EXHIBIT 99
Pall Corporation Earnings Up Over 50%
on Sales Increase of 14%
March 1, 2007 (EAST HILLS, NY) — Pall Corporation (NYSE: PLL) today reported sales and earnings results for the second quarter ended January 31, 2007.
Sales for the quarter were $544.9 million, up 13.9% compared with the second quarter last year. Diluted earnings per share (“EPS”) were $0.45, up from $0.26 a year ago. Net earnings were $55.8 million compared to $32.4 million a year ago. EPS on a pro forma basis, excluding items principally related to the Company’s cost reduction initiatives, were $0.43 per share as compared to $0.28 per share in the same quarter last year.
For the six months ended January 31, 2007, sales were $1.04 billion, an increase of 14.8% over the prior year. Net earnings were $80.2 million, or $0.64 per share compared to $0.46 last year. Earnings on a pro forma basis, excluding charges principally related to the Company’s cost reduction initiatives, were $0.71 per share as compared to $0.48 per share in the same period last year.
“Sales growth was strong in Industrial and Life Sciences driven by our ‘Total Fluid Managementsm’ strategy and leading position in fast-growing markets. Improvements in productivity and our well-established cost reduction initiatives were the real stars of the quarter. Our six month operating profit growth of 33% demonstrates that Pall is successfully executing its profit improvement efforts,” said Eric Krasnoff, Chairman and CEO.
Income Statement Discussion
At constant exchange rates, sales increased $43.9 million, or 9.2%, in the quarter and $103.2 million, or 11.3%, during the six months. The impact of foreign currency translation increased the reported sales growth to $66.5 million, or 13.9%, for the quarter, and $134.6 million, or 14.8%, for the first six months. The impact of foreign currency translation increased EPS by $0.01 in the quarter and for the six months.
Mr. Krasnoff added, “Results for the second quarter indicate that gross margins are now beginning to stabilize, reflecting top-line leverage and our cost reduction initiatives. System sales were up 36% in the quarter. Profitability of systems is improving as our cost reduction and rationalization initiatives gain traction. We are on track to see significant gross margin expansion in fiscal 2008.
Selling, general and administrative (“S,G&A”) expenses again decreased as a percentage of sales, falling to 30.9% in the quarter. This continues a long-term improving trend.”
1
EXHIBIT 99
Life Sciences — Second Quarter Summary
| | | | | | | | | | | | | |
| | | | | | | | | | | % CHANGE | |
| | | | | | | | | | | IN LOCAL | |
| Sales: | | JAN. 31, 2007 | | | % CHANGE | | | CURRENCY | |
| Medical | | $ | 119,605 | | | | 11.5 | | | | 7.7 | |
| BioPharmaceuticals | | | 92,330 | | | | 14.6 | | | | 8.8 | |
| | | | | | | | | | | | |
| Total Life Sciences segment | | $ | 211,935 | | | | 12.8 | | | | 8.1 | |
| | | | | | | | | | | | |
| |
| | | | | | | % OF SALES | | | | | |
| Gross profit | | $ | 106,014 | | | | 50.0 | % | | | | |
| Operating profit | | $ | 37,036 | | | | 17.5 | % | | | | |
Highlights of the Quarter:
BioPharmaceuticals sales reflect the continued adoption of Pall technologies throughout the fast-growing biotechnology and vaccine industries.
Medical sales increased driven by new blood center customers and new products and applications for the blood business; and growth in the Hospital and BioSciences markets. Laboratory products posted growth of over 11% on top of strong performance in the same quarter last year.
Gross margin improved to 50% compared with 49.3% last year. S,G&A improved to 28.8% as a percentage of sales. Operating profit increased 34% to $37 million and operating margin improved to 17.5% from 14.7% last year.
The backlog in Life Sciences increased 14% compared to a year ago, with strong growth in the BioSciences and BioPharmaceuticals markets.
Industrial — Second Quarter Summary
| | | | | | | | | | | | | |
| | | | | | | | | | | % CHANGE | |
| | | | | | | | | | | IN LOCAL | |
| Sales: | | JAN. 31, 2007 | | | % CHANGE | | | CURRENCY | |
| General Industrial | | $ | 196,975 | | | | 14.6 | | | | 9.3 | |
| Aerospace and Transportation | | 60,735 | | | | 7.4 | | | | 2.8 | |
| Microelectronics | | | 75,285 | | | | 21.2 | | | | 17.7 | |
| | | | | | | | | | | | |
| Total Industrial segment | | $ | 332,995 | | | | 14.6 | | | | 9.8 | |
| | | | | | | | | | | | |
| |
| | | | | | | % OF SALES | | | | | |
| Gross profit | | $ | 152,545 | | | | 45.8 | % | | | | |
| Operating profit | | $ | 48,373 | | | | 14.5 | % | | | | |
2
EXHIBIT 99
Highlights of the Quarter:
General Industrial systems sales growth in the Municipal Water and energy markets was particularly strong.
