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): March 28, 2008

PALL CORPORATION

(Exact name of registrant as specified in its charter)

New York	001-04311	11-1541330
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)
2200 Northern Boulevard, East Hills, NY (Address of principal executive offices)		11548 (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:

     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))

TABLE OF CONTENTS

EX-99: PRESS RELEASE

ITEM 2.02 Results of Operations and Financial Condition.

     On March 28, 2008, Pall Corporation released its results of operations for its second quarter ended January 31, 2008. A copy of the press release issued by the Registrant is furnished herewith as Exhibit 99 to this report.

ITEM 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

     99 Press Release, dated March 28, 2008 (furnished pursuant to Item 2.02).

2

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 hereunto duly authorized.

		Pall Corporation
	/s/	FRANCIS MOSCHELLA
April 1, 2008		Francis Moschella
		Vice President – Corporate Controller
		Chief Accounting Officer

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INDEX TO EXHIBITS

Exhibit
Number	Description
99	Press Release, dated March 28, 2008 (furnished pursuant to Item 2.02).

4

EX-99

EXHIBIT 99

Pall Corporation Reports Second Quarter Results
Sales Increase 15%
Announces Completion of Restatement of Prior Period Financial Statements

East Hills, NY (March 28, 2008) — Pall Corporation (NYSE: PLL) today reported sales and earnings for the second quarter ended January 31, 2008 and the completion of the restatement of prior period financial statements.

Audit Committee Inquiry and Restatement

The Company previously announced that the audit committee of its board of directors, with the assistance of independent counsel, completed its inquiry with respect to Pall’s previously announced understatement of U.S. federal income tax payments and provision for income taxes. As a result of the matters that led to this inquiry, the Company restated its financial statements for the fiscal years 1999 through 2006 and for each of the fiscal quarters ended October 31, 2006, January 31, 2007, and April 30, 2007.

The restatement of those prior period financial statements is now complete and described in detail in the Company’s fiscal year 2007 Annual Report on Form 10-K, filed with the SEC today, and accessible on Pall’s website at www.pall.com/investor.

The Company concurrently filed its Quarterly Reports on Form 10-Q for the first and second quarters of fiscal year 2008. With these filings, the Company is current with its SEC reporting requirements and in compliance with its reporting obligations under its debt and related agreements. All restated amounts within this document are identified accordingly.

Sales and Earnings Overview

Sales for the quarter were $625.7 million, an increase of 14.8% compared with the second quarter last year. Diluted earnings per share (“EPS”) were $0.39 compared to $0.36 (as restated) a year ago. Net earnings were $48 million compared to $44.3 million (as restated) a year ago. Excluding restructuring and other charges, EPS on a pro forma basis were $0.46 per share as compared to $0.35 per share (as restated) in the same quarter last year.

Sales for the six months ended January 31, 2008 were approximately $1.2 billion, up 13.7% compared with the six months ended January 31, 2007. Diluted EPS were $0.68, up from $0.49 (as restated) a year ago. Net earnings were $84.1 million compared to $60.3 million (as restated) a year ago. Excluding items reflected as restructuring and other charges, EPS on a pro forma basis were $0.82 per share as compared to $0.57 per share (as restated) in the same period last year.

Sales in local currency increased $44.9 million, or 8.2%, in the quarter and $78.7 million, or 7.5%, for the six months. Foreign currency translation increased reported sales by $36 million or 6.6%, for the quarter, and $63.8 million, or 6.2%, for the six months. The impact of foreign currency translation added approximately $0.02 to earnings in the quarter and $0.04 for the six months.

1

Eric Krasnoff, Chairman and CEO, stated, “We are pleased that the restatement process is behind us and that the Company is now current with its SEC filing obligations. I particularly want to recognize the efforts of our CFO, Lisa McDermott, and her team for their tireless work guiding our Company through this period. We are also grateful for the support of our lenders. It is now time to move forward.”

