<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    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 March 31, 2001

OR

[ ]     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 0-27316


                          Molecular Devices Corporation
             (Exact name of registrant as specified in its charter)

        Delaware                                                 94-2914362
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                               1311 Orleans Drive
                           Sunnyvale, California 94089
          (Address of principal executive offices, including zip code)


                                 (408) 747-1700
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                               YES [X]     NO [ ]

As of May 9, 2001, 16,533,738 shares of the Registrant's Common Stock were
outstanding.

<PAGE>   2

                          Molecular Devices Corporation

                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2001

                                      INDEX


<TABLE>
<CAPTION>
                                                                           PAGE
PART I.    FINANCIAL INFORMATION                                          NUMBER
<S>        <C>                                                            <C>

ITEM 1.    FINANCIAL STATEMENTS

           CONDENSED CONSOLIDATED BALANCE SHEETS
           March 31, 2001 and December 31, 2000..........................   3

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           Three Months Ended March 31, 2001 and 2000....................   4

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           Three Months Ended March 31, 2001 and 2000....................   5

           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS..........   6

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS...........................   9

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES
           ABOUT MARKET RISK.............................................  22


PART II.   OTHER INFORMATION

           ITEM 1.   LEGAL PROCEEDINGS ..................................  24

           ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS...........  24

           ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.....................  24

           ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF
                     SECURITY HOLDERS....................................  24

           ITEM 5.   OTHER INFORMATION...................................  24

           ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K....................  24

SIGNATURE................................................................  25
</TABLE>



                                       2
<PAGE>   3

                          PART I: FINANCIAL INFORMATION
                          ITEM 1: FINANCIAL STATEMENTS
                          MOLECULAR DEVICES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
               (in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                            March 31,      December 31,
                                                              2001            2000
                                                           -----------     ------------
ASSETS:                                                    (unaudited)
<S>                                                        <C>             <C>
  Current assets:
    Cash and cash equivalents                              $  74,238       $  41,832
    Short-term investments                                    20,611          55,259
    Accounts receivable, net                                  23,205          27,561
    Inventories                                               18,130          13,056
    Deferred tax asset                                         9,786          10,816
    Other current assets                                       5,472           5,791
                                                           ---------       ---------
      Total current assets                                   151,442         154,315

  Equipment and leasehold  improvements, net                   9,330           9,015
  Intangible and other assets                                 20,298          16,703
                                                           ---------       ---------
                                                           $ 181,070       $ 180,033
                                                           =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                                       $   5,422       $   4,902
    Accrued liabilities                                        6,004           8,424
    Deferred revenue                                           2,172           2,488
    Current portion of long-term debt                             --             317
                                                           ---------       ---------
      Total current liabilities                               13,598          16,131

Long-term debt, net of current portion                            --             269

Stockholders' equity:
  Preferred stock, no par value; 3,000,000 authorized
    no shares issued or outstanding                               --              --
  Common stock, $.001 par value; 30,000,000 shares
    authorized; 16,529,454 and 16,331,167
    shares issued and outstanding, at March 31, 2001
    and December 31, 2000, respectively                           17              17
  Additional paid-in capital                                 172,810         169,820
  Accumulated deficit                                         (3,189)         (4,833)
  Deferred compensation                                         (416)           (443)
  Accumulated other comprehensive loss                        (1,750)           (928)
                                                           ---------       ---------
    Total stockholders' equity                               167,472         163,633
                                                           ---------       ---------
                                                           $ 181,070       $ 180,033
                                                           =========       =========
</TABLE>

        The accompanying notes are an integral part of these statements.



                                       3
<PAGE>   4

                          MOLECULAR DEVICES CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                             Three Months Ended
                                                  March 31,
                                             2001           2000
                                           -----------------------
                                                  (unaudited)
<S>                                        <C>            <C>
TOTAL REVENUES                             $ 20,732       $ 20,179

TOTAL COST OF REVENUES                        7,976          7,361
                                           --------       --------

GROSS MARGIN                                 12,756         12,818
                                           --------       --------

OPERATING EXPENSES:
  Research and development                    3,635          3,987
  Selling, general and administrative         7,773          7,478
                                           --------       --------

Total operating expenses                     11,408         11,465
                                           --------       --------

INCOME FROM OPERATIONS                        1,348          1,353
Other income, net                             1,325            602
                                           --------       --------

INCOME BEFORE TAXES                           2,673          1,955
Income tax provision                         (1,029)          (769)
                                           --------       --------

NET INCOME                                 $  1,644       $  1,186
                                           ========       ========

BASIC NET INCOME PER SHARE                 $   0.10       $   0.09
                                           ========       ========

DILUTED NET INCOME PER SHARE               $   0.10       $   0.08
                                           ========       ========

SHARES USED IN COMPUTING BASIC NET
INCOME PER SHARE                             16,454         13,906
                                           ========       ========

SHARES USED IN COMPUTING DILUTED
NET INCOME PER SHARE                         17,207         15,205
                                           ========       ========
</TABLE>

        The accompanying notes are an integral part of these statements.



                                       4
<PAGE>   5

                          MOLECULAR DEVICES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                         March 31,
                                                                    2001           2000
                                                                  --------       --------
                                                                        (Unaudited)
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                        $  1,644       $  1,186
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation                                                       641            492
    Amortization of deferred compensation                               27            109
    Stock compensation expense                                          --            535
    Amortization of goodwill and developed technology                  141             79
    (Increase) decrease in assets:
      Accounts receivable                                            4,356           (562)
      Inventories                                                   (5,074)        (1,278)
      Deferred tax asset                                             1,030           (865)
      Other current assets                                             319           (970)
    Increase (decrease) in liabilities:
      Accounts payable                                                 520          1,176
      Accrued liabilities                                           (2,420)           743
      Deferred revenue                                                (316)           579
                                                                  --------       --------
Net cash provided by operating activities                              868          1,224
                                                                  --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments                                 (6,914)       (11,414)
Proceeds from sales and maturities of short-term investments        41,562            997
Capital expenditures                                                  (956)        (2,338)
Acquisition of Nihon Molecular Devices                              (3,150)            --
Other assets                                                          (586)        (1,283)
                                                                  --------       --------

Net cash provided by (used in) investing activities                 29,956        (14,038)
                                                                  --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on borrowings                                                (586)           (67)
Issuance of common stock, net                                        2,990         19,960
                                                                  --------       --------

Net cash provided by financing activities                            2,404         19,893
                                                                  --------       --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                               (822)          (215)

Net increase in cash and cash equivalents                           32,406          6,864
Cash and cash equivalents at beginning of period                    41,832         32,083
                                                                  --------       --------

Cash and cash equivalents at end of period                        $ 74,238       $ 38,947
                                                                  ========       ========
</TABLE>

        The accompanying notes are an integral part of these statements.



                                       5
<PAGE>   6

                          MOLECULAR DEVICES CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)


NOTE 1. BASIS OF PRESENTATION

Molecular Devices Corporation ("Molecular Devices"), a Delaware corporation, is
principally involved in the design, development, manufacture, sale and service
of bioanalytical measurement systems for life sciences and drug discovery
applications. The principal markets for Molecular Devices' products include
leading pharmaceutical and biotechnology companies as well as medical centers,
universities, government research laboratories and other institutions throughout
the world.

