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SECURITIES AND EXCHANGE COMMISSIONWashington, 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 June 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
(State or other jurisdiction of
incorporation or organization) |  | 95-2802182
(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.

[YESü]        [NO        ]

The number of shares of Common Stock, no par value, outstanding as of June 30,
2002, was 28,535,610.



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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                           
|PART II. OTHER INFORMATION   
|                              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|SIGNATURES                   
|EXHIBIT 99.1                 



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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM I. FINANCIAL STATEMENTS




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

(Dollars In Thousands, except per share data)

|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |         | 
|----------------------------------------- | ------------------------- |  | ------------------ | ------ | ---------------- |  | ------ | ------ | ---- |  | ------ | ------- |  |  | ------ | ------- | 
|                                          |                           |  | Three Months Ended |        | Six Months Ended
|                                          |                           |  | June 30,           |        | June 30,        
|                                          |                           |  |                    |        |                 
|                                          |                           |  | 2002               |        | 2001             |  | 2002   |        | 2001
|                                          |                           |  |                    |        |                  |  |        |        |     
|SALES:                                    |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | Non-Affiliated Customers  |  | $                  | 76,178 |                  |  | $      | 64,013 |      |  | $      | 143,716 |  |  | $      | 126,363 | 
|                                          | Unconsolidated Affiliates |  |                    | 8,434  |                  |  |        | 8,785  |      |  |        | 15,623  |  |  |        | 14,232  | 
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | Total Sales               |  |                    | 84,612 |                  |  |        | 72,798 |      |  |        | 159,339 |  |  |        | 140,595 | 
|COST OF SALES                             |                           |  | 35,692             |        |                  |  | 31,196 |        |      |  | 66,362 |         |  |  | 60,212 |        
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | Gross Profit              |  |                    | 48,920 |                  |  |        | 41,602 |      |  |        | 92,977  |  |  |        | 80,383  | 
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|OPERATING EXPENSES:                       |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|Selling                                   |                           |  | 13,524             |        |                  |  | 12,724 |        |      |  | 26,761 |         |  |  | 24,836 |        
|Research and Development                  |                           |  | 9,319              |        |                  |  | 7,985  |        |      |  | 18,030 |         |  |  | 16,287 |        
|General and Administrative                |                           |  | 7,560              |        |                  |  | 6,271  |        |      |  | 14,217 |         |  |  | 12,798 |        
|Equity in Income of Affiliates            |                           |  | (1,118             | )      |                  |  | (746   | )      |      |  | (1,830 | )       |  |  | (1,601 | )      
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|OPERATING EXPENSES  NET                  |                           |  | 29,285             |        |                  |  | 26,234 |        |      |  | 57,178 |         |  |  | 52,320 |        
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | OPERATING INCOME          |  |                    | 19,635 |                  |  |        | 15,368 |      |  |        | 35,799  |  |  |        | 28,063  | 
|Interest/Other Income (Expense)  Net     |                           |  | 610                |        |                  |  | (613   | )      |      |  | 431    |         |  |  | (700   | )      
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|INCOME BEFORE TAXES
AND MINORITY INTEREST |                           |  | 20,245             |        |                  |  | 14,755 |        |      |  | 36,230 |         |  |  | 27,363 |        
|PROVISION FOR INCOME TAXES                |                           |  | 6,276              |        |                  |  | 4,486  |        |      |  | 11,231 |         |  |  | 8,319  |        
|MINORITY INTEREST                         |                           |  | (81                | )      |                  |  | 260    |        |      |  | 142    |         |  |  | 483    |        
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | NET INCOME                |  | $                  | 14,050 |                  |  | $      | 10,009 |      |  | $      | 24,857  |  |  | $      | 18,561  | 
|                                          |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|EARNINGS PER SHARE:                       |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | BASIC                     |  | $                  | .49    |                  |  | $      | .36    |      |  | $      | .87     |  |  | $      | .66     | 
|                                          | DILUTED                   |  | $                  | .47    |                  |  | $      | .34    |      |  | $      | .84     |  |  | $      | .63     | 
|WEIGHTED-AVERAGE SHARES OUTSTANDING:      |                           |  |                    |        |                  |  |        |        |      |  |        |         |  |  |        |        
|                                          | BASIC                     |  |                    | 28,465 |                  |  |        | 28,081 |      |  |        | 28,413  |  |  |        | 27,987  | 
|                                          | DILUTED                   |  |                    | 29,723 |                  |  |        | 29,440 |      |  |        | 29,625  |  |  |        | 29,246  | 

