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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



|x | Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2002



|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

(Exact name of registrant as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|California                                                     |  | 95-2802182                       
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer
Identification No.)

5700 West 96th Street
Los Angeles, California 90045
(Address of principal executive offices)

Registrants telephone number: (310) 645-8200

No change

(Former name, former address, and former fiscal year, if changed since last report)

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 ü ]     [NO  ]

The number of shares of Common Stock, no par value, outstanding as of September
30, 2002, was 28,546,259.



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TABLE OF CONTENTS



|                              |                                                                                               |                                            |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM I. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME         
|                              |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                              | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION   
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|SIGNATURES                   
|EXHIBIT INDEX                
|EXHIBIT 99.1                 



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PART I. FINANCIAL INFORMATION




ITEM I. FINANCIAL STATEMENTS




DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |         | 
|----------------------------------------- | ------------------------- | ---- | ------------------ | ------ | ----------------- | ---- | ------ | ------ |  |  | ------- | ------- |  |  | ------ | ------- | 
|                                          |                           |      | Three Months Ended |        | Nine Months Ended
|                                          |                           |      | September 30,      |        | September 30,    
|                                          |                           |      |                    |        |                  
|(In Thousands, except per share data)     |                           | 2002 |                    | 2001   |                   | 2002 |        | 2001  
|                                          |                           |      |                    |        |                   |      |        |       
|SALES:                                    |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | Non-Affiliated Customers  |      | $                  | 72,251 |                   |      | $      | 62,072 |  |  | $       | 215,967 |  |  | $      | 188,435 | 
|                                          | Unconsolidated Affiliates |      |                    | 7,185  |                   |      |        | 5,794  |  |  |         | 22,808  |  |  |        | 20,026  | 
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | Total Sales               |      |                    | 79,436 |                   |      |        | 67,866 |  |  |         | 238,775 |  |  |        | 208,461 | 
|COST OF SALES                             |                           |      | 34,229             |        |                   |      | 28,849 |        |  |  | 100,590 |         |  |  | 89,061 |        
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | Gross Profit              |      |                    | 45,207 |                   |      |        | 39,017 |  |  |         | 138,185 |  |  |        | 119,400 | 
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|OPERATING EXPENSES:                       |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|Selling                                   |                           |      | 13,189             |        |                   |      | 12,352 |        |  |  | 39,950  |         |  |  | 37,188 |        
|Research and Development                  |                           |      | 9,326              |        |                   |      | 7,786  |        |  |  | 27,355  |         |  |  | 24,073 |        
|General and Administrative                |                           |      | 7,240              |        |                   |      | 6,270  |        |  |  | 21,457  |         |  |  | 19,068 |        
|Equity in Income of Affiliates            |                           |      | (604               | )      |                   |      | (626   | )      |  |  | (2,434  | )       |  |  | (2,227 | )      
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|OPERATING EXPENSES  NET                  |                           |      | 29,151             |        |                   |      | 25,782 |        |  |  | 86,328  |         |  |  | 78,102 |        
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | OPERATING INCOME          |      |                    | 16,056 |                   |      |        | 13,235 |  |  |         | 51,857  |  |  |        | 41,298  | 
|Interest/Other Income (Expense)  Net     |                           |      | (2,352             | )      |                   |      | 238    |        |  |  | (1,922  | )       |  |  | (462   | )      
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|INCOME BEFORE TAXES
AND MINORITY INTEREST |                           |      | 13,704             |        |                   |      | 13,473 |        |  |  | 49,935  |         |  |  | 40,836 |        
|PROVISION FOR INCOME TAXES                |                           |      | 4,248              |        |                   |      | 4,176  |        |  |  | 15,480  |         |  |  | 12,495 |        
|MINORITY INTEREST                         |                           |      | (450               | )      |                   |      | 166    |        |  |  | (308    | )       |  |  | 649    |        
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | NET INCOME                |      | $                  | 9,906  |                   |      | $      | 9,131  |  |  | $       | 34,763  |  |  | $      | 27,692  | 
|                                          |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|EARNINGS PER SHARE:                       |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | BASIC                     |      | $                  | .35    |                   |      | $      | .32    |  |  | $       | 1.22    |  |  | $      | .99     | 
|                                          | DILUTED                   |      | $                  | .34    |                   |      | $      | .31    |  |  | $       | 1.17    |  |  | $      | .94     | 
|WEIGHTED-AVERAGE SHARES OUTSTANDING:      |                           |      |                    |        |                   |      |        |        |  |  |         |         |  |  |        |        
|                                          | BASIC                     |      |                    | 28,540 |                   |      |        | 28,221 |  |  |         | 28,456  |  |  |        | 28,064  | 
|                                          | DILUTED                   |      |                    | 29,506 |                   |      |        | 29,601 |  |  |         | 29,619  |  |  |        | 29,364  | 