Microelectronics sales continue to benefit from our strategic diversification into the consumer side of the electronics market. Sales in Asia were robust while the U.S. market started to slow in the quarter.
Gross margins were on par with last year. S,G&A improved by 3.1% as a percentage of sales to 29.1% reflecting top-line leverage and cost reduction initiatives. Operating profit increased almost 42% to $48.4 million and operating margin improved to 14.5% from 11.8% last year.
The backlog in Industrial was up 21% compared to a year ago. The systems backlog increased 24%, with particularly strong growth in the Municipal Water market.
Outlook
Life Sciences: We continue to expect mid single-digit sales growth in fiscal 2007 with Medical sales growth abating in the second half of the year and BioPharmaceuticals achieving low double-digit growth for the year.
Industrial: We expect sales in Pall Industrial to modestly surpass the 5-7% growth range provided at the beginning of the fiscal year reflecting a slowdown in Microelectronics and the consistent vitality of the systems business.
We expect gross margins for the Corporation to stabilize as the impact of our cost reduction initiatives grows. S,G&A is expected to be about 31% of sales for the full year and our underlying tax rate to be about 24% for the full year. Free cash flow (net cash provided by operating activities less capital expenditures) is expected to exceed our earlier estimate of $135 to $180 million.
With these six month results and assuming a steady macroeconomic environment, we now expect to post full year earnings per share on a pro forma basis above our original guidance of $1.45 to $1.60.
Conference Call
Tomorrow, March 2, 2007, at 8:30 am ET, Pall Corporation will host its quarterly earnings conference call. The call will be webcast and individuals can access it at www.pall.com/investor. 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, separation and purification. Pall is organized into two businesses: Life Sciences and Industrial. These businesses provide leading-edge products to meet the demanding needs of customers in biotechnology, pharmaceutical, transfusion medicine, energy, electronics, municipal and industrial water purification, aerospace, transportation and broad industrial markets. Total revenues for fiscal year 2006 were $2.0 billion. The Company headquarters is in East Hills, New York with extensive operations throughout the world. For more information visit Pall at http://www.pall.com/.
3
EXHIBIT 99
Forward Looking Statements:
Results for second quarter ended January 31, 2007 are preliminary until the Company’s Form 10-Q is filed with the Securities and Exchange Commission. Forward-looking statements contained in this and other written and oral reports are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. All statements regarding future performance, earnings projections, earnings guidance, events or developments are forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in product mix and product pricing particularly as we expand our systems business in which we experience significantly longer sales cycles and less predictable revenue with no certainty of future revenue streams from related consumable product offerings and services; increases in costs of manufacturing and operating costs including energy and raw materials; the Company’s ability to achieve the savings anticipated from cost reduction and margin improvement initiatives including the timing of completion of the facilities rationalization initiative; fluctuations in foreign currency exchange rates and interest rates; regulatory approval and market acceptance of new technologies; changes in business relationships with key customers and suppliers including delays or cancellations in shipments; success in enforcing patents and protecting proprietary products and manufacturing techniques; successful completion or integration of acquisitions; domestic and international competition in the Company’s global markets; and global and regional economic conditions and legislative, regulatory and political developments. The Company makes these statements as of the date of this disclosure and undertakes no obligation to update them.
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 ongoing operations.
