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Pall Corporation Reports Second Quarter EPS Up Over 50% on Sales Increase of 15%
Dépèche transmise le 10 mars 2011 par Business Wire
Pall Corporation Reports Second Quarter EPS Up Over 50% on Sales Increase of 15%
PORT WASHINGTON, N.Y.--(BUSINESS WIRE)--Pall Corporation (NYSE:PLL) today reported financial results for the second quarter of fiscal 2011 which ended on January 31, 2011.
“The Company’s execution of its strategic growth initiatives continues to yield positive results.”
Sales and Earnings Overview
Second quarter sales were $645.2 million, a 15.1% gain over last year. Sales in local currency ("LC") increased 15.7%. Foreign currency translation reduced reported sales by 0.6%.
Diluted earnings per share (“EPS”) were $0.64, compared to $0.42 last year, an increase of 52%. Pro forma EPS were $0.68 excluding restructuring and other charges (“Discrete Items"). This compares to $0.42 last year, for an increase of 62%. The estimated impact of foreign currency translation increased both measures of fiscal year 2011 EPS by $0.01 in the quarter.
For the six months, sales increased 12.9% over last year. Sales in LC increased 14.0%. Foreign currency translation reduced reported sales in the six months by 1.1%. Diluted EPS were $1.25, a 28% increase compared to $0.98 for the same period last year. Pro forma EPS, excluding Discrete Items, were $1.29, a 57% increase compared to $0.82 a year earlier (which also excluded items reducing interest expense and provision for income taxes). The estimated impact of foreign currency translation increased both measures of fiscal year 2011 EPS in the six months by $0.01.
Eric Krasnoff, Chairman, CEO and President, said, “The Company’s execution of its strategic growth initiatives continues to yield positive results.
Sales growth from the first to the second quarter accelerated from 12% to over 15% in LC. Growth was broadly based by both market and geography. The BioPharmaceuticals and Microelectronics markets outperformed expectations in the quarter. All Industrial markets in the Western Hemisphere posted strong performance, collectively growing 42.5%.
Overall, sales increased 14% in LC in Life Sciences and nearly 18% in Industrial. Within Life Sciences, BioPharmaceuticals grew over 23%. Within Industrial, the Energy & Water and Microelectronics markets each grew over 20%. Sales in Aeropower increased more than 11%.
Orders remained strong. Life Sciences and Industrial orders increased 12% and 19%, respectively. At the end of the quarter, backlog growth was over 20%.
Operating margins continued their upward trend, reaching 17.8% as gross margin climbed to 51.5%.
These results demonstrate that Pall is on the right track and business is accelerating.”
Life Sciences – Second Quarter Highlights
| (Dollar Amounts in Thousands and Discussion of Sales and Orders Changes are in Local Currency) | ||||||||||||||
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% |
% CHANGE |
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Sales: |
JAN. 31, 2011 | JAN. 31, 2010 |
CHANGE |
IN LC |
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| BioPharmaceuticals | $ | 179,550 | $ | 146,972 | 22.2 | 23.6 | ||||||||
| Medical | 102,305 | 100,451 | 1.8 | 3.3 | ||||||||||
| Food & Beverage | 52,359 | 49,876 | 5.0 | 7.5 | ||||||||||
| Total Life Sciences segment | $ | 334,214 | $ | 297,299 | 12.4 | 14.0 | ||||||||
| Gross profit | $ | 184,726 | $ | 166,661 | ||||||||||
| % of sales | 55.3 | 56.1 | ||||||||||||
| Operating profit | $ | 83,650 | $ | 68,360 | ||||||||||
| % of sales | 25.0 | 23.0 | ||||||||||||
BioPharmaceuticals: Sales in Pharmaceuticals increased 25.1% reflecting Pall’s leading position in the fast-growing biotech, vaccine and plasma markets. Consumables sales grew 20.2% and systems sales more than doubled compared to last year.
Sales in Laboratory increased 14.8% with solid growth in all regions.
Medical: Hospital Critical Care sales grew 14.7%. Sales of Pall-AquasafeTM water filters to hospitals in Europe were particularly strong.
OEM sales grew 6.9% on strong demand for I.V. filters in the Western Hemisphere. Blood Filtration sales were flat.
Food & Beverage: Consumables sales increased 4.3%, with all geographies contributing. Systems grew 25.1%. New products, including PROFi beer systems and an expanded offering of consumable filters, are driving growth.
Overall, Life Sciences operating margin improved by 200 basis points reflecting the business’ continued ability to leverage its sales growth with disciplined cost control. Operating profit increased 22.4% compared to a year ago to $83.7 million.
