RNS Number:6598L
Pall Corporation
5 June 2000
For More Information Contact:
John Adamovich, Pall Corporation
(516) 484 5400
Pall Corporation Third Quarter Earnings Per Share Increases 21%
East Hills, NY (05/24/2000) - - Pall Corporation (NYSE: PLL) today reported
sales and earnings results for the third quarter and nine months of fiscal 2000,
which ended April 29, 2000.
Sales for the quarter of $318.0 million increased 6% compared to $299.9 million
in the prior year. In local currency, sales were up 8%. Foreign exchange rates
reduced sales 2% or $5.9 million.
Sales for the nine months grew 6 1/2% to $879.9 million compared to $828.0
million in the prior year. Local currency sales were up 8%. Foreign exchange
rates reduced sales 1 1/2% or $12.8 million for the nine months.
Earnings for the third quarter were $41.8 million, equal to 34 cents per share
and an increase of 21%, compared to recurring earnings of $35.2 million, equal
to 28 cents per share in the prior year. Earnings for the nine months were
$100.5 million, equal to 81 cents per share and an increase of 56%, compared to
recurring earnings of $64.6 million, equal to 52 cents per share in the prior
year.
During last year's third quarter, the Company took a non-recurring charge of 51
cents per share (including pro forma tax effect) in connection with a
restructuring plan. Including the nonrecurring charge, last year's third quarter
and nine month per share amounts were a loss of 23 cents and income of 1 cent,
respectively.
Eric Krasnoff, Chairman and CEO, said, "Increased revenues and the benefits of
our cost reduction efforts continue to show in the operating margin, which
increased to 22.9% of sales in the quarter. As expected, third quarter's sales
were driven by the trends seen earlier this year in blood filters and
Microelectronics, as well as a strong showing by our Industrial Process
business.
In the blood filter market, the movement toward universal leukocyte depletion of
blood continued strongly. Confirming this, overall blood filter sales growth for
the quarter was 15% in local currency. Demand was high in both the Western
Hemisphere and Europe, where overall sales of blood filters grew 20% and 18%,
respectively. Continuing the trend away from hospitals, our blood filter sales
to blood centers grew 37% and sales to hospitals declined 7%.
In the Microelectronics subsegment, sales increased 52 1/2% in the quarter.
Here, Pall's sales continue to benefit from the surging semiconductor industry
and a surge of new products. As a critical supplier to this market, we expect
strong growth to continue. Backlog again increased and is now nearly 200% higher
than this time last year.
In the quarter, the Water Processing Division of Industrial Process more than
doubled its orders from $8 million to $17 million. Pall has become a key
supplier to the municipal water market, which has embraced our membrane-based
Aria(SM) water treatment systems.
By geography, we continue to see double-digit local currency sales growth in
both the Western Hemisphere and Asia. Europe is coming off two years of
excellent growth and has been relatively quiet this year.
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, continue to clearly be seen in the earnings.
We started the year with the twin goals of increasing our earnings per share by
30% over last year's 92 cents (excluding last year's one-time charge) and
achieving at least a 19% return on equity. Results for the nine months indicate
that those goals are very much intact. We continue to believe earnings per share
will increase 30 - 35% for the year excluding one-time charges.
At the end of nine months, cost of sales has come down by 60 basis points to
46.0% and our other costs have been reduced by 4 1/2 percentage points to 37.9%
as a percentage of sales. With operating profit increasing by 380 basis points
from 17.1% of sales to 20.9% of sales and with corporate costs down 13.5% in the
nine months, we are on target for a record year in both sales and earnings.
We have pledged to continue to reduce costs beyond the major restructuring
efforts of last year. In this regard, we recently announced the planned closing
of three manufacturing facilities. There will also be an expansion and
redefinition of our medical manufacturing structure to lower costs. These
actions and others will result in a one-time charge in the fourth quarter of
this year. We expect this cost to be around $10 million and it may well be less.
Our aim is that the resulting savings will pay for this one-time charge in the
next two years."
