        |         |   |         |       
|Current assets:                               |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              | Cash and equivalents                                                                                                                  |                            | $       | 46,831 |         |   | $       | 22,169 |        
|                                              | Marketable equity securities                                                                                                          |                            |         | 1,402  |         |   |         | 2,281  |        
|                                              | Accounts receivable (net of allowance for doubtful
accounts of $1,275 in 2003 and $989 in 2002)                                       |                            |         | 46,613 |         |   |         | 45,139 |        
|                                              | Inventories                                                                                                                           |                            |         | 25,462 |         |   |         | 22,410 |        
|                                              | Deferred taxes                                                                                                                        |                            |         | 9,612  |         |   |         | 7,756  |        
|                                              | Prepaid expenses and other                                                                                                            |                            |         | 2,329  |         |   |         | 2,634  |        
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              |                                                                                                                                       | Total current assets       |         |        | 132,249 |   |         |        | 102,389 | 
|Property, plant and equipment, net            |                                                                                                                                       |                            | 45,436  |        |         |   | 44,895  |       
|Goodwill                                      |                                                                                                                                       |                            | 24,261  |        |         |   | 19,549  |       
|Intangible assets, net                        |                                                                                                                                       |                            | 4,595   |        |         |   | 5,506   |       
|Other assets                                  |                                                                                                                                       |                            | 6,559   |        |         |   | 8,379   |       
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              |                                                                                                                                       | $                          | 213,100 |        |         | $ | 180,718 |       
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       
|LIABILITIES AND STOCKHOLDERS EQUITY          |                                                                                                                                       |                            |         |        |         |   |         |       
|Current liabilities:                          |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              | Notes payable to banks                                                                                                                |                            | $       | 1,334  |         |   | $       | 2,503  |        
|                                              | Accounts payable                                                                                                                      |                            |         | 5,443  |         |   |         | 5,227  |        
|                                              | Accrued liabilities                                                                                                                   |                            |         | 29,045 |         |   |         | 24,306 |        
|                                              | Income taxes payable                                                                                                                  |                            |         | 6,189  |         |   |         | 4,902  |        
|                                              | Accrued product warranty                                                                                                              |                            |         | 3,188  |         |   |         | 2,912  |        
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              |                                                                                                                                       | Total current liabilities  |         |        | 45,199  |   |         |        | 39,850  | 
|Deferred taxes                                |                                                                                                                                       |                            | 4,107   |        |         |   | 4,949   |       
|Long-term debt                                |                                                                                                                                       |                            | 500     |        |         |   | 1,002   |       
|Other long-term liabilities                   |                                                                                                                                       |                            | 4,014   |        |         |   | 3,210   |       
|Commitments 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: 20,933,913 in 2003 and 21,089,372
in 2002) |                            |         | 77,395 |         |   |         | 67,626 |        
|                                              | Retained earnings                                                                                                                     |                            |         | 78,774 |         |   |         | 67,439 |        
|                                              | Accumulated other comprehensive gain/(loss)                                                                                           |                            |         | 3,111  |         |   |         | (3,358 | )      
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              |                                                                                                                                       | Total stockholders equity |         |        | 159,280 |   |         |        | 131,707 | 
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       
|                                              |                                                                                                                                       | $                          | 218,100 |        |         | $ | 180,718 |       
|                                              |                                                                                                                                       |                            |         |        |         |   |         |       

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME

|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |        |        | 
|--------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------------ | ------- | ------ | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                                      |                                                                   |                          |         |        |        |     
|Years ended June 30                                                   |                                                                   | 2003                     |         | 2002   |        | 2001
|(In thousands, except per share amounts)                              |                                                                   |                          |         |        |        |     
|Net sales                                                             |                                                                   | $                        | 214,909 |        |        | $    | 182,434 |        |        | $ | 186,757 |       
|Cost of sales                                                         |                                                                   |                          | 73,273  |        |        |      | 63,740  |        |        |   | 64,071  |       
|Revaluation of acquired inventory                                     |                                                                   |                          |        |        |        |      |        |        |        |   | 121     |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Gross profit                                                          |                                                                   |                          | 141,636 |        |        |      | 118,694 |        |        |   | 122,565 |       
|Operating expenses:                                                   |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|                                                                      | Selling, general and administrative                               |                          |         | 76,929 |        |      |         | 65,126 |        |   |         | 63,443 |       
|                                                                      | Research and product development                                  |                          |         | 16,888 |        |      |         | 15,094 |        |   |         | 14,742 |       
|                                                                      | Write-off of in-process research and development                  |                          |         |       |        |      |         |       |        |   |         | 865    |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|                                                                      |                                                                   | Total operating expenses |         |        | 93,817 |      |         |        | 80,220 |   |         |        | 79,050 | 
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Operating income                                                      |                                                                   |                          | 47,819  |        |        |      | 38,474  |        |        |   | 43,515  |       
|Other income                                                          |                                                                   |                          | 497     |        |        |      | 2,101   |        |        |   | 3,048   |       
|Write-off of a non-affiliate investment                               |                                                                   |                          | (2,067  | )      |        |      |        |        |        |   |        |       
|Interest income                                                       |                                                                   |                          | 504     |        |        |      | 528     |        |        |   | 850     |       
|Interest expense                                                      |                                                                   |                          | (192    | )      |        |      | (203    | )      |        |   | (353    | )     
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Income before taxes on income                                         |                                                                   |                          | 46,561  |        |        |      | 40,900  |        |        |   | 47,060  |       
|Taxes on income                                                       |                                                                   |                          | 15,133  |        |        |      | 13,292  |        |        |   | 15,295  |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Net income before cumulative effect of
change in accounting principle |                                                                   |                          | 31,428  |        |        |      | 27,608  |        |        |   | 31,765  |       
|Cumulative effect of change in
accounting principle                   |                                                                   |                          |        |        |        |      |        |        |        |   | 359     |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Net income                                                            |                                                                   | $                        | 31,428  |        |        | $    | 27,608  |        |        | $ | 31,406  |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Basic earnings per share:                                             |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|                                                                      | Income before cumulative effect of
change in accounting principle |                          | $       | 1.49   |        |      | $       | 1.27   |        |   | $       | 1.43   |       
|                                                                      | Cumulative effect of change in
accounting principle               |                          |         |       |        |      |         |       |        |   |         | (0.01  | )     
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Net income                                                            |                                                                   | $                        | 1.49    |        |        | $    | 1.27    |        |        | $ | 1.42    |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Diluted earnings per share:                                           |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|                                                                      | Income before cumulative effect of
change in accounting principle |                          | $       | 1.45   |        |      | $       | 1.24   |        |   | $       | 1.39   |       
|                                                                      | Cumulative effect of change in
accounting principle               |                          |         |       |        |      |         |       |        |   |         | (0.02  | )     
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Net income                                                            |                                                                   | $                        | 1.45    |        |        | $    | 1.24    |        |        | $ | 1.37    |       
|                                                                      |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|Shares used in computing earnings per share:                          |                                                                   |                          |         |        |        |      |         |        |        |   |         |       
|                                                                      | Basic                                                             |                          |         | 21,057 |        |      |         | 21,705 |        |   |         | 22,137 |       
|                                                                      | Diluted                                                           |                          |         | 21,632 |        |      |         | 22,184 |        |   |         | 22,895 |       

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |         |  
|------------------------------------------------------------------------------- | ---------------------------------------- | ------ | ------------ | ------ | -------- | -------- | ------------- | ------------ | ------------- | ----- | ------- | ------ |  | - | ------ | ------- | - | - | ------- | ------- | - | - | ------ | ------- | -
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   | Other  |         |   |   |         |         |   |   |       
|                                                                                |                                          |        | Common Stock |        | Retained |          | Comprehensive |              | Comprehensive
|                                                                                |                                          | Shares |              | Amount |          | Earnings |               | Income(Loss) |               | Total |         | Income
|(Dollars in thousands)                                                          |                                          |        |              |        |          |          |               |              |               |       |         |       
|Balance, June 30, 2000                                                          |                                          |        | 22,122,863   |        |          |          | 60,957        |              |               |       | 48,285  |        |  |   | 9,200  |         |   |   | 118,442 |         |   |   |        |        
|Comprehensive income,
net of tax:                                               |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|                                                                                | Net income                               |        |              |        |          |          |               |              |               |       |         | 31,406 |  |   |        |         |   |   |         | 31,406  |   |   | $      | 31,406  |  
|                                                                                | Foreign currency
translation
adjustments |        |              |        |          |          |               |              |               |       |         |        |  |   |        | (4,900  | ) |   |         | (4,900  | ) |   |        | (4,900  | )
|                                                                                | Unrealized gain on
securities            |        |              |        |          |          |               |              |               |       |         |        |  |   |        | (11,928 | ) |   |         | (11,928 | ) |   |        | (11,928 | )
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Comprehensive income                                                            |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   | $ | 14,578 |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Common stock issued
under employee
benefit plans
including related tax
benefits |                                          |        | 415,142      |        |          |          | 7,352         |              |               |       |         |        |  |   |        |         |   |   | 7,352   |         |   |   |        |        
|Repurchase of common
stock                                                      |                                          |        | (361,000     | )      |          |          | (1,027        | )            |               |       | (9,487  | )      |  |   |        |         |   |   | (10,514 | )       |   |   |        |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Balance, June 30, 2001                                                          |                                          |        | 22,177,005   |        |          |          | 67,282        |              |               |       | 70,204  |        |  |   | (7,628 | )       |   |   | 129,858 |         |   |   |        |        
|Comprehensive income,
net of tax:                                               |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|                                                                                | Net income                               |        |              |        |          |          |               |              |               |       |         | 27,608 |  |   |        |         |   |   |         | 27,608  |   |   | $      | 27,608  |  
|                                                                                | Foreign currency
translation
adjustments |        |              |        |          |          |               |              |               |       |         |        |  |   |        | 5,644   |   |   |         | 5,644   |   |   |        | 5,644   |  
|                                                                                | Unrealized loss on
Securities            |        |              |        |          |          |               |              |               |       |         |        |  |   |        | (1,374  | ) |   |         | (1,374  | ) |   |        | (1,374  | )
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Comprehensive income                                                            |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   | $ | 31,878 |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Common stock issued
under employee
benefit plans
including related tax
benefits |                                          |        | 246,237      |        |          |          | 4,468         |              |               |       |         |        |  |   |        |         |   |   | 4,468   |         |   |   |        |        
|Repurchase of common
stock                                                      |                                          |        | (1,333,870   | )      |          |          | (4,124        | )            |               |       | (30,373 | )      |  |   |        |         |   |   | (34,497 | )       |   |   |        |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Balance, June 30, 2002                                                          |                                          |        | 21,089,372   |        |          |          | 67,626        |              |               |       | 67,439  |        |  |   | (3,358 | )       |   |   | 131,707 |         |   |   |        |        
|Comprehensive income,
net of tax:                                               |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|                                                                                | Net income                               |        |              |        |          |          |               |              |               |       |         | 31,428 |  |   |        |         |   |   |         | 31,428  |   |   | $      | 31,428  |  
|                                                                                | Foreign currency
translation
adjustments |        |              |        |          |          |               |              |               |       |         |        |  |   |        | 6,808   |   |   |         | 6,808   |   |   |        | 6,808   |  
|                                                                                | Unrealized loss on
Securities            |        |              |        |          |          |               |              |               |       |         |        |  |   |        | (339    | ) |   |         | (339    | ) |   |        | (339    | )
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Comprehensive income                                                            |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   | $ | 37,897 |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Common stock issued
under employee
benefit plans
including related tax
benefits |                                          |        | 567,241      |        |          |          | 12,185        |              |               |       |         |        |  |   |        |         |   |   | 12,185  |         |   |   |        |        
|Repurchase of common
stock                                                      |                                          |        | (722,700     | )      |          |          | (2,416        | )            |               |       | (20,093 | )      |  |   |        |         |   |   | (22,509 | )       |   |   |        |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        
|Balance, June 30, 2003                                                          |                                          |        | 20,933,913   |        |          | $        | 77,395        |              |               | $     | 78,774  |        |  | $ | 3,111  |         |   | $ | 159,280 |         |   |   |        |        
|                                                                                |                                          |        |              |        |          |          |               |              |               |       |         |        |  |   |        |         |   |   |         |         |   |   |        |        