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DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

(Dollars in Thousands)

|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |         |  
|----------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------- | ------- | ------------ | - | ------- | ------- | -
|                                                      |                                                                                                                                                                              |   | June 30, |         | December 31,
|                                                      |                                                                                                                                                                              |   | 2002     |         | 2001        
|                                                      |                                                                                                                                                                              |   |          |         |             
|Assets                                                |                                                                                                                                                                              |   |          |         |              |   |         |        
|CURRENT ASSETS:                                       |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Cash and cash equivalents                                                                                                                                                    |   | $        | 29,495  |              |   | $       | 31,834  |  
|                                                      | Accounts receivable (including receivables from
unconsolidated affiliates of $11,459 and
$6,635)  net of allowance for doubtful
accounts of $1,960 and $1,719, respectively |   |          | 84,650  |              |   |         | 74,630  |  
|                                                      | Inventories                                                                                                                                                                  |   |          | 68,859  |              |   |         | 62,815  |  
|                                                      | Prepaid expenses and other current assets                                                                                                                                    |   |          | 5,411   |              |   |         | 981     |  
|                                                      | Deferred income taxes                                                                                                                                                        |   |          | 3,225   |              |   |         | 3,225   |  
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Total current assets                                                                                                                                                         |   |          | 191,640 |              |   |         | 173,485 |  
|PROPERTY, PLANT, AND EQUIPMENT:                       |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Land and buildings                                                                                                                                                           |   |          | 51,869  |              |   |         | 49,922  |  
|                                                      | Machinery and equipment                                                                                                                                                      |   |          | 67,224  |              |   |         | 64,650  |  
|                                                      | Leasehold improvements                                                                                                                                                       |   |          | 10,690  |              |   |         | 7,242   |  
|                                                      | Construction in progress                                                                                                                                                     |   |          | 1,842   |              |   |         | 6,278   |  
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Total                                                                                                                                                                        |   |          | 131,625 |              |   |         | 128,092 |  
|                                                      | Less accumulated depreciation and amortization                                                                                                                               |   |          | (63,761 | )            |   |         | (63,989 | )
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Property, plant, and equipment  net                                                                                                                                         |   |          | 67,864  |              |   |         | 64,103  |  
|SALES-TYPE AND OPERATING LEASES  net                 |                                                                                                                                                                              |   | 65,924   |         |              |   | 56,570  |        
|DEFERRED INCOME TAXES                                 |                                                                                                                                                                              |   | 1,111    |         |              |   | 1,111   |        
|INVESTMENTS IN AFFILIATED COMPANIES                   |                                                                                                                                                                              |   | 21,349   |         |              |   | 17,242  |        
|GOODWILL  Net of accumulated amortization of $11,852 |                                                                                                                                                                              |   | 13,329   |         |              |   | 13,256  |        
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|TOTAL ASSETS                                          |                                                                                                                                                                              | $ | 361,217  |         |              | $ | 325,767 |        
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|Liabilities and Shareholders Equity                  |                                                                                                                                                                              |   |          |         |              |   |         |        
|CURRENT LIABILITIES:                                  |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Notes payable                                                                                                                                                                |   | $        | 20,642  |              |   | $       | 17,014  |  
|                                                      | Accounts payable                                                                                                                                                             |   |          | 13,180  |              |   |         | 22,173  |  
|                                                      | Accrued liabilities                                                                                                                                                          |   |          | 20,741  |              |   |         | 13,267  |  
|                                                      | Income taxes payable                                                                                                                                                         |   |          | 6,463   |              |   |         | 3,336   |  
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Total current liabilities                                                                                                                                                    |   |          | 61,026  |              |   |         | 55,790  |  
|MINORITY INTEREST                                     |                                                                                                                                                                              |   | 2,953    |         |              |   | 3,073   |        
|SHAREHOLDERS EQUITY:                                 |                                                                                                                                                                              |   |          |         |              |   |         |        
|                                                      | Common Stockno par value, authorized 60,000,000 shares;
outstanding 28,535,610 shares and 28,343,170 shares,
respectively                                                   |   |          | 58,032  |              |   |         | 55,068  |  
|                                                      | Retained earnings                                                                                                                                                            |   |          | 262,201 |              |   |         | 240,748 |  
|                                                      | Accumulated other comprehensive loss                                                                                                                                         |   |          | (22,995 | )            |   |         | (28,912 |  
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|Total shareholders equity                            |                                                                                                                                                                              |   | 297,238  |         |              |   | 266,904 |        
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY            |                                                                                                                                                                              | $ | 361,217  |         |              | $ | 325,767 |        
|                                                      |                                                                                                                                                                              |   |          |         |              |   |         |        

