EX-99 2 exhibit99.htm PRESS RELEASE, DATED SEPTEMBER 14, 2010 (FURNISHED PURSUANT TO ITEM 2.02) exhibit99.htm
Exhibit 99
 
Pall Corporation Reports Strong Earnings
 
Port Washington, NY (September 14, 2010) -- Pall Corporation (NYSE:PLL) today reported financial results for the fourth quarter and fiscal year ended July 31, 2010.
 
Fourth Quarter Sales and Earnings Overview
 
Fourth quarter sales were $678.6 million, a 4.1% gain over last year. Sales in local currency ("LC") increased 5.9%. Foreign currency translation reduced reported sales by $11.6 million, or 1.8%.
 
Pro forma earnings per share ("EPS") were $0.72, compared to $0.57 last year, an increase of 26.3%. This excludes restructuring and other charges, items affecting interest expense and provision for taxes, as well as costs related to the prepayment of debt (collectively, "Discrete Items"). Diluted EPS were $0.46, compared to $0.58 last year, a decrease of 20.7%. Foreign currency translation did not impact EPS in the quarter.
 
Commenting on the fourth quarter in LC, Eric Krasnoff, Chairman, CEO and President, said, “Momentum from the third quarter carried over into the fourth. Overall orders were up 19%. Our Industrial business continued to rebound with sales and orders up 4.2% and 26%, respectively, over last year’s fourth quarter. Sales and orders in Life Sciences increased 7.6% and 12.7%, respectively, with all markets contributing.
 
Significant improvement in gross margin reflects the contribution of ongoing productivity and cost reduction programs and new products. During the quarter we refinanced all of our significant debt. This further secures Pall's liquidity and solidifies our long-term capital structure at historically low interest rates."
 
Full Year Sales and Earnings Overview
 
Sales were $2.4 billion, an increase of 3.1% compared to fiscal year 2009. Sales in LC were up slightly. Foreign currency translation increased reported sales by $58.3 million, or 2.5%.
 
Pro forma EPS increased 19.8% to $2.12 compared to $1.77 last fiscal year, excluding Discrete Items. Diluted EPS increased 23.8% to $2.03, compared to $1.64 in fiscal 2009. Foreign currency translation increased both measures of EPS by approximately $0.10.
 
Commenting on the year, Mr. Krasnoff said, “Pall delivered a solid year in a challenging economy. On the top line, Life Sciences performed well all year. Industrial returned to growth mid-year largely on the rapid rebooting of the Microelectronics market. Orders were up in all Industrial markets.
 
Pall’s programs to increase productivity and reduce costs are part of our DNA. The results are evident in gross margin and EPS. SG&A is up reflecting strategic investments and confidence in the future. We continue to execute our strategic plan to increase shareholder value.”
 
Segment and Market Reorganization
 
Effective in the fourth quarter of fiscal year 2010, the Company reorganized its operating segments and markets in order to better align our technologies, market channel and management to customer needs. The changes are as follows:
 
Food & Beverage is now integrated within Life Sciences. It was previously managed by the Industrial business and reported within the Energy, Water and Process Technologies market (“EWPT”).
 
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The Aerospace & Transportation market has been renamed Aeropower. Aeropower now includes Industrial Manufacturing, previously reported as part of EWPT, which was combined with Transportation to form the Machinery & Equipment submarket.
 
The Power Generation, Fuels & Chemicals and Municipal Water submarkets remaining within EWPT are now being reported as Energy & Water.
 
Segment and market information for prior periods has been restated to reflect these changes. All discussions and amounts reported in this release are based on the reorganized segment and market structure. Tables outlining the restatement are appended to this earnings release.
 
