10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2009

OR

¨              Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________to_________

Commission File Number: 0-6511

O. I. CORPORATION

(Exact name of registrant as specified in its charter)

OKLAHOMA	73-0728053
State of Incorporation	I.R.S. Employer
	Identification No.

P.O. Box 9010
151 Graham Road
College Station, Texas	77842-9010
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (979) 690-1711

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).           Yes ¨ No ¨

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  Large accelerated filer ¨    Accelerated filer ¨    Non-accelerated filer ¨    Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ¨  No þ

As of May 8, 2009, there were 2,355,214 shares of the issuer’s common stock, $.10 par value, outstanding.

Caution Regarding Forward-Looking Information; Risk Factors

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of United States securities laws, including the United States Private Securities Litigation Reform Act of 1995. From time to time, our public filings, press releases and other communications will contain forward-looking statements. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “forecast”, “target”, “project”, “may”, “will”, “should”, “could”, “estimate”, “predict” or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements in this quarterly report on Form 10-Q include, but are not limited to, statements with respect to expectations of our prospects, future revenues, earnings, activities and technical results.

Forward-looking statements and information are based on current beliefs as well as assumptions made by, and information currently available to, us concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. The forward-looking statements in this quarterly report on Form 10-Q are made as of the date it was issued and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that outcomes implied by forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These risks and uncertainties may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. When relying on our forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

Our public filings are available at www.oico.com and on EDGAR at www.sec.gov.

Please see “Part I, Item 1A—Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2008, as well as Part II, Item IA—“Risk Factors” of this quarterly report on Form 10-Q, for further discussion regarding our exposure to risks. Additionally, new risk factors emerge from time to time and it is not possible for us to predict all such factors nor to assess the impact such factors might have on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

O.I. CORPORATION

and SUBSIDIARY

Condensed Consolidated Balance Sheets

(In Thousands, Except Par Value)

	March 31,
	2009			December 31,
	(Unaudited)			2008
Assets
Current assets:
Cash and cash equivalents	$	3,551		$	3,134
Accounts receivable, trade, net of allowance for
doubtful accounts of $295 and $299, respectively		4,372			6,195
Investments at market		200			300
Inventories, net		5,800			5,754
Current deferred income tax assets		825			825
Other current assets		720			729
Total current assets		15,468			16,937
Property, plant and equipment, net		3,059			3,159
Long-term deferred income tax assets		657			657
Intangible assets, net		487			462
Other assets		355			389
Total assets	$	20,026		$	21,604
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable, trade	$	1,327		$	1,516
Accrued compensation and other related expenses		1,051			1,281
Accrued liabilities		247			846
Total current liabilities		2,625			3,643
Uncertain tax positions-Long term liabilities		27			27
Commitments and contingencies
Stockholders' equity:
Common stock, $.10 par value, 10,000 shares
authorized, 4,103 shares issued, 2,351 and 2,349
shares outstanding, respectively		410			410
Additional paid-in capital		5,440			5,402
Treasury stock, 1,752 and 1,754 shares, respectively, at cost		(13,180	)		(13,195	)
Retained earnings		24,704			25,317
Total stockholders' equity		17,374			17,934
Total liabilities and stockholders' equity	$	20,026		$	21,604

See Notes to Unaudited Condensed Consoldiated Financial Statements.

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O.I. Corporation

and Subsidiary

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

(In Thousands, Except Per $ Share Amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
Net revenues:
Products	$	3,832		$	6,407
Services		789			920
		4,621			7,327
Cost of revenues:
Products		2,068			3,281
Services		382			599
		2,450			3,880
Gross profit		2,171			3,447
Selling, general and administrative expenses		1,977			2,299
Research and development expenses		946			908
Operating (loss) income		(752	)		240
Other income, net		12			80
(Loss) income before income taxes		(740	)		320
(Benefit) provision for income taxes		(244	)		80
Net (loss) income	$	(496	)	$	240
Comprehensive (loss) income	$	(496	)	$	218
(Loss) earnings per share:
Basic	$	(0.21	)	$	0.09
Diluted	$	(0.21	)	$	0.09
Shares used in computing (loss) earnings per share:
Basic		2,351			2,615
Diluted		2,351			2,654
Cash dividends declared per share of common stock	$	0.05		$	0.05

See Notes to Unaudited Condensed Consolidated Financial Statements.

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O.I. Corporation

and Subsidiary

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
Cash Flows from Operating Activities:
Net income (loss)	$	(496	)	$	240
Depreciation and amortization		139			153
Stock based compensation		31			41
Change in working capital		802			(286	)
Net cash flows provided by operating activities		476			148
Cash Flows from Investing Activities:
Purchase of investments		-			(2,533	)
Maturity of investments		100			301
Purchase of property, plant and equipment		(35	)		(26	)
Proceeds from sale of property, plant and equipment		-			37
Change in other assets		(29	)		(17	)
Net cash flows provided by (used in) investing activities		36			(2,238	)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock pursuant to exercise
of employee stock options and employee stock purchase plan		22			14
Purchase of Treasury stock		-			(132	)
Payment of cash dividends on common stock		(117	)		(131	)
Net cash flows (used in) financing activities		(95	)		(249	)
Net increase (decrease) in cash and cash equivalents		417			(2,339	)
Cash and cash equivalents:
Beginning of period		3,134			3,356
End of period	$	3,551		$	1,017

See Notes to Unaudited Condensed Consolidated Financial Statements.

