8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 4, 2007

PALL CORPORATION

(Exact name of registrant as specified in its charter)

New York	001- 04311	11-1541330
(State or other jurisdiction	(Commission file number)	(I.R.S. Employer
of incorporation)		Identification No.)

2200 Northern Boulevard, East Hills, NY	11548
(Address of principal executive offices)	(Zip Code)

(516) 484-5400
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):  

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 Results of Operations and Financial Condition.

On October 4, 2007, Pall Corporation issued a press release announcing its preliminary unaudited condensed consolidated financial highlights for the fourth quarter and year ended July 31, 2007. A copy of the press release is furnished as Exhibit 99 to this report.

ITEM 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

     99 Press Release, dated October 4, 2007 (furnished pursuant to Item 2.02).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Pall Corporation
October 5, 2007	/s/	FRANCIS MOSCHELLA
		Francis Moschella Vice President – Corporate Controller Chief Accounting Officer

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INDEX TO EXHIBITS

Exhibit
Number	Description
99	Press Release, dated October 4, 2007 (furnished pursuant to Item 2.02).

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EX-99

EXHIBIT 99

Pall Corporation Reports Preliminary Unaudited Financial Highlights
For the Fourth Quarter and Fiscal Year 2007

Fourth Quarter Earnings Before Interest and Income Taxes Up Over 18% on Sales
Increase of 8%

East Hills, N.Y.—(Business Wire)—Oct. 4, 2007—Pall Corporation (NYSE: PLL) today reported preliminary unaudited financial highlights for the fourth quarter and year ended July 31, 2007. These highlights are subject to review and audit by the Company’s external auditors and the other limitations discussed below.

The Company previously announced that it will miss its filing deadline for audited financial results pending completion of an independent inquiry by its Audit Committee. The Company also continues to work on the restatement of certain prior period financial statements, including the periods reflected in this release. The restatement is expected to relate principally to the Company’s understatement of its U.S. income taxes and provision for income taxes in the affected periods and, accordingly, will affect the Company’s net earnings, as well as amounts reportable on its consolidated balance sheet and statements of cash flows for those periods.

Preliminary Unaudited Sales and Earnings Before Interest and Income Taxes

Sales for the fourth quarter were $646.3 million, up 8.2% compared with the fourth quarter last year. For the year ended July 31, 2007, sales were $2.2 billion, an increase of 11.6% over the prior year. In local currency, sales increased $31.1 million, or 5.2%, in the quarter and $161.3 million, or 8%, for the year.

Earnings before interest and income taxes (“EBIT”) in the quarter were $102.8 million compared to $86.5 million in the fourth quarter last year, an increase of 18.9%. Excluding items principally related to the Company’s broad cost reduction initiatives, EBIT in the quarter were $103.1 million compared to $87.8 million for the same period a year ago, an increase of 17.4%.

For the year, EBIT were $299.6 million compared to $233.4 million a year ago, an increase of 28.4%. EBIT, excluding items principally related to the Company’s cost reduction initiatives, were $321.9 million compared to $245.7 million a year ago, an increase of 31.0%.

Eric Krasnoff, Chairman and CEO, stated, “The Company continues to see the benefit of robust sales in both our Life Sciences and Industrial segments. Growth in Asia has maintained its fast pace. Our broad cost reduction initiatives are providing the expected lift to operating profits. Pall’s Total Fluid Management^sm approach is increasingly resonating with customers as reflected by significantly higher systems sales in the quarter. The profitability of systems continued its upward trend while the higher proportion of systems sales dampened gross margins in the quarter.”

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Life Sciences - Fourth Quarter Preliminary Unaudited Highlights

(Dollar Amounts in Thousands)

						% CHANGE
						IN LOCAL
Sales:	JUL. 31, 2007		% CHANGE			CURRENCY
Medical	$	130,318		1.2			(1.4	)
BioPharmaceuticals		115,888		10.7			7.4
Total Life Sciences segment	$	246,206		5.4			2.6
			% OF SALES
Gross profit	$	124,707		50.7	%
Operating profit	$	48,941		19.9	%

BioPharmaceuticals sales growth was driven by strong systems sales in the Western Hemisphere into the fast-growing biotechnology and vaccine industries supported by growth in consumables in Europe and Asia. Medical sales growth slowed as expected in the Blood market while Laboratory product sales increased in all geographies.