Life Sciences – Fourth Quarter Highlights
 
(Dollar Amounts in Thousands and Discussion of Sales and Orders Changes are in Local Currency)
 
                    % CHANGE
Sales:         JUL. 31, 2010       JUL. 31, 2009       % CHANGE       IN LC
BioPharmaceuticals   $        167,478   $        156,293   7.2   10.0
Medical     103,666     102,497   1.1   3.6
Food & Beverage     64,293     61,768   4.1   8.4
Total Life Sciences segment   $ 335,437   $ 320,558   4.6   7.6
                     
Gross profit   $ 174,096   $ 161,246        
% of sales     51.9     50.3        
Operating profit   $ 73,760   $ 65,927        
% of sales     22.0     20.6        

BioPharmaceuticals: Consumable sales in the Pharmaceuticals submarket grew 8.7% with all geographies contributing. These results reflect healthy demand for vaccines and expanding adoption of single-use systems for biotechnology production. Systems sales to Pharmaceutical customers were up 10.1%.
 
Medical: Sales in the Blood Filtration submarket grew 3.3% reflecting increased adoption of new products.
 
Food & Beverage: Sales grew 8.4% with increases in both consumables and systems sales.
 
The gross margin improvement in Life Sciences continues to be driven by productivity, cost reduction and pricing gains. Operating profit increased 11.9%.
 
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Industrial – Fourth Quarter Highlights
 
(Dollar Amounts in Thousands and Discussion of Sales and Orders Changes are in Local Currency)
 
                      % CHANGE
Sales:         JUL. 31, 2010       JUL. 31, 2009       % CHANGE       IN LC
Energy & Water   $ 148,297   $ 160,438                    (7.6 )                    (6.5 )
Aeropower     118,684     116,224   2.1     4.1  
Microelectronics     76,192     54,737   39.2     35.5  
Total Industrial segment   $ 343,173   $ 331,399   3.6     4.2  
                         
Gross profit   $ 163,991   $ 139,474            
       % of sales     47.8     42.1            
Operating profit   $ 70,074   $ 45,710            
       % of sales     20.4     13.8            

Energy & Water: The Fuels & Chemicals submarket declined 11%. Consumables sales were up 5% while system sales decreased almost 50% reflecting reduced capital orders during the financial crisis. Power Generation submarket sales, while up slightly for the year, decreased 12.7% for the quarter on weakness in the turbomachinery market. Municipal Water submarket sales increased 7.1% driven by surface water treatment projects in the Western Hemisphere.
 
Aeropower: The Military Aerospace submarket remained weak. The Commercial Aerospace submarket was flat, while the Machinery & Equipment submarket grew 27.8% as customers increased production levels and replenished inventories.
 
Microelectronics: Strong growth was driven by high utilization rates as chip producers approach full capacity and by a healthier consumer appetite for electronics.
 
Industrial’s strong gross margin improvement reflects volume growth particularly in Microelectronics and Machinery & Equipment. Structural improvements made over the past few years are now more evident with the return to higher volumes. Operating profit increased 53.3%.
 
Conclusion/Outlook
 
Mr. Krasnoff concluded, "Pall is steadily executing its strategic plans. We maintain a strong focus on near-term performance while being mindful of our 2013 strategic plan goals presented last December.
 
Some notable accomplishments during fiscal 2010 warrant comment. The European headquarters in Switzerland is now operational. Considerable progress was made to establish Singapore as Pall's Asian hub and on the implementation of our global ERP system. Working capital management efforts were rewarded in the year with operating cash flow of about $380 million. Overall, we are pleased with the progress made in fiscal 2010.
 
In fiscal year 2011, Pro forma EPS is projected to be in a range of $2.35 to $2.55 per share. This guidance reflects a $0.03 headwind from foreign currency translation.”
 
Conference Call
 
On Wednesday, September 15, 2010, at 8:30 am ET, Pall Corporation will host a conference call to review these results. The call can be accessed at www.pall.com/investor. The webcast will be archived for 30 days.
 
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About Pall Corporation
 
Pall Corporation (NYSE:PLL) is a filtration, separation and purification leader providing solutions to meet the critical needs of customers across the broad spectrum of Life Sciences and Industrial markets. Pall works with customers to advance health, safety and environmentally responsible technologies. The Company’s engineered products enable process and product innovation and minimize emissions and waste. Pall Corporation, with total revenues of $2.4 billion for fiscal 2010, is an S&P 500 company with more than 10,000 employees serving customers worldwide. Pall has been named a top "green company" by Newsweek magazine. To see how Pall is helping enable a greener, safer, more sustainable future, visit www.pall.com/green.
 
