BW20030304002112 20030304T223439Z UTC
( BW)(PALL-CORPORATION)(PLC) Interim Results
Business Editors
UK REGULATORY NEWS
EAST HILLS, N.Y--(BUSINESS WIRE)--Mar. 4, 2003--
Pall Corporation Reports 36% Sales Increase and Over 70%
Earnings Increase in Second Quarter
Pall Corporation (NYSE: PLL) today reported sales and earnings results
for the second quarter and six months of fiscal 2003, which ended
February 1, 2003.
Sales for the second quarter increased 36% to $388.5 million compared
with $285.4 million last year. Foreign exchange rates increased sales
8 1/2% or $24.2 million. Excluding restructuring and other charges,
pro forma earnings increased 73 1/2% and were $32.0 million, or 26
cents per share, compared to last year's $18.4 million, or 15 cents
per share. Reported earnings for the second quarter were $31.4
million, or 25 cents per share.
Sales for the six months increased 29% to $720.7 million compared to
$559.6 million last year. Foreign exchange rates increased sales 6% or
$31.5 million. Excluding restructuring and other charges, pro forma
earnings were $48.2 million, or 39 cents per share, compared to last
year's $37.8 million, or 31 cents per share. Restructuring and other
charges of $39.9 million, or 32 cents per share including the pro
forma tax effect, were recorded in the six 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 six months to earnings of $8.2 million, or 7 cents per
share.
Eric Krasnoff, Pall's Chairman and CEO, said, "Our second quarter
performance was uniformly robust. Earnings grew over 70% compared to
last year and exceeded both our own and analyst consensus
expectations. Life Sciences as expected was strong. The Industrial
side of our business showed resiliency and strength across all major
sectors. For Pall as a whole, expenses were well controlled and
foreign exchange provided more of a benefit than originally projected.
The General Industrial Group, which serves industries including food
and beverage, water processing and chemicals, achieved sales growth of
60 1/2% compared to last year and generated operating profits of $14.2
million. This is an increase of 144% over last year. The
Microelectronics Group posted double-digit sales growth for the third
consecutive quarter. Its operating profits grew over $7 million in the
quarter to 17.7% compared to break even in last year's second quarter.
The Aerospace Group's sales grew 13%, posting an operating profit
margin of 27.7%, up from 18.7% last year. Overall, Industrial business
operating profits have improved by 159% in the quarter.
Turning to Life Sciences, the BioPharmaceuticals Group grew 12%
compared to last year's second quarter, buoyed by strong biotechnology
sales. Medical Group sales grew 4% over last year's second quarter and
the operating profit margin was 16%. Looking at Medical sequentially,
sales increased 36 1/2% and operating profit margins more than doubled
compared to the first quarter.
By region, Europe posted sales growth of 36 1/2%, Asia's sales grew by
26% and the Western Hemisphere sales were up by 21% compared to last
year's second quarter. With sales growth of over $50 million in the
quarter compared to our first quarter, operating margins in each
geography have improved considerably."
Commenting on the quarter's earnings growth compared to last year, Mr.
Krasnoff said, "Organic growth, aided by continuing cost reduction
programs, contributed 4 cents in earnings per share. The change in
foreign exchange rates also added about 4 cents. We estimate that FSG
was accretive by about 3 cents. Our estimate of $5 million in
acquisition-related synergies for this quarter indicates that full
year synergies are running ahead of our $15 million goal."
Looking ahead, Mr. Krasnoff continued, "We anticipate earnings per
share for the year in the range of $1.02 to $1.12. This is an increase
of 2 cents from the midpoint of our prior guidance range and a 30%
increase from the prior year's 82 cents per share. For the third
quarter, we expect earnings per share in the range of 28 to 33 cents."
Mr. Krasnoff also announced top management changes, saying, "Pall's
President, Jeremy Hayward-Surry, is following through on his
long-standing plan to retire at the end of this fiscal year at age 60.
He has been a leader and force in our company for almost 30 years. I
wish him equal success and happiness in retirement.
Marcus Wilson, currently Pall's Executive Vice President, will succeed
Jeremy as President on August 1, 2003. Marc has been with Pall since
1978 and has broad experience in all facets of the business. He
currently manages Pall's European operations and will relocate to Long
Island, New York this summer.
Don Stevens, another Pall veteran, has been promoted to the newly
created position of Chief Operating Officer. Marc and Don will join me
to form an 'Office of the Chief Executive.' We will work closely
together to guide the strategic direction of the company," concluded
Mr. Krasnoff.