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

(Dollars in Thousands)

|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |         |   |         |  
|------------------------------------------------ | -------------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------------------------------------- | ------- | ---------------- | ------- | ------ | ------- | - | ------- | -
|                                                 |                                              |                                                                                  |                                                             |         | Six Months Ended
|                                                 |                                              |                                                                                  |                                                             |         | June 30,        
|                                                 |                                              |                                                                                  |                                                             |         |                 
|                                                 |                                              |                                                                                  |                                                             |         | 2002             |         | 2001  
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |       
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                              |                                                                                  |                                                             |         |                  |         |        |        
|                                                 | Net income                                   |                                                                                  | $                                                           | 24,857  |                  |         | $      | 18,561  |  
|                                                 |                                              | Adjustments to reconcile net income to net cash
flows from operating activities: |                                                             |         |                  |         |        |         |   |        
|                                                 |                                              |                                                                                  | Depreciation and amortization                               |         |                  | 12,715  |        |         |   | 12,386  |  
|                                                 |                                              |                                                                                  | Equity in undistributed income of unconsolidated affiliates |         |                  | (1,830  | )      |         |   | (1,601  | )
|                                                 |                                              | Changes in operating assets and liabilities:                                     |                                                             |         |                  |         |        |         |   |        
|                                                 |                                              |                                                                                  | Accounts receivable                                         |         |                  | (10,764 | )      |         |   | (15,538 | )
|                                                 |                                              |                                                                                  | Inventories                                                 |         |                  | (4,788  | )      |         |   | (1,220  | )
|                                                 |                                              |                                                                                  | Prepaid expenses and other current assets                   |         |                  | (1,971  | )      |         |   | (348    | )
|                                                 |                                              |                                                                                  | Accounts payable                                            |         |                  | (10,560 | )      |         |   | 4,119   |  
|                                                 |                                              |                                                                                  | Accrued liabilities                                         |         |                  | 6,416   |        |         |   | (2,046  | )
|                                                 |                                              |                                                                                  | Income taxes payable                                        |         |                  | 2,744   |        |         |   | 2,637   |  
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|                                                 | Net cash flows from operating activities     |                                                                                  |                                                             | 16,819  |                  |         |        | 16,950  |  
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|CASH FLOWS USED FOR INVESTING ACTIVITIES:        |                                              |                                                                                  |                                                             |         |                  |         |        |        
|                                                 |                                              |                                                                                  | Additions to property, plant, and equipment                 |         |                  | (5,412  | )      |         |   | (15,517 | )
|                                                 |                                              |                                                                                  | Sales-type and operating leases                             |         |                  | (15,343 | )      |         |   | (10,081 | )
|                                                 |                                              |                                                                                  | Investment in affiliated companies                          |         |                  | (946    | )      |         |   | (851    | )
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|                                                 | Net cash flows used for investing activities |                                                                                  |                                                             | (21,701 | )                |         |        | (26,449 | )
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|CASH FLOWS FROM FINANCING ACTIVITIES:            |                                              |                                                                                  |                                                             |         |                  |         |        |        
|                                                 |                                              |                                                                                  | Borrowing (repayment) of notes payable net                 |         |                  | 1,581   |        |         |   | (288    | )
|                                                 |                                              |                                                                                  | Proceeds from exercise of stock options                     |         |                  | 2,964   |        |         |   | 4,595   |  
|                                                 |                                              |                                                                                  | Cash dividends paid                                         |         |                  | (3,404  | )      |         |   | (3,352  | )
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|                                                 | Net cash flows from financing activities     |                                                                                  |                                                             | 1,141   |                  |         |        | 955     |  
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|EFFECT OF EXCHANGE RATE CHANGES ON CASH          |                                              |                                                                                  | 1,402                                                       |         |                  |         | 439    |        
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|NET DECREASE IN CASH AND CASH EQUIVALENTS        |                                              |                                                                                  | (2,339                                                      | )       |                  |         | (8,105 | )      
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |                                              |                                                                                  | 31,834                                                      |         |                  |         | 26,395 |        
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        
|CASH AND CASH EQUIVALENTS AT END OF PERIOD       |                                              | $                                                                                | 29,495                                                      |         |                  | $       | 18,290 |        
|                                                 |                                              |                                                                                  |                                                             |         |                  |         |        |        

