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TheStreet Open House

CLARCOR Reports Second Quarter Results

Stock quotes in this article: CLC

CLARCOR will be holding a conference call to discuss the second quarter 2012 results at 10:00 a.m. CST on June 21, 2012. Interested parties can listen to the conference call at www.clarcor.com or www.viavid.net. A replay will be available on these websites and also at 877-870-5176 or 858-384-5517 by providing confirmation code 1664629. The replay will be available through July 5, 2012 by telephone and for 30 days on the Internet.

CLARCOR is based in Franklin, Tennessee, and is a diversified marketer and manufacturer of mobile, industrial and environmental filtration products and consumer and industrial packaging products sold in domestic and international markets. Common shares of CLARCOR are traded on the New York Stock Exchange under the symbol CLC.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements made in this press release other than statements of historical fact, are forward-looking statements. These statements may be identified from use of the words “may,” “should,” “could,” “potential,” “continue,” “plan,” “forecast,” “estimate,” “project,” “believe,” “intent,” “anticipate,” “expect,” “target,” “is likely,” “will,” or the negative of these terms, and similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, among other things: statements and assumptions relating to anticipated future growth and results of operations, including the anticipated 2012 performance of the Company and each of its segments, our projections with respect to 2012 estimated sales growth and 2012 estimated operating margins for the Company and each of its segments, and our projections with respect to 2012 cash from operations, 2012 capital expenditures and 2012 effective tax rates; statements regarding management's short-term and long-term performance goals; statements regarding anticipated order patterns from our customers or the anticipated economic conditions of the industries and markets that we serve; statements related to the performance of the U.S. and other economies generally; statements relating to the anticipated effects on results of operations or financial condition from recent and expected developments or events; statements regarding our anticipated execution throughout 2012 of managing administrative costs while supporting profitable growth; statements regarding uncertain conditions in China for the remainder of 2012, the strength of our customer relationships in China, and our ability to capitalize on China’s projected long-term filtration growth; statements related to the anticipated support to our domestic heavy-duty engine filter sales from the launch of two significant OEM aftermarket programs; statements regarding our ability to achieve our long-term operating margin goal of 15% in the Industrial/Environmental segment in the next three to four years; statements regarding the further development of our natural gas business in the U.S. and internationally, the anticipated growth of natural gas sales in the U.S. and Asia in 2012, our ability to participate in the expected global growth in the natural gas market, and the long-term potential of the natural gas market; statements regarding our outlook for China in the Mobile/Engine Filtration segment for the remainder of 2012; statements regarding our uncertain outlook in Europe for the Industrial/Environmental Filtration segment for the remainder of 2012, and that our strong backlog in this segment in Europe, the Middle East and Africa along with expected sales growth driven by sales of air filtration products to the swine industry could facilitate the continuation of sales growth in the third and fourth quarters; statements regarding our aggressive pursuit of significant sales opportunities in our Packaging segment pipeline over the remainder of 2012, and our expectations regarding sequential improvements in our Packaging segment over the third and fourth quarters of 2012; and any other statements or assumptions that are not historical facts. The Company believes that its expectations are based on reasonable assumptions. However, these forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Company's actual results, performance or achievements, or industry results, to differ materially from the Company's expectations of future results, performance or achievements expressed or implied by these forward-looking statements. The Company's past results of operations do not necessarily indicate its future results. The Company’s future results may differ materially from the Company’s past results as a result of various risks and uncertainties, including the risk factors discussed in the “Risk Factors” section of the Company’s 2011 Form 10-K and other risk factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release. Except as otherwise required by applicable laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements or the risk factors described in this press release, including estimated sales growth and estimated operating margin levels for 2012 for the Company and its business segments, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release.

TABLES FOLLOW

CLARCOR INC. 2012 UNAUDITED SECOND QUARTER RESULTS
 
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
       
Quarter Ended Six Months
June 2, May 28, June 2, May 28,
2012 2011 2012 2011
 
Net sales $ 284,855 $ 288,533 $ 542,119 $ 534,253
Cost of sales   186,670     189,071     357,719     353,838  
 
Gross profit 98,185 99,462 184,400 180,415
 
Selling and administrative expenses   49,074     50,682     100,977     100,344  
 
Operating profit   49,111     48,780     83,423     80,071  
 
Other income (expense):
Interest expense (88 ) (221 ) (188 ) (265 )
Interest income 169 239 303 276
Other, net   (117 )   (228 )   495     (428 )
 
  (36 )   (210 )   610     (417 )
 
Earnings before income taxes 49,075 48,570 84,033 79,654
 
Provision for income taxes   15,996     15,689     27,462     24,852  
 
Net earnings 33,079 32,881 56,571 54,802
 

 

Net (earnings) losses attributable to noncontrolling interests

  (152 )   (73 )   (165 )   (113 )
 
Net earnings attributable to CLARCOR Inc $ 32,927   $ 32,808   $ 56,406   $ 54,689  
 
Net earning per share attributable to CLARCOR Inc. - Basic $ 0.65   $ 0.65   $ 1.12   $ 1.08  
Net earning per share attributable to CLARCOR Inc. - Diluted $ 0.65   $ 0.64   $ 1.11   $ 1.07  
 
