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You are about to review presentations, news releases, reports and/or filings of Pall Corporation that contain time-sensitive information. The information contained therein is only accurate as of the date thereof. Pall Corporation will not be reviewing or updating the material that is contained in these items after the date thereof. The information contained therein may be updated, amended, supplemented or otherwise altered by subsequent presentations, news releases, reports and/or filings by Pall Corporation. |
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Pall Corporation Earnings Up 26% East Hills, NY (June 9, 2008) - - Pall Corporation (NYSE: PLL) today reported its full financial results for the third quarter ended April 30, 2008.Sales and Earnings Overview Third quarter sales increased 18.3% to $661.7 million compared to the third quarter of fiscal 2007. Diluted earnings per share were $0.51 compared to $0.40 (as restated). Net earnings were $63.3 million versus $50.4 million (as restated). Pro forma earnings per share excluding restructuring and other charges were $0.54 versus last year's $0.45 (as restated). Sales for the nine months ended April 30, 2008 were approximately $1.8 billion, a 15.3% increase over the comparable period. Diluted EPS were $1.19, up from $0.89 (as restated). Net earnings were $147.4 million compared to last year's $110.7 million (as restated). Pro forma earnings excluding restructuring and other charges were $1.36 per share versus $1.02 (as restated) a year ago. Sales in local currency (“LC”) increased $53.5 million, or 9.6%, in the quarter and $132.2 million, or 8.3%, for the nine months. Foreign currency translation increased reported sales by $48.8 million or 8.7%, for the quarter, and $112.6 million, or 7%, for the nine months. The impact of foreign currency translation added approximately $0.04 to earnings per share in the quarter and $0.08 for the nine months. Eric Krasnoff, Chairman and CEO, stated, "Pall's market, application and geographic diversity give our Total Fluid Management capability teeth. Sales growth was again broad-based across markets and geographies as the Company's technologies are increasingly applied to solve a wide range of fluid management challenges. Our well-established process improvement initiatives continue to drive costs down. Despite a 66% increase in systems sales this quarter, gross margins approached 49%. Our working capital management initiatives improved operating cash flow more than 40% within the quarter to over $90 million. We continue to make significant progress toward our short and long-term goals."
Within Life Sciences, sales in BioPharmaceuticals increased almost 10%. Consumables sales exceeded 6% growth and were particularly strong in Europe as vaccine production and biotech activity increased. As expected, Medical sales decreased just under 3% on lower Blood Filtration sales. Other products within the Medical portfolio, including hospital water filters and disposable systems for cell therapy applications, posted solid results. Laboratory product sales increased over 9%. Operating profit margin improved to 22.1% reflecting price increases and SG&A cost reductions.
Pall Industrial delivered a very strong quarter. Every market within General Industrial reported double-digit sales increases. Growth in Municipal Water and Food and Beverage was particularly robust. Systems sales, which are concentrated within General Industrial, grew close to 60%. The installed base of systems within these markets helped to drive consumable sales growth of nearly 10%. Long-term customer partnerships, which lead to a combination of strong system and consumable sales, are the goal of Pall's Total Fluid Management (SM) strategy. Within Aerospace and Transportation, Commercial Aerospace sales grew 16% driven by strong after-market demand and increased sales to airframe manufacturers. Military sales increased about 31% aided by helicopter upgrade projects in the U.S. and military water systems in Asia. Microelectronics sales were down 4% as the cyclical downturn in the semiconductor market continues. Our macroelectronics market continued to grow with demand for high-tech electronics and solar cells. Operating profit increased about 22% to $66.2 million while operating profit margin declined slightly on very strong systems sales. Conclusion/Outlook Mr. Krasnoff concluded, “Looking at this full fiscal year, we expect sales growth in the mid-single digit range with Pall Industrial slightly outpacing Pall Life Sciences. Gross margins are expected to be level to slightly improved and SG&A expense to decrease to just over 29% of sales. Pro forma earnings per share are expected to be at or above the high end of our guidance range." Conference Call On Tuesday June 10, 2008, at 8:30 am ET, Pall Corporation will host a conference call to review these results. The call will be webcast and individuals can access it at www.pall.com/investor. Listening to the webcast requires audio speakers and Microsoft Windows Media Player software. The webcast will be archived for 30 days. Special Note on Financial Tables The 2007 financial tables presented below reflect the restatement of interest expense and provision for taxes. For further details on the restatement, refer to Note 2, Audit Committee Inquiry and Restatement, to the consolidated financial statements in the Company's fiscal year 2007 Annual Report on Form 10-K. About Pall Corporation Pall Corporation is the global leader in the rapidly growing field of filtration, separation and purification. Pall is organized into two businesses: Life Sciences and Industrial. These businesses provide leading-edge products to meet the demanding needs of customers in biotechnology, pharmaceutical, transfusion medicine, energy, electronics, water purification, aerospace, transportation and broad industrial markets. Total revenues for fiscal year 2007 were $2.2 billion. The Company is headquartered in East Hills, New York and has extensive operations around the world. For more information visit Pall at http://www.pall.com./ Forward-Looking Statements The matters discussed in this release contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this release and in the Company’s other written and oral reports are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. All statements regarding future performance, earnings projections, earnings guidance, management’s expectations about its future cash needs and effective tax rate, and other future events or developments are forward-looking statements. Such risks and uncertainties include, but are not limited to: risks relating to the Company’s restatement of prior period financial statements, including the risks associated with the pending IRS audit and pending SEC and Department of Justice investigations and litigation proceedings; risks associated with the Company’s planned cash management initiatives, which may result in changes in the Company's effective tax rate; changes in product mix and product pricing may affect the Company’s operating results particularly as the systems business expands in which significantly longer sales cycles are experienced with less predictable revenue and profitability and less certainty of future revenue streams from related consumable product offerings and services; increases in costs of manufacturing and operating costs, including energy and raw materials; the Company’s ability to achieve the savings anticipated from its cost reduction and margin improvement initiatives including the timing of completion of its facilities rationalization initiative; fluctuations in foreign currency exchange rates and interest rates; regulatory approval or market acceptance of new technologies; changes in demand for the Company’s products and business relationships with key customers and suppliers including delays or cancellations in shipments; success in enforcing patents and protecting proprietary products and manufacturing techniques; risks associated with the completion or integration of acquisitions; domestic and international competition; and global and regional economic conditions, including particularly the impact of current challenging conditions in the United States that may also have global implications; and legislative, regulatory and political developments. The Company makes these statements as of the date of this disclosure and undertakes no obligation to update them. You should carefully consider these factors as well as the additional risk factors outlined in more detail in our most recent Annual Report on Form 10-K under Item 1A, Risk Factors, and in other filings the Company makes with the Securities and Exchange Commission. Management uses certain non-GAAP measurements to assess the Company's current and future financial performance. The non-GAAP measurements do not replace the presentation of Pall's GAAP financial results. These measurements provide supplemental information to assist management in analyzing the Company's financial position and results of operations. The Company has chosen to provide this information to facilitate meaningful comparisons of past, present and future operating results and as a means to emphasize the results of ongoing operations.
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