Forward-Looking Statements
 
The matters discussed in this release contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Results for fiscal year 2010 are preliminary until the Company's Form 10-K is filed with the Securities and Exchange Commission on or before September 29, 2010.
 
Forward-looking statements are those that address activities, events or developments that the Company or management intends, expects, projects, believes or anticipates will or may occur in the future. 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. Forward-looking statements are those that use terms such as "may," "will," "expect," "believe," "intend," "should," "could," "anticipate," "estimate," "forecast," "project," "plan," "predict," "potential," and similar expressions. Forward-looking statements contained in this and other written and oral reports are based on management’s assumptions and assessments in the light of past experience and trends, current conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Our forward-looking statements are also subject to risks and uncertainties, which can affect our performance in both the near- and long-term and cause actual results to differ materially. Such risks and uncertainties include, but are not limited to, those discussed in Part I, Item 1A, “Risk Factors” in the 2009 Form 10-K, and other reports the Company files with the Securities and Exchange Commission, including the effect of litigation and regulatory inquiries associated with the restatement of our prior period financial statements; our ability to successfully complete our business improvement initiatives, which include integrating and upgrading our information systems and the effect of a serious disruption in our information systems; the impact of legislative, regulatory and political developments globally and the impact of the uncertain global economic environment and the timing and strength of a recovery in the markets and regions we serve, and the extent to which adverse economic conditions may affect our sales volume and results; demand for our products and business relationships with key customers and suppliers, which may be impacted by their cash flow and payment practices, as well as delays or cancellations in shipments; volatility in foreign currency exchange rates, interest rates and energy costs and other macro economic challenges currently affecting us; changes in product mix, market mix and product pricing, particularly relating to the expansion of the systems business; increase in costs of manufacturing and operating costs; our ability to obtain regulatory approval or market acceptance of new technologies, enforce patents and protect proprietary products and manufacturing techniques; fluctuations in our effective tax rate; our ability to successfully complete or integrate any acquisitions; the impact of pricing and other actions by competitors; and our ability to achieve the savings anticipated from cost reduction and gross margin improvement initiatives. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. The Company makes these statements as of the date of this disclosure and undertakes no obligation to update them, whether as a result of new information, future developments or otherwise.
 
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 the Company’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)
 
        JULY 31, 2010       JULY 31, 2009
Assets:            
Cash and cash equivalents   $ 498,563   $ 414,011
Accounts receivable     566,499     561,063
Inventories     415,046     413,278
Other current assets     222,651     182,098
       Total current assets     1,702,759     1,570,450
             
Property, plant and equipment, net     706,435     681,658
Other assets     590,018     588,704
       Total assets   $           2,999,212   $           2,840,812
             
Liabilities and Stockholders' Equity:            
             
Short-term debt   $ 42,028   $ 139,803
Accounts payable, income taxes and other current liabilities     595,177     577,587
       Total current liabilities     637,205     717,390
             
Long-term debt     741,353     577,666
Deferred taxes and other non-current liabilities     438,304     431,158
       Total liabilities     1,816,862     1,726,214
             
Stockholders' equity     1,182,350     1,114,598
       Total liabilities and stockholders' equity   $ 2,999,212   $ 2,840,812
             
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PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)
 
