1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED NOVEMBER 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________________________
COMMISSION FILE NUMBER 1-11024
CLARCOR Inc.
---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-0922490
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2323 Sixth Street, P.O. Box 7007, Rockford, Illinois 61125
- ---------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 815-962-8867
------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
Common Stock, par value $1.00 per share New York Stock Exchange
Preferred Stock Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:
None
----------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
The aggregate market value (based on the closing price of registrant's Common
Stock on February 10, 1999 as reported on the New York Stock Exchange Composite
Transactions) of the voting stock held by non-affiliates of the registrant as at
February 10, 1999 is $465,005,418.
The number of outstanding shares of Common Stock, as of February 10, 1999 is
23,980,125 shares.
Certain portions of the registrant's 1998 Annual Report to Shareholders are
incorporated by reference in Parts I, II and IV. Certain portions of the
registrant's Proxy Statement dated February 18, 1999 for the Annual Meeting of
Shareholders to be held on March 23, 1999 are incorporated by reference in Part
III.
2
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(a) General Development of Business
CLARCOR Inc. ("CLARCOR") was organized in 1904 as an Illinois corporation
and in 1969 was reincorporated in the State of Delaware. As used herein, the
"Company" refers to CLARCOR and its subsidiaries unless the context otherwise
requires.
The Company's fiscal year ends on the Saturday closest to November 30. For
fiscal year 1998, the year ended on November 28, 1998 and for fiscal year 1997,
the year ended on November 29, 1997. In this Form 10-K, all references to fiscal
years are shown to begin on December 1 and end on November 30 for clarity of
presentation.
(i) Certain Significant Developments.
Stock Split. On March 24, 1998, the Board of Directors of the Company
declared a three-for-two stock split in the form of a 50% stock dividend
effective April 24, 1998 to shareholders of record April 10, 1998. All share and
per share amounts for all periods presented have been adjusted to reflect the
stock split.
Other. During 1998 the Company purchased Air Technologies, Inc. ("ATI"), a
manufacturer of air filtration products, and also purchased a small distributor
of air filtration products. In addition, the Company's investment in Baldwin
Filters (Aust.) Pty. Ltd. was increased to 100% from 50% and the Company's
investment in Baldwin-Unifil S.A. was increased to 80% from 70%. Each of the
transactions were cash transactions and the transactions did not have a
significant impact on the operating results of the Company.
(ii) Summary of Business Operations.
During 1998, the Company conducted business in three principal industry
segments: (1) Engine/ Mobile Filtration, (2) Industrial/Environmental Filtration
and (3) Packaging (formerly referred to as Consumer Packaging).
Engine/Mobile Filtration. Engine/Mobile Filtration includes filters for
oil, air, fuel, coolants and hydraulic fluids for trucks, automobiles,
construction and industrial equipment, locomotives, marine and agricultural
equipment.
Industrial/Environmental Filtration. Industrial/Environmental Filtration
products are used primarily for commercial and industrial applications. The
segment's industrial and environmental products include air and antimicrobial
treated filters and high efficiency electronic air cleaners for commercial
buildings, factories, residential buildings, paint spray booths, gas turbine
systems, medical facilities, motor vehicle cabins, clean rooms, compressors and
dust collector systems.
Packaging. Packaging products include a wide variety of custom styled
containers and packaging items used primarily by the food, spice, drug,
toiletries and chemical specialties industries. The segment's products include
lithographed metal containers, flat sheet decorated metal, combination metal and
plastic containers, plastic closures, composite containers and various
specialties, such as spools for wire and cable, dispensers for razor blades and
outer shells for dry cell batteries and film canisters.
(b) Financial Information About Industry Segments
Business segment information for the fiscal years 1996 through 1998 is
included on pages 26 and 27 of the Company's 1998 Annual Report to Shareholders
(the "Annual Report"), is incorporated herein by reference and is filed as part
of Exhibit 13(a)(vi) to this 1998 Annual Report on Form 10-K ("1998 Form 10-K").
2
3
(c) Narrative Description of the Business
ENGINE/MOBILE FILTRATION
The Company's engine/mobile filtration products business is conducted by
the following wholly-owned subsidiaries: Baldwin Filters, Inc.; Clark Filter,
Inc.; Hastings Filters, Inc.; Baldwin Filters (Aust.) Pty. Ltd.; Baldwin Filters
N.V.; and Baldwin Filters Limited. In addition, the Company owns (i) 90% of
Filtros Baldwin de Mexico ("FIBAMEX"), (ii) 70% of Baldwin-Weifang Filters Ltd.,
and (iii) 80% of Baldwin-Unifil S.A.