Life Sciences — Second Quarter Highlights

(Dollar Amounts in Thousands)

					% CHANGE
					IN LOCAL
Sales:	JAN. 31, 2008		% CHANGE		CURRENCY
Medical	$	125,277		4.7		0.8
BioPharmaceuticals		119,203		29.1		20.4
Total Life Sciences segment	$	244,480		15.4		9.3
			% OF SALES
Gross profit	$	121,343		49.6
Operating profit	$	48,153		19.7

Within Life Sciences, BioPharmaceuticals sales increased 20%. This was driven by strong systems sales in all geographies and a double-digit increase in consumable sales in Europe. Improved pricing and savings generated from cost reduction initiatives were offset by increased systems sales, reducing Life Sciences gross margin slightly to 49.6% from 50% last year. SG&A expenses, as a percentage of sales, improved 300 basis points to 25.8%. This reflects the impact of cost reduction initiatives and leverage on the top line. Operating profit increased 30% to $48.2 million. Operating profit margin improved to 19.7% from 17.5% last year.

2

Industrial — Second Quarter Highlights

(Dollar Amounts in Thousands)

					% CHANGE
					IN LOCAL
Sales:	JAN. 31, 2008		% CHANGE		CURRENCY
General Industrial	$	232,005		17.8		9.4
Aerospace and Transportation		71,013		16.9		11.7
Microelectronics		78,249		3.9		(0.7	)
Total Industrial segment	$	381,267		14.5		7.5
			% OF SALES
Gross profit	$	166,933		43.8
Operating profit	$	55,443		14.5

Looking at Pall Industrial, the General Industrial markets saw consumable sales increase in most markets and in all geographies with the highest growth rates reported in two “systems heavy” markets: Municipal Water and Fuels and Chemicals. Systems sales grew 10.3% led by nearly 20% growth in the Municipal Water market.

Within Aerospace and Transportation, Military sales increased 21.8%. Commercial Aerospace sales grew 6.3% driven by the Western Hemisphere. As expected, Microelectronics sales were down slightly due to the cyclical downturn in the marketplace.

Pall Industrial’s gross margin decreased to 43.8% from 45.8%. Gross margins were adversely affected by an increased proportion of systems sales and a change in market mix within consumables. Incremental costs in Europe related to the facilities rationalization initiative also contributed to the margin decline. These factors were partly offset by savings generated by myriad manufacturing cost reduction and efficiency initiatives.

SG&A expenses, as a percentage of sales improved 190 basis points to 27.2% reflecting the impact of cost reduction initiatives and the leveraging of growth in sales. Operating profit increased about 15% to $55.4 million and operating margin was 14.5%, on par with last year.

Conclusion

Mr. Krasnoff concluded, “We remain committed to delivering long-term sustainable, profitable growth for shareholders. Pall’s Total Fluid Management^SM (TFM) capability continues to resonate powerfully with customers across our many markets. At the halfway point of the year our Industrial and Life Sciences businesses are on course.”

Conference Call

On Monday March 31, 2008, 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.

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Special Note on Financial Tables

The financial tables presented below reflect the restatement of interest expense and provision for taxes in the affected periods as referred to above. For further details on the restatement as related to the periods presented in the financial tables that follow, refer to Note 2, Audit Committee Inquiry and Restatement, to the consolidated financial statements in the Company’s fiscal year 2007 Annual Report on Form 10-K.

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, water purification, aerospace, transportation and broad industrial markets. Total revenues for fiscal year 2007 were $2.2 billion. The Company is headquartered in East Hills, New York and has extensive operations around the world. For more information visit Pall at http://www.pall.com.

Forward-Looking Statements

The matters discussed in this release contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this release and in the Company’s 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, management’s expectations about its future cash needs and effective tax rate, and other future events or developments are forward-looking statements. Such risks and uncertainties include, but are not limited to: risks relating to the Company’s restatement of prior period financial statements, including the risks associated with the pending IRS audit and pending SEC and Department of Justice investigations and litigation proceedings; risks associated with the Company’s planned cash management initiatives, which may result in changes in the Company’s effective tax rate; changes in product mix and product pricing may affect the Company’s operating results particularly as the systems business expands in which significantly longer sales cycles are experienced with less predictable revenue and profitability and less 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 its cost reduction and margin improvement initiatives including the timing of completion of its facilities rationalization initiative; fluctuations in foreign currency exchange rates and interest rates; regulatory approval or market acceptance of new technologies; changes in demand for the Company’s products and business relationships with key customers and suppliers including delays or cancellations in shipments; success in enforcing patents and protecting proprietary products and manufacturing techniques; risks associated with the completion or integration of acquisitions; domestic and international competition; and global and regional economic conditions, including particularly the impact of current challenging conditions in the United States that may also have global implications; 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. You should carefully consider these factors as well as the additional risk factors outlined in more detail in our most recent Annual Report on Form 10-K under Item 1A, Risk Factors, and in other filings the Company makes with the Securities and Exchange Commission.