4
PALL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(AMOUNTS IN THOUSANDS)
| | | | | | | | | |
| | | JAN. 31, 2007 | | | JUL. 31, 2006 | |
| Assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 345,686 | | | $ | 317,657 | |
| Accounts receivable | | | 476,286 | | | | 517,632 | |
| Inventories | | | 434,891 | | | | 408,273 | |
| Other current assets | | | 141,405 | | | | 133,419 | |
| | | | | | | |
| Total current assets | | | 1,398,268 | | | | 1,376,981 | |
| | | | | | | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 576,730 | | | | 620,979 | |
| Other assets | | | 536,848 | | | | 554,898 | |
| | | | | | | |
| Total assets | | $ | 2,511,846 | | | $ | 2,552,858 | |
| | | | | | | |
| | | | | | | | | |
| Liabilities and Stockholders’ Equity: | | | | | | | | |
| | | | | | | | | |
| Short-term debt | | $ | 55,090 | | | $ | 63,382 | |
| Accounts payable, income taxes and other current liabilities | | | 454,908 | | | | 467,434 | |
| | | | | | | |
| Total current liabilities | | | 509,998 | | | | 530,816 | |
| | | | | | | |
| | | | | | | | | |
| Long-term debt | | | 533,993 | | | | 640,015 | |
| Deferred taxes and other non-current liabilities | | | 207,413 | | | | 203,331 | |
| | | | | | | |
| Total liabilities | | | 1,251,404 | | | | 1,374,162 | |
| | | | | | | | | |
| Stockholders’ Equity | | | 1,260,442 | | | | 1,178,696 | |
| | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 2,511,846 | | | $ | 2,552,858 | |
| | | | | | | |
5
EXHIBIT 99
PALL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | |
| | | SECOND QUARTER ENDED | | | SIX MONTHS ENDED | |
| | | JAN. 31, | | | JAN. 31, | | | JAN. 31, | | | JAN. 31, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Net Sales | | $ | 544,930 | | | $ | 478,436 | | | $ | 1,044,218 | | | $ | 909,598 | |
| Cost of sales | | | 288,460 | (a) | | | 252,618 | (b) | | | 564,076 | (a) | | | 482,103 | (b) |
| | | | | | | | | | | | | |
| Gross profit | | | 256,470 | | | | 225,818 | | | | 480,142 | | | | 427,495 | |
| | | | | | | | | | | | | |
| % of sales | | | 47.1 | % | | | 47.2 | % | | | 46.0 | % | | | 47.0 | % |
| Selling, general and administrative expenses | | | 168,203 | | | | 159,136 | | | | 325,578 | | | | 308,843 | |
| Research and development | | | 15,277 | | | | 14,398 | | | | 29,511 | | | | 27,464 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings before restructuring and other charges/(gains), net (“ROTC”), interest expense, net, and income taxes | | | 72,990 | | | | 52,284 | | | | 125,053 | | | | 91,188 | |
| ROTC | | | (3,648 | )(a) | | | 3,736 | (b) | | | 13,440 | (a) | | | 3,686 | (b) |
| Interest expense, net | | | 4,848 | | | | 5,642 | | | | 10,634 | | | | 11,381 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings before income taxes | | | 71,790 | | | | 42,906 | | | | 100,979 | | | | 76,121 | |
| Provision for income taxes | | | 15,987 | (a) | | | 10,470 | | | | 20,742 | (a) | | | 18,575 | |
| | | | | | | | | | | | | |
| Net earnings | | $ | 55,803 | | | $ | 32,436 | | | $ | 80,237 | | | $ | 57,546 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.45 | | | $ | 0.26 | | | $ | 0.65 | | | $ | 0.46 | |
| Diluted | | $ | 0.45 | | | $ | 0.26 | | | $ | 0.64 | | | $ | 0.46 | |
| | | | | | | | | | | | | | | | | |
| Average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 123,185 | | | | 125,225 | | | | 122,988 | | | | 125,045 | |
| Diluted | | | 124,504 | | | | 126,090 | | | | 124,392 | | | | 125,879 | |
| | | | | | | | | | | | | | | | | |
| Net earnings as reported | | $ | 55,803 | | | $ | 32,436 | | | $ | 80,237 | | | $ | 57,546 | |
6
EXHIBIT 99
| | | | | | | | | | | | | | | | | |
| | | SECOND QUARTER ENDED | | | SIX MONTHS ENDED | |
| | | JAN. 31, | | | JAN. 31, | | | JAN. 31, | | | JAN. 31, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| ROTC and one-time purchase accounting adjustment, after pro forma tax effect | | | (915 | ) | | | 2,608 | | | | 10,146 | | | | 2,779 | |