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O.I. CORPORATION and SUBSIDIARY

Notes to Unaudited Condensed Consolidated Financial Statements

1. Basis of Presentation

O.I. Corporation (the “Company”, “we”, or “our”), an Oklahoma corporation, was organized in 1963.  The Company designs, manufactures, markets, and services analytical, monitoring and sample preparation products, components, and systems used to detect, measure, and analyze chemical compounds.

The consolidated financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and include all normal and recurring adjustments which are, in the opinion of management, necessary for a fair presentation. These financial statements have not been audited by an independent accountant. The consolidated financial statements include the accounts of the Company and its subsidiary.  All inter-company transactions and balances have been eliminated in the financial statements. 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 for interim reporting.

The Company believes that the disclosures are adequate to prevent the information from being misleading. However, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2008.  The financial data for the interim periods presented may not necessarily reflect the results to be anticipated for the complete year.

2. Inventories, Net

Inventories, net, which include material, labor and manufacturing overhead, are stated at the lower of first-in, first-out cost or market (in thousands):

	March 31,			December 31,
	2009			2008
Raw materials	$	5,129		$	4,838
Work-in-process		107			486
Finished goods		1,140			1,084
Reserves		(576	)		(654	)
	$	5,800		$	5,754

3. ComprehensiveIncome(Loss)

Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of stockholders' equity. The Company's components of comprehensive income (loss) are net income and unrealized gains and losses on available-for-sale investments.

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4. (Loss) Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands except per share data):

	Quarter Ended March 31,
	2009			2008
Numerator, (loss) earnings attributable to common stockholders	$	(496	)	$	240
Denominator:
Basic-weighted average common shares outstanding		2,351			2,615
Dilutive effect of employee stock options		-			39
Diluted outstanding shares		2,351			2,654
Basic (loss) earnings per common share	$	(0.21	)	$	0.09
Diluted (loss) earnings per common share	$	(0.21	)	$	0.09

For the three months ended March 31, 2009, the Company’s potentially dilutive options of 88,000 were not used in the calculation of diluted earnings since the effect of potentially dilutive securities in computing a loss per share was antidilutive. For the three months ended March 31, 2008, there were 98,000 anti-dilutive shares.

5. Stock-Based Compensation

On January 1, 2006, we adopted the provisions of Statement 123 (revised 2004) (“Statement 123(R)”), “Share-Based Payment”, which revises Statement 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion 25, Accounting for Stock Issued to Employees. In accordance with Statement 123(R), our financial statements recognize expense related to our stock-based compensation awards that were granted after January 1, 2006, or that were unvested as of January 1, 2006, based on their grant-date fair value.

Our pre-tax compensation cost for stock-based compensation for the three months ended March 31, 2009 and 2008 was $31,000 and $41,000 ($19,000 and $25,000 after tax effects), respectively.

Statement 123(R) requires that cash flows from the exercise of stock options resulting from tax benefits in excess of recognized cumulative compensation cost (excess tax benefits) be classified as financing cash flows. For the three months ended March 31, 2009 and 2008, there was no excess tax benefit, respectively.

No options were granted during the three months ended March 31, 2009 or 2008.

Other Information

As of March 31, 2009, we had $203,000 of total unrecognized compensation cost related to non-vested awards granted under our various share-based plans, which we expect to recognize over 1.6 years.

We received cash from options exercised during the first three months of fiscal years 2009 and 2008 of $12,000 and $9,000, respectively. The impact of these cash receipts is included in financing activities in the accompanying consolidated statements of cash flows.

The Company’s practice has been to issue shares for option exercises out of treasury stock as provided under the terms of the 2003 Incentive Compensation Plan. We believe our treasury stock holdings are sufficient to satisfy any exercises in 2009.

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6. Segment Data

The Company categorizes its operations into two business segments: Laboratory Products and Air-Monitoring Systems.  Operations in these segments include designing, manufacturing, marketing and selling analytical instruments.  In the Laboratory Products segment, the Company provides products generally used to ensure regulatory compliance with environmental requirements for water.  Analytical instruments sold in the Air-Monitoring Systems segment are used for trace level detection of airborne gaseous chemical warfare agents.

Following is the Company’s business segment information for March 31, 2009 and 2008:

		Laboratory			Air-Monitoring
		Products			Systems			Total
2009
	Revenue	$	3,228		$	1,393		$	4,621
	Operating income (loss)		(577	)		(175	)		(752	)
	Total Assets		16,655			3,371			20,026
	Capital Expenditures		34			1			35
	Depreciation and amortization		121			18			139
2008
	Revenue	$	5,549		$	1,778		$	7,327
	Operating income (loss)		346			(106	)		240
	Total Assets		21,008			3,902			24,910
	Capital Expenditures		25			1			26
	Depreciation and amortization		126			27			153

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

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto. This discussion also contains forward-looking statements. Please see the “Caution Regarding Forward-Looking Information; Risk Factors” above.