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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |         |  
|------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ------------- | ------- | ------------ | - | ------- | ------- | -
|                                                                                |                                                                                                                                                                             |      | September 30, |         | December 31,
|(Dollars in Thousands)                                                          |                                                                                                                                                                             | 2002 |               | 2001   
|                                                                                |                                                                                                                                                                             |      |               |        
|Assets                                                                          |                                                                                                                                                                             |      |               |         |              |   |         |        
|CURRENT ASSETS:                                                                 |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Cash and cash equivalents                                                                                                                                                   |      | $             | 42,967  |              |   | $       | 31,834  |  
|                                                                                | Accounts receivable (including receivables from
unconsolidated affiliates of $9,941 and $6,635)  net
of allowance for doubtful accounts of $2,076 and $1,719,
respectively |      |               | 77,255  |              |   |         | 74,630  |  
|                                                                                | Inventories                                                                                                                                                                 |      |               | 73,365  |              |   |         | 62,815  |  
|                                                                                | Prepaid expenses and other current assets                                                                                                                                   |      |               | 4,289   |              |   |         | 981     |  
|                                                                                | Deferred income taxes                                                                                                                                                       |      |               | 3,225   |              |   |         | 3,225   |  
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Total current assets                                                                                                                                                        |      |               | 201,101 |              |   |         | 173,485 |  
|PROPERTY, PLANT, AND EQUIPMENT:                                                 |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Land and buildings                                                                                                                                                          |      |               | 52,568  |              |   |         | 49,922  |  
|                                                                                | Machinery and equipment                                                                                                                                                     |      |               | 68,138  |              |   |         | 64,650  |  
|                                                                                | Leasehold improvements                                                                                                                                                      |      |               | 10,711  |              |   |         | 7,242   |  
|                                                                                | Construction in progress                                                                                                                                                    |      |               | 2,461   |              |   |         | 6,278   |  
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Total                                                                                                                                                                       |      |               | 133,878 |              |   |         | 128,092 |  
|                                                                                | Less accumulated depreciation and amortization                                                                                                                              |      |               | (65,857 | )            |   |         | (63,989 | )
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Property, plant, and equipment  net                                                                                                                                        |      |               | 68,021  |              |   |         | 64,103  |  
|SALES-TYPE AND OPERATING LEASES  net                                           |                                                                                                                                                                             |      | 62,630        |         |              |   | 56,570  |        
|DEFERRED INCOME TAXES                                                           |                                                                                                                                                                             |      | 1,111         |         |              |   | 1,111   |        
|INVESTMENTS IN AFFILIATED COMPANIES                                             |                                                                                                                                                                             |      | 21,026        |         |              |   | 17,242  |        
|GOODWILL  Net of accumulated amortization of
$11,879 and $11,852, respectively |                                                                                                                                                                             |      | 13,294        |         |              |   | 13,256  |        
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|TOTAL ASSETS                                                                    |                                                                                                                                                                             | $    | 367,183       |         |              | $ | 325,767 |        
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|Liabilities and Shareholders Equity                                            |                                                                                                                                                                             |      |               |         |              |   |         |        
|CURRENT LIABILITIES:                                                            |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Notes payable                                                                                                                                                               |      | $             | 17,730  |              |   | $       | 17,014  |  
|                                                                                | Accounts payable                                                                                                                                                            |      |               | 17,321  |              |   |         | 22,173  |  
|                                                                                | Accrued liabilities                                                                                                                                                         |      |               | 22,809  |              |   |         | 13,267  |  
|                                                                                | Income taxes payable                                                                                                                                                        |      |               | 4,308   |              |   |         | 3,336   |  
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Total current liabilities                                                                                                                                                   |      |               | 62,168  |              |   |         | 55,790  |  
|MINORITY INTEREST                                                               |                                                                                                                                                                             |      | 2,633         |         |              |   | 3,073   |        
|SHAREHOLDERS EQUITY:                                                           |                                                                                                                                                                             |      |               |         |              |   |         |        
|                                                                                | Common
Stock  no par value, authorized 60,000,000 shares;
outstanding 28,546,259 shares and 28,343,170 shares,
respectively                                                |      |               | 58,248  |              |   |         | 55,068  |  
|                                                                                | Retained earnings                                                                                                                                                           |      |               | 270,395 |              |   |         | 240,748 |  
|                                                                                | Accumulated other comprehensive loss                                                                                                                                        |      |               | (26,261 | )            |   |         | (28,912 | )
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|Total shareholders equity                                                      |                                                                                                                                                                             |      | 302,382       |         |              |   | 266,904 |        
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                      |                                                                                                                                                                             | $    | 367,183       |         |              | $ | 325,767 |        
|                                                                                |                                                                                                                                                                             |      |               |         |              |   |         |        

