##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 For the quarterly period ended June 30, 2005
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 For the transition period from  to
 Commission file number 1-9957
 Diagnostic Products Corporation
  California
    
    95-2802182(State or other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)
 5210 Pacific Concourse
Los Angeles, California 90045
 (310) 645-8200
 No change
   þ o
  þ o




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM I. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 6. EXHIBITSSIGNATURESEXHIBIT INDEXExhibit 31.1Exhibit 31.2Exhibit 32.1    Table of Contents  
 PART I. FINANCIAL INFORMATION
 
 ITEM I. FINANCIAL STATEMENTS
 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,(Amounts in Thousands, Except Per Share Data)
    
    2005
    
    2004
    
    2005
    
    2004SALES:Non-Affiliated Customers
    
    $
    119,776
    
    
    $
    102,749
    
    
    $
    226,839
    
    
    $
    199,723Unconsolidated Affiliates
    
    
    5,683
    
    
    
    7,719
    
    
    
    11,531
    
    
    
    16,828Total Sales
    
    
    125,459
    
    
    
    110,468
    
    
    
    238,370
    
    
    
    216,551COST OF SALES
    
    
    52,185
    
    
    
    44,816
    
    
    
    98,923
    
    
    
    90,838Gross Profit
    
    
    73,274
    
    
    
    65,652
    
    
    
    139,447
    
    
    
    125,713OPERATING EXPENSES:Selling
    
    
    21,081
    
    
    
    19,382
    
    
    
    41,692
    
    
    
    38,109Research and Development
    
    
    12,852
    
    
    
    11,025
    
    
    
    25,118
    
    
    
    22,449General and Administrative
    
    
    13,587
    
    
    
    11,058
    
    
    
    26,143
    
    
    
    20,723Equity in Income of Affiliates
    
    
    (3,582
    )
    
    
    (2,700
    )
    
    
    (6,135
    )
    
    
    (4,830
    )OPERATING EXPENSES-NET
    
    
    43,938
    
    
    
    38,765
    
    
    
    86,818
    
    
    
    76,451OPERATING INCOME
    
    
    29,336
    
    
    
    26,887
    
    
    
    52,629
    
    
    
    49,262Interest/Other Income (Expense)-Net
    
    
    1,012
    
    
    
    (184
    )
    
    
    1,186
    
    
    
    (553
    )INCOME BEFORE INCOME TAXESAND MINORITY INTEREST
    
    
    30,348
    
    
    
    26,703
    
    
    
    53,815
    
    
    
    48,709PROVISION FOR INCOME TAXES
    
    
    8,668
    
    
    
    8,011
    
    
    
    15,661
    
    
    
    14,613MINORITY INTEREST
    
    
    797
    
    
    
    73
    
    
    
    1,137
    
    
    
    20NET INCOME
    
    $
    20,883
    
    
    $
    18,619
    
    
    $
    37,017
    
    
    $
    34,076EARNINGS PER SHARE:BASIC
    
    $
    0.71
    
    
    $
    0.64
    
    
    $
    1.26
    
    
    $
    1.17DILUTED
    
    $
    0.69
    
    
    $
    0.62
    
    
    $
    1.23
    
    
    $
    1.14WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC
    
    
    29,316
    
    
    
    29,059
    
    
    
    29,295
    
    
    
    29,014DILUTED
    
    
    30,079
    
    
    
    29,866
    
    
    
    30,092
    
    
    
    29,894DIVIDENDS DECLARED PER SHARE
    
    $
    0.07
    
    
    $
    0.06
    
    
    $
    0.14
    
    
    $
    0.12
   2




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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(Amounts in Thousands, Except Share Data)
    
    June 30,
    
    December 31,2005
    
    2004AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    78,157
    
    
    $
    80,425Accounts receivable (including receivables from unconsolidated
affiliates of $7,074 and $6,190, respectively)  net of allowance
for doubtful accounts of $3,687 and $3,667, respectively
    
    
    108,699
    
    
    
    100,094Inventories
    
    
    94,504
    
    
    
    93,228Prepaid expenses and other current assets
    
    
    7,804
    
    
    
