<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the Quarterly Period Ended January 30, 1999
Commission File No. 1-4311
PALL CORPORATION
Incorporated in New York State I.R.S. Employer Identifi-
cation # 11-1541330
2200 Northern Boulevard, East Hills, N.Y. 11548
Telephone Number (516) 484-5400
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 the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No |_|
At March 8, 1999, 124,643,311 shares of common stock of the Registrant were
outstanding.
<PAGE> 2
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PALL CORPORATION
INDEX TO FORM 10-Q
------------------
COVER SHEET 1
INDEX TO FORM 10-Q 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed consolidated balance sheets - January 30, 1999
and August 1, 1998 3
Condensed consolidated statements of earnings -
three months and six months ended January 30, 1999
and January 31, 1998 4
Condensed consolidated statements of cash flows -
six months ended January 30, 1999 and January 31, 1998 5
Notes to condensed consolidated financial statements 6
Item 2. Management's discussion and analysis of financial condition and
results of operations 8
PART II. OTHER INFORMATION
Item 4. Submission of matters to a vote of security holders 14
Item 6. Exhibits and reports on Form 8-K 14
SIGNATURES 15
EXHIBIT INDEX 16
<PAGE> 3
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
(in thousands)
January 30, August 1,
ASSETS 1999 1998
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 15,276 $ 12,125
Short-term investments 34,000 16,800
Accounts receivable, net of allowances
for doubtful accounts of $6,412
and $5,879, respectively 292,191 291,535
Inventories - Note 2 239,867 227,254
Taxes receivable 4,098 6,941
Deferred income taxes 18,500 15,915
Other 35,792 31,919
----------- -----------
Total Current Assets 639,724 602,489
Property, plant and equipment, net of
accumulated depreciation of $433,445
and $399,821, respectively 530,569 520,592
Other assets 225,987 223,838
----------- -----------
Total Assets $ 1,396,280 $ 1,346,919
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable to banks $ 201,248 $ 134,615
Accounts payable 55,562 66,773
Accrued liabilities:
Salaries and commissions 30,528 39,998
Other 65,281 61,271
----------- -----------
95,809 101,269
Income taxes 16,283 21,939
Current portion of long-term debt 54,194 50,292
Dividends payable 19,952 19,202
----------- -----------
Total Current Liabilities 443,048 394,090
Long-term debt, less current portion 109,753 111,469
Deferred income taxes 22,655 21,514
Other non-current liabilities 55,833 54,231
----------- -----------
Total Liabilities 631,289 581,304
----------- -----------
Stockholders' Equity:
Common stock, $.10 par value 12,796 12,796
Capital in excess of par value 92,893 92,893
Retained earnings 751,295 764,927
Treasury stock, at cost (74,934) (87,281)
Stock option loans (8,829) (7,140)
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustment (3,581) (10,416)
Minimum pension liability (4,095) (4,062)
Unrealized investment (losses) gains (554) 3,898
----------- -----------
(8,230) (10,580)
Total Stockholders' Equity 764,991 765,615
----------- -----------
Total Liabilities and
Stockholders' Equity $ 1,396,280 $ 1,346,919
=========== ===========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE> 4
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PALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
(in thousands, (in thousands,
except per share data) except per share data)
Three Months Ended Six Months Ended
--------------------- ---------------------
Jan. 30, Jan. 31, Jan. 30, Jan. 31,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 278,255 $ 259,004 $ 528,105 $ 496,355
Costs and expenses:
Cost of sales 129,564 115,384 245,337 220,995
Selling, general and
administrative expenses 105,684 97,626 202,571 188,613
Research and development 15,034 14,565 29,969 28,755
Other (income) expenses, net - (7,778) - (7,778)
Interest expense, net 3,035 1,728 5,983 2,716
--------- --------- --------- ---------
Total costs and expenses 253,317 221,525 483,860 433,301
Earnings before income taxes 24,938 37,479 44,245 63,054
Income taxes 6,234 9,933 11,061 17,094
--------- --------- --------- ---------
Net earnings $ 18,704 $ 27,546 $ 33,184 $ 45,960
========= ========= ========= =========
Earnings per share:
Basic $0.15 $0.22 $0.27 $0.37
Diluted $0.15 $0.22 $0.27 $0.36
Dividends declared per share $0.160 $0.155 $0.315 $0.295
Average number of shares outstanding:
Basic 124,595 124,714 124,339 125,861
Diluted 125,067 125,461 124,831 126,561
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE> 5
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PALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(in thousands)
Six Months Ended
----------------------
Jan.30, Jan.31,
1999 1998
-------- --------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 43,884 $ 66,070
INVESTING ACTIVITIES:
Investments and licenses (9,435) (19,162)
Capital expenditures (36,251) (37,058)
Disposals of fixed assets 1,198 796
Short-term investments (17,200) (20,200)
-------- --------
NET CASH USED BY INVESTING ACTIVITIES (61,688) (75,624)
FINANCING ACTIVITIES:
Net short-term borrowings 64,305 37,047
Long-term borrowings 2,960 60,576
Payments on long-term debt (11,524) (4,380)
Net proceeds from exercise of stock options 33,445 2,605
Purchase of treasury stock (30,000) (74,999)
Dividends paid (38,481) (17,801)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,705 3,048
-------- --------
CASH FLOW FOR PERIOD 2,901 (6,506)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 12,125 17,972
EFFECT OF EXCHANGE RATE CHANGES ON CASH 250 (652)
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15,276 $ 10,814
======== ========
Supplemental disclosures:
Interest paid (net of amount capitalized) $ 8,081 $ 5,156
Income taxes paid (net of refunds) 13,449 12,133
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE> 6
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PALL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The financial information included herein is unaudited. However, such
information reflects all adjustments which are, in the opinion of management,
necessary to present fairly the Company's financial position, results of
operations and cash flows as of the dates and for the periods presented herein.
These financial statements should be read in conjunction with the financial
statements and notes set forth in the Company's Annual Report on Form 10-K for
the fiscal year ended August 1, 1998.
NOTE 2 - INVENTORIES
The major classes of inventory are as follows:
<TABLE>
<CAPTION>
(in thousands)
Jan. 30, Aug. 1,
1999 1998
-------------------------
<S> <C> <C>
Raw materials and components $ 94,371 $ 95,861
Work-in-process 28,718 24,168
Finished goods 116,778 107,225
-------------------------
Total inventory $239,867 $227,254
=========================
</TABLE>
NOTE 3 - COMPREHENSIVE INCOME
The Company has adopted SFAS No. 130, "Reporting Comprehensive Income",
which requires that all components of comprehensive income and total
comprehensive income be reported and that changes be shown in a financial
statement displayed with the same prominence as other financial statements.
Total comprehensive income for the three months and six months ended January
30, 1999 and January 31, 1998 was comprised of the following:
<TABLE>
<CAPTION>
(in thousands)
Three months ended Six months ended
Jan. 30, Jan. 31, Jan. 30, Jan. 31,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income $ 18,704 $ 27,546 $ 33,184 $ 45,960
Foreign currency translation adjustment (6,067) (11,497) 6,724 (4,589)
Income taxes 365 337 111 (8)
-------- -------- -------- --------
Foreign currency translation adjustment, net (5,702) (11,160) 6,835 (4,597)
Minimum pension liability adjustment (20) 684 (50) 664
Income taxes 7 (239) 17 (232)
-------- -------- -------- --------
Minimum pension liability adjustment, net (13) 445 (33) 432
Unrealized investment gains (losses) 1,999 (58) (6,848) (164)
Income taxes (700) (63) 2,396 (128)
-------- -------- -------- --------
Unrealized investment gains (losses), net 1,299 (121) (4,452) (292)
Total comprehensive income $ 14,288 $ 16,710 $ 35,534 $ 41,503
======== ======== ======== ========
</TABLE>
<PAGE> 7
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Note 4 - OTHER MATTERS
In March 1999, the Company announced that it will be restructuring its business
with targeted payroll and expense cost reductions of over $50 million annually.
The restructuring will involve all parts of the Company and is expected to
include some relocations and consolidations in manufacturing locations, the
closure of ancillary facilities, and changes in product distribution throughout
Europe. Employment levels globally are expected to be reduced by a minimum 350
people or about 4% of the Company's workforce. The Company will take a one-time
charge in the third quarter as part of the restructuring.