See notes to consolidated financial statements

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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |         |        |        |  
|----------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------ | --------------------------------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | -
|                                                |                                                                                   |                                                  |                                   |         |        |       
|Years ended June 30                             |                                                                                   | 2003                                             |                                   | 2002    |        | 2001  
|(In thousands)                                  |                                                                                   |                                                  |                                   |         |        |       
|Cash and equivalents provided by (used for):    |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|Cash flows from operating activities:           |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|                                                | Net income                                                                        |                                                  | $                                 | 31,428  |        |        | $       | 27,608  |        |        | $       | 31,406  |       
|                                                | Adjustments to reconcile net income to
net cash provided by operating activities: |                                                  |                                   |         |        |        |         |         |        |        |         |         |       
|                                                |                                                                                   | Write-off of in process research and
development |                                   |         |       |        |         |         |       |        |         |         | 865    |       
|                                                |                                                                                   | Write-off of a non-affiliate investment          |                                   |         | 2,067  |        |         |         |       |        |         |         |       |       
|                                                |                                                                                   | Depreciation and amortization                    |                                   |         | 5,912  |        |         |         | 4,827  |        |         |         | 5,251  |       
|                                                |                                                                                   | Gain on sale of marketable equity securities     |                                   |         | (414   | )      |         |         | (2,093 | )      |         |         | (2,951 | )     
|                                                |                                                                                   | Tax benefit related to stock option plans        |                                   |         | 3,598  |        |         |         | 1,225  |        |         |         | 2,688  |       
|                                                |                                                                                   | Deferred taxes                                   |                                   |         | (2,221 | )      |         |         | 807    |        |         |         | 1,126  |       
|                                                |                                                                                   | Changes in assets and liabilities:               |                                   |         |        |        |         |         |        |        |         |         |        |       
|                                                |                                                                                   |                                                  | Accounts receivable               |         |        | 1,851  |         |         |        | 3,046  |         |         |        | (4,020 | )
|                                                |                                                                                   |                                                  | Inventories                       |         |        | (1,770 | )       |         |        | 4,187  |         |         |        | (8,825 | )
|                                                |                                                                                   |                                                  | Prepaid expenses and other assets |         |        | (1,658 | )       |         |        | 282    |         |         |        | 505    |  
|                                                |                                                                                   |                                                  | Accounts payable                  |         |        | (110   | )       |         |        | (1,313 | )       |         |        | 297    |  
|                                                |                                                                                   |                                                  | Accrued liabilities               |         |        | 3,315  |         |         |        | 2,320  |         |         |        | 1,443  |  
|                                                |                                                                                   |                                                  | Income taxes payable              |         |        | 1,301  |         |         |        | 1,187  |         |         |        | 1,037  |  
|                                                |                                                                                   |                                                  | Accrued product warranty          |         |        | 65     |         |         |        | (249   | )       |         |        | (1,504 | )
|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|Net cash provided by operating activities       |                                                                                   |                                                  | 43,364                            |         |        |        | 41,834  |         |        |        | 27,318  |        
|Cash flows from investing activities:           |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|                                                | Proceeds from sale of marketable equity securities                                |                                                  |                                   | 728     |        |        |         | 3,380   |        |        |         | 3,658   |       
|                                                | Purchase of property, plant and equipment                                         |                                                  |                                   | (3,659  | )      |        |         | (4,790  | )      |        |         | (7,128  | )     
|                                                | Acquisition, net of cash acquired                                                 |                                                  |                                   | (3,000  | )      |        |         | (2,500  | )      |        |         | (12,404 | )     
|                                                | Investments in unaffiliated companies                                             |                                                  |                                   | (500    | )      |        |         | (1,567  | )      |        |         |        |       
|                                                | Other                                                                             |                                                  |                                   | 143     |        |        |         | 94      |        |        |         | 102     |       
|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|Net cash used for investing activities          |                                                                                   |                                                  | (6,288                            | )       |        |        | (5,383  | )       |        |        | (15,772 | )      
|Cash flows from financing activities:           |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|                                                | Net change in notes payable to banks                                              |                                                  |                                   | (1,169  | )      |        |         | (80     | )      |        |         | 480     |       
|                                                | Proceeds from long-term debt                                                      |                                                  |                                   |        |        |        |         | 483     |        |        |         | 2,691   |       
|                                                | Principal payments on long-term debt                                              |                                                  |                                   | (502    | )      |        |         | (475    | )      |        |         | (1,056  | )     
|                                                | Sale of common stock                                                              |                                                  |                                   | 8,586   |        |        |         | 3,243   |        |        |         | 4,664   |       
|                                                | Repurchase of common stock                                                        |                                                  |                                   | (22,509 | )      |        |         | (34,497 | )      |        |         | (10,514 | )     
|                                                | Other                                                                             |                                                  |                                   |        |        |        |         |        |        |        |         |        |       
|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|Net cash used for financing activities          |                                                                                   |                                                  | (15,594                           | )       |        |        | (31,326 | )       |        |        | (3,735  | )      
|Effect of exchange rate changes on cash         |                                                                                   |                                                  | 3,180                             |         |        |        | (267    | )       |        |        | 114     |        
|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|Net increase/(decrease) in cash and equivalents |                                                                                   |                                                  | 24,662                            |         |        |        | 4,858   |         |        |        | 7,925   |        
|Cash and equivalents, beginning of year         |                                                                                   |                                                  | 22,169                            |         |        |        | 17,311  |         |        |        | 9,386   |        
|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        
|Cash and equivalents, end of year               |                                                                                   | $                                                | 46,831                            |         |        | $      | 22,169  |         |        | $      | 17,311  |        
|                                                |                                                                                   |                                                  |                                   |         |        |        |         |         |        |        |         |        

See notes to consolidated financial statements

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Note 1 / SIGNIFICANT ACCOUNTING POLICIES

OrganizationDionex Corporation (the Company) is a leading manufacturer and
marketer of chromatography systems for chemical analysis. The Companys systems
are used in environmental analysis and by the pharmaceutical, life sciences,
chemical, petrochemical, power generation, food and electronics industries in a
variety of applications.

Principles of ConsolidationThe consolidated financial statements include the
Company and its subsidiaries. All significant intercompany transactions and
accounts are eliminated in consolidation.

Certain Risks and UncertaintiesThe preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of investments and trade receivables. The
Company invests in high-grade instruments which it places for safekeeping with
high quality financial institutions. The Company sells its products primarily
to large organizations in diversified industries worldwide. Credit risk is
further mitigated by the Companys credit evaluation process and the reasonably
short collection terms. The Company does not require collateral or other
security to support accounts receivable. The Company maintains allowances for
potential credit losses.

The Company is subject to certain risks and uncertainties and believes that
changes in any of the following areas could have a material adverse effect on
the Companys future financial position or results of operations. Such factors
include, among others: the continuation or spread of the current economic
uncertainty; risks related to international operations, including foreign
currency fluctuations; the importance of meeting customer demand for new
products; competition in the analytical instrumentation market; our ability to
maintain inventories; the importance of attracting and retaining key personnel;
and our ability to protect our proprietary information.

Cash EquivalentsCash equivalents are highly liquid debt instruments with a
maturity, at the date of purchase, of three months or less.

InvestmentsThe Company classifies its debt and equity securities as held to
maturity or available for sale. Securities classified as held to maturity
are reported at amortized cost and available for sale securities are reported
at fair market value, with a corresponding recognition of the unrealized gains
and losses (net of tax effect) as a separate component of stockholders equity.
The Companys investments in marketable equity securities have been classified
as available for sale.

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InventoriesInventories are stated at the lower of standard cost (which
approximates cost on a first-in, first-out basis) or market.

Property, Plant and EquipmentProperty, plant and equipment are stated at cost.
Depreciation is computed using the straight-line method based on estimated
useful lives of 3 to 30 years. Leasehold improvements are amortized over the
lesser of the useful life or the remaining term of the lease.

Purchased Technology and GoodwillPurchased technology amounts are recorded at
their fair market values as of the date of acquisition and amortized over their
estimated useful lives of up to seven years.

In July 2001, the Company adopted Statement of Financial Accounting Standard
No. 141, Business Combinations (SFAS No. 141) which is effective for any
business combination accounted for by the purchase method that is completed
after June 30, 2001. This statement requires that the purchase method of
accounting be used for all business combinations and eliminates the
pooling-of-interests method of accounting for business combinations. The
Company has completed one business combination in the previous three years and
used the purchase method of accounting in that business combination.

In July 2001, the Company adopted Statement of Financial Accounting Standard
No. 142, Goodwill and Other Intangible Assets (SFAS No. 142). The statement
establishes that goodwill is not amortized but is tested for impairment as
required. It requires that identifiable intangible assets be recognized
separately from goodwill if certain criteria are met and that those assets be
amortized over their useful economic life. The Company tests goodwill for
impairment in April each year and more often if circumstances indicate that
goodwill may be impaired. If impaired, a charge is recorded in income from
operations.