    FOURTH QUARTER ENDED   YEAR ENDED
        JUL. 31, 2010       JUL. 31, 2009       JUL. 31, 2010       JUL. 31, 2009
Net sales   $ 678,610     $ 651,957     $ 2,401,932     $ 2,329,158  
Cost of sales     340,523       351,237       1,195,830       1,228,468  
Gross profit     338,087       300,720       1,206,102       1,100,690  
       % of sales     49.8 %     46.1 %     50.2 %     47.3 %
Selling, general and administrative expenses     188,963       183,495       739,936       699,832  
       % of sales     27.8 %     28.1 %     30.8 %     30.0 %
Research and development     20,070       18,643       74,944       71,213  
Earnings before restructuring and other charges,                                
net ("ROTC"), interest expense, net, loss on                                
extinguishment of debt and income taxes     129,054       98,582       391,222       329,645  
       % of sales     19.0 %     15.1 %     16.3 %     14.2 %
ROTC (a)     11,005       5,432       17,664       30,723  
Interest expense, net (b)     7,982       5,581       14,324       28,136  
Loss on extinguishment of debt (c)     31,513       -       31,513       -  
Earnings before income taxes     78,554       87,569       327,721       270,786  
Provision for income taxes (b)     23,599       18,070       86,473       75,167  
Net earnings   $ 54,955     $ 69,499     $ 241,248     $ 195,619  
                                 
Earnings per share:                                
       Basic   $ 0.47     $ 0.59     $ 2.05     $ 1.65  
       Diluted   $ 0.46     $ 0.58     $ 2.03     $ 1.64  
                                 
Average shares outstanding:                                
       Basic     116,814       118,308       117,437       118,631  
       Diluted     118,345       119,280       118,846       119,571  
                                 
Net earnings as reported   $ 54,955     $ 69,499     $ 241,248     $ 195,619  
Discrete items:                                
       Note redemption related costs, after pro forma tax                                
              effect (c)     21,041       -       21,041       -  
       Tax adjustments (b)     3,012       (4,925 )     (11,176 )     (6,351 )
       Interest adjustments, after pro forma tax                                
              effect (b)     (231 )     -       (9,804 )     -  
       ROTC, after pro forma tax effect (a)     6,970       3,979       11,074       22,813  
       Total discrete items     30,792       (946 )     11,135       16,462  
Pro forma earnings   $        85,747     $        68,553     $         252,383     $         212,081  
                                 
Diluted earnings per share as reported   $ 0.46     $ 0.58     $ 2.03     $ 1.64  
Discrete items:                                
       Note redemption related costs, after pro forma tax                                
              effect (c)     0.17       -       0.17       -  
       Tax adjustments (b)     0.03       (0.04 )     (0.09 )     (0.06 )
       Interest adjustments, after pro forma tax                                
              effect (b)     -       -       (0.08 )     -  
       ROTC, after pro forma tax effect (a)     0.06       0.03       0.09       0.19  
       Total discrete items     0.26       (0.01 )     0.09       0.13  
Pro forma diluted earnings per share   $ 0.72     $ 0.57     $ 2.12     $ 1.77  
                                 
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Pro forma earnings exclude the items below as they are deemed to be non-recurring in nature and/or not considered by management to be indicative of underlying operating performance. The pro forma tax effects disclosed were calculated using applicable entity-specific U.S. federal and/or foreign tax rates.
 
(a) ROTC in the quarter and year ended July 31, 2010 of $11,005 ($6,970 after pro forma tax effect of $4,035) and $17,092 ($11,074 after pro forma tax effect of $6,018), respectively, includes severance and other costs related to the Company's cost reduction and reorganization initiatives and an increase to a previously established environmental reserve. Such costs in the year were partly offset by receipt of insurance claim payments related to the previously reported matters that were under inquiry by the audit committee of the Company's board of directors.
 
ROTC in the quarter ended July 31, 2009 of $5,432 ($3,979 after pro forma tax effect of $1,453) is primarily comprised of severance and other costs related to the Company's cost reduction programs. ROTC in the year ended July 31, 2009 of $30,723 ($22,813 after pro forma tax effect of $7,910) is primarily comprised of severance and other costs related to the Company's cost reduction programs, professional fees related to the previously reported matters that were under inquiry by the audit committee of the Company’s board of directors, an increase to previously established environmental reserves, the impairment of investments and capitalized software development costs and a charge to write-off in process research and development acquired in the acquisition of GeneSystems, SA.
 
(b) Provision for taxes in the quarter ended July 31, 2010 include a charge of $3,012 primarily related to tax costs associated with the establishment of the Company's European Life Sciences Headquarters.
 
