Pall Corporation Reports Third Quarter Results

Published on Wednesday, 06 June 2012 17:06 Written by TradersHuddle Staff

PORT WASHINGTON, N.Y.-( Business Wire )-

Pall Corporation (NYSE:PLL) today reported financial results for the third quarter of fiscal year 2012 which ended on April 30, 2012.

Third Quarter and Nine Months Sales and Earnings Overview

Third quarter sales were $715.2 million, an increase of about 1% (+2.6% in local currency (“LC”)) over last year. Diluted earnings per share (“EPS”) were $0.67 in the quarter, compared to $0.60 last year. Pro forma EPS were $0.70 (excluding restructuring and other charges and transaction costs, as well as items impacting provision for income taxes in the prior period, defined as “Discrete Items”). Foreign currency translation negatively impacted third quarter EPS by $0.01. This compares to $0.72 last year.

For the nine months, sales increased 8.1% over last year (+7.2% LC). Diluted EPS were $1.98 in the nine months, compared to $1.84 for the same period last year. Pro forma EPS, excluding Discrete Items, were $2.20, a 9.5% increase compared to $2.01 a year earlier, including a benefit of approximately $0.05 from translation.

Sales from continuing operations ⁽¹⁾ in the quarter were $658.0 million, an increase of about 1% over last year (+2.5% LC). Diluted EPS from continuing operations were $0.60 in the quarter, compared to $0.52 last year. Pro forma EPS from continuing operations were $0.61 compared to $0.64 last year.

Sales from continuing operations for the nine months increased 8.4% (+7.5% LC) over last year. Diluted EPS from continuing operations were $1.74 in the nine months, compared to $1.60 for the same period last year. Pro forma EPS, excluding Discrete Items, were $1.94, a 9.6% increase compared to $1.77 a year earlier.

Larry Kingsley, President and CEO, said, “It was a difficult quarter, especially as the Eurozone struggled and our previously announced “global go-live” ERP transition disrupted our supply chain more than anticipated. As a result of this temporary disruption, certain shipments of high margin consumables were delayed and we incurred substantial additional costs to take care of our customers. The ERP transition issues are being resolved and we are making good progress in filling past due orders. We expect to have caught up with backorders by this August, which is the beginning of our FY ’13, and we are grateful for the continued patience and support of our customers.”

Noting that consumables orders increased over 3% in Life Sciences, with double digit growth in the Pharmaceutical market and low single digits in Food and Beverage, Kingsley said, “Unrelated to the temporary operational challenges in the quarter, we experienced relatively soft industrial orders in all geographies, with consumables down 8%. While the Americas order rate is strengthening in most end markets, Europe remains weak and we are taking appropriate cost actions to mitigate potential impact on FY ’13 profitability.”

Kingsley continued: “As we look ahead and given the macroeconomic environment, especially in Europe, we are now expecting full year FY ’12 EPS of approximately $3.10, or $2.72 on a continuing operations basis. Previewing FY ’13, we anticipate low-single digit organic sales growth, with increases in Asia and the Americas more than offsetting a decline in Europe. We will update our expectations for our next fiscal year on our Q4 call.”

(1)		As discussed in our news release dated April 29, 2012, the Company announced it had entered into an agreement to sell certain assets of its Blood product line to Haemonetics Corporation (NYSE:HAE). Accordingly, discussion of results from continuing operations exclude the Blood product line. Tables appended to this release are presented on a continuing operations basis (with reconciliation to include the discontinued Blood product line). Further, Life Sciences and Industrial operating profit have been restated to reflect a change in the allocation of certain shared expenses on a continuing operations basis.

Life Sciences – Third Quarter Highlights (1)
(Dollar Amounts in Thousands and Discussion of Sales and Orders Changes are in Local Currency)
Sales:		APR. 30, 2012			APR. 30, 2011			% CHANGE			% CHANGE IN LC
BioPharmaceuticals		$	201,670		$	197,186		2.3			4.4
Food & Beverage			66,568			63,787		4.4			7.1
Medical			49,731			51,718		(3.8	)		(1.5	)
Total Life Sciences segment		$	317,969		$	312,691		1.7			4.0
Gross profit		$	180,187		$	175,047
% of sales			56.7			56.0
Segment profit		$	75,386		$	78,885
% of sales			23.7			25.2

Biopharmaceuticals: Pharmaceuticals sales increased 9%, with consumables and systems sales each up 9%. Continued strength in the biotech market, as well as ForteBio’s BLItz^TM and Octet® instrumentation platforms, contributed significantly to this growth. Fulfillment challenges due to the ERP implementation in the Americas dampened organic sales growth in Pharmaceuticals as well as in Laboratory, where sales decreased about 23%.

