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 1, 2006

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)

Not Applicable

(Former name or former address, if changed since last report)

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):

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

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

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

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 June 1, 2006, Pall Corporation (the “Registrant”) released its results of operations for its fiscal third quarter ended April 30, 2006. A copy of the press release issued by the Registrant is furnished herewith as Exhibit 99 to this report.

The information contained in this Item 2.02 and in the accompanying exhibit shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a) (2) of the Securities Act of 1933, as amended, or incorporated by reference into any filing of the registrant unless the registrant specifically states that the information is to be considered “filed” under the Securities Exchange Act of 1934 or incorporates it by reference into a filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

ITEM 2.05   Costs Associated with Exit or Disposal Activities.

(a)	On June 1, 2006, the Registrant announced a facilities rationalization program (the “Program”), under which the Registrant will reduce its footprint by approximately 1.2 million square feet, or over 20%, and will include up to twelve facilities. In connection with the reduction in facilities, global manufacturing headcount will be reduced by approximately 10%. The Company expects to be substantially complete with the Program by the end of fiscal year 2008.
(b)	The Registrant’s preliminary estimate of severance and other employee-related costs associated with the global manufacturing headcount reduction is approximately $35 million. Non-employee exit costs, such as impairment and accelerated depreciation charges, associated with the Program are estimated to be approximately $20-$25 million.
(c)	The Registrant’s estimate of costs to be incurred for the Program are expected to be approximately $55-$60 million.
(d)	The Registrant’s estimate of the costs to be incurred for the Program that will result in future cash expenditures is approximately $35 million.

ITEM 9.01 Financial Statements and Exhibits.

(d)	Exhibits.
	99	Press Release, dated June 1, 2006, reporting the results of operations of Pall Corporation for its fiscal third quarter ended April 30, 2006.

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 thereunto duly authorized.

		Pall Corporation
	/s/	LISA MCDERMOTT
June 7, 2006		Lisa McDermott
		Chief Financial Officer
		and Treasurer

3

INDEX TO EXHIBITS

Exhibit Number	Description
99	Press Release, dated June 1, 2006, reporting the results of operations of Pall Corporation for its fiscal third quarter ended April 30, 2006.

4

EX-99

Exhibit 99

PALL REPORTS THIRD QUARTER RESULTS FOR FISCAL YEAR 2006

Reports Strong Microelectronics and BioPharmaceuticals Sales Growth

Announces Facilities Reduction and Consolidation Expected to Generate Annualized

Savings of $40MM in Costs and $10MM in Tax by FYE 2008

Repatriates $400 Million in Foreign Subsidiary Earnings;

Takes Related $17 MM Charge

East Hills, NY (June 1, 2006) -- Pall Corporation (NYSE: PLL) today reported sales and earnings results for the third quarter and nine months ended April 30, 2006. The Company also announced a facilities reduction and consolidation program expected to generate annualized savings of $40 million in costs and $10 million in tax by fiscal year end 2008.

Third Quarter Results

Reported sales for the quarter were $510 million and earnings were $25.2 million, or $0.20 per share, as compared to sales of $493.5 million and earnings of $43.7 million, or $0.35 per share, in the same quarter last year. Local currency sales increased 7% driven by strong growth in Microelectronics and BioPharmaceuticals. On a pro forma basis, third quarter earnings were $47.2 million, or $0.37 per share, excluding restructuring and other charges primarily related to cost-cutting and the facilities rationalization program of $0.04 per share, net of related tax effect, and a one-time charge related to repatriation of foreign subsidiary earnings of $0.13 per share as compared to pro forma earnings of $46.3 million, or $0.37 per share, in the same quarter last year.

Foreign currency translation reduced sales by 3½% and earnings per share by $0.01 in the quarter, and the impact of stock compensation and SFAS No. 123R, “Share-Based Payment” reduced earnings per share by an additional $0.02. Factoring in these items, third quarter pro forma earnings per share growth is $0.03, or 8%.

