##### 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 September 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
  o þ




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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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Amounts in Thousands, Except Per Share Data)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004SALES:Non-Affiliated Customers
    
    $
    111,105
    
    
    $
    100,742
    
    
    $
    337,944
    
    
    $
    300,465Unconsolidated Affiliates
    
    
    5,225
    
    
    
    8,221
    
    
    
    16,756
    
    
    
    25,049Total Sales
    
    
    116,330
    
    
    
    108,963
    
    
    
    354,700
    
    
    
    325,514COST OF SALES
    
    
    50,499
    
    
    
    46,432
    
    
    
    149,422
    
    
    
    137,270Gross Profit
    
    
    65,831
    
    
    
    62,531
    
    
    
    205,278
    
    
    
    188,244OPERATING EXPENSES:Selling
    
    
    20,215
    
    
    
    19,126
    
    
    
    61,907
    
    
    
    57,235Research and Development
    
    
    12,524
    
    
    
    11,188
    
    
    
    37,642
    
    
    
    33,637General and Administrative
    
    
    11,977
    
    
    
    11,752
    
    
    
    38,120
    
    
    
    32,475Gain on Sale of Product Line
    
    
    (343
    )
    
    
    
    
    
    
    (343
    )Equity in Income of Affiliates
    
    
    (1,752
    )
    
    
    (1,705
    )
    
    
    (7,887
    )
    
    
    (6,535
    )OPERATING EXPENSES-NET
    
    
    42,621
    
    
    
    40,361
    
    
    
    129,439
    
    
    
    116,812OPERATING INCOME
    
    
    23,210
    
    
    
    22,170
    
    
    
    75,839
    
    
    
    71,432Interest/Other Income  Net
    
    
    1,084
    
    
    
    1,334
    
    
    
    2,270
    
    
    
    781INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST
    
    
    24,294
    
    
    
    23,504
    
    
    
    78,109
    
    
    
    72,213PROVISION FOR INCOME TAXES
    
    
    6,655
    
    
    
    6,573
    
    
    
    22,316
    
    
    
    21,186MINORITY INTEREST
    
    
    587
    
    
    
    414
    
    
    
    1,724
    
    
    
    434NET INCOME
    
    $
    17,052
    
    
    $
    16,517
    
    
    $
    54,069
    
    
    $
    50,593EARNINGS PER SHARE:BASIC
    
    $
    0.58
    
    
    $
    0.57
    
    
    $
    1.84
    
    
    $
    1.74DILUTED
    
    $
    0.56
    
    
    $
    0.55
    
    
    $
    1.79
    
    
    $
    1.69WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC
    
    
    29,395
    
    
    
    29,120
    
    
    
    29,329
    
    
    
    29,049DILUTED
    
    
    30,212
    
    
    
    29,853
    
    
    
    30,133
    
    
    
    29,880DIVIDENDS DECLARED PER SHARE
    
    $
    0.07
    
    
    $
    0.06
    
    
    $
    0.21
    
    
    $
    0.18
  2




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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,(Amounts in Thousands, Except Share Data)
    
    2005
    
    
    2004AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    97,887
    
    
    $
    80,425Accounts receivable (including receivables from unconsolidated
affiliates of $6,651 and $6,190, respectively)  net of allowance
for doubtful accounts of $3,657 and $3,667, respectively
    
    
    106,190
    
    
    
    100,094Inventories
    
    
    94,158
    
    
    
    93,228Prepaid expenses and other current assets
    
    
    7,992
    
    
    
    5,297Deferred income taxes
    
    
    4,349
    
    
    
    4,030Total current assets
    
    
    310,576
    
    
    
    283,074PROPERTY, PLANT, AND EQUIPMENT  net
    
    
    153,172
    
    
    
    144,772INSTRUMENTS
 net
    
    
    78,651
    
    
    
    82,730INVESTMENTS IN AFFILIATED COMPANIES
    
    
    38,303
    
    
    
    39,227OTHER ASSETS
 net
    
    
    10,964
    
    
    