Food and Beverage: Overall sales growth reflects an increase in systems sales of over 70%, largely driven by Asia. Excluding the impact of the divestiture of a non-strategic asset in Italy, consumables sales were down about 5%. This also reflects the fulfillment challenges mentioned above, impacting all regions. Weak economic conditions in parts of Europe also contributed. Growth in emerging markets partly mitigated this impact.

Medical: Medical OEM sales were flat in the quarter. Customer inventory reductions and supply challenges hampered growth. Hospital sales were down about 3% reflecting the impact of weak economic conditions in Europe and the resulting spending reduction by hospitals.

Industrial – Third Quarter Highlights (1)
(Dollar Amounts in Thousands and Discussion of Sales and Orders Changes are in Local Currency)
Sales:		APR. 30, 2012			APR. 30, 2011			% CHANGE			% CHANGE IN LC
Process Technologies		$	213,804		$	208,238		2.7			4.7
Aerospace			50,706			50,959		(0.5	)		1.0
Microelectronics			75,497			81,904		(7.8	)		(7.8	)
Total Industrial segment		$	340,007		$	341,101		(0.3	)		1.2
Gross profit		$	154,239		$	157,219
% of sales			45.4			46.1
Segment profit		$	39,431		$	47,200
% of sales			11.6			13.8

Process Technologies: Sales in Fuels & Chemicals increased approximately 20%, as systems sales more than doubled. This reflects investment in oil and gas expansion in Brazil, Eastern Europe and the Middle East. Consumables sales decreased 7%.

Power Generation sales increased about 5%. Consumables sales grew about 3%, while systems sales were up 17%. Europe benefited from increased activity in the nuclear energy sector and recovery in the turbine OEM sector. Sales in Asia were strong, reflecting increased investment by customers in China.

Municipal Water sales decreased 14%. Sales in both the Americas and Europe were down, reflecting pressure on infrastructure investment due to fiscal challenges in the public sector. In Asia, a small but growing water market, sales more than doubled.

Machinery & Equipment sales declined for the first time in two years, by 3%, impacted by the comparative to last year that included a large mine water system sale in the Americas. Consumables sales grew in all regions. This reflects growth in the mining, automotive in-plant and mobile OEM sectors.

Aerospace: Military Aerospace grew about 13% in the quarter, with all regions contributing. Sales in Europe were particularly strong due to a combination of projects mainly for marine and helicopter applications. Commercial Aerospace sales were down 10%, impacted by shipment delinquencies in the Americas.

Microelectronics: Sales reflect continued weakness in the marketplace in all regions.

Conference Call

On Thursday June 7, 2012, 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.

About Pall Corporation

Pall Corporation (NYSE:PLL) is a filtration, separation and purification leader providing solutions to meet the critical fluid management needs of customers across the broad spectrum of life sciences and industry. 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 $2.7 billion for fiscal year 2011, is an S&P 500 company with almost 11,000 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, follow us on Twitter @PallCorporation or visit www.pall.com/green.

Forward-Looking Statements

The matters discussed in this report contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Results for the third quarter are preliminary until the Company's Form 10-Q is filed with the Securities and Exchange Commission on or before June 11, 2012.

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, dilution from the disposition or future allocation of capital 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 light of past experience and trends, current conditions, expected future developments and other relevant factors.

The Company’s forward-looking statements are subject to risks and uncertainties and are not guarantees of future performance, and actual results, developments and business decisions may differ materially from those envisaged by the Company’s forward-looking statements. Such risks and uncertainties include, but are not limited to, those discussed in Part I–Item 1A.–Risk Factors in the 2011 Form 10-K, and other reports the Company files with the Securities and Exchange Commission, including: the impact of legislative, regulatory and political developments globally; the impact of the uncertain global economic environment; the extent to which adverse economic conditions may affect the Company's sales volume and results; changes in product mix, market mix and product pricing, particularly relating to the expansion of the systems business; the Company's ability to develop and commercialize new technologies, enforce patents and protect proprietary products and manufacturing techniques; demand for our products and business relationships with key customers and suppliers, which may be impacted by their cash flow and payment practices; delays or cancellations in shipments; the Company's ability to obtain regulatory approval or market acceptance of new technologies; the Company's ability to successfully complete the Company's business improvement initiatives, which include supply chain enhancements and integrating and upgrading the Company's information systems; the effect of a serious disruption in the Company's information systems; fluctuations in the Company's effective tax rate; volatility in foreign currency exchange rates, interest rates and energy costs and other macroeconomic challenges currently affecting the Company; increase in costs of manufacturing and operating costs; the Company's ability to achieve and sustain the savings anticipated from cost reduction and gross margin improvement initiatives; the Company's ability to attract and retain management talent; the impact of pricing and other actions by competitors; the effect of litigation and regulatory inquiries associated with the restatement of the Company's prior period financial statements; the effect of the restrictive covenants in the Company's debt facilities; and the Company's ability to successfully complete or integrate any acquisitions. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company 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.