Gross margins improved to 50.7% from 50.2% last year. The increase in gross margins was principally driven by improved pricing in the BioPharmaceuticals market and by savings generated from cost reduction initiatives. These savings primarily derive from ongoing continuous improvement efforts in manufacturing plants and the facilities rationalization program. Operating profit increased about 3% to $48.9 million.

Industrial - - Fourth Quarter Preliminary Unaudited Highlights

(Dollar Amounts in Thousands)

						% CHANGE
						IN LOCAL
Sales:	JUL. 31, 2007		% CHANGE			CURRENCY
General Industrial	$	256,678		17.7			13.1
Aerospace and Transportation		71,191		(1.7	)		(4.2	)
Microelectronics		72,265		(1.4	)		(0.5	)
Total Industrial segment	$	400,134		10.0			6.9
			% OF SALES
Gross profit	$	177,239		44.3	%
Operating profit	$	68,206		17.0	%

The growth in General Industrial was led by strong systems sales accompanied by growth in consumables. Systems sales growth was particularly strong in the Energy and Municipal Water markets.

Aerospace sales declined as high single-digit growth in the Commercial business driven by the Western Hemisphere and Europe was offset by a decline in Military sales. Microelectronics sales decreased as the semiconductor cycle cooled.

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Gross margins were 44.3% on par with last year as margin improvements from sales, manufacturing efficiency and other cost reduction initiatives, particularly in systems, were offset by the impact of product mix resulting from strong systems growth in the quarter.

Operating profit increased about 28% to $68.2 million and operating margin improved to 17.0% from 14.6% last year.

The overall backlog in Industrial was up about 27% compared to a year ago. The systems backlog increased about 50%, with particularly strong growth in the Municipal Water and Food and Beverage markets.

Conclusion

Mr. Krasnoff concluded, “The operating performance of the Company remains strong and we continue to execute on our broad strategic initiatives. Pall’s sophisticated and dedicated workforce is to be congratulated for maintaining the Company’s momentum and focus during this difficult period. I look forward to providing a further update on our fourth quarter earnings upon completion of the previously announced independent inquiry being conducted by the Audit Committee.”

Conference Call

Tomorrow, October 5, 2007, at 8:30 am ET, Pall Corporation will host a conference call to review these results. The call will be webcast and individuals can access it at www.pall.com/investor. Listening to the webcast requires audio speakers and Microsoft Windows Media Player software. The webcast will be archived for 30 days.

About Pall Corporation

Pall Corporation is the global leader in the rapidly growing field of filtration, separation and purification. Pall is organized into two businesses: Life Sciences and Industrial. These businesses provide leading-edge products to meet the demanding needs of customers in biotechnology, pharmaceutical, transfusion medicine, energy, electronics, municipal and industrial water purification, aerospace, transportation and broad industrial markets. Total revenues for fiscal year 2007 were $2.2 billion. The Company headquarters is in East Hills, New York with extensive operations throughout the world. For more information visit Pall at http://www.pall.com.

Cautionary Statement and Forward Looking Statements

On August 2, 2007, the Company disclosed in a Current Report on Form 8-K that its previously issued financial statements for each of the eight fiscal years in the period ended July 31, 2006 and for the each of the fiscal quarters ended October 31, 2006, January 31, 2007 and April 30, 2007 should no longer be relied upon and that a restatement of some or all of those financial statements will be required. This conclusion results from the Company’s previously announced understatement of U.S. income tax payments and of its provision for income taxes as disclosed in a Current Report on Form 8-K on July 19, 2007. The Company cannot predict the impact of the restatement on its financial statements. Such restatement may affect other disclosures in the Company’s SEC filings, including information appearing under the headings “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Risk Factors” in such filings and disclosures with respect to the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting and disclosures about other factors that may affect its results of operations, financial condition and prospects. The Company also believes that, as a result of these circumstances, it may have one or more material weaknesses in its internal control over financial reporting.