| Reversal of valuation allowance | | | (1,517 | ) | | | — | | | | (1,517 | ) | | | — | |
| | | | | | | | | | | | | |
| Pro forma earnings | | $ | 53,371 | | | $ | 35,044 | | | $ | 88,866 | | | $ | 60,325 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share as reported | | $ | 0.45 | | | $ | 0.26 | | | $ | 0.64 | | | $ | 0.46 | |
| ROTC and one-time purchase accounting adjustment, after pro forma tax effect | | | (0.01 | ) | | | 0.02 | | | | 0.08 | | | | 0.02 | |
| Reversal of valuation allowance | | | (0.01 | ) | | | — | | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Pro forma diluted earnings per share | | $ | 0.43 | | | $ | 0.28 | | | $ | 0.71 | | | $ | 0.48 | |
| | | | | | | | | | | | | |
| | |
| (a) | | Cost of sales includes incremental depreciation and other adjustments of $1,523 (1 cent per share after pro forma tax effect) in the quarter and $1,950 (1 cent per share, after pro forma tax effect) in the six months recorded in conjunction with the Company’s facilities rationalization initiative. Furthermore, cost of sales includes a charge of $566 for the quarter and six months related to a one-time purchase accounting adjustment to record at market value, inventory acquired from BioSepra. This resulted in an $2,431 increase in acquired inventories in accordance with SFAS No. 141 “Business Combinations” and charges to cost of sales in the periods when the sale of a portion of the underlying inventory occurred. |
| |
| | | ROTC in the quarter includes income of $3,648 (2 cents per share, after pro forma tax effect) primarily comprised of a gain on the sale of a facility partly offset by severance and other costs related to the Company’s cost reduction programs, including its facilities rationalization initiative. ROTC in the six months includes a charge of $10,879 (6 cents per share, after pro forma tax effect) primarily comprised of severance costs and an impairment charge on certain long-lived assets partly offset by a gain on the sale of a facility. The charges in the six months relate to the Company’s cost reduction programs, including its facilities rationalization initiative. In addition, the six months includes $2,561 (1 cent per share, after pro forma tax effect) related to an increase in environmental reserves. |
7
EXHIBIT 99
| | |
| | | Provision for income taxes includes the reversal of a deferred tax asset valuation reserve of $1,517 (1 cent per share) in the quarter and six months. |
| |
| (b) | | Included in cost of sales is a charge of $195 and $506 in the quarter and six months, respectively, related to a one-time purchase accounting adjustment to record at market value, inventory acquired from BioSepra as discussed above. |
| |
| | | ROTC includes severance and other costs of $4,130 (2 cents per share, after pro forma tax effect) in the quarter and $5,886 (3 cents per share, after pro forma tax effect) in the six months primarily related to the Company’s business realignment and ongoing cost reduction programs, partly offset by gains of $394 in the quarter and $2,200 ( 1 cent per share, after pro forma tax effect) in the six months. |
8
EXHIBIT 99
PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(AMOUNTS IN THOUSANDS)
| | | | | | | | | |
| | | SIX MONTHS ENDED | |
| | | JAN. 31, 2007 | | | JAN. 31, 2006 | |
| | | | | | | |
| Net cash provided by operating activities | | $ | 148,875 | | | $ | 125,020 | |
| | | | | | | |
| | | | | | | | | |
| Investing activities: | | | | | | | | |
| | | | | | | | | |
| Proceeds from sale of assets | | | 42,029 | | | | — | |
| Capital expenditures | | | (32,210 | ) | | | (52,021 | ) |
| Other | | | 127 | | | | (7,591 | ) |
| | | | | | | |
| | | | | | | | | |