Weighted average number of shares outstanding - Basic   50,378,164     50,594,963     50,394,680     50,581,731  
Weighted average number of shares outstanding - Diluted   50,980,347     51,282,383     51,037,366     51,284,811  
 
Dividends paid per share $ 0.1200   $ 0.1050   $ 0.2400   $ 0.2100  
CLARCOR INC. 2012 UNAUDITED SECOND QUARTER RESULTS, continued
     
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 2, December 3,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ 140,574 $ 155,999
Restricted cash 616 1,105

Accounts receivable, less allowance for losses of $10,266 and $9,795, respectively

208,130 206,664
Inventories 210,896 200,274
Deferred income taxes 26,156 25,974
Income tax receivable - 3,373
Prepaid expenses and other current assets   7,169     7,510  
Total current assets   593,541     600,899  
 
 
Plant assets, at cost, less accumulated depreciation of $303,845 and $293,111, respectively 192,105 184,992
Assets held for sale 2,000 2,000
Goodwill 240,740 235,530
Acquired intangibles, less accumulated amortization 98,071 98,674
Deferred income taxes 505 749
Other noncurrent assets   15,898     12,089  
Total assets $ 1,142,860   $ 1,134,933  
 
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 1,321 $ 1,289
Accounts payable and accrued liabilities 142,610 155,585
Income taxes payable   847     3,176  
Total current liabilities   144,778     160,050  
 
Long-term debt, less current portion 16,598 15,981
Long-term pension and postretirement healthcare benefits liabilities 59,921 74,524
Deferred income taxes 42,240 36,194
Other long-term liabilities   8,759     11,069  
Total liabilities   272,296     297,818  
 
Contingencies
Redeemable noncontrolling interests 1,615 1,557
 
SHAREHOLDERS' EQUITY
Capital stock 50,141 50,145
Capital in excess of par value 16,773 19,453
Accumulated other comprehensive loss (52,698 ) (44,391 )
Retained earnings   853,959     809,520  
Total CLARCOR Inc. equity   868,175     834,727  
Noncontrolling interests   774     831  
Total shareholders' equity   868,949     835,558  
Total liabilities and shareholders' equity $ 1,142,860   $ 1,134,933  
CLARCOR INC. 2012 UNAUDITED SECOND QUARTER RESULTS, continued
 
CONSOLIDATED CONDENSED CASH FLOWS
(Dollars in thousands)
   
Six Months Ended
June 2, May 28,
2012 2011
Cash flows from operating activities:
Net earnings $ 56,571 $ 54,802
Depreciation 13,192 13,956
Amortization 2,877 2,750
Other noncash items (67 ) (175 )
Net loss (gain) on disposition of plant assets (553 ) 31
Stock-based compensation expense 4,152 3,700
Excess tax benefit from stock-based compensation (2,487 ) (2,041 )
Deferred income taxes 8,890 (729 )
Changes in assets and liabilities   (49,197 )   (33,138 )
Net cash provided by operating activities   33,378     39,156  
 
Cash flows from investing activities:
Restricted cash 91 172
Business acquisitions, net of cash acquired (10,510 ) (10,455 )
Additions to plant assets (19,398 ) (9,271 )
Proceeds from disposition of plant assets 446 233
Investment in affiliates   (357 )   -  
Net cash used in investing activities   (29,728 )   (19,321 )
 
Cash flows from financing activities:
Payments on long-term debt (79 ) (1,797 )
Payment of financing costs (564 ) -
Sale of capital stock under stock option and employee purchase plans 3,864 5,820
Purchase of treasury stock (11,383 ) (8,892 )
Excess tax benefits from stock-based compensation 2,487 2,041
Cash dividends paid   (12,096 )   (10,618 )
Net cash used in financing activities   (17,771 )   (13,446 )
 
Net effect of exchange rate changes on cash   (1,304 )   (1,468 )
 
Net change in cash and cash equivalents (15,425 ) 4,921
 
Cash and cash equivalents, beginning of period   155,999     117,022  
 
Cash and cash equivalents, end of period $ 140,574   $ 121,943  
 
Cash paid during the period for:
Interest $ 144   $ 70  
Income taxes, net of refunds $ 18,849   $ 13,785  
CLARCOR INC. 2012 UNAUDITED SECOND QUARTER RESULTS, continued
 
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
       
Quarter Ended Six Months
June 2, May 28, June 2, May 28,
2012 2011 2012 2011
Net sales by segment:
Engine/Mobile Filtration $ 130,677 $ 131,276 $ 250,960 $ 242,604
Industrial/Environmental Filtration 134,629 133,499 255,743 245,618
Packaging   19,549     23,758     35,416     46,031  
$ 284,855   $ 288,533   $ 542,119   $ 534,253  
 
Operating profit by segment:
Engine/Mobile Filtration $ 29,628 $ 29,592 $ 52,925 $ 50,794
Industrial/Environmental Filtration 17,747 16,179 28,452 23,427
Packaging   1,736     3,009     2,046     5,850  
$ 49,111   $ 48,780   $ 83,423   $ 80,071  
 
 
Operating margin by segment:
Engine/Mobile Filtration 22.7 % 22.5 % 21.1 % 20.9 %
Industrial/Environmental Filtration 13.2 % 12.1 % 11.1 % 9.5 %
Packaging   8.9 %   12.7 %   5.8 %   12.7 %
  17.2 %   16.9 %   15.4 %   15.0 %




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