Molecular Devices acquired all of the outstanding stock of LJL BioSystems, Inc.
("LJL BioSystems") in a tax-free, stock-for-stock transaction on August 30,
2000. LJL BioSystems was also engaged in the design, development, manufacture,
sale and service of bioanalytical measurement systems for life sciences and drug
discovery applications. Molecular Devices has accounted for the transaction as a
pooling of interests, and, accordingly, the condensed consolidated financial
statements and all financial information related to the year 2000 have been
restated to reflect the combined operations, financial position and cash flows
of both companies.

Molecular Devices acquired all of the capital stock of Nihon Molecular Devices
("NMD"), its Japanese distributor on January 5, 2001. Molecular Devices has
accounted for the transaction as a purchase, and all financial information
related to 2001 include the results of both companies.

The condensed consolidated financial statements included herein have been
prepared in accordance with the published rules and regulations of the
Securities and Exchange Commission ("SEC") applicable to interim financial
information. Certain information and footnote disclosures included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted in these interim statements as allowed by such SEC rules and
regulations. However, management believes that the disclosures are adequate to
make the information presented not misleading. The unaudited condensed
consolidated financial statements included in this Form 10-Q should be read in
conjunction with the audited consolidated financial statements and notes thereto
for the fiscal year ended December 31, 2000, included in the Molecular Devices
Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed
with the SEC on March 30, 2001.

The unaudited condensed consolidated financial statements included herein
reflect all adjustments (which include only normal, recurring adjustments) which
are, in the opinion of management, necessary to state fairly the results for the
periods presented. The results for the three-month period ended March 31, 2001
are not necessarily indicative of the results to be expected for the entire
fiscal year ending December 31, 2001.

NOTE 2.  RECENT ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities." SFAS No. 133, which we adopted January 1, 2001,
establishes accounting and reporting standards for derivative instruments and
for hedging activities. SFAS No. 133 requires a company to recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Changes in the fair value
of derivatives will be reported currently in earnings



                                       6
<PAGE>   7

or in other comprehensive income, depending on their effectiveness pursuant to
SFAS No. 133. As of March 31, 2001, we had not engaged in hedging activities.
However, we anticipate engaging in hedging activity in the future, and
therefore, expect to be impacted by the pronouncement at such time.

NOTE 3. BUSINESS COMBINATIONS

On January 5, 2001, Molecular Devices acquired all of the capital stock of NMD,
its Japanese distributor, in exchange for $3,150,000. As a result, NMD became a
wholly owned subsidiary of Molecular Devices. JCR Pharmaceuticals Co., Ltd. and
Molecular Devices jointly established NMD in 1995 to import and sell Molecular
Devices' products in Japan. The excess of the purchase price over the identified
net assets of NMD has been allocated to goodwill (as follows) and is being
amortized over ten years (in thousands):

<TABLE>
      <S>                                                          <C>
      Acquired goodwill                                            $1,938
      Net book value of acquired assets and liabilities
          which approximate fair value                              1,212
                                                                   ------
      Total purchase price                                         $3,150
                                                                   ======
</TABLE>

Pro forma consolidated results for Molecular Devices had the acquisition been
consummated January 1, 2001 are not materially different from those presented in
this Form 10-Q.

Molecular Devices acquired all of the outstanding stock of LJL BioSystems in a
tax-free, stock-for-stock transaction on August 30, 2000, as a result of which
LJL BioSystems became a wholly owned subsidiary of Molecular Devices. Molecular
Devices exchanged approximately 4.5 million shares of common stock for all of
the outstanding common shares of LJL BioSystems. In addition, Molecular Devices
assumed outstanding options and warrants to acquire LJL BioSystems shares, which
were converted into options and warrants to acquire approximately 557,000 share
of Molecular Devices' common stock. The transaction was accounted for under the
pooling-of-interests method of accounting and, accordingly, the accompanying
condensed consolidated financial statements and all financial information for
the year 2000 have been restated to include the operations of LJL BioSystems for
all periods presented.

NOTE 4.  COMPREHENSIVE INCOME

Statement of Financial Accounting Standards No. 130 requires unrealized gains or
losses on Molecular Devices' short-term investments and the cumulative effect of
Molecular Devices' foreign currency translation adjustments, which are reported
in stockholders' equity, to be included in other comprehensive income.
Comprehensive income was approximately $1.1 million for each of the three-month
periods ended March 31, 2001 and 2000.

NOTE 5.  CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Molecular Devices considers all highly liquid investments in debt securities
with a remaining maturity from the date of purchase of 90 days or less to be
cash equivalents. Cash equivalents consist of money market funds and corporate
debt securities and U.S. government debt instruments. Molecular Devices'
short-term investments include obligations of $5.0 million of governmental
agencies and $15.6 million of corporate debt securities with original maturities
ranging between 3 and 12 months. By policy, Molecular Devices limits
concentration of credit risk by diversifying its investments among a variety of
high credit-quality issuers. All cash equivalents and short-term investments are
classified as available-for-sale. Available-for-sale securities are carried at
amortized cost, which approximated fair value at March 31, 2001. Material
unrealized gains and losses, if any, are reported in stockholders' equity and
included in other comprehensive income. Fair value is estimated based on
available market information.



                                       7
<PAGE>   8

The cost of securities sold is based on the specific identification method. For
the three months ended March 31, 2001, gross realized gains and losses on
available-for-sale securities were immaterial.

NOTE 6. INVENTORIES

Inventories consist of (in thousands):

<TABLE>
<CAPTION>
                                                    March 31,     December 31,
                                                      2001            2000
                                                   -----------    ------------
                                                   (unaudited)
<S>                                                <C>            <C>
Finished goods                                      $  9,074        $  5,920
Work in process                                        2,525           2,227
Raw materials and subassemblies                        6,531           4,909
                                                    --------        --------
                                                    $ 18,130        $ 13,056
                                                    ========        ========
</TABLE>

NOTE 7. NET INCOME PER SHARE

Basic net income per share is computed using the weighted average number of
shares of common stock outstanding and diluted net income per share is computed
using the weighted average number of shares of common stock outstanding and
dilutive common equivalent shares from outstanding stock options (using the
treasury stock method). Computation of earnings per share is as follows (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                                   March 31,
                                                              2001          2000
                                                            ----------------------
                                                                  (unaudited)
<S>                                                         <C>           <C>
Net Income                                                  $  1,644      $  1,186
                                                            ========      ========

Denominator for basic EPS -- weighted average
common shares outstanding                                     16,454        13,906

Effect of dilutive securities -- employee stock options          753         1,299
                                                            --------      --------

Denominator for diluted EPS -- weighted average
common shares outstanding plus dilutive securities            17,207        15,205
                                                            --------      --------

BASIC NET INCOME PER SHARE                                  $   0.10      $   0.09
                                                            ========      ========

DILUTED NET INCOME PER SHARE                                $   0.10      $   0.08
                                                            ========      ========
</TABLE>

NOTE 8.  SEGMENT INFORMATION

Molecular Devices operates in a single industry segment: the design,
development, manufacture, sale and service of bioanalytical measurement systems
for drug discovery and life sciences research applications.



