Pall Corp. (PLL, Financial) filed Quarterly Report for the period ended 2010-04-30.
Pall Corp. has a market cap of $3.77 billion; its shares were traded at around $32.23 with a P/E ratio of 17.8 and P/S ratio of 1.6. The dividend yield of Pall Corp. stocks is 2%. Pall Corp. had an annual average earning growth of 9.1% over the past 10 years. GuruFocus rated Pall Corp. the business predictability rank of 4.5-star.PLL is in the portfolios of Daniel Loeb of Third Point, LLC, Stanley Druckenmiller of Duquesne Capital Management, LLC, Robert Olstein of Olstein Financial Alert Fund, Westport Asset Management, Andreas Halvorsen of Viking Global Investors LP, Manning & Napier Advisors, Inc, Edward Owens of Vanguard Health Care Fund, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
Research and development (“R&D”) expenses were $18,986 in the third quarter of fiscal year 2010 compared to $16,218 in the third quarter of fiscal year 2009, an increase of 17.1% (15.2% in local currency). The increase in R&D reflects increased spending in both the Life Sciences and Industrial segments. As a percentage of sales, R&D expenses in the third quarter were 3.1% compared to 2.9% in the third quarter of fiscal year 2009. R&D expenses were $54,874 in the nine months of fiscal year 2010 compared to $52,570 in the nine months of fiscal year 2009, an increase of 4.4% (3.3% in local currency). The increase in R&D in the nine months reflects an increase in spending in the Life Sciences segment partly offset by a decrease in spending in the Industrial segment. As a percentage of sales, R&D expenses in the nine months were 3.2%, compared to 3.1% in the nine months of fiscal year 2009. For a detailed discussion of R&D by segment, refer to the section “Review of Operating Segments” below.
In the third quarter and nine months of fiscal year 2010, the Company recorded restructuring and other charges (“ROTC”) of $2,030 and $6,659, respectively. ROTC in the quarter was primarily comprised of severance and other costs related to the Company s on-going cost reduction initiatives. ROTC in the nine months was primarily comprised of severance and other costs related to the Company s on-going cost reduction initiatives, an increase to previously established environmental reserves and legal and other professional fees in connection with the Federal Securities Class Actions, Shareholder Derivative Lawsuits and Other Proceedings (see Note 6, Commitments and Contingencies, to the accompanying condensed consolidated financial statements). Such costs were partly offset by the receipt of insurance claim payments related to matters that had been under inquiry by the audit committee as well as by a gain on the sale of certain securities held by the Company s benefits protection trust that had previously been written down for an other-than-temporary diminution in value.
Earnings before interest and income taxes (“EBIT”) were $105,213 in the third quarter of fiscal year 2010 compared to $70,896 in the third quarter of fiscal year 2009. The impact of foreign currency translation increased EBIT by $7,177 in the third quarter of fiscal year 2010. As a percentage of sales, EBIT were 17.1% compared to 12.8% in the third quarter of fiscal year 2009. EBIT were $255,509 in the nine months of fiscal year 2010 compared to $205,772 in the nine months of fiscal year 2009. The impact of foreign currency translation increased EBIT by $17,418 in the nine months of fiscal year 2010. As a percentage of sales, EBIT were 14.8% compared to 12.3% in the third quarter of fiscal year 2009.
Net interest expense in the third quarter of fiscal year 2010 was $3,254 compared to $6,576 in the third quarter of fiscal year 2009. Net interest expense in the quarter reflects the reversal of $2,553 of accrued interest primarily related to the resolution of a foreign tax audits and expiring statutes of limitation for assessment related to uncertain tax positions. Excluding these items, net interest expense decreased $769 compared to the third quarter of fiscal year 2009. Net interest expense in the nine months of fiscal year 2010 was $6,342 compared to $22,555 in the nine months of fiscal year 2009. Net interest expense in the nine months reflects the reversal of $11,537 of accrued interest primarily related to the resolution of a foreign tax audit and expiring statutes of limitation for assessment. Excluding these items, net interest expense decreased $4,676 compared to the nine months of fiscal year 2009, reflecting the repayment of higher rate foreign debt in the second and third quarters of fiscal year 2009, the impact of lower interest rates in the U.S. on outstanding debt and a reduction in interest bearing tax liabilities. A decline in interest income, related to lower interest rates, partly offset the above.
Net earnings in the third quarter of fiscal year 2010 were $69,691, or 58 cents per share, compared with net earnings of $44,162, or 37 cents per share in the third quarter of fiscal year 2009. In summary, the increase in net earnings and earnings per share reflects the increase in EBIT and the decline in net interest expense. Net earnings in the nine months of fiscal year 2010 were $186,293, or $1.56 per share, compared with net earnings of $126,120, or $1.05 per share in the nine months of fiscal year 2009. In summary, the increase in net earnings and earnings per share reflect the increase in EBIT, the decline in net interest expense and a decrease in the effective tax rate. Company management estimates that foreign currency translation increased net earnings per share by 4 cents in the third quarter of fiscal year 2010 and 10 cents in the nine months of fiscal year 2010.