PALL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in Thousands)
		APR. 30, 2012									JUL. 31, 2011
Assets:
Cash and cash equivalents		$	535,891								$	557,766
Accounts receivable			614,900									646,769
Inventories			402,292									444,842
Other current assets			207,572									159,831
Assets held for sale (1)			126,737									-
Total current assets			1,887,392									1,809,208
Property, plant and equipment			772,293									794,599
Other assets			735,169									628,609
Total assets		$	3,394,854								$	3,232,416
Liabilities and Stockholders' Equity:
Short-term debt		$	200,435								$	215,468
Accounts payable, income taxes and other current liabilities			623,570									574,539
Total current liabilities			824,005									790,007
Long-term debt, net of current portion			487,936									491,954
Deferred taxes and other non-current liabilities			419,119									460,634
Total liabilities			1,731,060									1,742,595
Stockholders' equity			1,663,794									1,489,821
Total liabilities and stockholders' equity		$	3,394,854								$	3,232,416
(1) Reflects assets to be disposed of related to the sale of the Blood product line.

PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in Thousands, Except Per Share Data)
		THIRD QUARTER ENDED																NINE MONTHS ENDED
		APR. 30, 2012								APR. 30, 2011								APR. 30, 2012								APR. 30, 2011
Net sales		$	657,976							$	653,792							$	1,949,285							$	1,798,479
Cost of sales			323,550								321,526								941,342								867,087
Gross profit			334,426								332,266								1,007,943								931,392
% of sales			50.8	%							50.8	%							51.7	%							51.8	%
Selling, general and administrative expenses			215,226								203,327								632,982								572,026
% of sales			32.7	%							31.1	%							32.5	%							31.8	%
Research and development			20,780								19,308								60,351								57,198
Operating profit			98,420								109,631								314,610								302,168
% of sales			15.0	%							16.8	%							16.1	%							16.8	%
ROTC (a)			2,861								7,723								31,001								13,921
Interest expense, net			6,351								6,068								17,682								19,176
Earnings from continuing operations before income taxes			89,208								95,840								265,927								269,071
Provision for income taxes (b)			18,270								34,082								60,691								80,021
Net earnings from continuing operations		$	70,938							$	61,758							$	205,236							$	189,050
Earnings from discontinued operations, net of income taxes (c)			7,980								9,311								27,866								29,092
Net Earnings		$	78,918							$	71,069							$	233,102							$	218,142
Average shares outstanding:
Basic			116,567								116,899								116,190								116,565
Diluted			118,358								118,723								117,817								118,296
Earnings per share from continuing operations:
Basic		$	0.61							$	0.53							$	1.77							$	1.62
Diluted		$	0.60							$	0.52							$	1.74							$	1.60
Earnings per share from discontinued operations:
Basic		$	0.07							$	0.08							$	0.24							$	0.25
Diluted		$	0.07							$	0.08							$	0.24							$	0.25
Earnings per share:
Basic		$	0.68							$	0.61							$	2.01							$	1.87
Diluted		$	0.67							$	0.60							$	1.98							$	1.84
Pro forma earnings reconciliation from Continuing Operations
Net earnings from continuing operations as reported		$	70,938							$	61,758							$	205,236							$	189,050
Discrete items:
Tax adjustments (b)			-								8,409								-								8,409
ROTC, after pro forma tax effect (a)			1,772								5,621								23,493								11,413
Total discrete items			1,772								14,030								23,493								19,822
Pro forma earnings from continuing operations		$	72,710							$	75,788							$	228,729							$	208,872
Diluted earnings per share from continuing operations as reported		$	0.60							$	0.52							$	1.74							$	1.60
Discrete items:
Tax adjustments (b)			-								0.07								-								0.07
ROTC, after pro forma tax effect (a)			0.01								0.05								0.20								0.10
Total discrete items			0.01								0.12								0.20								0.17
Pro forma diluted earnings per share from continuing operations		$	0.61							$	0.64							$	1.94							$	1.77
Pro forma earnings reconciliation from Total Company
Net earnings as reported		$	78,918							$	71,069							$	233,102							$	218,142
Discrete items:
Tax adjustments (b)			-								8,409								-								8,409
Transaction costs, after pro forma tax effect (c)			2,702								-								3,123								-
ROTC, after pro forma tax effect (a)			1,772								5,621								23,493								11,413
Total discrete items			4,474								14,030								26,616								19,822
Pro forma earnings		$	83,392							$	85,099							$	259,718							$	237,964
Diluted earnings per share as reported		$	0.67							$	0.60							$	1.98							$	1.84
Discrete items:
Tax adjustments (b)			-								0.07								-								0.07
Transaction costs, after pro forma tax effect (c)			0.02								-								0.02								-
ROTC, after pro forma tax effect (a)			0.01								0.05								0.20								0.10
Total discrete items			0.03								0.12								0.22								0.17
Pro forma diluted earnings per share		$	0.70							$	0.72							$	2.20							$	2.01