    11,937GOODWILL
    
    
    13,383
    
    
    
    13,441TOTAL ASSETS
    
    $
    605,049
    
    
    $
    575,181Liabilities and Shareholders EquityCURRENT LIABILITIES:Notes payable
    
    $
    2,888
    
    
    $
    4,145Accounts payable
    
    
    21,878
    
    
    
    18,391Accrued liabilities
    
    
    35,519
    
    
    
    45,644Income taxes payable
    
    
    7,205
    
    
    
    3,872Total current liabilities
    
    
    67,490
    
    
    
    72,052LONG-TERM LIABILITIES
    
    
    7,632
    
    
    
    8,846DEFERRED INCOME TAXES
    
    
    6,016
    
    
    
    5,841MINORITY INTEREST
    
    
    5,349
    
    
    
    4,210SHAREHOLDERS EQUITY:Common
Stockno par value, authorized 60,000,000 shares
at September 30, 2005 and December 31, 2004; outstanding
29,445,997 shares and 29,230,196 shares, respectively
    
    
    80,386
    
    
    
    73,881Retained earnings
    
    
    438,509
    
    
    
    390,597Unrealized gains (losses) on foreign exchange contracts
    
    
    55
    
    
    
    (500
    )Cumulative foreign currency translation adjustment
    
    
    (388
    )
    
    
    20,254Total shareholders equity
    
    
    518,562
    
    
    
    484,232TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    605,049
    
    
    $
    575,181
  3




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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,(Amounts in Thousands)
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    54,069
    
    
    $
    50,593Adjustments to reconcile net income to net cash
flows from operating activities:Depreciation and amortization
    
    
    36,676
    
    
    
    31,542Provision for doubtful accounts
    
    
    715
    
    
    
    549Minority interest
    
    
    1,724
    
    
    
    434Equity in undistributed income of unconsolidated affiliates  net
of distributions
    
    
    (3,801
    )
    
    
    (4,630
    )Deferred income taxes
    
    
    420
    
    
    
    3,633Income tax benefit received upon exercise of stock options
    
    
    1,378Changes in operating assets and liabilities:Accounts receivable
    
    
    (9,021
    )
    
    
    (13,826
    )Inventories
    
    
    (26,101
    )
    
    
    (32,092
    )Prepaid expenses and other assets
    
    
    (3,769
    )
    
    
    980Accounts payable
    
    
    5,355
    
    
    
    2,425Accrued liabilities
    
    
    (9,356
    )
    
    
    8,826Income taxes payable
    
    
    3,823
    
    
    
    2,181Net cash flows from operating activities
    
    
    52,112
    
    
    
    50,615CASH FLOWS USED FOR INVESTING ACTIVITIES:Investment in affiliated companies
    
    
    
    
    
    
    (219
    )Additions to property, plant, and equipment
    
    
    (24,467
    )
    
    
    (43,249
    )Net cash flows used for investing activities
    
    
    (24,467
    )
    
    
    (43,468
    )CASH FLOWS USED FOR FINANCING ACTIVITIES:Borrowings under notes payable
    
    
    1,578
    
    
    
    10,158Repayments of notes payable
    
    
    (3,656
    )
    
    
    (15,543
    )Proceeds from exercise of stock options
    
    
    5,127
    
    
    
    4,097Cash dividends paid
    
    
    (6,157
    )
    
    
    (5,225
    )Cash dividends paid to shareholders of minority interest
    
    
    (696
    )
    
    
    Net cash flows used for financing activities
    
    
    (3,804
    )
    
    
    (6,513
    )EFFECT OF EXCHANGE RATE CHANGES ON CASH
    
    
    (6,379
    )
    
    
    513NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    17,462
    
    
    
    1,147CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    80,425
    
    
    
    69,843CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    97,887
    
    
    $
    70,990SUPPLEMENTAL CASH FLOW INFORMATION:Non cash transactions  instrument placements transferred from inventories
    