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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(AMOUNTS IN THOUSANDS)

	JAN. 31, 2008		JUL. 31, 2007
Assets:
Cash and cash equivalents	$	410,265	$	443,036
Accounts receivable		576,204		551,393
Inventories		506,365		471,467
Other current assets		133,943		140,481
Total current assets		1,626,777		1,606,377
Property, plant and equipment, net		628,071		607,900
Other assets		623,848		494,569
Total assets	$	2,878,696	$	2,708,846
Liabilities and Stockholders’ Equity:
Short-term debt	$	65,014	$	41,720
Accounts payable, income taxes and other current liabilities		521,106		790,470
Total current liabilities		586,120		832,190
Long-term debt		692,430		591,591
Deferred taxes and other non-current liabilities		450,056		224,464
Total liabilities		1,728,606		1,648,245
Stockholders’ Equity		1,150,090		1,060,601
Total liabilities and stockholders’ equity	$	2,878,696	$	2,708,846

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PALL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)

	SECOND QUARTER ENDED						SIX MONTHS ENDED
	JAN. 31, 2008			JAN. 31, 2007			JAN. 31, 2008			JAN. 31, 2007
				(As Restated)						(As Restated)
Net sales	$	625,747		$	544,930		$	1,186,754		$	1,044,218
Cost of sales		337,471			288,460	(b)		637,162			564,076	(b)
Gross profit		288,276			256,470			549,592			480,142
% of sales		46.1	%		47.1	%		46.3	%		46.0	%
Selling, general and administrative expenses		178,845			168,203			349,832			325,578
Research and development		18,092			15,277			34,987			29,511
Earnings before restructuring and other charges/(gains), net (“ROTC”), interest expense, net, and income taxes		91,339			72,990			164,773			125,053
ROTC		13,859	(a)		(3,648)	(b)		22,628	(a)		13,440	(b)
Interest expense, net		8,063			9,759			15,784			20,455
Earnings before income taxes		69,417			66,879			126,361			91,158
Provision for income taxes		21,429			22,532			42,271	(a)		30,810
Net earnings	$	47,988		$	44,347		$	84,090		$	60,348
Earnings per share:
Basic	$	0.39		$	0.36		$	0.68		$	0.49
Diluted	$	0.39		$	0.36		$	0.68		$	0.49
Average shares outstanding:
Basic		123,372			123,185			123,256			122,988
Diluted		124,572			124,504			124,449			124,392
Net earnings as reported	$	47,988		$	44,347		$	84,090		$	60,348
ROTC and one-time purchase accounting adjustment, after pro forma tax effect		9,229			(611	)		15,325			10,462
Tax adjustments (a)		—			—			2,435			—
Pro forma earnings	$	57,217		$	43,736		$	101,850		$	70,810
Diluted earnings per share as reported	$	0.39		$	0.36		$	0.68		$	0.49
ROTC and one-time purchase accounting adjustment, after pro forma tax effect		0.07			(0.01	)		0.12			0.08
Tax adjustments (a)		—			—			0.02			—
Pro forma diluted earnings per share	$	0.46		$	0.35		$	0.82		$	0.57

(a) ROTC in the quarter and the six months includes charges of $3,959 (2 cents per share, after pro forma tax effect) and $8,962 (5 cents per share, after pro forma tax effect) primarily comprised of severance and other costs related to the Company’s cost reduction programs, including its facilities rationalization initiative. ROTC in the quarter and six months also includes $9,900 (5 cents per share, after pro forma tax effect) and $13,666 (7 cents per share, after pro forma tax effect) primarily comprised of legal and other professional fees related to the matters under inquiry by the audit committee of the Company’s board of directors.

Provision for income taxes in the six months includes a charge of $2,435 (2 cents per share) resulting from newly enacted tax legislation in a foreign tax jurisdiction. Pro forma earnings exclude this item as it is deemed to be non-recurring in nature.