Interest expense, net, and provision for income taxes in the year ended July 31, 2010 also includes the reversal of accrued interest of $11,537 ($9,573 after pro forma tax effect of $1,964) and income taxes payable of $14,188, respectively. These items principally related to the resolution of foreign tax audits and expiring foreign statutes of limitation for assessment related to uncertain tax positions.
 
Provision for income taxes in the quarter ended July 31, 2009 includes benefits related to the repatriation of earnings, a favorable tax settlement and a restructuring. Provision for income taxes in the year ended July 31, 2009 also includes a benefit for newly enacted tax legislation.
 
(c) In the quarter and the year ended July 31, 2010, the Company redeemed its $280,000 6.00% Senior Notes due in fiscal year 2013. Costs of $32,875 ($21,041 after pro forma tax effect of $11,834), include the loss on extinguishment of debt (comprised of a redemption premium and the write-off of deferred financing costs related to the origination of the notes) and incremental interest expense incurred during the redemption period.
 
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PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in Thousands)
 
    YEAR ENDED
        JUL. 31, 2010       JUL. 31, 2009
Net cash provided by operating activities   $            377,860     $            327,495  
                 
Investing activities:                
                 
Acquisitions, net of cash acquired     (8,984 )     (37,249 )
Capital expenditures     (136,313 )     (133,049 )
Other     (23,437 )     (11,732 )
Net cash used by investing activities     (168,734 )     (182,030 )
                 
Financing activities:                
                 
Dividends paid     (71,284 )     (64,914 )
Notes payable and long-term borrowings / (repayments)     58,599       (23,471 )
Redemption premium on notes     (28,268 )      -  
Financing costs on new debt     (6,311 )      -  
Purchase of treasury stock     (99,999 )     (96,439 )
Other     26,600       16,214  
Net cash used by financing activities     (120,663 )     (168,610 )
                 
Cash flow for period     88,463       (23,145 )
Cash and cash equivalents at beginning of year     414,011       454,065  
Effect of exchange rate changes on cash     (3,911 )     (16,909 )
Cash and cash equivalents at end of period   $ 498,563     $ 414,011  
                 
Free cash flow:                
Net cash provided by operating activities   $ 377,860     $ 327,495  
Less capital expenditures     136,313       133,049  
Free cash flow   $ 241,547     $ 194,446  
 
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PALL CORPORATION
SUMMARY OPERATING PROFIT BY SEGMENT
(Unaudited)
(Dollar Amounts in Thousands)
 
    FOURTH QUARTER ENDED   YEAR ENDED
        JUL. 31, 2010       JUL. 31, 2009       JUL. 31, 2010       JUL. 31, 2009
Life Sciences                                
Sales   $        335,437     $        320,558     $        1,237,835     $        1,166,275  
Cost of sales     161,341       159,312       569,097       578,439  
Gross profit     174,096       161,246       668,738       587,836  
       % of sales     51.9 %     50.3 %     54.0 %     50.4 %
                                 
Selling, general and administrative expenses     87,269       82,931       340,628       309,441  
       % of sales     26.0 %     25.9 %     27.5 %     26.5 %
Research and development     13,067       12,388       48,021       44,340  
Operating profit   $ 73,760     $ 65,927     $ 280,089     $ 234,055  
       % of sales     22.0 %     20.6 %     22.6 %     20.1 %
                                 
Industrial                                
Sales   $ 343,173     $ 331,399     $ 1,164,097     $ 1,162,883  
Cost of sales     179,182       191,925       626,733       650,029  
Gross profit     163,991       139,474       537,364       512,854  
       % of sales     47.8 %     42.1 %     46.2 %     44.1 %
                                 
Selling, general and administrative expenses     86,914       87,509       345,897       333,913  
       % of sales     25.3 %     26.4 %     29.7 %     28.7 %
Research and development     7,003       6,255       26,923       26,873  
Operating profit   $ 70,074     $ 45,710     $ 164,544     $ 152,068  
       % of sales     20.4 %     13.8 %     14.1 %     13.1 %
                                 