Pro forma earnings measures 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 nine months ended April 30, 2012 of $2,861 ($1,772 after pro forma tax effect of $1,089) and $31,001 ($23,493 after pro forma tax effect of $7,508), respectively, includes expenses related to the Company's cost reduction initiatives, primarily in the Industrial segment and certain employment contract obligations. ROTC in the nine months was partly offset by a gain on the sale of an investment.

ROTC in the quarter and nine months ended April 30, 2011 of $7,723 ($5,621 after pro forma tax effect of $2,102) and $13,921 ($11,413 after pro forma tax effect of $2,508), respectively, primarily includes costs related to the Company's cost reduction initiatives and certain employment contract obligations.

(b) Provision for income taxes in the quarter and nine months ended April 30, 2011 includes a charge of $8,409 related to tax costs associated with the establishment of the Company's Asian Headquarters in Singapore.

(c) Discontinued operations include transaction costs of $3,336 ($2,702 after pro forma tax effect of $634) and $3,994 ($3,123 after pro forma tax effect of $871) for the three and nine months, respectively, related to the sale of the Blood product line.

PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in Thousands)
		NINE MONTHS ENDED
		APR. 30, 2012										APR. 30, 2011
Net cash provided by operating activities		$	326,417									$	280,956
Investing activities:
Acquisition of business			(167,638	)									-
Capital expenditures			(126,923	)									(103,142	)
Proceeds from sale of assets			25,604										530
Other			(10,049	)									(16,231	)
Net cash used by investing activities			(279,006	)									(118,843	)
Financing activities:
Dividends paid			(64,554	)									(57,287	)
Repayments of notes payable and long-term borrowings			(15,290	)									(153,578	)
Purchase of treasury stock			-										(64,524	)
Other			39,022										65,286
Net cash used by financing activities			(40,822	)									(210,103	)
Cash flow for period (1)			6,589										(47,990	)
Cash and cash equivalents at beginning of year			557,766										498,563
Effect of exchange rate changes on cash			(28,464	)									40,923
Cash and cash equivalents at end of period		$	535,891									$	491,496
Free cash flow:
Net cash provided by operating activities		$	326,417									$	280,956
Less capital expenditures			126,923										103,142
Free cash flow		$	199,494									$	177,814
(1) Cash flows are inclusive of discontinued operations.

PALL CORPORATION
SUMMARY SEGMENT PROFIT BY SEGMENT FROM CONTINUING OPERATIONS
(Unaudited)
(Dollar Amounts in Thousands)
		THIRD QUARTER ENDED																NINE MONTHS ENDED
		APR. 30, 2012								APR. 30, 2011								APR. 30, 2012								APR. 30, 2011
Life Sciences
Sales		$	317,969							$	312,691							$	918,954							$	852,463
Cost of sales			137,782								137,644								382,871								364,596
Gross profit			180,187								175,047								536,083								487,867
% of sales			56.7	%							56.0	%							58.3	%							57.2	%
Selling, general and administrative expenses			91,289								83,999								265,696								238,944
% of sales			28.7	%							26.9	%							28.9	%							28.0	%
Research and development			13,512								12,163								37,196								35,256
Segment profit		$	75,386							$	78,885							$	233,191							$	213,667
% of sales			23.7	%							25.2	%							25.4	%							25.1	%
Industrial
Sales		$	340,007							$	341,101							$	1,030,331							$	946,016
Cost of sales			185,768								183,882								558,471								502,491
Gross profit			154,239								157,219								471,860								443,525
% of sales			45.4	%							46.1	%							45.8	%							46.9	%
Selling, general and administrative expenses			107,540								102,874								317,510								287,327
% of sales			31.6	%							30.2	%							30.8	%							30.4	%
Research and development			7,268								7,145								23,155								21,942
Segment profit		$	39,431							$	47,200							$	131,195							$	134,256
% of sales			11.6	%							13.8	%							12.7	%							14.2	%
Consolidated:
Segment profit		$	114,817							$	126,085							$	364,386							$	347,923
Corporate services group			16,397								16,454								49,776								45,755
Operating profit			98,420								109,631								314,610								302,168
ROTC			2,861								7,723								31,001								13,921
Interest expense, net			6,351								6,068								17,682								19,176
Earnings from continuing operations before income taxes		$	89,208							$	95,840							$	265,927							$	269,071

Note:
Life Sciences results exclude the results of the Blood product line, which has been reported as discontinued operations.
The Life Sciences and Industrial results have been restated to reflect the change in the allocation of certain shared expenses on a continuing operations basis.