Valuation of Long-Lived AssetsThe carrying value of the Companys long-lived
assets is reviewed for impairment whenever events or changes in circumstances
indicate that an asset may not be recoverable. The Company looks to current and
future profitability, as well as current and future undiscounted cash flows, as
primary indicators of recoverability. If impairment is determined to exist, any
related impairment loss is calculated based on fair value.

Revenue RecognitionRevenue is derived from the sale of products and from
services rendered to our customers including installation, training and
maintenance. Generally, our products contain embedded software that is
essential to their functionality.

Revenue is recognized in accordance with Staff Accounting Bulletin No. 101,
Revenue Recognition in Financial Statements (SAB 101) and Statement of
Position 97-2, Software Revenue Recognition (SOP 97-2), when persuasive
evidence of an arrangement exists, the product has been delivered, the price is
fixed or determinable, collection is probable and vendor specific objective
evidence exists to allocate revenue to the various elements of the arrangement.
Vendor specific objective evidence is based on the price charged when a element
is sold separately or, if not yet sold separately, when the price is
established by authorized management. Delivery is generally considered to have
occurred when shipped.

The Company sells equipment through our direct sales force and through
distributors and resellers. Sales through distributors and resellers are
recognized as revenue upon sale to the distributor or reseller as these sales
are considered to be final and no right of return or price protection exists.
Customer

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acceptance is generally limited to performance under our published
product specifications. When additional customer acceptance conditions apply,
all revenue related to the sale is deferred until acceptance is obtained.
Equipment typically includes a one-year warranty. The estimated cost of product
warranty claims is accrued at the time the sale is recognized, based on
historical experience.

Installation and training services are not considered to be essential to the
functionality of our products, and revenue related to these services is
recognized when the services are completed. Maintenance fees are recognized
ratably over the period of the related maintenance contract. Maintenance
consists of product repair services, unspecified software upgrades and
telephone support.

Cumulative Effect of Change in Accounting PrincipleEffective July 1, 2000, the
Company adopted SAB 101. SAB 101 outlines the basic criteria that must be met
to recognize revenue and provides guidance for disclosures related to revenue
recognition policies.

The Companys previous policy was to recognize product installation revenue
upon shipment and to accrue product installation costs at the time revenue was
recognized. Upon adoption of SAB 101, the Company defers installation revenue
until installation has been completed and recognizes installation costs as
incurred.

The cumulative effect of the change, totaling $359,000, is shown as a one-time
charge to income in the consolidated statement of income for fiscal 2001.

Stock-based Compensation PlansThe Company applies Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) and
related interpretations in accounting for its stock-based compensation plans
(Note 10). Accordingly, no accounting recognition is given to stock options
granted at fair market value until they are exercised. Upon exercise, net
proceeds, including tax benefits realized, are credited to equity.

Statement of Financial Accounting Standard No. 123, Accounting for Stock-Based
Compensation (SFAS No. 123) sets forth a fair-value based method of
recognizing stock-based compensation expense. As permitted by SFAS No. 123, the
Company has elected to continue to apply APB No. 25 to account for its
stock-based compensation plans. Had compensation costs under the Companys
stock-based compensation plans been determined based on the fair value at the
grant dates consistent with the method set forth under SFAS No. 123, the effect
on the Companys net income and earnings per share would have been as follows:

|                                                                                                                            |             |      |        |      |  |      |        |      |  |   |        |      | 
|--------------------------------------------------------------------------------------------------------------------------- | ----------- | ---- | ------ | ---- |  | ---- | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                            |             |      |        |      |  |     
|Years ended June 30                                                                                                         |             | 2003 |        | 2002 |  | 2001
|(In thousands, except per share data)                                                                                       |             |      |        |      |  |     
|Net income, as reported                                                                                                     |             | $    | 31,428 |      |  | $    | 27,608 |      |  | $ | 31,406 |     
|Less: Total stock-based employee
compensation expense determined
under fair value method for all
awards, net of tax effects |             |      | 5,309  |      |  |      | 5,909  |      |  |   | 6,281  |     
|                                                                                                                            |             |      |        |      |  |      |        |      |  |   |        |     
|Adjusted net income                                                                                                         |             | $    | 26,119 |      |  | $    | 21,699 |      |  | $ | 25,125 |     
|                                                                                                                            |             |      |        |      |  |      |        |      |  |   |        |     
|Basic earnings per share:                                                                                                   |             |      |        |      |  |      |        |      |  |   |        |     
|                                                                                                                            | As reported |      | $      | 1.49 |  |      | $      | 1.27 |  |   | $      | 1.42 | 
|                                                                                                                            |             |      |        |      |  |      |        |      |  |   |        |     
|                                                                                                                            | Pro forma   |      | $      | 1.24 |  |      | $      | 1.00 |  |   | $      | 1.13 | 
|                                                                                                                            |             |      |        |      |  |      |        |      |  |   |        |     

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|                                      |             |      |        |      |  |      |        |      |  |  |        |      | 
|------------------------------------- | ----------- | ---- | ------ | ---- |  | ---- | ------ | ---- |  |  | ------ | ---- | 
|                                      |             |      |        |      |  |     
|Years ended June 30                   |             | 2003 |        | 2002 |  | 2001
|(In thousands, except per share data) |             |      |        |      |  |     
|Diluted earnings per share:           |             |      |        |      |  |      |        |      |  |  |        |     
|                                      | As reported |      | $      | 1.45 |  |      | $      | 1.24 |  |  | $      | 1.37 | 
|                                      |             |      |        |      |  |      |        |      |  |  |        |     
|                                      | Pro forma   |      | $      | 1.21 |  |      | $      | 0.98 |  |  | $      | 1.10 | 
|                                      |             |      |        |      |  |      |        |      |  |  |        |     
|Basic shares                          |             |      | 21,057 |      |  |      | 21,705 |      |  |  | 22,137 |     
|Diluted shares                        |             |      | 21,632 |      |  |      | 22,184 |      |  |  | 22,895 |     

The resulting pro forma compensation expense may not be representative of the
amount to be expected in future years. Pro forma compensation expense for
options granted is reflected over the vesting period; therefore, future pro
forma compensation expense may be greater as additional options are granted.

The fair value of each option grant was estimated on the grant date using the
Black-Scholes option-pricing model, using the multiple option approach, with
the following weighted-average assumptions:

|                         |  |      |      |       |  |      |      |       |  |   |      |      
|------------------------ |  | ---- | ---- | ----- |  | ---- | ---- | ----- |  | - | ---- | -----
|                         |  | 2003 |      | 2002  |  | 2001
|                         |  |      |      |       |  |     
|Volatility               |  |      | 53   | %     |  |      | 52   | %     |  |   | 45   | %    
|Risk-free interest rate  |  |      | 3.03 | %     |  |      | 3.94 | %     |  |   | 4.97 | %    
|Expected life of options |  |      | 5.9  | years |  |      | 5.9  | years |  |   | 5.9  | years
|Expected dividend        |  | $    | 0.00 |       |  | $    | 0.00 |       |  | $ | 0.00 |      

The Black-Scholes option-pricing model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option-pricing models require the input of highly
subjective assumptions, including expected stock price volatility. Because the
Companys employee stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in managements
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

Earnings per ShareBasic earnings per share is computed based upon the weighted
average number of shares of common stock outstanding and the net income
attributable to common stockholders. Diluted earnings per share is computed by
dividing net income by the weighted average number of common shares for all
dilutive potential common shares outstanding. Shares used in the calculation of
diluted earnings per share during fiscal 2003, 2002 and 2001 include 575,000,
479,000 and 758,000, respectively, of common equivalent shares related to stock
options. Antidilutive common equivalent shares related to stock options
excluded from the calculation of diluted shares were 854,000, 1,167,000 and
1,068,000 for fiscal 2003, 2002 and 2001, respectively.

Common Stock RepurchasesThe Company repurchases shares in the open market
under its ongoing stock repurchase program. For each share repurchased, the
Company reduces the common stock account by the average value per share
reflected in the account prior to the repurchase with the excess allocated to
retained earnings. The Company currently retires all shares repurchased.

During fiscal 2003, the Company repurchased 722,700 shares of its common stock
on the open market for $22.5 million (an average of $31.15 per share), compared
with 1,333,870 shares repurchased for $34.5 million (an average of $25.86 per
share)

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for fiscal 2002. During fiscal 2001, the Company repurchased 361,000 shares of
its common stock on the open market for $10.5 million (an average of $29.12 per
share).

Translation of Foreign CurrencyThe Companys foreign operations are measured
using local currencies as the functional currency. Assets and liabilities are
translated into U.S. dollars at year-end rates of exchange, and results of
operations are translated at average rates for the year. Translation
adjustments are included in stockholders equity as accumulated other
comprehensive income.

Derivative SecuritiesEvery derivative instrument, including certain derivative
instruments embedded in other contracts, is recorded on the consolidated
balance sheet at its fair value. Changes in the fair value of derivatives is
recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction. The Company formally documents,
designates and assesses the effectiveness of transactions that receive hedge
accounting.

The Company enters into foreign exchange forward contracts with high quality
financial institutions to manage its exposure to the impact of fluctuations in
foreign currency exchange rates on its intercompany receivables balances. These
contracts generally have maturities of approximately 30 days and require the
Company to exchange foreign currencies for U.S. dollars at maturity. The
Company has not designated these contracts as hedging instruments. The
contracts are recorded at fair value on the consolidated balance sheet. Changes
in the fair values of these derivative instruments are recognized in earnings
in the period they occur.

At June 30, 2003, the Company had forward exchange contracts to sell foreign
currencies totaling $19.1 million dollars, including approximately $10.6
million in Euros, $7.6 million in Japanese yen and $900,000 in Canadian
dollars. At June 30, 2002, the Company had forward exchange contracts to sell
foreign currencies totaling $16.9 million dollars, including approximately
$10.3 million in Euros, $4.8 million in Japanese yen, $593,000 in British
pounds, $469,000 in Swiss francs and $657,000 in Canadian dollars. At June 30,
2003 and 2002, the aggregate unrealized gains or losses on the forward exchange
contracts were not material.

