RNS Number:7287G
Pall Corporation
29 February 2000
For More Information Contact:
John Adamovich, Pall Corporation
(516) 484-5400
Pall Corporation Second Quarter Earnings Increase 112%
East Hills, NY (02/29/2000) - - Pall Corporation (NYSE: PLL) today reported
sales and earnings results for the second quarter and six months of fiscal 2000,
which ended January 29, 2000.
Sales for the quarter were up 6% at $294.7 million compared to $278.3 million in
the prior year. Foreign exchange rates reduced sales 2% or $6.1 million. In
local currency, sales were up 8% and, excluding fiscal 1999 sales of our now
divested Stratapac(R) business, the increase was 9%.
Sales for the six months grew 6 1/2% to $561.8 million compared to $528.1
million in the prior year. Foreign exchange rates reduced sales 1% or $6.9
million for the six months. In local currency sales were up 7 1/2% and,
excluding the fiscal 1999 divestiture, the increase was 8 1/2%.
Earnings for the second quarter were $33.8 million, equal to 27 cents per
diluted share, compared to $16.0 million, equal to 13 cents per diluted share in
the prior year. Earnings for the six months were $58.7 million, equal to 47
cents per diluted share, compared to $29.4 million, equal to 24 cents per
diluted share in the prior year. Prior year per share amounts have been
adjusted down by two cents for the quarter and three cents for the six months
for a change in an accounting principle related to start up costs.
Eric Krasnoff, Chairman and CEO, said, "Each market segment posted improvement
in profit margins in the quarter. Our blood filters and our Microelectronics
products used in semiconductor manufacture were the stars in boosting sales for
the quarter.
In the blood filter market, the movement toward universal leukocyte depletion of
blood continued strongly. For the quarter, sales of our blood filters to blood
centers grew 55%, continuing the trend away from hospitals. Confirming this,
sales to hospitals declined 23%. In local currency, Pall's overall blood filter
sales growth was 18%.
We are very confident in Pall's future growth prospects in this market as well.
We added manufacturing capacity in Europe through the purchase of a state of the
art manufacturing plant in Italy. Demand is high in Europe, where our blood
filter sales grew 24% in the quarter.
In our Microelectronics subsegment, sales increased 69% in the quarter. Here,
Pall's sales are benefiting from the surging semiconductor industry. Backlog
again increased and is now 140% higher than this time last year. Sales in the
Western Hemisphere doubled and both Asia and Europe showed increases of more
than 50%.
By geography, we continued to see double digit local currency sales growth in
both the Western Hemisphere and Asia, while Europe was up 4 1/2%.
The benefits of the restructuring we started in the third quarter last year
coupled with our on-going cost reduction program and local currency growth in
the top-line can clearly be seen in the earnings.
We started the year with three goals to help increase our earnings per share by
30% (excluding last year's one time charge) and achieve at least a 19% return on
equity. Those goals were:
- Increase local currency sales growth in the range of 8% to 10%
- Stop the reduction in gross margins
- Reducing selling, general and administrative expenses plus R & D as a
percentage of sales by at least 2 percentage points.
At the end of six months, cost of sales has come down by 1 percentage point to
46.5% and our other costs have been reduced by 5 1/2 percentage points to 38.6%
as a percentage of sales. With operating profit increasing 45% from 14.6% of
sales to 19.8% of sales and with corporate costs down 14% in the six months, we
are on target for a record year in both sales and earnings. These goals are
fully intact and we now believe we can exceed the goal of 30% growth in earnings
per share compared to last year's 92 cents.
Looking at the Balance Sheet, net debt as a percentage of net debt plus equity
stayed at 28% as we bought back $13.0 million of our stock in the quarter and
$14.6 million for the six month period. Capital expenditures in the half year
were $28.4 million and our depreciation and amortization was $34.9 million."
With annual sales over $1 billion, Pall Corporation is based in East Hills, New
York, USA and operates directly in about 30 countries. Pall Corporation
provides innovative solutions to complex filtration and separations problems in
four major markets: Medical, BioPharmaceuticals, Aeropower and Fluid Processing.
The Company's shares are listed on the New York Stock Exchange (PLL). Further
information is available on the Company's web site at 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 risk and uncertainties which could cause
actual results to differ materially. Such risks and uncertainties include, but
are not limited to, foreign currency exchange fluctuations, regulatory
approvals, market acceptance of new technologies, economic conditions and market
demand.
Tomorrow, March 1, 2000, at 10:00 am EST, Pall Corporation will host its
quarterly earnings conference call. The call will be Webcast live over the
Internet. Go to the Vcall web site at http://www.vcall.com and click on the
"Today's Vcall's" button.