    5,297Deferred income taxes
    
    
    4,008
    
    
    
    4,030Total current assets
    
    
    293,172
    
    
    
    283,074PROPERTY, PLANT, AND EQUIPMENT  net
    
    
    150,434
    
    
    
    144,772INSTRUMENTS
 net
    
    
    77,023
    
    
    
    82,730INVESTMENTS IN AFFILIATED COMPANIES
    
    
    38,437
    
    
    
    39,227OTHER ASSETS
 net
    
    
    12,310
    
    
    
    11,937GOODWILL
    
    
    13,387
    
    
    
    13,441TOTAL ASSETS
    
    $
    584,763
    
    
    $
    575,181Liabilities and Shareholders EquityCURRENT LIABILITIES:Notes payable
    
    $
    3,289
    
    
    $
    4,145Accounts payable
    
    
    23,058
    
    
    
    18,391Accrued liabilities
    
    
    34,199
    
    
    
    45,644Income taxes payable
    
    
    5,046
    
    
    
    3,872Total current liabilities
    
    
    65,592
    
    
    
    72,052LONG-TERM LIABILITIES
    
    
    7,439
    
    
    
    8,846DEFERRED INCOME TAXES
    
    
    6,193
    
    
    
    5,841MINORITY INTEREST
    
    
    4,900
    
    
    
    4,210SHAREHOLDERS EQUITY:Common
Stockno par value, authorized 60,000,000 shares
at June 30, 2005 and December 31, 2004; outstanding
29,328,746 shares and 29,230,196 shares, respectively
    
    
    76,597
    
    
    
    73,881Retained earnings
    
    
    423,512
    
    
    
    390,597Unrealized gains (losses) on foreign exchange contracts
    
    
    212
    
    
    
    (500
    )Cumulative foreign currency translation adjustment
    
    
    318
    
    
    
    20,254Total shareholders equity
    
    
    500,639
    
    
    
    484,232TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    584,763
    
    
    $
    575,181


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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Amounts in Thousands)
    
    Six Months EndedJune 30,2005
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    37,017
    
    
    $
    34,076Adjustments to reconcile net income to net cash
flows from operating activities:Depreciation and amortization
    
    
    23,771
    
    
    
    19,274Provision for doubtful accounts
    
    
    401
    
    
    
    284Minority interest
    
    
    1,137
    
    
    
    20Equity in undistributed income of unconsolidated affiliates  net
of distributions
    
    
    (3,411
    )
    
    
    (3,244
    )Deferred income taxes
    
    
    597
    
    
    
    (849
    )Income tax benefit received upon exercise of stock options
    
    
    751
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (13,856
    )
    
    
    (12,563
    )Inventories
    
    
    (17,747
    )
    
    
    (20,554
    )Prepaid expenses and other assets
    
    
    (2,679
    )
    
    
    2,349Accounts payable
    
    
    7,283
    
    
    
    4,460Accrued liabilities
    
    
    (10,610
    )
    
    
    (359
    )Income taxes payable
    
    
    1,635
    
    
    
    4,560Net cash flows from operating activities
    
    
    24,289
    
    
    
    27,454CASH FLOWS USED FOR INVESTING ACTIVITIES:Investment in affiliated companies
    
    
    
    
    
    
    (219
    )Additions to property, plant, and equipment
    
    
    (16,906
    )
    
    
    (28,265
    )Net cash flows used for investing activities
    
    
    (16,906
    )
    
    
    (28,484
    )CASH FLOWS USED FOR FINANCING ACTIVITIES:Borrowings under notes payable
    
    
    459
    
    
    
    7,513Repayments of notes payable
    
    
    (2,155
    )
    
    
    (11,496
    )Proceeds from exercise of stock options
    
    
    1,965
    
    
    
    3,386Cash dividends paid
    
    
    (4,102
    )
    
    
    (3,479
    )Cash dividends paid to shareholders of minority interest
    
    
    (447
    )
    
    
    Net cash flows used for financing activities
    
    
    (4,280
    )
    
    
    (4,076
    )EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
    
    (5,371
    )
    
    
    507NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (2,268
    )
    