Comprehensive IncomeThe Company is required to report comprehensive income in
the financial statements, in addition to net income. For the Company, the
primary differences between net income and comprehensive income are foreign
currency translation adjustments and net unrealized gains or losses on
securities available for sale. At June 30, 2003 and 2002, the components of
accumulated other comprehensive loss were as follows:

|                                                      |  |      |        |      |  |   |        |  
|----------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|(In thousands)                                        |  | 2003 |        | 2002
|                                                      |  |      |        |     
|Foreign currency translation adjustments              |  | $    | (2,683 | )    |  | $ | (4,125 | )
|Unrealized gain on securities available
for sale, net |  |      | 428    |      |  |   | 767    |  
|                                                      |  |      |        |      |  |   |        |  
|                                                      |  | $    | (3,111 | )    |  | $ | (3,358 | )
|                                                      |  |      |        |      |  |   |        |  

ReclassificationsCertain reclassifications have been made to the prior year
financial statements to conform with the fiscal 2003 financial statements
presentation.

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New Accounting PronouncementsIn October 2001, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard No. 144,
Impairment on Disposal of Long-Lived Assets (SFAS No. 144), effective for
fiscal years beginning after December 31, 2001. Under SFAS No. 144, the
criteria required for classifying an asset as held-for-sale has been
significantly changed. Assets held-for-sale are stated at the lower of their
fair values or carrying amounts, and depreciation is no longer recognized. In
addition, the expected future operating losses from discontinued operations
will be displayed in discontinued operations in the period in which the losses
are incurred rather than as of the measurement date. More dispositions will
qualify for discontinued operations treatment in the
income statement under the new rules. The Company has determined that adoption
of this standard had no material impact on its consolidated financial
statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure. SFAS No. 148 amends FASB Statement No.
123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends
the disclosure requirements of SFAS 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. SFAS No. 148 is effective for fiscal years ending after December 14,
2002. The Company has adopted the disclosure provisions of SFAS No. 148 for the
quarterly period beginning on January 1, 2003. The Company does not expect to
adopt the fair value based method of accounting for stock-based employee
compensation; and therefore, adoption of SFAS No. 148 is not expected to have
an impact on the financial position, results of operations or cash flows of the
Company.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. The Interpretation elaborates
on the existing disclosure requirements for most guarantees, including loan
guarantees such as standby letters of credit. It also clarifies that at the
time a company issues a guarantee, the company must recognize an initial
liability for the fair value, or market value, of the obligations it assumes
under the guarantee and must disclose that information in its interim and
annual financial statements. The provisions related to recognizing a liability
at inception of the guarantee for the fair value of the guarantors obligations
does not apply to product warranties or to guarantees accounted for as
derivatives. The initial recognition and initial measurement provisions apply
on a prospective basis to guarantees issued or modified after December 31,
2002.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective immediately for all new variable interest entities created or
acquired after January 31, 2003. For variable interest entities created or
acquired prior to February 1, 2003, the provision of FIN 46 must be applied for
the first interim or annual period beginning after June 15, 2003. The adoption
of FIN 46 to date has not had any impact on our consolidated financial
statements.

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Note 2 / BUSINESS COMBINATIONS

On October 17, 2000, the Company purchased all of the issued and outstanding
shares of LC Packings Nederlands B.V. and LC Packings (U.S.A.), Inc.
(collectively referred to as LC Packings) for a purchase price of $12.4
million including acquisition costs. In addition, the shareholders of LC
Packings had the right to receive additional contingent purchase consideration,
to be paid in varying amounts at the end of calendar years 2000 through 2004,
in the event LC Packings achieved certain revenue goals. If the entire
additional contingent purchase consideration was achieved, the shareholders of
LC Packings would be paid an additional amount not to exceed $13.0 million. At
June 30, 2003, $13.0 million of the additional contingent purchase
consideration had been earned and was recorded as goodwill bringing the total
purchase price to $25.4 million. Payments of $6.5 million have been made for
the additional purchase consideration. The remaining $6.5 million will be paid
within the next two fiscal years; $3.0 million will be paid within twelve
months and $3.5 million in the following year. The goodwill recorded as a
result of the acquisition is deductible for income tax purposes.

In connection with the acquisition, the Company recorded a nonrecurring charge
of $865,000 in fiscal 2001 for the write-off of in-process research and
development acquired. In addition, cost of sales in fiscal 2001 included
$121,000 related to
the sale of inventory acquired which has been written-up to fair market value
as part of the purchase price allocation.

LC Packings, which markets its products primarily in the United States and
Europe, specializes in micro, capillary and nano liquid chromatography used by
proteomics and genomics researchers in pharmaceutical, biotechnology and
scientific laboratories to analyze and separate proteins, glycoproteins and
other complex compounds.

Note 3 / INVESTMENTS

The Company had no temporary cash investments at June 30, 2003 and 2002.

There were no sales of held-to-maturity securities for the years ended June 30,
2003, 2002 and 2001.

In December 1989, the Company invested $3.0 million in the stock of Molecular
Devices Corporation (MDC). The Companys Chairman and a director serve on the
Board of Directors of MDC. The Companys ownership interest in MDC is
approximately 1% and has been classified as available for sale and is
included in marketable equity securities. At June 30, 2003 and 2002, the fair
value of this investment was $1.4 million and $2.3 million, respectively, and
cost was $692,000 and $1.0 million, respectively. In the years ended June 30,
2003, 2002 and 2001, the Company realized gross proceeds from the sale of
marketable securities of $728,000, $3.4 million and $3.7 million, respectively,
and recognized net gains on sale of $414,000, $2.1 million and $3.0 million,
respectively.

During fiscal 2003, the Company wrote off an investment in an unaffiliated
entity, PharmaSeq, Inc., in the amount of $2.1 million. Management determined
that the decline in value of the investment, accounted for under the cost
method, was other than temporary.

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Note 4 / INVENTORIES

Inventories at June 30 consist of:

|                                |  |      |        |      |  |   |        | 
|------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|(In thousands)                  |  | 2003 |        | 2002
|                                |  |      |        |     
|Finished goods                  |  | $    | 11,638 |      |  | $ | 9,127  | 
|Work in process                 |  |      | 3,822  |      |  |   | 3,643  | 
|Raw materials and subassemblies |  |      | 10,002 |      |  |   | 9,640  | 
|                                |  |      |        |      |  |   |        | 
|                                |  | $    | 25,462 |      |  | $ | 22,410 | 
|                                |  |      |        |      |  |   |        | 

Note 5 / PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30 consist of:

|                                          |  |      |         |      |  |   |         |  
|----------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|(In thousands)                            |  | 2003 |         | 2002
|                                          |  |      |         |     
|Land                                      |  | $    | 19,610  |      |  | $ | 19,196  |  
|Buildings and improvements                |  |      | 28,471  |      |  |   | 26,985  |  
|Machinery, equipment and tooling          |  |      | 20,907  |      |  |   | 19,786  |  
|Furniture and fixtures                    |  |      | 7,191   |      |  |   | 6,295   |  
|                                          |  |      |         |      |  |   |         |  
|                                          |  |      | 76,179  |      |  |   | 72,262  |  
|Accumulated depreciation and amortization |  |      | (30,743 | )    |  |   | (27,367 | )
|                                          |  |      |         |      |  |   |         |  
|Property, plant and equipment, net        |  | $    | 45,436  |      |  | $ | 44,895  |  
|                                          |  |      |         |      |  |   |         |  

Note 6 / GOODWILL AND INTANGIBLE ASSETS

In accordance with SFAS No. 142, the Company discontinued the amortization of
goodwill effective July 1, 2001. A reconciliation of previously reported net
income and earnings per share to the amounts adjusted for the exclusion of
goodwill amortization net of related income tax effect follows:

|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |      | 
|------------------------------------------------------------ | --------------------------------- | ---- | ------ | ---- |  | ---- | ------ | ---- |  | - | ------ | ---- | 
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|Years
Ended June 30,(in thousands, except per share amounts) |                                   | 2003 |        | 2002 |  | 2001
|                                                             |                                   |      |        |      |  |     
|Reported net income                                          |                                   | $    | 31,428 |      |  | $    | 27,608 |      |  | $ | 31,406 |     
|Add: Goodwill amortization, net of
tax                       |                                   |      |       |      |  |      |       |      |  |   | 460    |     
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|Adjusted net income                                          |                                   | $    | 31,428 |      |  | $    | 27,608 |      |  | $ | 31,866 |     
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|Basic earnings per share:                                    |                                   |      |        |      |  |      |        |      |  |   |        |     
|                                                             | As reported                       |      | $      | 1.49 |  |      | $      | 1.27 |  |   | $      | 1.42 | 
|                                                             | Goodwill amortization, net of tax |      |        |     |  |      |        |     |  |   |        | 0.02 | 
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|                                                             | As adjusted                       |      | $      | 1.49 |  |      | $      | 1.27 |  |   | $      | 1.44 | 
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|Diluted earnings per share:                                  |                                   |      |        |      |  |      |        |      |  |   |        |     
|                                                             | As reported                       |      | $      | 1.45 |  |      | $      | 1.24 |  |   | $      | 1.37 | 
|                                                             | Goodwill amortization, net of tax |      |        |     |  |      |        |     |  |   |        | 0.02 | 
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     
|                                                             | As adjusted                       |      | $      | 1.45 |  |      | $      | 1.24 |  |   | $      | 1.39 | 
|                                                             |                                   |      |        |      |  |      |        |      |  |   |        |     

Information regarding the Companys goodwill and other intangible assets
reflect current foreign exchange rates.

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Changes in the carrying amount of goodwill for the years ended June 30, 2003
and 2002 are as follows (in thousands):

|                                    |  |   |        | 
|----------------------------------- |  | - | ------ | 
|Balance as of July 1, 2001          |  | $ | 13,233 | 
|Goodwill acquired during the period |  |   | 5,498  | 
|Translation adjustments and other   |  |   | 818    | 
|                                    |  |   |        | 
|Balance as of June 30, 2002         |  | $ | 19,549 | 
|Goodwill acquired during the period |  |   | 3,795  | 
|Translation adjustments and other   |  |   | 917    | 
|                                    |  |   |        | 
|Balance as of June 30, 2003         |  | $ | 24,261 | 
|                                    |  |   |        | 

In connection with SFAS No. 142, the Company performed an annual impairment
test on goodwill and determined that goodwill was not impaired.