    $
    23,001
    
    
    $
    22,614Cash paid during the period for income taxes
    
    $
    17,387
    
    
    $
    17,067Cash paid during the period for interest, net of capitalized interest
    
    $
    904
    
    
    $
    1,202
  4




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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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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Amounts in Thousands, Except Per Share Data)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net Income:As Reported
    
    $
    17,052
    
    
    $
    16,517
    
    
    $
    54,069
    
    
    $
    50,593Pro Forma expense
    
    
    (804
    )
    
    
    (737
    )
    
    
    (2,387
    )
    
    
    (2,090
    )Pro Forma
    
    $
    16,248
    
    
    $
    15,780
    
    
    $
    51,682
    
    
    $
    48,503Net Earnings Per ShareBasic:As Reported
    
    $
    0.58
    
    
    $
    0.57
    
    
    $
    1.84
    
    
    $
    1.74Pro Forma Adjustment
    
    
    (0.03
    )
    
    
    (0.03
    )
    
    
    (0.08
    )
    
    
    (0.07
    )Pro Forma
    
    $
    0.55
    
    
    $
    0.54
    
    
    $
    1.76
    
    
    $
    1.67Diluted:As Reported
    
    $
    0.56
    
    
    $
    0.55
    
    
    $
    1.79
    
    
    $
    1.69Pro Forma Adjustment
    
    
    (0.02
    )
    
    
    (0.02
    )
    
    
    (0.07
    )
    
    
    (0.07
    )Pro Forma
    
    $
    0.54
    
    
    $
    0.53
    
    
    $
    1.72
    
    
    $
    1.62
 Note 3
 Inventories
  September 30,
    
    
    December 31,(Amounts in Thousands)
    
    2005
    
    
    2004Raw materials
    
    $
    38,992
    
    
    $
    43,899Work in process
    
    
    32,703
    
    
    
    32,767Finished goods
    
    
    22,463
    
    
    
    16,562Total
    
    $
    94,158
    
    
    $
    93,228
 Note 4
 Property, Plant & Equipment
  September 30,
    
    
    December 31,
    
    
    Estimated(Amounts in Thousands)
    
    2005
    
    
    2004
    
    
    Useful LivesLand and buildings
    
    $
    113,817
    
    
    $
    114,552
    
    
    20-50 YearsMachinery and equipment
    
    
    113,787
    
    
    
    104,245
    
    
    3-5 YearsLeasehold improvements
    
    
    10,356
    
    
    
    9,578
    
    
    3-9 YearsConstruction in progress
    
    
    9,056
    
    
    
    3,714Total
    
    
    247,016
    
    
    
    232,089Accumulated depreciation and amortization
    
    
    (93,844
    )
    
    
    (87,317
    )Property, plant and equipment  net
    
    $
    153,172
    
    
    $
    144,772
  6




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Note 5
 Instruments
  September 30,
    
    
    December 31,(Amounts in Thousands)
    
    2005
    
    
    2004Placements and operating leases
    
    $
    233,901
    
    
    $
    227,434Less accumulated amortization
    
    
    (160,548
    )
    
    
    (150,956
    )Net
    
    
    73,353
    
    
    
    76,478Sales-type leases
    
    
    6,493
    
    
    
    7,234Less current portion
    
    
    (1,195
    )
    
    
    (982
    )Net
    
    
    5,298
    
    
    
    6,252Total
    
    $
    78,651
    
    
    $
    82,730
 Note 6
 Other Assets
  September 30,
    
    
    December 31,(Amounts in Thousands)
    
    2005
    
    
    2004Long-term accounts receivable
    
    $
    3,305
    
    
    $
    4,637Purchased technology licenses
    
    
    9,093
    
    
    
    8,017Less accumulated amortization of purchased technology licenses
    
    
    (1,434
    )
    
    
    (717
    )Total
    
    $
    10,964
    
    
    $
    11,937
  Note 7
 Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Amounts in Thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income
    