                                       8
<PAGE>   9

                          MOLECULAR DEVICES CORPORATION

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

Except for the historical information contained herein, the following discussion
contains "forward-looking statements." For this purpose, any statements that are
not statements of historical fact may be deemed to be forward-looking
statements. Words such as "believes," "anticipates," "plans," "predicts,"
"expects," "estimates," "intends," "will," "continue," "may," "potential,"
"should" and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause our results
to differ materially from those indicated by these forward-looking statements,
including, among others, those discussed below and under the caption "Factors
that May Affect Future Results," as well as those identified in the Molecular
Devices Annual Report on Form 10-K for the year ended December 31, 2000 filed
with the SEC on March 30, 2001.

Molecular Devices acquired all of the outstanding stock of LJL BioSystems in a
tax-free, stock-for-stock transaction on August 30, 2000, as a result of which
LJL BioSystems became a wholly owned subsidiary of Molecular Devices. The
transaction was accounted for under the pooling of interests method of
accounting and, accordingly, all financial information related to the year 2000
has been restated to include the operations of LJL BioSystems for all periods
presented.

The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in Part I
-- Item 1 of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended December 31,
2000 contained in the Molecular Devices Annual Report on Form 10-K for the year
ended December 31, 2000 filed with the SEC on March 30, 2001. The results for
the first three months of 2001 are not necessarily indicative of the results to
be expected for the entire fiscal year ending December 31, 2001.

RESULTS OF OPERATIONS -- Three months ended March 31, 2001 and 2000

REVENUES. Revenues for the first quarter of 2001 increased 3% to $20.7 million
from $20.2 million in the first quarter of 2000, but were below our expectations
as a result of postponements of order decisions by a number of customers late in
the quarter. The Life Sciences and Drug Discovery product families both
generated increased levels of revenue. The Life Sciences Research product family
consists of Molecular Devices' Maxline(TM), Skatron and Threshold(R) products.
The Drug Discovery product family consists of Molecular Devices' FLIPR(R), CLIPR
and Cytosensor systems and the entire LJL BioSystems product family. Life
Sciences Research revenues increased nominally by 1% primarily due to continued
strong demand for the SPECTRAmax PLUS384 (which was introduced in the first
quarter of 2000). Drug Discovery revenues increased by 4% primarily due to the
introduction and sales of our FLEXstation(TM) in the first quarter of 2001 as
well as increased sales of our Cytosensor product line. We typically experience
a decrease in the level of sales in the first calendar quarter as compared to
the fourth quarter of the preceding year because of budgetary and capital
equipment purchasing patterns in the life sciences industry.

GROSS MARGIN. Gross margin decreased to 61.5% in the first quarter of 2001 as
compared to 63.5% in the first quarter of 2000. This margin deterioration was
primarily due to lower sales volumes of our higher margin products including the
LJL BioSystems products as well as the Gemini XS. In addition, a higher overhead
base combined with lower than expected sales volumes in the first quarter of
2001 added to the margin deterioration.



                                       9
<PAGE>   10

RESEARCH AND DEVELOPMENT. Research and development expenses for the first
quarter of 2001 decreased by 9% to $3.6 million (17.5% of revenues) from $4.0
million (19.8% of revenues) for the first quarter of 2000. The decreased
spending for the period was primarily the result of the synergies created by the
combined Molecular Devices/LJL BioSystems research and development groups.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses for the first quarter of 2001 increased by 4% to $7.8 million (37.5% of
revenues) from $7.5 million (37.1% of revenues) for the first quarter of 2000.
The increased spending was primarily the result of additional expenditures
worldwide on marketing, sales and service activities, most notably our
acquisition of our Japanese distributor Nihon Molecular Devices, as we continued
our efforts to expand our worldwide market coverage. Decreased administrative
spending, reflective of the synergies created by the combination of Molecular
Devices' and LJL BioSystems' administrative organizations, partially offset the
increased marketing, sales and service expenditures.

OTHER INCOME (NET). Net other income increased to $1.3 million in the first
quarter of 2001 as compared to $602,000 in the same period of 2000. The increase
in the period was due to additional interest income generated from higher cash
balances.

INCOME TAX PROVISION. We recorded an income tax provision of $1.0 million in the
first quarter of 2001 as compared to $769,000 in the same period of 2000. The
difference in the effective tax rate of 38.5% for the first quarter of 2001
compared to 39.3% for the first quarter of 2000 results from the fact that the
tax rate for the first quarter of 2000 is based on the evaluation of various
different factors, including the combined companies' statutory and state tax
rates and the elimination of a portion of the valuation allowance for deferred
tax assets of LJL BioSystems in the first quarter of 2000.

LIQUIDITY AND CAPITAL RESOURCES

We had cash, cash equivalents, and short-term investments of approximately $94.8
million at March 31, 2001 compared to $97.1 million at December 31, 2000.
Operating activities in the first three months of 2001 provided approximately
$868,000 of cash primarily due to our earnings and decreased accounts receivable
as offset by increased inventory. Approximately $30.0 million of cash was
provided by investing activities in the first three months of 2001 primarily due
to $34.6 million of net short-term investment maturities offset by (1) $3.2
million used to acquire Nihon Molecular Devices, our Japanese distributor, (2) a
$1.2 million strategic equity investment in a privately held company, as
partially offset by the amortization of goodwill and acquired technology, and
(3) $956,000 of capital expenditures, primarily related to the completion of our
facilities expansion in Sunnyvale, California, as well as various computer and
software related projects. Financing activities provided $2.4 million, primarily
due to the issuance of common stock related to the exercise of stock options by
employees, as partially offset by the payoff of $586,000 in short- and long-term
debt.

We believe that our existing cash and investment securities and anticipated cash
flow from our operations will be sufficient to support our current operating
plan for the foreseeable future. Our forecast of the period of time through
which our financial resources will be adequate to support our operations is a
forward-looking statement that involves risks and uncertainties, and actual
results could vary as a result of a number of factors. We have based this
estimate on assumptions that may prove to be wrong. Our future capital
requirements will depend on many factors, including:

-   the progress of our research and development;

-   the number and scope of our research programs;



                                       10
<PAGE>   11

-   market acceptance and demand for our products;

-   the costs that may be involved in enforcing our patent claims and other
    intellectual property rights;

-   potential acquisition and technology licensing opportunities;

-   manufacturing capacity requirements; and

-   the costs of expanding our sales, marketing and distribution capabilities
    both in the United States and abroad.

We have generated sufficient cash flow to fund our capital requirements
primarily though financing activities over the last three years. However, we
cannot assure you that we will not require additional financing in the future to
support our existing operations or potential acquisition and technology
licensing opportunities that may arise. Therefore, we may in the future seek to
raise additional funds through bank facilities, debt or equity offerings or
other sources of capital.

Our cash and investments policy emphasizes liquidity and preservation of
principal over other portfolio considerations. We select investments that
maximize interest income to the extent possible given these two constraints. We
satisfy liquidity requirements by investing excess cash in securities with
different maturities to match projected cash needs and limit concentration of
credit risk by diversifying our investments among a variety of high
credit-quality issuers.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Our business faces significant risks and the risks described below may not be
the only risks we face. Additional risks that we do not know of or that we
currently think are immaterial may also impair our business operations. If any
of the events or circumstances described in the following risks actually occurs,
our business, financial condition or results of operations could be harmed and
the trading price of our common stock could decline.

