BW20030904002164 20030905T060041Z UTC
( BW)(PALL-CORPORATION)(PLC) Final Results
Business Editors
UK REGULATORY NEWS
EAST HILLS, N.Y--(BUSINESS WIRE)--Sept. 5, 2003--
Pall Corporation Sales and Earnings up Strongly
Pall Corporation (NYSE: PLL) today reported sales and earnings results
for the fourth quarter and fiscal year ended August 2, 2003.
Sales for the fourth quarter increased 10% to $471.4 million including
a $29.5 million assist from favorable foreign exchange rates.
Earnings, excluding restructuring and other charges, increased 53%.
They were $56.0 million, or 45 cents per share, compared to last
year's $36.7 million, or 30 cents per share. Reported earnings for the
fourth quarter were $54.6 million, or 44 cents per share, compared to
$9.0 million or 7 cents per share last year.
For the full year, sales increased 25% to $1.614 billion compared to
$1.291 billion last year. Foreign exchange rates increased sales by
$97.6 million. Full year earnings, excluding restructuring and other
charges, increased 47%. They amounted to $148.8 million, or $1.20 per
share compared to last year's $100.9 million, or 82 cents per share.
Restructuring and other charges of $47.5 million, or 37 cents per
share (including the pro forma tax effect), were recorded in fiscal
year 2003 primarily to write off the in-process research and
development from the acquired Filtration and Separations Group
("FSG"). This reduced the results for the year to earnings of $103.2
million, or 83 cents per share, compared to $73.2 million or 59 cents
per share last year. Last year's results included restructuring and
other charges of $32.8 million, or 23 cents per share (including the
pro forma tax effect), which included a purchase accounting adjustment
of $6 million in cost of sales.
Eric Krasnoff, Pall's Chairman and CEO, said, "We have produced
another solid quarter. Sales increased 10%. Excluding restructuring
and other charges of $1.2 million, earnings and earnings per share
increased 53% and 50%, respectively. Our results exceeded analysts'
consensus estimates. Cash flow for the year was very strong and net
debt has been reduced by $174 million.
"We have achieved the three key goals set at the beginning of fiscal
year 2003. These were to improve profitability, to aggressively reduce
debt and to successfully integrate FSG into Pall. The results achieved
are well ahead of the initial 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. Our combined enterprise is now supporting more
customers with a greater range of products and services. As important,
operating margins have improved sharply to 20.8% from 17.3% in the
fourth quarter last year."
Looking at the sales results for the quarter in local currency:
"Industrial operating profit improved 33% to $46.2 million on sales
growth of 2%. Overall Aerospace sales were up 11 1/2% with Military
Aerospace sales up a strong 24% and Commercial Aerospace level. Sales
in the General Industrial segment, which serves industries including
food and beverage, water processing, chemicals and power generation,
grew 1/2%. Microelectronics' sales were off 2 1/2% after double-digit
increases in each of the first three quarters of this year.
"Turning to Life Sciences, BioPharmaceuticals grew 9% compared to last
year's fourth quarter, buoyed by strong biotechnology sales. Medical
sales increased 14% sequentially on an as reported basis over the
third quarter and were flat compared to the same quarter last year.
Fourth quarter Medical profits came in at 25.2%, building on the
pattern of sequential operating profit improvement that began with
7.8% in the first quarter."
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, and includes about 2 cents per share for foreign exchange
translation. We achieved the run rate necessary to accomplish our
two-year acquisition-related synergies goal of $30 million at the end
of the third quarter. Further savings are expected under the overall
umbrella of the company's 'CORE' cost reduction program. This program
will continue to play a central role in improving profitability."