The companies market a full line of oil, air, fuel, coolant and hydraulic
fluid filters. The Company's filters are used in a wide variety of applications
including engines and industrial equipment and in processes where filter
efficiency, reliability and durability are essential. Impure air or fluid flows
through semi-porous paper, cotton, synthetic, chemical or membrane filter media
with high-efficiency filtration characteristics. The impurities on the media are
disposed of when the filter is changed. The segment's filters are sold
throughout the United States, Canada and worldwide, primarily in the replacement
market for trucks, automobiles, locomotives, marine, construction, industrial
and agricultural equipment. In addition, some first-fit filters are sold to the
original equipment market.
INDUSTRIAL/ENVIRONMENTAL FILTRATION
The Company's industrial/environmental filtration products business is
conducted by the following wholly-owned subsidiaries: Airguard Industries, Inc.
("Airguard"); Airklean Engineering Pte. Ltd.; Airguard Asia Sdn. Bhd.; United
Air Specialists, Inc.; and United Air Specialists (U.K.) Ltd.
The companies market commercial and industrial air filters and systems,
electrostatic contamination control equipment and electrostatic high precision
spraying equipment. The air filters and systems remove contaminants from
recirculated indoor air and from process air which is exhausted outdoors. The
products represent a complete line of air cleaners with a wide range of uses for
maintaining high quality standards in interior air and exterior pollution
control. These products are sold throughout the United States, Canada and
worldwide.
PACKAGING
The Company's consumer and industrial packaging products business is
conducted by a wholly-owned subsidiary, J. L. Clark, Inc. ("J. L. Clark").
In fiscal 1998 a wide variety of different types and sizes of containers
and metal packaging specialties were manufactured for the Company's customers.
Metal, plastic and paper containers, combination metal/plastic containers and
plastic closures manufactured by the Company are used in packaging a wide
variety of dry and paste form products, such as food specialties (tea, spices,
dry bakery products, potato chips, pretzels, candy and other confections);
beverages and juices; cosmetics and toiletries; drugs and pharmaceuticals; and
chemical specialties (hand cleaners, soaps and special cleaning compounds).
Metal packaging specialties include shells for dry batteries, film canisters,
dispensers for razor blades, candles, spools for insulated and fine wire, and
custom decorated flat steel sheets.
Containers and metal packaging specialties are manufactured only upon
orders received from customers, and individualized containers and packaging
specialties are designed and manufactured, usually with distinctive decoration,
to meet each customer's marketing and packaging requirements and specifications.
DISTRIBUTION
Engine/Mobile Filtration and Industrial/Environmental Filtration products
are sold primarily through a combination of over 3,300 independent distributors
and dealers for original equipment manufacturers.
3
4
The engine/mobile segment also distributes filtration products worldwide
through each of its subsidiaries. Baldwin Filters N.V. and Baldwin Filters
Limited primarily serve the European markets. Baldwin Filters (Aust.) Pty. Ltd.,
markets heavy duty liquid and air filters in Australia and New Zealand. FIBAMEX
manufactures filters in Mexico with distribution in Mexico and Central and South
America. Through the Company's investment in Baldwin-Weifang Filters Ltd., heavy
duty filters are manufactured in China for distribution in China and Southeast
Asia. Additionally, through Baldwin-Unifil S.A., air filtration products are
manufactured in South Africa with distribution throughout Africa, Great Britain,
Europe and the Middle East.
The industrial/environmental segment also distributes and services
filtration products through company-owned branches and wholly-owned
subsidiaries. The branches are located throughout the United States and in
Germany, and the segment's subsidiaries are located in Singapore, Malaysia and
England.
Packaging salespersons call directly on customers and prospective customers
for containers and packaging specialties. Each salesperson is trained in all
aspects of the Company's manufacturing processes with respect to the products
sold and is qualified to consult with customers and prospective customers
concerning the details of their particular requirements. In addition,
salespersons with expertise in specific areas, such as flat-sheet decorating,
are focused on specific customers and markets.
CLASS OF PRODUCTS
No class of products accounted for as much as 10% of the total sales of the
Company.
RAW MATERIAL
Steel, filter media, cartons, aluminum sheet and coil, stainless steel,
chrome vanadium, chrome silicon, resins, roll paper, bulk and roll plastic
materials and cotton, wood and synthetic fibers and adhesives are the most
important raw materials used in the manufacture of the Company's products. All
of these are purchased or are available from a variety of sources. The Company
has no long-term purchase commitments. The Company did not experience shortages
in the supply of raw materials during 1998.