VARIATIONS IN THE AMOUNT OF TIME IT TAKES FOR US TO SELL OUR PRODUCTS AND
COLLECT ACCOUNTS RECEIVABLE AND THE TIMING OF CUSTOMER ORDERS MAY CAUSE
FLUCTUATIONS IN OUR OPERATING RESULTS, WHICH COULD CAUSE OUR STOCK PRICE TO
DECLINE.

The timing of capital equipment purchases by customers is expected to be uneven
and difficult to predict. Many of our products represent significant capital
purchases for our customers. The list prices for our instruments range from
$5,000 to $494,500. Accordingly, our customers generally take a relatively long
time to evaluate our products, and a significant portion of our revenues is
typically derived from sales of a small number of relatively high-priced
products. Purchases are generally made by purchase orders and not long-term
contracts. Delays in receipt of anticipated orders for our relatively high
priced products could lead to substantial variability from quarter to quarter.
Furthermore, we have historically received purchase orders and made a
significant portion of each quarter's product shipments near the end of the
quarter. If that pattern continues, even short delays in the receipt of orders
or shipment of products at the end of a quarter could have a materially adverse
affect on results of operations for that quarter.

We expend significant resources educating and providing information to our
prospective customers regarding the uses and benefits of our products. Because
of the number of factors influencing the sales process, the period between our
initial contact with a customer and the time when we recognize revenues from
that customer, if ever, varies widely. Our sales cycles typically range from
three to six



                                       11
<PAGE>   12

months, but can be much longer. During these cycles, we commit substantial
resources to our sales efforts in advance of receiving any revenues, and we may
never receive any revenues from a customer despite our sales efforts.

The relatively high purchase price for a customer order contributes to
collection delays that result in working capital volatility. While the terms of
most of our purchase orders require payment within 30 days of product shipment,
in the past we have experienced significant collection delays. We cannot predict
whether we will continue to experience similar or more severe delays.

The capital spending policies of our customers have a significant effect on the
demand for our products. Those policies are based on a wide variety of factors,
including resources available to make purchases, spending priorities, and
policies regarding capital expenditures during industry downturns or
recessionary periods. Any decrease in capital spending by our customers
resulting from any of these factors could harm our business.

WE DEPEND ON ORDERS THAT ARE RECEIVED AND SHIPPED IN THE SAME QUARTER AND
THEREFORE HAVE LIMITED VISIBILITY OF FUTURE PRODUCT SHIPMENTS.

Our net sales in any given quarter depend upon a combination of orders received
in that quarter for shipment in that quarter and shipments from backlog. Our
products are typically shipped within 30 to 90 days of purchase order receipt.
As a result, we do not believe that the amount of backlog at any particular date
is indicative of our future level of sales. Our backlog at the beginning of each
quarter does not include all product sales needed to achieve expected revenues
for that quarter. Consequently, we are dependent on obtaining orders for
products to be shipped in the same quarter that the order is received. Moreover,
customers may reschedule deliveries, and production difficulties could delay
shipments. Accordingly, we have limited visibility of future product shipments,
and our results of operations are subject to significant variability from
quarter to quarter.

MANY OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE SIGNIFICANTLY GREATER
RESOURCES THAN WE DO, AND INCREASED COMPETITION COULD IMPAIR SALES OF OUR
PRODUCTS.

We operate in a highly competitive industry and face competition from companies
that design, manufacture and market instruments for use in the life sciences
research industry, from genomic, pharmaceutical, biotechnology and diagnostic
companies and from academic and research institutions and government or other
publicly-funded agencies, both in the United States and abroad. We may not be
able to compete effectively with all of these competitors. Many of these
companies and institutions have greater financial, engineering, manufacturing,
marketing and customer support resources than we do. As a result, our
competitors may be able to respond more quickly to new or emerging technologies
or market developments by devoting greater resources to the development,
promotion and sale of products, which could impair sales of our products.
Moreover, there has been significant merger and acquisition activity among our
competitors and potential competitors. These transactions by our competitors and
potential competitors may provide them with a competitive advantage over us by
enabling them to rapidly expand their product offerings and service capabilities
to meet a broader range of customer needs. Many of our customers and potential
customers are large companies that require global support and service, which may
be easier for our larger competitors to provide.

We believe that competition within the markets we serve is primarily driven by
the need for innovative products that address the needs of customers. We attempt
to counter competition by seeking to develop new products and provide quality
products and services that meet customers' needs. We cannot assure you, however,
that we will be able to successfully develop new products or that our existing
or new products and services will adequately meet our customers' needs.



                                       12
<PAGE>   13

Rapidly changing technology, evolving industry standards, changes in customer
needs, emerging competition and frequent new product and service introductions
characterize the markets for our products. To remain competitive, we will be
required to develop new products and periodically enhance our existing products
in a timely manner. We are facing increased competition as new companies
entering the market with new technologies compete, or will compete, with our
products and future products. We cannot assure you that one or more of our
competitors will not succeed in developing or marketing technologies or products
that are more effective or commercially attractive than our products or future
products, or that would render our technologies and products obsolete or
uneconomical. Our future success will depend in large part on our ability to
maintain a competitive position with respect to our current and future
technologies, which we may not be able to do. In addition, delays in the launch
of our new products may result in loss of market share due to our customers'
purchases of competitors' products during any delay.

IF WE ARE NOT SUCCESSFUL IN DEVELOPING NEW AND ENHANCED PRODUCTS, WE MAY LOSE
MARKET SHARE TO OUR COMPETITORS.

The life sciences instrumentation market is characterized by rapid technological
change and frequent new product introductions. Over 76% of our revenues in 2000
were derived from the sale of products that were introduced in the last three
years, and our future success will depend on our ability to enhance our current
products and to develop and introduce, on a timely basis, new products that
address the evolving needs of our customers. We may experience difficulties or
delays in our development efforts with respect to new products, and we may not
ultimately be successful in developing them. Any significant delay in releasing
new systems could adversely affect our reputation, give a competitor a
first-to-market advantage or cause a competitor to achieve greater market share.
In addition, our future success depends on our continued ability to develop new
applications for our existing products. If we are not able to complete the
development of these applications, or if we experience difficulties or delays,
we may lose our current customers and may not be able to attract new customers,
which could seriously harm our business and our future growth prospects.

WE MUST EXPEND A SIGNIFICANT AMOUNT OF TIME AND RESOURCES TO DEVELOP NEW
PRODUCTS AND IF THESE PRODUCTS DO NOT ACHIEVE COMMERCIAL ACCEPTANCE, OUR
OPERATING RESULTS MAY SUFFER.

We expect to spend a significant amount of time and resources to develop new
products and refine existing products. In light of the long product development
cycles inherent in our industry, these expenditures will be made well in advance
of the prospect of deriving revenues from the sale of new products. Our ability
to commercially introduce and successfully market new products is subject to a
wide variety of challenges during this development cycle that could delay
introduction of these products. In addition, since our customers are not
obligated by long-term contracts to purchase our products, our anticipated
product orders may not materialize, or orders that do materialize may be
canceled. As a result, if we do not achieve market acceptance of new products,
our operating results will suffer. We cannot predict whether these or other new
products that we expect to introduce will achieve commercial acceptance. Our
products are generally priced higher than competitive products, which may impair
commercial acceptance.

IF WE DELIVER PRODUCTS WITH DEFECTS, OUR CREDIBILITY WILL BE HARMED AND THE
SALES AND MARKET ACCEPTANCE OF OUR PRODUCTS WILL DECREASE.