The Company bought back an additional $10 million and $20 million of its common
stock during the first and second quarters, respectively and expects to complete
the purchase of the remaining $35 million authorized under its current buy-back
program during calendar year 1999.
The second quarter of fiscal 1998 includes one-time income of $13.5 million from
Micron Separations Inc., which was found to have infringed the Company's Nylon
membrane patent. The one-time income from the patent litigation settlement is
reported net of legal and professional fees related to the patent litigation; a
settlement, including costs, of $2.5 million with the Department of Defense
concerning a long standing disagreement over a sale dating back nearly 10 years;
and a write-off of $2.2 million of inventory and equipment due to the
acquisition of new technology.
<PAGE> 8
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's discussion & analysis may contain "forward looking statements" as
defined in the Private Securities Litigation Reform Act of 1995. These
statements are based on current Company expectations and are subject to risks
and uncertainties, which could cause actual results to differ materially. In
addition to foreign exchange rates, such risks and uncertainties include, but
are not limited to, regulatory approval, market acceptance of new technologies,
economic conditions and market demand.
I. Results of Operations
Sales for the quarter were $278 million, an increase of 7 1/2%, compared to $259
million last year. Exchange rates and acquisitions increased sales by 3% and 2%,
respectively. Sales for the six months increased 6 1/2% while exchange rates and
businesses acquired increased sales by 1% and 2 1/2%, respectively. Price
reductions reduced six months sales by about 1%. A detailed summary of sales by
industry and geographic segments is given below.
Sales by Market
($ = 000)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED
-------------------- EXCHANGE % CHANGE
JAN. 30, JAN. 31, % RATE IN LOCAL
1999 1998 CHANGE DIFFERENCE CURRENCY
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Medical $ 66,039 $ 62,638 5 1/2 $ 1,497 3
BioPharmaceuticals 82,223 69,218 19 1,791 16
-------- -------- --------
Total Health Care 148,262 131,856 12 1/2 3,288 10
Aerospace 32,061 30,966 3 1/2 662 1 1/2
Industrial Hydraulics 32,651 32,609 -- 844 (2 1/2)
-------- -------- --------
Total Aeropower 64,712 63,575 2 1,506 (1/2)
Microelectronics 14,202 22,996 (38) 650 (41)
Industrial Process 51,079 40,577 26 1,531 22
-------- -------- --------
Total
Fluid Processing 65,281 63,573 2 1/2 2,181 (1/2)
-------- -------- --------
TOTAL $278,255 $259,004 7 1/2 $ 6,975 4 1/2
-------- -------- --------
</TABLE>
<PAGE> 9
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<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------- EXCHANGE % CHANGE
JAN. 30, JAN. 31, % RATE IN LOCAL
1999 1998 CHANGE DIFFERENCE CURRENCY
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Medical $126,089 $117,182 7 1/2 $ 1,260 6 1/2
BioPharmaceuticals 153,401 136,299 12 1/2 1,687 11 1/2
-------- -------- --------
Total Health Care 279,490 253,481 10 1/2 2,947 9
Aerospace 61,962 56,748 9 833 7 1/2
Industrial Hydraulics 63,022 62,976 -- 809 (1)
-------- -------- --------
Total Aeropower 124,984 119,724 4 1/2 1,642 3
Microelectronics 25,900 45,247 (43) 83 (43)
Industrial Process 97,731 77,903 25 1/2 755 24 1/2
-------- -------- --------
Total
Fluid Processing 123,631 123,150 1/2 838 (1/2)
-------- -------- --------
TOTAL $528,105 $496,355 6 1/2 $ 5,427 5 1/2
-------- -------- --------
</TABLE>
Sales by geographic region
($ = 000)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED
-------------------- EXCHANGE % CHANGE
JAN. 30, JAN. 31, % RATE IN LOCAL
1999 1998 CHANGE DIFFERENCE CURRENCY
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asia $ 45,412 $ 42,415 7 $ 2,278 1 1/2
Europe 112,050 90,866 23 1/2 4,899 18
Western
Hemisphere 120,793 125,723 (4) (202) (4)
-------- -------- -------
TOTAL $278,255 $259,004 7 1/2 $ 6,975 4 1/2
-------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------- EXCHANGE % CHANGE