    $
    17,052
    
    
    $
    16,517
    
    
    $
    54,069
    
    
    $
    50,593Foreign currency translation adjustment
    
    
    (705
    )
    
    
    4,297
    
    
    
    (20,642
    )
    
    
    1,308Unrealized gain on foreign exchange contracts,
net of tax impact
    
    
    (157
    )
    
    
    39
    
    
    
    555
    
    
    
    2,003Comprehensive income
    
    $
    16,190
    
    
    $
    20,853
    
    
    $
    33,982
    
    
    $
    53,904
  7




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Note 8
 Earnings Per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Shares in Thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Basic shares
    
    
    29,395
    
    
    
    29,120
    
    
    
    29,329
    
    
    
    29,049Assumed exercise of stock options
    
    
    817
    
    
    
    733
    
    
    
    804
    
    
    
    831Diluted shares
    
    
    30,212
    
    
    
    29,853
    
    
    
    30,133
    
    
    
    29,880
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Shares in Thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Antidilutive shares
    
    
    44
    
    
    
    530
    
    
    
    48
    
    
    
    156
 Note 9
 Segment and Product Line Information
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Amounts in Thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Sales:IMMULITE (includes all models and service)
    
    $
    107,716
    
    
    $
    99,715
    
    
    $
    326,438
    
    
    $
    296,795Radioimmunoassay (RIA)
    
    
    5,288
    
    
    
    5,785
    
    
    
    16,322
    
    
    
    18,266Other (includes DPC and non-DPC
manufactured products)
    
    
    3,326
    
    
    
    3,463
    
    
    
    11,940
    
    
    
    10,453$
    116,330
    
    
    $
    108,963
    
    
    $
    354,700
    
    
    $
    325,514
  8




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Euro/DPC
    
    
    DPC
    
    
    DPCLimited
    
    
    Biermann
    
    
    Medlab
    
    
    
    
    
    
    Less:United
    
    
    (United
    
    
    (German
    
    
    (Brazilian
    
    
    
    
    
    
    Intersegment(Amounts in Thousands)
    
    States
    
    
    Kingdom)
    
    
    Group)*
    
    
    Group)*
    
    
    Other
    
    
    Elimination
    
    TotalThree Months Ended September 30, 2005Sales
    
    $
    78,413
    
    
    $
    22,189
    
    
    $
    14,515
    
    
    $
    13,528
    
    
    $
    21,466
    
    
    $
    (33,781
    )
    
    $
    116,330Net income
    
    
    8,511
    
    
    
    5,429
    
    
    
    472
    
    
    
    1,334
    
    
    
    1,834
    
    
    
    (528
    )
    
    
    17,052Three Months ended September 30, 2004Sales
    
    $
    69,476
    
    
    $
    22,432
    
    
    $
    13,599
    
    
    $
    10,640
    
    
    $
    22,491
    
    
    $
    (29,675
    )
    
    $
    108,963Net income
    
    
    8,039
    
    
    
    5,130
    
    
    
    310
    
    
    
    940
    
    
    
    2,452
    
    
    
    (354
    )
    
    
    16,517
 Euro/DPC
    
    
    DPC
    
    
    DPCLimited
    
    
    Biermann
    
    
    Medlab
    
    
    
    
    
    
    Less:United
    
    
    (United
    
    
    (German
    
    
    (Brazilian
    
    
    
    
    
    
    Intersegment(Amounts in Thousands)
    
    States
    
    
    Kingdom)
    
    
    Group)*
    
    
    Group)*
    
    
    Other
    
    
    Elimination
    
    TotalNine Months Ended September 30, 2005Sales
    
    $
    229,743
    
    
    $
    66,849
    
    
    $
    47,355
    
    
    $
    38,721
    
    
    $
    73,517
    
    
    $
    (101,485
    )
    
    $
    354,700Net income
    
    
    25,136
    
    
    
    16,205
    
    
    
    2,111
    
    
    
    3,919
    
    
    
    8,239
    
    
    
    (1,541
    )
    