Looking ahead to fiscal year 2004, Mr. Krasnoff continued, "We
anticipate this new fiscal year to be a continuation of 2003. This
means strong growth in BioPharmaceuticals and improving sales in
Medical. The industrial businesses should post modest growth with
Microelectronics continuing its slow recovery from the latest cyclical
low of the semiconductor cycle. Aerospace will continue to be our most
profitable segment but faces difficult comparisons due to the one-time
sales benefit of the Iraqi conflict. General Industrial will grow
modestly and may do better if Europe and the U.S. see more robust
economic recovery and a freeing up of capital spending. Asia will
continue to lead with double-digit growth. Overall we anticipate
earnings per share for the year to be in the range of $1.25 to $1.40.
At the mid-point, that represents a 10% increase."
Regarding quarterly earnings guidance for fiscal 2004, Mr. Krasnoff
said, "We are joining the growing trend of companies who are getting
away from providing quantitative quarterly guidance. We will of course
continue to give in depth qualitative assessment of business
conditions and expectations on a quarterly basis, but will not provide
a range of anticipated earnings per share. However, we will provide
the following starting point for this fiscal year. As is normal for
Pall, the first quarter is traditionally our smallest as far as sales
and earnings per share are concerned. We expect the first quarter to
follow the pattern of fiscal 2003 in terms of contribution to the full
year's result."
Tomorrow, September 5, 2003, at 8:30 a.m. ET, 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.
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 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
are $1.6 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.
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.
PALL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
AUG. 2, AUG. 3,
2003 2002
------- -------
Assets
Cash and short-term investments $ 149,753 $ 145,424
Accounts receivable, net 423,467 415,853
Inventories, net 274,442 256,910
Other current assets 105,081 94,947
--------- ---------
Total current assets 952,743 913,134
Property, plant and equipment, net 600,153 605,095
Other assets 463,405 492,214
--------- ---------
Total assets $2,016,301 $2,010,443
--------- ---------
Liabilities and Stockholders' Equity
Short-term debt $ 59,376 $ 103,546
Accounts payable, income taxes
and other current liabilities 357,705 331,777
--------- ---------
Total current liabilities 417,081 435,323
Long-term debt 494,285 619,705
Deferred taxes and other
non-current liabilities 170,399 135,695
--------- ---------
Total liabilities 1,081,765 1,190,723
Stockholders' equity 934,536 819,720
--------- ---------
Total liabilities and
stockholders' equity $2,016,301 $2,010,443
--------- ---------
PALL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
FOURTH QUARTER ENDED YEAR ENDED
-------------------- -------------------
AUG. 2, AUG. 3, AUG. 2, AUG. 3,
2003 2002 2003 2002
-------- -------- -------- --------
Net sales $471,412 $428,889 $1,613,635 $1,290,820
Cost of sales 230,106 228,943(b) 810,039 654,889(b)
------- ------- ------- -------
Gross profit 241,306 199,946 803,596 635,931
Selling, general
and administrative
expenses 151,833 133,554 536,194 440,025
Research and
development 12,489 16,304 52,204 54,778
Restructuring and
other charges, net 1,189 26,822 47,524 26,822
Interest expense,
net 5,200 5,663 24,438 14,331
------- ------- ------- -------
Earnings before
income taxes 70,595 17,603 143,236 99,975
Provision for
income taxes 15,989 8,619 40,034 26,741
------- ------- ------- -------
Net earnings $ 54,606 $ 8,984 $ 103,202 $ 73,234
------- ------- ------- -------
Earnings per share:
Basic: $ 0.44 $ 0.07 $ 0.84 $ 0.60
------- ------- ------- -------
Diluted: $ 0.44 $ 0.07 $ 0.83 $ 0.59
Average number of
shares outstanding:
Basic: 124,062 122,629 123,275 122,353
Diluted: 125,330 123,582 124,214 123,532
Net earnings
as reported $ 54,606 $ 8,984 $ 103,202 $ 73,234
Restructuring and
other charges,
net, after pro
forma tax effect 1,386(a) 27,679(b) 45,591(a) 27,679
------- ------- ------- -------
Pro forma earnings $ 55,992 $ 36,663 $ 148,793 $ 100,913
------- ------- ------- -------
Diluted earnings
per share as
reported $ 0.44 $ 0.07 $ 0.83 $ 0.59
Restructuring and
other charges,
net $ 0.01(a) $ 0.23(b) $ 0.37(a)$ 0.23
------- ------- ------- -------
Pro forma diluted
earnings per
share $ 0.45 $ 0.30 $ 1.20 $ 0.82
(a) Restructuring and other charges, net, for the year includes
$37,600 (30 cents per share) of acquired in-process research and
development and $9,924 (7 cents per share, after pro forma tax
effect) of restructuring costs inclusive of $1,189 (1 cent per
share, after pro forma tax effect) incurred in the fourth quarter.
