UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2008


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-11250

DIONEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware		94-2647429

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


1228 Titan Way, Sunnyvale, California		94085

(Address of principal executive offices)		(Zip Code)

(408) 737-0700
(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. YESþ NOo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange ~~Act~~Act. (Check one):


Large accelerated filerþ	Accelerated filero	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YESo NOþ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of ~~May 8,~~November 06, 2008:


CLASS		NUMBER OF SHARES

Common Stock		~~18,319,093~~17,965,675

Part I. Financial Information

Item 1. Financial Statements

DIONEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	March 31,		June 30,		September 30,		June 30,
	2008		2007		2008		2008
ASSETS
Current assets:
Cash and cash equivalents	$	72,033	$	54,938	$	63,048	$	75,624
Short-term investments		1		124		2,786		77
Accounts receivable (net of allowance for doubtful accounts of $750 at March 31, 2008 and $610 at June 30, 2007)		74,258		65,990
Accounts receivable (net of allowance for doubtful accounts of $470 at September 30, 2008 and $524 at June 30, 2008)						69,102		74,436
Inventories		32,120		28,626		32,274		31,627
Deferred taxes		9,552		8,983		11,507		11,534
Prepaid expenses and other		15,117		12,113		12,962		13,742

Total current assets		203,081		170,774		191,679		207,040
Property, plant and equipment, net		69,044		62,366		70,779		72,335
Goodwill		26,654		25,443		27,042		26,670
Intangible assets, net		6,739		6,955		6,837		6,463
Other assets		14,732		6,231		16,631		17,922

	$	320,250	$	271,769	$	312,968	$	330,430

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	17,969	$	231	$	25,074	$	21,805
Accounts payable		15,239		12,293		15,549		16,086
Accrued liabilities		31,046		30,329		26,730		32,211
Deferred revenue		21,654		18,617		20,628		21,352
Income taxes payable		6,777		13,068		4,030		5,873
Accrued product warranty		3,585		2,875		3,255		3,444

Total current liabilities		96,270		77,413		95,266		100,771
Deferred and other income taxes payable		21,978		5,060		23,529		27,013
Other long-term liabilities		6,171		3,588		5,998		5,897
Commitments and other contingencies (Note 12)
Stockholders’ equity:
Preferred stock (par value $.001 per share; 1,000,000 shares authorized; none outstanding)		—		—		—		—
Common stock (par value $.001 per share; 80,000,000 shares authorized; issued and outstanding: 18,314,542 shares at March 31, 2008 and 18,845,802 shares at June 30, 2007)		169,845		161,409
Common stock (par value $.001 per share; 80,000,000 shares authorized; issued and outstanding: 17,961,767 shares at September 30, 2008 and 18,130,713 shares at June 30, 2008)						171,407		170,045
Retained earnings		1,275		13,223		2,957		2,582
Accumulated other comprehensive income		24,711		11,076		13,811		24,122

Total stockholders’ equity		195,831		185,708		188,175		196,749

	$	320,250	$	271,769	$	312,968	$	330,430

DIONEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended						Three Months Ended
	March 31,						September 30,
	2008			2007			2008			2007
Cash flows from operating activities:
Net income	$	38,574		$	33,435		$	11,816		$	10,150
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,424			5,235			2,320			2,149
Stock-based compensation		4,449			3,797			1,485			1,443
Allowance for bad debts		(13	)		21			43			47
Loss on disposal of fixed assets		406			377			34			9
Tax benefit related to equity incentive		(2,021	)		(1,043	)
Tax benefit related to stock transactions								(111	)		(487	)
Deferred income taxes		(3,049	)		726			(85	)		238
Changes in assets and liabilities:
Changes in assets and liabilities
Accounts receivable		(815	)		(3,611	)		978			3,515
Inventories		1,338			385			(3,960	)		(876	)
Prepaid expenses and other assets		427			(1,696	)		591			1,606
Accounts payable		580			2,715			110			143
Accrued liabilities		2,938			2,531			(3,150	)		(1,657	)
Deferred revenue		2,809			4,787			76			(438	)
Income taxes payable		(2,402	)		2,737			(1,476	)		(2,748	)
Accrued product warranty		408			(221	)		10			(28	)

Net cash provided by operating activities		50,053			50,175			8,681			13,066

Cash flows from investing activities:
Proceeds from sale of marketable securities		—			9,700
Purchase of marketable securities		—			(2,600	)		(2,713	)		—
Purchase of property, plant and equipment		(6,557	)		(7,472	)		(4,581	)		(854	)
Purchase of intangible assets		(2,071	)		(439	)		—			(1,572	)
Purchase of business		543			—			(952	)		—
Other		—			26

Net cash provided by (used for) investing activities		(8,085	)		(785	)
Net cash used for investing activities								(8,246	)		(2,426	)

Cash flows from financing activities:
Net change in notes payable		17,656			2,546			3,265			18,012
Proceeds from issuance of common stock		8,307			7,730			1,657			2,361
Tax benefit related to equity incentive		2,021			1,043
Tax benefit related to stock transactions								111			487
Repurchase of common stock		(55,441	)		(49,474	)		(13,332	)		(18,587	)

Net cash used for financing activities		(27,457	)		(38,155	)
Net cash provided by (used for) financing activities								(8,299	)		2,273


Effect of exchange rate changes on cash		2,584			506			(4,712	)		1,726

Net increase in cash and cash equivalents		17,095			11,741

Net increase (decrease) in cash and cash equivalents								(12,576	)		14,639
Cash and cash equivalents, beginning of period		54,938			43,524			75,624			54,938

Cash and cash equivalents, end of period	$	72,033		$	55,265		$	63,048		$	69,577

Supplemental disclosures of cash flow information:
Income taxes paid	$	19,974		$	16,018		$	8,325		$	7,721
Interest expense paid		643			105			202			135
Supplemental schedule of non-cash investing and financing activities:
Accrued purchases of property, plant and equipment		339			247			526			328
Accrued purchase of business consideration		191			—
Accrued consideration of business purchase								592			—
Elimination of equity investment associated with step-acquisition of business								760			—

DIONEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Dionex Corporation, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2007.~~2008. Unless the context otherwise requires, the terms “Dionex,” “we,” “our” and “us” and words of similar import as used in these notes to condensed consolidated financial statements include Dionex Corporation and its consolidated subsidiaries.

The unaudited condensed consolidated financial statements included herein reflect all adjustments (which include only normal, recurring adjustments) that are, in the opinion of management, necessary to state fairly the results for the periods presented. The results for such periods are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2008. Separate line item disclosure of the change in deferred revenue has been provided in the condensed consolidated statement of cash flows for the nine months ended March 31, 2007 to conform to the fiscal 2008 presentation. Net operating results have not been affected by this re-classification.2009.

2. New Accounting Pronouncements

Recently Adopted Accounting Pronouncement.In ~~December 2007,~~September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157,Fair Value Measurements(“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. FASB Staff Position 157-2,Effective Date of FASB Statement No. 157,was further released in February 2008 to amend the effective date pertaining to nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) until years beginning after November 15, 2008. Effective July 1, 2008, we adopted SFAS No. 157, except as it applies to the non-financial assets and non-financial liabilities subject to FASB Staff Position SFAS No. 157-2.

Recent Accounting Pronouncements Not Yet Adopted.In May 2008, the FASB issued SFAS No. 162,The Hierarchy of Generally Accepted Accounting Principles(“SFAS No. 162”). SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with accounting principles generally accepted in the United States of America for nongovernmental entities. SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411,The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. Any effect of applying the provisions of SFAS No. 162 is to be reported as a change in accounting principles in accordance with SFAS No. 154,Accounting Changes and Error Corrections — a replacement of APB Opinion No. 20 and FASB Statement No. 3. The Company will adopt SFAS No. 162 once it is effective and we are currently evaluating the effect that the adoption will have on the Company’s consolidated financial statements.

In April 2008, the FASB released FASB Staff Position 142-3,Determination of the Useful Life of Intangible Assets(“SFAS No. 142-3”), which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142,Goodwill and Other Intangible Assets(“SFAS No. 142”). The intent of the statement is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007) and other U.S. generally accepted accounting principles. SFAS No. 142-3 is effective as of the beginning of an entity’s fiscal year that begins after December 15, 2008, which will be the Company’s fiscal year beginning July 1, 2009. We are currently evaluating the potential impact, if any, of the adoption of SFAS No. 142-3 on the Company’s consolidated financial position, results of operations and cash flows.

In March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities(“SFAS No. 161”). SFAS No. 161 enhances financial disclosure by requiring that objectives for using derivative instruments be described in terms of underlying risk and accounting designation in the form of tabular presentation, requiring transparency with respect to the entity’s

liquidity from using derivatives, and cross-referencing an entity’s derivative information within its financial footnotes. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, which will be the Company’s fiscal year beginning July 1, 2009.

