EXPLORING NEW HORIZONS

1980-1989

A revolution was born as small, powerful computers invaded the home and workplace, ushering in the much heralded Information Age. Fractures began to appear in the Communist world, triggering epochal change that ended in the 1991 collapse of the Soviet Union and the cessation of the Cold War. Wall Street provided a fitting epitaph for the decade as fortunes were made while markets toppled. Pall’s ongoing search for new opportunities earned it a

growing presence in the Pacific Basin, Europe and South America, as well as an emerging role in improving the quality and safety of the world’s blood supply.

T H R E E M I L E I S L A N D C L E A N U P

50

PALL GOESUNDERGROUND...AND UNDERWATER

Pall’s technical exper-tise has figured in

some of the most cele-brated engineering pro-jects of our times.Construction of the $10billion Eurotunnelunder the EnglishChannel betweenEngland and France,begun in the mid-80s, is a case-in-point.

With installation subjectto financial penalties ofup to $938,000 per dayin the event of projectoverruns, reliable operation was absolutelyessential to the project.

Pall Plays aMajor Role inThree MileIsland CleanupThree Mile Island. The name continuesto evoke haunting memories of anation’s most serious nuclear accident.And though the infamous event onMarch 28, 1979 at the nuclear power station in the Susquehanna River nearHarrisburg, Pennsylvania, was minisculein its health consequences, it has had aprofound and lasting impact on thenuclear power industry.

The cleanup of the damaged radioactive Unit 2reactor required nearly a decade of intense

work at a cost of over $1 billion. Pall was anintegral part of that project. The company wasapproached by General Public Utilities, theowner of the nuclear reactor, to provide a sys-tem to be used in the cleanup of radioactivewater, which had gathered to a depth of 20 to30 feet above the damaged core of Unit 2. By recirculating that water through Pall filters,visual clarity would be maintained so thatworkers could remove debris and rubble withremote tools.

On April 29, 1983, a meeting was held at Pall’sScientific and Laboratory Services Group inGlen Cove, New York to map out a strategy.The intense research and development programthat followed resulted in the development of anentirely new product: a sintered stainless steelfilter which offered significant advantages overother solutions that had been proposed.Among the benefits were a simple, continuousmode of operation and elimination of a com-plex filter control system.

E X P L O R I N G N E W H O R I Z O N S

Pall went underground to play an important role in the construction of the Eurotunnel between England and France.

16

(Continued on page 17, column 3)(Continued on page 17)

The new filter was later named Pall PorousMetal Membrane (PMM) filter and extensivetests by the engineers at the cleanup site under-scored its effectiveness. Working under tighttime constraints, Pall’s plant in Cortland, NewYork began producing the material and in lessthan a year had manufactured and delivered 50canisters filled with PMM media for the cleanupof damaged Unit 2.

Ultimately, two million gallons of cleanup waterwere passed through the PMM modules and20,000 lbs. of irradiated solids were removed.For its efforts, Pall was presented with a plaquefrom General Public Utilities for its “significantcontribution” to the success of the Three MileIsland cleanup.

The story does not end with Three Mile Island,however. The new filter technology thatemerged from the project has since found itsway into a number of important — albeit moreroutine — applications at nuclear power stations.

Perhaps the single mostcritical operationalrequirement was thedependability of themassive machines whichbored and erected theconcrete structure of thetunnel. Keeping thesemachines at peak oper-ating efficiency depend-ed heavily on theperformance of theirhydraulic systems.

Aware of Pall’s experi-ence in the field, themanufacturer of thehydraulic systems usedin the boring machinescalled on Pall’s Scientificand Laboratory Services(SLS) facility inPortsmouth, England forhelp. SLS agreed to takean active and immedi-ate role, beginning withthe specification of fil-tration and cleanlinesslevels at both the designand build stages inorder to ensure trouble-free operation.

SLS also monitored theproject’s progress, pro-vided instruction to themaintenance staff, andset-up a quality systemto measure and ensureperformance. Thanksin part to Pall’s help, theformidable task of tun-neling under the EnglishChannel was completedsix months ahead ofschedule.

1 9 8 0 - 1 9 8 9

“The cleanup of the damaged radioac-tive Unit 2 reactor required nearly adecade of intense work at a cost ofover $1 billion. Pall was an integralpart of that project…For its efforts,Pall was presented with a plaque fromGeneral Public Utilities for its ‘signifi-cant contribution’ to the success of theThree Mile Island cleanup.”