| Net cash provided/(used) by investing activities | | | 9,946 | | | | (59,612 | ) |
| | | | | | | |
| | | | | | | | | |
| Financing activities: | | | | | | | | |
| | | | | | | | | |
| Dividends paid | | | (26,885 | ) | | | (24,885 | ) |
| Notes payable and long-term borrowings | | | (121,281 | ) | | | 11,651 | |
| Purchase of treasury stock | | | (11,800 | ) | | | (5,750 | ) |
| Other | | | 27,759 | | | | 14,861 | |
| | | | | | | |
| Net cash used by financing activities | | | (132,207 | ) | | | (4,123 | ) |
| | | | | | | |
| | | | | | | | | |
| Cash flow for period | | | 26,614 | | | | 61,285 | |
| Cash and cash equivalents at beginning of year | | | 317,657 | | | | 164,928 | |
| Effect of exchange rate changes on cash | | | 1,415 | | | | 1,785 | |
| | | | | | | |
| Cash and cash equivalents at end of period | | $ | 345,686 | | | $ | 227,998 | |
| | | | | | | |
| | | | | | | | | |
| Free cash flow: | | | | | | | | |
| Net cash provided by operating activities | | $ | 148,875 | | | $ | 125,020 | |
| Less capital expenditures | | | 32,210 | | | | 52,021 | |
| | | | | | | |
| Free cash flow | | $ | 116,665 | | | $ | 72,999 | |
| | | | | | | |
9
EXHIBIT 99
PALL CORPORATION
SUMMARY STATEMENT OF OPERATING PROFIT BY SEGMENT
(Unaudited)
(DOLLAR AMOUNTS IN THOUSANDS)
| | | | | | | | | | | | | | | | | |
| | | SECOND QUARTER ENDED | | | SIX MONTHS ENDED | |
| | | JAN. 31, 2007 | | | JAN. 31, 2006 | | | JAN. 31, 2007 | | | JAN. 31, 2006 | |
| Life Sciences | | | | | | | | | | | | | | | | |
| Sales | | $ | 211,935 | | | $ | 187,867 | | | $ | 404,937 | | | $ | 356,814 | |
| Cost of sales (a) | | | 105,921 | | | | 95,265 | | | | 203,697 | | | | 181,835 | |
| | | | | | | | | | | | | |
| Gross profit | | | 106,014 | | | | 92,602 | | | | 201,240 | | | | 174,979 | |
| % of sales | | | 50.0 | % | | | 49.3 | % | | | 49.7 | % | | | 49.0 | % |
| | | | | | | | | | | | | | | | | |
| Selling, general and administrative expenses | | | 61,136 | | | | 56,356 | | | | 119,528 | | | | 109,352 | |
| Research and development | | | 7,842 | | | | 8,697 | | | | 15,488 | | | | 15,511 | |
| | | | | | | | | | | | | |
| Operating profit | | $ | 37,036 | | | $ | 27,549 | | | $ | 66,224 | | | $ | 50,116 | |
| % of sales | | | 17.5 | % | | | 14.7 | % | | | 16.4 | % | | | 14.0 | % |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Industrial | | | | | | | | | | | | | | | | |
| Sales | | $ | 332,995 | | | $ | 290,569 | | | $ | 639,281 | | | $ | 552,784 | |
| Cost of sales (a) | | | 180,450 | | | | 157,158 | | | | 357,863 | | | | 299,762 | |
| | | | | | | | | | | | | |
| Gross profit | | | 152,545 | | | | 133,411 | | | | 281,418 | | | | 253,022 | |
| % of sales | | | 45.8 | % | | | 45.9 | % | | | 44.0 | % | | | 45.8 | % |
| | | | | | | | | | | | | | | | | |
| Selling, general and administrative expenses | | | 96,737 | | | | 93,564 | | | | 185,733 | | | | 180,142 | |
| Research and development | | | 7,435 | | | | 5,701 | | | | 14,023 | | | | 11,953 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating profit | | $ | 48,373 | | | $ | 34,146 | | | $ | 81,662 | | | $ | 60,927 | |
| % of sales | | | 14.5 | % | | | 11.8 | % | | | 12.8 | % | | | 11.0 | % |
| | | | | | | | | | | | | |
10
EXHIBIT 99
| | | | | | | | | | | | | | | | | |
| | | SECOND QUARTER ENDED | | | SIX MONTHS ENDED | |
| | | JAN. 31, 2007 | | | JAN. 31, 2006 | | | JAN. 31, 2007 | | | JAN. 31, 2006 | |
| CONSOLIDATED: | | | | | | | | | | | | | | | | |
| Operating profit | | $ | 85,409 | | | $ | 61,695 | | | $ | 147,886 | | | $ | 111,043 | |
| General corporate expenses | | | (10,330 | ) | | | (9,216 | ) | | | (20,317 | ) | | | (19,349 | ) |
| | | | | | | | | | | | | |
| Earnings before ROTC, interest expense, net and income taxes(a) | | | 75,079 | | | | 52,479 | | | | 127,569 | | | | 91,694 | |
