Filtration and purification specialist Pall has reported a 10 per cent rise in sales to $471 million (€430m) in the fourth quarter, boosted by favourable exchange rates and the integration of the recently-acquired FSG operations.
The company is holding a conference call later today to discuss the results.
Currency factors boosted quarter's revenues by around $30 million, while earnings rose a healthy 53 per cent over the year-earlier period to $56 million or 45 cents a share, topping the Thomson First Call analysts consensus estimate of 40 cents a share.
Eric Krasnoff, Pall's chairman and CEO, said: "we have achieved the three key goals set at the beginning of fiscal year 2003. These were to improve profitability, to aggressively reduce debt and to successfully integrate FSG into Pall." By the end of the year, Pall's debt burden had been reduced by $174 million, he noted.
For the full year, sales increased 25 per cent to $1.61 billion, lifted by a $98 million gain from exchange rates. Full year earnings, excluding restructuring and other charges, increased 47 per cent to $149 million, or $1.20 a share.
The company's biopharmaceuticals division put in a strong performance, with a 9 per cent growth in revenues in the fourth quarter driven by strong sales to the biotechnology industry. Medical sales were flat compared to last year's fourth quarter, but up 14 per cent over the third quarter of fiscal 2003. Profitability for the medical business is also improving and reached 24 per cent in the fourth quarter, up from 7 per cent in the first.
Restructuring and other charges of $47.5 million, or 37 cents per share (including the pro forma tax effect), were recorded in fiscal year 2003 primarily to write off the in-process research and development from FSG. This reduced the results for the year to earnings of $103.2 million, or 83 cents per share.
However, with the addition of FSG to its business, Pall "is now supporting more customers with a greater range of products and services. As important, operating margins have improved sharply to 20.8 from 17.3 per cent in the fourth quarter last year,"said Krasnoff.
The improvement in EPS is attributable to organic growth, he said, aided by continuing cost reduction programs, and the firm achieved its two-year acquisition-related synergies goal of $30 million at the end of the third quarter. Further savings are expected under the company's CORE cost reduction program.
Looking ahead to fiscal 2004, Krasnoff said he expected it to be a continuation of 2003. "This means strong growth in biopharmaceuticals and improving sales in medical." Overall he predicted that EPS in 2004 will be in the range of $1.25 to $1.40.