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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |         |   |         |  
|------------------------------------------------ | -------------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------------------------------------- | ------- | ----------------- | ------- | ------ | ------- | - | ------- | -
|                                                 |                                              |                                                                                  |                                                             |         | Nine Months Ended
|                                                 |                                              |                                                                                  |                                                             |         | September 30,    
|                                                 |                                              |                                                                                  |                                                             |         |                  
|(Dollars in Thousands)                           |                                              | 2002                                                                             |                                                             | 2001   
|                                                 |                                              |                                                                                  |                                                             |        
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                              |                                                                                  |                                                             |         |                   |         |        |        
|                                                 | Net income                                   |                                                                                  | $                                                           | 34,763  |                   |         | $      | 27,692  |  
|                                                 |                                              | Adjustments to reconcile net income to net cash
flows from operating activities: |                                                             |         |                   |         |        |         |   |        
|                                                 |                                              |                                                                                  | Depreciation and amortization                               |         |                   | 21,413  |        |         |   | 19,779  |  
|                                                 |                                              |                                                                                  | Equity in undistributed income of unconsolidated affiliates |         |                   | (2,434  | )      |         |   | (2,227  | )
|                                                 | Changes in operating assets and liabilities: |                                                                                  |                                                             |         |                   |         |        |         |  
|                                                 |                                              |                                                                                  | Accounts receivable                                         |         |                   | (6,001  | )      |         |   | (10,134 | )
|                                                 |                                              |                                                                                  | Inventories                                                 |         |                   | (9,852  | )      |         |   | (4,675  | )
|                                                 |                                              |                                                                                  | Prepaid expenses and other current assets                   |         |                   | (1,860  | )      |         |   | (356    | )
|                                                 |                                              |                                                                                  | Accounts payable                                            |         |                   | (4,816  | )      |         |   | 6,839   |  
|                                                 |                                              |                                                                                  | Accrued liabilities                                         |         |                   | 10,207  |        |         |   | (184    | )
|                                                 |                                              |                                                                                  | Income taxes payable                                        |         |                   | 836     |        |         |   | 6,605   |  
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|                                                 | Net cash flows from operating activities     |                                                                                  |                                                             | 42,256  |                   |         |        | 43,339  |  
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|CASH FLOWS USED FOR INVESTING ACTIVITIES:        |                                              |                                                                                  |                                                             |         |                   |         |        |        
|                                                 |                                              |                                                                                  | Additions to property, plant, and equipment                 |         |                   | (8,095  | )      |         |   | (16,923 | )
|                                                 |                                              |                                                                                  | Sales-type and operating leases                             |         |                   | (21,628 | )      |         |   | (24,451 | )
|                                                 |                                              |                                                                                  | Investment in affiliated companies                          |         |                   | (1,373  | )      |         |   | (1,231  | )
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|                                                 | Net cash flows used for investing activities |                                                                                  |                                                             | (31,096 | )                 |         |        | (42,605 | )
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|CASH FLOWS USED FOR FINANCING ACTIVITIES:        |                                              |                                                                                  |                                                             |         |                   |         |        |        
|                                                 |                                              |                                                                                  | Repayments
of notes payable  net                           |         |                   | (1,034  | )      |         |   | (64     | )
|                                                 |                                              |                                                                                  | Proceeds from exercise of stock options                     |         |                   | 3,180   |        |         |   | 5,621   |  
|                                                 |                                              |                                                                                  | Cash dividends paid                                         |         |                   | (5,116  | )      |         |   | (5,048  | )
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|                                                 | Net cash flows from financing activities     |                                                                                  |                                                             | (2,970  | )                 |         |        | 509     |  
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|EFFECT OF EXCHANGE RATE CHANGES ON CASH          |                                              |                                                                                  | 2,943                                                       |         |                   |         | (773   | )      
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|NET INCREASE IN CASH AND CASH EQUIVALENTS        |                                              |                                                                                  | 11,133                                                      |         |                   |         | 470    |        
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |                                              |                                                                                  | 31,834                                                      |         |                   |         | 26,395 |        
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        
|CASH AND CASH EQUIVALENTS
AT END OF PERIOD       |                                              | $                                                                                | 42,967                                                      |         |                   | $       | 26,865 |        
|                                                 |                                              |                                                                                  |                                                             |         |                   |         |        |        

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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1  Basis of Presentation

The information for the three and nine-month periods ended September 30, 2002
and 2001 has not been audited by independent public accountants, but includes
all adjustments (consisting of normal recurring accruals) that are, in the
opinion of management, necessary to a fair statement of the results for such
periods.

Certain information and footnote disclosure normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted pursuant to the requirements
of the Securities and Exchange Commission, although the Company believes that
the disclosures included in these financial statements are adequate to make the
information not misleading. The consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Companys 2001 Annual Report on Form 10-K as filed with
the Securities and Exchange Commission.

The results of operations for the three and nine-month periods ended September
30, 2002 are not necessarily indicative of the results to be expected for the
year ending December 31, 2002. Basic earnings per share is computed by
dividing net income by the weighted-average number of shares outstanding.
Diluted earnings per share includes the dilutive effect of stock options.

The accompanying December 31, 2001 balance sheet contains a reclassification of
amounts included in the Companys 2001 Annual Report on Form 10-K to conform to
the September 30, 2002 presentation. Current liabilities at December 31, 2001
totaled $55,790,000 in the accompanying December 31, 2001 balance sheet,
compared with $58,863,000 reported in the Annual Report on Form 10-K,
reflecting a $3,073,000 reclassification of minority interest to a separate
financial statement line item.

Note 2  Inventories

Inventories by major categories are summarized as follows:

|                       |  |               |        |              |  |   |        | 
|---------------------- |  | ------------- | ------ | ------------ |  | - | ------ | 
|                       |  | September 30, |        | December 31,
|(Dollars in Thousands) |  | 2002          |        | 2001        
|                       |  |               |        |             
|Raw materials          |  | $             | 33,102 |              |  | $ | 27,884 | 
|Work in process        |  |               | 29,633 |              |  |   | 23,611 | 
|Finished goods         |  |               | 10,630 |              |  |   | 11,320 | 
|                       |  |               |        |              |  |   |        | 
|Total                  |  | $             | 73,365 |              |  | $ | 62,815 | 
|                       |  |               |        |              |  |   |        | 

Note 3  Comprehensive Income

Comprehensive income is summarized as follows:

|                                        |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        |  
|--------------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | -
|                                        |  | Three Months Ended |        | Nine Months Ended
|                                        |  | September 30,      |        | September 30,    
|                                        |  |                    |        |                  
|(Dollars in Thousands)                  |  | 2002               |        | 2001              |  | 2002 |        | 2001
|                                        |  |                    |        |                   |  |      |        |     
|Net income                              |  | $                  | 9,906  |                   |  | $    | 9,131  |      |  | $ | 34,763 |  |  | $ | 27,692 |  
|Foreign currency translation adjustment |  |                    | (3,266 | )                 |  |      | 1,502  |      |  |   | 2,651  |  |  |   | (3,851 | )
|                                        |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        |  
|Comprehensive income                    |  | $                  | 6,640  |                   |  | $    | 10,633 |      |  | $ | 37,414 |  |  | $ | 23,841 |  
|                                        |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        |  

The Company does not provide for U.S. income taxes on foreign currency
translation adjustments because it does not provide for such taxes on
undistributed earnings of foreign subsidiaries.

