BW20030603002205 20030604T060046Z UTC
( BW)(PALL-CORPORATION)(PLC) Pall Corporation Third Quarter Sales and
Earnings Surge
Business Editors
UK REGULATORY NEWS
EAST HILLS, N.Y--(BUSINESS WIRE)--June 4, 2003--
Pall Corporation (NYSE: PLL) today reported sales and earnings
results for the third quarter and nine months of fiscal 2003, which
ended May 3, 2003.
Sales for the third quarter increased 39 1/2% to $421.5 million
compared with $302.4 million last year. Foreign exchange rates
increased sales 12% or $36.6 million. Earnings increased nearly 70%
and were $44.6 million, or 36 cents per share, excluding restructuring
and other charges, compared to last year's $26.4 million, or 21 cents
per share. Reported earnings for the third quarter were $40.4 million,
or 33 cents per share.
Sales for the nine months increased 32 1/2% to $1.142 billion compared
to $861.9 million last year. Foreign exchange rates increased sales 8%
or $68.1 million. Earnings were $92.8 million, or 75 cents per share,
excluding restructuring and other charges, compared to last year's
$64.3 million, or 52 cents per share. Restructuring and other charges
of $46.4 million, or 36 cents per share (including the pro forma tax
effect), were recorded in the nine months primarily to write-off the
in-process research and development from the acquired Filtration and
Separations Group ("FSG"). This reduced the reported results for the
nine months to earnings of $48.6 million, or 39 cents per share.
Eric Krasnoff, Pall's Chairman and CEO, said, "We are pleased to have
produced another solid quarter. Sales increased 39 1/2%. Earnings and
earnings per share each increased nearly 70%. Our results exceeded
analyst consensus estimates. Cash flow for the nine months was strong
and net debt has been reduced by $63 million.
"The first nine months of the fiscal year have seen substantial
progress on our three main goals. Those are to improve profitability,
to aggressively reduce debt and to successfully integrate FSG into
Pall. We are well ahead of our targets in each of these areas.
"The end of April marked our first anniversary as the "new Pall" with
FSG now fully integrated into our sales, marketing and technical
organizations. We are selling more to shared and new customers than we
could have alone. As important, operating margins have improved to
19.8% from 16.9% in the third quarter last year.
Among the highlights for the quarter:
"All Industrial business segments experienced double-digit sales
growth in the quarter ranging from 25 1/2 to 57%. In total, Industrial
sales were up 47%. Operating profit improved 114% to $43.7 million.
The General Industrial segment, which serves industries including food
and beverage, water processing and chemicals, achieved sales growth of
57%. Microelectronics posted its fourth consecutive quarter of
double-digit sales growth in a semiconductor market that is slowly
recovering. Aerospace also turned in a double-digit increase in sales
as Military Aerospace sales increased 55%. Commercial Aerospace held
steady in the quarter.
"Turning to Life Sciences, BioPharmaceuticals grew 16 1/2% compared to
last year's third quarter, buoyed by strong biotechnology sales.
Medical sales increased 6% sequentially over the second quarter but
were flat compared to the same quarter last year. Blood filter sales
were down 1 1/2% compared to last year as we continue to focus on
improving margins. Third quarter Medical profits came in at 19.5%,
building on the pattern of sequential operating profit improvement
that began with 7.8% in the first quarter.
"By region, Europe posted sales growth of 39%, Asia's sales grew by 36
1/2% and Western Hemisphere sales were up by 15% compared to last
year's third quarter. With sales growth of $33 million in the quarter
compared to our second quarter, operating margins in each geography
have improved considerably."
Commenting on the quarter's earnings growth compared to last year, Mr.
Krasnoff said, "The 15 cent improvement in earnings per share is
attributable to organic growth, aided by continuing cost reduction
programs, FSG synergies and also includes about 4 cents per share for
foreign exchange translation. Our estimate of $7 million in
acquisition-related synergies for this quarter indicates that full
year synergies continue to run ahead of our goal."
Looking ahead, Mr. Krasnoff continued, "We anticipate earnings per
share for the year in the range of $1.14 to $1.19. The midpoint of
this range is an increase of 9 cents per share from the midpoint of
our prior guidance range and, if achieved, represents a 42% increase
from the prior year's 82 cents per share."
Tomorrow, June 4, 2003, at 8:30 a.m. EST, Pall Corporation will host
its quarterly earnings conference call. Individuals can access the
webcast on the home page of the Company's website, www.pall.com.
Listening to the webcast requires speakers and Microsoft Windows Media
Player audio software. The webcast will be archived for 14 days.
About Pall Corporation:
Pall Corporation is the global leader in the rapidly growing field of
filtration, separations and purification. Pall's business is organized
around two broad markets: Life Sciences and Industrial. The Company
provides leading-edge products to meet the demanding needs of
customers in biotechnology, pharmaceuticals, transfusion medicine,
semiconductors, municipal drinking water and aerospace. Total revenues
in the last twelve months were about $1.5 billion. The Company is
headquartered in East Hills, New York. Further information can be
found on its Web site www.pall.com.
This release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These statements are
based on current Company expectations and are subject to risks and
uncertainties, which could cause actual results to differ materially.