Information regarding the Companys other intangible assets having a finite
life is as follows (in thousands):

|                       |  |                     |       |                     |  |             |        |                 |  |              |       |     |  |   |       |             |  |   |        |   |  |   |       | 
|---------------------- |  | ------------------- | ----- | ------------------- |  | ----------- | ------ | --------------- |  | ------------ | ----- | --- |  | - | ----- | ----------- |  | - | ------ | - |  | - | ----- | 
|                       |  | As of June 30, 2003 |       | As of June 30, 2002
|                       |  |                     |       |                    
|                       |  |                     |       |                     |  | Accumulated |        |                 |  |              |       |     |  |   |       | Accumulated |  |   |        |  
|                       |  | Carrying Amount     |       | Amortization        |  | Net         |        | Carrying Amount |  | Amortization |       | Net
|                       |  |                     |       |                     |  |             |        |                 |  |              |       |    
|Patents and
Trademarks |  | $                   | 379   |                     |  | $           | (379   | )               |  | $            |      |     |  | $ | 379   |             |  | $ | (375   | ) |  | $ | 4     | 
|Developed Technology   |  |                     | 9,475 |                     |  |             | (4,880 | )               |  |              | 4,595 |     |  |   | 8,651 |             |  |   | (3,149 | ) |  |   | 5,502 | 
|                       |  |                     |       |                     |  |             |        |                 |  |              |       |     |  |   |       |             |  |   |        |   |  |   |       | 
|Total                  |  | $                   | 9,854 |                     |  | $           | (5,259 | )               |  | $            | 4,595 |     |  | $ | 9,030 |             |  | $ | (3,524 | ) |  | $ | 5,506 | 
|                       |  |                     |       |                     |  |             |        |                 |  |              |       |     |  |   |       |             |  |   |        |   |  |   |       | 

The Company amortizes developed technology over a period of seven years.
Amortization expense of other intangible assets was $1,366,000, $1,214,000 and
$861,000, respectively, for the twelve months ended June 30, 2003, 2002 and
2001. The estimated amortization for each of the five fiscal years subsequent
to June 30, 2003 is as follows:

|           |  |              |       | 
|---------- |  | ------------ | ----- | 
|Year Ended |  | Amortization
|June 30,   |  | Expense     
|           |  |             
|2004       |  | $            | 1,396 | 
|2005       |  | $            | 1,378 | 
|2006       |  | $            | 897   | 
|2007       |  | $            | 714   | 
|2008       |  | $            | 210   | 
|           |  |              |       | 
|           |  | $            | 4,595 | 
|           |  |              |       | 

Note 7 / FINANCING ARRANGEMENTS

The Company has unsecured lines of credit with various domestic and foreign
banks totaling approximately $31.7 million which have been used primarily to
minimize the Companys exposure to foreign currency fluctuations and to fund
acquisitions (Note 2). These lines of credit expire between September 30, 2003
and December 31, 2004. Borrowings in each country bear interest at local
reference rates which ranged from 0.6% to 9.25% at June 30, 2003. Amounts
outstanding under these lines totaled $834,000 at June 30, 2003.

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Such line of credit agreements impose certain financial restrictions relating
to cash dividends, working capital and tangible net worth. At June 30, 2003,
the Company was in compliance with all such covenants.

At June 30, 2003, the Company had a mortgage note payable denominated in
Japanese yen totaling $1.0 million. This note bears interest at a rate of 1.5%
per annum. Principal payments are due monthly until June 30, 2005 with a
current portion totaling $500,000. During the year ended June 30, 2001, the
Company capitalized interest of $221,000 related to the construction of a
building in Japan.

One of the Companys foreign subsidiaries discounts trade notes receivable with
banks. Total notes receivable discounted were approximately $5.0 million in
fiscal 2003 and $9.3 million in fiscal 2002. The uncollected balances of notes
receivable due to the discounting banks at June 30, 2003 and 2002 were
approximately $2.9 million and $2.6 million, respectively. The Company has
determined that the carrying amount of its contingent liability under this
guarantee was insignificant at June 30, 2003 and 2002 based on its past
experience of discounting trade notes receivable.

Total interest paid was $123,000 in 2003, $118,000 in 2002 and $578,000 in
2001.

Note 8 / WARRANTY

Product warranties are recorded at the time revenue is recognized for certain
product shipments. While the Company engages in extensive product quality
programs and processes, our warranty obligation is affected by product failure
rates, material usage and service costs incurred in correcting a product
failure. Should actual product failure rates, material usage or service costs
differ from our previous estimates, revisions to the estimated warranty
liability would be required.

Details of the change in accrued product warranty for fiscal 2003, 2002 and
2001 are as follows (in thousands):

|                          |               |  |           |       |           |  |             |       |               |  |         |      |   |  |         |        |   |  |   |       | 
|------------------------- | ------------- |  | --------- | ----- | --------- |  | ----------- | ----- | ------------- |  | ------- | ---- | - |  | ------- | ------ | - |  | - | ----- | 
|                          |               |  |           |       |           |  |             |       |               |  | CHARGED |      |   |  |         |        |   |  |  
|                          |               |  | BALANCE   |       |           |  |             |       | (CREDITED)    |  |         |      |   |  | BALANCE
|                          |               |  | BEGINNING |       |           |  |             |       | TO OTHER      |  |         |      |   |  | END    
|                          |               |  | OF YEAR   |       | ADDITIONS |  | ACCOUNTS(1) |       | DEDUCTIONS(2) |  | OF YEAR
|                          |               |  |           |       |           |  |             |       |               |  |        
|Accrued product warranty: |               |  |           |       |           |  |             |       |               |  |         |      |   |  |         |        |   |  |   |      
|                          | June 30, 2003 |  | $         | 2,912 |           |  | $           | 2,642 |               |  | $       | 216  |   |  | $       | (2,582 | ) |  | $ | 3,188 | 
|                          | June 30, 2002 |  | $         | 2,983 |           |  | $           | 3,191 |               |  | $       | 181  |   |  | $       | (3,443 | ) |  | $ | 2,912 | 
|                          | June 30, 2001 |  | $         | 4,645 |           |  | $           | 1,085 |               |  | $       | (178 | ) |  | $       | (2,569 | ) |  | $ | 2,983 | 

(1)  Effects of exchange rate changes.

(2)  Product warranty costs.


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Note 9 / ACCRUED LIABILITIES

Accrued liabilities at June 30 consist of:

|                                     |  |      |        |      |  |   |        | 
|------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | 
|(In thousands)                       |  | 2003 |        | 2002
|                                     |  |      |        |     
|Accrued payroll and related expenses |  | $    | 11,771 |      |  | $ | 9,269  | 
|Deferred revenues                    |  |      | 8,280  |      |  |   | 5,705  | 
|Accrued earn-out on acquisition      |  |      | 3,000  |      |  |   | 3,000  | 
|Other accrued liabilities            |  |      | 5,994  |      |  |   | 6,332  | 
|                                     |  |      |        |      |  |   |        | 
|                                     |  | $    | 29,045 |      |  | $ | 24,306 | 
|                                     |  |      |        |      |  |   |        | 

Note 10 / STOCK OPTION AND PURCHASE PLANS

Stock Option PlansThe Company has two stock option plans (the Option Plans)
under which incentive and nonqualified options may be granted. Options are
granted at the stocks fair market value at the grant date. Options generally

become exercisable in increments over a period of four years from the date of
grant and expire five or ten years from the grant date.

Activity under the Option Plans for the three-year period ended June 30, 2003
is summarized below.

|                                                               |  |        |           |       |  |           |       |       |  |        |           |           |  |   |       |  |  |           |           |   |  |   |       | 
|-------------------------------------------------------------- |  | ------ | --------- | ----- |  | --------- | ----- | ----- |  | ------ | --------- | --------- |  | - | ----- |  |  | --------- | --------- | - |  | - | ----- | 
|                                                               |  | 2003   |           | 2002  |  | 2001     
|                                                               |  |        |           |       |  |          
|                                                               |  |        |           |       |  | Wtd. Avg. |       |       |  |        |           | Wtd. Avg. |  |   |       |  |  | Wtd. Avg.
|                                                               |  |        |           |       |  | Exercise  |       |       |  |        |           | Exercise  |  |   |       |  |  | Exercise 
|                                                               |  | Shares |           | Price |  | Shares    |       | Price |  | Shares |           | Price    
|                                                               |  |        |           |       |  |           |       |       |  |        |           |          
|Options outstanding,
beginning of year                         |  |        | 3,419,172 |       |  | $         | 23,39 |       |  |        | 2,839,047 |           |  | $ | 22.54 |  |  |           | 3,090,082 |   |  | $ | 20.66 | 
|Granted                                                        |  |        | 269,000   |       |  |           | 26.03 |       |  |        | 852,700   |           |  |   | 23.99 |  |  |           | 186,150   |   |  |   | 31.57 | 
|Exercised                                                      |  |        | (509,187  | )     |  |           | 14.40 |       |  |        | (190,050  | )         |  |   | 10.22 |  |  |           | (358,835  | ) |  |   | 9.50  | 
|Canceled                                                       |  |        | (59,629   | )     |  |           | 29.20 |       |  |        | (82,525   | )         |  |   | 30.57 |  |  |           | (78,350   | ) |  |   | 29.95 | 
|                                                               |  |        |           |       |  |           |       |       |  |        |           |           |  |   |       |  |  |           |           |   |  |   |       | 
|Options outstanding,
end of year                               |  |        | 3,119,256 |       |  | $         | 24.97 |       |  |        | 3,419,172 |           |  | $ | 23.39 |  |  |           | 2,839,047 |   |  | $ | 22.54 | 
|                                                               |  |        |           |       |  |           |       |       |  |        |           |           |  |   |       |  |  |           |           |   |  |   |       | 
|Options exercisable
at year-end                                |  |        | 2,038,353 |       |  | $         | 20.43 |       |  |        | 1,976,010 |           |  | $ | 20.48 |  |  |           | 1,777,332 |   |  | $ | 17.33 | 
|Weighted average fair
value of options
granted during the year |  |        |           |       |  | $         | 13.70 |       |  |        |           |           |  | $ | 12.79 |  |  |           |           |   |  | $ | 15.63 | 