PALL CORPORATION
SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND REGION
FROM CONTINUING OPERATIONS
(Unaudited)
(Dollar Amounts in Thousands)
											EXCHANGE				% CHANGE
											RATE				IN LOCAL
THIRD QUARTER ENDED		APR. 30, 2012			APR. 30, 2011			% CHANGE			IMPACT				CURRENCY
Life Sciences (1)								|-------------- Increase/(Decrease) -------------|
By Market:
BioPharmaceuticals		$	201,670		$	197,186		2.3			$	(4,277	)		4.4
Food & Beverage			66,568			63,787		4.4				(1,770	)		7.1
Medical			49,731			51,718		(3.8	)			(1,211	)		(1.5	)
Total Life Sciences		$	317,969		$	312,691		1.7			$	(7,258	)		4.0
By Region:
Americas		$	95,505		$	88,164		8.3			$	(710	)		9.1
Europe			154,527			164,715		(6.2	)			(7,133	)		(1.9	)
Asia			67,937			59,812		13.6				585			12.6
Total Life Sciences		$	317,969		$	312,691		1.7			$	(7,258	)		4.0
Industrial
By Market:
Process Technologies		$	213,804		$	208,238		2.7			$	(4,300	)		4.7
Aerospace			50,706			50,959		(0.5	)			(752	)		1.0
Microelectronics			75,497			81,904		(7.8	)			1			(7.8	)
Total Industrial		$	340,007		$	341,101		(0.3	)		$	(5,051	)		1.2
By Region:
Americas		$	100,210		$	112,401		(10.8	)		$	(708	)		(10.2	)
Europe			103,637			103,094		0.5				(5,417	)		5.8
Asia			136,160			125,606		8.4				1,074			7.5
Total Industrial		$	340,007		$	341,101		(0.3	)		$	(5,051	)		1.2
Total Sales:
Continuing operations		$	657,976		$	653,792		0.6			$	(12,309	)		2.5
Discontinued operations			57,180			56,016		2.1			$	(673	)		3.3
Total Sales		$	715,156		$	709,808		0.8			$	(12,982	)		2.6

(1) Excludes the results of the Blood product line, which has been reported as discontinued operations.

SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND REGION
FROM CONTINUING OPERATIONS
(Unaudited)
(Dollar Amounts in Thousands)
											EXCHANGE				% CHANGE
											RATE				IN LOCAL
NINE MONTHS ENDED		APR. 30, 2012			APR. 30, 2011			% CHANGE			IMPACT				CURRENCY
Life Sciences (1)								|-------------- Increase/(Decrease) -------------|
By Market:
BioPharmaceuticals		$	599,329		$	538,145		11.4			$	4,703			10.5
Food & Beverage			175,953			167,775		4.9				353			4.7
Medical			143,672			146,543		(2.0	)			755			(2.5	)
Total Life Sciences		$	918,954		$	852,463		7.8			$	5,811			7.1
By Region:
Americas		$	270,243		$	250,503		7.9			$	(998	)		8.3
Europe			460,432			436,627		5.5				768			5.3
Asia			188,279			165,333		13.9				6,041			10.2
Total Life Sciences		$	918,954		$	852,463		7.8			$	5,811			7.1
Industrial
By Market:
Process Technologies		$	639,743		$	563,245		13.6			$	3,298			13.0
Aerospace			162,298			149,119		8.8				12			8.8
Microelectronics			228,290			233,652		(2.3	)			6,598			(5.1	)
Total Industrial		$	1,030,331		$	946,016		8.9			$	9,908			7.9
By Region:
Americas		$	314,001		$	317,948		(1.2	)		$	(965	)		(0.9	)
Europe			309,124			271,432		13.9				(3,263	)		15.1
Asia			407,206			356,636		14.2				14,136			10.2
Total Industrial		$	1,030,331		$	946,016		8.9			$	9,908			7.9
Total Sales:
Continuing operations		$	1,949,285		$	1,798,479		8.4			$	15,719			7.5
Discontinued operations			169,493			162,038		4.6			$	448			4.3
Total Sales		$	2,118,778		$	1,960,517		8.1			$	16,167			7.2

(1) Excludes the results of the Blood product line, which has been reported as discontinued operations.