Pall’s sintered stainless steel filters treated two million gallons ofcleanup water at Three Mile Island and removed 20,000 lbs. ofirradiated solids.

17

(Continued from page 16)

Protecting Patientsfrom ForeignInvadersPall’s family of health care products continuedto evolve with the changing needs of physi-cians and patients. In the area of hematology,the health care profession had been aware formany years that patients given blood transfu-sions frequently developed fevers and allergicreactions, and that repeated transfusionsresulted, in the body’s rejection of furthertransfusions.

By the late 1970s, immunologic research hadidentified leukocytes, or white blood cells indonor blood, as the major source of the prob-

lem. Leukocyte reduction by filtration came to lightas a possible solution. But filtration was not able toachieve the level of leukocyte reduction that the med-ical community felt was necessary to maximize patientsafety and ensure the effectiveness of the treatment.

A research team under the direction of Dr. David Palltook up the challenge in 1985. What emerged fromtheir laboratories after two years of intense work wasa series of new filters that surpassed anything on themarket. They made it possible to turn any red cell orplatelet component into a significantly leukocytereduced blood product for safer effective transfusions.

In 1988, Pall Corporation began selling its new leuko-cyte reduction product line, which could be attachedto any blood transfusion bag at the patient’s bedside.The health care community was clearly excited, andfilter sales soared. By the end of the year, more than650 hospitals were using Pall leukocyte reduction fil-ters, and they continue to be the most widely usedhospital filters worldwide.

Blood collection centers also became major users ofPall filters. For this application, Pall scientists devel-oped another family of leukocyte reduction productsfor the filtration of blood at the time of donation, aswell as during the storage life of the blood.

The sale of Pall blood filters to blood centers rose dra-matically in the 1990s as a greater awareness of thebenefits of leukocyte reduction began to take holdworldwide. Pall filters now play a pivotal role inimproving patient outcomes, shortening hospital stays,and cutting health care costs.

1 9 8 0 - 1 9 8 9

18

Pall researchers found a way to produce significantly leukocyte reduced blood product for safer transfusions. Shown below is a photomicrograph of leukocytes trapped on Pall filter media.

50

REAPING THE REWARDS

1990-PRESENT

The century’s last decade stirs up a brew of terrorism, civil war and AIDS. But in other ways, the world has never looked better — or smaller. The Global Village is

at last reality. It’s a world in which products, markets, technologies, even business strategies, are converging. Indeed, the real frontiers are no longer territorial; they are markets and ideas.

Pall, after nearly 50 years of hard work and preparation, finds itself perfectly positioned to enjoy the exciting opportunities now unfolding.

F requently in Pall’s history there have been com-pelling — and gratifying — examples of thepower of its products. None is greater, however,

than Centrisep air cleaners installed in U.S. Army andRoyal Air Force (U.K.) helicopters undergoing combatin Operation Desert Storm. Centrisep air cleaners weremajor contributors to keeping the helicopters in the airand pilots alive during the war against Iraq inearly 1991.

The problem that Army aviators faced at theoutset of the war was frightening: rapid powerloss as their engines loaded up with sand anddust from the harsh desert surface. As one heli-copter pilot later explained, “Operating a Cobrameant playing Russian Roulette as to whether

you could get in and out of Iraq without engine loss.”

Pall’s solution was the Improved Particle Separator (IPS),part of the Centrisep family of air cleaners. With lives atstake, it was essential that this product be brought to lifeas quickly and efficiently as possible.

It was accomplished, as Pall marshalled its own forcesfor an extraordinary, round-the-clock effort inboth the U.S. and U.K. The Improved ParticleSeparator was designed, manufactured, qualifi-cation tested, put through full flight trials, andapproved by the U.S. Army in a total of 42days. In all, 515 units were manufactured andshipped from November 1990 through February1991.

PALL FILTERS EARNED THEIR WINGS DURING OPERATION DESERT STORM

PALL’S QUALITY LEADERSHIP AND INNOVATION

The success of PallCorporation during its

first five decades is synony-mous with the history of itsquality leadership.

