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CLARCOR Reports Third Quarter Results

We project 2012 cash from operations to be between $125 million and $135 million, capital expenditures to be between $35 million and $40 million and our average tax rate to be between 32.5% and 33.5%.

CLARCOR will be holding a conference call to discuss the third quarter 2012 results at 10:00 a.m. CST on September 20, 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 6433348. The replay will be available through October 4, 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, our projections with respect to 2012 diluted earnings per share (including our implied projected fourth quarter diluted earnings per share range), 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 belief that we will experience a rebound in our base domestic business with respect to heavy-duty engine filters when the U.S. economy accelerates; statements regarding our belief that we will not realize the full sales potential of aftermarket programs through OE dealers launched in the third quarter until the second half of 2013; statements regarding our belief that we continue to be well-positioned to capitalize on China’s projected long-term first-fit and aftermarket heavy-duty engine filtration growth; statements regarding our belief that many orders of new air filtration systems by hog farmers will be deferred until the summer of 2013; statements regarding our belief that we are well-positioned to achieve our long-term operating margin goal of 15% in the Industrial/Environmental Filtration segment in the next three to four years; statements regarding our intent to aggressively pursue several significant sales opportunities in our pipeline with respect to our Packaging segment over the remainder of the year; statements regarding our expectation that our Packaging segment operating performance will continue to improve sequentially in the fourth quarter; statements regarding our anticipated increase in sales of 8% in the fourth quarter of 2012 compared to the third quarter of 2012; statements regarding our expectation that higher fourth quarter sales will be driven by a significant backlog of aviation fuel, marine fuel and petrochemical filtration vessel sales in Europe, the Middle East and Africa and higher sales of heavy-duty engine filtration products in markets outside the U.S. including China where we believe we will benefit from the launch of an OEM aftermarket program with a large local diesel engine manufacturer; statements regarding our expectation of flat sales in the domestic heavy-duty engine filter aftermarket in the fourth quarter from the third quarter of 2012; statements regarding our long-term expectation to grow sales between 6.0% and 10.0% annually, and that we will fall short of that goal this year; statements regarding our belief that we are well-positioned to achieve between 6.0% and 10.0% sales growth going forward; statements regarding our belief that we possess a solid foundation for future long-term growth based upon the many initiatives we continue to develop including adding new heavy-duty engine filtration distributors and broadening our product offerings both in the U.S. and abroad; statements regarding our belief about our position in the oil and gas filtration market compared with other markets; statements regarding our belief that we are well positioned within a growing filtration industry to continue to capitalize on future profitable growth opportunities including our ability to share our advanced media development technology across our diverse business units; our estimates related to the sales and operating profit growth comparison impact of the fifty-third week in 2011 and the fourteenth week in the fourth quarter of 2011 compared with comparable period in 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 2012 diluted earnings per share and 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 THIRD QUARTER RESULTS
 
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
       
Quarter Ended Nine Months
September 1, August 27, September 1, August 27,
2012 2011 2012 2011
 
Net sales $ 286,733 $ 284,819 $ 828,852 $ 819,072
Cost of sales   191,845     188,945     549,563     542,783  
 
Gross profit 94,888 95,874 279,289 276,289
 
Selling and administrative expenses   48,707     49,413     149,685     149,757  
 
Operating profit   46,181     46,461     129,604     126,532  
 
Other income (expense):
Interest expense (176 ) (87 ) (364 ) (352 )
Interest income 156 170 459 446
Other, net   (186 )   16     309     (412 )
 
  (206 )   99     404     (318 )
 
Earnings before income taxes 45,975 46,560 130,008 126,214
 
Provision for income taxes   15,564     14,401     43,026     39,253  
 
Net earnings 30,411 32,159 86,982 86,961
 

Net (earnings) losses attributable to noncontrolling interests

  (141 )   (89 )   (306 )   (202 )
 
Net earnings attributable to CLARCOR Inc $ 30,270   $ 32,070   $ 86,676   $ 86,759  
 
Net earning per share attributable to CLARCOR Inc. - Basic $ 0.60   $ 0.63   $ 1.72   $ 1.72  
Net earning per share attributable to CLARCOR Inc. - Diluted $ 0.60   $ 0.63   $ 1.70   $ 1.69  
 
Weighted average number of shares outstanding - Basic   50,283,340     50,527,206     50,357,567     50,563,556  
Weighted average number of shares outstanding - Diluted   50,863,894     51,200,241     50,979,542     51,256,621  
 
Dividends paid per share $ 0.1200   $ 0.1050   $ 0.3600   $ 0.3150  
 
 
 
 
 
 
CLARCOR INC. 2012 UNAUDITED THIRD QUARTER RESULTS, continued
 
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
        September 1,   December 3,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ 165,347 $ 155,999
Restricted cash 869 1,105

Accounts receivable, less allowance for losses of $9,524 and $9,795, respectively