Industrial – Second Quarter Highlights
| (Dollar Amounts in Thousands and Discussion of Sales and Orders Changes are in Local Currency) | ||||||||||||||
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% |
% CHANGE |
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|
Sales: |
JAN. 31, 2011 | JAN. 31, 2010 |
CHANGE |
IN LC |
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| Aeropower | $ | 106,614 | $ | 96,651 | 10.3 | 11.6 | ||||||||
| Energy & Water | 127,611 | 105,484 | 21.0 | 21.0 | ||||||||||
| Microelectronics | 76,793 | 60,967 | 26.0 | 21.4 | ||||||||||
| Total Industrial segment | $ | 311,018 | $ | 263,102 | 18.2 | 17.7 | ||||||||
| Gross profit | $ | 147,759 | $ | 117,624 | ||||||||||
| % of sales | 47.5 | 44.7 | ||||||||||||
| Operating profit | $ | 47,942 | $ | 23,424 | ||||||||||
| % of sales | 15.4 | 8.9 | ||||||||||||
Aeropower: Machinery & Equipment sales grew 15.0% with all geographies up. Demand in the mining and primary metals industries remained strong.
Sales in Aerospace increased 7.7% with 17.0% growth in Commercial Aerospace. Military Aerospace sales were flat.
Energy & Water: Sales in Fuels & Chemicals increased 6.4%. Robust activity in the oil and gas, chemicals, and polymers markets was seen in the Western Hemisphere and Europe.
Power Generation sales increased 16.3%. The wind turbine market in Asia and demand from fossil fuel and nuclear power stations in the Western Hemisphere were noteworthy contributors.
Municipal Water sales principally comprised of systems which can be lumpy, increased 82.3%. In the Western Hemisphere sales more than tripled from a year ago.
Microelectronics: Activity in the Microelectronics market remained high globally and in all end markets. We see continued high capacity utilization rates at chip producers and consumer demand for electronics.
Industrial’s operating margin improved 650 basis points reflecting leverage of a strong top line supported by productivity improvements in manufacturing. Operating profit more than doubled to $47.9 million compared to a year ago.
Conclusion/Outlook
Mr. Krasnoff concluded, “We have positioned the Company to benefit as the economy strengthens. Our first-half results attest to the demand for Pall technologies and solid execution of our growth plans. In light of our first half performance and our expectations for the rest of the year, we are raising guidance. Including an estimated $0.09 benefit from foreign currency translation, we now expect projected pro forma EPS to be in the range of $2.80 to $2.90 for fiscal 2011.
In closing, we see significant opportunities for sustained revenue and profit growth to continue to drive value creation for shareholders.”
Conference Call
On Friday, March 11, 2011, at 8:30 am EST, 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 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 $2.4 billion for fiscal 2010, is an S&P 500 company with more than 10,000 employees serving customers worldwide. To see how Pall is helping enable a greener, safer, more sustainable future, 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 second quarter of fiscal year 2011 are preliminary until the Company's Form 10-Q is filed with the Securities and Exchange Commission on or before March 14, 2011.
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 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 2010 Form 10-K, and other reports the Company files with the Securities and Exchange Commission, including the effect of litigation and regulatory inquiries associated with the restatement of our prior period financial statements; the impact of legislative, regulatory and political developments globally and the impact of the uncertain global economic environment and the timing and strength of a recovery in the markets and regions we serve, and the extent to which adverse economic conditions may affect our sales volume and results; demand for our products and business relationships with key customers and suppliers, which may be impacted by their cash flow and payment practices, as well as delays or cancellations in shipments; our ability to obtain regulatory approval or market acceptance of new technologies; our ability to successfully complete our business improvement initiatives, which include integrating and upgrading our information systems and the effect of a serious disruption in our information systems; fluctuations in our effective tax rate; volatility in foreign currency exchange rates, interest rates and energy costs and other macro economic challenges currently affecting us; changes in product mix, market mix and product pricing, particularly relating to the expansion of the systems business; increase in costs of manufacturing and operating costs; our ability to achieve and sustain the savings anticipated from cost reduction and gross margin improvement initiatives; the effect of the restrictive covenants in our debt facilities; our ability to enforce patents and protect proprietary products and manufacturing techniques; our ability to successfully complete or integrate any acquisitions; and the impact of pricing and other actions by competitors. Factors or events that could cause our 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) | ||||||||