PATENTS
Certain features of some of the Company's products are covered by domestic
and, in some cases, foreign patents or patent applications. While these patents
are valuable and important for certain products, the Company does not believe
that its competitive position is dependent upon patent protection.
CUSTOMERS
The largest 10 customers of the Engine/Mobile Filtration segment accounted
for 16.2% of the $223,761,000 of fiscal year 1998 sales of such segment.
The largest 10 customers of the Industrial/Environmental Filtration segment
accounted for 16.9% of the $135,828,000 of fiscal year 1998 sales of such
segment.
The largest 10 customers of the Packaging segment accounted for 52.6% of
the $67,184,000 of fiscal year 1998 sales of such segment.
No single customer accounted for 10% or more of the Company's consolidated
1998 sales.
BACKLOG
At November 30, 1998, the Company had a backlog of firm orders for products
amounting to approximately $36,100,000. The comparable backlog figure for 1997
was approximately $43,400,000
4
5
and included orders for promotional packaging products and a $2,800,000 order
for gas turbine filtration equipment which did not recur in 1998. All of the
orders on hand at November 30, 1998 are expected to be filled during fiscal
1999.
COMPETITION
The Company encounters strong competition in the sale of all of its
products. The Company competes in a number of filtration markets against a
variety of competitors. The Company is unable to state its relative competitive
position in all of these markets due to a lack of reliable industry-wide data.
However, in the replacement market for heavy duty liquid and air filters used in
internal combustion engines, the Company believes that it is among the top five
measured by annual sales. In the replacement market for industrial and
environmental filtration products, the Company believes that it is among the top
five measured by annual sales. In addition, the Company believes that it is a
leading manufacturer of liquid and air filters for diesel locomotives.
In the Packaging segment, its principal competitors are approximately 10
manufacturers whose specialty packaging segments are smaller than the Company's
and who often compete on a regional basis only. Strong competition is also
presented by manufacturers of paper, plastic and glass containers. The Company's
competitors generally manufacture and sell a wide variety of products in
addition to packaging products of the type produced by the Company and do not
publish separate sales figures relative to these competitive products.
Consequently, the Company is unable to state its relative competitive position
in those markets.
The Company believes that it is able to maintain its competitive position
because of the quality and breadth of its products and services.
PRODUCT DEVELOPMENT
The Company's Technical Centers and laboratories test filters, containers,
filter components, paints, inks, varnishes, adhesives and sealing compounds to
insure high quality manufacturing results, aid suppliers in the development of
special finishes and conduct controlled tests of finishes and newly designed
filters, air cleaning systems and containers being perfected for particular
uses. Product development departments are concerned with the improvement of
existing filters, air cleaning systems, consumer and industrial packaging
products and the creation of new and individualized filters, containers and
consumer products, in order to broaden the uses of these items, counteract
obsolescence and evaluate other products available in the marketplace.
In fiscal 1998, the Company employed 57 professional employees on a
full-time basis on research activities relating to the development of new
products or the improvement or redesign of its existing products. During this
period the Company spent approximately $4,855,000 on such activities as compared
with $3,991,000 for 1997 and $3,600,000 for 1996.
ENVIRONMENTAL FACTORS
The Company is not aware of any facts which would cause it to believe that
it is in material violation of existing applicable standards respecting
emissions to the atmosphere, discharges to waters, or treatment, storage and
disposal of solid or hazardous wastes.
The Company is party to various proceedings relating to environmental
issues. The U.S. Environmental Protection Agency (EPA) and/or other responsible
state agencies have designated the Company as a potentially responsible party
(PRP), along with other companies, in remedial activities for the cleanup of
waste sites under the federal Superfund statute.
Environmental and related remediation costs are difficult to quantify for a
number of reasons including the number of parties involved, the difficulty in
determining the extent of the contamination, the length of time remediation may
require, the complexity of environmental regulation and the continuing
advancement of remediation technology. Applicable federal law may impose joint
and
5
6
several liability on each PRP for the cleanup. It is the opinion of management,
after consultation with legal counsel, that additional liabilities, if any,
resulting from these matters are not expected to have a material adverse effect
on the Company's financial condition or consolidated results of operations.
The Company does anticipate, however, that it may be required to install
additional pollution control equipment to augment existing equipment in the
future in order to meet applicable environmental standards. The Company is
presently unable to predict the timing or the cost of such equipment and cannot
give any assurance that the cost of such equipment may not have an adverse
effect on earnings. However, the Company is not aware, at this time, of any
current or pending requirement to install such equipment at any of its
facilities.