    
    54,069Nine Months Ended September 30, 2004Sales
    
    $
    207,165
    
    
    $
    66,480
    
    
    $
    42,479
    
    
    $
    28,162
    
    
    $
    72,612
    
    
    $
    (91,384
    )
    
    $
    325,514Net income
    
    
    24,757
    
    
    
    15,669
    
    
    
    1,553
    
    
    
    987
    
    
    
    7,871
    
    
    
    (244
    )
    
    
    50,593
 
 *
    
    DPC Biermann includes the Companys operations in Germany, Czech Republic, Poland, Slovenia,
Slovakia and Croatia. DPC Medlab includes the Companys operations in Brazil, Costa Rica,
Venezuela, Uruguay, Bolivia, Honduras, Guatemala and Panama. Germany and Brazil account for the
most significant portion of sales and net income for their respective groups. 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
  -
    
    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 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;
 11




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-
    
    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 and auditing 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
 SUMMARY FINANCIAL DATA
 Three Months Ended
    
    
    Nine Months Ended(Amounts in Thousands, Except Per Share Data)
    
    2005
    
    
    % change
    
    
    2004
    
    
    2005
    
    
    % change
    
    
    2004Sales
    
    $
    116,330
    
    
    
    6.8
    %
    
    $
    108,963
    
    
    $
    354,700
    
    
    
    9.0
    %
    
    $
    325,514Gross Profit
    
    
    65,831
    
    
    
    
    
    
    
    62,531
    
    
    
    205,278
    
    
    
    
    
    
    
    188,244% of sales
    
    
    56.6
    %
    
    
    
    
    
    
    57.4
    %
    
    
    57.9
    %
    
    
    
    
    
    
    57.8
    %Operating Expenses:Selling
    
    
    20,215
    
    
    
    
    
    
    
    19,126
    
    
    
    61,907
    
    
    
    
    
    
    
    57,235Research and Development
    
    
    12,524
    
    
    
    
    
    
    
    11,188
    
    
    
    37,642
    
    
    
    
    
    
    
    33,637General and Administrative
    
    
    11,977
    
    
    
    
    
    
    
    11,752
    
    
    
    38,120
    
    
    
    
    
    
    
    32,475Gain on Sale of Product Line
    
    
    (343
    )
    
    
    
    
    
    
    
    
    
    
    (343
    )Equity in Income of Affiliates
    
    
    (1,752
    )
    
    
    
    
    
    
    (1,705
    )
    
    
    (7,887
    )
    
    
    
    
    
    
    (6,535
    )Total Operating Expenses
    
    
    42,621
    
    
    
    5.6
    %
    
    
    40,361
    
    
    
    129,439
    
    
    
    10.8
    %
    
    
    116,812% of sales
    
    
    36.6
    %
    
    
    
    
    
    
    37.0
    %
    
    
    36.5
    %
    
    
    
    
    
    
    35.9
    %Operating Income
    
    
    23,210
    
    
    
    4.7
    %
    
    
    22,170
    
    
    
    75,839
    
    
    
    6.2
    %
    
    
    71,432% of sales
    
    
    20.0
    %
    
    
    
    
    
    
    20.3
    %
    
    
    21.4
    %
    
    
    
    
    
    
    21.9
    %Interest/Other Income-net
    
    
    1,084
    
    
    
    
    
    
    
    1,334
    
    
    
    2,270
    
    
    
    
    
    
    
    781Income Before Income Taxes and
Minority Interest
    
    
    24,294
    
    
    
    
    
    
    
    23,504
    
    
    
    78,109
    
    
    
    
    
    
    
    72,213Provision for Income Taxes
    
    
    6,655
    
    
    
    
    
    
    
    6,573
    
    
    
    22,316
    
    
    
    
    
    
    
    21,186Income Tax Rate
    
    
    27.4
    %
    
    
    
    
    
    
    28.0
    %
    
    
    28.6
    %
    
    
    
    
    
    
    29.3
    %Minority Interest
    
    
    587
    
    
    
    
    
    
    