Company Overview

O. I. Corporation, referred to as “the Company,” “OI,” “we,” “our” or “us”, was organized in 1963 in accordance with the Business Corporation Act of the State of Oklahoma as Clinical Development Corporation, a builder of medical and research laboratories. In 1969, we moved from Oklahoma City, Oklahoma to College Station, Texas and changed our name to Oceanography International Corporation. To better reflect current business operations, we again changed our name to O.I. Corporation in July 1980, and in January 1989 we began doing business as OI Analytical.

At OI, we provide innovative products for chemical monitoring and analysis. Our products perform chemical detection, analysis, measurement and monitoring applications in a wide variety of industries including food, beverage, pharmaceutical, semiconductor, power generation, chemical, petrochemical and security. Headquartered in College Station, Texas, we sell our products throughout the world utilizing a direct sales force as well as a network of independent sales representatives and distributors.

Recent Developments

During the first quarter of 2009, we felt the full impact of the global economic downturn. Our sales declined 37% in comparison to the first quarter of 2008, with bookings down across virtually all product lines and all regions. Although quotation levels were relatively strong during the quarter, many of our customers deferred purchase commitments in order to conserve cash.

In response to this slowdown in business activity, we initiated a 10% across the board pay reduction in February and began evaluating other cost saving measures. We subsequently reduced staffing by approximately 20% at our College Station facility in April, initiated a reduction in certain employee benefits, reduced Board-related expenses, and curtailed travel and entertainment expenses. Although our savings from these efforts will initially be offset by severance benefits of approximately $100,000, when they are fully in effect during the second quarter, we anticipate annualized savings of approximately $2,200,000. We believe these expense reductions will enable us to return to profitability during the second half of the year.

Our cash and investments position increased during the first quarter, despite the loss we incurred. The savings initiatives we have implemented should enable us to maintain an adequate level of liquidity to meet our operating needs during this economic slowdown.

During the first quarter, we renewed our value-added reseller agreement with Agilent, extending this contract through the end of 2009. We are pleased to continue our relationship with Agilent, the industry leader in gas chromatography (“GC”) solutions, and believe our cooperative efforts will improve future sales opportunities. Last year, we announced a strategic alliance with Picarro, Inc., to develop a solution combining our total organic compound (“TOC”) technology with Picarro’s cavity ring-down spectroscopy technology. This novel technology won a prestigious new product innovation award in March and should enable us to pursue new market segments such as the analysis of food origin and adulteration, and ecosystem studies.

We began producing prototype, beta versions of our new process TOC and miniaturized mass spectrometer products during the first quarter and will conduct field tests of these new products during the second quarter. This represents the final stage in developing these products for market release.

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While we do not know how long the global economic downturn will last, we believe that our financial strength and lower cost structure will enable us to weather this short term decline as we work to achieve longer term sales growth through our new products and strategic alliances.

Results of Operations

Revenues

	Three Months Ended
	March 31,										Increase
(dollars in 000’s)	2009		% of Rev.			2008		% of Rev.			(Decrease)
Sales by Segment:
Laboratory Products	$	3,228		69.9	%	$	5,549		75.7	%	$	(2,321	)
Air-Monitoring Systems		1,393		30.1	%		1,778		24.3	%		(385	)
Total	$	4,621		100.0	%	$	7,327		100.0	%	$	(2,706	)

Our total revenue declined $2,706,000, or 36.9%, for the three months ended March 31, 2009 compared to the first quarter of 2008.   Laboratory Products segment sales decreased 41.8% in the first quarter, while sales in the Air-Monitoring Systems segment declined 21.7%.

The slowdown in Laboratory Products sales was most pronounced in the domestic market where sales declined 48%, with sales of GC products experiencing the largest decline.  Domestic sales of our TOC product line also declined substantially from last year, though we experienced some growth in sales of Automated Chemistry Analyzers (“ACA”) in the first quarter and anticipate future opportunities due to the recent regulatory approval for a new cyanide-analysis method using our ACA products.

Internationally, the decline in Laboratory Product sales was less severe, with revenues down 38%, due largely to improved sales of GC products in Latin America.  While we experienced small pockets of success in certain regions, in general sales of more expensive equipment such as configured systems, sample introduction products and TOC’s declined as customers deferred purchase commitments due to the difficult economy.  We are increasing our efforts to sell Laboratory Products into the governmental and educational markets where funds are more readily available.  However, our backlog remains low and it is difficult to project the success of these efforts in the near term.

Sales in the Air-Monitoring Systems segment declined during the first quarter of 2009 compared to the same period in 2008 because of a diminished backlog at the end of  2008.  Our sales in this segment generally involve products and services provided in connection with U.S. governmental projects.  As a result, the sales process is longer in duration than the sales process in our Lab Products segment.  The federal government did not complete its budget at the end of 2008 and governmental activity was slowed by uncertainty surrounding the transition in administration.  We historically experience improved bookings in this segment during the second quarter and anticipate this trend to continue in the current year.

