RNS No 3935a
PALL CORPORATION
2nd September 1997
( BW)(PALL-CORP)(PLL) Pall Corporation Reports Fourth Quarter and
Year End Results
Business Editors
EAST HILLS, N.Y.--(BUSINESS WIRE)--September 2, 1997--Pall
Corporation (NYSE: PLL) today reported sales and earnings for the
fourth quarter and year ended August 2, 1997.
Sales for the fourth quarter of fiscal 1997 were $290,119,000
compared to last year's $309,732,000 a decrease of 6 1/2%. Sales
reduced 4% due to foreign currency exchange rates. For the year,
sales were $1,062,008,000 compared to last year's $1,072,433,000 a
decrease of 1%. Sales reduced 3 1/2% due to foreign currency
exchange rates.
Earnings for the quarter were $43,270,000, equal to 34 cents per
share compared to $48,620,000, equal to 39 cents per share. Earnings
for the year were $67,318,000, equal to 53 cents per share compared
to $142,834,000 or $1.14 per share. This includes the effects of the
Gelman Sciences merger and restructuring charges and other one-time
charges taken for the year, aggregating $95,930,000, equal to 50
cents per share (after pro forma tax effect).
Commenting on the results for the quarter and expectations for
fiscal 1998, Eric Krasnoff, Chairman and Chief Executive Officer,
said, "When we released our numbers last quarter we stated that we
expected a continued reduction in sales to the semiconductor industry
as well as a sluggish health care market in the fourth quarter. We
also expected exchange rates to reduce sales by 3%.
"Exchange rates reduced sales by 4%, or $11 1/2 million, and
earnings per share by four cents. Patient Protection sales fared
slightly worse than anticipated and we saw a continuation in price
reductions which accounted for 3% of the local currency reduction in
sales. Microelectronics sales were better than expected, although
there was a reduction of 5 1/2% in local currency. This area seems
to be turning round, as orders in the quarter increased 14 1/2%.
"On the bright side, we continued to see solid growth in
Commercial Aerospace sales, which increased 16% this quarter and 23%
for the year. Asia, outside of Japan, grew 29% and Germany, which
has been holding us back recently, experienced a modest local
currency increase in sales.
"Our Gelman acquisition continues on track, and for the quarter
was non-dilutive due mainly to the execution of planned synergies.
The effects can clearly be seen in our selling, general and
administrative expenses which, despite the reduction in sales for the
quarter, remained at about 32 1/2% of sales, the same as the fourth
quarter last year. The increase in cost of sales of 2 1/2% was due
mostly to exchange rates this quarter.
"Looking at the year as a whole, our results were impacted by a 3
1/2% ($35 million) reduction in sales due to exchange rates and we
estimate this has reduced our earnings per share by 14 cents.
Pricing for the year has been flat, although we saw an overall 2%
price reduction in our Patient Protection products.
"We have taken a number of actions that will help us in fiscal
1998. Our one-time charge, taken in the third quarter, reflects both
the acquisition and restructuring costs of the Gelman acquisition and
the restructuring of other parts of Pall Corporation. These actions
will reduce both cost of sales and selling, general and
administrative costs. We have achieved about $20 million in savings
and we will see its full year effect in fiscal 1998.
"We believe we will not see a decrease in semiconductor sales and
are already seeing increases in orders in that area. We have become
more competitive in sales of Patient Protection products and have
opened a manufacturing plant in Ireland, which will reduce our costs,
increase profits and give us the ability to deliver product more
efficiently to the European markets. We are continuing to see good
orders in the Fluid Processing division and recently created a sales
group for municipal water applications. We have achieved early
success and intend to increase the product range offered to these
customers. Commercial Aerospace should continue in strength and we
expect to continue the robust growth rate in Southeast Asia.
"In addition, we now have our own sales companies in Norway and
Belgium and will look to increase our presence in the European
countries where we see strong growth potential, particularly for our
Fluid Processing segment. We began manufacturing in Southern Ireland
this quarter, which should help maintain and even reduce our overall
underlying tax rate, which was about 29% for the year.
"Our goal for fiscal 1998 is to return to double-digit growth
later in the year and to improve our rate of profit so that earnings
per share grow at a rate greater than sales."