Eric Krasnoff, Chairman and CEO, said, “In the quarter, we saw good growth in Microelectronics and BioPharmaceuticals sales at 36½% and 18% (in local currency), respectively, driven by strong demand across product lines and in all geographies. Overall backlog is at an all-time high and we continue to make progress on our Total Fluid Management strategy, increasing system sales in every geography particularly in our BioPharmaceuticals and Food and Beverage markets. Systems represented 9% of total sales in the quarter compared to 8% last year, with 83% in the Industrial business and 17% in Life Sciences. Our margins in aggregate are much weaker than they should be, and we are committed to addressing this through a number of initiatives, including the facilities rationalization program that we are announcing today.”

“A heightened focus on improving working capital has resulted in a nine-day reduction in days sales outstanding compared with third quarter of fiscal year 2005. Inventory levels increased in the quarter and stock turns decreased due to fourth quarter volume expectations and as a result of our facilities rationalization program. Net debt was reduced $60.3 million compared with year-end and now stands at 20%” continued Mr. Krasnoff.

Third Quarter Financial Highlights

	Third Quarter
(in thousands of US$, except per share data)	FY06	FY05	Change in Local Currency
Pall Segment Results
Total Industrial	$304,044	$291,909	8%
Total Life Sciences	205,937	201,634	6%
Total sales	509,981	493,543	7%
Operating profit	81,693	85,056
Net Earnings	25,189	43,678
Diluted EPS	$0.20	$0.35
Pro Forma EPS	$0.37	$0.37

Cost Reduction & Facilities Rationalization Program

The Company expects the facilities rationalization program to achieve cost savings of $2 million in fiscal year 2006, growing to annualized savings of $40 million plus a further $10 million in tax savings by the end of fiscal year 2008. The Company’s facilities rationalization program will reduce its’ footprint by over 20% and result in a 10% global manufacturing headcount reduction. The facilities rationalization program is expected to be substantially complete by the end of fiscal year 2008, with approximately 20% of the cost savings realized in fiscal year 2007. Restructuring and other charges of approximately $7.3 million were recorded in the third quarter, primarily related to the Company’s cost reduction programs, of which $3.5 million was related to facilities reduction initiatives and $3.8 million was primarily related to other cost reductions, including headcount reductions and streamlining operations in Europe. The established cost reduction programs are expected to deliver the targeted $20 million this fiscal year.

“Our most pressing challenge is to reduce cost of sales and drive gross margin improvement across all businesses,” Mr. Krasnoff continued. “While SG&A, at 30.9% of sales, improved 180 basis points in the quarter, gross margin was again down, reflecting increased operating and manufacturing related costs such as commodities, energy and transportation, as well as the continued impact of reduced pricing in our blood business, and the higher level of system sales in the quarter. While we remain fully committed to our strategy of integrated businesses and systems sales, these efforts are contributing to margin compression in the short term, as the systems sales in particular generate lower margins but should yield sustainable higher margin sales over the long term.”

“We are taking aggressive steps to address costs across the organization with a number of initiatives, including a significant facilities reduction effort, better procurement and sales discipline for our systems business, and streamlining of operations, particularly in lower-growth regions,” said Mr. Krasnoff. “While we have achieved some improvement in SG&A costs for the past several quarters, we must reduce them further to counter rising external, less controllable costs. To ensure that our cost reductions have the momentum to stay ahead of rising costs, we are taking these further steps to more aggressively reduce costs and realize a greater impact on margins.”

Foreign Subsidiary Earnings Repatriation

The Company also elected to repatriate, during the fourth quarter of 2006, $400 million in foreign subsidiary earnings under the American Jobs Creation Act of 2004. This dividend, 85% of which will be exempt from U.S. tax, has resulted in a one-time charge of $17 million, or $0.13 cents per share, in the third quarter. The repatriation will enable the Company to preserve existing foreign tax credits for use in connection with future dividends from low tax rate jurisdictions. In order to take advantage of these benefits, the Company is required to complete the repatriation before fiscal year end 2006. The repatriation will be funded with existing overseas cash balances, supplemented by borrowings under a new $500 million European-based multi-currency, multi-borrower revolving credit facility, which is expected to close this month. The new facility will replace the Company’s existing facility. Deployment of the repatriated cash will include the repayment of amounts outstanding under the Company’s existing revolving credit facility, contributions to its U.S. defined benefit plans, and other investments in the U.S. such as the funding of research and development activities and possible U.S.-based acquisitions.