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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 six-month periods ended June 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 six-month periods ended June 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 June 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:

(Dollars in Thousands)

|                |  |          |        |              |  |   |        | 
|--------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                |  | June 30, |        | December 31,
|                |  | 2002     |        | 2001        
|                |  |          |        |             
|Raw materials   |  | $        | 33,191 |              |  | $ | 27,884 | 
|Work in process |  |          | 25,785 |              |  |   | 23,611 | 
|Finished goods  |  |          | 9,883  |              |  |   | 11,320 | 
|                |  |          |        |              |  |   |        | 
|Total           |  | $        | 68,859 |              |  | $ | 62,815 | 
|                |  |          |        |              |  |   |        | 

Note 3  Comprehensive Income

Comprehensive income is summarized as follows:

(Dollars in Thousands)

|                                        |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        |  
|--------------------------------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | -
|                                        |  | Three Months Ended |        | Six Months Ended
|                                        |  | June 30,           |        | June 30,        
|                                        |  |                    |        |                 
|                                        |  | 2002               |        | 2001             |  | 2002 |        | 2001
|                                        |  |                    |        |                  |  |      |        |     
|Net income                              |  | $                  | 14,050 |                  |  | $    | 10,009 |      |  | $ | 24,857 |  |  | $ | 18,561 |  
|Foreign currency translation adjustment |  |                    | 7,774  |                  |  |      | (871   | )    |  |   | 5,917  |  |  |   | (5,353 | )
|                                        |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        |  
|Comprehensive income                    |  | $                  | 21,824 |                  |  | $    | 9,138  |      |  | $ | 30,774 |  |  | $ | 13,208 |  
|                                        |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        |  

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, Spain, The Netherlands, Belgium, Luxemborg, 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 |        | Six Months Ended
|                                          |  | June 30,           |        | June 30,        
|                                          |  |                    |        |                 
|                                          |  | 2002               |        | 2001             |  | 2002 |        | 2001
|                                          |  |                    |        |                  |  |      |        |     
|(Dollars in Thousands)                    |  |                    |        |                  |  |      |        |      |  |   |         |  |  |   |         | 
|Sales:                                    |  |                    |        |                  |  |      |        |      |  |   |         |  |  |   |         | 
|IMMULITE (includes service)               |  | $                  | 71,758 |                  |  | $    | 59,582 |      |  | $ | 134,149 |  |  | $ | 113,441 | 
|Radioimmunoassay (RIA)                  |  |                    | 7,903  |                  |  |      | 8,581  |      |  |   | 15,767  |  |  |   | 17,218  | 
|Other (Includes DPC and
non-DPC products) |  |                    | 4,951  |                  |  |      | 4,635  |      |  |   | 9,423   |  |  |   | 9,936   | 
|                                          |  |                    |        |                  |  |      |        |      |  |   |         |  |  |   |         | 
|                                          |  | $                  | 84,612 |                  |  | $    | 72,798 |      |  | $ | 159,339 |  |  | $ | 140,595 | 
|                                          |  |                    |        |                  |  |      |        |      |  |   |         |  |  |   |         | 