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The Audit Committee of the Company’s Board of Directors is conducting an independent inquiry into the circumstances that gave rise to the need to restate its financial statements. That inquiry is ongoing, and the Company cannot predict when it will be completed. As the Audit Committee pursues its inquiry and as the Company completes the restatement, the Company may learn of other matters that may affect the scope of the restatement or remedial actions and their impact on the Company’s consolidated financial statements, prospects and outlook, including its cash management plans and effective tax rate in future periods. There can be no assurance that the information contained herein will not be subject to adjustment upon completion of such inquiry and restatement and the audit of the Company’s financial statements for the fiscal year ended July 31, 2007 by its independent registered public accounting firm.

Forward-looking statements contained in this and other written and oral reports are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. All statements regarding future performance, earnings projections, earnings guidance, events or developments are forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in product mix and product pricing particularly as we expand our systems business in which we experience significantly longer sales cycles and less predictable revenue with no certainty of future revenue streams from related consumable product offerings and services; increases in costs of manufacturing and operating costs including energy and raw materials; the Company’s ability to achieve the savings anticipated from cost reduction and margin improvement initiatives including the timing of completion of the facilities rationalization initiative; fluctuations in foreign currency exchange rates and interest rates; regulatory approval and market acceptance of new technologies; changes in business relationships with key customers and suppliers including delays or cancellations in shipments; success in enforcing patents and protecting proprietary products and manufacturing techniques; successful completion or integration of acquisitions; domestic and international competition in the Company’s global markets; risks arising from potential material weaknesses in our control environment; potential adverse effects to our financial condition, results of operations or prospects as a result of any restatement of prior period financial statements; risks associated with our inability to satisfy covenants under our syndicated credit facility or to obtain waivers of compliance with those covenants or waivers of defaults under our debt and other agreements; potential adverse effects if we are required to recognize adverse tax- or accounting-related developments other than those previously disclosed; risks relating to litigation or regulatory inquiries associated with the restatement of prior period financial statements or other related matters; and global and regional economic conditions and legislative, regulatory and political developments. The Company makes these statements as of the date of this disclosure and undertakes no obligation to update them.

Management uses certain non-GAAP measurements to assess the Company’s current and future financial performance. The non-GAAP measurements do not replace the presentation of Pall’s GAAP financial results. These measurements provide supplemental information to assist management in analyzing the Company’s financial position and results of operations. The Company has chosen to provide this information to facilitate meaningful comparisons of past, present and future operating results and as a means to emphasize the results of ongoing operations.

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PALL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollar Amounts in Thousands)

Preliminary Condensed Consolidated Earnings Before Interest and Income Taxes

	FOURTH QUARTER ENDED								YEAR ENDED
	JUL. 31, 2007				JUL. 31, 2006				JUL. 31, 2007				JUL. 31, 2006
Net sales	$	646,340			$	597,251			$	2,249,905			$	2,016,830
Cost of sales		344,246		(a)		319,259		(b)		1,190,549		(a)		1,072,750		(b)
Gross profit		302,094				277,992				1,059,356				944,080
% of sales		46.7	%			46.5	%			47.1	%			46.8	%
Selling, general and administrative expenses		181,750				174,780				675,005				641,030
Research and development		17,247				15,396				62,414				57,371
Earnings before restructuring and other charges/(gains), net (“ROTC”), interest and income taxes		103,097				87,816				321,937				245,679
ROTC		292		(a)		1,327		(b)		22,352		(a)		12,326		(b)
Earnings before interest and income taxes	$	102,805			$	86,489			$	299,585			$	233,353

(a) Cost of sales includes incremental depreciation and other adjustments amounting to income of $148 in the quarter and charges of $2,179 in the year primarily recorded in conjunction with the Company’s facilities rationalization initiative. Furthermore, cost of sales includes a charge of $566 for the year related to a one-time purchase accounting adjustment to record, at market value, inventory acquired from BioSepra. This resulted in a $2,431 increase in acquired inventories in accordance with SFAS No. 141 “Business Combinations” and charges to cost of sales in the periods when the sale of a portion of the underlying inventory occurred.

