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Pall Corp. Reports Operating Results (10-Q)

December 09, 2011 | About:

10qk

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Pall Corp. (PLL) filed Quarterly Report for the period ended 2011-10-31.

Pall Corp. has a market cap of $6.04 billion; its shares were traded at around $52.5 with a P/E ratio of 18.9 and P/S ratio of 2.2. The dividend yield of Pall Corp. stocks is 1.3%. Pall Corp. had an annual average earning growth of 12.8% over the past 10 years. GuruFocus rated Pall Corp. the business predictability rank of 4.5-star.

Highlight of Business Operations:

Life Sciences segment sales increased 9.6% (in local currency) reflecting growth in all three of its markets, with sales in the BioPharmaceuticals market particularly strong. Industrial segment sales increased 14.3% (in local currency) reflecting strong growth in the Energy & Water and Aeropower markets. Sales in Microelectronics were down slightly (in local currency). Overall consumable filtration products (including appurtenant hardware sales) increased 8.8% (in local currency) reflecting growth of 7.5% in Life Sciences and 10.3% in Industrial. Overall systems sales increased 43.0% (in local currency) reflecting growth of over 40% in both the Life Sciences and Industrial segments. Systems sales represented 11.3% of total sales in the first quarter of fiscal year 2012 compared to 9.0% in the first quarter of fiscal year 2011. Sales in emerging markets grew about 35% in the quarter, and now represent about 20% of total sales. For a detailed discussion of sales, refer to the section Review of Operating Segments below.

Research and development (R&D) expenses were $20,938 in the first quarter of fiscal year 2012 compared to $20,169 in the first quarter of fiscal year 2011, an increase of $769, or 3.8% ($516, or 2.6% in local currency). The increase in R&D expenses in local currency reflects increased spending in the Industrial segment partly offset by a decline in Life Sciences. As a percentage of sales, R&D expenses were 3.0% compared to 3.3% in the first quarter of fiscal year 2011. For a detailed discussion of R&D by business, refer to the section Review of Operating Segments below.

SG&A expenses in the first quarter of fiscal year 2012, increased by $13,122, or 15.7% (an increase of $9,687, or 11.6% in local currency) compared to the first quarter of fiscal year 2011. Selling expenses in local currency increased close to 13%, while G&A expenses increased about 10%. In addition to inflation in payroll and related costs that impacted both selling and G&A expenses, the increase in SG&A (in local currency) principally reflects increased spending related to regional expansion in emerging markets (impacting selling and G&A expenses), including the Latin America acquisition, and investments in information technology as discussed in the Review of Consolidated Results above. SG&A as a percentage of sales increased to 27.1% from 26.8% in the first quarter of fiscal year 2011. The increase in SG&A as a percentage of sales reflects the increase in spending in key areas as discussed above, partly offset by the leverage of sales growth. As a percentage of sales, selling expenses were 16.4% compared to 15.9% in the first quarter of fiscal year 2011. As a percentage of sales, G&A expenses were 10.7% compared to 10.9% in the first quarter of fiscal year 2011.

SG&A expenses increased by $15,096, or 17.5% (an increase of $11,148, or 12.9% in local currency) compared to the first quarter of fiscal year 2011. Selling expenses in local currency increased about 12%, while G&A expenses were up about 14%. In addition to inflation in payroll and related costs, the increase in SG&A (in local currency) principally reflects increased spending related to regional expansion in emerging markets (impacting selling and G&A expenses), including the Latin America acquisition, and investments in information technology as discussed in the Review of Consolidated Results, as well as costs related to bringing Industrial into the European and Asian headquarters. SG&A expenses as a percentage of sales decreased to 29.1% from 29.4% in the first quarter of fiscal year 2011. The decrease in SG&A as a percentage of sales reflects the leverage of the increase in sales, partly offset by the increase in spending in key areas as discussed above. As a percentage of sales, selling expenses were 17.7% compared to 18.0% in the first quarter of fiscal year 2011. As a percentage of sales, G&A expenses were 11.4% compared to 11.5% in the first quarter of fiscal year 2011.

R&D expenses were $7,633 in the first quarter of fiscal year 2012 compared to $6,912 in the first quarter of fiscal year 2011, an increase of $721, or 10.4% ($655, or 9.5% in local currency). As a percentage of sales, R&D expenses were 2.2% compared to 2.4% in the first quarter of fiscal year 2011.

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