In December 2007, the FASB issued SFAS No. 141 (revised 2007),Business Combinations(“ (“SFAS No. 141(R)”). SFAS No. 141(R) expands the definition of a business combination and requires the fair value of the purchase price of an acquisition, including the issuance of equity securities, to be determined on the acquisition date. SFAS No. 141(R) also requires that all assets, liabilities, contingent consideration and contingencies of an acquired business be recorded at fair value at the acquisition date. In addition, SFAS No. 141(R) requires that acquisition costs generally be expensed as incurred, restructuring costs generally be expensed in periods subsequent to the acquisition date, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period that impacts income tax expense. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is ~~effective for fiscal years~~on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 (for Dionex, beginning with our fiscal 2010) with early adoption prohibited. ~~We are currently evaluating the effect the implementation of SFAS 141(R) will have on our consolidated financial statements.~~

~~In December 2007, the FASB issued SFAS No. 160,~~~~Non-controlling Interest in Consolidated Financial Statements.~~This Statement amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 (for Dionex, beginning with our fiscal 2010). We are currently evaluating the effect that adoption of SFAS No. 160 will have on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities(“SFAS No. 159”). SFAS No. 159 permits entities to choose, at specified election dates, to measure eligible items at fair value (or “fair value option”) and to report in earnings unrealized gains and losses on those items for which the fair value option has been elected. SFAS No. 159 also requires entities to display the fair value of those assets and liabilities on the face of the balance sheet. SFAS No. 159 establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for us as of the first quarter of fiscal 2009. ~~We are currently evaluating~~Currently, we have elected not to adopt the ~~impact of this pronouncement on our consolidated financial statements.~~

~~In September 2006, the FASB issued SFAS No. 157,~~~~Fair Value Measurements~~~~(“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring~~ fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. Originally, SFAS No. 157 was effective for the first fiscal year beginning after November 15, 2007. However, in February 2008 the FASB released FASB Staff Position 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) until years beginning after November 15, 2008, which will be our fiscal year beginning July 1, 2009. We are currently evaluating the impact ofoption under this ~~pronouncement on our consolidated financial statements.~~pronouncement.

3. Stock-Based Compensation

We account for our stock plans as required by SFAS No. 123 (Revised 2004),Share-Based Payment (“SFAS No. 123R”). SFAS No. 123R requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. We have a stock-based compensation plan (Equity Incentive Plan) and an employee stock purchase plan (ESPP). Pursuant to the Equity Incentive Plan, we issue stock options and restricted stock units.

Generally, stock options granted to employees and non-employee directors fully vest four years from the grant date and have a term of ten years. We recognize stock-based compensation expense over the requisite service period of the individual grants, generally, equal to the vesting period.

Stock option activity under our plans during the ~~nine~~three months ended ~~March 31,~~September 30, 2008 was as follows:

Weighted
Average
Weighted Remaining Aggregate
Average Contractual Intrinsic
Options Exercise Term Value
Outstanding Price (Years) (in 000’s )

Balance at June 30, 2007 1,694,462 $ 41.91 — —
Options granted 347,750 $ 72.81 — —
Options exercised (154,937 ) $ 41.55 — —
Options forfeited/cancelled/expired (12,253 ) $ 51.72 — —

Balance at March 31, 2008 1,875,022 $ 47.60 6.47 $ 48,187
Options vested and expected to vest at March 31, 2008 1,856,512 $ 47.42 6.45 $ 48,029
Exercisable at March 31, 2008 1,151,183 $ 38.49 5.13 $ 39,911


						Weighted
						Average
				Weighted		Remaining		Aggregate
				Average		Contractual		Intrinsic
	Options			Exercise		Term		Value
	Outstanding			Price		(Years)		(in 000’s )
Balance at June 30, 2008		1,792,708		$	47.20
Options granted		199,250		$	74.27
Options exercised		(14,778	)	$	40.74
Options forfeited/cancelled/expired		(2,177	)	$	56.15
Balance at September 30, 2008		1,975,003		$	49.97		6.35	$	31,931
Options vested and expected to vest at September 30, 2008		1,955,813		$	49.78		6.32	$	31,889
Exercisable at September 30, 2008		1,285,533		$	41.45		5.10	$	29,092

The aggregate intrinsic values in the table above represent the total pretax intrinsic values based on our closing stock price of ~~$76.99~~$63.55 at ~~March, 31,~~September 30, 2008, which would have been received by the option holders had all option holders exercised their options as of that date.

The total pre-tax intrinsic value of options exercised ~~were $1.0 million and $6.5~~was $0.6 million during the three ~~and nine~~ months ended ~~March 31,~~September 30, 2008.

8.9. Earnings per Share

Basic earnings per share are determined by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined by dividing net income by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method.

The following table is a reconciliation of the numerators and denominators used in computing basic and diluted earnings per share (in thousands, except per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended
	March 31,				March 31,				September 30,
	2008		2007		2008		2007		2008		2007
Numerator:
Net income	$	13,595	$	11,497	$	38,574	$	33,435	$	11,816	$	10,150

Denominator:
Weighted average shares used to compute net income per common share — basic		18,438		19,047		18,602		19,214		18,068		18,765

Effect of dilutive stock options		554		504		574		458		479		529

Weighted average shares used to compute net income per common share — diluted		18,992		19,551		19,176		19,672		18,547		19,294

Basic earnings per share	$	0.74	$	0.60	$	2.07	$	1.74	$	0.65	$	0.54

Diluted earnings per share	$	0.72	$	0.59	$	2.01	$	1.70	$	0.64	$	0.53

On July 1, 2008, we acquired a 100% ownership interest in a Swedish company through a step-acquisition, for which we previously held a 30% equity interest with a carrying amount of $760,000 at June 30, 2008, using a combination of cash and earn-out payment arrangements. The total purchase consideration for the incremental 70% ownership interest was approximately $1.5 million, excluding contingent earn-out payments in 2009 through 2011. Approximately $952,000 of the purchase consideration was paid during the quarter ended September 30, 2008, with the remaining $592,000 payable on July 1, 2011 and included within other long-term liabilities at September 30, 2008. As a result of this acquisition, the $760,000 equity interest previously included within other assets was eliminated, and $1.5 million of goodwill was recorded along with $830,000 of identifiable intangible assets.

Our reporting units represent our operating segments, the Chemical Analysis Business Unit (CABU) and the Life Sciences Business Unit (LSBU). All goodwill has been assigned to the LSBU reporting unit. The evaluation of goodwill is based upon the fair value of this reporting unit. Pursuant to the provisions of SFAS No. 142,Goodwill and Other Intangible Assets, we performed annual impairment tests on goodwill in April ~~2007~~2008 and determined that goodwill was not impaired.

Information regarding our other intangible assets follows (in thousands):


	As of March 31, 2008							As of June 30, 2007
	Carrying		Accumulated					Carrying		Accumulated					As of September 30, 2008							As of June 30, 2008
	Amount		Amortization			Net		Amount		Amortization			Net		Carrying		Accumulated					Carrying		Accumulated
	Amount		Amortization			Net		Amount		Amortization			Net
Patents and trademarks	$	5,958	$	(1,226	)	$	4,732	$	5,958	$	(779	)	$	5,179	$	5,958	$	(1,527	)	$	4,431	$	5,958	$	(1,376	)	$	4,582
Developed technology		10,814		(10,814	)		—		10,013		(9,805	)		208		10,189		(10,189	)		—		10,825		(10,825	)		—
Other		2,807		(800	)		2,007		2,205		(637	)		1,568
Customer lists																3,306		(900	)		2,406		2,761		(880	)		1,881

Total	$	19,579	$	(12,840	)	$	6,739	$	18,176	$	(11,221	)	$	6,955	$	19,453	$	(12,616	)	$	6,837	$	19,544	$	(13,081	)	$	6,463

~~11.~~12. Commitments and Other Contingencies

Revenue generated from international operations is generally denominated in foreign currencies. We enter into forward foreign exchange contracts to hedge against fluctuations of intercompany account balances. Market value gains and losses on these exchange contracts are substantially offset by fluctuations in the underlying balances being hedged, and the net financial impact is not expected to be material in future periods. We had forward exchange contracts to sell foreign currencies totaling ~~$21.4~~$18.4 million (including approximately $11.6 million in Euros, $4.5 million in Japanese yen, $1.2 million in Australian dollars and ~~$10.9~~$1.0 million in Canadian dollars) at September 30, 2008, and $15.5 million at ~~March 31, 2008 and 2007, respectively.~~September 30, 2007. In March 2007, we entered into a $10.0 million cross-currency swap arrangement for Japanese Yen which matures in March 2010. This derivative instrument did not qualify for net investment hedge accounting and was deemed to be an ineffective hedge instrument because, at the inception of the hedge transaction, there was no formal documentation of the hedging relationship and our risk management objective and strategy for undertaking the hedge. Therefore, we marked to market the decrease in value of approximately ~~$1.0 million~~$698,000 for the ~~six~~three months ended ~~December 31,~~September 30, 2007 and this amount was recorded in other expense, net. Starting January 2008, we determined that the cross-currency swap qualified as a net investment hedge. As a result, during the three months ended ~~March 31,~~September 30, 2008, we marked to market ~~$1.3 million~~a decrease in value of $110,000 in Other Comprehensive Income related to the hedge.