(b) Cost of sales includes incremental depreciation and other adjustments of $1,523 (1 cent per share, after pro forma tax effect) in the quarter and $1,950 (1 cent per share, after pro forma tax effect) in the six months recorded in conjunction with the Company’s facilities rationalization initiative. Furthermore, cost of sales includes a charge of $566 for the quarter and six months 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 income of $3,868 ( 2 cents per share, after pro forma tax effect) primarily comprised of a gain on the sale of a facility partly offset by severance and other costs related to the Company’s cost reduction programs, including its facilities rationalization initiative. ROTC in the six months includes a charge of $9,724 (5 cents per share, after pro forma tax effect) 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. The charges in the six months relate to the Company’s cost reduction programs, including its facilities rationalization initiative. In addition, the quarter and six months include charges of $220 and $3,716 (2 cents per share, after pro forma tax effect), respectively related to an increase in environmental reserves and a legal settlement.

6

PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(AMOUNTS IN THOUSANDS)

	SIX MONTHS ENDED
	JAN. 31, 2008			JAN. 31, 2007
Net cash (used)/provided by operating activities	$	(74,905	)	$	148,875
Investing activities:
Disposals of long-lived assets		4,605			43,968
Capital expenditures		(52,681	)		(32,210	)
Other		(4,789	)		(1,812	)
Net cash (used)/provided by investing activities		(52,865	)		9,946
Financing activities:
Dividends paid		(29,425	)		(26,885	)
Notes payable and long-term borrowings		101,453			(121,281	)
Purchase of treasury stock		—			(11,800	)
Other		8,222			27,759
Net cash provided/(used) by financing activities		80,250			(132,207	)
Cash flow for period		(47,520	)		26,614
Cash and cash equivalents at beginning of year		443,036			317,657
Effect of exchange rate changes on cash		14,749			1,415
Cash and cash equivalents at end of period	$	410,265		$	345,686
Free cash flow:
Net cash (used)/provided by operating activities	$	(74,905	)	$	148,875
Less capital expenditures		52,681			32,210
Free cash flow	$	(127,586	)	$	116,665

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

	SECOND QUARTER ENDED						SIX MONTHS ENDED
	JAN. 31, 2008			JAN. 31, 2007			JAN. 31, 2008			JAN. 31, 2007
Life Sciences
Sales	$	244,480		$	211,935		$	459,094		$	404,937
Cost of sales (a)		123,137			105,921			226,603			203,697
Gross profit		121,343			106,014			232,491			201,240
% of sales		49.6	%		50.0	%		50.6	%		49.7	%
Selling, general and administrative expenses		62,982			61,136			124,729			119,528
Research and development		10,208			7,842			19,826			15,488
Operating profit	$	48,153		$	37,036		$	87,936		$	66,224
% of sales		19.7	%		17.5	%		19.2	%		16.4	%
Industrial
Sales	$	381,267		$	332,995		$	727,660		$	639,281
Cost of sales (a)		214,334			180,450			410,559			357,863
Gross profit		166,933			152,545			317,101			281,418
% of sales		43.8	%		45.8	%		43.6	%		44.0	%
Selling, general and administrative expenses		103,606			96,737			201,420			185,733
Research and development		7,884			7,435			15,161			14,023
Operating profit	$	55,443		$	48,373		$	100,520		$	81,662
% of sales		14.5	%		14.5	%		13.8	%		12.8	%
CONSOLIDATED:
Operating profit	$	103,596		$	85,409		$	188,456		$	147,886
General corporate expenses		12,257			10,330			23,683			20,317
Earnings before ROTC, interest and income taxes		91,339			75,079			164,773			127,569
ROTC (a)		13,859			(1,559	)		22,628			15,956
Interest expense, net (b)		8,063			9,759			15,784			20,455
Earnings before income taxes	$	69,417		$	66,879		$	126,361		$	91,158

(a) Included in ROTC for the purpose of evaluation of segment profitability are other adjustments recorded in cost of sales. For the quarter and six months ended January 31, 2007, such adjustments include incremental depreciation and other adjustments of $1,523 and $1,950 recorded in conjunction with the Company’s facilities rationalization initiative. Furthermore, such adjustments include a charge of $566 for the quarter and six months ended January 31, 2007 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.

(b) Interest expense, net and Earnings before income taxes have been restated for the quarter and six months ended January 31, 2007 as a result of matters that led to the audit committee inquiry.