Our products are complex and sometimes have contained errors, defects and bugs
when introduced. If we deliver products with errors, defects or bugs, our
credibility and the market acceptance and sales of our products would be harmed.
Further, if our products contain errors, defects or bugs, we may be required to
expend significant capital and resources to alleviate such problems. Defects
could also lead to product liability as a result of product liability lawsuits
against us or against our customers. We have



                                       13
<PAGE>   14

agreed to indemnify our customers in some circumstances against liability
arising from defects in our products. In the event of a successful product
liability claim, we could be obligated to pay damages significantly in excess of
our product liability insurance limits.

MOST OF OUR CURRENT AND POTENTIAL CUSTOMERS ARE FROM THE PHARMACEUTICAL AND
BIOTECHNOLOGY INDUSTRIES AND ARE SUBJECT TO RISKS FACED BY THOSE INDUSTRIES.

We derive a significant portion of our revenues from sales to pharmaceutical and
biotechnology companies. We expect that sales to pharmaceutical and
biotechnology companies will continue to be a primary source of revenues for the
foreseeable future. As a result, we are subject to risks and uncertainties that
affect the pharmaceutical and biotechnology industries, such as pricing
pressures as third-party payors continue challenging the pricing of medical
products and services, government regulation and uncertainty of technological
change, and reduction and delays in research and development expenditures by
companies in these industries.

In addition, our future revenues may be adversely affected by the ongoing
consolidation in the pharmaceutical and biotechnology industries, which will
reduce the number of our potential customers. Furthermore, we cannot assure you
that the pharmaceutical and biotechnology companies that are our customers will
not develop their own competing products or in-house capabilities.

OUR PRODUCTS COULD INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, WHICH
MAY CAUSE US TO ENGAGE IN COSTLY LITIGATION AND, IF WE ARE NOT SUCCESSFUL, COULD
ALSO CAUSE US TO PAY SUBSTANTIAL DAMAGES AND PROHIBIT US FROM SELLING OUR
PRODUCTS.

Third parties may assert infringement or other intellectual property claims
against us. We may have to pay substantial damages, including treble damages,
for past infringement if it is ultimately determined that our products infringe
a third party's proprietary rights. Further, any legal action against us could,
in addition to subjecting us to potential liability for damages, prohibit us
from selling our products before we obtain a license to do so from the party
owning the intellectual property, which, if available at all, may require us to
pay substantial royalties. Even if these claims are without merit, defending a
lawsuit takes significant time, may be expensive and may divert management
attention from other business concerns. There may be third-party patents that
may relate to our technology or potential products. Any public announcements
related to litigation or interference proceedings initiated or threatened
against us could cause our stock price to decline. We believe that there may be
significant litigation in the industry regarding patent and other intellectual
property rights. If we become involved in litigation, it could consume a
substantial portion of our managerial and financial resources.

WE MAY NEED TO INITIATE LAWSUITS TO PROTECT OR ENFORCE OUR PATENTS, WHICH WOULD
BE EXPENSIVE AND, IF WE LOSE, MAY CAUSE US TO LOSE SOME OF OUR INTELLECTUAL
PROPERTY RIGHTS, WHICH WOULD REDUCE OUR ABILITY TO COMPETE IN THE MARKET.

We rely on patents to protect a large part of our intellectual property and our
competitive position. In order to protect or enforce our patent rights, we may
initiate patent litigation against third parties, such as infringement suits or
interference proceedings. Litigation may be necessary to:

-   assert claims of infringement;

-   enforce our patents;



                                       14
<PAGE>   15

-   protect our trade secrets or know-how; or

-   determine the enforceability, scope and validity of the proprietary rights
    of others.

Lawsuits could be expensive, take significant time and divert management's
attention from other business concerns. They would put our patents at risk of
being invalidated or interpreted narrowly and our patent applications at risk of
not issuing. We may also provoke third parties to assert claims against us.
Patent law relating to the scope of claims in the technology fields in which we
operate is still evolving and, consequently, patent positions in our industry
are generally uncertain. We cannot assure you that we will prevail in any of
these suits or that the damages or other remedies awarded, if any, will be
commercially valuable. During the course of these suits, there may be public
announcements of the results of hearings, motions and other interim proceedings
or developments in the litigation. If securities analysts or investors perceive
any of these results to be negative, it could cause our stock price to decline.

THE RIGHTS WE RELY UPON TO PROTECT OUR INTELLECTUAL PROPERTY UNDERLYING OUR
PRODUCTS MAY NOT BE ADEQUATE, WHICH COULD ENABLE THIRD PARTIES TO USE OUR
TECHNOLOGY AND WOULD REDUCE OUR ABILITY TO COMPETE IN THE MARKET.

Our success will depend in part on our ability to obtain commercially valuable
patent claims and to protect our intellectual property. Our patent position is
generally uncertain and involves complex legal and factual questions. Legal
standards relating to the validity and scope of claims in our technology field
are still evolving. Therefore, the degree of future protection for our
proprietary rights is uncertain.

The risks and uncertainties that we face with respect to our patents and other
proprietary rights include the following:

-   the pending patent applications we have filed or to which we have exclusive
    rights may not result in issued patents or may take longer than we expect to
    result in issued patents;

-   the claims of any patents which are issued may not provide meaningful
    protection;

-   we may not be able to develop additional proprietary technologies that are
    patentable;

-   the patents licensed or issued to us or our customers may not provide a
    competitive advantage;

-   other companies may challenge patents licensed or issued to us or our
    customers;

-   patents issued to other companies may harm our ability to do business;

-   other companies may independently develop similar or alternative
    technologies or duplicate our technologies; and

-   other companies may design around technologies we have licensed or
    developed.

In addition to patents, we rely on a combination of trade secrets, nondisclosure
agreements and other contractual provisions and technical measures to protect
our intellectual property rights. Nevertheless, these measures may not be
adequate to safeguard the technology underlying our products. If they do not
protect our rights, third parties could use our technology, and our ability to
compete in the market would be reduced. In addition, employees, consultants and
others who participate in the development of our



                                       15
<PAGE>   16

products may breach their agreements with us regarding our intellectual
property, and we may not have adequate remedies for the breach. We also may not
be able to effectively protect our intellectual property rights in some foreign
countries. For a variety of reasons, we may decide not to file for patent,
copyright or trademark protection or prosecute potential infringements of our
patents. We also realize that our trade secrets may become known through other
means not currently foreseen by us. Notwithstanding our efforts to protect our
intellectual property, our competitors may independently develop similar or
alternative technologies or products that are equal or superior to our
technology and products without infringing on any of our intellectual property
rights or design around our proprietary technologies.

WE OBTAIN SOME OF THE COMPONENTS AND SUBASSEMBLIES INCLUDED IN OUR SYSTEMS FROM
A SINGLE SOURCE OR A LIMITED GROUP OF SUPPLIERS, AND THE PARTIAL OR COMPLETE
LOSS OF ONE OF THESE SUPPLIERS COULD CAUSE PRODUCTION DELAYS AND A SUBSTANTIAL
LOSS OF REVENUES.

We rely on outside vendors to manufacture many components and subassemblies.
Certain components, subassemblies and services necessary for the manufacture of
our systems are obtained from a sole supplier or limited group of suppliers,
some of which are our competitors. Additional components, such as optical,
electronic and pneumatic devices, are currently purchased in configurations
specific to our requirements and, together with certain other components, such
as computers, are integrated into our products. We maintain only a limited
number of long-term supply agreements with our suppliers.