“Pall’s financial position will be further strengthened by the one-time opportunity to repatriate foreign earnings at a favorable tax rate, which supports our continuing efforts to minimize our effective tax rate for the longer term. In addition, the new credit facility increases our liquidity while providing us with greater borrowing flexibility at reduced cost” concluded Mr. Krasnoff.

Nine Month Results

Reported sales for the nine month period increased 3% to approximately $1.42 billion and earnings were $82.7 million, or $0.66 per share, as compared to sales of $1.38 billion and earnings of $97.4 million, or $0.78 per share, for the comparable period last year. Local currency sales for the nine months were up 6½%. On a pro forma basis, earnings for the nine month period were $107.6 million, or $0.85 per share, excluding restructuring and other charges primarily related to cost-cutting and the facilities rationalization program of $0.06 per share, net of related tax effect, and a one-time charge related to repatriation of foreign subsidiary earnings of $0.13 per share as compared to pro forma earnings of $108.6 million, or $0.87 per share, in the same nine month period last year. The effect of foreign currency translation reduced sales by 3½% and earnings per share by $0.02 and the impact of stock compensation and SFAS No. 123R, “Share-Based Payment”, reduced earnings per share in the nine months by an additional $0.05. Factoring in these items, pro forma earnings per share growth for the nine month period is $0.05, or 6%.

Nine Month Results Highlights

(in thousands of US$, except per share data)	FY06		FY05		Change in Local Currency
Pall Segment Results
Total Industrial		$856,828		$821,884	7½%
Total Life Sciences		562,751		555,864	4½%
Total sales		1,419,579		1,377,748	6½%
Operating profit		203,187		213,099
Net Earnings		82,735		97,422
Diluted EPS		$0.66		$0.78
Pro Forma EPS		$0.85		$0.87

Guidance

“We are fully committed to our integrated system strategy in combination with aggressive margin improvement and are confident that it will position Pall to deliver sustainable profitable growth in the long term. We are comfortable narrowing our earnings per share guidance range to $1.31 to $1.36 for fiscal year 2006” Mr. Krasnoff concluded.

Industrial Highlights

	Sales		% Change Local Currency		Operating Profit		Operating Margin %
General Industrial	$	189,777	3		$	17,217	9
Aerospace		44,790	(4	)		7,842	17	½
Microelectronics		69,477	36	½		19,085	27	½
Total Industrial	$	304,044	8		$	44,144	14	½

○ General Industrial sales increased 3% in the quarter. Operating profit margin declined to 9% compared with 12½% last year. Operating profit dollars declined to $17.2 million reflecting the decline in margin partly offset by the impact of higher sales. Within General Industrial:

– Power Generation sales increased 10½% driven by investment in new capacity in the marketplace and the upgrade of existing plants.

– Food and Beverage sales increased 7½% in the quarter driven by strong system and consumables sales in the Western Hemisphere.

– Machinery & Equipment sales increased 5% driven by growth in Europe and Asia.

– Fuels & Chemicals sales were down slightly in the quarter. Sales were up 7½% for the nine months. Orders growth was strong, increasing 17½% in the quarter.

– Municipal Water sales were down 10% in the quarter reflecting the lumpiness of systems business. Although orders were down in the quarter, for the nine months, orders were up 8½%.

○ Microelectronics sales were up 36½%, continuing to benefit from new fab construction and strength in the storage and display markets. Operating profit margin improved to 27½% and operating profit dollars increased 148½% to $19.1 million.

○ Aerospace sales decreased 4% in the quarter primarily related to timing of shipments. For the nine months sales increased 6% primarily driven by incremental, but discounted, sales attributable to our expanded agreement/relationship with Satair. The overall Aerospace operating margin was 17½% compared with 21% last year, while operating profit dollars were $7.8 million.

Life Sciences Highlights

	Sales		% Change Local Currency		Operating Profit		Operating Margin %
BioPharmaceuticals	$	93,200	18		$	24,518	26
Medical		112,737	(2	½)		13,031	11	½
Total Life Sciences	$	205,937	6		$	37,549	18

○ BioPharmaceuticals sales increased 18% driven by strong growth in consumables in all geographies combined with an increase in system sales of over 170%. Growth continues to be driven by products for biotechnology, vaccine and plasma fractionation. Orders increased 25½% in the quarter. Operating profit margin improved to 26% and operating profit dollars increased 31½% to $24.5 million.