8

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

							EXCHANGE		% CHANGE
							RATE		IN LOCAL
SECOND QUARTER ENDED	JAN. 31, 2008		JAN. 31, 2007		% CHANGE		IMPACT		CURRENCY
					Increase/(Decrease)
Life Sciences
By Market:
Medical	$	125,277	$	119,605		4.7	$	4,742		0.8
BioPharmaceuticals		119,203		92,330		29.1		7,995		20.4
Total Life Sciences	$	244,480	$	211,935		15.4	$	12,737		9.3
By Geography:
Western Hemisphere	$	95,897	$	89,441		7.2	$	465		6.7
Europe		117,471		95,249		23.3		10,162		12.7
Asia		31,112		27,245		14.2		2,110		6.5
Total Life Sciences	$	244,480	$	211,935		15.4	$	12,737		9.3
Industrial
By Market:
General Industrial	$	232,005	$	196,975		17.8	$	16,583		9.4
Aerospace and Transportation		71,013		60,735		16.9		3,159		11.7
Microelectronics		78,249		75,285		3.9		3,480		(0.7	)
Total Industrial	$	381,267	$	332,995		14.5	$	23,222		7.5
By Geography:
Western Hemisphere	$	98,976	$	96,949		2.1	$	964		1.1
Europe		149,309		131,687		13.4		13,792		2.9
Asia		132,982		104,359		27.4		8,466		19.3
Total Industrial	$	381,267	$	332,995		14.5	$	23,222		7.5

9

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

							EXCHANGE		% CHANGE
							RATE		IN LOCAL
SIX MONTHS ENDED	JAN. 31, 2008		JAN. 31, 2007		% CHANGE		IMPACT		CURRENCY
					Increase/(Decrease)
Life Sciences
By Market:
Medical	$	235,449	$	223,117		5.5	$	8,695		1.6
BioPharmaceuticals		223,645		181,820		23.0		14,175		15.2
Total Life Sciences	$	459,094	$	404,937		13.4	$	22,870		7.7
By Geography:
Western Hemisphere	$	182,899	$	173,637		5.3	$	758		4.9
Europe		218,493		179,921		21.4		18,626		11.1
Asia		57,702		51,379		12.3		3,486		5.5
Total Life Sciences	$	459,094	$	404,937		13.4	$	22,870		7.7
Industrial
By Market:
General Industrial	$	440,694	$	372,048		18.5	$	29,193		10.6
Aerospace and Transportation		137,272		121,067		13.4		6,196		8.3
Microelectronics		149,694		146,166		2.4		5,562		(1.4	)
Total Industrial	$	727,660	$	639,281		13.8	$	40,951		7.4
By Geography:
Western Hemisphere	$	195,909	$	185,915		5.4	$	1,746		4.4
Europe		281,768		251,120		12.2		25,682		2.0
Asia		249,983		202,246		23.6		13,523		16.9
Total Industrial	$	727,660	$	639,281		13.8	$	40,951		7.4

10

PALL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)

	FIRST QUARTER ENDED
	OCT. 31, 2007			OCT. 31, 2006
				(As Restated)
Net sales	$	561,007		$	499,288
Cost of sales		299,691			275,616	(b)
Gross profit		261,316			223,672
% of sales		46.6	%		44.8	%
Selling, general and administrative expenses		170,987			157,375
Research and development		16,895			14,234
Earnings before restructuring and other charges/(gains), net (“ROTC”), interest expense, net, and income taxes		73,434			52,063
ROTC		8,769	(a)		17,088	(b)
Interest expense, net		7,721			10,696
Earnings before income taxes		56,944			24,279
Provision for income taxes		20,842	(a)		8,278
Net earnings	$	36,102		$	16,001
Earnings per share:
Basic	$	0.29		$	0.13
Diluted	$	0.29		$	0.13
Average shares outstanding:
Basic		123,167			122,812
Diluted		124,360			123,801
Net earnings as reported	$	36,102		$	16,001
ROTC and cost of sales adjustments, after pro forma tax effect		6,096			11,073
Tax adjustments (a)		2,435			—
Pro forma earnings	$	44,633		$	27,074
Diluted earnings per share as reported	$	0.29		$	0.13
ROTC and cost of sales adjustments, after pro forma tax effect		0.05			0.09
Tax adjustments (a)		0.02			—
Pro forma diluted earnings per share	$	0.36		$	0.22

(a) ROTC in the quarter includes charges of $5,003 (3 cents per share, after pro forma tax effect) primarily comprised of severance and other costs related to the Company’s cost reduction programs. ROTC also includes $3,766 (2 cents per share, after pro forma tax effect) comprised of legal and other professional fees related to the matters under inquiry by the audit committee of the Company’s board of directors.