212,687 206,664
Inventories 210,521 200,274
Deferred income taxes 32,377 25,974
Income tax receivable - 3,373
Prepaid expenses and other current assets   7,324     7,510  
Total current assets   629,125     600,899  
 
 
Plant assets, at cost, less accumulated depreciation of $309,822 and $293,111, respectively 195,239 184,992
Assets held for sale 2,000 2,000
Goodwill 241,602 235,530
Acquired intangibles, less accumulated amortization 96,871 98,674
Deferred income taxes 361 749
Other noncurrent assets   16,221     12,089  
Total assets $ 1,181,419   $ 1,134,933  
 
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 208 $ 1,289
Accounts payable and accrued liabilities 166,190 155,585
Income taxes payable   1,504     3,176  
Total current liabilities   167,902     160,050  
 
Long-term debt, less current portion 16,551 15,981
Long-term pension and postretirement healthcare benefits liabilities 35,124 74,524
Deferred income taxes 54,586 36,194
Other long-term liabilities   8,774     11,069  
Total liabilities   282,937     297,818  
 
Contingencies
Redeemable noncontrolling interests 1,707 1,557
 
SHAREHOLDERS' EQUITY
Capital stock 50,076 50,145
Capital in excess of par value 14,223 19,453
Accumulated other comprehensive loss (46,625 ) (44,391 )
Retained earnings   878,193     809,520  
Total CLARCOR Inc. equity   895,867     834,727  
Noncontrolling interests   908     831  
Total shareholders' equity   896,775     835,558  
Total liabilities and shareholders' equity $ 1,181,419   $ 1,134,933  
 
 
 
 
 
 
CLARCOR INC. 2012 UNAUDITED THIRD QUARTER RESULTS, continued
 
CONSOLIDATED CONDENSED CASH FLOWS
(Dollars in thousands)
         
Nine Months Ended
September 1, August 27,
2012 2011
Cash flows from operating activities:
Net earnings $ 86,982 $ 86,961
Depreciation 19,387 20,679
Amortization 4,383 4,160
Other noncash items (24 ) 180
Net loss (gain) on disposition of assets (792 ) 168
Stock-based compensation expense 5,397 4,786
Excess tax benefit from stock-based compensation (2,606 ) (2,338 )
Deferred income taxes 8,355 (1,353 )
Changes in assets and liabilities   (41,325 )   (43,934 )
Net cash provided by operating activities   79,757     69,309  
 
Cash flows from investing activities:
Restricted cash (79 ) (317 )
Business acquisitions, net of cash acquired (11,974 ) (14,160 )
Additions to plant assets (29,473 ) (16,789 )
Proceeds from disposition of plant assets 502 244
Investment in affiliates   (801 )   (100 )
Net cash used in investing activities   (41,825 )   (31,122 )
 
Cash flows from financing activities:
Payments on long-term debt (1,253 ) (1,825 )
Payment of financing costs (564 ) -
Sale of capital stock under stock option and employee purchase plans 5,389 6,900
Purchase of treasury stock (16,724 ) (18,204 )
Excess tax benefits from stock-based compensation 2,606 2,338
Dividend paid to noncontrolling interests - (321 )
Cash dividends paid   (18,132 )   (15,927 )
Net cash used in financing activities   (28,678 )   (27,039 )
 
Net effect of exchange rate changes on cash   94     (1,105 )
 
Net change in cash and cash equivalents 9,348 10,043
 
Cash and cash equivalents, beginning of period   155,999     117,022  
 
Cash and cash equivalents, end of period $ 165,347   $ 127,065  
 
Cash paid during the period for:
Interest $ 319   $ 95  
Income taxes, net of refunds $ 27,827   $ 26,505  
 
 
 
 
 
 
CLARCOR INC. 2012 UNAUDITED THIRD QUARTER RESULTS, continued
 
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
       
Quarter Ended Nine Months
September 1, August 27, September 1, August 27,
2012 2011 2012 2011
Net sales by segment:
Engine/Mobile Filtration $ 126,903 $ 129,467 $ 377,863 $ 372,071
Industrial/Environmental Filtration 138,532 132,380 394,275 377,998
Packaging   21,298     22,972     56,714     69,003  
$ 286,733   $ 284,819   $ 828,852   $ 819,072  
 
Operating profit by segment:
Engine/Mobile Filtration $ 28,478 $ 30,175 $ 81,403 $ 80,969
Industrial/Environmental Filtration 15,741 13,650 44,193 37,077
Packaging   1,962     2,636     4,008     8,486  
$ 46,181   $ 46,461   $ 129,604   $ 126,532  
 
Operating margin by segment:
Engine/Mobile Filtration 22.4 % 23.3 % 21.5 % 21.8 %
Industrial/Environmental Filtration 11.4 % 10.3 % 11.2 % 9.8 %
Packaging   9.2 %   11.5 %   7.1 %   12.3 %
  16.1 %   16.3 %   15.6 %   15.4 %
 
 
 




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