Gross Profit

	Three Months Ended March 31,
	2009					2008
(dollars in 000’s)	$		%			$		%
Gross Profit by Segment:
Laboratory Products	$	1,425		44.1	%	$	2,504		45.1	%
Air-Monitoring Systems		746		53.6	%		943		53.0	%
Total	$	2,171		47.0	%	$	3,447		47.0	%

Our overall gross profit for the three months ended March 31, 2009 decreased $1,276,000, or 37.0%, compared to the first quarter of 2008 because of lower sales.  On a percentage of sales basis, our overall margins were unchanged in first quarter 2009.  Margins in our Laboratory Products segment were down 1.0% because of unfavorable manufacturing variances associated with our decreased production levels, while margins in our Air-Monitoring Systems segment increased slightly.

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Operating Expenses 

	Three Months Ended March 31,
	2009					2008
(dollars in 000’s)	$		% of Rev.			$		% of Rev.
SG&A Expenses by Segment:
Laboratory Products	$	1,467		45.4	%	$	1,689		30.4	%
Air-Monitoring Systems		510		36.6	%		610		34.3	%
Total	$	1,977		42.8	%	$	2,299		31.4	%
R&D Expenses by Segment:
Laboratory Products	$	535		16.6	%	$	469		8.5	%
Air-Monitoring Systems		411		29.5	%		439		24.7	%
Total	$	946		20.5	%	$	908		12.4	%

Total selling, general and administrative ("SG&A") expenses for the three months ended March 31, 2009 decreased $322,000, or 14.0%, compared to the same period of the prior year.  The decline in Laboratory Products SG&A expenses was attributable to decreased sales commissions, lower wage-related expenses and reduced Board-related expenses.  SG&A expenses in the Air-Monitoring Systems segment were down because of lower wage related expenses and reduced legal fees.  Our recent cost savings measures were minimally reflected in these first quarter results.  We anticipate a further reduction in SG&A expenses during the second quarter, and significantly lower SG&A expenses in subsequent quarters when these cost savings measures are fully in effect.

Total research and development ("R&D") expenses for the three months ended March 31, 2009 increased by $38,000, or 4.2%, compared to the first quarter of 2008.  This increase resulted from higher R&D expenses in our Laboratory Products segment, which was primarily attributable to decreased billings under our U.S. Army contract.  Lower contract billings resulted in an increased allocation of R&D resources for product development activities.  R&D expenses for the Air-Monitoring Systems segment declined because of lower wage related and consulting expenses.   Our cost control measures in the Laboratory Products segment should result in lower R&D expenses in future quarters.

Operating Income (Loss)

	Three Months Ended March 31,
	2009						2008
(dollars in 000’s)	$			% of Rev.			$			% of Rev.
Operating (Loss) Income  by Segment
Laboratory Products	$	(577	)		-17.9	%	$	346			6.2	%
Air-Monitoring Systems		(175	)		-12.6	%		(106	)		-6.0	%
Total	$	(752	)		-16.3	%	$	240			3.3	%

For the three months ended March 31, 2009, we generated a total operating loss of $752,000, or (16.3%) of revenues compared to operating income of $240,000 in the first quarter of 2008.  The loss in the first quarter of 2009 resulted from lower sales activity in both segments.

Other Income, Net

Other income totaled $12,000 for the three months ended March 31, 2009, compared to $80,000 in 2008.  Due to our return of value to shareholders through stock repurchases in 2008 and last year’s loss on our investment holdings in preferred stock and corporate bonds, our cash available to invest in 2009 was down compared to 2008.  Because of lower interest rates on investments and reduced cash to invest, our other income declined in 2009.

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Provision (Benefit) for Income Taxes

Our benefit for income taxes totaled $244,000 during the first quarter of 2009, an effective rate of 33% based on our estimated tax rate after taking into consideration applicable tax credits such as the R&D tax credit and the Domestic Production Activity Deduction.  In the first quarter of 2008, we recorded a tax provision of $80,000, which reflected a 25% estimated tax rate.

Liquidity and Capital Resources

Net cash flow provided by operating activities for the quarter ended March 31, 2009 totaled $476,000 compared to $148,000 during the comparable period of 2008.  Despite our loss for the quarter, we generated positive cash flow from operations because of reduced working capital, which resulted primarily from collections on our accounts receivable.  The combination of lower sales and positive collections caused our accounts receivable to decline by $1,823,000.  This positive cash flow was partially offset by decreases in our current liabilities, the most significant of which occurred in our accrued liabilities and was largely attributable to reduced income taxes payable.

Net cash flow provided by investing activities totaled $36,000 for the three months ended March 31, 2009, compared to a $2,238,000 use of cash in the first quarter of 2008.  Last year’s use of cash resulted primarily from investment purchases such as commercial paper and bank certificates of deposit as we invested excess cash on hand.  Our net investment activity was minimal during the first quarter of 2009.  We kept purchases of property, plant and equipment to a minimum in both periods.   As of March 31, 2009, we had no material commitments for the purchase of property, plant and equipment outstanding.