CONTACT: Pall Corporation
Jeremy Hayward-Surry
(516) 484-5400
PALL CORPORATION SALES BY MARKET
FOR THE FOURTH QUARTER AND YEAR FOR FISCAL
1997 COMPARED TO 1996
(000s omitted)
FOURTH QUARTER ENDED EXCHANGE % CHANGE
AUG 2, AUG 3, % RATE IN LOCAL
1997 1996 CHANGE DIFFERENCE CURRENCY
Patient Protection $ 69,539 $ 76,954 (9 1/2) $ (2,443) (6 1/2)
Other 78,878 84,682 (7) (3,751) (2 1/2)
Total Health Care 148,417 161,636 (8) (6,194) (4 1/2)
Microelectronics 24,199 26,993 (10 1/2) (1,264) (5 1/2)
Other 48,872 50,614 (3 1/2) (1,324) (1)
Total Fluid
Processing 73,071 77,607 (6) (2,588) (2 1/2)
Aeropower 68,631 70,489 (2 1/2) (2,724) 1
TOTAL $290,119 $309,732 (6 1/2) $(11,506) (2 1/2)
YEAR ENDED EXCHANGE % CHANGE
AUG. 2, AUG. 3, % RATE IN LOCAL
1997 1996 CHANGE DIFFERENCE CURRENCY
Patient Protection $256,484 $265,897 (3 1/2) $ (8,075) (1/2)
Other 298,894 304,938 (2) (10,040) 1 1/2
Total Health Care 555,378 570,835 (2 1/2) (18,115) 1/2
Microelectronics 93,893 103,600 (9 1/2) (5,144) (4 1/2)
Other 169,530 162,923 4 (5,614) 7 1/2
Total Fluid
Processing 263,423 266,523 (1) (10,758) 3
Aeropower 243,207 235,075 3 1/2 (6,358) 6
TOTAL $1,062,008 $1,072,433 (1) $(35,231) 2 1/2
PALL CORPORATION SALES BY GEOGRAPHIC REGION
FOR THE FOURTH QUARTER AND YEAR ENDED
FISCAL 1997 COMPARED TO 1996
(000s omitted)
FOURTH QUARTER ENDED EXCHANGE % CHANGE
AUG. 2, AUG. 3, % RATE IN LOCAL
1997 1996 CHANGE DIFFERENCE CURRENCY
Asia $ 50,186 $ 49,683 1 $ (3,193) 7 1/2
Europe 97,259 108,190 (10) (8,298) (2 1/2)
Western
Hemisphere 142,674 151,859 (6) (15) (6)
TOTAL $290,119 $309,732 (6 1/2) $(11,506) (2 1/2)
YEAR ENDED EXCHANGE % CHANGE
AUG. 2, AUG. 3, % RATE IN LOCAL
1997 1996 CHANGE DIFFERENCE CURRENCY
Asia $192,027 $183,901 4 1/2 $(17,097) 13 1/2
Europe 368,767 387,533 (5) (18,082) -
Western
Hemisphere 501,214 500,999 - (52) -
TOTAL $1,062,008 $1,072,433 (1) $(35,231) 2 1/2
CONSOLIDATED STATEMENTS OF EARNINGS
PALL CORPORATION REPORTS FOR THE FOURTH QUARTER AND YEAR
(Amounts in thousands, except per share data)
FOURTH QUARTER ENDED YEAR ENDED
AUG. 2, AUG. 3, AUG. 2, AUG. 3,
1997 1996 1997 1996
REVENUES
Net sales $ 290,119 $ 309,732 $1,062,008 $1,072,433
COSTS AND EXPENSES
Cost of sales 121,439 122,176 468,413(b) 429,728
Selling, general and
administrative expenses 94,536 100,539 376,904 378,809
Research and development 14,178 14,090 53,747 53,772
Gelman merger and
restructuring charges - - 30,621 -
Other charges - 2,800(a) 43,360 2,800(a)
Interest expense, net 814 855 2,836 3,587
Total costs and expenses 230,967 240,460 975,881 868,696
Earnings before
income taxes 59,152 69,272 86,127 203,737
Income taxes 15,882 20,652 18,809 60,903
Net earnings $ 43,270 $ 48,620 $ 67,318 $142,834
Average number of shares
outstanding 127,266 125,596 126,319 125,114
Earnings per share $ .34 $ .39 $ .53 $ 1.14
Pro forma earnings per share
excluding Gelman merger
and restructuring charges,
other charges and inventory
write-downs $ .34 $ .40 $ 1.03 $ 1.15
(a) Represents increase in environmental remediation costs incurred by
Gelman Sciences.
(b) Includes inventory write-downs of $21,949.
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
AUG. 2, AUG. 3,
1997 1996
Assets
Cash and short-term investments $ 55,472 $ 115,568
Accounts receivable, net 266,604 268,599
Inventories 198,080 205,515
Other current assets 58,828 43,511
Total current assets 578,984 633,193
Property, plant and equipment, net 504,046 498,029
Other assets 154,974 141,956
Total assets $1,238,004 $1,273,178
Liabilities and Stockholders' Equity
Short-term debt $ 128,652 $ 157,283
Accounts payable, income taxes
and other current liabilities 144,757 185,167
Total current liabilities 273,409 342,450
Long-term debt 62,126 54,416
Deferred taxes and other
non-current liabilities 77,636 79,324
Stockholders' equity 824,833 796,988
Total liabilities and
stockholders' equity $1,238,004 $1,273,178
Pall Corporation is the international leader in the design,
manufacture and marketing of fine disposable filters, membranes and
other fluid clarification and separations devices for the Health
Care, Aeropower and Fluid Processing markets. The Company's shares
are listed on the New York Stock Exchange (PLL) and the London Stock
Exchange (0668260).
This release contains forward-looking statements that 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
exchange rates, regulatory approval, market acceptance of new
technologies, economic conditions and market demand.
CONTACT: Pall Corporation
Jeremy Hayward-Surry
(516) 484-5400
END
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