Tomorrow, March 5, 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,
http://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
for fiscal 2002 were about $1.3 billion. The Company is headquartered
in East Hills, New York, and has operations in more than 30 countries.
Further information can be found on its Web site http://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 and in integrating
the operations of FSG into the Company's business; 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 http://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: http://www.sec.gov.
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
FEB. 1, AUG. 3,
2003 2002
Assets
Cash and short-term investments $ 123,185 $ 145,424
Accounts receivable, net 373,015 415,853
Inventories, net 280,547 256,910
Other current assets 95,898 94,946
Total current assets 872,645 913,133
Property, plant and equipment, net 607,727 605,095
Other assets 482,549 500,995
Total assets $1,962,921 $2,019,223
Liabilities and Stockholders' Equity
Short-term debt $ 61,268 $ 103,546
Accounts payable, income taxes
and other current liabilities 296,738 331,777
Total current liabilities 358,006 435,323
Long-term debt 598,838 619,705
Deferred taxes and other
non-current liabilities 162,372 144,475
Total liabilities 1,119,216 1,199,503
Stockholders' equity 843,705 819,720
Total liabilities and
stockholders' equity $1,962,921 $2,019,223
PALL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
SECOND QUARTER ENDED SIX MONTHS ENDED
FEB. 1, JAN. 26 FEB. 1, JAN. 26,
2003 2002 2003 2002
Net sales $388,522 $285,435 $720,732$ 559,554
Cost of sales 200,085 145,394 374,346 280,464
Gross profit 188,437 140,041 346,386 279,090
Selling, general and
administrative expenses 128,837 101,152 245,697 199,226
Research and development 12,415 12,468 25,460 25,315
Restructuring and other
charges 924 - 41,299 -
Interest expense, net 6,207 2,815 13,473 6,078
Earnings before
income taxes 40,054 23,606 20,457 48,471
Provision for
income taxes 8,675 5,191 12,216 10,664
Net earnings $ 31,379 $ 18,415 $ 8,241 $ 37,807
Earnings per share:
Basic: $ 0.26 $ 0.15 $ 0.07 $ 0.31
Diluted: $ 0.25 $ 0.15 $ 0.07 $ 0.31
Average number of
shares outstanding:
Basic: 122,948 122,151 122,893 122,200
Diluted: 123,551 123,408 123,612 123,530
Net earnings
as reported $ 31,379 $ 18,415 $ 8,241 $ 37,807
Restructuring and other
charges after pro forma
tax effect 585(a) - 39,928(a) -
Pro forma earnings $ 31,964 $ 18,415 $ 48,169 $ 37,807
Diluted earnings per
share as reported $ 0.25 $ 0.15 $ 0.07 $ 0.31
Restructuring and
other charges $ 0.01(a) $ - $ 0.32(a) $ -
Pro forma diluted
earnings per share $ 0.26 $ 0.15 $ 0.39 $ 0.31
(a) Restructuring and other charges for the six months includes
$37,600 (30 cents per share) of acquired in-process research and
development and restructuring costs of $2,328 (2 cents per share,
after pro forma tax effect) inclusive of $585 (1 cent per share,
after pro forma tax effect) incurred in the second quarter.
PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
% CHANGE
SALES % IN LOCAL
SECOND QUARTER ENDED: FEB. 1, 2003 JAN. 26, 2002 CHANGE CURRENCY
MARKET SEGMENT
INFORMATION:
Medical(a) $ 79,119 $ 72,733 9 4
BioPharmaceuticals (a) 81,652 68,345 19 1/2 12
Total Life Sciences 160,771 141,078 14 8
General Industrial 140,888 80,738 74 1/2 60 1/2
Aerospace 46,019 38,738 19 13
Microelectronics 40,844 24,881 64 55
Total Industrial 227,751 144,357 58 47
Total $388,522 $285,435 36 27 1/2
GEOGRAPHIC
INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
Western
Hemisphere $151,092 $126,320 19 1/2 21
Europe 165,970 105,284 57 1/2 36 1/2
Asia 71,460 53,831 33 26
Total $388,522 $285,435 36 27 1/2
TOTAL SALES
Western
Hemisphere $189,719 $153,128
Europe 185,548 119,569
Asia 72,306 54,396
Eliminations (59,051) (41,658)
Total $388,522 $285,435
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
OPERATING PROFIT
SECOND QUARTER ENDED: FEB. 1, 2003 % JAN. 26,2002 %
MARKET SEGMENT
INFORMATION:
Medical(a) $ 12,665 16.0 $ 11,597 15.9
BioPharmaceuticals(a) 16,039 19.6 16,350 23.9
Life Sciences 28,704 17.9 27,947 19.8
General Industrial 14,213 10.1 5,832 7.2
Aerospace 12,752 27.7 7,246 18.7
Microelectronics 7,246 17.7 114 .5
Industrial 34,211 15.0 13,192 9.1
Subtotal 62,915 16.2 41,139 14.4
Restructuring and other charges (924) -
General corporate expenses (15,730) (14,718)
Interest expense, net (6,207) (2,815)
Earnings before income taxes $ 40,054 $ 23,606
GEOGRAPHIC INFORMATION:
Western Hemisphere $ 24,727 13.0 $ 13,348 8.7
Europe 29,271 15.8 19,198 16.1
Asia 11,192 15.5 8,763 16.1
Eliminations (2,275) (170)
Subtotal 62,915 16.2 41,139 14.4
Restructuring and other charges (924)
General corporate expenses (15,730) (14,718)
Interest expense, net (6,207) (2,815)
Earnings before income taxes $ 40,054 $ 23,606
(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 % IN LOCAL
SIX MONTHS ENDED: FEB. 1, 2003 JAN.26, 2002 CHANGE CURRENCY
MARKET SEGMENT
INFORMATION:
Medical(a) $137,085 $140,168 (2) (5 1/2)
BioPharmaceuticals (a) 155,715 132,874 17 12
Total Life Sciences 292,800 273,042 7 3
General Industrial 267,267 160,695 66 1/2 57 1/2
Aerospace 82,972 76,382 8 1/2 4 1/2
Microelectronics 77,693 49,435 57 51 1/2
Total Industrial 427,932 286,512 49 1/2 42 1/2
Total $720,732 $559,554 29 23
GEOGRAPHIC INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
Western
Hemisphere $ 289,159 $252,012 14 1/2 16 1/2
Europe 301,020 200,020 50 1/2 34 1/2
Asia 130,553 107,522 21 1/2 17 1/2
Total $ 720,732 $559,554 29 23
TOTAL SALES
Western
Hemisphere $ 367,356 $306,875
Europe 338,899 226,385
Asia 132,273 108,488
Eliminations (117,796) (82,194)
Total $ 720,732 $559,554
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
OPERATING PROFIT
SIX MONTHS ENDED: FEB. 1, 2003 % JAN. 26,2002 %
MARKET SEGMENT
INFORMATION:
Medical(a) $ 17,192 12.5 $ 16,196 11.6
BioPharmaceuticals(a) 31,211 20.0 33,268 25.0
Life Sciences 48,403 16.5 49,464 18.1
General Industrial 25,037 9.4 16,296 10.1
Aerospace 21,239 25.6 18,711 24.5
Microelectronics 12,060 15.5 144 .3
Industrial 58,336 13.6 35,151 12.3
Subtotal 106,739 14.8 84,615 15.1
Restructuring and other charges (41,299) -
General corporate expenses (31,510) (30,066)
Interest expense, net (13,473) (6,078)
Earnings before income taxes $ 20,457 $ 48,471
GEOGRAPHIC INFORMATION:
Western Hemisphere $ 44,676 12.2 $ 31,583 10.3
Europe 46,998 13.9 34,684 15.3
Asia 17,651 13.3 17,567 16.2
Eliminations (2,586) 781
Subtotal 106,739 14.8 84,615 15.1
Restructuring and other charges (41,299) -
General corporate expenses (31,510) (30,066)
Interest expense, net (13,473) (6,078)
Earnings before income taxes $ 20,457 $ 48,471
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
Short Name: Pall Corporation
Category Code: IR
Sequence Number: 00002519
Time of Receipt (offset from UTC): 20030304T211956+0000
--30--ad/ny db/in
CONTACT: Pall Corporation
John Adamovich, 516/801-9808
KEYWORD: NEW YORK UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BIOTECHNOLOGY MEDICAL MEDICAL DEVICES
PHARMACEUTICAL CHEMICALS/PLASTICS CONFERENCE CALLS EARNINGS
SOURCE: Pall Corporation
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