(b) Included in cost of sales is a $6,014 (3 cents per share, after
pro forma tax effect) one-time purchase accounting adjustment.
Restructuring and other charges, net, includes $14,495 (12 cents per
share, after pro forma tax effect) relating to the write-down of
investments, additions to previously established environmental
reserves of $7,000 (4 cents per share, after pro forma tax effect)
and restructuring costs, primarily related to the FSG acquisition,
of $5,327 (4 cents per share, after pro forma tax effect).
PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
% CHANGE
SALES % IN LOCAL
FOURTH QUARTER ENDED: AUG. 2, AUG. 3, CHANGE CURRENCY
2003 2002
-------- -------- ------- ----------
MARKET SEGMENT
INFORMATION:
Medical(a) $ 95,981 $ 91,794 4 1/2 -
BioPharmaceuticals (a) 102,864 87,842 17 9
------- ------- ------- ----------
Total Life Sciences 198,845 179,636 10 1/2 4 1/2
------- ------- ------- ----------
General Industrial 177,893 162,336 9 1/2 1/2
Aerospace 51,399 43,917 17 11 1/2
Microelectronics 43,275 43,000 1/2 (2 1/2)
------- ------- -------- ----------
Total Industrial 272,567 249,253 9 1/2 2
------- ------- -------- ----------
Total $471,412 $428,889 10 3
GEOGRAPHIC
INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
-------------------------
Western
Hemisphere $176,738 $190,486 (7) (8 1/2)
Europe 192,104 165,221 16 1/2 2 1/2
Asia 102,570 73,182 40 34
------- ------- ------- ---------
Total $471,412 $428,889 10 3
------- ------- ------- ---------
TOTAL SALES
-----------
Western
Hemisphere $220,971 $228,067
Europe 217,577 184,051
Asia 103,543 74,093
Eliminations (70,679) (57,322)
Total $471,412 $428,889
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
OPERATING PROFIT
FOURTH QUARTER ENDED: AUG. 2, 2003 % AUG. 3, 2002 %
------------ ---- ------------ ----
MARKET SEGMENT
INFORMATION:
Medical(a) $ 24,140 25.2 $14,689 16.0
BioPharmaceuticals(a) 27,727 27.0 24,953 28.4
------ ------
Total Life Sciences 51,867 26.1 39,642 22.1
------ ------
General Industrial 22,874 12.9 19,982 12.3
Aerospace 15,000 29.2 9,817 22.4
Microelectronics 8,282 19.1 4,917 11.4
------ ------
Total Industrial 46,156 16.9 34,716 13.9
------ ------
Subtotal 98,023 20.8 74,358 17.3
Restructuring and other charges (1,189) (32,836)
------ ------
General corporate expenses (21,039) (18,256)
Interest expense, net (5,200) (5,663)
------ ------
Earnings before income taxes $ 70,595 $ 17,603
------ ------
GEOGRAPHIC INFORMATION:
Western Hemisphere $ 39,558 17.9 $ 35,812 15.7
Europe 36,998 17.0 24,618 13.4
Asia 20,760 20.0 11,263 15.2
Eliminations 707 2,665
------ ------
Subtotal 98,023 20.8 74,358 17.3
Restructuring and other charges (1,189) (32,836)
General corporate expenses (21,039) (18,256)
Interest expense, net (5,200) (5,663)
------ ------
Earnings before income taxes $ 70,595 $ 17,603
------ ------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