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Pall Corp. has a market cap of $3.77 billion; its shares were traded at around $32.23 with a P/E ratio of 17.8 and P/S ratio of 1.6. The dividend yield of Pall Corp. stocks is 2%. Pall Corp. had an annual average earning growth of 9.1% over the past 10 years. GuruFocus rated Pall Corp. the business predictability rank of 4.5-star.PLL is in the portfolios of Daniel Loeb of Third Point, LLC, Stanley Druckenmiller of Duquesne Capital Management, LLC, Robert Olstein of Olstein Financial Alert Fund, Westport Asset Management, Andreas Halvorsen of Viking Global Investors LP, Manning & Napier Advisors, Inc, Edward Owens of Vanguard Health Care Fund, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Sales in the third quarter of fiscal year 2010 increased 10.8% to $615,982 from $555,883 in the third quarter of fiscal year 2009. Sales in the nine months of fiscal year 2010 increased 2.8% compared to the nine months of fiscal year 2009. Exchange rates used to translate foreign subsidiary results into U.S. Dollars increased reported sales by $28,630 in the quarter and $69,919 in the nine months, primarily due to the weakening of the U.S. Dollar against the Euro, Australian Dollar, Japanese Yen (“JPY”), Korean Won and British Pound. In local currency, sales increased 5.7% in the quarter and decreased 1.4% in the nine months compared to the same periods in fiscal year 2009. Increased pricing contributed $526 to overall sales in the quarter, reflecting an improvement in the Life Sciences segment partly offset by a decline in the Industrial segment. In the nine months, increased pricing contributed $7,048 to overall sales, primarily attributable to an improvement in the Life Sciences segment.Research and development (“R&D”) expenses were $18,986 in the third quarter of fiscal year 2010 compared to $16,218 in the third quarter of fiscal year 2009, an increase of 17.1% (15.2% in local currency). The increase in R&D reflects increased spending in both the Life Sciences and Industrial segments. As a percentage of sales, R&D expenses in the third quarter were 3.1% compared to 2.9% in the third quarter of fiscal year 2009. R&D expenses were $54,874 in the nine months of fiscal year 2010 compared to $52,570 in the nine months of fiscal year 2009, an increase of 4.4% (3.3% in local currency). The increase in R&D in the nine months reflects an increase in spending in the Life Sciences segment partly offset by a decrease in spending in the Industrial segment. As a percentage of sales, R&D expenses in the nine months were 3.2%, compared to 3.1% in the nine months of fiscal year 2009. For a detailed discussion of R&D by segment, refer to the section “Review of Operating Segments” below.
In the third quarter and nine months of fiscal year 2010, the Company recorded restructuring and other charges (“ROTC”) of $2,030 and $6,659, respectively. ROTC in the quarter was primarily comprised of severance and other costs related to the Company s on-going cost reduction initiatives. ROTC in the nine months was primarily comprised of severance and other costs related to the Company s on-going cost reduction initiatives, an increase to previously established environmental reserves and legal and other professional fees in connection with the Federal Securities Class Actions, Shareholder Derivative Lawsuits and Other Proceedings (see Note 6, Commitments and Contingencies, to the accompanying condensed consolidated financial statements). Such costs were partly offset by the receipt of insurance claim payments related to matters that had been under inquiry by the audit committee as well as by a gain on the sale of certain securities held by the Company s benefits protection trust that had previously been written down for an other-than-temporary diminution in value.
Earnings before interest and income taxes (“EBIT”) were $105,213 in the third quarter of fiscal year 2010 compared to $70,896 in the third quarter of fiscal year 2009. The impact of foreign currency translation increased EBIT by $7,177 in the third quarter of fiscal year 2010. As a percentage of sales, EBIT were 17.1% compared to 12.8% in the third quarter of fiscal year 2009. EBIT were $255,509 in the nine months of fiscal year 2010 compared to $205,772 in the nine months of fiscal year 2009. The impact of foreign currency translation increased EBIT by $17,418 in the nine months of fiscal year 2010. As a percentage of sales, EBIT were 14.8% compared to 12.3% in the third quarter of fiscal year 2009.
Net interest expense in the third quarter of fiscal year 2010 was $3,254 compared to $6,576 in the third quarter of fiscal year 2009. Net interest expense in the quarter reflects the reversal of $2,553 of accrued interest primarily related to the resolution of a foreign tax audits and expiring statutes of limitation for assessment related to uncertain tax positions. Excluding these items, net interest expense decreased $769 compared to the third quarter of fiscal year 2009. Net interest expense in the nine months of fiscal year 2010 was $6,342 compared to $22,555 in the nine months of fiscal year 2009. Net interest expense in the nine months reflects the reversal of $11,537 of accrued interest primarily related to the resolution of a foreign tax audit and expiring statutes of limitation for assessment. Excluding these items, net interest expense decreased $4,676 compared to the nine months of fiscal year 2009, reflecting the repayment of higher rate foreign debt in the second and third quarters of fiscal year 2009, the impact of lower interest rates in the U.S. on outstanding debt and a reduction in interest bearing tax liabilities. A decline in interest income, related to lower interest rates, partly offset the above.
Net earnings in the third quarter of fiscal year 2010 were $69,691, or 58 cents per share, compared with net earnings of $44,162, or 37 cents per share in the third quarter of fiscal year 2009. In summary, the increase in net earnings and earnings per share reflects the increase in EBIT and the decline in net interest expense. Net earnings in the nine months of fiscal year 2010 were $186,293, or $1.56 per share, compared with net earnings of $126,120, or $1.05 per share in the nine months of fiscal year 2009. In summary, the increase in net earnings and earnings per share reflect the increase in EBIT, the decline in net interest expense and a decrease in the effective tax rate. Company management estimates that foreign currency translation increased net earnings per share by 4 cents in the third quarter of fiscal year 2010 and 10 cents in the nine months of fiscal year 2010.
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