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   |  | DPC Medlab |        |             |  |              |       | Less: |  |   |        | 
|                                 |  | United |        | (United  |  | (German  |        | (Brazilian |  |            |        |             |  | Intersegment |       |       |  |  
|                                 |  | States |        | Kingdom) |  | Group)*  |        | Group)*    |  | Other      |        | Elimination |  | Total       
|                                 |  |        |        |          |  |          |        |            |  |            |        |             |  |             
|(Dollars in Thousands)           |  |        |        |          |  |          |        |            |  |            |        |             |  |              |       |       |  |   |        |  |  |   |         |   |  |   |        | 
|Three Months Ended June 30, 2002 |  |        |        |          |  |          |        |            |  |            |        |             |  |              |       |       |  |   |        |  |  |   |         |   |  |   |        | 
|Sales                            |  | $      | 60,966 |          |  | $        | 11,775 |            |  | $          | 10,159 |             |  | $            | 8,833 |       |  | $ | 18,832 |  |  | $ | (25,953 | ) |  | $ | 84,612 | 
|Net income (loss)                |  |        | 8,873  |          |  |          | 2,660  |            |  |            | 453    |             |  |              | (71   | )     |  |   | 2,009  |  |  |   | 126     |   |  |   | 14,050 | 
|Three Months Ended June 30, 2001 |  |        |        |          |  |          |        |            |  |            |        |             |  |              |       |       |  |   |        |  |  |   |         |   |  |   |        | 
|Sales                            |  | $      | 54,396 |          |  | $        | 8,831  |            |  | $          | 7,961  |             |  | $            | 7,768 |       |  | $ | 14,367 |  |  | $ | (20,525 | ) |  | $ | 72,798 | 
|Net income (loss)                |  |        | 7,420  |          |  |          | 1,411  |            |  |            | 150    |             |  |              | 330   |       |  |   | 1,198  |  |  |   | (500    | ) |  |   | 10,009 | 

|                               |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |   |  |   |         | 
|------------------------------ |  | ------ | ------- | -------- |  | -------- | ------ | ---------- |  | ------ | ------ | ----------- |  | ------------ | ------ | ----- |  | - | ------ |  |  | - | ------- | - |  | - | ------- | 
|                               |  |        |         |          |  | Euro/DPC |        | DPC        |  | DPC    |        |             |  |              |        |       |  |   |        |  |  |  
|                               |  |        |         |          |  | Limited  |        | Biermann   |  | Medlab |        |             |  |              |        | Less: |  |   |        | 
|                               |  | United |         | (United  |  | (German  |        | (Brazilian |  |        |        |             |  | Intersegment |        |       |  |  
|                               |  | States |         | Kingdom) |  | Group)*  |        | Group)*    |  | Other  |        | Elimination |  | Total       
|                               |  |        |         |          |  |          |        |            |  |        |        |             |  |             
|(Dollars in Thousands)         |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |   |  |   |         | 
|Six Months Ended June 30, 2002 |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |   |  |   |         | 
|Sales                          |  | $      | 116,007 |          |  | $        | 21,540 |            |  | $      | 19,229 |             |  | $            | 16,235 |       |  | $ | 34,501 |  |  | $ | (48,173 | ) |  | $ | 159,339 | 
|Net income (loss)              |  |        | 16,571  |          |  |          | 4,411  |            |  |        | 454    |             |  |              | 323    |       |  |   | 3,145  |  |  |   | (47     | ) |  |   | 24,857  | 
|Six Months Ended June 30, 2001 |  |        |         |          |  |          |        |            |  |        |        |             |  |              |        |       |  |   |        |  |  |   |         |   |  |   |         | 
|Sales                          |  | $      | 103,898 |          |  | $        | 17,605 |            |  | $      | 16,536 |             |  | $            | 14,700 |       |  | $ | 27,914 |  |  | $ | (40,058 | ) |  | $ | 140,595 | 
|Net income (loss)              |  |        | 13,901  |          |  |          | 2,757  |            |  |        | 438    |             |  |              | 613    |       |  |   | 2,052  |  |  |   | (1,200  | ) |  |   | 18,561  | 