During the 1950s, Dr. Pall was proactivelybuilding quality into eachof the company’s filterproducts. Not content withjust inventing technologi-cally advanced filtrationmedia, Dr. Pall also fo-cused on designing robustfilter configurations andthe equipment to manufac-ture them. To help ascer-tain acceptable qualitylevels, he invented andpatented the first non-de-structive filter integrity test.

What Dr. Pall did for prod-uct quality, Abe Krasnoffdid for service quality. AsChief Executive Officer for20 years and the company’ssecond Chairman of theBoard, Abe made certainthat everyone in the orga-nization “always did whatwas right for the customer.”

Pall’s third Chairman andCEO, Maurice Hardy, tookquality to another level. Heled over 6,000 employeesthrough continuous qualityimprovement training. Hewas also one of the first inthe industry to see theimportance of the ISO 9000series of quality systemstandards. Beginning in1987 with Pall facilities inGreat Britain, he worked tobring the entire corporateuniverse of 40 facilities,including manufacturingplants, distribution centersand sales centers, up to ISO9001 or 9002 standards.

The results were dramatic and swift. Availabilityof the U.S. Army’s UH-1 Huey helicopters, lessthan 50 percent at the beginning of DesertStorm, rose to nearly 90 percent after theImproved Particle Separators were installed.Impressive results also occurred with Apaches,Cobras, Blackhawks, CH-47 Chinooks andother helicopters outfitted with the new filtersystems. For their part, the British forces expe-rienced virtually no engine losses during theentire Desert Storm campaign thanks to theCentrisep Particle Separators.

A young U.S. warrant officer who flew numer-ous missions during Desert Storm perhapssummed it up best. Stopping by Pall’s booth ata U.S. Army Desert Storm Exhibition in St.Louis, Missouri after the war, he thanked theengineers and designers on hand for theirexceptional efforts. In all probability, he said,the Centrisep air cleaner had saved his life.

R E A P I N G T H E R E W A R D S

“When I started with Pall 30 years ago, we werea $40 million company with each location fo-cused only on their own needs. Today we are abillion dollar company with facilities and inter-ests around the world. This has resulted intremendous changes in how we work togetherglobally. Pall’s purchasing operations are agood example of sharing information and ideas.No longer do our purchasing people in variousparts of the world – including Europe and Asia – work in isolation. They are constantlycommunicating with one another through e-mail, fax and telephone. As a team we haveidentified specific Pall locations whose purchas-ing staffs coordinate our worldwide require-ments for common materials andproducts. This ensures that allPall locations receive the bestprice, terms and availability. We have indeed become a bigcompany, but our ability to com-municate effectively has enabled us to turn size to our advantage.”

Kathy WalshDirector ofPurchasing

20

Pall filters helped keep helicopters in the air and pilots alive duringDesert Storm.

(Continued on page 21, column 3)

High-EndSeparationsProvides aPathway Intothe 21st Century

W ith its traditional fluid clarification busi-ness firmly established, Pall began pos-ing in the early 1990s a provocative

question: where would future sales and earningsgrowth come from?

The answer was soon forthcoming. PallCorporation, under the new leadership team ofEric Krasnoff and Jeremy Hayward-Surry, wouldadd the complementary field of high-end separa-tions to its portfolio. And with that one boldstroke, the company increased the marketpotential for its products and technologiesworldwide to over $12 billion.

While the fluid clarification business is made upof thousands of small orders, much of it replace-

ment of disposable filters, the separations busi-ness represents for Pall a totally different set ofdynamics — and opportunities. Complete sepa-rations systems, which remove large amounts ofsludgy contaminants that are otherwise difficultto filter, can easily command prices of $250,000to $2 million. Moreover, a sale can take as longas a year to 18 months to conclude.

Just as important, high-end separations gave Pallaccess to an exciting range of applicationsacross its Fluid Processing, Aeropower andHealth Care businesses that were previously outof reach.

Almost as soon as it was unveiled, separationsproved to be an unqualified success. It wasstrengthened through Pall’s acquisition of Filtron,whose microfiltration and ultrafiltration mem-branes meet the separation needs of customersin the laboratory and life sciences markets. Byfiscal 1995 the expansion of Pall’s business hadhelped the new leadership team achieve itsavowed goal: restore double-digit, top-linegrowth. What’s more, Pall now had a strategyfor growing the business in a logical, cost-effec-tive way that promised to carry it well into the21st Century.