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Additional information regarding options outstanding and exercisable as of June
30, 2003 is as follows:

|                    |               |                     |  |             |  |          |               |             |          |          |   |       |  |  |          |           |  |  |   |       | 
|------------------- | ------------- | ------------------- |  | ----------- |  | -------- | ------------- | ----------- | -------- | -------- | - | ----- |  |  | -------- | --------- |  |  | - | ----- | 
|Options Outstanding |               | Options Exercisable
|                    |               |                    
|                    |               |                     |  |             |  |          | Weighted Avg. |             | Weighted |          |   |       |  |  | Weighted
|                    |               |                     |  |             |  |          | Remaining     |             | Avg.     |          |   |       |  |  | Avg.    
|Range of            |               | Number              |  | Contractual |  | Exercise |               | Number      |          | Exercise
|Exercise Prices     |               | Outstanding         |  | Life (yrs)  |  | Price    |               | Exercisable |          | Price   
|                    |               |                     |  |             |  |          |               |             |          |         
|$                   | 7.94  10.44  |                     |  | 250,900     |  |          |               | 1.60        |          |          | $ | 10.12 |  |  |          | 250,900   |  |  | $ | 10.12 | 
|                    | 16.31  23.98 |                     |  | 1,146,945   |  |          |               | 6.72        |          |          |   | 21.45 |  |  |          | 646,914   |  |  |   | 19.50 | 
|                    | 24.06  29.95 |                     |  | 692,162     |  |          |               | 6.63        |          |          |   | 25.21 |  |  |          | 402,408   |  |  |   | 24.60 | 
|                    | 30.72  32.00 |                     |  | 610,925     |  |          |               | 6.42        |          |          |   | 31.89 |  |  |          | 434,780   |  |  |   | 31.95 | 
|                    | 32.25  45.75 |                     |  | 418,424     |  |          |               | 6.70        |          |          |   | 33.04 |  |  |          | 303,351   |  |  |   | 33.07 | 
|                    |               |                     |  |             |  |          |               |             |          |          |   |       |  |  |          |           |  |  |   |       | 
|$                   | 7.94  45.75  |                     |  | 3,119,356   |  |          |               | 6.23        |          |          | $ | 24.97 |  |  |          | 2,038,353 |  |  | $ | 24.03 | 
|                    |               |                     |  |             |  |          |               |             |          |          |   |       |  |  |          |           |  |  |   |       | 

At June 30, 2003, 1,395,362 shares were available for future grants under the
Option Plans.

Employee Stock Purchase PlanUnder the Companys Employee Stock Purchase Plan,
(the Purchase Plan), eligible employees are permitted to have salary
withholdings to purchase shares of common stock at a price equal to 85% of the
lower of the market value of the stock at the beginning or end of each
six-month offer period, subject to certain annual limitations. Stock issued
under the Purchase Plan was 58,054, 56,187 and 56,307 shares in fiscal 2003,
2002 and 2001 at weighted average prices of $21.62, $23.16 and $22.31,
respectively. The weighted average fair value of the fiscal 2003, 2002 and 2001
awards was $7.16, $8.35 and $7.88, respectively. At June 30, 2003, 1,022,779
shares were reserved for future issuances under the Purchase Plan. In July
2003, the Board of Directors approved the 2003 Employee Stock Participation
Plan with 800,000 shares authorized for issuance. The Plan will be presented
for stockholder approval at the Annual Meeting in October 2003.

Note 11 / EMPLOYEE 401(K) PLAN

The Company has a 401(k) tax deferred savings plan covering most U.S.
employees. Participants may contribute up to 10% of their compensation and the
Company makes matching contributions ($1,267,000 in fiscal 2003, $1,223,000 in
fiscal 2002 and $1,188,000 in fiscal 2001) limited to 5% of each participants
compensation. Matching contributions vest in 25% increments each year beginning
two years after the participants date of employment.

Note 12 / TAXES ON INCOME

The provision for taxes on income consists of:

|                    |         |               |   |       |        |      |   |       |        |  |   |       |        | 
|------------------- | ------- | ------------- | - | ----- | ------ | ---- | - | ----- | ------ |  | - | ----- | ------ | 
|Years ended June 30 |         |               |   |       |        |      |   |       |        |  |   |      
|(In thousands)      |         | 2003          |   | 2002  |        | 2001
|                    |         |               |   |       |        |     
|Current:            |         |               |   |       |        |      |   |       |        |  |   |      
|                    | Federal |               | $ | 6,961 |        |      | $ | 5,981 |        |  | $ | 8,302 |       
|                    | State   |               |   | 1,015 |        |      |   | 1,063 |        |  |   | 1,313 |       
|                    | Foreign |               |   | 8,639 |        |      |   | 5,348 |        |  |   | 4,599 |       
|                    |         |               |   |       |        |      |   |       |        |  |   |      
|                    |         | Total current |   |       | 16,615 |      |   |       | 12,392 |  |   |       | 14,214 | 

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|                    |         |                |        |      |        |      |        |     |     |   |        |     |       | 
|------------------- | ------- | -------------- | ------ | ---- | ------ | ---- | ------ | --- | --- | - | ------ | --- | ----- | 
|Years ended June 30 |         |                |        |      |        |      |        |     |     |   |        |    
|(In thousands)      |         | 2003           |        | 2002 |        | 2001
|                    |         |                |        |      |        |     
|Deferred:           |         |                |        |      |        |      |        |     |     |   |        |    
|                    | Federal |                |        | (790 | )      |      |        | 346 |     |   |        | 770 |      
|                    | State   |                |        | (80  | )      |      |        | 29  |     |   |        | 169 |      
|                    | Foreign |                |        | (622 | )      |      |        | 525 |     |   |        | 142 |      
|                    |         |                |        |      |        |      |        |     |     |   |        |    
|                    |         | Total deferred |        |      | (1,482 | )    |        |     | 900 |   |        |     | 1,081 | 
|                    |         |                |        |      |        |      |        |     |     |   |        |    
|                    |         | $              | 15,133 |      |        | $    | 13,292 |     |     | $ | 15,295 |    
|                    |         |                |        |      |        |      |        |     |     |   |        |    

Domestic and foreign income before taxes on income is as follows:

|                    |  |      |        |      |  |      |        |  |  |   |        | 
|------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|Years ended June 30 |  |      |        |      |  |      |        |  |  |   |        | 
|(In thousands)      |  | 2003 |        | 2002 |  | 2001
|                    |  |      |        |      |  |     
|Domestic            |  | $    | 30,516 |      |  | $    | 29,928 |  |  | $ | 38,357 | 
|Foreign             |  |      | 16,045 |      |  |      | 10,972 |  |  |   | 8,703  | 
|                    |  |      |        |      |  |      |        |  |  |   |        | 
|                    |  | $    | 45,561 |      |  | $    | 40,900 |  |  | $ | 47,060 | 
|                    |  |      |        |      |  |      |        |  |  |   |        | 

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The components of the
current and noncurrent deferred tax assets and liabilities are as follows:

|                                                                         |                                                                      |                                   |       |       |       |   |       |       |       | 
|------------------------------------------------------------------------ | -------------------------------------------------------------------- | --------------------------------- | ----- | ----- | ----- | - | ----- | ----- | ----- | 
|Years ended June 30                                                      |                                                                      |                                   |       |       |       |   |       |      
|(In thousands)                                                           |                                                                      | 2003                              |       | 2002 
|                                                                         |                                                                      |                                   |       |      
|Current deferred tax assets:                                             |                                                                      |                                   |       |       |       |   |       |      
|                                                                         | Accounting accruals deductible in
different periods for tax purposes |                                   | $     | 9,245 |       |   | $     | 7,309 |      
|                                                                         | State income tax                                                     |                                   |       | 221   |       |   |       | 301   |      
|                                                                         | Other                                                                |                                   |       | 146   |       |   |       | 146   |      
|                                                                         |                                                                      |                                   |       |       |       |   |       |      
|                                                                         |                                                                      | Total current deferred tax assets |       |       | 9,612 |   |       |       | 7,756 | 
|                                                                         |                                                                      |                                   |       |       |       |   |       |      
|Noncurrent deferred tax asset - Difference
in tax basis from acquisition |                                                                      |                                   | 2,798 |       |       |   | 3,145 |      
|Noncurrent deferred tax liabilities:                                     |                                                                      |                                   |       |       |       |   |       |      
|                                                                         | Accelerated depreciation                                             |                                   |       | 966   |       |   |       | 898   |      
|                                                                         | Net unrealized gain on available for
sale securities                 |                                   |       | 286   |       |   |       | 515   |      
|                                                                         | Excess tax basis from acquisition                                    |                                   |       | 2,798 |       |   |       | 3,145 |      
|                                                                         | Other                                                                |                                   |       | 57    |       |   |       | 391   |      
|                                                                         |                                                                      |                                   |       |       |       |   |       |      
|                                                                         |                                                                      | Total deferred tax liabilities    |       |       | 4,107 |   |       |       | 4,949 | 
|                                                                         |                                                                      |                                   |       |       |       |   |       |      
|Net deferred tax assets (liabilities)                                    |                                                                      | $                                 | 8,303 |       |       | $ | 5,952 |      
|                                                                         |                                                                      |                                   |       |       |       |   |       |      

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Total income tax expense differs from the amount computed by applying the
statutory Federal income tax rate to income before taxes as follows:

|                                                     |  |      |      |      |  |      |      |   |  |  |      |  
|---------------------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|Years ended June 30                                  |  | 2003 |      | 2002 |  | 2001
|                                                     |  |      |      |      |  |     
|Statutory Federal income tax rate                    |  |      | 35.0 | %    |  |      | 35.0 | % |  |  | 35.0 | %
|State income taxes, net of
Federal income tax effect |  |      | 1.3  |      |  |      | 1.7  |   |  |  | 1.8  |  
|FSC income not taxed                                 |  |      | (2.9 | )    |  |      | (2.4 | ) |  |  | (3.1 | )
|Taxes on foreign income                              |  |      | 0.1  |      |  |      | 0.2  |   |  |  | 0.8  |  
|Other                                                |  |      | (1.0 | )    |  |      | (2.0 | ) |  |  | (2.0 | )
|                                                     |  |      |      |      |  |      |      |   |  |  |      |  
|                                                     |  |      | 32.5 | %    |  |      | 32.5 | % |  |  | 32.5 | %
|                                                     |  |      |      |      |  |      |      |   |  |  |      |  

Income taxes paid were $11,730,000 in fiscal 2003, $9,398,000 in fiscal 2002
and $11,953,000 in fiscal 2001.

The Company has not provided for Federal income taxes on approximately $41.7
million of undistributed earnings of foreign subsidiaries, which have been
permanently reinvested in subsidiary operations. If these earnings were
distributed to the parent company, foreign tax credits available under current
law would substantially eliminate the resulting Federal income tax liability.

Note 13 / COMMITMENTS AND OTHER CONTINGENCIES

Certain facilities and equipment are leased under noncancelable operating
leases. The Company generally pays taxes, insurance and maintenance costs on
leased facilities and equipment. Minimum annual rental commitments under these
noncancelable operating leases are $3,582,000 for fiscal 2004, $2,896,000 for
fiscal 2005, $2,211,000 for fiscal 2006, $1,565,000 for fiscal 2007, $1,184,000
for fiscal 2008 and $4,920,000 thereafter.