    
    (4,599
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    80,425
    
    
    
    69,843CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    78,157
    
    
    $
    65,244SUPPLEMENTAL CASH FLOW INFORMATION:Non cash transactions  instrument placements transferred from inventories
    
    $
    13,995
    
    
    $
    14,169Cash paid during the period for income taxes
    
    $
    12,476
    
    
    $
    11,378Cash paid during the period for interest, net of capitalized interest
    
    $
    585
    
    
    $
    802


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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1
 Basis of Presentation
      Note 2
 Pro Forma Stock-Based Compensation
   5




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(Amounts in Thousands, Except Per Share Data)
    
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net Income:As Reported
    
    $
    20,883
    
    
    $
    18,619
    
    
    $
    37,017
    
    
    $
    34,076Pro Forma expense
    
    
    (801
    )
    
    
    (680
    )
    
    
    (1,583
    )
    
    
    (1,353
    )Pro Forma
    
    $
    20,082
    
    
    $
    17,939
    
    
    $
    35,434
    
    
    $
    32,723Net Earnings Per ShareBasic:As Reported
    
    $
    0.71
    
    
    $
    0.64
    
    
    $
    1.26
    
    
    $
    1.17Pro Forma Adjustment
    
    
    (0.03
    )
    
    
    (0.02
    )
    
    
    (0.05
    )
    
    
    (0.04
    )Pro Forma
    
    $
    0.68
    
    
    $
    0.62
    
    
    $
    1.21
    
    
    $
    1.13Diluted:As Reported
    
    $
    0.69
    
    
    $
    0.62
    
    
    $
    1.23
    
    
    $
    1.14Pro Forma Adjustment
    
    
    (0.02
    )
    
    
    (0.02
    )
    
    
    (0.05
    )
    
    
    (0.05
    )Pro Forma
    
    $
    0.67
    
    
    $
    0.60
    
    
    $
    1.18
    
    
    $
    1.09
 Note 3
 Inventories
  (Amounts in Thousands)
    
    June 30,
    
    December 31,2005
    
    2004Raw materials
    
    $
    41,337
    
    
    $
    43,899Work in process
    
    
    32,817
    
    
    
    32,767Finished goods
    
    
    20,350
    
    
    
    16,562Total
    
    $
    94,504
    
    
    $
    93,228
 Note 4
 Property, Plant & Equipment
  (Amounts in Thousands)
    
    June 30,
    
    December 31,
    
    Estimated2005
    
    2004
    
    Useful LivesLand and buildings
    
    $
    109,493
    
    
    $
    114,552
    
    
    20-50 YearsMachinery and equipment
    
    
    111,697
    
    
    
    104,245
    
    
    3-5 YearsLeasehold improvements
    
    
    10,188
    
    
    
    9,578
    
    
    3-9 YearsConstruction in progress
    
    
    10,240
    
    
    
    3,714Total
    
    
    241,618
    
    
    
    232,089Accumulated depreciation and amortization
    
    
    (91,184
    )
    
    
    (87,317
    )Property, plant and equipment  net
    
    $
    150,434
    
    
    $
    144,772
  Note 5
 Instruments
  6




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(Amounts in Thousands)
    
    June 30,
    
    December 31,2005
    
    2004Placements and operating leases
    
    $
    225,846
    
    
    $
    227,434Less accumulated amortization
    
    
    (154,278
    )
    
    
    (150,956
    )Net
    
    
    71,568
    
    
    
    76,478Sales-type leases
    
    
    6,686
    
    
    
    7,234Less current portion
    
    
    (1,231
    )
    
    
    (982
    )Net
    
    
    5,455
    
    
    
    6,252Total
    
    $
    77,023
    
    
    $
    82,730
 Note 6
 Other Assets
  (Amounts in Thousands)
    
    June 30,
    
    December 31,2005
    
    2004Long-term accounts receivable
    
    $
    5,365
    
    
    $
    4,637Purchased technology licenses
    
    
    8,112
    
    
    
    8,017Less accumulated amortization of purchased technology licenses
    
    
    (1,167
    )
    