○ Medical segment sales were down 2½%. Sales in the BioSciences submarket increased 2% driven by growth in OEM sales in Europe. Blood Filtration sales were down 4½% reflecting a shortfall in the Western Hemisphere related to new long-term contracts with major blood bank customers. Operating profit margin declined to 11½% reflecting reduced pricing in our blood filtration business and the integration of certain Corporate functions into the business. Operating profit dollars were $13 million.

Tomorrow, June 2, 2006, at 8:30 am EST, Pall Corporation will host its quarterly earnings conference call. Individuals can access the webcast from the home page of the Company’s website, www.pall.com. Listening to the webcast requires 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, separations and purification. Pall’s business is organized around two broad business groups: Life Sciences and Industrial. The Company provides leading-edge products to meet the demanding needs of customers in biotechnology, pharmaceutical, transfusion medicine, semiconductor, water purification, aerospace and broad industrial markets. Total revenues for fiscal year 2005 were $1.9 billion. The Company headquarters is in East Hills, New York with extensive operations throughout the world. Visit Pall at 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 and its ability to achieve the savings anticipated from its cost reduction initiatives; 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.

Management uses certain non-GAAP measurements to assess Pall’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 Pall’s financial position and results of operations. Pall 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 on-going operations.

Financial Tables Follow

PALL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	(Amounts in thousands)
	APR. 30,   2006		JUL. 31,   2005
Assets
Cash and cash equivalents	$	207,359	$	164,928
Accounts receivable, net		464,731		493,650
Inventories, net		438,848		365,929
Other current assets		147,436		135,885
Total current assets		1,258,374		1,160,392
Property, plant and equipment, net		619,897		608,758
Other assets		509,058		496,151
Total assets	$	2,387,329	$	2,265,301
Liabilities and Stockholders’ Equity
Short-term debt	$	29,099	$	25,658
Accounts payable, income taxes and other current liabilities		446,511		431,481
Total current liabilities		475,610		457,139
Long-term debt		488,807		510,161
Deferred taxes and other non-current liabilities		182,611		158,024
Total liabilities		1,147,028		1,125,324
Stockholders’ equity		1,240,301		1,139,977
Total liabilities and stockholders’ equity	$	2,387,329	$	2,265,301

PALL CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	(Amounts in thousands, except per share data)
		THIRD QUARTER ENDED						NINE MONTHS ENDED
		APR. 30, 2006			APR. 30, 2005			APR. 30, 2006			APR. 30, 2005
Net sales	$	509,981		$	493,543		$	1,419,579		$	1,377,748
Cost of sales		271,388	(a)		248,554			753,491	(a)		707,955
Gross profit		238,593			244,989			666,088			669,793
Selling, general and administrative expenses		157,407			161,461			466,250			464,906
Research and development		14,511			15,498			41,975			43,118
Restructuring and other charges, net		7,313	(a)		4,292	(c)		10,999	(a)		15,253	(c)
Interest expense, net		5,091			7,084			16,472			18,937
Earnings before income taxes		54,271	(b)		56,654			130,392	(b)		127,579
Provision for income taxes		29,082	(a)		12,976			47,657	(a)		30,157
Net earnings	$	25,189		$	43,678		$	82,735		$	97,422
Earnings per share:
Basic:	$	0.20		$	0.35		$	0.66		$	0.78
Diluted:	$	0.20		$	0.35		$	0.66		$	0.78
Average number of shares outstanding:
Basic:		125,614			124,869			125,243			124,535
Diluted:		126,581			125,924			126,121			125,481
Net earnings as reported	$	25,189		$	43,678		$	82,735		$	97,422
One-time purchase accounting adjustment and restructuring and other charges, net, after pro forma tax effect		5,040			2,641			7,819			11,130
Tax effect of repatriation		17,000			—			17,000			—
Pro forma earnings	$	47,229		$	46,319		$	107,554		$	108,552
Diluted earnings per share as reported	$	0.20		$	0.35		$	0.66		$	0.78
One-time purchase accounting adjustment and restructuring and other charges, net		0.04	(a)		0.02	(c)		0.06	(a)		0.09	(c)
Tax effect of repatriation		0.13	(a)		—			0.13	(a)		—
Pro forma diluted earnings per share	$	0.37	(b)	$	0.37		$	0.85	(b)	$	0.87