CONSOLIDATED:                                
Operating profit   $ 143,834     $ 111,637     $ 444,633     $ 386,123  
General corporate expenses     14,780       13,055       53,411       56,478  
Earnings before ROTC, interest expense, net, loss                                
on extinguishment of debt and income taxes     129,054       98,582       391,222       329,645  
ROTC     11,005       5,432       17,664       30,723  
Interest expense, net     7,982       5,581       14,324       28,136  
Loss on extinguishment of debt     31,513       -       31,513       -  
Earnings before income taxes   $ 78,554     $ 87,569     $ 327,721     $ 270,786  
 
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PALL CORPORATION
SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(Dollar Amounts in Thousands)
 
                      EXCHANGE   % CHANGE
                      RATE   IN LOCAL
FOURTH QUARTER ENDED       JUL. 31, 2010       JUL. 31, 2009       % CHANGE       IMPACT       CURRENCY
Life Sciences               |----------------Increase/(Decrease) ----------------|
By Market:                                
BioPharmaceuticals   $        167,478   $        156,293                  7.2     $          (4,407 )                10.0  
Medical     103,666     102,497   1.1       (2,544 )   3.6  
Food & Beverage     64,293     61,768   4.1       (2,663 )   8.4  
Total Life Sciences   $ 335,437   $ 320,558   4.6     $ (9,614 )   7.6  
                                 
By Geography:                                
Western Hemisphere   $ 123,809   $ 113,988   8.6     $ 494     8.2  
Europe     148,213     153,738   (3.6 )     (13,377 )   5.1  
Asia     63,415     52,832   20.0       3,269     13.8  
Total Life Sciences   $ 335,437   $ 320,558   4.6     $ (9,614 )   7.6  
                                 
Industrial                                
By Market:                                
Energy & Water   $ 148,297   $ 160,438   (7.6 )   $ (1,736 )   (6.5 )
Aeropower     118,684     116,224   2.1       (2,315 )   4.1  
Microelectronics     76,192     54,737   39.2       2,035     35.5  
Total Industrial   $ 343,173   $ 331,399   3.6     $ (2,016 )   4.2  
                                 
By Geography:                                
Western Hemisphere   $ 117,321   $ 96,840   21.1     $ 534     20.6  
Europe     94,107     117,741   (20.1 )     (8,489 )   (12.9 )
Asia     131,745     116,818   12.8       5,939     7.7  
Total Industrial   $ 343,173   $ 331,399   3.6     $ (2,016 )   4.2  
 
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PALL CORPORATION
SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(Dollar Amounts in Thousands)
 
                      EXCHANGE   % CHANGE
                      RATE   IN LOCAL
YEAR ENDED       JUL. 31, 2010       JUL. 31, 2009       % CHANGE       IMPACT       CURRENCY
Life Sciences               |----------------Increase/(Decrease) ----------------|
By Market:                              
BioPharmaceuticals   $        620,279   $        550,620                 12.7     $        13,304               10.2  
Medical     399,507     389,841   2.5       6,449   0.8  
Food & Beverage     218,049     225,814   (3.4 )     4,357   (5.4 )
Total Life Sciences   $ 1,237,835   $ 1,166,275   6.1     $ 24,110   4.1  
                               
By Geography:                              
Western Hemisphere   $ 430,285   $ 399,614   7.7     $ 1,602   7.3  
Europe     595,719     578,319   3.0       6,881   1.8  
Asia     211,831     188,342   12.5       15,627   4.2  
Total Life Sciences   $ 1,237,835   $ 1,166,275   6.1     $ 24,110   4.1  
                               
Industrial                              
By Market:                              
Energy & Water   $ 479,866   $ 505,468   (5.1 )   $ 14,177   (7.9 )
Aeropower     418,203     446,386   (6.3 )     8,641   (8.2 )
Microelectronics     266,028     211,029   26.1       11,361   20.7  
Total Industrial   $ 1,164,097   $ 1,162,883   0.1     $ 34,179   (2.8 )
                               