PALL CORPORATION
LIFE SCIENCES SEGMENT SALES FROM CONTINUING OPERATIONS
FISCAL YEAR 2012 AND 2011 BY QUARTER
(Unaudited)
(Dollar Amounts in Thousands)
		Q1							Q2							6 MONTHS
Fiscal Year 2012		OCT. 31, 2011							JAN. 31, 2012							JAN. 31, 2012
Life Sciences (1)
By Market:
BioPharmaceuticals		$	196,012						$	201,647						$	397,659
Food & Beverage			56,019							53,366							109,385
Medical			49,723							44,218							93,941
Total Life Sciences		$	301,754						$	299,231						$	600,985
By Geography:
Americas		$	90,724						$	84,014						$	174,738
Europe			153,878							152,027							305,905
Asia			57,152							63,190							120,342
Total Life Sciences		$	301,754						$	299,231						$	600,985
		Q1							Q2							Q3							Q4
Fiscal Year 2011		OCT. 31, 2010							JAN. 31, 2011							APR. 30, 2011							JUL. 31, 2011							TOTAL YEAR
Life Sciences
By Market:
BioPharmaceuticals		$	161,409						$	179,550						$	197,186						$	199,865						$	738,010
Food & Beverage			51,629							52,359							63,787							77,810							245,585
Medical			46,856							47,969							51,718							54,004							200,547
Total Life Sciences		$	259,894						$	279,878						$	312,691						$	331,679						$	1,184,142
By Geography:
Americas		$	78,125						$	84,214						$	88,164						$	94,770						$	345,273
Europe			131,665							140,247							164,715							168,912							605,539
Asia			50,104							55,417							59,812							67,997							233,330
Total Life Sciences		$	259,894						$	279,878						$	312,691						$	331,679						$	1,184,142
(1) Excludes the results of the Blood product line, which has been reported as discontinued operations.

PALL CORPORATION
SUMMARY SEGMENT PROFIT FROM CONTINUING OPERATIONS
FISCAL YEAR 2012 BY QUARTER
(Unaudited)
(Dollar Amounts in Thousands)
		Q1								Q2								6 MONTHS
Fiscal Year 2012		OCT. 31, 2011								JAN. 31, 2012								JAN. 31, 2012
Life Sciences
Sales		$	301,754							$	299,231							$	600,985
Cost of sales			123,541								121,548								245,089
Gross profit			178,213								177,683								355,896
% of sales			59.1	%							59.4	%							59.2	%
Selling, general and administrative expenses			87,066								87,341								174,407
% of sales			28.9	%							29.2	%							29.0	%
Research and development			11,430								12,254								23,684
Segment profit		$	79,717							$	78,088							$	157,805
% of sales			26.4	%							26.1	%							26.3	%
Industrial
Sales		$	349,508							$	340,816							$	690,324
Cost of sales			192,369								180,334								372,703
Gross profit			157,139								160,482								317,621
% of sales			45.0	%							47.1	%							46.0	%
Selling, general and administrative expenses			105,413								104,557								209,970
% of sales			30.2	%							30.7	%							30.4	%
Research and development			8,091								7,796								15,887
Segment profit		$	43,635							$	48,129							$	91,764
% of sales			12.5	%							14.1	%							13.3	%
Consolidated:
Segment profit		$	123,352							$	126,217							$	249,569
Corporate services group			15,701								17,678								33,379
Operating profit			107,651								108,539								216,190
ROTC			22,984								5,156								28,140
Interest expense, net			5,945								5,386								11,331
Earnings from continuing operations before income taxes		$	78,722							$	97,997							$	176,719

Note:
Life Sciences results exclude the results of the Blood product line, which has been reported as discontinued operations.
The Life Sciences and Industrial results have been restated to reflect the change in the allocation of certain shared expenses on a continuing operations basis.

