Pall Corporation Earnings Up 26%

Business Wire, June 9, 2008

EAST HILLS, N.Y. -- Pall Corporation (NYSE: PLL) today reported its full financial results for the third quarter ended April 30, 2008.

Sales and Earnings Overview

Third quarter sales increased 18.3% to $661.7 million compared to the third quarter of fiscal 2007. Diluted earnings per share were $0.51 compared to $0.40 (as restated). Net earnings were $63.3 million versus $50.4 million (as restated). Pro forma earnings per share excluding restructuring and other charges were $0.54 versus last year's $0.45 (as restated).

Sales for the nine months ended April 30, 2008 were approximately $1.8 billion, a 15.3% increase over the comparable period. Diluted EPS were $1.19, up from $0.89 (as restated). Net earnings were $147.4 million compared to last year's $110.7 million (as restated). Pro forma earnings excluding restructuring and other charges were $1.36 per share versus $1.02 (as restated) a year ago.

Sales in local currency ("LC") increased $53.5 million, or 9.6%, in the quarter and $132.2 million, or 8.3%, for the nine months. Foreign currency translation increased reported sales by $48.8 million or 8.7%, for the quarter, and $112.6 million, or 7%, for the nine months. The impact of foreign currency translation added approximately $0.04 to earnings per share in the quarter and $0.08 for the nine months.

Eric Krasnoff, Chairman and CEO, stated, "Pall's market, application and geographic diversity give our Total Fluid Management capability teeth. Sales growth was again broad-based across markets and geographies as the Company's technologies are increasingly applied to solve a wide range of fluid management challenges.

Our well-established process improvement initiatives continue to drive costs down. Despite a 66% increase in systems sales this quarter, gross margins approached 49%. Our working capital management initiatives improved operating cash flow more than 40% within the quarter to over $90 million. We continue to make significant progress toward our short and long-term goals."

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Within Life Sciences, sales in BioPharmaceuticals increased almost 10%. Consumables sales exceeded 6% growth and were particularly strong in Europe as vaccine production and biotech activity increased.

As expected, Medical sales decreased just under 3% on lower Blood Filtration sales. Other products within the Medical portfolio, including hospital water filters and disposable systems for cell therapy applications, posted solid results. Laboratory product sales increased over 9%.

Operating profit margin improved to 22.1% reflecting price increases and SG&A cost reductions.

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Pall Industrial delivered a very strong quarter. Every market within General Industrial reported double-digit sales increases. Growth in Municipal Water and Food and Beverage was particularly robust. Systems sales, which are concentrated within General Industrial, grew close to 60%. The installed base of systems within these markets helped to drive consumable sales growth of nearly 10%. Long-term customer partnerships, which lead to a combination of strong system and consumable sales, are the goal of Pall's Total Fluid Management (SM) strategy.

Within Aerospace and Transportation, Commercial Aerospace sales grew 16% driven by strong after-market demand and increased sales to airframe manufacturers. Military sales increased about 31% aided by helicopter upgrade projects in the U.S. and military water systems in Asia.

Microelectronics sales were down 4% as the cyclical downturn in the semiconductor market continues. Our macroelectronics market continued to grow with demand for high-tech electronics and solar cells.

Operating profit increased about 22% to $66.2 million while operating profit margin declined slightly on very strong systems sales.

Conclusion/Outlook

Mr. Krasnoff concluded, "Looking at this full fiscal year, we expect sales growth in the mid-single digit range with Pall Industrial slightly outpacing Pall Life Sciences. Gross margins are expected to be level to slightly improved and SG&A expense to decrease to just over 29% of sales. Pro forma earnings per share are expected to be at or above the high end of our guidance range."

Conference Call

On Tuesday June 10, 2008, at 8:30 am ET, Pall Corporation will host a conference call to review these results. The call will be webcast and individuals can access it at www.pall.com/investor. Listening to the webcast requires audio speakers and Microsoft Windows Media Player software. The webcast will be archived for 30 days.

Special Note on Financial Tables

The 2007 financial tables presented below reflect the restatement of interest expense and provision for taxes. For further details on the restatement, refer to Note 2, Audit Committee Inquiry and Restatement, to the consolidated financial statements in the Company's fiscal year 2007 Annual Report on Form 10-K.

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, water purification, aerospace, transportation and broad industrial markets. Total revenues for fiscal year 2007 were $2.2 billion. The Company is headquartered in East Hills, New York and has extensive operations around the world. For more information visit Pall at http://www.pall.com.