East Hills, NY (March 1, 2006) - - Pall Corporation (NYSE: PLL) today reported sales and earnings results for the second quarter and six months ended January 31, 2006.
Reported sales for the quarter increased 2% to $478.4 million and earnings were $32.4 million and 26 cents per share as compared to $32 million and 26 cents per share last year. Local currency sales increased a strong 7½% with growth in all reporting segments. Foreign currency translation reduced sales by 5½% and earnings per share by 1 cent in the quarter.
On a pro forma basis, earnings were $35 million or 28 cents per share excluding restructuring and other charges, net of related tax effect, as compared to $35.8 million or 29 cents per share last year. The impact of stock compensation and the adoption of SFAS No. 123R, "Share-Based Payment", reduced earnings per share in the quarter by 2 cents.
Reported sales for the six months increased 3% to $909.6 million and earnings were $57.5 million or 46 cents per share as compared to $53.7 million and 43 cents per share last year. Local currency sales for the half year were up 6%. The effect of foreign currency translation reduced sales by 3% and earnings per share by 1 cent.
On a pro forma basis, earnings were $60.3 million or 48 cents per share excluding restructuring and other charges, net of related tax effect, as compared to $62.2 million or 50 cents per share last year. The impact of stock compensation and the adoption of SFAS No. 123R, "Share-Based Payment", reduced earnings per share in the six months by 4 cents.
Eric Krasnoff, Chairman and CEO, said, "In the quarter and six months, we saw local currency sales growth across all of our segments and in all geographies. Pall's top line growth rate has been progressing steadily and has more than doubled in the past three years. Orders have been strong all of this year, increasing 17% in the second quarter and backlog is at an all time high.
We continue to focus on costs. SG&A improved 30 basis points in the quarter. Excluding the impact of stock compensation expense, SG&A would have improved 70 basis points in the quarter. This reflects the effectiveness of our CoRe cost reduction programs and the integration of our business structure along broad business lines beginning in late 2004. Gross margin should improve even as systems shipments increase in the second half of this year. We are also seeing the benefits of our focus on working capital in the five day reduction in DSO and a reduction in net debt of $52 million."
Of particular note is the comprehensive strength in orders growth with the Western Hemisphere up 25%, Europe 10½% and Asia 17½%.
Mr. Krasnoff concluded, "Overall, we are pleased with the progress to date. Despite the strengthened dollar, Pall is well on track and we are comfortable reiterating the earnings guidance issued at the beginning of our fiscal year".
Tomorrow, March 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 markets: 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 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.
Contact Lisa McDermott Pall Corporation Tel: (516) 801-9808