PALL CORPORATION
SUMMARY SEGMENT PROFIT FROM CONTINUING OPERATIONS
FISCAL YEAR 2011 BY QUARTER
(Unaudited)
(Dollar Amounts in Thousands)
		Q1							Q2							Q3							Q4
Fiscal Year 2011		OCT. 31, 2010							JAN. 31, 2011							APR. 30, 2011							JUL. 31, 2011							TOTAL YEAR
Life Sciences
Sales		$	259,894						$	279,878						$	312,691						$	331,679						$	1,184,142
Cost of sales			110,539							116,413							137,644							145,354							509,950
Gross profit			149,355							163,465							175,047							186,325							674,192
% of sales			57.5	%						58.4	%						56.0	%						56.2	%						56.9	%
Selling, general and administrative expenses			75,289							79,656							83,999							93,691							332,635
% of sales			29.0	%						28.5	%						26.9	%						28.2	%						28.1	%
Research and development			11,674							11,419							12,163							13,798							49,054
Segment profit		$	62,392						$	72,390						$	78,885						$	78,836						$	292,503
% of sales			24.0	%						25.9	%						25.2	%						23.8	%						24.7	%
Industrial
Sales		$	293,897						$	311,018						$	341,101						$	387,037						$	1,333,053
Cost of sales			155,246							163,363							183,882							219,842							722,333
Gross profit			138,651							147,655							157,219							167,195							610,720
% of sales			47.2	%						47.5	%						46.1	%						43.2	%						45.8	%
Selling, general and administrative expenses			89,365							95,088							102,874							109,192							396,519
% of sales			30.4	%						30.6	%						30.2	%						28.2	%						29.7	%
Research and development			6,912							7,885							7,145							9,510							31,452
Segment profit		$	42,374						$	44,682						$	47,200						$	48,493						$	182,749
% of sales			14.4	%						14.4	%						13.8	%						12.5	%						13.7	%
Consolidated:
Segment profit		$	104,766						$	117,072						$	126,085						$	127,329						$	475,252
Corporate services group			12,321							16,980							16,454							15,370							61,125
Operating profit			92,445							100,092							109,631							111,959							414,127
ROTC			1,409							4,789							7,723							12,584							26,505
Interest expense, net			7,294							5,814							6,068							(273	)						18,903
Earnings from continuing operations before income taxes		$	83,742						$	89,489						$	95,840						$	99,648						$	368,719

Note:
Life Sciences results exclude the results of the Blood product line, which has been reported as discontinued operations.
The Life Sciences and Industrial results have been restated to reflect the change in the allocation of certain shared expenses on a continuing operations basis.

PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FISCAL YEAR 2012 BY QUARTER
(Unaudited)
(Amounts in Thousands, Except Per Share Data)
		Q1								Q2								SIX MONTHS
		OCT. 31, 2011								JAN. 31, 2012								JAN. 31, 2012
Net sales		$	651,262							$	640,047							$	1,291,309
Cost of sales			315,910								301,882								617,792
Gross profit			335,352								338,165								673,517
% of sales			51.5	%							52.8	%							52.2	%
Selling, general and administrative expenses			208,180								209,576								417,756
% of sales			32.0	%							32.7	%							32.4	%
Research and development			19,521								20,050								39,571
Operating profit			107,651								108,539								216,190
% of sales			16.5	%							17.0	%							16.7	%
ROTC			22,984								5,156								28,140
Interest expense, net			5,945								5,386								11,331
Earnings from continuing operations before income taxes			78,722								97,997								176,719
Provision for income taxes			19,070								23,351								42,421
Net earnings from continuing operations		$	59,652							$	74,646							$	134,298
Earnings from discontinued operations, net of income taxes			9,803								10,083								19,886
Net Earnings		$	69,455							$	84,729							$	154,184
Average shares outstanding:
Basic			115,824								116,196								115,997
Diluted			117,224								117,914								117,555
Earnings per share from continuing operations:
Basic		$	0.52							$	0.64							$	1.16
Diluted		$	0.51							$	0.63							$	1.14
Earnings per share from discontinued operations:
Basic		$	0.08							$	0.09							$	0.17
Diluted		$	0.08							$	0.09							$	0.17
Earnings per share:
Basic		$	0.60							$	0.73							$	1.33
Diluted		$	0.59							$	0.72							$	1.31
Pro forma earnings reconciliation from Continuing Operations
Net earnings from continuing operations as reported		$	59,652							$	74,646							$	134,298
Discrete items:
ROTC, after pro forma tax effect			17,756								3,965								21,721
Pro forma earnings from continuing operations			77,408								78,611								156,019
Diluted earnings per share from continuing operations as reported		$	0.51							$	0.63							$	1.14
Discrete items:
ROTC, after pro forma tax effect			0.15								0.04								0.19
Pro forma diluted earnings per share from continuing operations		$	0.66							$	0.67							$	1.33
Pro forma earnings reconciliation from Total Company
Net earnings as reported		$	69,455							$	84,729							$	154,184
Discrete items:
Transaction costs, after pro forma tax effect			-								421								421
ROTC, after pro forma tax effect			17,756								3,965								21,721
Total discrete items			17,756								4,386								22,142
Pro forma earnings			87,211								89,115								176,326
Diluted earnings per share as reported		$	0.59							$	0.72							$	1.31
Discrete items:
Transaction costs, after pro forma tax effect			-								0.00								0.00
ROTC, after pro forma tax effect			0.15								0.04								0.19
Total discrete items			0.15								0.04								0.19
Pro forma diluted earnings per share		$	0.74							$	0.76							$	1.50