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Note 4  Segment and Product Line Information

The Company considers its manufactured instruments and medical immunodiagnostic
test kits as one operating segment, as the kits are required to run the
instruments and utilize similar technology and instrument manufacturing
processes. The Company manufactures its instruments and kits principally from
facilities in the United States and the United Kingdom. Kits and instruments
are sold to hospitals, medical centers, clinics, physicians, and other clinical
laboratories throughout the world through a network of distributors, including
consolidated distributors located in the United Kingdom, Germany, Czech
Republic, Poland, Slovenia, Spain, The Netherlands, Belgium, Luxembourg,
Finland, Norway, France, Australia, New Zealand, China, Brazil, Uruguay,
Bolivia, Venezuela, Costa Rica, Panama, Sweden, Latvia, Lithuania, Estonia, and
Denmark.

The Company sells its instruments and immunodiagnostic test kits under several
product lines. Product line sales information is as follows:

|                                          |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |         | 
|----------------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- |  |  | - | ------- | 
|                                          |  | Three Months Ended |        | Nine Months Ended
|                                          |  | September 30,      |        | September 30,    
|                                          |  |                    |        |                  
|(Dollars in Thousands)                    |  | 2002               |        | 2001              |  | 2002 |        | 2001
|                                          |  |                    |        |                   |  |      |        |     
|Sales:                                    |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |         | 
|IMMULITE (includes service)               |  | $                  | 68,127 |                   |  | $    | 54,767 |      |  | $ | 202,276 |  |  | $ | 168,209 | 
|Radioimmunoassay (RIA)                  |  |                    | 7,276  |                   |  |      | 8,676  |      |  |   | 23,043  |  |  |   | 25,895  | 
|Other (Includes DPC and
non-DPC products) |  |                    | 4,033  |                   |  |      | 4,423  |      |  |   | 13,456  |  |  |   | 14,357  | 
|                                          |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |         | 
|                                          |  | $                  | 79,436 |                   |  | $    | 67,866 |      |  | $ | 238,775 |  |  | $ | 208,461 | 
|                                          |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |         | 

The Company is organized and managed by geographic area. Transactions between
geographic segments are accounted for as normal sales for internal reporting
and management purposes with all intercompany amounts eliminated in
consolidation. Sales are attributed to geographic area based on the location
from which the instrument or kit is shipped to the customer. Information
reviewed by the Companys chief operating decision maker on significant
geographic segments is prepared on the same basis as the consolidated financial
statements and is as follows:

|                                      |  |        |        |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |   |  |   |        | 
|------------------------------------- |  | ------ | ------ | -------- |  | -------- | ------ | ---------- |  | ------ | ------ | ----------- |  | ------------ | ------ | ----- |  | - | ------ |  |  | - | ------- | - |  | - | ------ | 
|                                      |  |        |        |          |  | Euro/DPC |        | DPC        |  | DPC    |        |             |  |              |        |       |  |   |        |  |  |  
|                                      |  |        |        |          |  | Limited  |        | Biermann   |  | Medlab |        |             |  |              |        | Less: |  |   |        | 
|                                      |  | United |        | (United  |  | (German  |        | (Brazilian |  |        |        |             |  | Intersegment |        |       |  |  
|(Dollars in Thousands)                |  | States |        | Kingdom) |  | Group)*  |        | Group)*    |  | Other  |        | Elimination |  | Total       
|                                      |  |        |        |          |  |          |        |            |  |        |        |             |  |             
|Three Months Ended
September 30, 2002 |  |        |        |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |  
|Sales                                 |  | $      | 53,537 |          |  | $        | 11,155 |            |  | $      | 10,259 |             |  | $            | 7,054  |       |  | $ | 16,918 |  |  | $ | (19,487 | ) |  | $ | 79,436 | 
|Net income (loss)                     |  |        | 7,704  |          |  |          | 2,264  |            |  |        | 34     |             |  |              | (1,022 | )     |  |   | 439    |  |  |   | 487     |   |  |   | 9,906  | 
|                                     
|Three Months Ended
September 30, 2001 |  |        |        |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |  
|Sales                                 |  | $      | 51,088 |          |  | $        | 9,753  |            |  | $      | 7,919  |             |  | $            | 7,294  |       |  | $ | 13,517 |  |  | $ | (21,705 | ) |  | $ | 67,866 | 
|Net income (loss)                     |  |        | 4,837  |          |  |          | 1,620  |            |  |        | 139    |             |  |              | 211    |       |  |   | 2,924  |  |  |   | (600    | ) |  |   | 9,131  | 