| ROTC (a) | | | 1,559 | | | | (3,931 | ) | | | (15,956 | ) | | | (4,192 | ) |
| Interest expense, net | | | (4,848 | ) | | | (5,642 | ) | | | (10,634 | ) | | | (11,381 | ) |
| | | | | | | | | | | | | |
| Earnings before income taxes | | $ | 71,790 | | | $ | 42,906 | | | $ | 100,979 | | | $ | 76,121 | |
| | | | | | | | | | | | | |
| | |
| (a) | | Included in ROTC for the purpose of evaluation of segment profitability are other adjustments recorded in cost of sales. For the quarter and six months ended January 31, 2007, such adjustments include incremental depreciation and other adjustments of $1,523 and $1,950 recorded in conjunction with the Company’s facilities rationalization initiative. Furthermore, such adjustments include a charge of $566 for the quarter and six months ended January 31, 2007 and $195 and $506 for the quarter and six months ended January 31, 2006, respectively, related to a one-time purchase accounting adjustment to record at market value, inventory acquired from BioSepra. This resulted in an $2,431 increase in acquired inventories in accordance with SFAS No. 141 “Business Combinations” and charges to cost of sales in in the periods when the sale of a portion of the underlying inventory occurred. |
11
EXHIBIT 99
PALL CORPORATION
SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(DOLLAR AMOUNTS IN THOUSANDS)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | % CHANGE | |
| | | | | | | | | | | | | | | IN LOCAL | |
| SECOND QUARTER ENDED | | JAN. 31, 2007 | | | JAN. 31, 2006 | | | % CHANGE | | | CURRENCY | |
| Life Sciences | | | | | | | | | | | | | | | | |
| By Market: | | | | | | | | | | | | | | | | |
| Medical | | $ | 119,605 | | | $ | 107,310 | | | | 11.5 | | | | 7.7 | |
| BioPharmaceuticals | | | 92,330 | | | | 80,557 | | | | 14.6 | | | | 8.8 | |
| | | | | | | | | | | | | | | |
| Total Life Sciences | | $ | 211,935 | | | $ | 187,867 | | | | 12.8 | | | | 8.1 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| By Geography: | | | | | | | | | | | | | | | | |
| Western Hemisphere | | $ | 89,441 | | | $ | 86,335 | | | | 3.6 | | | | 3.6 | |
| Europe | | | 95,249 | | | | 76,047 | | | | 25.3 | | | | 14.6 | |
| Asia | | | 27,245 | | | | 25,485 | | | | 6.9 | | | | 4.4 | |
| | | | | | | | | | | | | | | |
| Total Life Sciences | | $ | 211,935 | | | $ | 187,867 | | | | 12.8 | | | | 8.1 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Industrial | | | | | | | | | | | | | | | | |
| By Market: | | | | | | | | | | | | | | | | |
| General Industrial (a) | | $ | 196,975 | | | $ | 171,876 | | | | 14.6 | | | | 9.3 | |
| Aerospace and Transportation (a) | | | 60,735 | | | | 56,563 | | | | 7.4 | | | | 2.8 | |
| Microelectronics | | | 75,285 | | | | 62,130 | | | | 21.2 | | | | 17.7 | |
| | | | | | | | | | | | | | | |
| Total Industrial | | $ | 332,995 | | | $ | 290,569 | | | | 14.6 | | | | 9.8 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| By Geography: | | | | | | | | | | | | | | | | |
| Western Hemisphere | | $ | 96,949 | | | $ | 91,498 | | | | 6.0 | | | | 6.0 | |
| Europe | | | 131,687 | | | | 112,150 | | | | 17.4 | | | | 7.5 | |
| Asia | | | 104,359 | | | | 86,921 | | | | 20.1 | | | | 17.0 | |
| | | | | | | | | | | | | | | |
| Total Industrial | | $ | 332,995 | | | $ | 290,569 | | | | 14.6 | | | | 9.8 | |
| | | | | | | | | | | | | | | |
| | |
| (a) | | Certain prior year amounts have been reclassified to conform to the current year presentation. |
12
EXHIBIT 99
PALL CORPORATION
SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(DOLLAR AMOUNTS IN THOUSANDS)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | % CHANGE | |
| | | | | | | | | | | | | | | IN LOCAL | |
| SIX MONTHS ENDED | | JAN. 31, 2007 | | | JAN. 31, 2006 | | | % CHANGE | | | CURRENCY | |
| Life Sciences | | | | | | | | | | | | | | | | |
| By Market: | | | | | | | | | | | | | | | | |
