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): June 3, 2003

PALL CORPORATION
(Exact name of registrant as specified in its charter)

New York (State or other jurisdiction of incorporation)	1- 4311 (Commission file number)	11-1541330 (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)

ITEM 9. Information Provided Under Item 12 (Results of Operations and Financial Condition)

The following information is furnished pursuant to Item 12, “Results of Operations and Financial Condition.”

On June 3, 2003, Pall Corporation issued a press release announcing its financial results for the fiscal quarter ended May 3, 2003. A copy of the press release is furnished as Exhibit 99.1 to this report.

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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
June 5, 2003	/s/	JOHN ADAMOVICH, JR John Adamovich, Jr Chief Financial Officer and Treasurer

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INDEX TO EXHIBITS

Exhibit
Number	Description
99.1	Press release, dated June 3, 2003, issued by Pall Corporation

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EX-99.1

EXHIBIT 99.1

Pall Corporation Third Quarter Sales and Earnings Surge

East Hills, NY (June 03, 2003)—Pall Corporation (NYSE: PLL) today reported sales and earnings results for the third quarter and nine months of fiscal 2003, which ended May 3, 2003.

Sales for the third quarter increased 39½% to $421.5 million compared with $302.4 million last year. Foreign exchange rates increased sales 12% or $36.6 million. Earnings increased nearly 70% and were $44.6 million, or 36 cents per share, excluding restructuring and other charges, compared to last year’s $26.4 million, or 21 cents per share. Reported earnings for the third quarter were $40.4 million, or 33 cents per share.

Sales for the nine months increased 32½% to $1.142 billion compared to $861.9 million last year. Foreign exchange rates increased sales 8% or $68.1 million. Earnings were $92.8 million, or 75 cents per share, excluding restructuring and other charges, compared to last year’s $64.3 million, or 52 cents per share. Restructuring and other charges of $46.4 million, or 36 cents per share (including the pro forma tax effect), were recorded in the nine months primarily to write-off the in-process research and development from the acquired Filtration and Separations Group (“FSG”). This reduced the reported results for the nine months to earnings of $48.6 million, or 39 cents per share.

Eric Krasnoff, Pall’s Chairman and CEO, said, “We are pleased to have produced another solid quarter. Sales increased 39½%. Earnings and earnings per share each increased nearly 70%. Our results exceeded analyst consensus estimates. Cash flow for the nine months was strong and net debt has been reduced by $63 million.

The first nine months of the fiscal year have seen substantial progress on our three main goals. Those are to improve profitability, to aggressively reduce debt and to successfully integrate FSG into Pall. We are well ahead of our targets in each of these areas.

The end of April marked our first anniversary as the “new Pall” with FSG now fully integrated into our sales, marketing and technical organizations. We are selling more to shared and new customers than we could have alone. As important, operating margins have improved to 19.8% from 16.9% in the third quarter last year.

Among the highlights for the quarter:

All Industrial business segments experienced double-digit sales growth in the quarter ranging from 25½ to 57%. In total, Industrial sales were up 47%. Operating profit improved 114% to $43.7 million. The General Industrial segment, which serves industries including food and beverage, water processing and chemicals, achieved sales growth of 57%. Microelectronics posted its fourth consecutive quarter of double-digit sales growth in a semiconductor market that is slowly recovering. Aerospace also turned in a double-digit increase in sales as Military Aerospace sales increased 55%. Commercial Aerospace held steady in the quarter.

Turning to Life Sciences, BioPharmaceuticals grew 16½% compared to last year's third quarter, buoyed by strong biotechnology sales. Medical sales increased 6% sequentially over the second quarter but were flat compared to the same quarter last year. Blood filter sales were down 1½% compared to last year as we continue to focus on improving margins. Third quarter Medical profits came in at 19.5%, building on the pattern of sequential operating profit improvement that began with 7.8% in the first quarter.

By region, Europe posted sales growth of 39%, Asia’s sales grew by 36½% and Western Hemisphere sales were up by 15% compared to last year's third quarter. With sales growth of $33 million in the quarter compared to our second quarter, operating margins in each geography have improved considerably.”

Commenting on the quarter’s earnings growth compared to last year, Mr. Krasnoff said, “The 15 cent improvement in earnings per share is attributable to organic growth, aided by continuing cost reduction programs, FSG synergies and also includes about 4 cents per share for foreign exchange translation. Our estimate of $7 million in acquisition-related synergies for this quarter indicates that full year synergies continue to run ahead of our goal.”

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Looking ahead, Mr. Krasnoff continued, “We anticipate earnings per share for the year in the range of $1.14 to $1.19. The midpoint of this range is an increase of 9 cents per share from the midpoint of our prior guidance range and, if achieved, represents a 42% increase from the prior year's 82 cents per share.”