|                                     |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |   |  |   |         | 
|------------------------------------ |  | ------ | ------- | -------- |  | -------- | ------ | ---------- |  | ------ | ------ | ----------- |  | ------------ | ------ | ----- |  | - | ------ |  |  | - | ------- | - |  | - | ------- | 
|                                     |  |        |         |          |  | Euro/DPC |        | DPC        |  | DPC    |        |             |  |              |        |       |  |   |        |  |  |  
|                                     |  |        |         |          |  | Limited  |        | Biermann   |  | Medlab |        |             |  |              |        | Less: |  |   |        | 
|                                     |  | United |         | (United  |  | (German  |        | (Brazilian |  |        |        |             |  | Intersegment |        |       |  |  
|(Dollars in Thousands)               |  | States |         | Kingdom) |  | Group)*  |        | Group)*    |  | Other  |        | Elimination |  | Total       
|                                     |  |        |         |          |  |          |        |            |  |        |        |             |  |             
|Nine Months Ended
September 30, 2002 |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |  
|Sales                                |  | $      | 169,544 |          |  | $        | 32,695 |            |  | $      | 29,488 |             |  | $            | 23,289 |       |  | $ | 51,419 |  |  | $ | (67,660 | ) |  | $ | 238,775 | 
|Net income (loss)                    |  |        | 24,275  |          |  |          | 6,675  |            |  |        | 488    |             |  |              | (699   | )     |  |   | 3,584  |  |  |   | 440     |   |  |   | 34,763  | 
|                                    
|Nine Months Ended
September 30, 2001 |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |  
|Sales                                |  | $      | 154,986 |          |  | $        | 27,359 |            |  | $      | 24,455 |             |  | $            | 21,994 |       |  | $ | 41,430 |  |  | $ | (61,763 | ) |  | $ | 208,461 | 
|Net income (loss)                    |  |        | 14,384  |          |  |          | 4,377  |            |  |        | 577    |             |  |              | 824    |       |  |   | 9,330  |  |  |   | (1,800  | ) |  |   | 27,692  | 

6



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|                       |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |          |   |  |   |         | 
|---------------------- |  | ------ | ------- | -------- |  | -------- | ------ | ---------- |  | ------ | ------ | ----------- |  | ------------ | ------ | ----- |  | - | ------ |  |  | - | -------- | - |  | - | ------- | 
|                       |  |        |         |          |  | Euro/DPC |        | DPC        |  | DPC    |        |             |  |              |        |       |  |   |        |  |  |  
|                       |  |        |         |          |  | Limited  |        | Biermann   |  | Medlab |        |             |  |              |        | Less: |  |   |        | 
|                       |  | United |         | (United  |  | (German  |        | (Brazilian |  |        |        |             |  | Intersegment |        |       |  |  
|(Dollars in Thousands) |  | States |         | Kingdom) |  | Group)*  |        | Group)*    |  | Other  |        | Elimination |  | Total       
|                       |  |        |         |          |  |          |        |            |  |        |        |             |  |             
|Total Assets           |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |          |   |  |   |         | 
|June 30, 2002          |  | $      | 397,862 |          |  | $        | 40,970 |            |  | $      | 45,878 |             |  | $            | 21,549 |       |  | $ | 67,903 |  |  | $ | (204,533 | ) |  | $ | 369,629 | 
|December 31, 2001      |  |        | 349,158 |          |  |          | 38,003 |            |  |        | 38,860 |             |  |              | 23,036 |       |  |   | 57,912 |  |  |   | (181,202 | ) |  |   | 325,767 | 



---

|* |  | DPC Biermann includes the
Companys operations in Germany, the Czech Republic, Slovenia,
and Poland. DPC Medlab includes the Companys operations in Brazil, Uruguay,
Venezuela, Costa Rica, and Panama.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 5  New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001. SFAS No. 142 changes the accounting for
goodwill from an amortization method to an impairment-only approach.
Amortization of goodwill ceased upon adoption of this statement. In addition,
the standard includes provisions for the reclassification of certain existing
recognized intangibles as goodwill, reassessment of the useful lives of
existing recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill, and the identification of reporting units for
purposes of assessing potential future impairments of goodwill. Under SFAS
Nos. 141 and 142, goodwill and other intangibles are initially assessed for
impairment upon adoption of the statements with subsequent assessments required
annually and when there is reason to suspect that their values have been
diminished or impaired, with any corresponding write-downs recognized as
necessary.

In connection with the adoption of SFAS No. 141, the Company evaluated its
intangibles including goodwill and determined that reclassification of such
balances was not necessary. Accordingly, the Companys intangibles consist
solely of goodwill generated in connection with the purchase of certain of its
affiliates. Effective January 1, 2002, the Company adopted SFAS No. 142.
Accordingly, amortization of goodwill ceased, effective January 1, 2002, and
would have been $270,000 in the third quarter and $800,000 in the first nine
months of 2002 had the non-amortization provisions of SFAS No. 142 not been
adopted. Pro forma net income for the three-month period ended September 30,
2001, had the non-amortization provisions of SFAS No. 142 been applied to that
period, would have been $9,333,000, an increase of $202,000 on an after-tax
basis, or $.32 per diluted share versus the $9,131,000 or $.31 per diluted
share actually reported. Pro forma net income for the nine-month period ended
September 30, 2001 would have been $28,268,000, an increase of $576,000 on an
after-tax basis, or $.96 per diluted share versus the $27,692,000 or $.94 per
diluted share actually reported. As required under SFAS No. 142, the Company
has completed the required transitional impairment testing and does not believe
impairment of its goodwill is necessary.

During the third quarter of 2001, the Financial Accounting Standards Board
issued SFAS No. 143, Accounting for Asset Retirement Obligations, and SFAS
No. 144, Accounting for the Impairment and Disposal of Long-Lived Assets.
These new standards clarify and supersede existing guidance for the reporting
and accounting for asset impairments and asset retirements. SFAS No. 143 will
be effective for the Company beginning January 1, 2003. The Company does not
believe that the impact of SFAS No. 143 will be material to the Companys
consolidated financial statements or results of operations. The Company
adopted SFAS No. 144 effective January 1, 2002. The adoption of this standard
did not have a material impact on the Companys consolidated financial position
and results of operations.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections. SFAS No. 145 rescinds or amends, effective
immediately, several other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their
applicability under changed conditions. In July 2002, the Financial Accounting
Standards Board issued SFAS No. 146, Accounting for Costs Associated with Exit
or Disposal Activities. The standard requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard include lease termination costs and certain employee
severance costs

7



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##### Table of Contents



that are associated with a restructuring, discontinued operation, plant
closing, or other exit or disposal activity. SFAS No. 146 is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.