EMPLOYEES
As of November 30, 1998, the Company had approximately 3,096 employees.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales
Financial information relating to export sales and the Company's operations
in the United States and other countries is set forth on pages 26 and 27 of the
Annual Report and is incorporated herein by reference and filed as Exhibit
13(a)(vi) to this 1998 Form 10-K. The Company is not aware of any unusual risks
attendant to the conduct of its operations in other countries.
ITEM 2. PROPERTIES.
(i) Location
An office building located in Rockford, Illinois, houses the Corporate
offices and the Packaging segment headquarters offices in 22,000 square feet of
office space.
Engine/Mobile Filtration. The following is a description of the principal
properties owned and utilized by the Company in conducting its Engine/Mobile
Filtration business:
The Baldwin Filters' Kearney, Nebraska plant contains 410,000 square feet
of manufacturing and warehousing space, 25,000 square feet of research and
development space, and 40,000 square feet of office space. An expansion to the
Kearney facility of approximately 106,000 square feet for distribution and
manufacturing will be completed in 1999. The Kearney facility is located on a
site of approximately 40 acres. In addition, Baldwin has a capital lease for a
100,000 square foot manufacturing facility on a site of 20 acres in Gothenburg,
Nebraska.
The Company also manufactures filters in Lancaster, Pennsylvania at its
Clark Filter plant. The building, constructed about 1968 on an 11.4 acre tract
of land, contains 168,000 square feet of manufacturing and office space and is
owned by the Company.
Hastings Filters' manufacturing and distribution facilities are located in
Yankton, South Dakota and Knoxville, Tennessee. The Yankton facility has
approximately 170,000 square feet of floor space on a 21 acre tract and the
Knoxville facility has approximately 168,000 square feet of floor space on a 22
acre tract. Both facilities are owned by the Company.
The Company leases various facilities in other countries for the
manufacture and distribution of filtration products.
Industrial/Environmental Filtration. The following is a description of the
principal properties owned and utilized by the Company in conducting its
Industrial/Environmental Filtration business:
Airguard has eight manufacturing and warehousing locations. It leases
318,000 square feet in New Albany, Indiana, 84,000 square feet in Corona,
California and 44,500 square feet in Dallas, Texas. Smaller facilities are also
leased in California, North Carolina and Wisconsin. The Airguard High Efficiency
Filter plant, located in Jeffersontown, Kentucky on a 7.5 acre tract of land,
contains 100,000 square feet of manufacturing and office facilities. Airguard's
ATI manufacturing and office facility in Ottawa, Kansas, contains 31,000 square
feet.
Airguard sales outlets with warehousing are located in Louisville,
Kentucky; Cincinnati, Ohio; Toledo, Ohio; Nashville, Tennessee; Atlanta,
Georgia; Columbus, Ohio; Birmingham, Alabama;
6
7
Commerce City, Colorado; Kansas City, Missouri; Arlington, Texas; Dallas, Texas;
and Corona, California. Airguard also has distribution centers in Wallingford,
Connecticut; New Albany, Indiana; Las Vegas, Nevada and Richmond, Virginia.
United Air Specialists ("UAS") has three owned facilities. The offices and
primary manufacturing facility is located in Blue Ash, Ohio (a suburb of
Cincinnati), on approximately 17 acres of land. This facility was built in 1978
and was expanded in 1991 and 1993 to a total of approximately 157,000 square
feet. UAS also has sales offices and a manufacturing facility in Warwick,
England which total approximately 13,200 square feet. UAS leases sales and
service facilities in Bad Camberg, Germany; Phoenix, Arizona; Fremont,
California; Anaheim, California; Louisville, Kentucky; Troy, Michigan; Jackson,
Mississippi, and Houston, Texas.
Packaging. The following is a description of the principal properties
owned by the Company in conducting its Packaging business:
The Company's J. L. Clark, Rockford, Illinois plant, located on 34 acres,
consists of one-story manufacturing buildings, the first of which was
constructed in 1910. Since then a number of major additions have been
constructed and an injection molding plant was constructed in 1972.
Approximately 450,000 square feet of floor area are devoted to manufacturing,
warehouse and office use. Of the 34 acres, approximately 12 are vacant.
A J. L. Clark plant is located in Lancaster, Pennsylvania on approximately
11 acres. It consists of a two-story office building containing approximately
7,500 square feet of floor space and a manufacturing plant and warehouse
containing 236,000 square feet of floor space, most of which is on one level.
These buildings were constructed between 1924 and 1964.
The various properties owned by the Company are considered by it to be in
good repair and well maintained. Plant asset additions in 1999 are estimated at
$25,000,000 for capacity additions and cost reduction projects.