PALL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FISCAL YEAR 2011 BY QUARTER
(Unaudited)
(Amounts in Thousands, Except Per Share Data)
		Q1							Q2							Q3							Q4				TOTAL YEAR
		OCT. 31, 2010							JAN. 31, 2011							APR. 30, 2011							JUL. 31, 2011				JUL. 31, 2011
Net sales		$	553,791						$	590,896						$	653,792						$	718,716			$	2,517,195
Cost of sales			265,785							279,776							321,526							365,196				1,232,283
Gross profit			288,006							311,120							332,266							353,520				1,284,912
% of sales			52.0	%						52.7	%						50.8	%						49.2	%			51.0	%
Selling, general and administrative expenses			176,975							191,724							203,327							218,253				790,279
% of sales			32.0	%						32.4	%						31.1	%						30.4	%			31.4	%
Research and development			18,586							19,304							19,308							23,308				80,506
Operating profit			92,445							100,092							109,631							111,959				414,127
% of sales			16.7	%						16.9	%						16.8	%						15.6	%			16.5	%
ROTC			1,409							4,789							7,723							12,584				26,505
Interest expense, net			7,294							5,814							6,068							(273	)			18,903
Earnings from continuing operations before income taxes			83,742							89,489							95,840							99,648				368,719
Provision for income taxes			21,903							24,036							34,082							9,501				89,522
Net earnings from continuing operations		$	61,839						$	65,453						$	61,758						$	90,147			$	279,197
Earnings from discontinued operations, net of income taxes			9,570							10,211							9,311							7,207				36,299
Net Earnings		$	71,409						$	75,664						$	71,069						$	97,354			$	315,496
Average shares outstanding:
Basic			116,292							116,476							116,899							116,544				116,521
Diluted			117,821							118,266							118,723							118,249				118,266
Earnings per share from continuing operations:
Basic		$	0.53						$	0.56						$	0.53						$	0.77			$	2.40
Diluted		$	0.52						$	0.55						$	0.52						$	0.76			$	2.36
Earnings per share from discontinued operations:
Basic		$	0.08						$	0.09						$	0.08						$	0.06			$	0.31
Diluted		$	0.08						$	0.09						$	0.08						$	0.06			$	0.31
Earnings per share:
Basic		$	0.61						$	0.65						$	0.61						$	0.84			$	2.71
Diluted		$	0.61						$	0.64						$	0.60						$	0.82			$	2.67
Pro forma earnings reconciliation from Continuing Operations
Net earnings from continuing operations as reported		$	61,839						$	65,453						$	61,758						$	90,147			$	279,197
Discrete items:
Tax adjustments			-							-							8,409							(18,990	)			(10,581	)
Interest adjustments, after pro forma tax effect			-							-							-							(3,413	)			(3,413	)
ROTC, after pro forma tax effect			1,054							4,738							5,621							9,420				20,833
Total discrete items			1,054							4,738							14,030							(12,983	)			6,839
Pro forma earnings from continuing operations			62,893							70,191							75,788							77,164				286,036
Diluted earnings per share from continuing operations as reported		$	0.52						$	0.55						$	0.52						$	0.76			$	2.36
Discrete items:
Tax adjustments			-							-							0.07							(0.16	)			(0.09	)
Interest adjustments, after pro forma tax effect			-							-							-							(0.03	)			(0.03	)
ROTC, after pro forma tax effect			0.01							0.04							0.05							0.08				0.18
Total discrete items			0.01							0.04							0.12							(0.11	)			0.06
Pro forma diluted earnings per share from continuing operations		$	0.53						$	0.59						$	0.64						$	0.65			$	2.42
Pro forma earnings reconciliation from Total Company
Net earnings as reported		$	71,409						$	75,664						$	71,069						$	97,354			$	315,496
Discrete items:
Tax adjustments			-							-							8,409							(18,990	)			(10,581	)
Interest adjustments, after pro forma tax effect			-							-							-							(3,413	)			(3,413	)
ROTC, after pro forma tax effect			1,054							4,738							5,621							14,739				26,152
Total discrete items			1,054							4,738							14,030							(7,664	)			12,158
Pro forma earnings			72,463							80,402							85,099							89,690				327,654
Diluted earnings per share as reported		$	0.61						$	0.64						$	0.60						$	0.82			$	2.67
Discrete items:
Tax adjustments			-							-							0.07							(0.16	)			(0.09	)
Interest adjustments, after pro forma tax effect			-							-							-							(0.03	)			(0.03	)
ROTC, after pro forma tax effect			0.01							0.04							0.05							0.13				0.22
Total discrete items			0.01							0.04							0.12							(0.06	)			0.10
Pro forma diluted earnings per share		$	0.62						$	0.68						$	0.72						$	0.76			$	2.77

Pall CorporationBrent Jones, 516-801-9848Vice President – This e-mail address is being protected from spambots. You need JavaScript enabled to view it.