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|                       |  |        |         |          |  |          |        |            |  |            |        |             |  |              |        |       |  |   |        |  |  |   |          |   |  |   |         | 
|---------------------- |  | ------ | ------- | -------- |  | -------- | ------ | ---------- |  | ---------- | ------ | ----------- |  | ------------ | ------ | ----- |  | - | ------ |  |  | - | -------- | - |  | - | ------- | 
|                       |  |        |         |          |  | Euro/DPC |        | DPC        |  | DPC        |        |             |  |              |        |       |  |   |        |  |  |  
|                       |  |        |         |          |  | Limited  |        | Biermann   |  | DPC Medlab |        |             |  |              |        | Less: |  |   |        | 
|                       |  | United |         | (United  |  | (German  |        | (Brazilian |  |            |        |             |  | Intersegment |        |       |  |  
|                       |  | States |         | Kingdom) |  | Group)*  |        | Group)*    |  | Other      |        | Elimination |  | Total       
|                       |  |        |         |          |  |          |        |            |  |            |        |             |  |             
|(Dollars in Thousands) |  |        |         |          |  |          |        |            |  |            |        |             |  |              |        |       |  |   |        |  |  |   |          |   |  |   |         | 
|Total Assets           |  |        |         |          |  |          |        |            |  |            |        |             |  |              |        |       |  |   |        |  |  |   |          |   |  |   |         | 
|June 30, 2002          |  | $      | 382,526 |          |  | $        | 41,077 |            |  | $          | 47,255 |             |  | $            | 21,769 |       |  | $ | 71,445 |  |  | $ | (202,855 | ) |  | $ | 361,217 | 
|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,
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 second quarter and $530,000 in the first six
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 June 30, 2001,
had the non-amortization provisions of SFAS No. 142 been applied to that
period, would have been $10,197,000, an increase of $188,000 on an after-tax
basis, or $.35 per diluted share versus the $10,009,000 or $.34 per diluted
share actually reported. Pro forma net income for the six-month period ended
June 30, 2001 would have been $18,930,000, an increase of $369,000 on an
after-tax basis, or $.65 per diluted share versus the $18,561,000 or $.63 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

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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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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

IMMULITE products, particularly the IMMULITE 2000, continue to drive the
Companys performance. The Companys sales increased 16% in the second quarter
of 2002 to $84.6 million compared to sales of $72.8 million in the second
quarter of 2001. Sales increased 13% in the first six months of 2002 to $159.3
million from $140.6 million in the first six months of 2001. Sales of all
IMMULITE products (instruments and reagents) in the second quarter of 2002 were
$71.8 million, a 20% increase over the second quarter of 2001. Sales of
IMMULITE products represented 85% of second quarter 2002 sales, compared to 82%
of second quarter 2001 sales. Sales of all IMMULITE products in the first six
months of 2002 were $134.1 million, an 18% increase over the first six months
of 2001. IMMULITE products represented 84% of sales in the first six months of
2002 versus 81% in 2001.

IMMULITE reagents represented $58.6 million of 2002 second quarter sales, a 30%
increase over 2001 and $109.5 million in the first six months of 2002, a 25%
increase over 2001. Sales of IMMULITE systems (including service revenue and
parts) were $13.2 million, down 10% from the second quarter of 2001 and $24.7
million in the first six months of 2002, a 5% decrease from 2001, reflecting an
increase in the number of instruments which were placed under operating leases
or rented rather than sold. The Company shipped to affiliated distributors and
third party customers a total of 315 IMMULITE systems during the 2002 second
quarter, including 183 IMMULITE 2000 systems and 132 IMMULITE One systems,
compared to 312 instruments in the same quarter of 2001 including 189 IMMULITE
2000 systems and 123 IMMULITE One systems. The total base of IMMULITE systems
shipped grew to 7,630, including 2,104 IMMULITE 2000 systems.