(ii) Function
Engine/Mobile Filtration. Oil, air, fuel, hydraulic fluid and coolant
filters are produced at the Baldwin and Hastings facilities in Kearney, and
Gothenburg, Nebraska and Yankton, South Dakota. Much of the Baldwin plant
equipment has been built or modified by Baldwin. The various processes of
pleating paper, winding cotton and synthetic fibers, placing the filter element
in a metal or fiber container and painting the containers are mechanized, but
require manual assistance. The plants also maintain an inventory of special dies
and molds for filter manufacture.
Oil, air and fuel filters, primarily for use in the railroad industry, are
produced at Clark Filter in Lancaster, Pennsylvania.
Industrial/Environmental Filtration. Air filters for the industrial air
and environmental markets are produced in the Airguard facilities. Dust
collection systems, high efficiency electronic air cleaning systems and
electrostatic precision spraying systems are designed and manufactured at the
UAS facility in Cincinnati, Ohio.
Packaging. The Company's metal and combination metal and plastic packaging
products are produced at J. L. Clark plants located in Rockford, Illinois, and
Lancaster, Pennsylvania. The Rockford and Lancaster plants are completely
integrated facilities which include creative and mechanical art departments and
photographic facilities for color separation, preparation of multiple-design
negatives and lithographing plates. Metal sheets are decorated on high speed
coating machines and lithographing presses connected with conveyor ovens.
Decorated sheets are then cut to working sizes on shearing equipment, following
which fabrication is completed by punch presses, can-forming and can-closing
equipment and other specialized machinery for supplementary operations. Most
tooling for fabricating equipment is designed and engineered by the Company's
engineering staffs, and much of it is produced in the Company's tool rooms.
7
8
Plastic packaging capabilities include printing and molding of irregular
shaped plastic containers and customized plastic closures which have
tamper-evidence as well as convenience features. J. L. Clark's distinctive
plastic closures include the combiTop(R) and the SST Series(TM) products.
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in legal actions arising in the normal course of
business. After taking into consideration legal counsel's evaluation of such
actions, management is of the opinion that their outcome will not have a
material adverse effect on the Company's consolidated results of operations or
financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
8
9
ADDITIONAL ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT
AGE AT YEAR ELECTED
NAME 11/30/98 TO OFFICE
---- -------- ------------
Lawrence E. Gloyd........................................... 66 1995
Chairman of the Board and Chief Executive Officer. Mr.
Gloyd was elected President and Chief Operating Officer in
1986, President and Chief Executive Officer in 1988,
Chairman, President and Chief Executive Officer in 1991, and
Chairman of the Board and Chief Executive Officer in 1995.
Norman E. Johnson........................................... 50 1995
President and Chief Operating Officer. Mr. Johnson has
been employed by the Company since 1990. He was elected
President-Baldwin Filters, Inc. in 1990, Vice
President-CLARCOR in 1992, Group Vice President-Filtration
Products Group in 1993, and President and Chief Operating
Officer in 1995.
Bruce A. Klein.............................................. 51 1995
Vice President-Finance and Chief Financial Officer. Mr.
Klein was employed by the Company and elected Vice
President-Finance and Chief Financial Officer on January 3,
1995.
David J. Anderson........................................... 60 1999
Vice President-Corporate Development. Mr. Anderson has
been employed by the Company since 1990. He was elected Vice
President Marketing & Business Development for the CLARCOR
Filtration Products subsidiary in 1991, Vice
President-Corporate Development in 1993, Vice
President-International/Corporate Development in 1994 and
Vice President-Corporate Development in 1999.
David J. Lindsay............................................ 43 1995
Vice President-Administration and Chief Administrative
Officer. Mr. Lindsay has been employed by the Company in
various administrative positions since 1987. He was elected
Vice President-Group Services in 1991, Vice
President-Administration in 1994 and Vice President-
Administration and Chief Administrative Officer in 1995.
Michael J. Tilton 49 1998
Executive Vice President-Engine/Mobile Filtration. Mr.
Tilton was employed by the Company and elected Executive
Vice President-Engine/Mobile Filtration on June 22, 1998.
William F. Knese............................................ 50 1997
Vice President and Treasurer. Mr. Knese has been employed
by the Company since 1979. He was elected Vice President,
Treasurer and Controller in 1991 and Vice President and
Treasurer in 1997.
Peter F. Nangle............................................. 37 1999
Vice President-Information Services and Chief Information
Officer. Mr. Nangle has been employed by the Company since
1993. He was elected Vice President-Information Services in
1994, Vice President-Information Services and Operations
Analysis, Chief Information Officer in 1997 and Vice
President-Information Services and Chief Information Officer
in 1999.