JAN. 30, JAN. 31, % RATE IN LOCAL
1999 1998 CHANGE DIFFERENCE CURRENCY
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asia $ 82,709 $ 87,536 (5 1/2) $(2,252) (3)
Europe 211,712 171,193 23 1/2 8,181 19
Western
Hemisphere 233,684 237,626 (1 1/2) (502) (1 1/2)
-------- -------- -------
TOTAL $528,105 $496,355 6 1/2 $ 5,427 5 1/2
-------- -------- -------
</TABLE>
For the quarter, the Health Care segment's sales increased 10% in local
currency. This increase was fueled by sales growth of 16% in the
BioPharmaceuticals market as the Medical market sales were up only 3%. Each
BioPharmaceuticals submarket experienced double-digit growth during the quarter
(Pharmaceuticals 16%; Food & Beverage 13%; and Specialty Materials 25%). Sales
growth in the Medical market was sluggish as blood filter sales
<PAGE> 10
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continue to move from the hospitals to the blood centers. Sales to blood centers
were up 32% while sales to hospitals declined by 19%. Even with this decline,
sales to hospitals of $21 million were 47% of total blood filter sales in the
quarter. By geography, sales to blood centers in Europe increased by 48%. In the
US they increased by 26% as the Company continues to see momentum towards
universal blood filtration. Many countries in Europe have already mandated
universal blood filtration.
Sales in the Aeropower segment were relatively flat. Sales in the Aerospace
market increased 1 1/2% as Military sales increased by 12% while commercial
aerospace sales declined by 6 1/2%. The decrease in commercial aerospace sales
is the reverse of what we have seen in the past several quarters. In the US,
Aerospace sales increased by 4 1/2% but declined by 4% in Europe. Sales in the
Industrial Hydraulics market decreased by 2 1/2% mostly due to sales decline in
the US by 22%. Industrial Hydraulics is a cyclical business and the market is
currently anemic. Additionally, the decline was partly due to a change in the
Company's distribution practices relating to delivery and inventory levels.
Sales in the Fluid Processing segment decreased by 1/2% in the quarter as the
decline in the Microelectronics sales of 41% continued to affect this segment's
performance. Sales in the Industrial Process market increased by 22%, assisted
by the acquisition of Rochem last year and increased sales in the refinery
market.
By geography, sales in Europe increased by 18%, led by growth in Fluid
Processing 43%, Health Care 19% and Aeropower 4%. The increase in the Fluid
Processing sales is primarily driven by Rochem and increased sales in the
refinery market. Sales in the Western Hemisphere declined by 4% as this region
continued to be affected by lower sales in Microelectronics. Sales in the
BioPharmaceuticals market increased by 9% but the Medical market declined by 6%.
Sales in Asia increased 1 1/2% with sales to the Health Care segment increasing
22%, however, this region continues to be affected by Microelectronics where
sales declined by 33%.
Cost of sales as a percentage of sales increased by 2% for the quarter and six
months mainly due to reduced gross margins on blood filter sales to blood
centers, and lower margins on Microelectronics and Industrial systems sales.
Gross margins on blood filter sales to blood centers are lower than sales to
hospitals, whereas pricing pressures in Microelectronics eroded gross margins.
The gross margins on Industrial systems are lower as the learning curve has
proven more expensive than anticipated on greater sales volume. Net interest
expense is higher for the quarter and six months on a comparable basis as the
Company's average debt, net of cash and short-term investments, was also higher
for the same comparable periods. Excluding special items in the second quarter
last year, pretax margins for the quarter and six months declined by about 2.5%
for the reasons cited above. The underlying tax rate for the six months was 25%
compared to 26% last
<PAGE> 11
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year. The reduction in the tax rate reflects the increase in products
manufactured in Puerto Rico and Ireland, which have lower tax rates.