By Geography:                              
Western Hemisphere   $ 359,076   $ 370,088   (3.0 )   $ 2,527   (3.7 )
Europe     350,233     381,988   (8.3 )     3,396   (9.2 )
Asia     454,788     410,807   10.7       28,256   3.8  
Total Industrial   $ 1,164,097   $ 1,162,883   0.1     $ 34,179   (2.8 )
 
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PALL CORPORATION
SUMMARY OPERATING PROFIT BY SEGMENT
RESTATED FISCAL YEARS 2010 AND 2009 BY QUARTER
(Unaudited)
(Dollar Amounts in Thousands)
 
    Q1   Q2   Q3   Q4        
Fiscal Year 2010       OCT. 31, 2009       JAN. 31, 2010       APR. 30, 2010       JUL. 31, 2010       Total Year
Life Sciences                                        
Sales   $        288,127     $        297,299     $        316,972     $        335,437     $        1,237,835  
Cost of sales     132,306       130,638       144,812       161,341       569,097  
Gross profit     155,821       166,661       172,160       174,096       668,738  
       % of sales     54.1 %     56.1 %     54.3 %     51.9 %     54.0 %
                                         
Selling, general and administrative expenses     80,653       86,177       86,529       87,269       340,628  
       % of sales     28.0 %     29.0 %     27.3 %     26.0 %     27.5 %
Research and development     10,614       12,124       12,216       13,067       48,021  
Operating profit   $ 64,554     $ 68,360     $ 73,415     $ 73,760     $ 280,089  
       % of sales     22.4 %     23.0 %     23.2 %     22.0 %     22.6 %
                                         
Industrial                                        
Sales   $ 258,812     $ 263,102     $ 299,010     $ 343,173     $ 1,164,097  
Cost of sales     144,435       145,478       157,638       179,182       626,733  
Gross profit     114,377       117,624       141,372       163,991       537,364  
       % of sales     44.2 %     44.7 %     47.3 %     47.8 %     46.2 %
                                         
Selling, general and administrative expenses     83,558       87,685       87,740       86,914       345,897  
       % of sales     32.3 %     33.3 %     29.3 %     25.3 %     29.7 %
Research and development     6,635       6,515       6,770       7,003       26,923  
Operating profit   $ 24,184     $ 23,424     $ 46,862     $ 70,074     $ 164,544  
       % of sales     9.3 %     8.9 %     15.7 %     20.4 %     14.1 %
                         
    Q1   Q2   Q3   Q4        
Fiscal Year 2009   OCT. 31, 2008   JAN. 31, 2009   APR. 30, 2009   JUL. 31, 2009   Total Year
Life Sciences                                        
Sales   $ 279,912     $ 275,478     $ 290,327     $ 320,558     $ 1,166,275  
Cost of sales     138,262       138,150       142,715       159,312       578,439  
Gross profit     141,650       137,328       147,612       161,246       587,836  
       % of sales     50.6 %     49.9 %     50.8 %     50.3 %     50.4 %
                                         
Selling, general and administrative expenses     78,420       71,940       76,150       82,931       309,441  
       % of sales     28.0 %     26.1 %     26.2 %     25.9 %     26.5 %
Research and development     11,163       10,320       10,469       12,388       44,340  
Operating profit   $ 52,067     $ 55,068     $ 60,993     $ 65,927     $ 234,055  
       % of sales     18.6 %     20.0 %     21.0 %     20.6 %     20.1 %
                                         
Industrial                                        
Sales   $ 298,110     $ 267,818     $ 265,556     $ 331,399     $ 1,162,883  
Cost of sales     160,369       148,797       148,938       191,925       650,029  
Gross profit     137,741       119,021       116,618       139,474       512,854  
       % of sales     46.2 %     44.4 %     43.9 %     42.1 %     44.1 %
                                         
Selling, general and administrative expenses     85,064       82,506       78,834       87,509       333,913  
       % of sales     28.5 %     30.8 %     29.7 %     26.4 %     28.7 %
Research and development     7,770       7,099       5,749       6,255       26,873  
Operating profit   $ 44,907     $ 29,416     $ 32,035     $ 45,710     $ 152,068  
       % of sales     15.1 %     11.0 %     12.1 %     13.8 %     13.1 %
 