    
    (717
    )Total
    
    $
    12,310
    
    
    $
    11,937
  Note 7
 Comprehensive Income
  (Amounts in Thousands)
    

Three Months Ended June 30,
    

Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004Net income
    
    $
    20,883
    
    
    $
    18,619
    
    
    $
    37,017
    
    
    $
    34,076Foreign currency translation adjustment
    
    
    (12,593
    )
    
    
    (2,352
    )
    
    
    (19,936
    )
    
    
    (2,990
    )Unrealized gain on foreign exchange contracts,
net of tax impact
    
    
    161
    
    
    
    328
    
    
    
    712
    
    
    
    1,964Comprehensive income
    
    $
    8,451
    
    
    $
    16,595
    
    
    $
    17,793
    
    
    $
    33,050
  Note 8
 Earnings Per Share
  7




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(Shares in Thousands)
    
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Basic shares
    
    
    29,316
    
    
    
    29,059
    
    
    
    29,295
    
    
    
    29,014Assumed exercise of stock options
    
    
    763
    
    
    
    807
    
    
    
    797
    
    
    
    880Diluted shares
    
    
    30,079
    
    
    
    29,866
    
    
    
    30,092
    
    
    
    29,894
  (Shares in Thousands)
    
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Antidilutive shares
    
    
    98
    
    
    
    186
    
    
    
    76
    
    
    
    156
 Note 9
 Segment and Product Line Information
  (Amounts in Thousands)
    

Three Months Ended June 30,
    

Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004Sales:IMMULITE (includes all models and service)
    
    $
    115,278
    
    

    $
    100,814
    
    
    $
    218,723
    
    
    $
    197,080Radioimmunoassay (RIA)
    
    
    5,443
    
    
    
    6,075
    
    
    
    11,034
    
    
    
    12,480Other (includes DPC and non-DPC
manufactured products)
    
    
    4,738
    
    
    
    3,579
    
    
    
    8,613
    
    
    
    6,991$
    125,459
    
    
    $
    110,468
    
    
    $
    238,370
    
    
    $
    216,551
  8




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Euro/DPC
    
    DPC
    
    DPCLimited
    
    Biermann
    
    Medlab
    
    
    
    
    
    Less:United
    
    (United
    
    (German
    
    (Brazilian
    
    
    
    
    
    IntersegmentStates
    
    Kingdom)
    
    Group)*
    
    Group)*
    
    Other
    
    Elimination
    
    Total(Amounts in Thousands)Three Months Ended June 30, 2005Sales
    
    $
    80,110
    
    
    $
    23,222
    
    
    $
    16,681
    
    
    $
    13,920
    
    
    $
    26,355
    
    
    $
    (34,829
    )
    
    $
    125,459Net income
    
    
    9,303
    
    
    
    6,121
    
    
    
    913
    
    
    
    1,812
    
    
    
    3,466
    
    
    
    (732
    )
    
    
    20,883Three Months ended June 30, 2004Sales
    
    $
    72,517
    
    
    $
    23,437
    
    
    $
    14,329
    
    
    $
    9,669
    
    
    $
    25,109
    
    
    $
    (34,593
    )
    
    $
    110,468Net income
    
    
    9,418
    
    
    
    5,792
    
    
    
    563
    
    
    
    167
    
    
    
    2,675
    
    
    
    4
    
    
    
    18,619
 Euro/DPC
    
    DPC
    
    DPCLimited
    
    Biermann
    
    Medlab
    
    
    
    
    
    Less:United
    
    (United
    
    (German
    
    (Brazilian
    
    
    
    
    
    IntersegmentStates
    
    Kingdom)
    
    Group)*
    
    Group)*
    
    Other
    
    Elimination
    
    Total(Amounts in Thousands)Six Months Ended June 30, 2005Sales
    
    $
    151,330
    
    
    $
    44,660
    
    
    $
    32,840
    
    
    $
    25,192
    
    
    $
    52,052
    
    
    $
    (67,704
    )
    
    $
    238,370Net income
    
    
    16,625
    
    
    
    10,776
    
    
    
    1,638
    
    
    
    2,585
    
    
    
    6,405
    
    
    
    (1,012
    )
    