Net cash flow used in financing activities for the three months ended March 31, 2009 totaled $95,000, compared to $249,000 in 2008.  During the first quarter of 2008, we purchased approximately 12,000 shares of our common stock on the open market, while in 2009 we had no stock purchases.  Our cash dividends declined slightly in 2009 compared to 2008 because we had fewer shares of common stock outstanding.  Over the course of the year, we repurchased 284,569 shares of our common stock in 2008 as part of our effort to return value to our shareholders.

Cash, cash equivalents and short-term investments totaled $3,751,000 as of March 31, 2009, compared to $3,434,000 as of December 31, 2008.  We believe our liquidity and expected cash flows from operations should be sufficient to meet expected working capital, capital expenditure and R&D requirements for the short term.  As the economy improves, we anticipate that cash flows from operations will generate sufficient cash flow to meet our long term liquidity needs. As of March 31, 2009, we had no borrowings under our $6,000,000 revolving line of credit.  Availability under this agreement may be limited by our eligible collateral value, which we have not calculated because we have no borrowings.  With the significant decline we have experienced in our accounts receivable, we believe our availability under the revolving line of credit is substantially less than $6,000,000.  We were not in compliance with our loan covenants as of March 31, 2009, but received a loan covenant waiver from the bank.

Because interest rates are historically low, we have established an investment committee consisting of two independent directors and our CEO/CFO to evaluate alternative investment options for excess funds to improve our returns.  These investments may include less than investment grade bonds or other securities that the committee feels are likely to increase in value and/or provide a higher interest return.  Though we have not currently invested in any such instruments, future investments made by the Investment Committee could subject us to a higher risk of loss than our current insured or government backed investments.

Our Board of Directors declared a cash dividend on February 2, 2009 of $0.05 per common share payable on February 27, 2009 to shareholders of record at the close of business on February 12, 2009. The quarterly dividend was declared in connection with the Board's decision in 2006 to establish an annual cash dividend of $0.20 per share, payable at $0.05 per quarter. The payment of future cash dividends under the policy is subject to the approval of our Board of Directors.

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Critical Accounting Policies

Please reference Part II-Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2008.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4.  Controls and Procedures

We maintain a set of disclosure controls and procedures designed to ensure that the information we are required to disclose in reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.  During the period from January 1, 2009 to March 31, 2009, an evaluation under the supervision and with the participation of management, including the Chief Executive Officer/CFO (our principal executive officer and principal financial officer), of the effectiveness of our disclosure controls and procedures was conducted.  Based on that evaluation, the Chief Executive Officer/CFO has concluded that, as of March 31, 2009, our disclosure controls and procedures are effective.

Subsequent to the date of his evaluation, there have been no changes in our internal controls that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Our management, including the Chief Executive Officer/CFO, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Part II- Other Information

Item 1. Legal Proceedings

In the normal course of our business, we are subject to legal proceedings brought against us.  There have been no material developments to the legal proceedings described in Part I, Item 3, "Legal Proceedings" in our Annual Report on Form 10-K for the year-ended December 31, 2008, and there are no new reportable legal proceedings for the quarter ended March 31, 2009. 

Item 1A. Risk Factors

There have been no material changes in the risk factors described in Part I, Item 1A, “Risk Factors”, of our Annual Report on Form 10-K for the year ended December 31, 2008.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

13

Item 5.  Other Information

The terms of our Value Added Reseller Program Agreement with Agilent Technologies, Inc., filed as Exhibit 10.1 to our Form 10-Q filed with the Securities and Exchange Commission on August 11, 2008, have been subsequently modified in part by two amendments which are being filed as Exhibits 10.1 and 10.2 hereto.  The amendments renew the Agreement through December 31, 2009, establish new sales volume targets for OI, provide for volume-based discount on eligible products, and provide additional procedural clarification.

Item 6. Exhibits

10.1*  Amendment No. 1 to the Value Added Reseller Program Agreement AHA47 By and Between Agilent Technologies, Inc. and O.I. Corporation dated September 5, 2008

10.2* Amendment No. 2 to the Value Added Reseller Program Agreement AHA47 By and Between Agilent Technologies, Inc. and O.I. Corporation dated January 6, 2009.  (Confidential Treatment Requested)

31* Principal Executive Officer and Principal Financial Officer certification pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 * Principal Executive Officer and Principal Financial Officer certification pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*  Filed herewith

14

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		O. I. CORPORATION
		(Registrant)
Date:	May 15, 2009	BY: /s/ J. Bruce Lancaster
		Chief Executive Officer and Chief Financial Officer
		(Principal Executive and Principal Financial Officer)

15

EXHIBIT INDEX

EXHIBIT
NUMBER	EXHIBIT TITLE
10.1*	Amendment No. 1 to the Value Added Reseller Program Agreement AHA47 By and Between Agilent Technologies, Inc. and O.I. Corporation dated September 5, 2008.
10.2*	Amendment No. 2 to the Value Added Reseller Program Agreement AHA47 By and Between Agilent Technologies, Inc. and O.I. Corporation dated January 6, 2009.  (Confidential Treatment Requested)
31*	Principal Executive Officer and Principal Financial Officer certification pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Principal Executive Officer and Principal Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*Filed herewith

16

EX-10.1

EXHIBIT 10.1

AMENDMENT No. I TO AGILENT VALUE ADDED RESELLER PROGRAM AGREEMENT AHA47

BY AND BETWEEN

AGILENT TECHNOLOGIES, INC.

