Q1 2012 Earnings Call Transcript

Transcript Call Date 12/09/2011

Operator: Welcome to Pall Corporation's Conference Call and Webcast for the First Quarter for Fiscal 2012. Today's call is being recorded and simultaneously webcast. Instructions for the question-and-answer session will be provided at the end of management's prepared remarks. Right now all lines are in listen-only mode.

We would like to remind you that the Company's first quarter press release is available at

Management's remarks this morning will include forward-looking statements. Please refer to Slide 2 or request a copy of the specific wording of this qualification of the Company's remarks. Management also uses certain non-GAAP measures to assess the Company's performance. Reconciliations of these measures to their GAAP counterparts are included in slides at the end of the presentation.

At this time, I will turn the call over to Mr. Larry Kingsley, Pall Corporation's CEO and President. Please go ahead, sir.

Lawrence D. Kingsley - CEO and President: Good morning. Thank you for joining us. This is my first conference call as Pall's CEO, and I am delighted to be with the Company. I am here today with Lisa McDermott, our CFO; and Frank Moschella, Corporate Controller.

We will review the quarter and our outlook in a moment, but before that, I want to answer some questions that I received in the current form since joining the Company in October. First, why did I come to Pall? Second, what should you expect from me or us in the short and long term, and where do I stand in our externally stated goals for 2013?

So, first, what drew to Pall? The answer is simple, that's a unique prospect. I left IDEX, a great company in really good shape for the opportunity to build Pall and to the company that I believe it can be. I see Pall as huge long-term value creation opportunity, and I'd like you to think about it that way as well.

Clearly, we have work to do. Some of it is foundational in nature. It's going to take some time. But Pall is already a good company, with the potential to be one of the best global technology enterprises. Opportunities to lead a company that serve great markets with differentiated technology, with strong global reach and a dedicated team for those just don't come along every day.

As shown on our Slide 5, our business model includes high barriers to entry. More than two-thirds of our sales are consumable purchases that are largely non-discretionary decisions. Beyond a business model at our technology, brand leadership, strong customer relationships and applications expertise and a global sales channel that's arguably the best of any company in our space. These characteristics combine deliver a great profile. The company has the girth and that's the presence and the fixed cost structure to grow. We're going to be working to develop our Pall Enterprise System to drive improved process and operational execution. We should be able to drive significantly more volume to our manufacturing plants, more products through our sales organization and new technology to our customers.

Last but not least, we have a terrific balance sheet that provides tremendous flexibility and can be deployed for growth. We also have a substantial amount of cash tied up in working capital. We will move to a more aggressive capital allocation strategy in the future, but the operative word is strategy, it's not a desire to just become highly acquisitive. Our investments will be thoughtful and disciplined to enhance our offering and to accelerate growth. So, that's why I am here and now what are we going to do.

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