    
    37,017Six Months Ended June 30, 2004Sales
    
    $
    137,689
    
    
    $
    44,048
    
    
    $
    28,880
    
    
    $
    17,521
    
    
    $
    50,122
    
    
    $
    (61,709
    )
    
    $
    216,551Net income
    
    
    16,719
    
    
    
    10,540
    
    
    
    1,243
    
    
    
    46
    
    
    
    5,418
    
    
    
    110
    
    
    
    34,076
 
  Note 10  New Accounting Pronouncements
   9




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Note 11  Commitments and Contingent Liabilities
    10




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
  11




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-
    
    the Companys ability to successfully market new and existing products;-
    
    the Companys ability to keep abreast of technological innovations and successfully
incorporate them into new products;-
    
    the Companys current dependence on sole suppliers for key chemical components in the
IMMULITE assays;-
    
    the Companys ability to address and resolve issues relating to the FDAs Application
Integrity Policy on a timely basis;-
    
    the Companys ability to have new tests reviewed and approved by the FDA;-
    
    the risks inherent in the development and release of new products, such as delays,
unforeseen costs, technical difficulties, and regulatory approvals;-
    
    competitive pressures, including technological advances and patents obtained by competitors;-
    
    environmental risks related to substances regulated by various federal, state, and international laws;-
    
    currency risks based on the relative strength or weakness of the U.S. dollar;-
    
    domestic and foreign governmental health care regulation and cost containment measures;-
    
    political and economic instability in certain foreign markets;-
    
    changes in accounting standards promulgated by the Financial Accounting Standards
Board, the Securities and Exchange Commission, the Public Company Accounting Oversight
Board, or the American Institute of Certified Public Accountants; and-
    
    the effects of governmental or other actions relating to certain payments by the
Companys Chinese subsidiary.
 Overview
       12




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Results of Operations
 13




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SUMMARY FINANCIAL DATA
 (Amounts in Thousands, Except Per Share Data)
    
    Three Months Ended
    
    Six Months Ended2005
    
    % change
    
    2004
    
    2005
    
    % change
    
    2004Sales
    
    $
    125,459
    
    
    
    13.6
    %
    
    $
    110,468
    
    
    $
    238,370
    
    
    
    10.1
    %
    
    $
    216,551Gross Profit
    
    
    73,274
    
    
    
    
    
    
    
    65,652
    
    
    
    139,447
    
    
    
    
    
    
    
    125,713% of sales
    
    
    58.4
    %
    
    
    
    
    
    
    59.4
    %
    
    
    58.5
    %
    
    
    
    
    
    
    58.1
    %Operating Expenses:Selling
    
    
    21,081
    
    
    
    
    
    
    
    19,382
    
    
    
    41,692
    
    
    
    
    
    
    
    38,109Research and Development
    
    
    12,852
    
    
    
    
    
    
    
    11,025
    
    
    
    25,118
    
    
    
    
    
    
    
    22,449General and Administrative
    
    
    13,587
    
    
    
    
    
    
    
    11,058
    
    
    
    26,143
    
    
    
    
    
    
    
    20,723Equity in Income of Affiliates
    
    
    (3,582
    )
    
    
    
    
    
    
    (2,700
    )
    
    
    (6,135
    )
    
    
    
    
    
    
    (4,830
    )Total Operating Expenses
    
    
    43,938
    
    
    
    13.3
    %
    
    
    38,765
    
    
    
    86,818
    
    
    
    13.6
    %
    
    
    76,451% of sales
    
    
    35.0
    %
    
    
    
    
    
    
    35.1
    %
    
    
    36.4
    %
    
    
    
    
    
    
    35.3
    %Operating Income
    
    
    29,336
    
    
    
    9.1
    %
    
    
    26,887
    
    
    
    52,629
    
    
    
    6.8
    %
    
    
    49,262% of sales
    
    
    23.4
    %
    
    
    
    
    
    
    24.3
    %
    
    
    22.1
    %
    
    
    
    
    
    
    22.7
    %Interest/Other (Expense) Income-net
    
    
    1,012
    
    
    
    
    
    
    
    (184
    )
    