Provision for income taxes in the quarter includes a charge of $2,435 (2 cents per share) resulting from newly enacted tax legislation in a foreign tax jurisdiction. Pro Forma earnings exclude this item as it is deemed to be non-recurring in nature.

(b) Cost of sales includes $427 comprised of incremental depreciation recorded in conjunction with the Company’s facilities rationalization initiative.

ROTC includes $13,581 (7 cents per share, after pro forma tax effect) primarily comprised of severance costs and an impairment charge for the planned disposal and early retirement of a building and certain other long-lived assets related to the Company’s cost reduction programs, including its facilities rationalization initiative. In addition, the quarter includes other charges of $3,507 (2 cents per share, after pro forma tax effect) primarily related to an increase in environmental reserves and a legal settlement.

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PALL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
FISCAL YEAR 2007 BY QUARTER — AS RESTATED
(Unaudited)
(Amounts in thousands, except per share data)

	QUARTER ENDED												FULL YEAR
	OCT. 31, 2006			JAN. 31, 2007			APR. 30, 2007			JUL. 31, 2007			JUL. 31, 2007
	(As Restated)			(As Restated)			(As Restated)
Net sales	$	499,288		$	544,930		$	559,347		$	646,340		$	2,249,905
Cost of sales		275,616			288,460			282,227			344,246			1,190,549	(a)
Gross profit		223,672			256,470			277,120			302,094			1,059,356
% of sales		44.8	%		47.1	%		49.5	%		46.7	%		47.1	%
Selling, general and administrative expenses		157,375			168,203			167,677			181,750			675,005
Research and development		14,234			15,277			15,656			17,247			62,414
Earnings before restructuring and other charges/(gains), net (“ROTC”), interest expense, net, and income taxes		52,063			72,990			93,787			103,097			321,937
ROTC		17,088			(3,648	)		8,620			292			22,352	(a)
Interest expense, net		10,696			9,759			9,171			9,430			39,056
Earnings before income taxes		24,279			66,879			75,996			93,375			260,529
Provision for income taxes		8,278			22,532			25,625			76,597			133,032	(b)
Net earnings	$	16,001		$	44,347		$	50,371		$	16,778		$	127,497
Earnings per share:
Basic	$	0.13		$	0.36		$	0.41		$	0.14		$	1.04
Diluted	$	0.13		$	0.36		$	0.40		$	0.13		$	1.02
Average shares outstanding:
Basic		122,812			123,185			123,399			123,114			123,115
Diluted		123,801			124,504			124,781			124,551			124,393
Net earnings as reported	$	16,001		$	44,347		$	50,371		$	16,778		$	127,497
ROTC and cost of sales adjustments, after pro forma tax effect		11,073			(611	)		5,675			462			16,599
Tax adjustments (b)											39,993			39,993
Pro forma earnings	$	27,074		$	43,736		$	56,046		$	57,233		$	184,089
Diluted earnings per share as reported	$	0.13		$	0.36		$	0.40		$	0.13		$	1.02
ROTC and cost of sales adjustments, after pro forma tax effect		0.09			(0.01	)		0.05			0.01			0.14
Tax adjustments (b)		—			—			—			0.32			0.32
Pro forma diluted earnings per share	$	0.22		$	0.35		$	0.45		$	0.46		$	1.48

(a) Cost of sales in fiscal year 2007 includes incremental depreciation and other adjustments of $2,179 (2 cents per share, after pro forma tax effect) recorded in conjunction with the Company’s facilities rationalization initiative. Furthermore, cost of sales includes a charge of $566 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 fiscal year 2007 includes a charge of $22,352 (12 cents per share, after pro forma tax effect) primarily comprised of severance costs, other exit costs and an impairment charge on certain long-lived assets partly offset by a gain on the sale of a facility. The charges relate to the Company’s cost reduction programs, including its facilities rationalization initiative.

(b) Provision for income taxes includes $39,993 (32 cents per share) a charge for the net tax cost of the anticipated repatriation of approximately $160 million of foreign earnings which had previously been asserted to be indefinitely reinvested and a change in estimate in fiscal year 2007 of certain income tax reserves. Pro forma earnings exclude these items as they are deemed to be non-recurring in nature.

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

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