| JAN. 31, 2011 | JULY 31, 2010 | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 435,261 | $ | 498,563 | ||||
| Accounts receivable | 545,436 | 566,499 | ||||||
| Inventories | 464,047 | 415,046 | ||||||
| Other current assets | 226,076 | 222,651 | ||||||
| Total current assets | 1,670,820 | 1,702,759 | ||||||
| Property, plant and equipment | 734,353 | 706,435 | ||||||
| Other assets | 611,231 | 590,018 | ||||||
| Total assets | $ | 3,016,404 | $ | 2,999,212 | ||||
| Liabilities and Stockholders' Equity: | ||||||||
| Short-term debt | $ | 170,836 | $ | 42,028 | ||||
| Accounts payable, income taxes and other current liabilities | 560,284 | 595,177 | ||||||
| Total current liabilities | 731,120 | 637,205 | ||||||
| Long-term debt | 485,637 | 741,353 | ||||||
| Deferred taxes and other non-current liabilities | 444,240 | 438,304 | ||||||
| Total liabilities | 1,660,997 | 1,816,862 | ||||||
| Stockholders' equity | 1,355,407 | 1,182,350 | ||||||
| Total liabilities and stockholders' equity | $ | 3,016,404 | $ | 2,999,212 | ||||
| PALL CORPORATION | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | ||||||||||||||||||||
| SECOND QUARTER ENDED | SIX MONTHS ENDED | |||||||||||||||||||
| JAN. 31, 2011 | JAN. 31, 2010 | JAN. 31, 2011 | JAN. 31, 2010 | |||||||||||||||||
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| Net sales | $ | 645,232 | $ | 560,401 | $ | 1,250,709 | $ | 1,107,340 | ||||||||||||
| Cost of sales | 312,747 | 276,116 | 609,551 | 552,857 | ||||||||||||||||
| Gross profit | 332,485 | 284,285 | 641,158 | 554,483 | ||||||||||||||||
| % of sales | 51.5 | % | 50.7 | % | 51.3 | % | 50.1 | % | ||||||||||||
| Selling, general and administrative expenses | 197,100 | 187,012 | 379,398 | 363,670 | ||||||||||||||||
| % of sales | 30.5 | % | 33.4 | % | 30.3 | % | 32.8 | % | ||||||||||||
| Research and development | 20,773 | 18,639 | 40,942 | 35,888 | ||||||||||||||||
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Earnings before restructuring and other charges, |
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|
net ("ROTC"), interest expense, net and income |
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| taxes | 114,612 | 78,634 | 220,818 | 154,925 | ||||||||||||||||
| % of sales | 17.8 | % | 14.0 | % | 17.7 | % | 14.0 | % | ||||||||||||
| ROTC (a) | 4,789 | 572 | 6,198 | 4,629 | ||||||||||||||||
|
Interest expense, net (b) |
5,814 | 5,694 | 13,108 | 3,088 | ||||||||||||||||
| Earnings before income taxes | 104,009 | 72,368 | 201,512 | 147,208 | ||||||||||||||||
| Provision for income taxes (b) | 28,345 | 22,749 | 54,439 | 30,606 | ||||||||||||||||
| Net earnings | $ | 75,664 | $ | 49,619 | $ | 147,073 | $ | 116,602 | ||||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.65 | $ | 0.42 | $ | 1.26 | $ | 0.99 | ||||||||||||
| Diluted | $ | 0.64 | $ | 0.42 | $ | 1.25 | $ | 0.98 | ||||||||||||
| Average shares outstanding: | ||||||||||||||||||||
| Basic | 116,476 | 117,875 | 116,405 | 117,749 | ||||||||||||||||
| Diluted | 118,266 | 119,290 | 118,102 | 119,028 | ||||||||||||||||
| Net earnings as reported | $ | 75,664 | $ | 49,619 | $ | 147,073 | $ | 116,602 | ||||||||||||
| Discrete items: | ||||||||||||||||||||
| Tax adjustments (b) | - | - | - | (14,188 | ) | |||||||||||||||
|
Interest adjustments, after pro forma tax effect (b) |
- | - | - | (7,499 | ) | |||||||||||||||
| ROTC, after pro forma tax effect (a) | 4,738 | - | 5,792 | 2,739 | ||||||||||||||||
| Total discrete items | 4,738 | - | 5,792 | (18,948 | ) | |||||||||||||||
| Pro forma earnings | $ | 80,402 | $ | 49,619 | $ | 152,865 | $ | 97,654 | ||||||||||||
| Diluted earnings per share as reported | $ | 0.64 | $ | 0.42 | $ | 1.25 | $ | 0.98 | ||||||||||||
| Discrete items: | ||||||||||||||||||||
| Tax adjustments (b) | - | - | - | (0.12 | ) | |||||||||||||||
|
Interest adjustments, after pro forma tax effect (b) |
- | - | - | (0.06 | ) | |||||||||||||||
| ROTC, after pro forma tax effect (a) | 0.04 | - | 0.04 | 0.02 | ||||||||||||||||
| Total discrete items | 0.04 | - | 0.04 | |||||||||||||||||