(a) Included in Provision for income taxes is a charge of $17,000 (or 13 cents per share) in the quarter and nine months related to the tax effect of the repatriation of foreign subsidiary earnings. Restructuring and other charges, net, includes severance and other costs of $7,313 (4 cents per share, after pro forma tax effect) in the quarter and $13,199 (7 cents per share, after pro forma tax effect) in the nine months primarily related to our on-going cost reduction programs. In addition, the nine months includes a gain of $2,200 (1 cent per share, after pro forma tax effect). Included in cost of sales is a charge of $333 and $839 in the quarter and nine months, respectively, related to a purchase accounting adjustment recorded in fiscal year 2005 to step up the value of inventory acquired from BioSepra by $2,431, in accordance with SFAS No. 141, “Business Combinations”.

(b) Includes expense of $2,463 (2 cents per share, after pro forma tax effect) in the quarter and $7,823 (5 cents per share, after pro forma tax effect) in the nine months related to stock compensation expense and the adoption of SFAS No. 123R, “Share-Based Payment”.

(c) Restructuring and other charges, net, includes $4,292 (2 cents per share, after pro forma tax effect) and $12,378 (7 cents per share, after pro forma tax effect) in the third quarter and nine months, respectively, primarily comprised of severance and other costs related to the restructuring of operations into globally integrated businesses. In addition, the nine months includes $2,875 (2 cents per share, after pro forma tax effect) related to the impairment of an investment.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

PALL CORPORATION AND SUBSIDIARIES

(Unaudited)

(Amounts in thousands)

		NINE MONTHS ENDED
		APR. 30, 2006			APR. 30, 2005
Net cash provided by operating activities	$	151,667		$	80,114
Investing activities:
Capital expenditures		(72,784	)		(59,361	)
Acquisitions of businesses, net of disposals and cash acquired		(75	)		(30,812	)
Other		(6,264	)		2,064
Net cash used by investing activities		(79,123	)		(88,109	)
Financing activities:
Dividends paid		(38,611	)		(34,673	)
Notes payable and long-term borrowings		(18,945	)		24,751
Purchase of treasury stock		(5,750	)		(49,998	)
Other		27,518			32,553
Net cash used by financing activities		(35,788	)		(27,367	)
Cash flow		36,756			(35,362	)
Cash and cash equivalents at beginning of period		164,928			207,277
Effect of exchange rate changes on cash		5,675			10,382
Cash and cash equivalents at end of period	$	207,359		$	182,297

PALL CORPORATION

MARKET SEGMENT AND GEOGRAPHIC INFORMATION

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS)

SALES THIRD QUARTER ENDED:	APR. 30, 2006			APR. 30, 2005			%           CHANGE		% CHANGE IN LOCAL CURRENCY
MARKET SEGMENT
INFORMATION:
Medical	$	112,737		$	119,065		(5	½)	(2	½)
BioPharmaceuticals		93,200			82,569		13		18
Total Life Sciences		205,937			201,634		2		6
General Industrial		189,777			191,379		(1	)	3
Aerospace		44,790			47,755		(6	)	(4	)
Microelectronics		69,477			52,775		31	½	36	½
Total Industrial		304,044			291,909		4		8
Total	$	509,981		$	493,543		3	½	7
GEOGRAPHIC INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
Western
Hemisphere	$	185,838		$	181,283		2	½	2	½
Europe		200,779			204,658		(2	)	5
Asia		123,364			107,602		14	½	19
Total	$	509,981		$	493,543		3	½	7
TOTAL SALES
Western
Hemisphere	$	251,157		$	242,406
Europe		227,468			240,076
Asia		125,164			109,278
Eliminations		(93,808	)		(98,217	)
Total	$	509,981		$	493,543