    
    1,186
    
    
    
    
    
    
    
    (553
    )Income Before Income Taxes and
Minority Interest
    
    
    30,348
    
    
    
    
    
    
    
    26,703
    
    
    
    53,815
    
    
    
    
    
    
    
    48,709Provision for Income Taxes
    
    
    8,668
    
    
    
    
    
    
    
    8,011
    
    
    
    15,661
    
    
    
    
    
    
    
    14,613Income Tax Rate
    
    
    28.6
    %
    
    
    
    
    
    
    30.0
    %
    
    
    29.1
    %
    
    
    
    
    
    
    30.0
    %Minority Interest
    
    
    797
    
    
    
    
    
    
    
    73
    
    
    
    1,137
    
    
    
    
    
    
    
    20Net Income
    
    $
    20,883
    
    
    
    12.2
    %
    
    $
    18,619
    
    
    $
    37,017
    
    
    
    8.6
    %
    
    $
    34,076Earnings per share:Basic
    
    $
    0.71
    
    
    
    
    
    
    $
    0.64
    
    
    $
    1.26
    
    
    
    
    
    
    $
    1.17Diluted
    
    $
    0.69
    
    
    
    
    
    
    $
    0.62
    
    
    $
    1.23
    
    
    
    
    
    
    $
    1.14
 Sales
  IMMULITE Product Line Sales(Amounts in Thousands)
    
    Three Months Ended June 30,
    
    Six Months Ended June 30,IMMULITE 2000/2500
    
    2005
    
    % change
    
    2004
    
    2005
    
    % change
    
    2004Reagents
    
    $
    71,498
    
    
    
    19.7
    %
    
    $
    59,728
    
    
    $
    135,363
    
    
    
    18.0
    %
    
    $
    114,705Instruments and Service
    
    
    11,295
    
    
    
    27.7
    %
    
    
    8,848
    
    
    
    19,239
    
    
    
    2.0
    %
    
    
    18,858Total
    
    $
    82,793
    
    
    
    20.7
    %
    
    $
    68,576
    
    
    $
    154,602
    
    
    
    15.8
    %
    
    $
    133,563IMMULITE 1000
Reagents
    
    $
    27,529
    
    
    
    0.5
    %
    
    $
    27,383
    
    
    $
    54,514
    
    
    
    0.0
    %
    
    $
    54,490Instruments and Service
    
    
    4,956
    
    
    
    2.1
    %
    
    
    4,855
    
    
    
    9,607
    
    
    
    6.4
    %
    
    
    9,027Total
    
    $
    32,485
    
    
    
    0.8
    %
    
    $
    32,238
    
    
    $
    64,121
    
    
    
    1.0
    %
    
    $
    63,517IMMULITE Product Line Sales
    
    $
    115,278
    
    
    
    14.3
    %
    
    $
    100,814
    
    
    $
    218,723
    
    
    
    11.0
    %
    
    $
    197,080
 14




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15




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16




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##### Table of Contents



Cost of Sales
  Operating Expenses and Other
  17




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##### Table of Contents



Income Taxes and Minority Interest
  Contractual Obligations and Commitments
  Net Income
  Critical Accounting Policies
  18




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##### Table of Contents



Allowance for Bad Debts
  Allowance for Obsolete and Slow-Moving Inventories
  Property, Plant and Equipment
   Goodwill and Intangible Assets
  Deferred Income Taxes
  19




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##### Table of Contents



Revenue Recognition
  Contingencies
  Liquidity and Capital Resources
    20




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##### Table of Contents



New Accounting Pronouncements
      
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  21




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Reporting
  Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 6. EXHIBITS
    
 SIGNATURES
  DIAGNOSTIC PRODUCTS CORPORATION
(Registrant)/s/ Michael Ziering
    
    Chief Executive Officer and
    
    August 9, 2005Michael Ziering
    
    Chairman of the Board(Principal Executive Officer)Director/s/ James L. Brill
    
    Chief Financial Officer and
    
    August 9, 2005James L. Brill
    
    Vice President-Finance(Principal Financial and AccountingOfficer)
 22




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EXHIBIT INDEX
 
   23