The Company does not believe that SFAS Nos. 145 and 146 will have a material
impact to its consolidated financial position or results or operations.

Note 6  Related Party Transaction

On April 1, 2002, the Company amended its lease relating to 116,000 square feet
of its Los Angeles facility. The original lease expires on December 31, 2002.
The amendment extends the term of the lease for two years through December 31,
2004 and increases the rent to approximately $.75 from $.70 per square foot,
for a total annual rent of $1,035,000. The Company also has the option to
extend the term for two years at $.79 per square foot. The lease is with a
partnership comprised of Michael Ziering, CEO and director, Ira Ziering, VP and
director, Marilyn Ziering, VP, and other children of Mrs. Ziering who are
shareholders of the Company. The rent was determined on the basis of an
independent appraisal, and the terms of the lease amendment were approved
unanimously by the non-interested members of the board of directors.

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##### Table of Contents






|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Forward-Looking Statements

Except for the historical information contained herein, this report and the
following discussion in particular contain forward-looking statements
(identified by the words estimate, project, anticipate, plan, expect,
intend, believe, hope, and similar expressions), which are based upon
managements current expectations and speak only as of the date made. These
forward-looking statements are subject to risks, uncertainties, and factors
that could cause actual results to differ materially from the results
anticipated in the forward-looking statements. These risks and uncertainties
include:



| |  |  | 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 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;                                                          
|
| |  |  | 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; and                                                           
|
| |  |  | political and economic instability in certain foreign markets.                                                                                        

Results of Operations

The Companys sales increased 17.0% in the third quarter ended September 30,
2002 to $79.4 million compared to sales of $67.9 million in the third quarter
of 2001. Sales increased 14.5 % to $238.8 million in the first nine months of
2002 from $208.5 million in the first nine months of 2001. Sales of all
IMMULITE products (instruments, parts, service, and reagents) in the three and
nine months ended September 30, 2002 were $68.1 million and $202.3 million,
increases of 24.4% and 20.3% over the corresponding periods of 2001. Sales of
IMMULITE PRODUCTS represented 84.7% of sales in the first nine months of 2002,
compared to 80.7% of sales in the first nine months of 2001.

IMMULITE reagents represented $55.5 million of 2002 third quarter sales, a
22.5% increase over the third quarter of 2001 and $165.0 million of sales in
the first nine months of 2001, a 24.3% increase over the first nine months of
2001. Sales of IMMULITE systems (including service revenue and parts) were
$12.6 million in the 2002 third quarter, up 33.3% from the third quarter of
2001. Instrument sales were $9.8 million or 12.4% of sales in the third
quarter of 2002 versus $7.8 million or 11.5% of sales in 2001. As instruments
are sold at a lower gross margin than reagents this shift negatively impacted
gross margins in 2002. In the first nine months of 2002, sales of IMMULITE
systems (including service revenue and parts) increased 5.1% to $37.3 million
compared to the first nine months of 2001. The Company shipped a total of 259
IMMULITE systems during the third quarter of 2002, including 141 IMMULITE 2000
systems and 118 IMMULITE One systems. The total base of IMMULITE systems
shipped grew to almost 7,900 including over 2,200 of the IMMULITE 2000 systems.
The number of instruments shipped is important as the Companys instruments
can only use the Companys reagents and thus provide an ongoing revenue stream.

Sales of the Companys mature RIA products decreased approximately 16.1% in the
third quarter of 2002 to $7.3 million from $8.7 million in 2001. In the first
nine months of 2002, RIA declined 11.0% from $25.9 million in 2001. Sales of
other DPC products, including allergy reagents, represented approximately 3% of
sales in each of the three and nine month periods ended September 30, 2002.
Sales of non-DPC products represented 2% of sales in the three and nine month
periods ending September 30, 2002.

In the third quarter of 2002, domestic sales grew at 17.3%, to 28.0% of total
sales, while foreign sales grew at 17.0%. In the first nine months of 2002,
domestic sales grew at 15.5% to 27.6% of total sales, while international sales
grew at 14.2%. The growth in domestic sales reflects continued penetration of
large laboratory accounts and group purchasing organizations and the growth of
a distributor of the Companys products in the physicians office laboratory
market.

9



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##### Table of Contents



Due to the significance of foreign sales (72% of total sales), in particular in
Europe and South America, the Company is subject to currency risks based on the
relative strength or weakness of the U.S. Dollar. In periods when the U.S.
Dollar is strengthening, the effect of the translation of the financial
statements of consolidated foreign affiliates is that of lower sales and net
income. Had the value of the U.S. dollar relative to other currencies remained
constant with the third quarter of 2001, sales for the three month period of
2002 would have increased 0.6% less over the 2001 period. Over the nine-month
period of 2002 sales would have increased an additional 1.2% when compared to
the same period of 2001. Due to intense competition, the Companys foreign
distributors are generally unable to increase prices to offset the negative
effect when the U.S. dollar is strong. During the three and nine-month period,
the U.S. Dollar weakened relative to the Euro but strengthened significantly
relative to the Brazilian Real.

Gross profit as a percentage of sales decreased to 56.9% in the third quarter
2002 from 57.5% in the third quarter of 2001 and increased to 57.9% in the
first nine months of 2002 from 57.3% in the first nine months of 2001. The
decrease in gross margin in the third quarter of 2002 was due in part to the
significant decline in the Brazilian Real relative to the U.S. Dollar causing
the cost of goods sold in Brazil to increase, an increase in instrument sales
as a percent of total sales and an increase in the number of instruments rented
or placed in customer locations by unconsolidated affiliates. The increase in
gross margin in the first nine months of 2002 was in part related to the
increase in reagent sales as a percent of total sales.