Our reliance on a sole or a limited group of suppliers involves several risks,
including the following:

-   we may be unable to obtain an adequate supply of required components;

-   we have reduced control over pricing and the timely delivery of components
    and subassemblies; and

-   our suppliers may be unable to develop technologically advanced products to
    support our growth and development of new systems.

For example, we relied primarily on a single supplier of disposable plastic tips
used with our FLIPR384 system for most of 2000, and we experienced delays and
customer dissatisfaction due to our supplier's inability to deliver an adequate
supply of tips. We now have an alternative supplier for the disposable plastic
tips but we cannot predict whether we will encounter additional similar delays
in the future. Our current suppliers and known potential alternative suppliers
of disposable plastic tips used with our FLIPR384 system are our competitors.

Because the manufacturing of certain of these components and subassemblies
involves extremely complex processes and requires long lead times, we may
experience delays or shortages caused by suppliers. We believe that alternative
sources could be obtained and qualified, if necessary, for most sole and limited
source parts. However, if we were forced to seek alternative sources of supply
or to manufacture such components or subassemblies internally, we may be forced
to redesign our systems, which could prevent us from shipping our systems to
customers on a timely basis. Some of our suppliers have relatively limited
financial and other resources. Any inability to obtain adequate deliveries, or
any other circumstance that would restrict our ability to ship our products,
could damage relationships with current and prospective customers and could harm
our business.



                                       16
<PAGE>   17

WE MAY ENCOUNTER MANUFACTURING AND ASSEMBLY PROBLEMS OR DELAYS, WHICH COULD
RESULT IN LOST REVENUES.

We assemble our systems in our manufacturing facilities located in Sunnyvale,
California and Norway. Our manufacturing and assembly processes are highly
complex and require sophisticated, costly equipment and specially designed
facilities. As a result, any prolonged disruption in the operations of our
manufacturing facilities could seriously harm our ability to satisfy our
customer order deadlines. As a result of the electricity crisis in California,
our Sunnyvale manufacturing facility periodically runs the risk of a partial or
complete power failure. If we cannot deliver our systems in a timely manner, our
revenues will likely suffer.

Our product sales depend in part upon manufacturing yields. We currently have
limited manufacturing capacity and experience variability in manufacturing
yields. We are currently manufacturing high throughput instruments in-house, in
limited volumes and with largely manual assembly. If demand for our high
throughput instruments increases, we will either need to expand our in-house
manufacturing capabilities or outsource to other manufacturers. If we fail to
deliver our products in a timely manner, our relationships with our customers
could be seriously harmed, and revenues would decline.

As we develop new products, we must transition the manufacture of a new product
from the development stage to commercial manufacturing. We cannot predict
whether we will be able to complete these transitions on a timely basis and with
commercially reasonable costs. We cannot assure you that manufacturing or
quality control problems will not arise as we attempt to scale-up our production
for any future new products or that we can scale-up manufacturing and quality
control in a timely manner or at commercially reasonable costs. If we are unable
to consistently manufacture our products on a timely basis because of these or
other factors, our product sales will decline.

WE MAY HAVE DIFFICULTY MANAGING OUR GROWTH.

We expect to continue to experience significant growth in the number of our
employees and customers and the scope of our operations. This growth may
continue to place a significant strain on our management and operations. Our
ability to manage this growth will depend upon our ability to broaden our
management team and our ability to attract, hire and retain skilled employees.
Our success will also depend on the ability of our officers and key employees to
continue to implement and improve our operational and other systems, to manage
multiple, concurrent customer relationships and to hire, train and manage our
employees. Our future success is heavily dependent upon growth and acceptance of
new products. If we cannot scale our business appropriately or otherwise adapt
to anticipated growth and new product introductions, a key part of our strategy
may not be successful.

WE RELY UPON DISTRIBUTORS FOR PRODUCT SALES AND SUPPORT OUTSIDE NORTH AMERICA.

In 2000 approximately 17% of our sales were made through distributors. We often
rely upon distributors to provide customer support to the ultimate end users of
our products. As a result, our success depends on the continued sales and
customer support efforts of our network of distributors. The use of distributors
involves certain risks, including risks that distributors will not effectively
sell or support our products, that they will be unable to satisfy financial
obligations to us and that they will cease operations. Any reduction, delay or
loss of orders from our significant distributors could harm our revenues. We
also do not currently have distributors in a number of significant international
markets that we have targeted and will need to establish additional
international distribution relationships. In January 2001, we acquired our
Japanese distributor, Nihon Molecular Devices. As a result, we will be providing
direct sales and service support to customers in this substantial market. There
can be no assurance that we will engage qualified distributors in a timely
manner, and the failure to do so could have a materially adverse affect on our
business, financial condition and results of operations.



                                       17
<PAGE>   18

IF WE CHOOSE TO ACQUIRE NEW AND COMPLEMENTARY BUSINESSES, PRODUCTS OR
TECHNOLOGIES INSTEAD OF DEVELOPING THEM OURSELVES, WE MAY BE UNABLE TO COMPLETE
THESE ACQUISITIONS OR MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE AN ACQUIRED
BUSINESS OR TECHNOLOGY IN A COST-EFFECTIVE AND NON-DISRUPTIVE MANNER.

Our success depends on our ability to continually enhance and broaden our
product offerings in response to changing technologies, customer demands and
competitive pressures. To this end, from time to time we have acquired
complementary businesses, products, or technologies instead of developing them
ourselves and may choose to do so in the future. We do not know if we will be
able to complete any acquisitions, or whether we will be able to successfully
integrate any acquired business, operate it profitably or retain its key
employees. Integrating any business, product or technology we acquire could be
expensive and time consuming, disrupt our ongoing business and distract our
management. In addition, in order to finance any acquisitions, we might need to
raise additional funds through public or private equity or debt financings. In
that event, we could be forced to obtain financing on terms that are not
favorable to us and, in the case of equity financing, that may result in
dilution to our shareholders. If we are unable to integrate any acquired
entities, products or technologies effectively, our business will suffer. In
addition, any amortization of goodwill or other assets or charges resulting from
the costs of acquisitions could harm our business and operating results.

WE DEPEND ON OUR KEY PERSONNEL, THE LOSS OF WHOM WOULD IMPAIR OUR ABILITY TO
COMPETE.

We are highly dependent on the principal members of our management, engineering
and scientific staff. The loss of the service of any of these persons could
seriously harm our product development and commercialization efforts. In
addition, research, product development and commercialization will require
additional skilled personnel in areas such as chemistry and biology, software
engineering and electronic engineering. Our corporate headquarters is located in
Sunnyvale, California, where demand for personnel with these skills is extremely
high and is likely to remain high. As a result, competition for and retention of
personnel, particularly for employees with technical expertise, is intense and
the turnover rate for these people is high. If we are unable to hire, train and
retain a sufficient number of qualified employees, our ability to conduct and
expand our business could be seriously reduced. The inability to retain and hire
qualified personnel could also hinder the planned expansion of our business.

WE ARE DEPENDENT ON INTERNATIONAL SALES AND OPERATIONS, WHICH EXPOSES US TO
FOREIGN CURRENCY EXCHANGE RATE, POLITICAL AND ECONOMIC RISKS.