OPERATING PROFIT THIRD QUARTER ENDED:	APR. 30, 2006			%	APR. 30, 2005			%
MARKET SEGMENT INFORMATION:
Medical	$	13,031		11.6	$	24,883		20.9
BioPharmaceuticals		24,518		26.3		18,679		22.6
Total Life Sciences		37,549		18.2		43,562		21.6
General Industrial		17,217		9.1		23,911		12.5
Aerospace		7,842		17.5		9,900		20.7
Microelectronics		19,085		27.5		7,683		14.6
Total Industrial		44,144		14.5		41,494		14.2
Subtotal		81,693		16.0		85,056		17.2
Restructuring and other charges		(7,646	)(a)			(4,292	)
General corporate expenses		(14,685	)			(17,026	)
Interest expense, net		(5,091	)			(7,084	)
Earnings before income taxes	$	54,271			$	56,654
GEOGRAPHIC INFORMATION:
Western Hemisphere	$	41,429		16.5	$	46,523		19.2
Europe		19,412		8.5		26,002		10.8
Asia		20,176		16.1		15,447		14.1
Eliminations		676				(2,916	)
Subtotal		81,693		16.0		85,056		17.2
Restructuring and other charges		(7,646	)(a)			(4,292	)
General corporate expenses		(14,685	)			(17,026	)
Interest expense, net		(5,091	)			(7,084	)
Earnings before income taxes	$	54,271			$	56,654

(a) Includes a charge of $333 recorded in cost of sales in the quarter related to a purchase accounting adjustment recorded in fiscal year 2005 to step up the value of inventory acquired from BioSepra by $2,431, in accordance with SFAS No. 141, “Business Combinations”.

PALL CORPORATION

MARKET SEGMENT AND GEOGRAPHIC INFORMATION

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS)

SALES NINE MONTHS ENDED:	APR. 30, 2006			APR. 30, 2005			% CHANGE		% CHANGE IN LOCAL CURRENCY
MARKET SEGMENT
INFORMATION:
Medical	$	315,194		$	324,888		(3	)	(	½)
BioPharmaceuticals		247,557			230,976		7		11	½
Total Life Sciences		562,751			555,864		1		4	½
General Industrial		538,252			533,057		1		4	½
Aerospace		133,561			128,536		4		6
Microelectronics		185,015			160,291		15	½	19	½
Total Industrial		856,828			821,884		4	½	7	½
Total	$	1,419,579		$	1,377,748		3		6	½
GEOGRAPHIC INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
Western
Hemisphere	$	518,306		$	500,895		3	½	3
Europe		560,664			566,267		(1	)	5	½
Asia		340,609			310,586		9	½	13
Total	$	1,419,579		$	1,377,748		3		6	½
TOTAL SALES
Western
Hemisphere	$	700,145		$	662,277
Europe		648,399			659,006
Asia		345,798			314,948
Eliminations		(274,763	)		(258,483	)
Total	$	1,419,579		$	1,377,748

OPERATING PROFIT NINE MONTHS ENDED:	APR. 30, 2006			%	APR. 30, 2005			%
MARKET SEGMENT
INFORMATION:
Medical	$	34,874		11.1	$	56,212		17.3
BioPharmaceuticals		61,033		24.7		54,244		23.5
Total Life Sciences		95,907		17.0		110,456		19.9
General Industrial		44,469		8.3		54,091		10.1
Aerospace		20,627		15.4		22,286		17.3
Microelectronics		42,184		22.8		26,266		16.4
Total Industrial		107,280		12.5		102,643		12.5
Subtotal		203,187		14.3		213,099		15.5
Restructuring and other charges		(11,838	)(a)			(15,253	)
General corporate expenses		(44,485	)			(51,330	)
Interest expense, net		(16,472	)			(18,937	)
Earnings before income taxes	$	130,392			$	127,579
GEOGRAPHIC INFORMATION:
Western Hemisphere	$	96,414		13.8	$	108,396		16.4
Europe		51,404		7.9		67,513		10.2
Asia		53,543		15.5		45,211		14.4
Eliminations		1,826				(8,021	)
Subtotal		203,187		14.3		213,099		15.5
Restructuring and other charges		(11,838	)(a)			(15,253	)
General corporate expenses		(44,485	)			(51,330	)
Interest expense, net		(16,472	)			(18,937	)
Earnings before income taxes	$	130,392			$	127,579

(a) Includes a charge of $839 recorded in cost of sales in the nine months related to a purchase accounting adjustment recorded in fiscal year 2005 to step up the value of inventory acquired from BioSepra by $2,431, in accordance with SFAS No. 141, “Business Combinations”.

Contact:

Investors

Lisa McDermott

Pall Corporation

Tel: (516) 801-9808

Media

Pat Iannucci

Pall Corporation

Tel: (516) 801-9848