RNS No 4136u
PALL CORPORATION
2nd September 1998
( BW)(PALL)(PLL) Pall Corporation Announces Fourth Quarter and Year
End Results for FY'98
EAST HILLS, N.Y.--(BUSINESS WIRE)--Sept. 2, 1998--Pall
Corporation (NYSE:PLL) today reported sales and earnings for the
fourth quarter and year ended August 1, 1998.
Sales for the quarter increased 4% to $301,759,000 compared to
last year's $290,119,000. In local currency, sales increased 7 1/2%.
Adverse foreign currency exchange rates reduced sales by $10,010,000
or 3 1/2%.
For the year, sales increased 2 1/2% to $1,087,285,000 compared
to last year's $1,062,008,000. In local currency, sales for the year
increased 6 1/2%. Adverse foreign currency exchange rates reduced
sales $43,455,000 or 4%. There was no effect from price increases on
sales in either the fourth quarter or full year.
Earnings for the quarter were $39,726,000, equal to 32 cents per
share(1) compared to $43,270,000, equal to 34 cents per share last year.
Exchange rates reduced earnings per share by about 3 cents.
Earnings for the year were $93,633,000, equal to 75 cents per
share compared to $67,318,000 or 53 cents per share last year.
Earnings for this year include non-recurring income of $4,978,000,
equal to 4 cents per share (after pro forma tax effect), reflecting a
payment received in settlement of a successful patent litigation net
of certain one-time costs, and a one-time charge of $27,000,000, equal
to 21 cents per share to write-off the in-process research and
development related to the acquisition of Rochem earlier this year.
Earnings for the prior fiscal year include the effects of the Gelman
Sciences merger and restructuring and other one-time charges
aggregating $95,930,000, equal to 49 cents per share (after pro forma
tax effect). Excluding non-recurring items, earnings for the year were
92 cents per share compared to $1.02 per share last year. Exchange
rates reduced earnings by about 15 cents.
Commenting on the results for the quarter, Eric Krasnoff,
Chairman and Chief Executive Officer, said, "We closed out this fiscal
year with record sales and posted our first $300 million quarter. The
distress in foreign currency markets and the weakened Asian economies
continued to hold down our earnings. In this quarter we built momentum
in key markets and geographies which will continue on into fiscal
1999.
"Our largest business group, Health Care, showed good growth in
both Medical and BioPharmaceuticals. In local currency during the
quarter, Medical grew 8% and BioPharmaceuticals grew 4 1/2% with sales
to drug companies growing 11%. For the second consecutive quarter,
this growth was fueled by double-digit growth in Europe. Sales of
blood filters strengthened.
"The growth in Aeropower was again led by double-digit growth in
Commercial Aerospace. The Industrial Hydraulics division grew 5% in
local currency.
"The Fluid Processing segment fared well, with an overall growth
rate of 10 1/2%, despite a 14 1/2% decline in Microelectronics sales
for the quarter. Microelectronics results continue to reflect the
downturn in the semiconductor industry.
"By geography, we were pleased with the strength of our business
in Europe, where sales increased 23 1/2% before the effects of
exchange rates. In Asia, the economic crisis impacted our sales which
were down 1% for the quarter, before the effects of exchange rates.
The Western Hemisphere was flat as it bore the brunt of the
Microelectronics downturn.
"Turning now to our earnings for the quarter, cost of sales came
in at 43.1%. This is slightly higher than last quarter and reflects a
less favorable product mix coupled with the negative effects of
exchange rates. This was offset to some extent by our continued
improvements in manufacturing productivity. Selling, general and
administrative expenses were lower as a percentage of sales. The
underlying tax rate for the year has been reduced to 25%, reflecting
our continuing efforts to move production into our manufacturing
facilities in Ireland and Puerto Rico, as well as proportionately
lower profits in high tax rate countries."
(1) references to earnings per share are on a diluted basis
PALL CORPORATION SALES BY MARKET
(000s omitted)
FOURTH QUARTER ENDED EXCHANGE % CHANGE
AUG 1, AUG 2, % RATE IN LOCAL
1998 1997 CHANGE DIFFERENCE CURRENCY
Medical $ 72,871 $ 69,539 5 $(2,206) 8
BioPharmaceuticals 79,910 78,878 1 1/2 (2,627) 4 1/2
Total Health Care 152,781 148,417 3 (4,833) 6
Microelectronics 19,147 24,199 (21) (1,593) (14 1/2)
Industrial Process 57,827 48,872 18 1/2 (2,072) 22 1/2
Total
Fluid Processing 76,974 73,071 5 1/2 (3,665) 10 1/2
Aerospace 35,163 32,514 8 (421) 9 1/2
Industrial
Hydraulics 36,841 36,117 2 (1,091) 5
Total Aeropower 72,004 68,631 5 (1,512) 7
TOTAL $301,759(2) $290,119 4 $(10,010) 7 1/2
YEAR ENDED EXCHANGE % CHANGE
AUG. 1, AUG. 2, % RATE IN LOCAL
1998 1997 CHANGE DIFFERENCE CURRENCY
Medical $260,124 $256,484 1 1/2 $ (9,711) 5
BioPharmaceuticals 294,202 298,894 (1 1/2) (12,615) 2 1/2
Total Health Care 554,326 555,378 - (22,326) 4
Microelectronics 87,608 93,893 (6 1/2) (5,886) (1/2)
Industrial Process 186,861 169,530 10 (6,942) 14 1/2
Total
Fluid Processing 274,469 263,423 4 (12,828) 9
Aerospace 124,449 110,784 12 1/2 (1,164) 13 1/2
Industrial
Hydraulics 134,041 132,423 1 (7,137) 6 1/2
Total Aeropower 258,490 243,207 6 1/2 (8,301) 9 1/2
TOTAL $1,087,285(2) $1,062,008 2 1/2 $(43,455) 6 1/2
(2) Includes approximately $7.0 million and $15.0 million of Rochem
related business for the fourth quarter and the year, respectively.
