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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-Q
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 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
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SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended February 1, 2003
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or
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 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
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SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________ to ____________
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Commission File Number 1- 4311
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PALL CORPORATION
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(Exact name of registrant as specified in its charter)
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New York
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11-1541330
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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2200 Northern Boulevard, East Hills, NY
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11548
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(Address of principal executive offices)
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(Zip Code)
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(516) 484-5400
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(Registrant’s telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes No
No The number of shares of the registrant’s common stock outstanding as of March 5, 2003 was 123,008,220.
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FORM 10-Q for the Quarter Ended February 1, 2003
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INDEX |
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Page
No. |
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| Item
1. |
Financial
Statements (Unaudited) |
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2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
PALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
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Feb. 1, 2003
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Aug. 3, 2002
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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102,185
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$
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105,224
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Short-term investments
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21,000
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40,200
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Accounts receivable, net
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373,015
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415,853
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Inventories
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280,547
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256,910
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Other current assets
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95,898
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94,947
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Total current assets
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872,645
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913,134
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Property, plant and equipment, net
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607,727
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605,095
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Goodwill, net
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223,969
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262,973
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Intangible assets, net
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53,394
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39,948
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Other assets
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205,186
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189,293
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Total assets
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$
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1,962,921
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$
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2,010,443
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable and other current liabilities
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$
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254,039
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$
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290,228
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Income taxes payable
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42,699
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41,549
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Current portion of long-term debt
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40,747
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61,344
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Notes payable to banks
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20,521
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42,202
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Total current liabilities
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358,006
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435,323
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Long-term debt, net of current portion
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598,838
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619,705
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Deferred taxes and other non-current liabilities
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162,372
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135,695
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Total liabilities
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1,119,216
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1,190,723
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Stockholders’ equity:
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Common stock, par value $.10 per share
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12,796
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12,796
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Capital in excess of par value
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110,078
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110,745
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Retained earnings
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817,167
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832,308
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Treasury stock, at cost
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(106,030
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)
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(110,799
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)
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Stock option loans
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(2,271
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)
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(3,259
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)
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Accumulated other comprehensive income (loss):
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Foreign currency translation
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17,951
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(17,429
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)
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Minimum pension liability
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(3,103
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(3,079
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)
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Unrealized investment losses
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(1,980
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)
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(236
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)
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Unrealized losses on derivatives
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(903
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)
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(1,327
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)
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11,965
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(22,071
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)
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Total stockholders’ equity
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843,705
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819,720
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Total liabilities and stockholders’ equity
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$
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1,962,921
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$
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2,010,443
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See accompanying notes to condensed consolidated financial statements.
3
PALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
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Three Months Ended
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Six Months Ended
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Feb. 1, 2003
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Jan. 26, 2002
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Feb. 1, 2003
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Jan. 26, 2002
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Net sales
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$
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388,522
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$
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285,435
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$
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720,732
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$
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559,554
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Cost of sales
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200,085
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145,394
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374,346
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280,464
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Gross profit
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188,437
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140,041
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346,386
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279,090
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Selling, general and administrative expenses
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128,837
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101,152
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245,697
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199,226
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Research and development
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12,415
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12,468
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25,460
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25,315
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Restructuring and other charges
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924
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—
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41,299
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—
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Interest expense, net
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6,207
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2,815
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13,473
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6,078
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Earnings before income taxes
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40,054
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23,606
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20,457
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48,471
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Income taxes
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8,675
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5,191
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12,216
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10,664
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Net earnings
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$
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31,379
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$
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18,415
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$
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8,241
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$
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37,807
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Earnings per share:
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Basic
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$
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0.26
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$
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0.15
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$
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0.07
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$
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0.31
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Diluted
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$
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0.25
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$
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0.15
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$
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0.07
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$
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0.31
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Dividends declared per share
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$
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0.09
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$
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0.17
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$
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0.18
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$
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0.34
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Average shares outstanding:
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Basic
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122,948
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122,151
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122,893
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122,200
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Diluted
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123,551
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123,408
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123,612
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123,530
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See accompanying notes to condensed consolidated financial statements.
4
PALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Six Months Ended
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Feb. 1, 2003
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Jan. 26, 2002
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Net cash provided by operating activities, net of effect of acquisitions
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$
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75,097
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$
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63,602
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Investing activities:
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Acquisition of business
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(8,125
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)
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—
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Capital expenditures
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(28,235
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)
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(33,919
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Disposals of fixed assets
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2,707
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1,164
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Short-term investments
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19,200
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77,900
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Benefits protection trust
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—
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(1,562
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)
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Net cash (used) provided by investing activities
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(14,453
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43,583
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Financing activities:
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Notes payable
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(373,339
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(17,931
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Long-term borrowings
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445,004
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1,034
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Repayments of long-term debt
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(130,921
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(44,530
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Net proceeds from stock plans
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3,868
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10,993
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Proceeds from termination of interest rate swaps
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7,533
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—
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Purchase of treasury stock
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—
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(9,999
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Dividends paid
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(22,105
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