New Records, Continued Growth
A message from Michael Ziering, CEO and President, DPC

Last year was one of continued expansion for DPC: expansion not only in sales—the Company's thirtieth consecutive year of sales growth—but also in the role of IVD systems provider for high-volume facilities. It was a record year for DPC in both respects, but also a time in which the foundation for continued strong growth was put in place with the number of instruments shipped, the international launch of allergy testing on the IMMULITE^® 2000, completion of our new facility in New Jersey, key assays released on the IMMULITE^® and IMMULITE 2000 systems, and research and development work on the next generation of instruments.

As was the case in 2000, the growth of DPC's business last year was driven primarily by the continuing demand for the IMMULITE 2000 product line. We shipped 651 IMMULITE 2000 instruments, bringing the total number of units shipped since launch in the third quarter of 1998 to over 1700. Even more significant was the shift in reagent use on the instruments: during the fourth quarter, for the first time, orders for IMMULITE 2000 tests exceeded those for IMMULITE tests.

Our business growth transcended geographical borders, with significant sales increases in Italy, the UK and China. The big story for 2001, however, was the same as for the previous year: strong growth in the US market in both the large national reference laboratory and hospital segments. We placed a significant number of IMMULITE 2000s in the country's largest reference laboratories; and in regional reference laboratories, customers added systems to their existing installed base. On the hospital laboratory side, we were added to the Broadlane GPO contract during the fourth quarter. We are now party to six GPO agreements either alone or in cooperation with Dade Behring. (Before 1998, we had no GPO awards.) The IMMULITE 2000, with its broad menu, state-of-the-art software, high throughput and strong customer service follow-up, is becoming the instrument of choice for many domestic hospitals.

In September, we introduced allergy testing on the IMMULITE 2000. The formal product launch in Strasbourg drew more than 200 customers. By coupling our patented liquid-allergen technology with the benefits of a highly automated instrument such as the IMMULITE 2000, we believe that we now offer a quality solution for this market. At launch we had more than 110 specific allergens and 10 panels available, and subsequently have released over 60 more. Adding allergy testing to the IMMULITE 2000 instrument enables us to better serve high-volume allergy accounts as well as provide additional value to the general laboratory interested in consolidating instruments.

While the growing acceptance of the IMMULITE 2000 was clearly the driving force in 2001, we continued to see strong placements of the original IMMULITE system. We shipped 464 systems, bringing the total shipped since the 1993 launch to over 5300 systems worldwide. Key factors that continue to drive demand for this product line are the instrument's ease of use, its remarkable reliability, and its menu: the most comprehensive available on any automated analyzer.

We added eleven tests to the IMMULITE 2000, and four tests to the IMMULITE during the year. In the third quarter, we received European "CE marking" of almost all our infectious disease kits on IMMULITE and IMMULITE 2000. I am happy to say that we were the first diagnostics company to receive CE marking on infectious disease kits—well before the mandatory date for these approvals. Domestically, we received premarket approval for our AFP assay as an aid in the detection of fetal open neural tube defects, as well as for our extended-range PSA and Third Generation PSA assays as aids in the detection of prostate cancer. Additionally, we received market clearance for 155 allergens and panels on the IMMULITE 2000. We have also submitted five hepatitis B markers to the FDA for approval.

DPC rose to the challenge of meeting the growing demand for reagents and instruments during 2001. In December, the Instrument Systems Division moved into its new facility in Flanders, New Jersey. The 88,000-square-foot facility provides state-of-the-art manufacturing and research capability, enough to accommodate the continuing demand for our current platforms and development of the next generation of DPC instruments. It also serves as the site for customer training. We continue to transfer reagent production to EURO/DPC in North Wales for manufacture and sale. For the first time, we transferred the manufacturing of certain IMMULITE 2000 kits to EURO/DPC.

To accommodate our continued growth, we are upgrading our manufacturing and business operations by conducting a large overhaul of our corporate information system. We expect the initial stage to be complete during the first quarter of this year with the roll-out of the business operations segment in Los Angeles. We will also implement this new software in New Jersey and Wales in the coming months. While expansion and the new facility give us room at both of these sites, we are space constrained in Los Angeles. This is an issue we will seek to address in the coming year.

In closing, I wish to acknowledge the charitable contributions of our DPC employees. During the year, they donated $56,000 for relief aid in El Salvador and India, which had experienced devastating earthquakes. With matching Company contributions, a total of $112,000 was raised. Additionally, in October, as a response to the tragic events of September 11th, 521 employees (70 percent) of the Los Angeles-based staff and members of the New Jersey staff raised more than $104,000, which the Company again matched, for a total of $209,000 that was donated to the New York relief effort.

The results this past year have been made possible by more than 1,900 DPC employees worldwide, our loyal independent distributors, our valued customers, and our confident shareholders. I would like to thank you all for your continued support.