The Company believes that because it sells to its affiliates in dollars, a
strengthening dollar as well as potential increases in product sales through
distribution agreements in the United States could put pressure on gross
margins in the future.

Selling expense increased in absolute terms in the third quarter and first nine
months of 2002 as a result of the higher level of sales, however it fell as a
percent of sales in both periods. Research and development expenses increased
in absolute dollars in the third quarter and the first nine months of 2002
relative to the third quarter and the first nine months of 2001, and increased
as a percentage of sales in the third quarter to 11.7% but fell slightly in the
nine month period of 2002 to 11.5%. The increase in expense reflects the
increased number of ongoing research and development projects. General and
administrative expenses increased in the third quarter and in the first nine
months of 2002, but decreased as a percent of sales to 9.1% in the third
quarter and 9.0% in the nine month period. It is expected that general and
administrative expenses will exceed historical levels in the future.

Equity in income of affiliates represents the Companys share of earnings of
non-consolidated affiliates, principally the 45%-owned Italian distributor.
This amount decreased to $604,000 in the third quarter of 2002 from $626,000 in
the third quarter of 2001. In the first nine months of 2002, this amount
increased to $2.4 million from $2.2 million for the comparable period in 2001.

Interest/other income (expense)  net includes interest income, interest expense,
and foreign exchange transaction losses and gains. In the third quarter of
2002, the Company had other expenses of $2.4 million versus income of $238,000
in 2001. In the first nine months of 2002, the Company had other expenses of
$1.9 million versus expenses of $462,000 in the same period of 2001. The third
quarter of 2002 included a $2.1 million foreign currency transaction loss
versus a $146,000 foreign currency gain in 2001. The first nine months of 2002
contained a foreign currency transaction loss of $1.5 million versus a loss of
$862,000 in the first nine months of 2001.

The Companys effective tax rate includes Federal, state, and foreign taxes.
The Companys tax rate remained at 31.0% in the third quarter of 2002, the same
as the third quarter of 2001. The rate increased to 31.0% in the first nine
months of 2002, from 30.6% in the same period in 2001.

Minority interest is the 44% minority owners interest in the earnings or
losses of the Companys consolidated Brazilian affiliate. This was a $450,000
income item (allocation of losses) in the third quarter of 2002 due to losses
in the Brazilian affiliate related to the decline in the Real relative to the
dollar, versus an expense item (allocation of income) of $166,000 in the third
quarter of 2001 when the Brazilian affiliate was profitable.

Net income increased 8.5% to $9.9 million in the third quarter of 2002 or $.34
per diluted share from $9.1 million or $.31 per diluted share in the third
quarter of 2001. Net income increased 26% in the first nine months of 2002 to
$34.8 million or $ 1.17 per diluted share from $27.7 million or $.94 per
diluted share in 2001.

10



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Liquidity and Capital Resources

The Company has adequate working capital and sources of capital to carry on its
current business and to meet its existing capital requirements. The Companys
principal source of liquidity is net cash flow from operating activities which
was $42.2 million in the first nine months of 2002 and $43.3 million in the
first nine months of 2001. Additions to property, plant, and equipment in the
first nine months of 2002 were $8.1 million, principally the result of the
Companys new computer systems in Los Angeles and Europe. Cash flow used for
the placement of IMMULITE systems under sales-type and operating leases was
$21.6 million in the first nine months of 2002 compared to $24.4 million in the
first nine months of 2001. These leases have periods ranging from three to
five years. The Company decreased borrowings by $1.0 million in the first nine
months of 2002 and by $64,000 in the first nine months of 2001. The Company is
considering the acquisition of additional real property in Los Angeles to
accommodate its future expansion.

The Companys foreign operations are subject to risks, such as currency
devaluations, associated with political and economic instability. See
discussion above under Results of Operations.

The Company continues to upgrade its computer systems. Expenditures for this
activity are anticipated to be less than $1 million for the remainder of 2002,
and it has no other material commitments for capital expenditures in 2002.

The Company has a $20 million domestic unsecured line of credit under which
there were no borrowings outstanding at September 30, 2002 or December 31,
2001. The Company had other notes payable (consisting of bank borrowings by
the Companys foreign consolidated subsidiaries payable in their local
currency, some of which are guaranteed by the Company) of $17.7 million at
September 30, 2002, compared to $17.0 million at December 31, 2001. The
Company received $3.2 million from the exercise of stock options in the first
nine months of 2002 versus $5.6 million in the first nine months of 2001. The
Company has paid a quarterly cash dividend of $.06 per share, on a
split-adjusted basis, since 1995.

Critical Accounting Policies

Managements beliefs regarding significant accounting policies have not changed
significantly from those discussed in Item 7 of the Companys Annual Report on
Form 10-K for the year ended December 31, 2001.

Contractual Obligations and Commitments

On April 1, 2002, the Company amended its lease relating to 116,000 square feet
of its Los Angeles facility. The original lease expires on December 31, 2002.
The amendment extends the term of the lease for two years through December 31,
2004 and increases the rent to approximately $.75 from $.70 per square foot,
for a total annual rent of $1,035,000. The Company also has the option to
extend the term for two years at $.79 per square foot. The lease is with a
partnership comprised of Michael Ziering, CEO and director, and Ira Ziering, VP
and director, Marilyn Ziering, VP, and other children of Mrs. Ziering who are
shareholders of the Company. The rent was determined on the basis of an
independent appraisal, and the terms of the lease amendment were approved
unanimously by the non-interested members of the board of directors. The
Company decided not to sign a long-term lease for this facility so that it will
have the flexibility to consider all options to meets its future space
requirements.