During the second quarter last year, the Company recorded one-time income of
$13.5 million from Micron Separations, Inc., which was found to have infringed
the Company's Nylon membrane patent. Offset against this income were related
legal and professional fees; a settlement, including costs, of $2.5 million with
the Department of Defense concerning a long standing disagreement over a sale
dating back nearly 10 years; and a write-off of $2.2 million of inventory and
equipment due to the acquisition of new technology.
For the quarter and six months earnings per share on a diluted basis were 15
cents and 27 cents compared to 22 cents and 36 cents, respectively. The second
quarter of last year included 4 cents per share (after proforma tax effect) of
one-time income, net of certain one-time charges as discussed above.
The Company recently announced that it will take a one-time charge related to
restructuring its operations in the third quarter. The restructuring relates to
all parts of the Company's business and is expected to include changes in
distribution practices in Europe, consolidation of manufacturing facilities and
closing of ancillary facilities. As a result of this restructuring the Company
expects to reduce its employment levels by at least 350 people. The
restructuring has targeted payroll and expense reductions of $50 million
annually. The Company expects that its current year earnings per share (before
one-time charges) will be about 10% to 15% below last year's amounts (before
one-time charges)
II. Liquidity and Capital Resources
The Company's balance sheet is affected by the spot exchange rates used at the
end of the second quarter for translating local currency amounts into US
dollars. In general the local currency amounts have strengthened against the US
dollar at the end of the second quarter when compared to the end of last year.
Net cash provided from operating activities has decreased by $22 million mainly
as a result of lower net earnings and reduction in accounts payable and
accruals. During the last six months the Company acquired the assets of its
distributors in Argentina and South Africa for approximately $7 million. The
Company also utilized the proceeds received from stock options exercised to buy
back an additional $30 million of its common stock. Capital expenditures and
depreciation and amortization for the six months were $36 million and $39
million, respectively. In local currency, debt and short-term borrowings, net of
cash and short-term investments, increased $34 million. At the end of the
quarter, approximately $9 million of accruals related to environmental matters
are reflected on the balance sheet.
The Company recently signed an agreement to sell its Well Technology business.
It is anticipated that the sale will close during the third quarter. In fiscal
<PAGE> 12
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1998 this segment generated $12 million in revenues. The Company decided to sell
this business as it does not consider this segment to be part of its core
business.
III. Other Matters
Year 2000 Readiness
Since 1996, the Company has been assessing the impact that the Year 2000 (Y2K)
issue will have on its information systems. In March 1998, a formal Y2K
Committee was established. The Y2K Committee is chaired by the Company's Chief
Financial Officer. The Committee has developed a comprehensive plan to enable
the Company to achieve Y2K compliance and is responsible to regularly determine
that training, guidance and resources, both human and financial, are available
to carry out the overall plan on a consistent basis worldwide. Throughout the
process, the Committee has utilized the Company's internal audit department and
a team of geographic leaders (that report directly to the Committee) and support
personnel to visit numerous global locations to conduct training and assess the
progress being made toward site readiness.
To date, the Company has inventoried critical systems that may be impacted by
Y2K and inquired of those vendors that support its critical systems. Many of the
vendors have acknowledged that their current systems are Y2K compliant; however,
the Company plans to test certain critical systems to ensure Y2K compliance.
(The Company does not plan to test systems of service providers such as banks,
the New York Stock Exchange, utility services and similar service providers as
it does not have the resources to test their systems). The Company expects to
finish the testing during its fourth quarter. Non-critical systems have also
been inventoried and, in many cases, tested with a goal of completing the
testing of these non-critical systems by the end of the Company's fourth
quarter. If these systems are found to be Y2K deficient, then contingency plans
call for replacements, upgrades and/or migrating to other available systems. At
the current time, the Company expects that its systems will be compliant by the
end of fiscal 1999 and it estimates that the expenditures necessary to achieve
compliance will not be material to its financial statements.
The Company has also surveyed critical suppliers, service providers and
distributors to determine the status of their Y2K compliance programs. The
Company's reliance on suppliers, service providers and distributors, and
therefore, proper functioning of their information systems and software means
that failure by such suppliers, service providers and distributors to address
their own Y2K issues could have a material impact on the Company's plan to
achieve Y2K compliance.