We have unsecured credit agreements with domestic and international financial institutions. The agreements provide for revolving unsecured lines of credit that we utilize primarily for our general corporate purposes, including stock repurchases and working capital needs. As of September 30, 2008, we have a total of $28.9 million in available lines of credit with outstanding borrowings of $25.1 million.

In July 2008, we acquired a Sweden company using a combination of cash and post acquisition earn-out payment arrangements. Under the purchase agreement, earn-out payments of 70% for fiscal 2009 and 30% for fiscal 2010 and 2011 as a percentage of the acquired company’s net income is payable to the seller at the end of each fiscal year. Each earn-out payment is contingent upon results of operation.

We enter into standard indemnification agreements with many of our customers and certain other business partners in the ordinary course of business. These agreements include provisions for indemnifying the customer against any claim brought by a third party to the extent any such claim alleges that our product infringes a patent, copyright or trademark, or violates any other proprietary rights of that third party. The maximum potential amount of future payments we could be required to make under these indemnification agreements is not estimable, however, we have not incurred any costs to defend lawsuits or settle claims related to these indemnification agreements. No material claims for such indemnifications were outstanding as of ~~March 31,~~September 30, 2008. We have not recorded any liabilities for these indemnification agreements at ~~March 31,~~September 30, 2008 or June 30, ~~2007.~~2008.

~~12.~~13. Business Segment Information

SFAS No. 131Disclosures about Segments of an Enterprise and Related Informationestablishes standards for reporting information about operating segments in annual and interim financial statements of public business enterprises. It also establishes standards for related disclosure about products and service, geographic areas and major customers.

The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires us to determine the probability of various possible outcomes. We evaluate these uncertain taxreporting positions on ~~a quarterly basis. This evaluation is based on~~ the ~~consideration~~presumption that all relevant tax authorities possess full knowledge of ~~several factors, including changes in~~those tax reporting positions, as well as all of the pertinent facts orand circumstances, ~~changes in applicable~~but it prohibits any discounting of any of the related tax ~~law, settlement~~effects for the time value of issues under audit, and new exposures. If we later determine that our exposure is lower or that the liability is not sufficient to cover our revised expectations, we adjust the liability and effect a related change in our tax provision during the period in which we make such determination. The cumulative effect of adopting FIN No. 48 on July 1, 2007 is recognized as a change in accounting principle, recorded as an adjustment to the opening balance of accumulated deficit on the adoption date.money.

Our total amount of unrecognized tax benefits as of ~~July 1, 2007~~June 30, 2008 was ~~$14.4~~$14.2 million, of which $3.3 million, if recognized, would affect our effective tax rate. The liability for income taxes associated with uncertain tax positions is classified in deferred and other income taxes payable. There have been no significant changes in these amounts during the quarter ended September 30, 2008.

We record interest and penalties related to unrecognized tax benefits in income tax expense. At ~~July 1, 2007,~~June 30, 2008, we had approximately ~~$1.7~~$1.9 million accrued for estimated interest and penalties related to uncertain tax positions. During the ~~nine~~three months ended ~~March 31,~~September 30, 2008 and 2007, we accrued a total of ~~$737,000~~$261,000 and $240,000, respectively in interest on these uncertain tax positions. During the quarter ended March 31, 2008, we reversed certain income taxes payable in the amount of $3.4 million, including $500,000 of accrued interest due to expiring statutes relating to FIN 48 liabilities previously accrued. Similarly, deferred tax assets were reduced by $2.0 million, including $175,000 of accrued interest, due to related expiring FIN 48 liabilities.

We are subject to audit by the Internal Revenue Service and the California Franchise Tax Board for the fiscal ~~years 2003~~year 2004 through the fiscal year ~~2007.~~2008. As we have operations in most other US states, other state tax authorities may assess deficiencies related to prior year activities; however, the years open to assessment vary with each state. We also file income tax returns for non-US jurisdictions; the most significant of which are Germany, Japan, the UK and Hong Kong. The years open to adjustment for Germany, UK and Hong Kong are ~~fiscal years 2003 through 2007,~~ fiscal years 2002 through ~~2007~~2008. The years open to adjustment for ~~the UK and Hong Kong and~~Japan are fiscal years 2001 through ~~2007 for Japan.~~2007.

A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of the statute of limitations, or other circumstances. At this time, an estimate of the range of ~~the~~ reasonably possible ~~change~~changes cannot be made.

1412

15. Fair Value Measurements

Effective July 1, 2008, we adopted fair value measurements for all financial assets and liabilities as required by SFAS No. 157,Fair Value Measurements(“SFAS No. 157”). SFAS No. 157 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing assets or liabilities. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which these assets and liabilities would be transacted.

SFAS No. 157 fair value hierarchy prioritizes the inputs to fair value measurement into three levels:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity have the ability to access at the measurement date.

Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis in accordance with SFAS No. 157 as of September 30, 2008:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			In Active		Other		Significant
			Markets or		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market	$	2,811	$	2,811	$	—	$	—
Mutual Fund		15		15		—		—
Equity indexed derivatives		652		—		652		—

Total	$	3,478	$	2,826	$	652	$	—

Liabilities:
Foreign currency contracts	$	1,211	$	1,211	$	—	$	—

Reported as:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			In Active		Other		Significant
			Markets or		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents (1)	$	2,826	$	2826	$	—	$	—
Short-term investments		652		—		652		—

Total	$	3,478	$	2,826	$	652	$	—

Liabilities:
Foreign currency contracts (2)	$	1,211	$	1,211	$	—	$	—


(1)		Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2008.

(2)		Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2008.

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

Cautionary Statement Regarding Forward-Looking Statements

Except for historical information contained herein, the discussion below and in the footnotes to our financial statements contained in this Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and are made under the safe harbor provisions thereof. Such statements are subject to certain risks, uncertainties and other factors that may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements, or industry results, expressed or implied by such forward-looking statements. Such risks and uncertainties include, among other things: general economic conditions, foreign currency fluctuations, risks associated with international sales, fluctuations in worldwide demand for analytical instrumentation, fluctuations in quarterly operating results, competition from other products, existing product obsolescence, new product development, including market receptiveness, the ability to manufacture products on an efficient and timely basis and at a reasonable cost and in sufficient volume, the ability to attract and retain talented employees and other risks as described in more detail below under the heading “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements that reflect management’s analysis only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Overview

Dionex Corporation designs, manufactures, markets and services analytical instrumentation and related accessories and chemicals. Our products are used to analyze chemical substances in the environment and in a broad range of industrial and scientific applications. Our systems are used in environmental analysis and by the pharmaceutical, life sciences, chemical, petrochemical, power generation, and food and electronics industries in a variety of applications. Unless the context otherwise requires, the terms “Dionex,” “we,” “our” and “us” and words of similar import as used herein include Dionex Corporation and its consolidated subsidiaries.

Our liquid chromatography systems are currently focused in two product areas: ion chromatography (IC) and high performance liquid chromatography (HPLC). We offer a mass spectrometer coupled with either an IC or HPLC system. For sample preparation, we provide automated solvent extraction systems. In addition, we develop and manufacture consumables, detectors, automation and analysis systems for use in or with liquid chromatographs.

We market and distribute our products and services through our own sales force in Austria, Australia, Brazil, Canada, China, Denmark, France, Germany, India, Ireland, Italy, Japan, Korea, the Netherlands, Singapore, Sweden, Switzerland, Taiwan, the United Kingdom, and the United States. In each of these countries, we maintain one or more local sales offices in order to support and service our customers in the regions. We manufacture our products based upon a forecast of customer demand and we generally try to maintain adequate inventories of completed modules or finished goods in advance of receipt of firm orders. System or instrument orders are generally placed by the customer on an as-needed basis and instruments are usually shipped within two to six weeks after receipt of an order.