We maintain facilities in Norway, the United Kingdom, Germany and Japan, and
sales to customers outside the U.S. accounted for approximately 37% our revenues
in 2000. We anticipate that international sales will continue to account for a
significant portion of our revenues.

All of our sales to international distributors are denominated in U.S. dollars.
All of our direct sales in the United Kingdom, Germany, France, Japan and Canada
are denominated in local currencies and totaled $19.2 million (20% of total
revenues) in 2000. To the extent that our sales and operating expenses are
denominated in foreign currencies, our operating results may be adversely
affected by changes in exchange rates. Historically, foreign exchange gains and
losses have been immaterial to our results of operations. However, we cannot
predict whether these gains and losses will continue to be immaterial,
particularly as we increase our direct sales outside North America. Owing to the
number of currencies involved, the substantial volatility of currency exchange
rates, and our constantly changing currency exposures, we cannot predict the
effect of exchange rate fluctuations on our future operating results. We do not
engage in foreign currency hedging transactions.



                                       18
<PAGE>   19

Our reliance on international sales and operations exposes us to foreign
political and economic risks, including:

-   political, social and economic instability;

-   trade restrictions and changes in tariffs;

-   import and export license requirements and restrictions;

-   difficulties in staffing and managing international operations;

-   disruptions in international transport or delivery;

-   difficulties in collecting receivables; and

-   potentially adverse tax consequences.

If any of these risks materialize, our international sales could decrease and
our foreign operations could suffer.

OUR OPERATING RESULTS FLUCTUATE AND ANY FAILURE TO MEET FINANCIAL EXPECTATIONS
MAY DISAPPOINT SECURITIES ANALYSTS OR INVESTORS AND RESULT IN A DECLINE IN OUR
STOCK PRICE.

We typically experience a decrease in the level of sales in the first calendar
quarter as compared to the fourth quarter of the preceding year because of
budgetary and capital equipment purchasing patterns in the life sciences
industry.

Our quarterly operating results have fluctuated in the past, and we expect they
will fluctuate in the future as a result of many factors, some of which are
outside of our control. In particular, if sales levels in a particular quarter
do not meet expectations, we may not be able to adjust operating expenses
sufficiently quickly to compensate for the shortfall, and our results of
operations for that quarter may be seriously harmed. We manufacture our products
based on forecasted orders rather than to outstanding orders. Our manufacturing
procedures may in certain instances create a risk of excess or inadequate
inventory levels if orders do not match forecasts. In addition, our expense
levels are based, in part, on expected future sales, and we generally cannot
quickly adjust operating expenses. For example, research and development and
general and administrative expenses are not affected directly by variations in
revenues.

It is possible that in some future quarter or quarters, our operating results
will be below the expectations of securities analysts or investors. In this
event, the market price of our common stock may fall abruptly and significantly.
Because our revenues and operating results are difficult to predict, we believe
that period-to-period comparisons of our results of operations are not a good
indication of our future performance.

OUR STOCK PRICE IS VOLATILE, WHICH COULD CAUSE SHAREHOLDERS TO LOSE A
SUBSTANTIAL PART OF THEIR INVESTMENT IN OUR STOCK.

The stock market in general, and the stock prices of technology companies in
particular, have recently experienced volatility which has often been unrelated
to the operating performance of any particular company or companies. Over the
last twelve months, our stock price has ranged from $17.33 to $112.50. Our stock
price could decline regardless of our actual operating performance, and
shareholders could lose a substantial part of their investment as a result of
industry or market-based fluctuations. In



                                       19
<PAGE>   20

the past, our stock has traded relatively thinly. If a more active public market
for our stock is not sustained, it may be difficult for shareholders to resell
shares of our common stock. Because we do not anticipate paying cash dividends
on our common stock for the foreseeable future, stockholders will not be able to
receive a return on their shares unless they sell them.

THE MARKET PRICE OF OUR COMMON STOCK WILL LIKELY FLUCTUATE IN RESPONSE TO A
NUMBER OF FACTORS, INCLUDING THE FOLLOWING:

-   our failure to meet the performance estimates of securities analysts;

-   changes in financial estimates of our revenues and operating results or
    buy/sell recommendations by securities analysts;

-   the timing of announcements by us or our competitors of significant
    products, contracts or acquisitions or publicity regarding actual or
    potential results or performance thereof; and

-   general stock market conditions, other economic or external factors.

PROVISIONS OF OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY INHIBIT A TAKEOVER,
WHICH COULD LIMIT THE PRICE INVESTORS MIGHT BE WILLING TO PAY IN THE FUTURE FOR
OUR COMMON STOCK.

Provisions in our certificate of incorporation and bylaws may have the effect of
delaying or preventing an acquisition, merger in which we are not the surviving
company or changes in our management. For example, our certificate of
incorporation gives our board of directors the authority to issue shares of
preferred stock and to determine the price, rights, preferences and privileges
and restrictions, including voting rights, of those shares without any further
vote or action by our stockholders. The rights of the holders of common stock
will be subject to, and may harmed by, the rights of the holders of any shares
of preferred stock that may be issued in the future. The issuance of preferred
stock may delay, defer or prevent a change in control, as the terms of the
preferred stock that might be issued could potentially prohibit our consummation
of any merger, reorganization, sale of substantially all of our assets,
liquidation or other extraordinary corporate transaction without the approval of
the holders of the outstanding shares of preferred stock. The issuance of
preferred stock could also have a dilutive effect on our stockholders. In
addition, because we are incorporated in Delaware, we are governed by the
provisions of Section 203 of the Delaware General Corporation Law. These
provisions may prohibit large stockholders, in particular those owning 15% or
more of the outstanding voting stock, from consummating a merger or combination
involving us. These provisions could limit the price that investors might be
willing to pay in the future for our common stock.

RISKS RELATING TO THE MERGER WITH LJL BIOSYSTEMS

IF WE DO NOT SUCCESSFULLY INTEGRATE THE COMPANIES INTO A SINGLE BUSINESS AND
REALIZE THE EXPECTED BENEFITS OF THE MERGER, WE WILL HAVE INCURRED SIGNIFICANT
COSTS WHICH MAY HARM OUR BUSINESS.

We expect to continue to incur costs from integrating LJL BioSystems'
operations, products and personnel. These costs may be substantial and may
include costs for:

-   employee redeployment, relocation or severance;

-   conversion of information systems;



                                       20
<PAGE>   21

-   reorganization or closures of facilities; and

-   relocation or disposition of excess equipment.


We do not know whether we will be successful in these integration efforts and
cannot assure you that we will realize the expected benefits of the merger.

IF CUSTOMER RELATIONSHIPS OR STRATEGIC PARTNERSHIPS ARE DISRUPTED AS A RESULT OF
THE MERGER, OUR SALES COULD DECLINE OR WE COULD LOSE CUSTOMERS.

Customers of Molecular Devices and LJL BioSystems may not continue their current
buying patterns following the merger. Any significant delay or reduction in
orders for Molecular Devices' or LJL BioSystems' products could have a
materially adverse effect on the combined company's business, financial
condition and results of operations. Customers may defer purchasing decisions as
they evaluate the likelihood of successful integration of Molecular Devices' and
LJL BioSystems' products and the combined company's future product strategy.
Customers may also consider purchasing products of competitors. In addition, by
increasing the breadth of Molecular Devices' and LJL BioSystems' business, it
may be more difficult for the combined company to enter into or maintain
relationships, including relationships with customers or partners.