9
10
AGE AT YEAR ELECTED
NAME 11/30/98 TO OFFICE
---- -------- ------------
Marcia S. Blaylock.......................................... 42 1997
Vice President, Controller and Corporate Secretary. Ms.
Blaylock has been an employee of the Company since 1974. She
was elected Assistant Secretary in 1994, Corporate Secretary
in 1995, Vice President and Corporate Secretary in 1996 and
Vice President, Controller and Corporate Secretary in 1997.
Each executive officer of the Company is elected for a term of one year
which begins at the Board of Directors Meeting at which he or she is elected,
held following the Annual Meeting of Shareholders, and ends on the date of the
next Annual Meeting of Shareholders or upon the due election and qualification
of his or her successor.
10
11
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS.
The Company's Common Stock is listed on the New York Stock Exchange; it is
traded under the symbol CLC. The following table sets forth the high and low
market prices as quoted during the relevant periods on the New York Stock
Exchange and dividends paid for each quarter of the last two fiscal years. All
amounts have been adjusted to reflect a three-for-two stock split effective
April 24, 1998.
MARKET PRICE
-------------------
QUARTER ENDED HIGH LOW DIVIDENDS
------------- ---- --- ---------
February 28, 1998........................................... $20 13/16 $17 3/16 $.1100
May 30, 1998................................................ 24 5/8 20 1/4 .1100
August 29, 1998............................................. 23 1/2 15 1/4 .1100
November 28, 1998........................................... 18 9/16 14 1/4 .1125
------
Total Dividends............................................. $.4425
======
MARKET PRICE
------------------
QUARTER ENDED HIGH LOW DIVIDENDS
------------- ---- --- ---------
March 1, 1997............................................... $17 $14 5/16 $.1084
May 31, 1997................................................ 16 9/16 13 5/16 .1083
August 30, 1997............................................. 18 3/16 15 5/8 .1083
November 29, 1997........................................... 20 3/4 17 3/8 .1100
------
Total Dividends............................................. $.4350
======
The approximate number of holders of record of the Company's Common Stock
at February 1, 1999 is 1,750. In addition, the Company believes that there are
approximately 6,000 beneficial owners whose shares are held in street names.
ITEM 6. SELECTED FINANCIAL DATA.
The information required hereunder is set forth on pages 30 and 31 of the
Annual Report under the caption "11-Year Financial Review," is incorporated
herein by reference and is filed as Exhibit 13(a)(ix) to this 1998 Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
The information required hereunder is set forth on pages 10 through 14 of
the Annual Report under the caption "Financial Review," is incorporated herein
by reference and is filed as Exhibit 13(a)(x) to this 1998 Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information required hereunder is set forth on page 12 of the Annual
Report under the caption "Financial Review -- Market Risk," is incorporated
herein by reference and is filed as Exhibit 13(a)(x) to this 1998 Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements, the Notes thereto and the report
thereon of PricewaterhouseCoopers LLP, independent accountants, required
hereunder with respect to the Company and its consolidated subsidiaries are set
forth on pages 15 through 28, inclusive, of the Annual Report,
11
12
are incorporated herein by reference and are filed as Exhibits 13(a)(ii) through
13(a)(vii) to this 1998 Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Certain information required hereunder is set forth on pages 1 and 2 of the
Company's Proxy Statement dated February 18, 1999 (the "Proxy Statement") for
the Annual Meeting of Shareholders to be held on March 23, 1999 under the
caption "Election of Directors -- Nominees for Election to the Board" and is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information required hereunder is set forth on pages 6 through 14
inclusive, of the Proxy Statement under the caption "Compensation of Executive
Officers and Other Information" and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required hereunder is set forth on pages 4 and 5 of the
Proxy Statement under the caption "Beneficial Ownership of the Company's Common
Stock" and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On September 4, 1998 the Company loaned $140,981 to Mr. Michael J. Tilton,
the Company's Executive Vice President-Engine/Mobile Filtration, on an
interest-free basis. The loan was repaid in full on October 26, 1998. The loan
was made pursuant to the Company's Relocation Expense Policy and was used by Mr.
Tilton to purchase a home in connection with his relocation from St. Louis,
Missouri to the Company's headquarters in Rockford, Illinois.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.