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Eric Krasnoff, Pall’scurrent Chairmanand CEO, has madestrategic qualityplanning the linch-pin of the compa-ny’s worldwideeffort to achieve cus-tomer satisfaction.Continuousimprovementbecame the operat-ing standard for allPall activities, andProcess Mapping akey tool by which toreach that goal. Byunderstanding howa process works,Process Mappingmakes it possible toeliminate bureau-cracy and waste,reduce cycle timesand, ultimately,provide increasedvalue to our cus-tomers.

Underlying thequality initiative is theempowerment of eachPall employee to takepersonal responsibilityfor quality improvementand, in the process,reach their full potential.

Pall’s leaders haveindeed served as pio-neers. At a time whenvery few companies inthe industry were com-peting on the basis ofquality, the companyestablished itself as thequality innovator. Thiscommitment has led tosteadily increasing pro-ductivity, customer satis-faction and profitability.By refusing to accept thestatus quo, Pall has cre-ated a quality “mindset”that will continue todrive the company’s per-formance well into thenext century.

Pall’s current leadership team of (from left to right) Derek Williams, Executive Vice President and Chief Operating Officer; Eric Krasnoff, Chairmanand Chief Executive Officer; and Jeremy Hayward-Surry, President and Chief Financial Officer, have made strategic quality planning the center-piece of the company’s worldwide efforts.

(Continued from page 20)

www.pall.comPall Takes Up Residenceon the InternetOn May 26, 1996, Pall Corporation tookanother giant step into the future. OurWorld Wide Web (WWW) site on theInternet was unveiled, and it was clearthat marketing would never be the same.

By tapping into the Internet, Pall becamepart of a frenzy that some compared tothe Gold Rush era of the 1850s. Everyone

wanted to be on the Internet. For businesses, itwas an unprecedented opportunity to reach aworldwide audience, swiftly and cost-effectively.For customers, it meant easy access to the infor-mation they needed to do their jobs better.

With statistics show-ing that 30 millionpeople currentlyhave access to theInternet, and over550 million areexpected to have itby the year 2000,was there any otherplace to be?

Obviously not, Pallrealized, and set towork designing aweb site. This wasno simple taskgiven the tremen-dous competitionfor the customer’stime. A way mustbe found to notonly draw cus-tomers in, but keepthem there withuseful information.The ultimate goal:build a web sitethat is the definitivesource for filtrationand separationsinformation.

As the early success of the site has since shown,Pall is well on its way. The site invites viewers toenter via a range of industries — microelectron-ics, health care, graphic arts, energy, industrialmanufacturing, chemicals & plastics and aero-space/defense. Once there, they can navigatethrough a veritable sea of information — infor-mation that not only informs, but challenges cus-tomers to find a solution to their problems bypartnering with Pall.

Pall’s presence on the web is rapidly evolving,with the possibilities seemingly endless. Newproduct roll-outs to worldwide audiences andelectronic availability of product catalogs withfull-color graphics loom on the horizon. Andwith real-time video on the Internet not far away,another exciting marketing dimension could soonbe opening up for Pall.

For now, though, the first bold step has beentaken. And Pall has at its fingertips an electronicplatform to carry it well into the next century.

R E A P I N G T H E R E W A R D S

22

MANUFACTURINGFLEXES ITSGLOBAL MUSCLES

Nowhere does Pall’sglobal strategy come

into sharper focus thanin the field of manufac-turing, where some 17plants worldwide meetthe needs of customerswith unprecedentedspeed and efficiency. By the 1990s, Pall hadcompleted its long-rangeplans to duplicate its U.S.manufacturing opera-tions in England andJapan, thus ensuringcontinuous productionand uniform availabili-ty of its productsthroughout the world.

Today, six manufactur-ing facilities in the U.K.are nearly equal, interms of capabilities, toPall’s North Americanoperations, producingmore than 80 percent ofall finished productssold in Europe. Thismanufacturing basegives the company aninside track on opportu-nities within the emerg-ing European Com-munity, as well as with-in Eastern Europe,which holds tremendouspromise for Pall downthe road. In Japan, Pallfacilities geared to spe-cialized manufacturingsupply over 30 percentof our products sold inAsia.