| Medical | | $ | 223,117 | | | $ | 202,457 | | | | 10.2 | | | | 7.5 | |
| BioPharmaceuticals | | | 181,820 | | | | 154,357 | | | | 17.8 | | | | 13.5 | |
| | | | | | | | | | | | | | | |
| Total Life Sciences | | $ | 404,937 | | | $ | 356,814 | | | | 13.5 | | | | 10.1 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| By Geography: | | | | | | | | | | | | | | | | |
| Western Hemisphere | | $ | 173,637 | | | $ | 162,416 | | | | 6.9 | | | | 6.8 | |
| Europe | | | 179,921 | | | | 145,628 | | | | 23.6 | | | | 15.5 | |
| Asia | | | 51,379 | | | | 48,770 | | | | 5.4 | | | | 4.7 | |
| | | | | | | | | | | | | | | |
| Total Life Sciences | | $ | 404,937 | | | $ | 356,814 | | | | 13.5 | | | | 10.1 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Industrial | | | | | | | | | | | | | | | | |
| By Market: | | | | | | | | | | | | | | | | |
| General Industrial (a) | | $ | 372,048 | | | $ | 325,547 | | | | 14.3 | | | | 10.3 | |
| Aerospace and Transportation (a) | | | 121,067 | | | | 111,699 | | | | 8.4 | | | | 5.1 | |
| Microelectronics | | | 146,166 | | | | 115,538 | | | | 26.5 | | | | 24.2 | |
| | | | | | | | | | | | | | | |
| Total Industrial | | $ | 639,281 | | | $ | 552,784 | | | | 15.7 | | | | 12.2 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| By Geography: | | | | | | | | | | | | | | | | |
| Western Hemisphere | | $ | 185,915 | | | $ | 170,052 | | | | 9.3 | | | | 9.2 | |
| Europe | | | 251,120 | | | | 214,257 | | | | 17.2 | | | | 9.7 | |
| Asia | | | 202,246 | | | | 168,475 | | | | 20.1 | | | | 18.3 | |
| | | | | | | | | | | | | | | |
| Total Industrial | | $ | 639,281 | | | $ | 552,784 | | | | 15.7 | | | | 12.2 | |
| | | | | | | | | | | | | | | |
| | |
| (a) | | Certain prior year amounts have been reclassified to conform to the current year presentation. |
13
EXHIBIT 99
PALL CORPORATION
SUMMARY STATEMENT OF OPERATING PROFIT BY SEGMENT
Restated Fiscal Year 2006 By Quarter
(Unaudited)
(DOLLAR AMOUNTS IN THOUSANDS)
| | | | | | | | | | | | | | | | | | | | | |
| | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | | |
| | | OCT. 31, | | | JAN. 31, | | | APRIL 30, | | | JULY 31, | | | Total Year | |
| | | 2005 | | | 2006 | | | 2006 | | | 2006 | | | 2006 | |
| Life Sciences | | | | | | | | | | | | | | | | | | | | |
| Sales | | $ | 168,947 | | | $ | 187,867 | | | $ | 205,937 | | | $ | 233,554 | | | $ | 796,305 | |
| Cost of sales (a) | | | 86,570 | | | | 95,265 | | | | 103,185 | | | | 116,204 | | | | 401,224 | |
| | | | | | | | | | | | | | | | |
| Gross profit | | | 82,377 | | | | 92,602 | | | | 102,752 | | | | 117,350 | | | | 395,081 | |
| % of sales | | | 48.8 | % | | | 49.3 | % | | | 49.9 | % | | | 50.2 | % | | | 49.6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Selling, general and administrative expenses | | | 52,996 | | | | 56,356 | | | | 54,159 | | | | 61,543 | | | | 225,054 | |
| % of sales | | | 31.4 | % | | | 30.0 | % | | | 26.3 | % | | | 26.4 | % | | | 28.3 | % |
| Research and development | | | 6,814 | | | | 8,697 | | | | 7,625 | | | | 8,452 | | | | 31,588 | |
| | | | | | | | | | | | | | | | |
| Operating profit | | $ | 22,567 | | | $ | 27,549 | | | $ | 40,968 | | | $ | 47,355 | | | $ | 138,439 | |
| % of sales | | | 13.4 | % | | | 14.7 | % | | | 19.9 | % | | | 20.3 | % | | | 17.4 | % |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Industrial | | | | | | | | | | | | | | | | | | | | |
| Sales | | $ | 262,215 | | | $ | 290,569 | | | $ | 304,044 | | | $ | 363,697 | | | $ | 1,220,525 | |
| Cost of sales (a) | | | 142,604 | | | | 157,158 | | | | 167,870 | | | | 202,227 | | | | 669,859 | |
| | | | | | | | | | | | | | | | |
| Gross profit | | | 119,611 | | | | 133,411 | | | | 136,174 | | | | 161,470 | | | | 550,666 | |