AND

O. I. CORPORATION

The above referenced Purchase Agreement ("Agreement") dated June 1, 2008, between Agilent Technologies, Inc. ("Agilent") and O.I. Corporation is hereby amended as follows:

I. Exhibit M is attached and hereby made part of above referenced Agreement AHA47.

ALL OTHER TERMS AND CONDITIONS OF THE REFERENCED AGREEMENT REMAIN UNCHANGED AND ARE IN FULL FORCE AND EFFECT.

AGREED TO:		AGREED TO:
AGILENT TECHNOLOGIES. INC.		O.I. CORPORATION
By:	/s/ Rose Douglas	By:	/s/ J. Bruce Lancaster
Rose Douglas		J. Bruce Lancaster
Title: Contracts Specialist		Title: CEO/CFO
Address:   2850 Centerville Rd		Address:           151 Graham Road
Wilmington, DE 19808		College Station, TX 77845
Date: 9/5/08		Date: 9/4/08

AHA47                    

Exhibit M Modified

MULTIPLE RELEASE POINT LIST

This Multiple Release Point list ("Exhibit M") is attached to and made a part of Agilent Agreement No. AHA47 ("Agreement) for the purpose of identifying the mutually agreed upon Reseller locations and legal entities that are eligible to place orders under the Agreement. Except as expressly modified herein, all terms and conditions of the Agreement remain in full force and effect

1. For non-educational institutions, Reseller certifies that any legal entity identified below is more than fifty (50%) percent controlled by Reseller or a common parent. This means that the Reseller or a common parent either holds more than fifty (50%) percent of the issued shares of voting stock, has the power to exercise more than fifty (50%) percent of the voting rights, or holds more than fifty (50%) percent of the capital or business assets of the Reseller legal entity.

2. For Educational Institutions, Reseller certifies that any educational entity identified below is governed by an established, staffed and operated entity which has the responsibility for controlling budgets and/or authorizing purchases.

3. For Resellers who qualify for multiple channels, one channel type must be specified for each release point in order to determine the applicable discount.

4. Reseller and Agilent agree that the following Reseller legal or educational entities located within the United States of America may purchase from the corresponding Agilent selling entities. The complete name and address of the locations eligible to participate in this Agreement are as follows (attach additional pages as necessary):

Agilent Selling Entities	Reseller Entities
Agilent Technologies, Inc.	O.I. Corporation
2850 Centerville Rd.	151 Graham Road
Wilmington, DE 19808	College Station, TX 77845
	CMS Field Services
	2148 Pelham Pkwy, Bldg 400
	Pelham, AL 35124-1131

EX-10.2

EXHIBIT 10.2

CONFIDENTIAL TREATMENT REQUESTED

[*] Denotes information for which confidential treatment has been requested.  Confidential portions omitted have been filed separately with the Securities and Exchange Commission.

AMENDMENT TWO

TO VALUE ADDED RESELLER PROGRAM AGREEMENT NUMBER AHA47

BY AND BETWEEN AGILENT TECHNOLOGIES, INC. AND

O.I. CORPORATION

The above referenced Value Added Reseller’s Agreement (“Agreement”) dated June 1, 2008, between Agilent Technologies, Inc. (“Agilent”) and O.I. Corporation (“Reseller”) is hereby amended as follows:

1. The Agreement Term is modified to coincide with the new ordering period of January 01, 2009 through December 31, 2009.

2. Exhibit E305 Version 9 LSCA Value Added Reseller Compensation Exhibit is hereby deleted and replaced with the attached Exhibit E305 Version 10.

3. Exhibit E306 Version 6 Value Added Reseller Business Plan LSCA Products is hereby added and made part of this agreement.

ALL OTHER TERMS AND CONDITIONS OF THE ABOVE REFERENCED VALUE ADDED RESELLER PROGRAM AGREEMENT REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.