The failure to correct a material Y2K problem could result in an interruption
in, or a failure of, certain normal business activities or operations. Such
failures could materially and adversely affect the Company's results of
operations. Due to the uncertainty inherent in the Y2K problem, the Company is
unable to determine, at
<PAGE> 13
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this time, whether the consequences of Y2K failures will have a material impact
on the Company's results of operations. The Y2K project is expected to reduce
the Company's level of uncertainty about the Y2K problem and, in particular,
about the Y2K compliance and readiness of its suppliers, service providers and
distributors. The Company believes that, with the completion of the project as
scheduled, the possibility of a material interruption of normal operations
should be reduced.
New European Currency
A new European currency (Euro) was introduced in January 1999 to replace the
separate currency of eleven individual countries. This will entail changes in
our operations as we modify systems and commercial arrangements to deal with the
new currency. Modifications will be necessary in operations such as payroll,
benefits and pension systems, contracts with suppliers and customers and
internal financial reporting systems. A three-year transition period is expected
during which transactions can be made in the legacy currencies. This may require
dual currency processes for our operations. We have identified issues involved
and are developing and implementing solutions. The cost of this effort is not
expected to have a material effect on our business or results of operations.
There is no guarantee, however, that all problems will be foreseen and
corrected, or that no material disruption of our business will occur. The
conversion to the Euro may have competitive implications on our pricing and
marketing strategies; however, any such impact is not known at this time.
<PAGE> 14
-14-
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The Annual Meeting of Shareholders of the Company was held November
19, 1998. Proxies for the meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934.
(b) Not required.
(c) The matters voted upon and the results of the voting were as
follows:
1. Holders of 106,391,662 shares of common stock voted either in
person or by proxy for the election of four directors. The
number of votes cast for each nominee were as indicated below:
<TABLE>
<S> <C> <C> <C>
John H.F. Haskell, Jr.
For: 105,782,273 Withheld: 609,389
Katherine L. Plourde
For: 105,760,293 Withheld: 631,369
Heywood Shelley
For: 105,731,695 Withheld: 659,967
Alan B. Slifka
For: 102,828,202 Withheld: 3,563,460
</TABLE>
2. The proposal to adopt the 1998 Employee Stock Option Plan was
approved by a vote of 101,997,660 for, 3,815,921 against and
578,081 abstensions.
(d) Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
See the Exhibit Index on page 16.
(b) Reports on Form 8-K.
The Company filed no reports on Form 8-K during the three
months ended January 30, 1999.
<PAGE> 15
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PALL CORPORATION
March 16, 1999 /s/ John Adamovich, Jr.
- ---------------- --------------------------
Date John Adamovich, Jr.
Chief Financial Officer
and Treasurer
March 16, 1999 /s/ Viraj J. Patel
- ---------------- --------------------------
Date Viraj J. Patel
Chief Corporate Accountant
<PAGE> 16
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Exhibit Index
Exhibit
Number Description of Exhibit
- ------- ----------------------
3 (i)* Restated Certificate of Incorporation of the Registrant
as amended through November 23, 1993, filed as Exhibit 3
(i) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended July 30, 1994.
3 (ii)* By-Laws of the Registrant as amended on October 9, 1998,
filed as Exhibit 3 (ii) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended August 2,
1998.
27 Financial Data Schedule (only filed electronically).
* Incorporated herein by reference.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> JAN-30-1999
<CASH> 15,276
<SECURITIES> 34,000
<RECEIVABLES> 298,603
<ALLOWANCES> 6,412
<INVENTORY> 239,867
<CURRENT-ASSETS> 639,724
<PP&E> 964,014
<DEPRECIATION> 433,445
<TOTAL-ASSETS> 1,396,280
<CURRENT-LIABILITIES> 443,048
<BONDS> 0
<COMMON> 12,796
0
0
<OTHER-SE> 752,195
<TOTAL-LIABILITY-AND-EQUITY> 1,396,280
<SALES> 528,105
<TOTAL-REVENUES> 528,105
<CGS> 245,337
<TOTAL-COSTS> 483,860
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,983
<INCOME-PRETAX> 44,245
<INCOME-TAX> 11,061
<INCOME-CONTINUING> 33,184
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,184
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
</TABLE>