PALL CORPORATION MARKET AND GEOGRAPHIC SEGMENT INFORMATION
DOLLAR AMOUNTS IN THOUSANDS
SALES
% CHANGE
OPERATING OPERATING IN LOCAL
SALES PROFIT % SALES PROFIT % %CHANGE CURRENCY
SECOND QUARTER
ENDED: JANUARY 29, 2000 JANUARY 30, 1999
MARKET SEGMENT
INFORMATION:
Medical $76,139 29.0 $66,039 21.1 15 1/2 17 1/2
Biopharmaceuticals 79,057 22.2 82,223 11.2 (4) (1)
Aerospace 31,083 32,061 (3) (1 1/2)
Industrial
Hydraulics 34,477 32,651 5 1/2 11
Total Aeropower 65,560 22.5 64,712 20.4 1 1/2 5
Microelectronics 24,678 14,202 74 69
Industrial Process 49,265 51,079 (3 1/2) (2)
Total Fluid
Processing 73,943 8.7 65,281 5.3 13 1/2 13 1/2
Total $294,699 20.6 $278,255 14.3 6 8
GEOGRAPHIC SEGMENT
INFORMATION:
Western
Hemisphere $133,600 23.3 $120,793 15.7 10 1/2 10 1/2
Europe 106,104 20.9 112,050 21.2 (5 1/2) 4 1/2
Asia 54,995 16.2 45,412 5.6 21 11
Total $294,699 20.6 $278,255 14.3 6 8
SIX MONTHS
ENDED: JANUARY 29, 2000 JANUARY 30, 1999
MARKET SEGMENT
INFORMATION:
Medical $143,289 25.7 $126,089 18.8 13 1/2 15
Bio
Pharmaceuticals 153,636 21.7 153,401 12.8 - 2
Aerospace 61,096 61,962 (1 1/2) (1/2)
Industrial
Hydraulics 65,768 63,022 4 1/2 8 1/2
Total Aeropower 126,864 23.4 124,984 22.1 1 1/2 4
Microelectronics 43,500 25,900 68 61 1/2
Industrial Process 94,532 97,731 (3 1/2) (3)
Total Fluid
Processing 138,032 8.2 123,631 4.7 11 1/2 10 1/2
Total $561,821 19.8 $528,105 14.6 6 1/2 7 1/2
GEOGRAPHIC SEGMENT
INFORMATION:
Western
Hemisphere $256,315 23.5 $233,684 13.6 9 1/2 9 1/2
Europe 203,562 20.7 211,712 22.3 (4) 4 1/2
Asia 101,944 14.1 82,709 4.2 23 1/2 10
Total $561,821 19.8 $528,105 14.6 6 1/2 7 1/2
PALL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
SECOND QUARTER ENDED SIX MONTHS ENDED
JAN 29 JAN 30 JAN 29 JAN 30
2000 1999 2000 1999
REVENUES
Net Sales $294,699 $278,255 $561,821 $528,105
COSTS AND
EXPENSES
Cost of Sales (a) 136,683 133,764 261,429 251,104
Selling, general
and administrative
expenses 98,857 105,684 193,590 202,571
Research and
development 11,680 15,034 23,498 29,969
Interest Expense, net 3,546 3,035 7,036 5,983
Total costs and
expenses 250,766 257,517 485,553 489,627
Earnings before
income taxes 43,933 20,738 76,268 38,478
Provisions for
income taxes 10,105 4,764 17,542 9,043
Net Earnings $ 33,828 $ 15, 974 $ 58,726 $ 29,435
Earnings per
Share (a):
Basic: $ 0.27 $ 0.13 $ 0.47 $ 0.24
Diluted: $ 0.27 $ 0.13 $ 0.47 $ 0.24
Average number
of shares
outstanding:
Basic 123,952 124,595 124,049 124,339
Diluted: 124,860 125,067 124,994 124,831
(a) The 1999 amounts include previously capitalized start up costs of $5,767,
3 cents per share ($1,567, 1 per cent share, and $4,200, 2 cents per share, in
the first and second quarters of fiscal 1999, respectively) expensed as a result
of adopting a new accounting principle in the third quarter of fiscal 1999.
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
JAN 29, JULY 31,
2000 1999
Assets
Cash and short-term investments $ 122,445 $ 137,177
Accounts receivable, net 283,096 326,197
Inventories 203,950 205,867
Other current assets 79,348 74,948
Total current assets 688,839 744,189
Property, plant and equipment, net 506,063 507,016
Other assets 241,087 237,122
Total assets $1,435,989 $1,488,327
Liabilities and Stockholders' Equity
Short term debt $ 310,375 $ 339,153
Accounts payable, income taxes
and other current liabilities 205,411 219,126
Total current liabilities 515,786 558,279
Long term debt 100,863 116,815
Deferred taxes and other
non current liabilities 86,935 82,569
Stockholders' equity 732,405 730,664
Total Liabilities and
stockholders' equity $1,435,989 $1,488,327
END
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