AGREED TO:		AGREED TO:
Representative:	O.I. Corporation	Agilent:	Agilent Technologies, Inc.
	/s/ J. Bruce Lancaster		/s/ Bill Wynne
	Authorized Representative Signature		Authorized Representative Signature
Name:	J. Bruce Lancaster	Name:	Bill Wynne
Title:	CEO/CFO	Title:	Contracts Specialist
Date:	01/06/09	Date:	01/06/09
Address:	151 Graham Road College Station, TX  77845	Address:	2850 Centerville Road Wilmington, DE  19808

	AHA47
LSCA VALUE ADDED RESELLER COMPENSATION EXHIBIT	Exhibit E305

DISCOUNT SUMMARY TABLE

	COLUMN I	COLUMN II	COLUMN III	COLUMN IV
Volume Discount (Section 1)	[*]	[*]	[*]	[*]
Volume Performance Discount (Section 2)	[*]	[*]	[*]	[*]
TOTAL DISCOUNT PERCENTAGE	[*]	[*]	[*]	[*]

1. VOLUME BASED DISCOUNT

Eligible Products, including applicable standard options, will receive discounts in accordance with the following "Discount Percentage Schedule" at the Estimated Volume level established under this Exhibit. The discounts granted under this Exhibit are in lieu of and not in addition to any other discounts that might be available from Agilent with the exception of certain special promotions that may be offered from time to time.

DISCOUNT PERCENTAGE SCHEDULE

WORLDWIDE US DOLLAR NET

I

II

III

IV

100,000

-

499,999

[

*]

[

*]

[

*]

[

*]

500,000

-

999,999

[

*]

[

*]

[

*]

[

*]

1,000,000

-

1,999,999

[

*]

[

*]

[

*]

[

*]

2,000,000

-

3,999,999

[

*]

[

*]

[

*]

[

*]

4,000,000

-

6,499,999

[

*]

[

*]

[

*]

[

*]

6,500,000

-

UP

[

*]

[

*]

[

*]

[

*]

PRODUCTS SUBJECT TO DISCOUNT

Reseller is appointed for the following Products as defined by the solutions in the business plan:

COLUMN I	ALL PRODUCTS FROM PRODUCT LINES	AA     Proprietary Supplies 58       Analytical Supplies BC      LC Columns JW     GC Columns
COLUMN II	SELECTED PRODUCTS FROM PRODUCT LINES	AZ*   Gas Chromatography systems and related Products CA*   Emerging Markets Measurement Solutions BZ*   Gas Chromatography/Mass Spectroscopy Systems and Related Products
COLUMN III	SELECTED PRODUCTS FROM PRODUCT LINES	29*    Liquid Chromatography and related Products MA   Spectroscopy 89*    LC Mass Spectrometers LI       Laboratory Informatics
COLUMN IV	PRODUCTS FROM PRODUCT LINES	8P      Replacement Parts

* Discounts also include all ChemStations associated with these Products

Notwithstanding the foregoing, Agilent reserves the right to determine which Products are eligible for discount.

PL29 PRODUCTS NOT ELIGIBLE FOR DISCOUNT

G1411A	Oracle client license
G4240A	HPLC-Chip MS Interface for use with Agilent MS

2. VOLUME PERFORMANCE DISCOUNT

Reseller will receive a Volume Performance Discount of [*] percent ([*]%) on all orders placed during the following six (6) month period for Products in Column II and III, if Reseller’s total net purchases of Agilent Products under this Agreement for the prior six (6) months equal or exceed one hundred percent (100%) of volume target specified in Table 1 below.

For new Resellers the Volume Performance Discount will commence only after the initial six (6) months of the Agreement period. Reseller will not be eligible to receive Volume Performance discount unless a business plan has been agreed to between Reseller and Agilent.Should this Agreement be renewed, this section is also applicable during the first six (6) months of the renewal period.

[*] Denotes information for which confidential treatment has been requested.  Confidential portions omitted have been filed separately with the Securities and Exchange Commission.

TABLE 1

NET SALES VOLUME TARGET*

E305	Page 2 / 3
Revision Date 01-Nov-2008	Version Number 10

	AHA47
LSCA VALUE ADDED RESELLER COMPENSATION EXHIBIT	Exhibit E305

1st Half – Agreement period	2nd  Half – Agreement period	Agreement period – Annual Volume target
[*] USD	[*] USD	[*] USD

* If Reseller’s initial agreement period is less than 12 months the volume estimate will be prorated on the basis of 12 months.

3. DEMO DISCOUNT

Products purchased for demonstration and development purposes receive an additional discount of [*] percent ([*]%), subject to Section 7 in R200L.

4. WARRANTY

The following warranty terms shall apply:

a) Reseller will receive an on-site warranty for Products beginning upon Reseller’s acceptance and ending either ninety (90) days thereafter or on the date that Reseller ships the Product(s) to the end-user, whichever occurs first. The end user warranty period for Products begins ninety (90) days after Reseller’s acceptance or the date the Product is received by the end-user, whichever occurs first.

b) Agilent reserves the right to change the warranty.  Such changes will affect only new orders.

c) Reseller may provide more extensive warranties to end-users for certain Products only to the extent it receives Agilent's prior approval and provided further that Reseller indemnifies Agilent against damages, liability or claims arising from Reseller’s breach of such warranties or associated warranty service.

d) End-users must provide proof of purchase to be eligible for Agilent warranty service.