| % of sales | | | 45.6 | % | | | 45.9 | % | | | 44.8 | % | | | 44.4 | % | | | 45.1 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Selling, general and administrative expenses | | | 86,578 | | | | 93,564 | | | | 92,880 | | | | 101,265 | | | | 374,287 | |
| % of sales | | | 33.0 | % | | | 32.2 | % | | | 30.5 | % | | | 27.8 | % | | | 30.7 | % |
| Research and development | | | 6,252 | | | | 5,701 | | | | 6,886 | | | | 6,944 | | | | 25,783 | |
| | | | | | | | | | | | | | | | |
| Operating profit | | $ | 26,781 | | | $ | 34,146 | | | $ | 36,408 | | | $ | 53,261 | | | $ | 150,596 | |
| % of sales | | | 10.2 | % | | | 11.8 | % | | | 12.0 | % | | | 14.6 | % | | | 12.3 | % |
| | | | | | | | | | | | | | | | |
14
EXHIBIT 99
| | | | | | | | | | | | | | | | | | | | | |
| | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | | |
| | | OCT. 31, | | | JAN. 31, | | | APRIL 30, | | | JULY 31, | | | Total Year | |
| | | 2005 | | | 2006 | | | 2006 | | | 2006 | | | 2006 | |
| CONSOLIDATED: | | | | | | | | | | | | | | | | | | | | |
| Operating profit | | $ | 49,348 | | | $ | 61,695 | | | $ | 77,376 | | | $ | 100,616 | | | $ | 289,035 | |
| General corporate expenses | | | (10,133 | ) | | | (9,216 | ) | | | (10,368 | ) | | | (11,972 | ) | | | (41,689 | ) |
| | | | | | | | | | | | | | | | |
| Earnings before ROTC, interest expense, net and income taxes (a) | | | 39,215 | | | | 52,479 | | | | 67,008 | | | | 88,644 | | | | 247,346 | |
| ROTC (a) | | | (261 | ) | | | (3,931 | ) | | | (7,646 | ) | | | (2,155 | ) | | | (13,993 | ) |
| Interest expense, net | | | (5,739 | ) | | | (5,642 | ) | | | (5,091 | ) | | | (6,505 | ) | | | (22,977 | ) |
| | | | | | | | | | | | | | | | |
| Earnings before income taxes | | $ | 33,215 | | | $ | 42,906 | | | $ | 54,271 | | | $ | 79,984 | | | $ | 210,376 | |
| | | | | | | | | | | | | | | | |
| | |
| (a) | | Included in ROTC for the purpose of evaluation of segment profitability are other adjustments of $1,667 recorded in cost of sales; $769 related to incremental depreciation recorded in conjunction with the Company’s facilities rationalization initiative and $898 related to a one-time purchase accounting adjustment to record at market value, inventory acquired from Biosepra. This resulted in a $2,431 increase in acquired inventories in accordance with SFAS No. 141 and a charge to cost of sales concurrent with the sale of a portion of the underlying inventory. |
15
EXHIBIT 99
PALL CORPORATION
SUPPLEMENTAL SALES INFORMATION BY GEOGRAPHY
Fiscal Year 2006 By Quarter
(Unaudited)
(DOLLAR AMOUNTS IN THOUSANDS)
| | | | | | | | | | | | | | | | | | | | | |
| | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | | |
| | | OCT. 31, | | | JAN. 31, | | | APRIL 30, | | | JULY 31, | | | Total Year | |
| | | 2005 | | | 2006 | | | 2006 | | | 2006 | | | 2006 | |
| Life Sciences | | | | | | | | | | | | | | | | | | | | |
| Western Hemisphere | | $ | 76,081 | | | $ | 86,335 | | | $ | 91,691 | | | $ | 97,920 | | | $ | 352,027 | |
| Europe | | | 69,581 | | | | 76,047 | | | | 86,096 | | | | 103,365 | | | | 335,089 | |
| Asia | | | 23,285 | | | | 25,485 | | | | 28,150 | | | | 32,269 | | | | 109,189 | |
| | | | | | | | | | | | | | | | |
| Total Life Sciences | | $ | 168,947 | | | $ | 187,867 | | | $ | 205,937 | | | $ | 233,554 | | | $ | 796,305 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Industrial | | | | | | | | | | | | | | | | | | | | |
| Western Hemisphere | | $ | 78,554 | | | $ | 91,498 | | | $ | 94,147 | | | $ | 111,289 | | | $ | 375,488 | |
| Europe | | | 102,107 | | | | 112,150 | | | | 114,683 | | | | 142,001 | | | | 470,941 | |
| Asia | | | 81,554 | | | | 86,921 | | | | 95,214 | | | | 110,407 | | | | 374,096 | |
| | | | | | | | | | | | | | | | |
| Total Industrial | | $ | 262,215 | | | $ | 290,569 | | | $ | 304,044 | | | $ | 363,697 | | | $ | 1,220,525 | |
| | | | | | | | | | | | | | | | |
Contact:
Lisa McDermott
Pall Corporation
516-801-9808
16