Results of Operations

Net sales for the ~~third~~first quarter of fiscal ~~2008~~2009 were ~~$98.4~~$93.4 million, compared with ~~$85.0~~$82.4 million reported for the same period in the prior year, reflecting an increase of ~~16%~~13%. Operating income for the quarter was ~~$20.0~~$19.5 million, an increase of ~~11%~~22% over operating income for the ~~third~~first quarter of fiscal ~~2007~~2008 of ~~$18.0~~$16.0 million. Cash flow from operating activities during the quarter was ~~$24.9~~$8.7 million ~~over cash flow from operations~~compared with $13.1 million for the ~~third~~first quarter of fiscal ~~2007~~2008, reflecting a decrease of ~~$20.0 million.~~34%. Our gross profit margin for the quarter was ~~65.6%~~67.1% compared to ~~65.7%~~65.2% reported in the same period last year. Selling, general and administrative expenses were ~~37.8%~~38.7% of net sales during the quarter, compared to ~~36.9%~~37.8% reported in the same period last year. Research and product development expenses for the quarter were 7.5% of net sales, equal to the ~~7.5%~~8.0% reported in the same period last year. Diluted earnings per share grew ~~22%~~21% to ~~$0.72~~$0.64 for the ~~third~~first quarter, compared to ~~$0.59~~$0.53 reported in the same period last year.

Net sales for the nine months ended March 31, 2008 were $278.8 million, an increase of 16% compared with the $241.3 million reported in the first nine months of fiscal 2007. Operating income was $58.7 million during the first nine months of fiscal 2008, an increase of 15% over operating income for the same period during the prior year of $50.9 million. Cash flow from operating activities for the first nine months of fiscal 2008 was $50 million. Gross profit margin for the nine months ended March 31, 2008 was 66.2% compared to 66.1% during the same period in the prior year. Diluted earnings per share for the first nine months of fiscal 2008 were $2.01, representing an 18% increase over the earnings per share of $1.70 reported during same period of fiscal 2007.

operating expenses as we added personnel and expanded our operations to satisfy the increased demand.

Net sales

Net sales in North America increased by ~~15%~~0.9% in the ~~third~~first quarter of fiscal ~~2008~~2009 to ~~$27.2~~$25.1 million, compared to ~~$23.7~~$24.9 million during the same period in the prior year, because of higher sales of ~~ion chromatography and~~ HPLC products as a result of the increased demand described above. Net sales in North America increased by 17% in the nine months ended March 31, 2008 to $79.6 million compared to $68.2 million during the nine months ended March 31, 2007, also reflecting continued increasing demand for both product lines in North America.

~~Net sales in~~ Europe increased by 3%15% to ~~$39.2~~$39.9 million in the ~~third~~first quarter of fiscal ~~2008~~2009, compared to ~~$38.2~~$34.8 million during the same period in the prior ~~year. Excluding the effect of~~year due to benefits from currency fluctuations of $1.4 million and growth in our net sales in Europe declined primarily as a result of weaker demand from the European life sciences market, mainly in Germany and the United Kingdom and due to the timing of the Easter holidays close to the end of the quarter. Net sales in Europe grew by 10% in the nine months ended March 31, 2008 to $118.6 million compared to $107.7 million during the nine months ended March 31, 2007, driven by currency fluctuations and increased sales in Italy, Switzerland, Austria and Denmark.

ion chromatography products. Net sales in the Asia/Pacific region grew by ~~39%~~25% in the ~~third~~first quarter of fiscal ~~2008~~2009 to ~~$32.0~~$28.4 million, compared to ~~$23.0~~$22.7 million during the same period in the prior year, driven by increased sales in Japan, China, India and Korea. Net sales increased by 23% in the nine months ended March 31, 2008 to $80.6 million compared to $65.5 million in the nine months ended March 31, 2007 as a result of increased sales in China, Korea, India and Australia and sales by our new subsidiaries in Brazil and Taiwan.Australia.

We are subject to the effects of foreign currency fluctuations that have an impact on net sales. Overall, currency fluctuations increased reported net sales for the three months ended ~~March 31,~~September 30, 2008 by ~~$6.2 million, or 7 percentage points compared to the same quarter last year. Currency fluctuations increased reported net sales for the nine months ended March 31, 2008 by $13.5~~$4.9 million, or 6 percentage points compared to the same ~~period~~quarter last year.

Percentage changes in net sales over the corresponding period in the prior year were as indicated in the table below:

Three Months Nine Months
Ended Ended
March 31, 2008 March 31, 2008
Percentage change in net sales
Total: 16 % 16 %
By geographic region:
North America 15 % 17 %
Europe 3 % 10 %
Asia/Pacific 39 % 23 %


	Three Months
	Ended
	September 30, 2008
Percentage change in net sales
Total:		13.4	%
By geographic region:
North America		0.9	%
Europe		14.8	%
Asia/Pacific		24.8	%

Percentage of change in net sales excluding currency fluctuations over the corresponding period in the prior year were as indicated in the table below:

Three Months Nine Months
Ended Ended
March 31, 2008 March 31, 2008
Percentage change in net sales excluding currency fluctuations
Total: 9 % 10 %
By geographic region:
North America 12 % 16 %
Europe -7 % 1 %
Asia/Pacific 31 % 19 %


	Three Months
	Ended
	September 30, 2008
Percentage change in net sales excluding currency fluctuations
Total:		7.4	%
By geographic region:
North America		0.6	%
Europe		4.0	%
Asia/Pacific		20.0	%

Gross margin

Gross margin for the ~~third~~first quarter of fiscal ~~2008~~2009 was ~~65.6%~~67.1%, ~~virtually unchanged slightly~~an increase from the ~~65.7%~~65.2% reported in the ~~third~~same quarter last ~~year. Gross margin for the first nine months of fiscal 2008 was 66.2%, virtually unchanged from the 66.1% reported~~year, principally due to currency and change in the ~~first nine months of fiscal 2007. Gross margin for the three~~geographical mix with relatively stronger performance in Europe and ~~nine months ended March 31, 2008 benefited from currency fluctuations offset by higher growth in lower-margin countries.~~Asia/Pacific.

Operating expenses

Operating expenses of ~~$44.5~~$43.2 million for the ~~third~~first quarter of fiscal ~~2008~~2009 increased by ~~$6.8~~$5.5 million, or ~~18%~~14.5%, from the $37.8 million reported in the same quarter last year. As a percentage of net sales, operating expenses were ~~45.2%~~46.3% for the ~~third~~first quarter of fiscal ~~2008,~~2009, a slight increase from the ~~44.4%~~45.8% of sales reported in the ~~third~~first quarter of fiscal ~~2007.~~2008. The effects of foreign currency fluctuations increased total operating expenses by $1.8 million, or 5%, for the quarter ended ~~March 31,~~September 30, 2008, compared to 4%3% during the same period in the prior year. The increase in operating expenses was attributable primarily to ~~$1.9~~$1.5 million of additional expenses associated with expansion of our Asia/Pacific operations related to that market’s disproportionate growth and ~~$1.0 million~~our new Sweden subsidiary, with the remainder of the increase related to ~~new products introduced~~a general increase in the quarter. Operating expenses for the nine months ended March 31, 2008 were $125.7 million, representing a 16% increase over the corresponding period during the prior year of $108.6 million mainly due to the effect of foreign currencypersonnel costs, travel and ~~higher costs due to continued expansion in Asia. As a percentage of net sales, operating expenses for the nine months ended March 31, 2008 and 2007 were 45.0% and 44.0% respectively.~~other costs.

Selling, general and administrative (SG&A) expenses were ~~$37.2~~$36.2 million for the ~~third~~first quarter of fiscal ~~2008~~2009, compared with ~~$31.4~~$31.2 million for the ~~third~~same quarter of fiscal ~~2007.~~2008. As a percentage of net sales, SG&A expenses were ~~37.8%~~38.7% in the ~~third~~first quarter of fiscal ~~2008~~2009, compared to ~~36.9%~~37.8% the same period in fiscal ~~2007.~~2008. Effects of foreign currency fluctuations increased SG&A expenses by ~~$1.4~~$1.6 million, or 4%5%, in the ~~third~~first quarter of fiscal ~~2008.~~2009. SG&A expenses, excluding currency effects, grew by ~~$5.8~~$3.6 million, or ~~18%~~11%, compared to the ~~third~~first quarter of fiscal ~~2007~~2008, due to the addition of our ~~two~~ new ~~subsidiaries~~subsidiary in ~~Taiwan and Singapore and~~Sweden, our continued expansion in the Asia/Pacific ~~region. The remainder of the increase was related to~~region, increases in salaries because of increased personnel and related expenses, and higher travel costs. SG&A expenses for the nine month period ended March 31, 2008 increased by 15%, or $13.8 million, to $104.2 million from $90.4 million during the same period last year due to the effect of foreign currency fluctuations of $5.0 million, $4.6 million due to the ongoing investment in the Asia/Pacific region and additional salaries and related expenses. As a percentage of net sales, SG&A expenses for the nine months ended March 31, 2008 and 2007 were 37.3% and 37.5%, respectively.