Tomorrow, June 4, 2003, at 8:30 a.m. EST, Pall Corporation will host its quarterly earnings conference call. Individuals can access the webcast on the home page of the Company’s website, www.pall.com. Listening to the webcast requires speakers and Microsoft Windows Media Player audio software. The webcast will be archived for 14 days.

Pall Corporation is the global leader in the rapidly growing field of filtration, separations and purification. Pall's business is organized around two broad markets: Life Sciences and Industrial. The Company provides leading-edge products to meet the demanding needs of customers in biotechnology, pharmaceuticals, transfusion medicine, semiconductors, municipal drinking water and aerospace. Total revenues in the last twelve months were about $1.5 billion. The Company is headquartered in East Hills, New York. Further information can be found on its Web site 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: fluctuations in foreign currency exchange rates; regulatory approval and market acceptance of new technologies; changes in product mix and product pricing and in interest rates and cost of raw materials; the Company’s success in enforcing its patents and protecting its proprietary products and manufacturing techniques; global and regional economic conditions and legislative, regulatory and political developments; and domestic and international competition in the Company’s global markets. Additional information regarding these and other factors is available on the web at www.pall.com and is included in the Company’s reports filed with the U.S. Securities and Exchange Commission. Copies of such reports can be obtained, without charge, at: www.sec.gov.

Financial Tables to Follow...

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PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

		MAY 3, 2003		AUG. 3, 2002
Assets
Cash and short-term investments	$	148,763	$	145,424
Accounts receivable, net		394,166		415,853
Inventories, net		293,529		256,910
Other current assets		106,960		94,947
Total current assets		943,418		913,134
Property, plant and equipment, net		597,993		605,095
Other assets		486,436		492,214
Total assets	$	2,027,847	$	2,010,443
Liabilities and Stockholders’ Equity
Short-term debt	$	57,626	$	103,546
Accounts payable, income taxes
and other current liabilities		332,604		331,777
Total current liabilities		390,230		435,323
Long-term debt		606,139		619,705
Deferred taxes and other
non-current liabilities		142,673		135,695
Total liabilities		1,139,042		1,190,723
Stockholders’ equity		888,805		819,720
Total liabilities and
stockholders’ equity	$	2,027,847	$	2,010,443

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PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except per share data)

		THIRD QUARTER ENDED					NINE MONTHS ENDED
		MAY 3, 2003			APR. 27, 2002		MAY 3, 2003			APR. 27, 2002
Net sales	$	421,491		$	302,377	$	1,142,223		$	861,931
Cost of sales		205,587			145,482		579,933			425,946
Gross profit		215,904			156,895		562,290			435,985
Selling, general and
administrative expenses		138,664			107,245		384,361			306,471
Research and development		14,255			13,159		39,715			38,474
Restructuring and other charges		5,036			–		46,335			–
Interest expense, net		5,765			2,590		19,238			8,668
Earnings before income taxes		52,184			33,901		72,641			82,372
Provision for income taxes		11,829			7,458		24,045			18,122
Net earnings	$	40,355		$	26,443	$	48,596		$	64,250
Earnings per share:
Basic:	$	0.33		$	0.22	$	0.40		$	0.53
Diluted:	$	0.33		$	0.21	$	0.39		$	0.52
Average number of
shares outstanding:
Basic:		123,146			122,336		122,983			122,242
Diluted		123,891			123,512		123,745			123,478
Net earnings as reported	$	40,355		$	26,443	$	48,596		$	64,250
Restructuring and other
charges after pro forma tax effect		4,277	(a)		–		44,205	(a)		–
Pro forma earnings	$	44,632		$	26,443	$	92,801		$	64,250
Diluted earnings per
share as reported	$	0.33		$	0.21	$	0.39		$	0.52
Restructuring and
other charges	$	0.03	(a)	$	–	$	0.36	(a)	$	–
Pro forma diluted
earnings per share	$	0.36		$	0.21	$	0.75		$	0.52

(a) Restructuring and other charges for the nine months includes $37,600 (30 cents per share) of acquired in-process research and development and $8,735 (6 cents per share, after pro forma tax effect) of restructuring costs inclusive of $5,036 (3 cents per share, after pro forma tax effect) incurred in the third quarter.