Sales of the Companys mature RIA products declined approximately 8% in both
the second quarter and in the first six months of 2002, representing 9% of
total sales in the second quarter and 10% in the first six months of 2002
compared to 12% of sales in the second quarter and the first six months of
2001. The sales decline in this product line is expected to continue. Sales of
other DPC products, including allergy reagents, increased by 4% over the second
quarter of 2001 and decreased by 9% in the first six months to 4% of 2002
second quarter sales, the same as the second quarter in 2001, and 4% of sales
in the first six months of 2002, down from 5% in the first six months of 2001.
Sales of non-DPC products, sold through its consolidated international
affiliates, increased 13% in the second quarter of 2002 to $1.7 million and
increased 12% in the first six months of 2002 to $3.5 million.

Due to the significance of foreign sales (73% of total sales in the second
quarter and in the first six months of 2002), particularly 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
weakening, the effect of the translation of the financial statements of
consolidated foreign affiliates is that of higher sales and net income.

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In the
second quarter of 2002, the effect of currency fluctuations, principally the
strong Euro, net of the weak Brazilian Real, had a 1.7% positive impact on
sales. In the first six months of 2002, the effect of currency fluctuations
principally the weak Real, net of the strong Euro, had a 0.7% negative impact
on sales. 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. The Brazilian Real in particular has historically been very
volatile relative to the Dollar. From December 31, 2001 until June 30, 2002 it
had devalued by approximately 22%. As previously mentioned, this reduces the
Companys consolidated revenues and decreases its gross margins as its
Brazilian subsidiary purchases goods in U.S. Dollars. Additionally, the
Brazilian subsidiary experienced a $1.0 million foreign currency transaction
loss in the second quarter of 2002. It is not possible to
anticipate what will happen to the Real relative to the U.S. Dollar in the
future; however, if it strengthens or weakens it will continue to effect the
Company.

In the second quarter of 2002, domestic sales grew at 16%, representing 27% of
total sales. In the first six months of 2001, domestic sales grew 15%,
remaining at 27% of total sales.

Gross profit as a percentage of sales increased from 57.1% in the second
quarter 2001 to 57.8% in the second quarter 2002 and from 57.2% in the first
six months of 2001 to 58.4% in the first six months of 2002. These increases
were due in part to a shift from lower margin equipment sales and rentals to
higher margin reagent sales, as a percentage of sales in 2002 versus 2001, and
manufacturing efficiencies on higher levels of production.

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. In addition, gross margins may also be affected by
product mix (instruments vs. reagents) and customer mix (domestic vs. foreign
distributor).

Selling expense increased in absolute dollars in both the second quarter and
the first six months of 2002 but fell as a percentage of sales in both periods
compared to 2001. Research and development expenses increased in absolute
dollars in the second quarter and first six months of 2002 relative to the
second quarter and first six months of 2001 and remained at 11% of sales in the
second quarter of 2002 while falling to 11% of sales from 12% in the first six
months of 2001. General and administrative expenses increased in the second
quarter and the first six months of 2002 by 21% and 11%, respectively, to 9% of
sales in the second quarter and the first six months of 2002 due in part to
increases in costs related to upgraded computer systems and additional costs
incurred in operating the new expanded manufacturing facilities in New Jersey.