ROTC in the quarter includes charges of $4,652 primarily comprised of severance and other costs related to the Company’s cost reduction programs, including its facilities rationalization initiative, partly offset by income from legal settlements. ROTC in the year includes charges of $22,980 primarily comprised of severance costs and an impairment charge on certain long-lived assets partly offset by a gain on the sale of a facility and income from legal settlements. The charges in the year relate to the Company’s cost reduction programs. In addition, the quarter and year include income of $2,117 and charges of $644, respectively, related to environmental matters, net of insurance recoveries.

(b) Included in cost of sales is a charge of $59 and $898 in the quarter and year, respectively, related to a one-time purchase accounting adjustment to record, at market value, inventory acquired from BioSepra as discussed above. Furthermore, cost of sales includes $769 in the quarter and year primarily comprised of incremental depreciation recorded in conjunction with the Company’s facilities rationalization initiative.

ROTC includes severance and other costs of $1,327 in the quarter and $14,526 in the year primarily related to the Company’s business realignment and ongoing cost reduction programs. In addition, the year includes gains on the sale of an investment and stock rights totaling $2,200.

Preliminary Condensed Consolidated Balance Sheet Highlights

	JUL. 31, 2007		JUL. 31, 2006
Cash and cash equivalents (“C&CE”)	$	443,036	$	317,657
Accounts Receivable, net	$	551,393	$	517,632
Inventories, net	$	471,467	$	408,273
Total indebtedness (including current portion of $41,720 and $63,382, respectively) (1)	$	633,311	$	703,397
Total indebtedness, net of C&CE	$	190,275	$	385,740

(1) As previously announced, the Company deposited $135,000 with the Internal Revenue Service in September 2007, virtually all of which relates to the Company’s aforementioned tax matter, that was partially financed with approximately $90,000 of additional indebtedness.

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PALL CORPORATION
PRELIMINARY SUMMARY OPERATING PROFIT BY SEGMENT
(Unaudited)
(Dollar Amounts in Thousands)

	FOURTH QUARTER ENDED						YEAR ENDED
	JUL. 31, 2007			JUL. 31, 2006			JUL. 31, 2007			JUL. 31, 2006
Life Sciences
Sales	$	246,206		$	233,554		$	880,187		$	796,305
Cost of sales (a)		121,499			116,204			432,190			401,224
Gross profit		124,707			117,350			447,997			395,081
% of sales		50.7	%		50.2	%		50.9	%		49.6	%
Selling, general and administrative expenses		65,954			61,543			248,851			225,054
Research and development		9,812			8,452			33,860			31,588
Operating profit	$	48,941		$	47,355		$	165,286		$	138,439
% of sales		19.9	%		20.3	%		18.8	%		17.4	%
Industrial
Sales	$	400,134		$	363,697		$	1,369,718		$	1,220,525
Cost of sales (a)		222,895			202,227			755,614			669,859
Gross profit		177,239			161,470			614,104			550,666
% of sales		44.3	%		44.4	%		44.8	%		45.1	%
Selling, general and administrative expenses		101,598			101,265			381,436			374,287
Research and development		7,435			6,944			28,554			25,783
Operating profit	$	68,206		$	53,261		$	204,114		$	150,596
% of sales		17.0	%		14.6	%		14.9	%		12.3	%
CONSOLIDATED:
Operating profit	$	117,147		$	100,616		$	369,400		$	289,035
General corporate expenses		14,198			11,972			44,718			41,689
Earnings before ROTC, interest and income taxes (a)		102,949			88,644			324,682			247,346
ROTC (a)		144			2,155			25,097			13,993
Earnings before interest and income taxes	$	102,805		$	86,489		$	299,585		$	233,353

(a) Included in ROTC for the purpose of evaluation of segment profitability are other adjustments recorded in cost of sales. Such adjustments include incremental depreciation and other adjustments recorded in conjunction with the Company’s facilities rationalization initiative amounting to income of $148 and charges of $2,179 for the quarter and year ended July 31, 2007, respectively, and charges of $769 for the quarter and year ended July 31, 2006. Furthermore, such adjustments also include charges of $566 for the year ended July 31, 2007 and $59 and $898 for the quarter and year ended July 31, 2006, respectively, related to a one-time purchase accounting adjustment to record, at market value, inventory acquired from BioSepra. This resulted in a $2,431 increase in acquired inventories in accordance with SFAS No. 141 “Business Combinations” and charges to cost of sales in the periods when the sale of a portion of the underlying inventory occurred.