Research and product development (R&D) expenses were ~~$7.3~~$7.0 million for the ~~third~~first quarter of fiscal ~~2008,~~2009, an increase of ~~$1.0~~$0.4 million, or ~~15%~~6.5%, from ~~$6.4~~$6.6 million reported in the ~~third~~first quarter of fiscal ~~2007.~~2008. As a percentage of net sales, R&D expenses ~~remained unchanged at~~decreased marginally to 7.5% in the ~~third~~first quarter of fiscal ~~2008~~2009 when compared to the ~~7.5%~~8.0% in the ~~third~~first quarter of fiscal 2007. R&D expenses for the nine month period ended March 31, 2008 increased by 18% to $21.5 million from $18.2 million in the same period of fiscal 2007 mainly due to the effect of foreign currency fluctuations, increase in professional services related to patent execution costs and project materials for our new products introduced in the quarter. As a percentage of net sales, R&D expenses for the nine months ended March 31, 2008 and 2007 were 7.7% and 7.5%, respectively.

In the third quarter of fiscal 2008, we reported an amount in other expense of approximately $150,000, pre-tax, due primarily to losses on foreign currency exchange. In the first nine months of fiscal 2008, we reported $1.5 million, pre-tax, in other expense due primarily to losses on foreign currency exchange and mark to market on cross currency swap.2008.

Income taxes

The effective tax rate in the ~~third~~first quarter of fiscal ~~2008~~2009 was ~~32.7%~~38.0%, reflecting ~~a decrease~~an increase from ~~37.8%~~35.3% reported for the ~~third~~first quarter of fiscal ~~2007.~~2008. The relative increase in our tax rate ~~for the third quarter~~ was ~~lower than our anticipated tax rate of 36.0% to 37.0%. Our tax rate for the nine months of fiscal 2008 was 33.8% compared with 35.5% in the same period of fiscal 2007. These decreases were~~ due to a ~~variety~~one-time tax benefit in the first quarter of ~~factors, including, but not limited to foreign~~last year of $332,200 and a lower research tax ~~credits, geographical mix~~credit this year, as the federal statute had expired as of ~~taxable income and expiring FIN 48 liabilities resulting from lapsing of statute of limitations.~~December 31, 2007. We anticipate our tax rate will be in the range of ~~35.5%~~35.0% to ~~36.5%~~36.0% for the remainder of fiscal year ~~2008.~~2009.

Net income

Net income in the ~~third~~first quarter of fiscal ~~2008~~2009 increased ~~18%~~16% to ~~$13.6~~$11.8 million, compared with ~~$11.5~~$10.2 million reported for the same period last year. ~~Net income for the nine month period ended March 31, 2008 was $38.6 million, an increase of 15% from $33.4 million in the same period of fiscal 2007.~~

Liquidity and Capital Resources

At ~~March 31,~~September 30, 2008, we had cash and equivalents and short-term investments of ~~$72.0~~$65.8 million. Our working capital was ~~$106.8~~$96.0 million, ~~an increase of $13.4 million from the $93.4 million~~unchanged compared to that reported at ~~June~~September 30, 2007.

Cash generated by operating activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2008 was ~~$50.1~~$8.7 million, compared with ~~$50.2~~$13.1 million for the same period last year. ~~Operating~~The decrease in operating cash ~~flow~~ was ~~virtually unchanged~~primarily attributable to the increased tax payments globally, increased inventory as we ramp up for ~~the nine month period. Increased net sales~~second quarter shipments, and ~~an increase~~a decrease in ~~collections~~accrued liabilities of ~~account receivables was offset by an increase in income tax payments.~~$3.1 million associated with payments of payroll related liabilities as of September 30, 2008.

Cash used for investing activities was ~~$8.1~~$8.2 million in the first ~~nine~~three months of fiscal ~~2008. Payments for intangible assets were $2.1 million for the nine months of fiscal 2008 of which $2.0 million was recorded in accrued liabilities at June 30, 2007.~~2009. Capital expenditures for the ~~nine~~three months of fiscal ~~2008~~2009 were ~~$6.0~~$4.6 million which included purchases related to our general operations, expansion of our IT platform and ~~an additional investment~~refurbishment of a building in ~~our Singapore subsidiary.~~Sunnyvale. Additionally, $952,000 was paid in connection with the acquisition of a Swedish company.

Cash used for financing activities was ~~$27.5~~$8.3 million in the first ~~nine~~three months of fiscal ~~2008.~~2009. The use of cash was primarily attributable to the repurchase of ~~719,166~~201,584 shares of our common stock for ~~$55.4~~$13.3 million, offset by ~~$8.3~~$1.7 million in proceeds from issuance of common stock, a tax benefit related to equity incentive plans of ~~$2.0 million~~$111,000 and net proceeds of ~~$17.7~~$3.3 million received from short-term borrowings.

At ~~March 31,~~September 30, 2008, we had utilized ~~$18.0~~$25.1 million of our $28.9 million in committed bank lines of ~~credit in the United States.~~credit. The borrowings were used to repurchase shares of our common stock and other corporate activities. ~~Available borrowings under our bank lines of credit were $7.0 million at March 31, 2008.~~

We believe that our cash flow from operating activities, current cash, cash equivalents and short-term investments and the remainder of our bank lines of credit will be adequate to meet our cash requirements for at least the next twelve months.

Contractual Obligations and Commercial Commitments

New Accounting Pronouncements

Recently Adopted Accounting Pronouncement.In ~~December 2007,~~September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“~~SFAS”~~SFAS No. 157”),Fair Value Measurements(“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. FASB Staff Position 157-2,Effective Date of FASB Statement No. 157,was further released in February 2008 to amend the effective date pertaining to nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) until years beginning after November 15, 2008. Effective July 1, 2008, we adopted SFAS No. 157, except as it applies to the non-financial assets and non-financial liabilities subject to FASB Staff Position SFAS No. 157-2.

is effective for financial statements issued for fiscal years beginning after November 15, 2008, which will be the Company’s fiscal year beginning July 1, 2009. We are currently evaluating the impact, if any, that SFAS No. 161 may have on the Company’s financial position or cash flows.

In December 2007, the FASB issued SFAS No. 141 (revised 2007),Business Combinations(“ (“SFAS No. 141(R)”). SFAS No. 141(R) expands the definition of a business combination and requires the fair value of the purchase price of an acquisition, including the issuance of equity securities, to be determined on the acquisition date. SFAS No. 141(R) also requires that all assets, liabilities, contingent consideration and contingencies of an acquired business be recorded at fair value at the acquisition date. In addition, SFAS No. 141(R) requires that acquisition costs generally be expensed as incurred, restructuring costs generally be expensed in periods subsequent to the acquisition date, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period that impacts income tax expense. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is ~~effective~~on or after the beginning of the first annual reporting period for fiscal years beginning on or after December 15, 2008 (for Dionex, beginning with our fiscal 2010) with early adoption prohibited. ~~We are currently evaluating the effect the implementation of SFAS 141(R) will have on our consolidated financial statements.~~

~~Critical Accounting Policies and Estimates~~pronouncement.

Summary

The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. We evaluate our estimates, including those related to product returns and allowances, bad debts, inventory valuation, goodwill and other intangible assets, income taxes, warranty and installation provisions, and contingencies on an ongoing basis.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

~~With the exception of the adoption of FIN No. 48,~~~~Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109~~~~, there~~There have been no significant changes during the ~~nine~~three months ended ~~March 31,~~September 30, 2008 to the items that we disclosed as our critical accounting policies and estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2007.~~

~~Income Taxes~~

As part of the process of preparing the consolidated financial statements, we estimate our income taxes in each of the jurisdictions in which we operate. The determination of our tax provision is subject to judgments and estimates due to the complexity of the tax laws that we are subject to in several tax jurisdictions. This process involves our estimate of our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as depreciation, amortization and inventory reserves for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included with our consolidated balance sheets.

~~We account for income taxes in accordance with SFAS No. 109,~~~~Accounting for Income Taxes~~~~(“SFAS 109”)~~.SFAS No. 109 requires that deferred tax assets and liabilities be recognized for the effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized.