PALL CORPORATION MARKET SEGMENT AND GEOGRAPHIC INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
% CHANGE
SALES % IN LOCAL
YEAR ENDED: AUG. 2, AUG. 3, CHANGE CURRENCY
2003 2002
------- ------- ------ --------
MARKET SEGMENT
INFORMATION:
Medical(a) $ 317,051 $ 311,037 2 (2 1/2)
BioPharmaceuticals (a) 351,874 293,809 20 12 1/2
--------- ---------
Total Life Sciences 668,925 604,846 10 1/2 4 1/2
--------- ---------
General Industrial 595,210 407,382 46 35
Aerospace 185,431 158,753 17 11 1/2
Microelectronics 164,069 119,839 37 31
--------- ---------
Total Industrial 944,710 685,974 37 1/2 28 1/2
--------- ---------
Total $1,613,635 $1,290,820 25 17 1/2
--------- ---------
GEOGRAPHIC INFORMATION:
SALES
TO UNAFFILIATED CUSTOMERS
-------------------------
Western
Hemisphere $ 630,307 $ 584,327 8 8
Europe 671,660 472,569 42 24 1/2
Asia 311,668 233,924 33 27
--------- ---------
Total $1,613,635 $1,290,820 25 17 1/2
--------- ---------
TOTAL SALES
-----------
Western
Hemisphere $ 794,819 $ 707,663
Europe 758,717 534,289
Asia 315,496 236,190
Eliminations (255,397) (187,322)
--------- ---------
Total $1,613,635 $1,290,820
--------- ---------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
OPERATING PROFIT
YEAR ENDED: AUG. 2, % AUG. 3, %
2003 2002
------- ---- -------- ----
MARKET SEGMENT
INFORMATION:
Medical(a) $ 57,745 18.2 $ 43,255 13.9
BioPharmaceuticals(a) 82,207 23.4 76,511 26.0
------- -------
Life Sciences 139,952 20.9 119,766 19.8
------- -------
General Industrial 67,493 11.3 45,320 11.1
Aerospace 52,593 28.4 37,489 23.6
Microelectronics 28,103 17.1 7,477 6.2
------- -------
Industrial 148,189 15.7 90,286 13.2
------- -------
Subtotal 288,141 17.9 210,052 16.3
Restructuring and other
charges (47,524) (32,836)
General corporate expenses (72,943) (62,910)
Interest expense, net (24,438) (14,331)
------- -------
Earnings before income
taxes $ 143,236 $ 99,975
------- -------
GEOGRAPHIC INFORMATION:
Western Hemisphere $ 116,035 14.6 $ 87,376 12.3
Europe 120,992 15.9 82,258 15.4
Asia 52,269 16.6 37,437 15.9
Eliminations (1,155) 2,981
------- -------
Subtotal 288,141 17.9 210,052 16.3
Restructuring and other
charges (47,524) (32,836)
General corporate expenses (72,943) (62,910)
Interest expense, net (24,438) (14,331)
------- -------
Earnings before income
taxes $ 143,236 $ 99,975
------- -------
(a) Certain prior year amounts have been reclassified to conform to
the current year presentation.
Short Name: Pall Corporation
Category Code: FR
Sequence Number: 00009293
Time of Receipt (offset from UTC): 20030904T210311+0100
--30--IS/ny* DB/ny
CONTACT: Pall Corporation
John Adamovich, 516-801-9808
KEYWORD: NEW YORK UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: ENVIRONMENT MANUFACTURING CONFERENCE CALLS
EARNINGS
SOURCE: Pall Corporation
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