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PALL CORPORATION
PRELIMINARY SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(Dollar Amounts in Thousands)

									EXCHANGE			% CHANGE
									RATE			IN LOCAL
FOURTH QUARTER ENDED	JUL. 31, 2007		JUL. 31, 2006		% CHANGE				IMPACT			CURRENCY
Life Sciences								Increase/(Decrease)
By Market:
Medical	$	130,318	$	128,839		1.2			$	3,282			(1.4	)
BioPharmaceuticals		115,888		104,715		10.7				3,398			7.4
Total Life Sciences	$	246,206	$	233,554		5.4			$	6,680			2.6
By Geography:
Western Hemisphere	$	106,245	$	97,920		8.5			$	142			8.4
Europe		108,645		103,365		5.1				5,978			(0.7	)
Asia		31,316		32,269		(3.0	)			560			(4.7	)
Total Life Sciences	$	246,206	$	233,554		5.4			$	6,680			2.6
Industrial
By Market:
General Industrial (a)	$	256,678	$	218,015		17.7			$	10,171			13.1
Aerospace and Transportation (a)		71,191		72,401		(1.7	)			1,817			(4.2	)
Microelectronics		72,265		73,281		(1.4	)			(671	)		(0.5	)
Total Industrial	$	400,134	$	363,697		10.0			$	11,317			6.9
By Geography:
Western Hemisphere	$	118,702	$	111,289		6.7			$	424			6.3
Europe		156,695		142,001		10.4				9,477			3.7
Asia		124,737		110,407		13.0				1,416			11.7
Total Industrial	$	400,134	$	363,697		10.0			$	11,317			6.9

(a) Certain prior year amounts have been reclassified to conform to the current year presentation.

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PALL CORPORATION
PRELIMINARY SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(Dollar Amounts in Thousands)

								EXCHANGE		% CHANGE
								RATE		IN LOCAL
YEAR ENDED	JUL. 31, 2007		JUL. 31, 2006		% CHANGE			IMPACT		CURRENCY
Life Sciences							Increase/(Decrease)
By Market:
Medical	$	475,369	$	444,033		7.1		$	12,900		4.2
BioPharmaceuticals		404,818		352,272		14.9			15,466		10.5
Total Life Sciences	$	880,187	$	796,305		10.5		$	28,366		7.0
By Geography:
Western Hemisphere	$	377,301	$	352,027		7.2		$	243		7.1
Europe		391,500		335,089		16.8			26,593		8.9
Asia		111,386		109,189		2.0			1,530		0.6
Total Life Sciences	$	880,187	$	796,305		10.5		$	28,366		7.0
Industrial
By Market:
General Industrial (a)	$	821,957	$	719,605		14.2		$	31,605		9.8
Aerospace and Transportation (a)		254,675		242,624		5.0			8,453		1.5
Microelectronics		293,086		258,296		13.5			3,380		12.2
Total Industrial	$	1,369,718	$	1,220,525		12.2		$	43,438		8.7
By Geography:
Western Hemisphere	$	398,428	$	375,488		6.1		$	663		5.9
Europe		536,094		470,941		13.8			36,808		6.0
Asia		435,196		374,096		16.3			5,967		14.7
Total Industrial	$	1,369,718	$	1,220,525		12.2		$	43,438		8.7

(a) Certain prior year amounts have been reclassified to conform to the current year presentation.

Contact:
Pall Corporation
Patricia Iannucci
V.P. Investor Relations & Corporate Communications
Telephone: 516-801-9848
Email: piannucci@pall.com

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