On July 1, 2007, we adopted FIN No. 48, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result of the implementation of FIN No. 48, we recognize the tax liability for uncertain income tax positions on the income tax return based on the two-step process prescribed in the interpretation. The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires us to determine the probability of various possible outcomes. We evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors, including changes in facts or circumstances, changes in applicable tax law, settlement of issues under audit, and new exposures. If we later determine that our exposure is lower or that the liability is not sufficient to cover our revised expectations, we adjust the liability and effect a related change in our tax provision during the period in which we make such determination.2008.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We are exposed to financial market risks from fluctuations in foreign currency exchange rates, interest rates and stock prices of marketable securities. With the exception of the stock price volatility of our marketable equity securities, we manage our exposure to these and other risks through our regular operating and financing activities and, when appropriate, through our hedging activities. Our policy is not to use hedges or other derivative financial instruments for speculative purposes. We deal with a diversified group of major financial institutions to limit the risk of nonperformance by any one institution on any financial instrument. Separate from our financial hedging activities, material changes in foreign exchange rates, interest rates and, to a lesser extent, commodity prices could cause significant changes in the costs to manufacture and deliver our products and in customers’ buying practices. We have not substantially changed our risk management practices during fiscal ~~2007~~2008 or the first ~~nine~~three months of fiscal ~~2008~~2009 and we do not currently anticipate significant changes in financial market risk exposures in the near future that would require us to change our current risk management practices.

Foreign Currency Exchange.Revenues generated from international operations are generally denominated in foreign currencies. We

entered into forward foreign exchange contracts to hedge against fluctuations of intercompany account balances. Market value gains and losses on these hedge contracts are substantially offset by fluctuations in the underlying balances being hedged, and the net financial impact is not expected to be material in future periods. At ~~March 31,~~September 30, 2008, we had forward exchange contracts to sell foreign currencies totaling ~~$21.4~~$18.4 million, including approximately ~~$11.7~~$11.6 million in Euros, ~~$6.0~~$4.5 million in Japanese yen, ~~$1.6~~$1.2 million in Australian dollars and ~~$2.1~~$1.0 million in Canadian dollars. The foreign exchange contracts outstanding at the end of ~~each fiscal year~~the period mature within ~~the first quarter of the following fiscal year.~~one month. Additionally, contract values and fair market values are the same.

In March 2007, we entered into a $10.0 million cross-currency swap arrangement for Japanese Yen which matures in March 2010. This derivative instrument did not qualify for net investment hedge accounting and was deemed to be an ineffective hedge instrument because, at the inception of the hedge transaction, there was no formal documentation of the hedging relationship and our risk management objective and strategy for undertaking the hedge. Therefore, we marked to market the decrease in value of approximately ~~$1.0 million~~$698,000 for the ~~six~~three months ended ~~December 31,~~September 30, 2007 and this amount was recorded in other expense, net. Starting January 2008, we determined that the cross-currency swap qualified as a net investment hedge. As a result, during the three months ended ~~March 31,~~September 30, 2008, we marked to market ~~a $1.3 million~~$110,000 in Other Comprehensive Income related to the hedge.

Interest and Investment Income.Our interest and investment income is subject to changes in the general level of U.S. interest rates. Changes in U.S. interest rates affect the interest earned on our cash equivalents and short-term investments. A sensitivity analysis assuming a hypothetical 10% movement in interest rates applied to our investment balances at ~~March 31,~~September 30, 2008 and June 30, ~~2007~~2008 indicated that such market movement would not have a material effect on our business, operating results or financial condition. Actual gains or losses in the future may differ materially from this analysis, depending on our actual balances and changes in the timing and amount of interest rate movements.

Debt and Interest Expense.At ~~March 31,~~September 30, 2008, we had notes payable of ~~$18.0~~$25.1 million. A sensitivity analysis assuming a hypothetical 10% movement in interest rates applied to our outstanding debt balance at ~~March 31,~~September 30, 2008, indicated that such market movement would not have a material effect on our business, operating results or financial condition. Actual gains or losses in the future may differ materially from this analysis, depending on changes in the timing and amount of interest rate movements and the level of borrowings maintained by us.

ITEM 4. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our “disclosure controls and procedures” (as defined in rules promulgated under the Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of ~~March 31,~~September 30, 2008 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective at the “reasonable assurance” level. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a Company have been detected.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act) during the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

risk factors include any material changes to, and supersede, the risk factors previously disclosed in our most recent annual report on
Form ~~10-K~~10-K.

Foreign currency fluctuations related to international operations may adversely affect our operating results.

We derived approximately 71% of our net sales from outside the United States in the first quarter of each of 2008 and ~~subsequently filed quarterly reports~~2009 and expect to continue to derive the majority of net sales from outside the United States for the foreseeable future. Most of our sales outside the United States are denominated in the local currency of our customers. As a result, the U.S. dollar value of our net sales varies with currency rate fluctuations. Significant changes in the value of the U.S. dollar relative to certain foreign currencies could have a material adverse effect on ~~Form 10-Q.~~our results of operations. In recent periods, our results of operations have been positively affected from the depreciation of the U.S. dollar against the Euro, the Japanese yen and other foreign currencies, but there can be no assurance that this positive impact will continue. In the past, our results of operations have been negatively impacted by the appreciation of the U.S. dollar against other currencies. Subsequent to September 30, 2008, the U.S. dollar has appreciated significantly compared to the Euro and other foreign currencies, excluding the Japanese Yen.

Economic, political and other risks associated with international sales and operations could adversely affect our results of operations.

Because we sell our products worldwide and have significant operations outside of the United States, our business is subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total sales. In addition, we expect that the proportion of our employees, ~~contract manufacturers,~~ suppliers, job functions and manufacturing facilities located outside the United States may increase. Accordingly, our future results could be harmed by a variety of factors, including:

	•		interruption to transportation flows for delivery of parts to us and finished goods to our customers;

	•		changes in a specific country’s or region’s political, economic or other conditions;

	•		trade protection measures and import or export licensing requirements;

	•		negative consequences from changes in tax laws;

	•		difficulty in staffing and managing widespread operations;

	•		differing labor regulations;

	•		differing protection of intellectual property;

	•		unexpected changes in regulatory requirements; and

	•		geopolitical turmoil, including terrorism and war.

~~Foreign currency fluctuations related to international operations may adversely affect our operating results.~~

We derived approximately 72% of our net sales from outside the United States in the third quarters of 2007 and 2008 and expect to continue to derive the majority of net sales from outside the United States for the foreseeable future. Most of our sales outside the United States are denominated in the local currency of our customers. As a result, the U.S. dollar value of our net sales varies with currency rate fluctuations. Significant changes in the value of the U.S. dollar relative to certain foreign currencies could have a material adverse effect on our results of operations. In recent periods, our results of operations have been positively affected from the depreciation of the U.S. dollar against the Euro, the Japanese yen and other foreign currencies, but there can be no assurance that this positive impact will continue. In the past, our results of operations have been negatively impacted by the appreciation of the U.S. dollar against other currencies.

~~Fluctuations in worldwide demand for analytical instrumentation could affect our operating results.~~

The demand for analytical instrumentation products can fluctuate depending upon capital expenditure cycles. Most companies consider our instrumentation products capital equipment and some customers may be unable to secure the necessary capital expenditure approvals due to general economic or customer specific conditions. Significant fluctuations in demand could harm our results of operations.

Fluctuations in our quarterly operating results may cause our stock price to decline.

A high proportion of our costs are fixed due in part to our significant sales, research and product development and manufacturing costs. Declines in revenue caused by fluctuations in currency rates, worldwide demand for analytical instrumentation or other factors could disproportionately affect our quarterly operating results, which may in turn cause our stock price to decline.

Our results of operations and financial condition will suffer if we do not introduce new products that are attractive to our customers on a timely basis.

Our products are highly technical in nature. As a result, many of our products must be developed months or even years in advance of the potential need by a customer. If we fail to introduce new products and enhancements as demand arises or in advance of the competition, our products are likely to become obsolete over time, which would harm operating results. Also, if the market is not receptive to our newly developed products, we may be unable to recover costs of research and product development and marketing, and may fail to achieve material components of our business plan.

The analytical instrumentation market is highly competitive, and our inability to compete effectively in this market would adversely affect our results of operations and financial condition.

The analytical instrumentation market is highly competitive and we compete with many companies on a local and international level that are significantly larger than us and have greater resources, including larger sales forces and technical staff. Competitors may introduce more effective and less costly products and, in doing so, may make it difficult for us to acquire and retain customers. If this occurs, our market share may decline and operating results could suffer.

We may experience difficulties with obtaining components from sole- or limited-source suppliers, or manufacturing delays, either of which could adversely affect our results of operations.

Most raw materials, components and supplies that we purchase are available from many suppliers. However, certain items are purchased from sole or limited-source suppliers and a disruption of these sources could adversely affect our ability to ship products as needed. A prolonged inability to obtain certain materials or components would likely reduce product inventory, hinder sales and harm our reputation with customers. Worldwide demand for certain components may cause the cost of such components to rise or limit the availability of these components, which could have an adverse affect our results of operations.