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PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)

									% CHANGE
SALES							%		IN LOCAL
THIRD QUARTER ENDED:		MAY 3, 2003			APR. 27, 2002		CHANGE		CURRENCY
MARKET SEGMENT
INFORMATION:
Medical (a)	$	83,985		$	79,075		6		–
BioPharmaceuticals (a)		93,295			73,093		27	½	16	½
Total Life Sciences		177,280			152,168		16	½	8
General Industrial		150,050			84,351		78		57
Aerospace		51,060			38,454		33		25	½
Microelectronics		43,101			27,404		57	½	46
Total Industrial		244,211			150,209		62	½	47
Total	$	421,491		$	302,377		39	½	27	½
GEOGRAPHIC
INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
Western Hemisphere	$	164,410		$	141,829		16		15
Europe		178,536			107,328		66	½	39
Asia		78,545			53,220		47	½	36	½
Total	$	421,491		$	302,377		39	½	27	½
TOTAL SALES
Western Hemisphere	$	206,492		$	172,721
Europe		202,241			123,853
Asia		79,680			53,609
Eliminations		(66,922	)		(47,806	)
Total	$	421,491		$	302,377

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

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OPERATING PROFIT
THIRD QUARTER ENDED:		MAY 3, 2003		%		APR. 27, 2002		%
MARKET SEGMENT
INFORMATION:
Medical (a)	$	16,413		19.5	$	12,370		15.6
BioPharmaceuticals (a)		23,269		24.9		18,290		25.0
Total Life Sciences		39,682		22.4		30,660		20.1
General Industrial		19,582		13.1		9,042		10.7
Aerospace		16,354		32.0		8,961		23.3
Microelectronics		7,761		18.0		2,416		8.8
Total Industrial		43,697		17.9		20,419		13.6
Subtotal		83,379		19.8		51,079		16.9
Restructuring and other charges		(5,036	)			–
General corporate expenses		(20,394	)			(14,588	)
Interest expense, net		(5,765	)			(2,590	)
Earnings before income taxes	$	52,184			$	33,901
GEOGRAPHIC INFORMATION:
Western Hemisphere	$	31,801		15.4	$	19,981		11.6
Europe		36,996		18.3		22,956		18.5
Asia		13,858		17.4		8,607		16.1
Eliminations		724				(465	)
Subtotal		83,379		19.8		51,079		16.9
Restructuring and other charges		(5,036	)
General corporate expenses		(20,394	)			(14,588	)
Interest expense, net		(5,765	)			(2,590	)
Earnings before income taxes	$	52,184			$	33,901

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

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PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)

									% CHANGE
SALES							%		IN LOCAL
NINE MONTHS ENDED:		MAY 3, 2003			APR. 27, 2002		CHANGE		CURRENCY
MARKET SEGMENT
INFORMATION:
Medical (a)	$	221,070		$	219,243		1		(3	½)
BioPharmaceuticals (a)		249,010			205,967		21		13	½
Total Life Sciences		470,080			425,210		10	½	4	½
General Industrial		417,317			245,046		70	½	57	½
Aerospace		134,032			114,836		16	½	11	½
Microelectronics		120,794			76,839		57		49	½
Total Industrial		672,143			436,721		54		44
Total	$	1,142,223		$	861,931		32	½	24	½
GEOGRAPHIC INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
Western Hemisphere	$	453,569		$	393,841		15		16
Europe		479,556			307,348		56		36
Asia		209,098			160,742		30		24
Total	$	1,142,223		$	861,931		32	½	24	½
TOTAL SALES
Western Hemisphere	$	573,848		$	479,596
Europe		541,140			350,238
Asia		211,953			162,097
Eliminations		(184,718	)		(130,000	)
Total	$	1,142,223		$	861,931

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

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OPERATING PROFIT
NINE MONTHS ENDED:		MAY 3, 2003		%		APR. 27, 2002		%
MARKET SEGMENT
INFORMATION:
Medical (a)	$	33,605		15.2	$	28,566		13.0
BioPharmaceuticals (a)		54,480		21.9		51,558		25.0
Life Sciences		88,085		18.7		80,124		18.8
General Industrial		44,619		10.7		25,338		10.3
Aerospace		37,593		28.0		27,672		24.1
Microelectronics		19,821		16.4		2,560		3.3
Industrial		102,033		15.2		55,570		12.7
Subtotal		190,118		16.6		135,694		15.7
Restructuring and other charges		(46,335	)			–
General corporate expenses		(51,904	)			(44,654	)
Interest expense, net		(19,238	)			(8,668	)
Earnings before income taxes	$	72,641			$	82,372
GEOGRAPHIC INFORMATION:
Western Hemisphere	$	76,477		13.3	$	51,564		10.8
Europe		83,994		15.5		57,640		16.5
Asia		31,509		14.9		26,174		16.1
Eliminations		(1,862	)			316
Subtotal		190,118		16.6		135,694		15.7
Restructuring and other charges		(46,335	)			–
General corporate expenses		(51,904	)			(44,654	)
Interest expense, net		(19,238	)			(8,668	)
Earnings before income taxes	$	72,641			$	82,372

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

Contact:

John Adamovich,
Pall Corporation
Tel: (516) 801-9808

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