PALL CORPORATION SALES BY GEOGRAPHIC REGION
(000s omitted)
FOURTH QUARTER ENDED EXCHANGE % CHANGE
AUG. 1, AUG. 2, % RATE IN LOCAL
1998 1997 CHANGE DIFFERENCE CURRENCY
Asia $ 41,475 $ 50,186 (17 1/2) $ (8,090) (1)
Europe 118,571 97,259 22 (1,745) 23 1/2
Western
Hemisphere 141,713 142,674 (1/2) (175) (1/2)
TOTAL $301,759 $290,119 4 $(10,010) 7 1/2
YEAR ENDED EXCHANGE % CHANGE
AUG. 1, AUG. 2, % RATE IN LOCAL
1998 1997 CHANGE DIFFERENCE CURRENCY
Asia $174,110 $192,027 (9 1/2) $(21,350) 2
Europe 397,880 368,767 8 (21,616) 14
Western
Hemisphere 515,295 501,214 3 (489) 3
TOTAL $1,087,285 $1,062,008 2 1/2 $(43,455) 6 1/2
PALL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
FOURTH QUARTER ENDED YEAR ENDED
AUG. 1, AUG. 2, AUG. 1, AUG. 2,
1998 1997 1998 1997
REVENUES
Net sales $ 301,759 $ 290,119 $1,087,285 $1,062,008
COSTS AND EXPENSES
Cost of sales 130,073 121,439 473,859 468,413 (b)
Selling, general and
administrative
expenses 102,566 94,536 392,809 376,904
Research and
development 14,514 14,178 58,540 53,747
Gelman merger and
restructuring
charges - - - 30,621
Other charges - - 19,222 (a) 43,360 (c)
Interest expense, net 2,897 814 7,870 2,836
Total costs and
expenses 250,050 230,967 952,300 975,881
Earnings before
income taxes 51,709 59,152 134,985 86,127
Income taxes 11,983 15,882 41,352 18,809
Net earnings $ 39,726 $ 43,270 $ 93,633 $ 67,318
Earnings per share:
Basic $ 0.32 $ 0.34 $ 0.75 $ 0.53
Diluted $ 0.32 $ 0.34 $ 0.75 $ 0.53
Pro forma earnings
per share excluding
Gelman merger and
restructuring
charges and other
charges, net:
Basic $ 0.32 $ 0.34 $ 0.93 $ 1.03
Diluted $ 0.32 $ 0.34 $ 0.92 $ 1.02
Average number of
shares outstanding:
Basic 124,132 127,266 125,070 126,319
Diluted 124,618 128,069 125,681 127,470
(a) Represents a one-time charge of $27,000 in the third quarter to
write off in-process research and development related to the
acquisition of Rochem, offset by $7,778 of other income, net,
recorded in the second quarter.
(b) Includes inventory write-downs of $21,949 related to the
restructuring.
(c) Represents charges for asset write-offs, environmental and legal
provisions and severance.
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
AUG. 1, AUG. 2,
1998 1997
Assets
Cash and short-term investments $ 28,925 $ 55,472
Accounts receivable, net 291,535 266,604
Inventories 227,254 198,080
Other current assets 88,371 86,448
Total current assets 636,085 606,604
Property, plant and equipment, net 520,592 504,046
Other assets 209,258 154,974
Total assets $1,365,935 $1,265,624
Liabilities and Stockholders' Equity
Short-term debt $ 184,907 $ 128,651
Accounts payable, income taxes
and other current liabilities 217,068 172,378
Total current liabilities 401,975 301,029
Long-term debt 111,469 62,126
Deferred taxes and other
non-current liabilities 86,876 77,636
Stockholders' equity 765,615 824,833
Total liabilities and
stockholders' equity $1,365,935 $1,265,624
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" 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,
regulatory approval, market acceptance of new technologies, economic
conditions and market demand.
CONTACT: Pall Corporation, East Hills
John Adamovich
516/484-5400
END
FR NFANAEFKPEAN
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