IF WE ARE NOT SUCCESSFUL IN INTEGRATING OUR ORGANIZATIONS, WE WILL NOT BE ABLE
TO OPERATE EFFICIENTLY.

Achieving the benefits of the merger will also depend in part on the successful
integration of Molecular Devices' and LJL BioSystems' operations and personnel
in a timely and efficient manner. For example, such integration requires
coordination of different development, engineering, sales, marketing,
manufacturing and administrative teams. This, too, will be difficult and
unpredictable because of possible cultural conflicts and different opinions on
technical decisions, product roadmaps and other decisions. If we cannot
successfully integrate our operations and personnel, we will not realize the
expected benefits of the merger and/or business results of operations may be
seriously harmed.

INTEGRATING OUR COMPANIES MAY DIVERT MANAGEMENT'S ATTENTION AWAY FROM OUR
OPERATIONS.

Successful integration of Molecular Devices' and LJL BioSystems' operations,
products and personnel may place a significant burden on our management and our
internal resources. The diversion of management attention and any difficulties
encountered in the transition and integration process could have a materially
adverse effect on the combined company's business, financial condition and
operating results.

FAILURE TO RETAIN KEY EMPLOYEES COULD DIMINISH THE BENEFITS OF THE MERGER.

The successful combination of Molecular Devices and LJL BioSystems will depend
in part on the retention of key personnel. We cannot assure you that the
combined company will be able to retain key management, technical, sales,
customer support and other personnel, or that the anticipated benefits of their
expertise, experience and capabilities will be realized.

IF WE DO NOT SUCCESSFULLY MANUFACTURE, PROMOTE, SELL AND SERVICE OUR PRODUCTS,
AND INTEGRATE OUR TECHNOLOGIES TO DEVELOP NEW PRODUCTS, WE MAY LOSE CUSTOMERS
AND FAIL TO ACHIEVE OUR FINANCIAL OBJECTIVES.

Achieving the benefits of the merger will depend in part on our ability to
continue to successfully manufacture, promote, sell and service our products,
and integrate our technologies to develop new



                                       21
<PAGE>   22

products and product features, in a timely and efficient manner. In order to
provide enhanced and more valuable products to our customers after the merger,
we will need to integrate our development organizations. This will be difficult
and unpredictable because our products:

-   are highly complex;

-   involve different technologies;

-   have been developed independently; and

-   were designed without regard to such integration.


If we cannot successfully manufacture, promote, sell and service our products
and integrate our technologies to provide customers with new products and
product features in the future on a timely basis, we may lose customers and our
business and results of operations may be seriously harmed.

THE MARKET PRICE OF MOLECULAR DEVICES' COMMON STOCK MAY DECLINE AS A RESULT OF
THE MERGER.

The market price of Molecular Devices' common stock may decline as a result of
the merger if:

-   the integration of Molecular Devices and LJL BioSystems is unsuccessful;

-   we do not achieve the perceived benefits of the merger as rapidly or to the
    extent anticipated by financial analysts or investors; or

-   the effect of the merger on our financial results is not consistent with the
    expectations of financial analysts or investors.

OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN OUR
FORWARD-LOOKING STATEMENTS.

This report contains forward-looking statements within the meaning of the
federal securities laws that relate to future events or our future financial
performance. When used in this report, you can identify forward-looking
statements by terminology such as "anticipates," "plans," "predicts," "expects,"
"estimates," "intends," "will," "continue," "may," "potential," "should" and the
negative of these terms or other comparable terminology. These statements are
only predictions. Our actual results could differ materially from those
anticipated in our forward-looking statements as a result of many factors,
including those set forth here under "Factors That May Affect Future Results"
and elsewhere in this report.

Although we believe that the expectations reflected in our forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Neither we nor any other person assumes
responsibility for the accuracy and completeness of these statements. We assume
no duty to update any of the forward-looking statements after the date of this
report or to conform these statements to actual results.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, including changes in interest rates and foreign
currency exchange rates. The primary objective of our investment activities is
to preserve principal while at the same time maximizing the income we receive
from our investments without significantly increasing risk. A discussion of our
accounting policies for financial instruments and further disclosures relating
to



                                       22
<PAGE>   23

financial institutions is included in the Summary of Significant Accounting
Policies note in the Notes to Consolidated Financial Statements included in the
Molecular Devices Annual Report on Form 10-K for the fiscal year ended December
31, 2000.

Our interest income is sensitive to changes in the general level of interest
rates, primarily United States interest rates. In this regard, changes in United
States interest rates affect the interest earned on our cash equivalents and
short-term investments. We invest our excess cash primarily in demand deposits
with United States banks and money market accounts and short-term securities.
These securities, consisting of $15.6 million of commercial paper and $5.0
million of U.S. government agency securities, are carried at market value, which
approximate cost, typically mature or are redeemable within 90 to 360 days, and
bear minimal valuation risk. We have not experienced any significant losses on
these investments.

We are exposed to changes in exchange rates primarily in the United Kingdom,
Germany, Japan and Canada, where we sell direct in local currencies. All export
sales, with the exception of sales into Canada, are denominated in U.S. dollars
and bear no exchange rate risk. However, a strengthening of the U.S. dollar
could make our products less competitive in overseas markets. Gains and losses
resulting from foreign currency transactions in Canada have historically been
immaterial. Translation gains and losses related to our foreign subsidiaries in
the United Kingdom, Germany, Japan and Norway are accumulated as a separate
component of stockholders' equity. Those gains and losses have historically been
immaterial.



                                       23
<PAGE>   24

                          MOLECULAR DEVICES CORPORATION

                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

In 2000, we entered into an employment arrangement with Ms. Patricia Sharp
pursuant to which we are obligated to issue an aggregate of up to 2,500 shares
of our common stock over a period of two years to Ms. Sharp in exchange for
services rendered. As a result of this arrangement, we issued shares of our
common stock to this officer as indicated below in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended.

<TABLE>
<CAPTION>
                                       Number of Shares       Date of Issue
<S>                                    <C>                    <C>
        Ms. Sharp                              625            March 5, 2001
</TABLE>

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.    OTHER INFORMATION

None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)      Exhibits

                    2.5      Stock Purchase Agreement dated as of November 14,
                             2000 by and among JCR Pharmaceuticals, K.K. and
                             Molecular Devices Corporation.

                    10.34    Change in Control Severance Benefit Plan.

            (b)     Reports on Form 8-K

                    No reports on Form 8-K were filed during the quarter ended
                    March 31, 2001.



                                       24
<PAGE>   25

SIGNATURE

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.



                              MOLECULAR DEVICES CORPORATION


                              By:   /s/ Timothy A. Harkness
                                    --------------------------------------------
                                    Vice President, Finance and Chief Financial
                                    Officer
                                    (Duly Authorized and Principal Financial and
                                    Accounting Officer)

                              Date: May 10, 2001



                                       25
<PAGE>   26

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit
Number         Description
------         -----------
<S>            <C>
2.5            Stock Purchase Agreement dated as of November 14, 2000 by and
               among JCR Pharmaceuticals, K.K. and Molecular Devices
               Corporation.

10.34          Change in Control Severance Benefit Plan.
</TABLE>