We manufacture products in our facilities in Germany, the Netherlands and the United States. Any prolonged disruption to the operations at these facilities, whether due to labor unrest, supplier issues, damage to the physical plants or equipment or other reasons, could also adversely affect our results of operations.

Our executive officers and other key employees are critical to our business, they may not remain with us in the future and finding talented replacements may be difficult.

Our operations require managerial and technical expertise. Each of the executive officers and key employees located in the United States is employed “at will” and may leave our employment at any time. In addition, we operate in a variety of locations around the world where the demand for qualified personnel may be extremely high and is likely to remain so for the foreseeable future. As a result, competition for personnel can be intense and the turnover rate for qualified personnel may be high. The loss of any of our executive officers or key employees could cause us to incur increased operating expenses and divert senior management resources in searching for replacements. An inability to hire, train and retain sufficient numbers of qualified employees would seriously affect our ability to conduct our business.

2321

We may be unable to protect our intellectual property rights and may face intellectual property infringement claims.

Our success will depend, in part, on our ability to obtain patents, maintain trade secret protection and operate without infringing the proprietary rights of third parties. We cannot be certain that:

	•		any of our pending patent applications or any future patent applications will result in issued patents;

	•		the scope of our patent protection will exclude competitors or provide competitive advantages to us;

	•		any of our patents will be held valid if subsequently challenged; or

	•		others will not claim rights in or ownership of the patents and other proprietary rights held by us.

Furthermore, we cannot be certain that others have not or will not develop similar products, duplicate any of our products or design around any patents issued, or that may be issued, in the future to us or to our licensors. Whether or not patents are issued to us or to our licensors, others may hold or receive patents which contain claims having a scope that covers products developed by us. We could incur substantial costs in defending any patent infringement suits or in asserting any patent rights, including those granted by third parties. In addition, we may be required to obtain licenses to patents or proprietary rights from third parties. There can be no assurance that such licenses will be available on acceptance terms, if at all.

Our issued U.S. patents, and corresponding foreign patents, expire at various dates ranging from 2008 to 2024. When each of our patents expires, competitors may develop and sell products based on the same or similar technologies as those covered by the expired patent. We have invested in significant new patent applications, and we cannot be certain that any of these applications will result in an issued patent to enhance our intellectual property rights.

The following table indicates common shares repurchased and additional shares added to the repurchase program during the three months ended ~~March 31,~~September 30, 2008:

ISSUER PURCHASES OF EQUITY SECURITIES

Total
Number of Maximum
Shares Number of
Purchased Additional Shares that
Total Avg. as Part of Shares May Yet Be
Number Price Publicly Authorized Purchased
of Shares Paid Announced for Under the
Period Purchased per Share Program Purchase(1) Program(2)

January 1 – 31, 2008 — — 6,539,844 10,000 941,591
February 1 – 28, 2008 241,141 77.02 6,780,985 9,149 726,202
March 1 – 31, 2008 32,558 71.52 6,813,543 2,266 695,910

Total

Number of

Maximum

Number of

Purchased

Additional

Shares that

Total

Avg.

as Part of

May Yet Be

Number

Price

Publicly

Authorized

Purchased

of Shares

Paid

Announced

for

Under the

Period

Purchased

per Share

Program

Purchase (1)

Program (2)

July 1 — 31, 2008

—

7,022,508

—

512,081

August 1 — 31, 2008

116,584

68.77

7,139,092

27,027

422,524

September 1 — 30, 2008

85,000

62.52

7,224,092

5,611

343,135


(1)		The number of shares represents the number of shares issued pursuant to employee stock plans that are authorized for purchase.

(2)		The number of shares includes current repurchase of 1.5 million shares of common stock approved in August 2006 plus that number of shares of common stock equal to the number of shares issued pursuant to employee stock plans subsequent to August 2006 minus the number of shares ~~purchased.~~purchased, but does not include the 1.0 million shares approved in October 2008.

DIVIDENDS

As of ~~March 31,~~September 30, 2008, we ~~have~~had paid no cash ~~dividend~~dividends on our common stock and we do not anticipate doing so in the foreseeable future.

2523

EXHIBIT INDEX

Item 6. EXHIBITS


Exhibit
Number	Description	Reference			Description	Reference
3.1	Restated Certificate of Incorporation, filed December 12, 1988		(1	)	Restated Certificate of Incorporation, filed December 12, 1988		(1	)

3.2	Certificate of Amendment of Restated Certificate of Incorporation, filed December 1, 1999 (Exhibit 3.2)		(12	)	Certificate of Amendment of Restated Certificate of Incorporation, filed December 1, 1999 (Exhibit 3.2)		(11	)

3.3	Bylaws, as amended on July 29, 2002 (Exhibit 3.2)		(4	)	Amended and Restated Bylaws, dated August 6, 2008 (Exhibit 99.1)		(4	)

3.4	Amendment to Bylaws, adopted on January 11, 2007 (Exhibit 3.1)		(10	)	Amendment to Bylaws, adopted on January 11, 2007 (Exhibit 3.1)		(10	)

4.1	Stockholder Rights Agreement dated January 21, 1999, between Dionex Corporation and Bank Boston N.A.		(2	)	Stockholder Rights Agreement dated January 21, 1999, between Dionex Corporation and BankBoston N.A.		(2	)

10.1	Medical Care Reimbursement Plan as amended October 30, 2007 (Exhibit 10.1)		(7	)	Medical Care Reimbursement Plan as amended October 30, 2007 (Exhibit 10.1)		(7	)

10.2	Credit Agreement dated November 13, 2000 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.15)		(3	)	Credit Agreement dated November 13, 2000 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.15)		(3	)

10.3	First amendment to Credit Agreement dated November 13, 2000 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.17)		(5	)	First amendment to Credit Agreement dated November 13, 2000 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.17)		(5	)

10.4	Dionex Corporation 2004 Equity Incentive Plan, as amended October 2006 (Exhibit 10.1)		(13	)	Dionex Corporation 2004 Equity Incentive Plan, as amended October 2007 (Exhibit 10.1)		(12	)

10.5	Form of Stock Option Agreement for non-employee directors (Exhibit 10.5)		(14	)	Form of Stock Option Agreement for non-employee directors (Exhibit 10.5)		(13	)

10.6	Form of Stock Option Agreement for other than non-employee directors (Exhibit 10.6)		(14	)	Form of Stock Option Agreement for other than non-employee directors (Exhibit 10.6)		(13	)

10.7	Form of Stock Unit Award Agreement (Exhibit 10.2)		(13	)	Form of Stock Unit Award Agreement (Exhibit 10.2)		(12	)

10.8	Form of International Stock Option Agreement (Exhibit 10.8)		(7	)	Form of International Stock Option Agreement (Exhibit 10.8)		(7	)

10.9	Employee Stock Participation Plan (Exhibit 10.13)		(6	)	Employee Stock Participation Plan (Exhibit 10.13)		(6	)

10.10	Second amendment to Credit Agreement dated November 13, 2000 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.1)		(8	)	Second amendment to Credit Agreement dated November 13, 2000 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.1)		(8	)

10.11	Change in Control Severance Benefit Plan (Exhibit 10.15)		(9	)	Change in Control Severance Benefit Plan, as amended August 6, 2008 (Exhibit 10.15)		(9	)

10.12	Third amendment to Credit Agreement dated December 1, 2006 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.8)		(11	)	Third amendment to Credit Agreement dated December 1, 2006 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.8)		(10	)

10.13	Amended Executive Employment Agreement for Lukas Braunschweiler dated January 30, 2008 (Exhibit 10.13)		(14	)	Amended Executive Employment Agreement for Lukas Braunschweiler dated January 30, 2008 (Exhibit 10.13)		(13	)

10.14					Form of Stock Unit Award Agreement for U.S. employees (Exhibit 10.9)		(9	)

10.15					Form of Stock Unit Award Agreement for International employees (Exhibit 10.10)		(9	)

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


(1)		Incorporated by reference to the corresponding exhibit in our Annual Report on Form 10-Q filed September 20, 1989.

(2)		Incorporated by reference to the corresponding exhibit in our Quarterly Report on Form 10-Q filed February 16, 1999.

(3)		Incorporated by reference to the indicated exhibit in our Quarterly Report on Form 10-Q filed February 14, 2001.

(4)		Incorporated by reference to the indicated Exhibit ~~10.17~~ in our ~~Annual Report on~~ Form ~~10-K~~8-K filed August ~~28,~~11, 2002.

(5)		Incorporated by reference to the indicated Exhibit in our Annual Report on Form 10-K filed September 24, 2003.