Pall’s World Wide Web site on the Internet is enabling the companyto reach customers around the world more quickly and cost-effec-tively than ever before. The site invites users to navigate a veritablesea of information about the company and filtration in general.

(Continued on page 23, column 3)

Dr. Pall Caps aBrilliant Careerwith the NationalMedal ofTechnologyIn the capstone to an illustrious careerthat has yielded 108 U.S. patents and therespect and admiration of his professionworldwide, Dr. David B. Pall was award-ed the National Medal of Technology onNovember 13, 1990 by President GeorgeBush in ceremonies at the White House.

The National Medal of Technology is thehighest award bestowed on Americantechnologists by the President. It recog-

nizes extraordinary individuals for their out-standing contributions to improving thewell-being of the United States through the de-velopment and application of technology.

Dr. Pall has indeed met that criterion. In a

career spanning four decades, he fathered tech-nologies that spawned hundreds of successfulproducts resulting in improved safety, efficiencyand economy across a broad sweep of industri-al and health disciplines. He used a rare com-bination of creative genius and business savvyto transform a one-man shop behind a shoe-shine parlor into an acknowledged worldleader in the field of fine filters and fluid clarifi-cation devices.

For the soft-spoken, scholarly individual whoread a book a day as a child, and knew at theage of 12 he would become a chemist, theNational Medal of Technology was a fitting and,perhaps for those who know him, not unex-pected tribute. He had risen to the top of hisbusiness field — but had remained a scientistthroughout. He had built a company thatreflected his values and intelligence.

Bram Appel summed it up best at a dinner sev-eral years ago honoring his life-long friend:“Pall Corporation is stamped with the ethos ofDavid Pall. Because he is brilliant, David sur-rounded himself with brilliant people. Becausehe is modest, he surrounded himself with peo-ple who eschew arrogance. And because he iscreative, he assembled an imaginative andhighly inventive team that is the pure essenceof Pall.”

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The manufacturingprocess often begins inEast Hills, New York,where products from ourresearch and develop-ment department enterprototype production and,when ready, are “export-ed” to Pall manufactur-ing facilities worldwide.Specialization and repli-cation are the hallmarksof this global network. Ablood filter product, forexample, is produced at astate-of-the-art plant inPuerto Rico as well as at acomparable facility inNewquay, U.K., while fil-ters for the semiconductorindustry are produced ata plant in Cortland, NewYork and in IIfracombeand Portsmouth, U.K. By the same token, filters for the aerospaceindustry emerge from Pall plants in New PortRichey and Pinellas Park,Florida, U.S., and inPortsmouth andRedruth,U.K.

Pall’s worldwide manu-facturing network —along with a strong tech-nical, distribution, salesand marketing presencethat has built up aroundit — is enabling the com-pany to operate locallymany times over. Andthat’s allowing Pall tocapitalize on marketopportunities it neverthought possible 30 and40 years ago.

President Bush, with wife Barbara looking on, presents Dr. Pall with the National Medal of Technology on November 13, 1990, at a WhiteHouse ceremony. The award is the highest honor the President can bestow on an American technologist.

(Continued from page 22)

Pall’s Global VisionComes into Sharp FocusConsider: if the world were today a townof 1,000 people, there would be 564Asians, 210 Europeans, 86 Africans, 80South Americans, and 60 North Americans.

Pall began to see over 30 years ago that itsreal future lay outside the borders of theUnited States. The purchase in 1962 of a

small engineering company in England made thatglobal vision real. From there, Pall began to putin place the European building blocks of its ex-panding enterprise: subsidiaries with direct salesforces in Germany (1966), Italy (1973), France(1975), Switzerland (1983), Austria (1984) andSpain (1988).

Japan provided Pall witha beachhead in thegiant Asianmarketplace.For nearly20 years,weworkedwith adistribu-tor therewhohelped usachieve tremen-dous visibility withinthe Japanese pharmaceuticaland electronic industries. His suddendeath in 1980 left Pall with a huge vacuum in itsAsian business. That changed dramatically withthe creation in 1982 of Nihon Pall, our whollyowned subsidiary. Today, Pall products arebelieved to have the largest share of such majorJapanese filter markets as pharmaceutical andfluid processing. In addition, Nihon Pall pro-duces filters for the Japanese Defense Departmentand is a leading supplier of filters for medicalapplications. Few American companies haveachieved that level of success in Japan. A similarpattern of success is emerging in Australia where

Pall acquired its distributor, Filter Pall, in 1994.

