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Pall Corp. Reports Operating Results (10-Q)

June 11, 2012 | About:
Arnold Joe

10qk

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Pall Corp. (PLL) filed Quarterly Report for the period ended 2012-04-30.

Pall Corp has a market cap of $6.14 billion; its shares were traded at around $52.34 with a P/E ratio of 17.9 and P/S ratio of 2.2. The dividend yield of Pall Corp stocks is 1.6%. Pall Corp had an annual average earning growth of 9.5% over the past 10 years. GuruFocus rated Pall Corp the business predictability rank of 4.5-star.

Highlight of Business Operations:

Research and development (“R&D”) expenses were $20,780 in the third quarter of fiscal year 2012 compared to $19,308 in the third quarter of fiscal year 2011, an increase of $1,472, or 7.6% ($1,700, or 9% in local currency). The increase in R&D expenses in local currency in the quarter reflects increased spending in the Life Sciences segment partly offset by a decline in the Industrial segment. As a percentage of sales, R&D expenses were 3.2% in the quarter compared to 3.0% in the third quarter of fiscal year 2011. In the nine months, R&D expenses were $60,351 compared to $57,198 in the nine months of fiscal year 2011, an increase of $3,153, or 5.5% as reported and in local currency. The increase in R&D expenses in local currency in the nine months reflects increased spending in Life Sciences partly offset by a decline in Industrial. As a percentage of sales, R&D expenses were 3.1% in the nine months compared to 3.2% in the nine months of fiscal year 2011. For a discussion of R&D expenses by business, refer to the section “Review of Operating Segments” below.

SG&A expenses in the third quarter of fiscal year 2012, increased by $7,290, or 8.7% (an increase of approximately $9,600, or 11% in local currency) compared to the third quarter of fiscal year 2011. In the nine months, SG&A expenses increased by $26,752, or 11.2% (an increase of approximately $25,900, or 11% in local currency) compared to the nine months of fiscal year 2011. Selling expenses increased approximately 1% in the quarter and 7% in the nine months. G&A expenses increased approximately 23% and 18% in the quarter and nine months, respectively. 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) in the quarter and nine months principally reflects increased spending related to regional expansion in emerging markets (impacting selling and G&A expenses), including the acquisition in Brazil, incremental costs related to the acquisition of ForteBio (selling and G&A) and information technology related costs as discussed in the Review of Consolidated Results above. SG&A as a percentage of sales increased to 28.7% from 26.9% in the third quarter of fiscal year 2011. The selling and G&A expense components of SG&A as a percentage of sales in the quarter were as follows:

R&D expenses in the third quarter of fiscal year 2012 were $13,512, an increase of $1,349, or 11.1% (approximately $1,500, or 13% in local currency). As a percentage of sales, R&D expenses were 4.2% compared to 3.9% in the third quarter of fiscal year 2011. In the nine months, R&D expenses were $37,196, an increase of $1,940, or 5.5% (approximately $2,000, or 6% in local currency). As a percentage of sales, R&D expenses were 4.0% compared to 4.1% in the nine months of fiscal year 2011.

Segment profit dollars were $75,386, a decrease of $3,499, or 4.4% (approximately $2,300, or 3% in local currency) compared to the third quarter of fiscal year 2011. Segment profit margin declined to 23.7% from 25.2% in the third quarter of fiscal year 2011. In the nine months, segment profit dollars were $233,191, an increase of $19,524, or 9.1% (approximately $14,500, or 7% in local currency) compared to the nine months of fiscal year 2011. Segment profit margin was 25.4% compared to 25.1% in the nine months of fiscal year 2011.

Segment profit dollars in the third quarter of fiscal year 2012 were $39,431, a decrease of $7,769, or 16.5% (approximately$7,500, or 16% in local currency). Segment profit margin decreased to 11.6% from 13.80% in the third quarter of fiscal year 2011. In the nine months, segment profit dollars were $131,195, a decrease of $3,061, or 2.3% (approximately$6,500, or 5% in local currency). Segment profit margin in the nine months decreased to 12.7% from 14.2% last year.

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