Total rental expense for all operating leases was $4,636,000 in fiscal 2003,
$3,928,000 in fiscal 2002 and $3,855,000 in fiscal 2001.

The Company enters into standard indemnification agreements with many of its
customers and certain other business partners in the ordinary course of
business. These agreements include provisions for indemnifying the customer
against any claim brought by a third party to the extent any such claim alleges
that a Dionex product infringes a patent, copyright or trademark, or violates
any other proprietary rights of that third party. The maximum potential amount
of future payments the Company could be required to make under these
indemnification agreements is not estimable, however, the Company has not
incurred any costs to defend lawsuits or settle claims related to these
indemnification agreements. To date, no material claims for such
indemnifications are outstanding as of June 30, 2003. The Company has not
recorded any liabilities for these indemnification agreements at June 30, 2003
and 2002.

Note 14 / BUSINESS SEGMENT INFORMATION

SFAS No. 131 establishes standards for reporting information about operating
segments in annual financial statements of public business enterprises. It also
establishes standards for related disclosures about products and service,
geographic areas and major customers. The Company evaluated its business
activities that are regularly reviewed by the Companys senior management and
has determined that it has one reporting segment.

50



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The Company sells products, installation and training services and maintenance
within this reportable segment, detailed as follows:

|                                   |  |      |         |      |  |      |         |  |  |   |         | 
|---------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|(In thousands)                     |  | 2003 |         | 2002 |  | 2001
|                                   |  |      |         |      |  |     
|Products                           |  | $    | 187,410 |      |  | $    | 160,053 |  |  | $ | 165,188 | 
|Installation and Training Services |  |      | 6,976   |      |  |      | 6,276   |  |  |   | 6,508   | 
|Maintenance                        |  |      | 20,523  |      |  |      | 16,105  |  |  |   | 15,061  | 
|                                   |  |      |         |      |  |      |         |  |  |   |         | 
|                                   |  | $    | 214,909 |      |  | $    | 182,434 |  |  | $ | 186,757 | 
|                                   |  |      |         |      |  |      |         |  |  |   |         | 

Geographic information is presented below:

|                                                 |                     |      |         |        |  |      |         |        |  |   |         |        | 
|------------------------------------------------ | ------------------- | ---- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|(In thousands)                                   |                     | 2003 |         | 2002   |  | 2001
|                                                 |                     |      |         |        |  |     
|Net sales to unaffiliated customers:             |                     |      |         |        |  |      |         |        |  |   |         |       
|                                                 | United States       |      | $       | 71,418 |  |      | $       | 66,585 |  |   | $       | 69,564 | 
|                                                 | Europe              |      |         | 90,060 |  |      |         | 72,696 |  |   |         | 68,899 | 
|                                                 | Japan               |      |         | 27,299 |  |      |         | 22,853 |  |   |         | 29,758 | 
|                                                 | Other International |      |         | 26,132 |  |      |         | 20,300 |  |   |         | 18,536 | 
|                                                 |                     |      |         |        |  |      |         |        |  |   |         |       
|Consolidated net sales to
unaffiliated customers |                     | $    | 214,909 |        |  | $    | 182,434 |        |  | $ | 186,757 |       
|                                                 |                     |      |         |        |  |      |         |        |  |   |         |        | 
|Long-lived assets:                               |                     |      |         |        |  |      |         |        |  |   |         |       
|                                                 | United States       |      | $       | 39,174 |  |      | $       | 37,251 |  |   |         |        | 
|                                                 | Europe              |      |         | 31,734 |  |      |         | 30,698 |  |   |         |        | 
|                                                 | Japan               |      |         | 9,776  |  |      |         | 10,149 |  |   |         |        | 
|                                                 | Other International |      |         | 167    |  |      |         | 231    |  |   |         |        | 
|                                                 |                     |      |         |        |  |      |         |        |  |   |         |       
|Consolidated assets                              |                     | $    | 80,851  |        |  | $    | 78,329  |        |  |   |         |       
|                                                 |                     |      |         |        |  |      |         |        |  |   |         |       

No individual customer was greater than 10% of net sales in fiscal 2003, 2002
and 2001 or greater than 10% of consolidated accounts receivable at June 30,
2003 and 2002.

Note 15 / QUARTERLY RESULTS OF OPERATIONS (unaudited)

The following is a summary of the unaudited quarterly results of operations for
the years ended June 30, 2003 and 2002.

|                           |  |         |        |        |  |       |        |        |  |   |        |  |  |   |        | 
|-------------------------- |  | ------- | ------ | ------ |  | ----- | ------ | ------ |  | - | ------ |  |  | - | ------ | 
|                           |  | Quarter
|(In thousands,             |  |        
|except per share amounts)  |  | First   |        | Second |  | Third |        | Fourth
|                           |  |         |        |        |  |       |        |       
|Fiscal 2003:               |  |         |        |        |  |       |        |        |  |   |        |  |  |   |        | 
|Net sales                  |  | $       | 47,272 |        |  | $     | 54,478 |        |  | $ | 56,069 |  |  | $ | 57,090 | 
|Gross profit               |  |         | 30,321 |        |  |       | 36,157 |        |  |   | 37,259 |  |  |   | 37,899 | 
|Net income                 |  |         | 6,309  |        |  |       | 8,899  |        |  |   | 7,612  |  |  |   | 8,608  | 
|Basic earnings per share   |  | $       | 0.30   |        |  | $     | 0.42   |        |  | $ | 0.36   |  |  | $ | 0.41   | 
|Diluted earnings per
share |  | $       | 0.29   |        |  | $     | 0.41   |        |  | $ | 0.36   |  |  | $ | 0.40   | 
|Fiscal 2002:               |  |         |        |        |  |       |        |        |  |   |        |  |  |   |        | 
|Net sales                  |  | $       | 42,067 |        |  | $     | 46,729 |        |  | $ | 45,060 |  |  | $ | 48,578 | 
|Gross profit               |  |         | 26,751 |        |  |       | 30,659 |        |  |   | 29,672 |  |  |   | 31,612 | 
|Net income                 |  |         | 5,357  |        |  |       | 7,597  |        |  |   | 7,148  |  |  |   | 7,506  | 
|Basic earnings per share   |  | $       | 0.24   |        |  | $     | 0.35   |        |  | $ | 0.33   |  |  | $ | 0.35   | 
|Diluted earnings per share |  | $       | 0.24   |        |  | $     | 0.34   |        |  | $ | 0.33   |  |  | $ | 0.35   | 

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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.




Item 9A. CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the
participation of the Companys Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the Companys disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and
Exchange Act of 1934. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer have concluded that the Registrants disclosure
controls and procedures as of June 30, 2003 were effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SECs rules
and forms.

There were no changes in the Companys internal controls over financial
reporting that occurred during the year ended June 30, 2003 that have
materially affected, or are reasonably likely to materially affect, the
Companys internal controls over financial reporting.




PART III




Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

IDENTIFICATION OF DIRECTORS

The information required by Item 10 of Form 10-K with respect to identification
of directors is incorporated by reference to the information contained in the
section captioned Nominees in the 2003 Proxy Statement.

IDENTIFICATION OF OFFICERS

See Pages 18 and 19 of this Report captioned Executive Officers of the
Registrant.




Item 11. EXECUTIVE COMPENSATION

The information required by Item 11 of Form 10-K is incorporated by reference
to the information contained in the section captioned Executive Compensation,
of the Registrants definitive Proxy Statement for the Annual Meeting of
Stockholders to be held October 24, 2003, which will be filed in accordance
with Regulation 14A under the Securities Exchange Act of 1934, as amended.




Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 12 of Form 10-K is incorporated by reference
to the information contained in the sections captioned Security Ownership of
Certain Beneficial Owners and Management of the Registrants definitive Proxy
Statement for the Annual Meeting of Stockholders to be held October 24, 2003,
which will be filed in accordance with Regulation 14A under the Securities
Exchange Act of 1934, as amended.

52



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Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 of Form 10-K with respect to certain
relationships and related transactions is incorporated by reference to the
information contained in the section captioned Certain Relationships and
Related Transactions in the 2003 Proxy Statement.




Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 14 of Form 10-K with respect to principal
accounting fees and services is incorporated by reference to the information
contained in the section captioned Auditors Fees in the 2003 Proxy
Statement.




PART IV




Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K



|(a) | (1) |  | Financial Statements  See Index to Financial Statements at
Page 31 of this Report.                  
|--- | --- |  | -----------------------------------------------------------------------------------------------------
|   
|    | (2) |  | Financial Statement Schedules  See Index to Financial Statement
Schedules at page 58 of this Report.
|   
|    | (3) |  | Exhibits  See Exhibit Index at page 54 through 56 of this Report.                                   



|(b) |  | Reports on Form 8-K  On April 21, 2003, the Company issued a press
release announcing the Companys third quarter financial results for the
period ended March 31, 2003. A copy of the press release was attached as
Exhibit 99.1 to a current report on Form 8-K filed on April 21, 2003.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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EXHIBIT INDEX

|        |  |                                                                                                                                                            |  |           |    |  
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | -- | -
|Exhibit |  |                                                                                                                                                            |  |           |    |  
|Number  |  | Description                                                                                                                                                |  | Reference
|        |  |                                                                                                                                                            |  |          
|3.1     |  | Restated Certificate of Incorporation, filed
November 6, 1996                                                                                              |  |           | (6 | )
|        |  |                                                                                                                                                            |  |           |    |  
|3.2     |  | Bylaws, as amended on July 29, 2002                                                                                                                        |  |           |    |  
|        |  |                                                                                                                                                            |  |           |    |  
|4.1     |  | Shareholder Rights Agreement dated January 21, 1999,
between the Registrant and BankBoston N.A.                                                            |  |           | (9 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.1    |  | Agreement, effective as of January 1, 1975,
between The Dow Chemical Company and
International Plasma Corporation                                          |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.2    |  | Memorandum agreement, dated March 14, 1975,
between The Dow Chemical Company and
International Plasma Corporation                                          |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.3    |  | Agreement, dated March 6, 1975, between
International Plasma Corporation and the
former Dionex Corporation                                                 |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.4    |  | Consent to Assignment executed as of March 26,
1980, between the Dow Chemical Company and the
former Dionex Corporation                                    |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.5    |  | Amendatory Agreement, effective as of November 1,
1981,between The Dow Chemical Company and the
Registrant (with certain confidential information
deleted) |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.6    |  | Amendatory Agreement, effective as of July 1, 1982,
between The Dow Chemical Company and the Registrant
(with certain confidential information deleted)    |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.7    |  | Registrants Supplemental Stock Option Plan
(Exhibit 28.4)                                                                                                 |  |           | (2 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.8    |  | Registrants Medical Care Reimbursement Plan
(Exhibit 10.17)                                                                                               |  |           | (1 | )
|        |  |                                                                                                                                                            |  |           |    |  
|10.9    |  | Registrants Employee Stock Participation Plan
(Exhibit 28.3)                                                                                              |  |           | (4 | )