Pall has also become an active player inSingapore and Korea while in China, with its 1.2billion people and steady drive toward a freemarket economy, we’re gaining a strong marketposition through such products as our cold beerstabilization system and Pall blowback andbackwash filter systems for the country’s oil pro-cessing and chemical industries.

Determined to establish a presence wherevergrowth opportunities exist, Pall has morerecently been developing its Eastern Europeanbusiness. In 1992, we formed Pall Poland Ltd.,which currently has 23 employees, and set up arepresentative office in Moscow staffed by Pallpeople to serve the Commonwealth ofIndependent States (CIS), including Russia.The company also has offices in Hungary andin the Czech Republic.

The latest region of emerging opportunity forPall is India. In this land of nearly a billion peo-ple, we hope to start trading by the end of theyear (and eventually build a factory) through a

joint venture, based in Bombay, with anIndian partner.

In retrospect, ourentry into the

global mar-ket 35

yearsago hashadsignifi-

cancebeyond

anyone’simagination.

Today, 60 per-cent of Pall sales

are generated outsidethe Western Hemisphere. That

includes about 41% from Europe and 19% fromAsia. We have a well-established manufactur-ing presence in England, Puerto Rico and Japan,and have entered into alliances with a numberof global partners that have given us a vast andpowerful presence in regions of the worldwhere we need to be.

At Pall, we have truly sown the seeds of global-ization over the years — and are now reapingthe rewards.

R E A P I N G T H E R E W A R D S

★ PALL OWNED SALES AND DISTRIBUTION CENTERS

■ MANUFACTURINGFACILITIES

▲ RESEARCH ANDDEVELOPMENT

● SLS LOCATIONS

24

Throughout its history,Pall has partnered with

companies that havestrengthened and expand-ed its market presence. In1960, for example, the pur-chase of Hollinger MachineCo., Ltd., SaniHydro Corp.,Ltd. and Beaumont PumpsCo., Ltd. gave Pall entree tothe vast Canadian market-place.

More recently, the acquisi-tion of Filtron TechnologyCorporation in January of1995 provided Pall with afoothold in the huge labo-ratory and life sciencesmarkets. Pall Filtron,based in Northborough,Massachusetts, employs 75 people in the U.S.,Germany, France,Scandinavia and TheNetherlands.

Another recent acquisitioninvolving the MedicalPlastics business unit ofBayer Corporationincreased Pall’s presence inthe patient protection field.More specifically, it led tothe creation in early 1996of Medsep Corporation, a450-employee businesswhich manufactures andsells plastic blood collectionsystems used in the collec-tion and processing ofwhole blood components.Pall filters are integral partsof these systems, permittingleukocyte reduction ofblood components prior totheir storage at regionalblood centers.

Pall Filtron and MedsepCorporation are indeedproving to be outstandingexamples of how to grow amodern day family.

GROWING THE PALL FAMILY

25

CELEBRATING PALL’S PEOPLEPALL NEWQUAY, UK

MEDSEP, USA

MEDSEP, USA

POLAND

PALL NEWQUAY, UK

PALL FILTRON, USA

EAST HILLS, USA

EUROPA HOUSE, UK

WALTON ROAD, UK

FORT MEYERS, USAEAST HILLS, USA

NEW PORT RICHEY, USA

PALL RAI, USA

CELEBRATING PALL’S PEOPLEJAPAN

SPAIN

SPAIN

JAPAN

KOREA

JAPAN

ITALY

ITALY

AUSTRALIA

26

AUSTRIA

SWITZERLAND

GERMANY

FRANCE

FRANCE

GERMANY

PUERTO RICO

PUERTO RICO

TAIWAN

HONG KONG

CANADA

27

28

CELEBRATING PALL’S PEOPLE

PALL ILFRACOMBE

PALL TRINCOR, USA

RUSSELL ASSOCIATES, USA

PTM CORTLAND,USA

PTM CORTLAND, USA

PTM CORTLAND

SINGAPORE

SINGAPORE

INDONESIA

CHINA

CHINA

Filtration.

Separation.

Solution.™