Euro Conversion

The Company has significant sales to European countries (the participating
countries), which converted to a common legal currency (the Euro) on January
1, 2002. The conversion to the Euro has eliminated currency exchange risk
among the participating countries.

The Company sells its products in the participating countries through
affiliated and non-affiliated distributors that determine sales prices in their
respective territories. The use of a single currency in the participating
countries may ultimately affect this variable pricing in the various European
markets because of price transparency. Nevertheless, other market factors such
as local taxes, customer preferences, and product assortment may reduce the
need for price equalization.

11



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##### Table of Contents



New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141, Business Combinations and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001. SFAS No. 142 changes the accounting for
goodwill from an amortization method to an impairment-only approach.
Amortization of goodwill ceased upon adoption of this statement. In addition,
the standard includes provisions for the reclassification of certain existing
recognized intangibles as goodwill, reassessment of the useful lives of
existing recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill, and the identification of reporting units for
purposes of assessing potential future impairments of goodwill. Under SFAS
Nos. 141 and 142, goodwill and other intangibles are initially assessed for
impairment upon adoption of the statements with subsequent assessments required
annually and when there is reason to suspect that their values have been
diminished or impaired, with any corresponding write-downs recognized as
necessary.

In connection with the adoption of SFAS No. 141, the Company evaluated its
intangibles including goodwill and determined that reclassification of such
balances was not necessary. Accordingly, the Companys intangibles consist
solely of goodwill generated in connection with the purchase of certain of its
affiliates. Effective January 1, 2002, the Company adopted SFAS No. 142.
Accordingly, amortization of goodwill ceased, effective January 1, 2002, and
would have been $270,000 in the third quarter and $800,000 in the first nine
months of 2002 had the non-amortization provisions of SFAS No. 142 not been
adopted. Pro forma net income for the three-month period ended September 30,
2001, had the non-amortization provisions of SFAS No. 142 been applied to that
period, would have been $9,333,000, an increase of $202,000 on an after-tax
basis, or $.32 per diluted share versus the $9,131,000 or $.31 per diluted
share actually reported. Pro forma net income for the nine-month period ended
September 30, 2001 would have been $28,268,000, an increase of $576,000 on an
after-tax basis, or $.96 per diluted share versus the $27,692,000 or $.94 per
diluted share actually reported. As required under SFAS No. 142, the Company
has completed the required transitional impairment testing and does not believe
impairment of its goodwill is necessary.

During the third quarter of 2001, the Financial Accounting Standards Board
issued SFAS No. 143, Accounting for Asset Retirement Obligations, and SFAS
No. 144, Accounting for the Impairment and Disposal of Long-Lived Assets.
These new standards clarify and supersede existing guidance for the reporting
and accounting for asset impairments and asset retirements. SFAS No. 143 will
be effective for the Company beginning January 1, 2003. The Company does not
believe that the impact of SFAS No. 143 will be material to the Companys
consolidated financial statements or results of operations. The Company
adopted SFAS No. 144 effective January 1, 2002. The adoption of this standard
did not have a material impact on the Companys consolidated financial position
and results of operations.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections. SFAS No. 145 rescinds or amends, effective
immediately, several other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their
applicability under changed conditions. In July 2002, the Financial Accounting
Standards Board issued SFAS No. 146, Accounting for Costs Associated with Exit
or Disposal Activities. The standard requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard include lease termination costs and certain employee
severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. SFAS No. 146 is
to be applied prospectively to exit or disposal activities initiated after
December 31, 2002.

The Company does not believe that SFAS Nos. 145 and 146 will have a material
impact to its consolidated financial position or results or operations.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change during the quarter and nine months ended
September 30, 2002, from the disclosures about market risk provided in the
Companys Annual Report on Form 10-K for the year ended December 31, 2001.

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ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation of the Companys disclosure controls and procedures
as of a date within 90 days prior to the filing of this report, the Chief
Executive Officer and Chief Financial Officer of the Company have concluded
that such disclosure controls and procedures were adequate and effective and
designed to ensure that material information relating to the Company and its
consolidated subsidiaries would be made known to them by others within those
entities. Since the date of such evaluation, there have been no significant
changes in internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.




PART II. OTHER INFORMATION




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.



| | A) |  | Exhibits
| | -- |  | --------

|     |  |                       
|---- |  | ----------------------
|99.1 |  | Officers Certification



| | B) |  | Forms 8-K  None
| | -- |  | ----------------




SIGNATURES

Pursuant to the requirements 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.

DIAGNOSTIC PRODUCTS CORPORATION
(Registrant)

|                                    |  |                                                                                                        |  |                  
|----------------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | -----------------
|/s/ Michael Ziering
Michael Ziering |  | President and
Chief Executive Officer and
Chairman of the Board
(Principal Executive Officer)
Director |  | November 13, 2002
|                                   
|/s/ James L. Brill
James L. Brill   |  | Vice President-Finance
(Principal Financial and Accounting
Officer)                                    |  | November 13, 2002

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CERTIFICATION

I, Michael Ziering, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Diagnostic Products
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002

/s/ Michael Ziering

Michael Ziering, Chief Executive Officer

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CERTIFICATION

I, James L. Brill, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Diagnostic Products
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002

/s/ James L. Brill

James L. Brill, Chief Financial Officer

15



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EXHIBIT INDEX

|     |  |                        
|---- |  | -----------------------
|99.1 |  | Officers Certification

16