WARRANTY TO END USERS

a) Product warranty terms are provided with the Product, on quotations, upon request or at http://www.agilent.com/go/warranty_terms. Each Product receives a global warranty which includes the standard warranty for the country of purchase.

b) Agilent warrants the Agilent hardware and consumables Products against defects in materials and workmanship and that the Product will conform to Specifications. Agilent warrants that Agilent owned standard Software substantially conforms to Specifications.

c) If Agilent receives notice of defects or non-conformance during the warranty period, Agilent will, at its option, repair or replace the affected Product. Reseller or end user will pay expenses for return of such Product(s). Agilent will pay expenses for shipment of repaired or replacement Product(s).

d) THE ABOVE WARRANTIES ARE EXCLUSIVE, AND NO OTHER WARRANTY, WHETHER WRITTEN OR ORAL, IS EXPRESSED OR IMPLIED. AGILENT SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

[*] Denotes information for which confidential treatment has been requested.  Confidential portions omitted have been filed separately with the Securities and Exchange Commission.

E305	Page 3 / 3
Revision Date 01-Nov-2008	Version Number 10

S1 Exhibit E306

VALUE ADDED RESELLER BUSINESS PLAN LSCA PRODUCTS

Enter volumes in '000 USD          

1. Volume Estimation by Product Line

Product Lines	Q1	Q2	Q3	Q4	1H	2H	CY
PL AZ - GC Products	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL CA -Emerging Markets Measurement Solutions	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL BZ - GC/MS Products	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL 29 - LC Products	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL MA - Spectroscopy	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL 89 - LC Mass Spectrometers	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL LI - Laboratory Informatics	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PLs AA, 58, JW and BC -
Consumables and Columns	[*]	[*]	[*]	[*]	[*]	[*]	[*]
PL 8P - Replacement Parts	[*]	[*]	[*]	[*]	[*]	[*]	[*]
Total	[*]	[*]	[*]	[*]	[*]	[*]	[*]

Note:   The above Total amounts will serve as the basis for the calculation of the Volume Performance Discount.

2. Activities Planned to Qualify for Functional Discounts

A. Value added solutions

Please list all the proposed value add solutions based on Agilent Products you will offer (add lines as appropriate). These solutions will be the only Value Added Solutions for which discounts are available under this agreement. New solutions introduced during the Agreement period require Agilent approval to become eligible for the VAR discounts.

Solution 1:

Description	Environmental system including the Agilent GC/MS and the OI Eclipse P&T system.
Agilent Products content	7890, 5975C, and software

Solution 2:

Description	GC system including the Agilent GC and OI ELCD/PID detectors
Agilent Products content	7890 and GC or GC/MS software

Solution 3:

Description

Agilent Products content

3. Sales and Service Coverage   Release point for all regions is College Station, TX

Please define geographic area with abilities to provide on-site sales and service activities on regular basis under this Agreement. The geographic areas are subject to Agilent's prior written approval.

Countries / region	Number of sales personnel	Number of service personnel
North America and Latin America/AFO	[*]	[*]
Euorpe/EMEA	[*]	[*]
Asia/APFO	[*]	[*]

Demo capabilities: Please provide details of demo facility, planned demo inventory and demo specialists Demo facility includes a new 7890/5975C with capillary flow technology connected to an Eclipse P&T. There are other Agilent GC and GC/MS products in the production and R&D labs.

3. Customer Database Management

Please indicate your willingness to share enduser profiles with Agilent for improving effectiveness of marketing

	Yes	No
Do you maintain customer profile database	x
Are you willing to share customer profiles with Agilent		x

4. Support Plan

The following services will be available to customers:	Yes	No
Method development	x
Application assistance and troubleshooting	x
HW support	x
HW support online	x
SW support	x
SW support online	x
Other:

[*] Denotes information for which confidential treatment has been requested.  Confidential portions omitted have been filed separately with the Securities and Exchange Commission.

S1 Exhibit E306

VALUE ADDED RESELLER BUSINESS PLAN LSCA PRODUCTS

5. Marketing Plan

Indicate all the activities you plan to run independently from Agilent to promote your company and the products and marketing activities you will run for Agilent and with Agilent.

Customer seminars: [*]

Telemarketing Activities planned: [*]

Promotional Activities: [*]

		Yes	No
Participation with Agilent:	Would you like to participate in Agilent Sales activities?

Which Agilent Sales Activities do you feel are most effective: [*]

Reseller Signature:	/s/ J. Bruce Lancaster	Date:	6-Jan-09
Agilent Signature:	/s/ Bill Wynne	Date:	6-Jan-09

[*] Denotes information for which confidential treatment has been requested.  Confidential portions omitted have been filed separately with the Securities and Exchange Commission.

EX-31

EX-32

Exhibit 32

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of O.I. Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Bruce Lancaster, Chief Executive Officer/CFO certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ J. Bruce Lancaster
Name:	J. Bruce Lancaster
Title:	Chief Executive Officer and Principal Financial Officer
Date:	May 15, 2009

This certification is made solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and not for any other purpose.

A signed original of this written statement required by Section 906 has been provided to O.I. Corporation and will be retained by O.I. Corporation and furnished to the Securities and Exchange Commission or its staff upon request.