Pall is the broadest-based filtration, separations and purification company in
the world and serves more markets with more proprietary products than any other
company in the $18 billion filtration industry. With annual sales of over $1
billion, Pall Corporation is based in East Hills, New York, USA and operates
directly in 30 countries. The Company provides innovative solutions to complex
filtration and separations problems in four major markets: Medical,
BioPharmaceuticals, Aeropower and Industrial 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 risks 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, May 25, 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
THIRD QUARTER ENDED: APRIL 29, 2000 MAY 1, 1999
MARKET SEGMENT
INFORMATION:
Medical $ 76,455 27.9 $ 68,362 29.0 12 13 1/2
BioPharmaceuticals 83,671 23.1 90,006 21.3 (7) (4 1/2)
Aerospace 34,875 36,881 (5 1/2) (4)
Industrial
Hydraulics 35,477 32,471 9 1/2 15
Total Aeropower 70,352 24.0 69,352 25.1 1 1/2 5
Microelectronics 27,774 17,936 55 52 1/2
Industrial Process 59,797 54,240 10 11 1/2
Total Fluid
Processing 87,571 17.5 72,176 11.9 21 1/2 21 1/2
Total $318,049 22.9 $299,896 21.7 6 8
GEOGRAPHIC SEGMENT INFORMATION:
Western
Hemisphere $150,156 27.4 $133,569 20.8 12 1/2 12 1/2
Europe 111,282 21.5 119,789 25.3 (7) 1
Asia 56,611 17.7 46,538 12.4 21 1/2 13
Total $318,049 22.9 $299,896 21.7 6 8
NINE MONTHS ENDED: APRIL 29, 2000 MAY 1, 1999
MARKET SEGMENT
INFORMATION:
Medical $219,744 26.5 $194,451 22.4 13 14 1/2
BioPharmaceuticals 237,307 22.2 243,407 16.0 (2 1/2) (1/2)
Aerospace 95,971 98,843 (3) (1 1/2)
Industrial
Hydraulics 101,245 95,493 6 10 1/2
Total Aeropower 197,216 23.6 194,336 23.1 1 1/2 4 1/2
Microelectronics 71,274 43,836 62 1/2 58
Industrial Process 154,329 151,971 1 1/2 2
Total Fluid
Processing 225,603 11.8 195,807 7.3 15 14 1/2
Total $879,870 20.9 $828,001 17.1 6 1/2 8
GEOGRAPHIC SEGMENT INFORMATION:
Western
Hemisphere $406,471 24.9 $367,253 16.2 10 1/2 10 1/2
Europe 314,844 21.0 331,501 23.4 (5) 3 1/2
Asia 158,555 15.4 129,247 7.1 22 1/2 11 1/2
Total $879,870 20.9 $828,001 17.1 6 1/2 8
PALL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
THIRD QUARTER ENDED NINE MONTHS ENDED
APRIL 29, MAY 1, APRIL 29, MAY 1,
2000 1999 2000 1999
REVENUES
Net sales $318,049 $299,896 $879,870 $828,001
COSTS AND EXPENSES
Cost of sales 143,568 159,529 404,997 410,633
Selling, general
and administrative
expenses 103,585 103,502 297,175 306,073
Research and
development 12,762 13,452 36,260 43,421
Restructuring and other
charges, net - 64,695 - 64,695
Interest expense, net 3,860 3,620 10,896 9,603
Total costs
and expenses 263,775 344,798 749,328 834,425
Earnings (loss)
before income taxes (a)54,274 (44,902) 130,542 (6,424)
Income taxes 12,482 (16,579) 30,024 (7,536)
Net earnings (loss) $ 41,792 $ (28,323) $ 100,518 $ 1,112
Earnings(loss) per share:(a)
Basic $ 0.34 $ (0.23) $ 0.81 $ 0.01
Diluted $ 0.34 $ (0.23) $ 0.81 $ 0.01
Proforma earnings per share
excluding restructuring and
other charges, net:
Basic $ 0.34 $ 0.28 $ 0.81 $ 0.52
Diluted $ 0.34 $ 0.28 $ 0.81 $ 0.52
Average number of
shares outstanding:
Basic 123,692 124,515 123,947 124,380
Diluted 124,504 124,782 124,848 124,797
(a) The 1999 amounts include restructuring and other charges of $89,433
(including $24,738 contained in cost of sales) or 51 cents per share (after pro
forma tax effect) in the third quarter.
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
APRIL 29, JULY 31,
2000 1999
Assets
Cash and short-term investments $ 137,024 $137,177
Accounts receivable, net 303,177 326,197
Inventories 208,315 205,867
other current assets 76,409 74,948
Total current assets 724,925 744,189
Property, plant and equipment, net 503,896 507,016
Other assets 238,675 237,122
Total assets $1,467,496 $1,488,327
Liabilities and Stockholders, Equity
Short-term debt $ 326,383 $ 339,153
Accounts payable, income taxes
and other current liabilities 225,356 219,126
Total current liabilities 551,739 558,279
Long-term debt 87,765 116,815
Deferred taxes and other
noncurrent liabilities 78,969 82,569
Stockholders' equity 749,023 730,664
Total Liabilities and
stockholders, equity $1,467,496 $1,488,327
END
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