(a) Financial Statements
The following financial information is incorporated herein by reference to
the Company's Annual Report to Shareholders for the fiscal year ended November
30, 1998:
*Consolidated Balance Sheets at November 30, 1998 and 1997
*Consolidated Statements of Earnings for the years ended November 30, 1998,
1997 and 1996
*Consolidated Statements of Shareholders' Equity for the years ended
November 30, 1998, 1997 and 1996
*Consolidated Statements of Cash Flows for the years ended November 30,
1998, 1997 and 1996
*Notes to Consolidated Financial Statements
*Report of Independent Accountants
*Management's Report on Responsibility for Financial Reporting
- ------------------------------
*Filed herewith as part of Exhibit 13(a) to this 1998 Form 10-K
12
13
The following items are set forth herein on the pages indicated:
Report of Independent Accountants.......................................... F-1
Financial Statement Schedules:
II. Valuation and Qualifying Accounts................................. F-2
Financial statements and schedules other than those listed above are
omitted for the reason that they are not applicable, are not required, or the
information is included in the financial statements or the footnotes therein.
(b) There were no Reports on Form 8-K filed during the fourth quarter of
the fiscal year ended November 30, 1998.
(c) Exhibits
3.1 The registrant's Second Restated Certificate of
Incorporation.
3.1(a) Amendment to ARTICLE FOURTH of the Second Restated
Certificate of Incorporation. Incorporated by reference to
the Company's Proxy Statement dated February 18, 1999 for
the Annual Meeting of Shareholders to be held on March 23,
1999.
3.2 The registrant's By-laws, as amended. Incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1995.
3.3 Certificate of Designation of Series B Junior Participating
Preferred Stock of CLARCOR as filed with the Secretary of
State of the State of Delaware on April 2, 1996.
Incorporated by reference to Exhibit 4.5 to the Registration
Statement.
4.1 Stockholder Rights Agreement dated as of March 28, 1996
between the registrant and the First Chicago Trust Company
of New York. Incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K filed April 3, 1996.
4.2 The instruments defining the rights of holders of long-term
debt securities of CLARCOR and its subsidiaries are omitted
pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K.
CLARCOR hereby agrees to furnish copies of these instruments
to the SEC upon request.
10.1 The registrant's Deferred Compensation Plan for Directors.
Incorporated by reference to Exhibit 10.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended
November 30, 1984 (the "1984 10-K").
10.2 The registrant's Supplemental Retirement Plan. Incorporated
by reference to Exhibit 10.2 to the 1984 10-K.
10.2(a) The registrant's 1994 Executive Retirement Plan.
Incorporated by reference to Exhibit 10.2(a) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 3, 1994 ("1994 10-K").
10.2(b) The registrant's 1994 Supplemental Pension Plan.
Incorporated by reference to Exhibit 10.2(b) to the 1994
10-K.
10.2(c) The registrant's Supplemental Retirement Plan (as amended
and restated effective December 1, 1994). Incorporated by
reference to Exhibit 10.2(c) to the 1994 10-K.
10.3 The registrant's 1984 Stock Option Plan. Incorporated by
reference to Exhibit A to the Company's Proxy Statement
dated March 2, 1984 for the Annual Meeting of Shareholders
held on March 31, 1984.
10.4 Employment Agreements with certain officers. Incorporated by
reference to Exhibit 5 to the Company's Current Report on
Form 8-K filed July 25, 1989.
10.4(a) Form of Employment Agreement with each of David J. Anderson,
Marcia S. Blaylock, Bruce A. Klein and Peter F. Nangle.
Incorporated by reference to Exhibit 10.4(a) to the
Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1996.
13
14
10.4(b) Employment Agreement with Lawrence E. Gloyd dated July 1, 1997. Incorporated by reference to Exhibit
10.4(b) to the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 1997 ("1997
10-K").
10.4(c) Employment Agreement with Norman E. Johnson dated July 1, 1997. Incorporated by reference to Exhibit
10.4(c) to the 1997 10-K.
10.4(d) Trust Agreement dated December 1, 1997. Incorporated by reference to Exhibit 10.4(d) to the 1997 10-K.
10.4(e) Executive Benefit Trust Agreement dated December 22, 1997. Incorporated by reference to Exhibit 10.4(e)
to the 1997 10-K.
10.4(f) Employment Agreement with Michael J. Tilton dated September 23, 1998.
10.5 The registrant's 1994 Incentive Plan. Incorporated by reference to Exhibit A to the Company's Proxy
Statement dated February 24, 1994 for the Annual Meeting of Shareholders held on March 31, 1994.
10.5(a) The registrant's First Amendment to the 1994 Incentive Plan. Incorporated by reference to Exhibit A to
the Company's Proxy Statement dated February 18, 1998 for the Annual Meeting of Shareholders held on
March 24, 1998.