(6)		Incorporated by reference to the indicated exhibit in our Annual Report on Form 10-K filed September 10, 2004.

(7)		Incorporated by reference to the indicated exhibit in our Form 10-Q filed November 9, 2007.

(8)		Incorporated by reference to the indicated exhibit in our current Report on Form 8-K filed December 22, 2004.

(9)		Incorporated by reference to the indicated exhibit in our ~~Quarterly~~Annual Report on Form ~~10-Q~~10-K filed ~~May 10, 2005.~~August 29, 2008.

(10)		~~Incorporated by reference to the indicated exhibit in our Form 8-K filed January 17, 2007.~~

~~(11)~~		Incorporated by reference to the indicated exhibit in our Quarterly Report on Form 10-Q filed February 9, 2007.

~~(12)~~(11)		Incorporated by reference to the indicated exhibit in our Form 10-K filed August 29, 2007.

~~(13)~~(12)		Incorporated by reference to the indicated exhibit in our Form 8-K filed October 15, 2007.

~~(14)~~(13)		Incorporated by reference to the indicated exhibit in our Form 10-Q filed February 8, 2008.

(14)		Incorporated by reference to the indicated exhibit in our Form 8-K filed November 3, 2008.

2725


	Page (s)
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements	2
Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2008 and June 30, ~~2007~~2008	2	3
Condensed Consolidated Statements of Income for the Three Months Ended ~~March 31,~~September 30, 2008 and 2007		4
~~Condensed Consolidated Statements of Income for the Nine Months Ended March 31, 2008 and 2007~~		5	3
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~March 31,~~September 30, 2008 and 2007	4	6
Notes to Condensed Consolidated Financial Statements		~~7-14~~	5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14	~~15-20~~
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk		20	18
ITEM 4. Controls and Procedures	19	21
PART II. OTHER INFORMATION
ITEM 1A. Risk Factors	19	22
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		25	22
ITEM 6. Exhibits	24	26
SIGNATURES		28	26
~~EXHIBIT 31.1~~EX-31.1
~~EXHIBIT 31.2~~EX-31.2
~~EXHIBIT 32.1~~EX-32.1
~~EXHIBIT 32.2~~EX-32.2


	Three Months Ended
	March 31,						Three Months Ended
	2008			2007			September 30,
	2008			2007
Net sales	$	98,356		$	84,954		$	93,435		$	82,423
Cost of sales		33,831			29,172			30,724			28,696

Gross profit		64,525			55,782			62,711			53,727

Operating expenses:
Selling, general and administrative		37,170			31,389			36,197			31,156
Research and product development		7,336			6,360			7,029			6,601

Total operating expenses		44,506			37,749			43,226			37,757

Operating income		20,019			18,033			19,485			15,970
Interest income		561			319			403			629
Interest expense		(236	)		(83	)		(218	)		(162	)
Other income (expense), net		(150	)		205			(613	)		(751	)

Income before taxes		20,194			18,474			19,057			15,686
Taxes on income		6,599			6,977			7,241			5,536

Net income	$	13,595		$	11,497		$	11,816		$	10,150

Basic earnings per share	$	0.74		$	0.60		$	0.65		$	0.54

Diluted earnings per share	$	0.72		$	0.59		$	0.64		$	0.53

Shares used in computing per share amounts:
Basic		18,438			19,047			18,068			18,765

Diluted		18,992			19,551			18,547			19,294


	Nine Months Ended
	March 31,
	2008			2007
Net sales	$	278,817		$	241,330
Cost of sales		94,359			81,786

Gross profit		184,458			159,544

Operating expenses:
Selling, general and administrative		104,214			90,394
Research and product development		21,506			18,209

Total operating expenses		125,720			108,603

Operating income		58,738			50,941
Interest income		1,771			941
Interest expense		(716	)		(205	)
Other income (expense), net		(1,540	)		136

Income before taxes		58,253			51,813
Taxes on income		19,679			18,378

Net income	$	38,574		$	33,435

Basic earnings per share	$	2.07		$	1.74

Diluted earnings per share	$	2.01		$	1.70

Shares used in computing per share amounts:
Basic		18,602			19,214

Diluted		19,176			19,672


	Three Months Ended						Nine Months Ended						Three Months Ended
	March 31,						March 31,						September 30,
	2008			2007			2008			2007			2008			2007
Cost of sales	$	163		$	106		$	445		$	287		$	185		$	131
Selling, general and administrative expenses		986			873			2,875			2,594			864			927
Research and development expenses		366			313			1,128			920			436			385

Total stock-based compensation expenses		1,515			1,292			4,448			3,801			1,485			1,443
Tax effect on stock-based compensation		(495	)		(472	)		(1,454	)		(1,389	)		(487	)		(430	)

Net effect on net income	$	1,020		$	820		$	2,994		$	2,412		$	998		$	1,013

Excess tax benefit related to equity incentive plans:
Cash flows from operations	$	(188	)	$	(581	)	$	(2,021	)	$	(1,043	)
Cash flows from financing activities		188			581			2,021			1,043
Effects on earnings per share:
Basic	$	0.06		$	0.05		$	0.16		$	0.13
Diluted	$	0.05		$	0.05		$	0.16		$	0.12


	Nine Months Ended				Three Months Ended
	March 31,				September 30,
	2008		2007		2008	2007

Volatility for option plan		28% - 29%		28.9%
Volatility for Equity Incentive Plan					29%	28%
Volatility for ESPP		23% - 31%		34.2%	24%	23%
Risk-free interest rate for option plan		2.91% - 4.60%		4.50% - 4.75%
Risk-free interest rate for Equity Incentive Plan					3.3%	4.6%
Risk-free interest rate for ESPP		2.16% - 4.80%		4.98%	2.0%	4.8%
Expected life of option plan	4.75 years		4.7 years
Expected life of Equity Incentive Plan					4.70 years	4.75 years
Expected life of ESPP	6 months		6 months		6 months	6 months
Expected dividend		$0.00		$0.00	$0.00	$0.00


			Gross
			Unrealized
	Cost		Losses			Fair Value

March 31, 2008, Marketable securities	$	1	$	—		$	1

June 30, 2007, Corporate debt securities	$	127	$	(3	)	$	124


	Total		Total
Balance as of July 1, 2007	$	25,443
Balance as of July 1, 2008			$	26,670
Translation adjustments		1,211		(1,135	)

Additions		—		1,507

Balance as of March 31, 2008	$	26,654
Balance as of September 30, 2008			$	27,042


							Actual
	Balance		Provision		Other		Warranty			Balance
	Beginning		For		Adjustments		Costs			End of
	of Period		Warranties		Accounts		Incurred			Period
					(1)
Accrued Product Warranty
Nine Months Ended:
March 31, 2008	$	2,875	$	2,565	$	294	$	(2,149	)	$	3,585
March 31, 2007	$	3,493	$	2,151	$	74	$	(2,406	)	$	3,313


	Three Months Ended
	March31,						Three Months Ended
	2008		2007		September 30,
	2008		2007
Products	$	86,658	$	74,191	$	81,834		$	71,946
Installation and Training Services		2,342		2,250		2,608			2,493
Maintenance		9,356		8,513		8,993			7,984

	$	98,356	$	84,954	$	93,435		$	82,423


	Three Months			Nine Months
	Ended			Ended
	March 31, 2008			March 31, 2008
Percentage change in net sales
Total:		16	%		16	%
By geographic region:
North America		15	%		17	%
Europe		3	%		10	%
Asia/Pacific		39	%		23	%


	Payments Due by Period										Payments Due by Period
			Less										Less
			Than 1		1-3		4-5		After 5				Than 1		1-3		4-5		After 5
Contractual Obligations	Total		Year		Years		Years		Years		Total		Year		Years		Years		Years
Short-Term Borrowings											$	25,074	$	25,074	$	—	$	—	$	—
Operating Lease Obligations	$	17,780	$	5,820	$	6,360	$	2,090	$	3,510		16,272		5,471		5,566		2,194		3,041

Total											$	41,346	$	30,545	$	5,566	$	2,194	$	3,041


	DIONEX CORPORATION
	(Registrant)



Date: ~~May 9,~~November 7, 2008

	By:	/s/ Lukas Braunschweiler

		Lukas Braunschweiler
		President, Chief Executive Officer And Director

	By:	/s/ Craig A. McCollam

		Craig A. McCollam
		Senior Vice President and Chief Financial Officer


	Remaining		Remaining
	Amortization		Amortization
	Expense		Expense
2008 (remaining three months)	$	243
2009		932
2009 (remaining nine months)			$	749
2010		894		975
2011		885		969
2012		885		969
2013				616
Thereafter		2,900		2,559

Total	$	6,739	$	6,837