Such risks and uncertainties include, but are not limited to:
fluctuations in foreign currency exchange rates; regulatory approval
and market acceptance of new technologies; changes in product mix and
product pricing and in interest rates and cost of raw materials; the
Company's success in enforcing its patents and protecting its
proprietary products and manufacturing techniques; global and regional
economic conditions and legislative, regulatory and political
developments; and domestic and international competition in the
Company's global markets. Additional information regarding these and
other factors is available on the web at www.pall.com and is included
in the Company's reports filed with the U.S. Securities and Exchange
Commission. Copies of such reports can be obtained, without charge,
at: www.sec.gov.
Financial Tables to Follow...
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
MAY 3, AUG. 3,
2003 2002
------------------------------------------------------------------
Assets
Cash and short-term investments $ 148,763 $ 145,424
Accounts receivable, net 394,166 415,853
Inventories, net 293,529 256,910
Other current assets 106,960 94,947
--------- ---------
Total current assets 943,418 913,134
Property, plant and equipment, net 597,993 605,095
Other assets 486,436 492,214
----------- -----------
Total assets $2,027,847 $2,010,443
----------- -----------
Liabilities and Stockholders' Equity
Short-term debt $ 57,626 $ 103,546
Accounts payable, income taxes and
other current liabilities 332,604 331,777
---------- -----------
Total current liabilities 390,230 435,323
Long-term debt 606,139 619,705
Deferred taxes and other non-current
liabilities 142,673 135,695
--------- ----------
Total liabilities 1,139,042 1,190,723
Stockholders' equity 888,805 819,720
---------- -----------
Total liabilities and stockholders'
equity $2,027,847 $2,010,443
------------ -----------
PALL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
THIRD QUARTER ENDED NINE MONTHS ENDED
------------------- -----------------
MAY 3, APR. 27, MAY 3, APR. 27,
2003 2002 2003 2002
----------------------------------------------------------------------
Net sales $421,491 $302,377 $1,142,223 $861,931
Cost of sales 205,587 145,482 579,933 425,946
-------- -------- --------- -------
Gross profit 215,904 156,895 562,290 435,985
Selling, general and
administrative
expenses 138,664 107,245 384,361 306,471
Research and
development 14,255 13,159 39,715 38,474
Restructuring and other
charges 5,036 - 46,335 -
Interest expense, net 5,765 2,590 19,238 8,668
-------- ------- ------- -------
Earnings before income
taxes 52,184 33,901 72,641 82,372
Provision for income
taxes 11,829 7,458 24,045 18,122
--------- ------- -------- --------
Net earnings $ 40,355 $ 26,443 $ 48,596 $ 64,250
--------- -------- -------- ---------
Earnings per share:
Basic: $ 0.33 $ 0.22 $ 0.40 $ 0.53
------- ------ ------ -------
Diluted: $ 0.33 $ 0.21 $ 0.39 $ 0.52
------- ------ ------- ------
Average number of
shares outstanding:
Basic: 123,146 122,336 122,983 122,242
Diluted: 123,891 123,512 123,745 123,478
Net earnings as
reported $ 40,355 $ 26,443 $ 48,596 $ 64,250
Restructuring and other
charges after pro forma
tax effect 4,277(a) - 44,205(a) -
---------- ------ -------- ------
Pro forma earnings $ 44,632 $ 26,443 $ 92,801 $ 64,250
------- ------ ------ -------
Diluted earnings per
share as reported $ 0.33 $ 0.21 $ 0.39 $ 0.52
Restructuring and
other charges $ 0.03(a)$ - $ 0.36(a)$ -
------ ----- ------- ------
Pro forma diluted
earnings per share $ 0.36 $ 0.21 $ 0.75 $ 0.52
----- ----- ------- -----
(a) Restructuring and other charges for the nine months includes
$37,600 (30 cents per share) of acquired in-process research and
development and $8,735 (6 cents per share, after pro forma tax
effect) of restructuring costs inclusive of $5,036 (3 cents per
share, after pro forma tax effect) incurred in the third quarter.
PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
% CHANGE
SALES MAY 3, APR. 27 % IN LOCAL
THIRD QUARTER ENDED: 2003 2002, CHANGE CURRENCY
------------------------------------------------------------------
MARKET SEGMENT
INFORMATION:
Medical(a) $ 83,985 $ 79,075 6 -
BioPharmaceuticals (a) 93,295 73,093 27 1/2 16 1/2
------ -------
Total Life Sciences 177,280 152,168 16 1/2 8
-------- -------
General Industrial 150,050 84,351 78 57
Aerospace 51,060 38,454 33 25 1/2
Microelectronics 43,101 27,404 57 1/2 46
------- -------
Total Industrial 244,211 150,209 62 1/2 47
-------- -------
Total $421,491 $302,377 39 1/2 27 1/2
--------- --------
GEOGRAPHIC
INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
---------------------------
Western Hemisphere $164,410 $141,829 16 15
Europe 178,536 107,328 66 1/2 39
Asia 78,545 53,220 47 1/2 36 1/2
------- --------
Total $421,491 $302,377 39 1/2 27 1/2
-------- --------
TOTAL SALES
-----------
Western Hemisphere $206,492 $172,721
Europe 202,241 123,853
Asia 79,680 53,609
Eliminations (66,922) (47,806)
--------- --------
Total $421,491 $302,377
--------- --------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
OPERATING PROFIT MAY 3, APR. 27,
THIRD QUARTER ENDED: 2003 % 2002 %
----------------------------------------------------------------------
MARKET SEGMENT
INFORMATION:
Medical(a) $16,413 19.5 $12,370 15.6
BioPharmaceuticals(a) 23,269 24.9 18,290 25.0
------- --------
Total Life Sciences 39,682 22.4 30,660 20.1
-------- --------
General Industrial 19,582 13.1 9,042 10.7
Aerospace 16,354 32.0 8,961 23.3
Microelectronics 7,761 18.0 2,416 8.8
------- ------
Total Industrial 43,697 17.9 20,419 13.6
------- ------
Subtotal 83,379 19.8 51,079 16.9
Restructuring and other
charges (5,036) -
General corporate expenses (20,394) (14,588)
Interest expense, net (5,765) (2,590)
-------- --------
Earnings before income
taxes $52,184 $33,901
-------- -------
GEOGRAPHIC INFORMATION:
Western Hemisphere $31,801 15.4 $19,981 11.6
Europe 36,996 18.3 22,956 18.5
Asia 13,858 17.4 8,607 16.1
Eliminations 724 (465)
-------- -------
Subtotal 83,379 19.8 51,079 16.9
Restructuring and other
charges (5,036)
General corporate expenses (20,394) (14,588)
Interest expense, net (5,765) (2,590)
--------- -------
Earnings before income
taxes $52,184 $33,901
--------- --------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
% CHANGE
SALES MAY 3, APR. 27, % IN LOCAL
NINE MONTHS ENDED: 2003 2002 CHANGE CURRENCY
----------------------------------------------------------------------
MARKET SEGMENT
INFORMATION:
Medical(a) $221,070 $219,243 1 (3 1/2)
BioPharmaceuticals (a) 249,010 205,967 21 13 1/2
----------- ----------
Total Life Sciences 470,080 425,210 10 1/2 4 1/2
----------- ----------
General Industrial 417,317 245,046 70 1/2 57 1/2
Aerospace 134,032 114,836 16 1/2 11 1/2
Microelectronics 120,794 76,839 57 49 1/2
----------- ----------
Total Industrial 672,143 436,721 54 44
----------- ----------
Total $1,142,223 $861,931 32 1/2 24 1/2
----------- ----------
GEOGRAPHIC INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
-------------------------
Western Hemisphere $453,569 $393,841 15 16
Europe 479,556 307,348 56 36
Asia 209,098 160,742 30 24
----------- ----------
Total $1,142,223 $861,931 32 1/2 24 1/2
----------- ----------
TOTAL SALES
-----------
Western Hemisphere $573,848 $479,596
Europe 541,140 350,238
Asia 211,953 162,097
Eliminations (184,718) (130,000)
----------- ----------
Total $1,142,223 $861,931
----------- ----------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
OPERATING PROFIT
NINE MONTHS ENDED: MAY 3, APR. 27,
2003 % 2002 %
----------------------------------------------------------------------
MARKET SEGMENT
INFORMATION:
Medical(a) $ 33,605 15.2 $ 28,566 13.0
BioPharmaceuticals(a) 54,480 21.9 51,558 25.0
---------- ---------
Life Sciences 88,085 18.7 80,124 18.8
---------- ---------
General Industrial 44,619 10.7 25,338 10.3
Aerospace 37,593 28.0 27,672 24.1
Microelectronics 19,821 16.4 2,560 3.3
---------- ---------
Industrial 102,033 15.2 55,570 12.7
---------- ---------
Subtotal 190,118 16.6 135,694 15.7
Restructuring and other
charges (46,335) -
General corporate expenses (51,904) (44,654)
Interest expense, net (19,238) (8,668)
---------- ---------
Earnings before income
taxes $ 72,641 $ 82,372
---------- ---------
GEOGRAPHIC INFORMATION:
Western Hemisphere $ 76,477 13.3 $ 51,564 10.8
Europe 83,994 15.5 57,640 16.5
Asia 31,509 14.9 26,174 16.1
Eliminations (1,862) 316
---------- ---------
Subtotal 190,118 16.6 135,694 15.7
Restructuring and other
charges (46,335) -
General corporate expenses (51,904) (44,654)
Interest expense, net (19,238) (8,668)
---------- ---------
Earnings before income
taxes $ 72,641 $ 82,372
---------- ---------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
Short Name: Pall Corporation
Category Code: QRT
Sequence Number: 00005444
Time of Receipt (offset from UTC): 20030603T214401+0100
--30--CK/ny*
CONTACT: Pall Corporation
John Adamovich, 516/801-9808
KEYWORD: NEW YORK UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BIOTECHNOLOGY MEDICAL MEDICAL DEVICES
PHARMACEUTICAL CONFERENCE CALLS EARNINGS
SOURCE: Pall Corporation
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