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|        |  |                                                                                                                      |  |           |     |  
|------- |  | -------------------------------------------------------------------------------------------------------------------- |  | --------- | --- | -
|Exhibit |  |                                                                                                                      |  |           |     |  
|Number  |  | Description                                                                                                          |  | Reference
|        |  |                                                                                                                      |  |          
|10.10   |  | Credit Agreement dated February 26, 1996
between Bank of America and the Registrant                                  |  |           | (5  | )
|        |  |                                                                                                                      |  |           |     |  
|10.11   |  | First amendment to Credit Agreement dated
February 29, 1996 between Bank of America and
the Registrant               |  |           | (7  | )
|        |  |                                                                                                                      |  |           |     |  
|10.12   |  | Second amendment to Credit Agreement dated
February 29, 1996 between Bank of America and
the Registrant              |  |           | (7  | )
|        |  |                                                                                                                      |  |           |     |  
|10.13   |  | Third amendment to Credit Agreement dated
February 29, 1996 between BankAmerica and the
Registrant.(Exhibit 10.1)    |  |           | (8  | )
|        |  |                                                                                                                      |  |           |     |  
|10.14   |  | Credit Agreement dated November 13, 2000
between Wells Fargo Bank and the Registrant
(Exhibit 10.15)                 |  |           | (11 | )
|        |  |                                                                                                                      |  |           |     |  
|10.15   |  | 1988 Directors Stock Option Plan (and related
stock option grant form) (Exhibit 10.20)                              |  |           | (3  | )
|        |  |                                                                                                                      |  |           |     |  
|10.16   |  | Dionex Corporation Stock Option Plan, as
amended and restated (formerly, the 1990 Stock
Option Plan) (Exhibit 10.12) |  |           | (10 | )
|        |  |                                                                                                                      |  |           |     |  
|10.17   |  | First amendment to Credit Agreement dated
November 13, 2000 between Wells Fargo Bank and the
Registrant              |  |           |     |  
|        |  |                                                                                                                      |  |           |     |  
|21.1    |  | Subsidiaries of Registrant                                                                                           |  |           |     |  
|        |  |                                                                                                                      |  |           |     |  
|23.1    |  | Independent Auditors Consent                                                                                        |  |           |     |  
|        |  |                                                                                                                      |  |           |     |  
|31.1    |  | Certification of Chief Executive Officer Pursuant to Section
302(a) of the Sarbanes-Oxley Act of 2002                |  |           |     |  
|        |  |                                                                                                                      |  |           |     |  
|31.2    |  | Certification of Chief Financial Officer Pursuant to Section
302(a) of the Sarbanes-Oxley Act of 2002                |  |           |     |  
|        |  |                                                                                                                      |  |           |     |  
|32.1    |  | Certification of the Chief Executive Officer Pursuant to Section
302(a) of the Sarbanes-Oxley Act of 2002            |  |           |     |  
|        |  |                                                                                                                      |  |           |     |  
|32.2    |  | Certification of the Chief Financial Officer Pursuant to Section
302(a) of the Sarbanes-Oxley Act of 2002            |  |           |     |  



|(1) |  | Incorporated by reference to the indicated exhibit in Amendment No. 1 of
the Registrants Registration Statement on Form S-1 filed December 7,
1982.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Incorporated by reference to the indicated exhibit in the Registrants
Registration Statement on Form S-8 filed March 3, 1987.                      

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##### Table of Contents





|(3)  |  | Incorporated by reference to the indicated exhibit in the Registrants
Annual Report on Form 10-K filed September 27, 1988.      
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------
|    
|(4)  |  | Incorporated by reference to the indicated exhibit in the Registrants
Statement on Form S-8 filed May 6, 1994.                  
|    
|(5)  |  | Incorporated by reference to the corresponding exhibit in the
Registrants Annual Report on Form 10-K filed September 26, 1996.  
|    
|(6)  |  | Incorporated by reference to the corresponding exhibit in the
Registrants Annual Report on Form 10-Q filed February 13, 1997.   
|    
|(7)  |  | Incorporated by reference to the corresponding exhibit in the
Registrants Annual Report on Form 10-K filed September 28, 1998.  
|    
|(8)  |  | Incorporated by reference to the indicated exhibit in the Registrants
Quarterly Report on Form 10-Q filed November 16, 1998.    
|    
|(9)  |  | Incorporated by reference to the corresponding exhibit in the
Registrants Quarterly Report on Form 10-Q filed February 16, 1999.
|    
|(10) |  | Incorporated by reference to the indicated exhibit in the Registrants
Statement on Form S-8 filed December 22, 1999.            
|    
|(11) |  | Incorporated by reference to the indicated exhibit in the Registrants
Quarterly Report on Form 10-Q filed November 14, 2001.    

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|                        |  |                    |  |                              
|----------------------- |  | ------------------ |  | -----------------------------
|                        |  | DIONEX CORPORATION
|                        |  | (Registrant)      
|                        |  |                    |  |                              
|Date September 19, 2003 |  | By                 |  | /s/ Lukas Braunschweiler     
|                        |  |                    |  |                              
|                        |  |                    |  | Lukas Braunschweiler         
|                        |  |                    |  | President and Chief Executive
|                        |  |                    |  | Officer                      

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

|                                             |  |                                                                                         |  |                   
|-------------------------------------------- |  | --------------------------------------------------------------------------------------- |  | ------------------
|Signature                                    |  | Title                                                                                   |  | Date              
|                                             |  |                                                                                         |  |                   
|/s/ Lukas BraunschweilerLukas Braunschweiler |  | President, Chief Executive
Officer, and Director
(Principal Executive Officer)          |  | September 19, 2003
|                                            
|/s/ Craig A. McCollamCraig A. McCollam       |  | Vice President and Chief
Financial Officer
(Principal Financial and
Accounting Officer) |  | September 19, 2003
|                                            
|/s/ A. Blaine BowmanA. Blaine Bowman         |  | Chairman of the Board                                                                   |  | September 19, 2003
|                                            
|/s/ David L. AndersonDavid L. Anderson       |  | Director                                                                                |  | September 19, 2003
|                                            
|/s/ B.J. MooreB.J. Moore                     |  | Director                                                                                |  | September 19, 2003
|                                            
|/s/ Riccardo PigliucciRiccardo Pigliucci     |  | Director                                                                                |  | September 19, 2003
|                                            
|/s/ Michael PopeMichael Pope                 |  | Director                                                                                |  | September 19, 2003

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INDEX TO FINANCIAL STATEMENT SCHEDULES

|                                                             |  |     
|------------------------------------------------------------ |  | ----
|                                                             |  | Page
|                                                             |  |     
|FINANCIAL STATEMENT SCHEDULES                                |  |     
|Independent Auditors Report                                 |  | 59  
|Schedule II - Valuation and Qualifying Accounts
and Reserves |  | 60  

All other schedules are omitted because they are not required, are not
applicable or the information is included in the consolidated financial
statements or notes thereto.

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INDEPENDENT AUDITORS REPORT

Dionex Corporation

We have audited the consolidated financial statements of Dionex Corporation and
its subsidiaries as of June 30, 2003 and 2002, and for each of the three years
in the period ended June 30, 2003, and have issued our report thereon dated
July 29, 2003; such financial statements and report are included herein. Our
audits also included the consolidated financial statement schedule of Dionex
Corporation and its subsidiaries, listed in the accompanying Index to Financial
Statement Schedules. This financial statement schedule is the responsibility
of the Companys management. Our responsibility is to express an opinion based
on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

DELOITTE & TOUCHE LLP

San Jose, California
July 29, 2003

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SCHEDULE II

DIONEX CORPORATION
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED JUNE 30, 2002, 2001 AND 2000
(IN THOUSANDS)

|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |       | 
|------------------------- | ----------------------------------------- |  | --------- | ----- | --------- |  | ------------ | ----- | ---------- |  | ------- | ---- | ---- |  | - | ------ | ------- | -- | - |  | - | ----- | 
|                          |                                           |  |           |       |           |  |              |       |            |  | Charged |      |      |  |   |        |         |    |   |  |  
|                          |                                           |  | Balance   |       |           |  |              |       | (Credited) |  |         |      |      |  |   |        | Balance
|                          |                                           |  | Beginning |       |           |  |              |       | to Other   |  |         |      |      |  |   |        | End of 
|                          |                                           |  | of Year   |       | Additions |  | Accounts (1) |       | Deductions |  |         |      | Year
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |     
|YEAR ENDED JUNE 30, 2003: |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|                          | Allowance for doubtful
accounts           |  | $         | 989   |           |  | $            | 356   |            |  | $       | (36  | )    |  | $ | (34    | )       | (2 | ) |  | $ | 1,275 | 
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|                          | Accrued product
warranty                  |  | $         | 2,912 |           |  | $            | 2,642 |            |  | $       | 216  |      |  | $ | (2,582 | )       | (3 | ) |  | $ | 3,188 | 
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|YEAR ENDED JUNE 30,
2002: |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|                          | Allowance for doubtful
accounts           |  | $         | 890   |           |  | $            | 181   |            |  | $       | 84   |      |  | $ | (166   | )       | (2 | ) |  | $ | 989   | 
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|                          | Accrued product
warranty                  |  | $         | 2,983 |           |  | $            | 3,191 |            |  | $       | 181  |      |  | $ | (3,443 | )       | (3 | ) |  | $ | 2,912 | 
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|YEAR ENDED JUNE 30,
2001: |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|                          | Allowance for doubtful
accounts           |  | $         | 765   |           |  | $            | 288   |            |  | $       | (71  | )    |  | $ | (92    | )       | (2 | ) |  | $ | 890   | 
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      
|                          | Accrued product
warranty and
installation |  | $         | 4,645 |           |  | $            | 1,085 |            |  | $       | (178 | )    |  | $ | (2,569 | )       | (3 | ) |  | $ | 2,983 | 
|                          |                                           |  |           |       |           |  |              |       |            |  |         |      |      |  |   |        |         |    |   |  |   |      



|(1) |  | Effects of exchange rate changes       
|--- |  | ---------------------------------------
|   
|(2) |  | Accounts written off, net of recoveries
|   
|(3) |  | Product warranty and installation costs

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