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PALL CORPORATION
SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET
RESTATED FISCAL YEARS 2010 AND 2009 BY QUARTER
(Unaudited)
(Dollar Amounts in Thousands)
 
    Q1   Q2   Q3   Q4      
Fiscal Year 2010       OCT. 31, 2009       JAN. 31, 2010       APR. 30, 2010       JUL. 31, 2010       Total Year
Life Sciences                              
By Market:                              
BioPharmaceuticals   $        143,223   $        146,972   $        162,606   $        167,478   $        620,279
Medical     95,687     100,451     99,703     103,666     399,507
Food & Beverage     49,217     49,876     54,663     64,293     218,049
Total Life Sciences   $ 288,127   $ 297,299   $ 316,972   $ 335,437   $ 1,237,835
                               
By Geography:                              
Western Hemisphere   $ 95,070   $ 101,616   $ 109,790   $ 123,809   $ 430,285
Europe     147,743     147,593     152,170     148,213     595,719
Asia     45,314     48,090     55,012     63,415     211,831
Total Life Sciences   $ 288,127   $ 297,299   $ 316,972   $ 335,437   $ 1,237,835
                               
Industrial                              
By Market:                              
Energy & Water   $ 107,244   $ 105,484   $ 118,841   $ 148,297   $ 479,866
Aeropower     95,019     96,651     107,849     118,684     418,203
Microelectronics     56,549     60,967     72,320     76,192     266,028
Total Industrial   $ 258,812   $ 263,102   $ 299,010   $ 343,173   $ 1,164,097
                               
By Geography:                              
Western Hemisphere   $ 72,098   $ 73,510   $ 96,147   $ 117,321   $ 359,076
Europe     82,974     82,196     90,956     94,107     350,233
Asia     103,740     107,396     111,907     131,745     454,788
Total Industrial   $ 258,812   $ 263,102   $ 299,010   $ 343,173   $ 1,164,097
                       
    Q1   Q2   Q3   Q4      
Fiscal Year 2009   OCT. 31, 2008   JAN. 31, 2009   APR. 30, 2009   JUL. 31, 2009   Total Year
Life Sciences                              
By Market:                              
BioPharmaceuticals   $ 127,923   $ 128,135   $ 138,269   $ 156,293   $ 550,620
Medical     92,406     96,887     98,051     102,497     389,841
Food & Beverage     59,583     50,456     54,007     61,768     225,814
Total Life Sciences   $ 279,912   $ 275,478   $ 290,327   $ 320,558   $ 1,166,275
                               
By Geography:                              
Western Hemisphere   $ 90,770   $ 94,869   $ 99,987   $ 113,988   $ 399,614
Europe     148,031     138,186     138,364     153,738     578,319
Asia     41,111     42,423     51,976     52,832     188,342
Total Life Sciences   $ 279,912   $ 275,478   $ 290,327   $ 320,558   $ 1,166,275
                               
Industrial                              
By Market:                              
Energy & Water   $ 110,664   $ 114,217   $ 120,149   $ 160,438   $ 505,468
Aeropower     120,047     103,047     107,068     116,224     446,386
Microelectronics     67,399     50,554     38,339     54,737     211,029
Total Industrial   $ 298,110   $ 267,818   $ 265,556   $ 331,399   $ 1,162,883
                               
By Geography:                              
Western Hemisphere   $ 92,445   $ 90,063   $ 90,740   $ 96,840   $ 370,088
Europe     93,524     86,913     83,810     117,741     381,988
Asia     112,141     90,842     91,006     116,818     410,807
Total Industrial   $ 298,110   $ 267,818   $ 265,556   $ 331,399   $ 1,162,883
 
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# # #
 
Contact:
 
Pall Corporation
Patricia Iannucci
V.P. Investor Relations & Corporate Communications
Telephone: 516-801-9848
Email: piannucci@pall.com
 
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