    414
    
    
    
    1,724
    
    
    
    
    
    
    
    434Net Income
    
    $
    17,052
    
    
    
    3.2
    %
    
    $
    16,517
    
    
    $
    54,069
    
    
    
    6.9
    %
    
    $
    50,593Earnings per share:Basic
    
    $
    0.58
    
    
    
    
    
    
    $
    0.57
    
    
    $
    1.84
    
    
    
    
    
    
    $
    1.74Diluted
    
    $
    0.56
    
    
    
    
    
    
    $
    0.55
    
    
    $
    1.79
    
    
    
    
    
    
    $
    1.69
 Sales
  IMMULITE Product Line Sales
    
    Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(Amounts in Thousands)
    
    2005
    
    
    % change
    
    
    2004
    
    
    2005
    
    
    % change
    
    
    2004IMMULITE 2000/2500Reagents
    
    $
    66,337
    
    
    
    13.7
    %
    
    $
    58,351
    
    
    $
    201,700
    
    
    
    16.6
    %
    
    $
    173,055Instruments and Service
    
    
    10,542
    
    
    
    16.9
    %
    
    
    9,016
    
    
    
    29,781
    
    
    
    6.8
    %
    
    
    27,874Total
    
    $
    76,879
    
    
    
    14.1
    %
    
    $
    67,367
    
    
    $
    231,481
    
    
    
    15.2
    %
    
    $
    200,929IMMULITE 1000Reagents
    
    $
    25,539
    
    
    
    -7.7
    %
    
    $
    27,667
    
    
    $
    80,052
    
    
    
    -2.6
    %
    
    $
    82,156Instruments and Service
    
    
    5,298
    
    
    
    13.2
    %
    
    
    4,681
    
    
    
    14,905
    
    
    
    8.7
    %
    
    
    13,710Total
    
    $
    30,837
    
    
    
    -4.7
    %
    
    $
    32,348
    
    
    $
    94,957
    
    
    
    -0.9
    %
    
    $
    95,866IMMULITE Product Line Sales
    
    $
    107,716
    
    
    
    8.0
    %
    
    $
    99,715
    
    
    $
    326,438
    
    
    
    10.0
    %
    
    $
    296,795
 14




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##### Table of Contents



15




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##### Table of Contents



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
  Revenue Recognition
 19




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##### Table of Contents



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
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Reporting
  21




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##### Table of Contents



Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  Votes CastName
    
    For
    
    
    WithheldSidney A. Aroesty
    
    
    20,977,005
    
    
    
    6,846,301Frederick Frank
    
    
    20,792,301
    
    
    
    7,031,005Kenneth A. Merchant
    
    
    26,658,675
    
    
    
    1,164,631John H. Reith
    
    
    27,495,528
    
    
    
    327,778James D. Watson
    
    
    27,350,520
    
    
    
    472,786Ira Ziering
    
    
    20,496,873
    
    
    
    7,326,433Michael Ziering
    
    
    20,744,167
    
    
    
    7,079,139
 
 ITEM 5. OTHER INFORMATION
    
 ITEM 6. EXHIBITS
 31.1
    
    Certificate of Chief Executive Officer
 22




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##### Table of Contents



31.2
    
    Certificate of Chief Financial Officer32.1
    
    Section 906 Officers Certification
 23




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##### Table of Contents



SIGNATURES
  DIAGNOSTIC PRODUCTS CORPORATION(Registrant)/s/ Michael Ziering
    
    Chief Executive Officer and
    
    November 9, 2005Michael Ziering
    
    Chairman of the Board(Principal Executive Officer)Director/s/ James L. Brill
    
    Chief Financial Officer and
    
    November 9, 2005James L. Brill
    
    Vice President-Finance(Principal Financial andAccounting Officer)
 24




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##### Table of Contents



EXHIBIT INDEX
 31.1
    
    Certificate of Chief Executive Officer31.2
    
    Certificate of Chief Financial Officer32.1
    
    Section 906 Officers Certification
 25