Increased equity in income of affiliates represents the Companys share of
earnings of non-consolidated affiliates, principally the 45%-owned Italian
distributor. This amount increased to $1.1 million in the second quarter of
2002 from $.7 million in the second quarter of 2001. In the first six months
of 2002, this amount increased to $1.8 million from $1.6 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 second quarter of
2002, the Company had other income of $610,000 versus expense of $613,000 in
2001. In the first six months of 2002, the Company had other income of
$431,000 versus expense of $700,000 in the same period of 2001. The second
quarter of 2002 included a $769,000 foreign currency transaction gain versus a
$587,000 foreign currency loss in 2001. The first six months of 2002 included
a foreign currency transaction gain of $687,000 versus a loss of $1.0 million
in 2001. Additionally, interest expense in the first six months was $163,000
in 2002 versus income of $241,000 in 2001.

The Companys effective tax rate includes Federal, state, and foreign taxes.
The Companys tax rate increased to 31.0% in the second quarter and the first
six months of 2002 from 30.4% in the second quarter and the first six months of
2001.

Net income increased 40% to $14.1 million in the second quarter of 2002 or $.47
per diluted share from $10.0 million or $.34 per diluted share in the second
quarter of 2001. Net income increased 34% in the first six months of 2002 to
$24.9 million or $.84 per diluted share from $18.6 million or $.63 per diluted
share in 2001.

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 $16.8 million in the first six months of 2002 and $17.0 million in the
first six months of 2001. Additions to property, plant, and equipment in the
first six months of 2002 were $5.4 million, principally

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the result of the
Companys implementation of new computer systems, compared to $15.5 million in
the first six months of 2001 which related primarily to the Companys facility
in New Jersey. Cash flow used for the placement of IMMULITE systems under
sales-type and operating leases was $15.3 million in the first six months of
2002 compared to $10.1 million in the first six months of 2001. These leases
have periods ranging from three to five years. The Company increased
borrowings by $1.6 million in the first six months of 2002 and decreased
borrowings by $0.3 million in the first six months of 2001.

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 $2 million for the remainder of 2002,
and 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 June 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 $20.6 million at June 30, 2002,
compared to $17.0 million at December 31, 2001. The Company received $3.0
million from the exercise of stock options in the first six months of 2002
versus $4.6 million in the first six 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, 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 meet 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.

The Company has significant sales in Europe and is continuing to evaluate the
business implications of the conversion to the Euro, but at this time the
Company does not expect the Euro conversion to have a material impact on its
business. The Company has converted or upgraded certain of its European
subsidiaries to a similar computer software system that will allow them to
operate in the European currency environment and to create a central repository
for all European information.

11



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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 second quarter and $530,000 in the first six
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 June 30, 2001,
had the non-amortization provisions of SFAS No. 142 been applied to that
period, would have been $10,197,000, an increase of $188,000 on an after-tax
basis, or $.35 per diluted share versus the $10,009,000 or $.34 per diluted
share actually reported. Pro forma net income for the six-month period ended
June 30, 2001 would have been $18,930,000, an increase of $369,000 on an
after-tax basis, or $.65 per diluted share versus the $18,561,000 or $.63 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 six months ended June
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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##### Table of Contents






PART II. OTHER INFORMATION




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

The following persons were elected directors of the Company at the Annual
Meeting of Shareholders held on May 7, 2002:

|                  |  |            |            |          |  |  |           | 
|----------------- |  | ---------- | ---------- | -------- |  |  | --------- | 
|                  |  | Votes Cast
|                  |  |           
|Name              |  | For        |            | Withheld
|                  |  |            |            |         
|Sidney A. Aroesty |  |            | 21,149,978 |          |  |  | 5,321,718 | 
|Frederick Frank   |  |            | 24,604,578 |          |  |  | 1,867,118 | 
|Maxwell H. Salter |  |            | 24,658,329 |          |  |  | 1,813,367 | 
|James D. Watson   |  |            | 24,666,243 |          |  |  | 1,805,453 | 
|Ira Ziering       |  |            | 21,372,471 |          |  |  | 5,099,225 | 
|Michael Ziering   |  |            | 21,099,172 |          |  |  | 5,372,524 | 




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 |  | August 12, 2002
|                                   
|/s/ James L. Brill
James L. Brill   |  | Vice President-Finance
(Principal Financial and
Accounting Officer)                                    |  | August 12, 2002

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