13 (a) The following items incorporated by reference herein from the Company's 1998 Annual Report to
Shareholders ("1998 Annual Report"), are filed as Exhibits to this Annual Report Form 10-K:
(i) Business segment information for the fiscal years 1996
through 1998 set forth on pages 26 and 27 of the 1998
Annual Report (included in Exhibit 13(a)(vi) -- Note O
of Notes to Consolidated Financial Statements);
(ii) Consolidated Balance Sheets of the Company and its
Subsidiaries at November 30, 1998 and 1997 set forth on
page 15 of the 1998 Annual Report;
(iii) Consolidated Statements of Earnings of the Company and
its Subsidiaries for the years ended November 30, 1998,
1997 and 1996 set forth on page 16 of the 1998 Annual
Report;
(iv) Consolidated Statements of Shareholders' Equity for the
Company and its Subsidiaries for the years ended
November 30, 1998, 1997 and 1996 set forth on page 17
of the 1998 Annual Report;
(v) Consolidated Statements of Cash Flows of the Company
and its Subsidiaries for the years ended November 30,
1998, 1997 and 1996 set forth on page 18 of the 1998
Annual Report;
(vi) Notes to Consolidated Financial Statements set forth on
pages 19 through 27 of the 1998 Annual Report;
(vii) Report of Independent Accountants set forth on page 28
of the 1998 Annual Report;
(viii) Management's Report on Responsibility for Financial
Reporting set forth on page 28 of the 1998 Annual
Report;
(ix) Information under the caption "11-Year Financial
Review" set forth on pages 30 and 31 of the 1998 Annual
Report; and
(x) Management's Discussion and Analysis of Financial
Condition and Results of Operation set forth under the
caption "Financial Review" on pages 10 through 14 of
the 1998 Annual Report.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
27 Financial Data Schedule.
14
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: February 18, 1999 CLARCOR Inc.
(Registrant)
By: /s/ LAWRENCE E. GLOYD
--------------------------------------
Lawrence E. Gloyd
Chairman of the Board
& Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: February 18, 1999 By: /s/ LAWRENCE E. GLOYD
------------------------------------------------
Lawrence E. Gloyd
Chairman of the Board &
Chief Executive Officer and Director
Date: February 18, 1999 By: /s/ BRUCE A. KLEIN
------------------------------------------------
Bruce A. Klein
Vice President -- Finance &
Chief Financial Officer
Date: February 18, 1999 By /s/ MARCIA S. BLAYLOCK
------------------------------------------------
Marcia S. Blaylock
Vice President, Controller, Corporate Secretary
& Chief Accounting Officer
Date: February 18, 1999 By /s/ J. MARC ADAM
------------------------------------------------
J. Marc Adam
Director
Date: February 18, 1999 By /s/ MILTON R. BROWN
------------------------------------------------
Milton R. Brown
Director
Date: February 18, 1999 By /s/ CARL J. DARGENE
------------------------------------------------
Carl J. Dargene
Director
Date: February 18, 1999 By /s/ DUDLEY J. GODFREY, JR.
------------------------------------------------
Dudley J. Godfrey, Jr.
Director
15
16
Date: February 18, 1999 By /s/ NORMAN E. JOHNSON
------------------------------------------------
Norman E. Johnson
Director
Date: February 18, 1999 By /s/ JAMES L. PACKARD
------------------------------------------------
James L. Packard
Director
Date: February 18, 1999 By /s/ STANTON K. SMITH, JR.
------------------------------------------------
Stanton K. Smith, Jr.
Director
Date: February 18, 1999 By /s/ DON A. WOLF
------------------------------------------------
Don A. Wolf
Director
16
17
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Shareholders
CLARCOR Inc.
Rockford, Illinois
Our report on the consolidated financial statements of CLARCOR Inc. and
Subsidiaries has been incorporated by reference in this Form 10-K from page 28
of the 1998 Annual Report to Shareholders of CLARCOR Inc. In connection with our
audits of such financial statements, we have also audited the related financial
statement schedule listed on page 13 (index of exhibits) of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
PricewaterhouseCoopers LLP
Chicago, Illinois
January 8, 1999
F-1
18
CLARCOR INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED NOVEMBER 30, 1998, 1997 AND 1996
(DOLLARS IN THOUSANDS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------------------------- ---------- ----------------------- ---------- ----------
ADDITIONS
-----------------------
(1) (2)
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- ------------------------------------- ---------- ---------- ---------- ---------- ----------
1998:
Allowance for losses on accounts
receivable......................... $2,106 $3,075 $ 46(A) $2,516(B) $2,711
====== ====== ==== ====== ======
1997:
Allowance for losses on accounts
receivable......................... $2,007 $ 696 $ 58(A) $ 655(B) $2,106
====== ====== ==== ====== ======
1996:
Allowance for losses on accounts
receivable......................... $1,846 $ 568 $ -- $ 407(B) $2,007
====== ====== ==== ====== ======
NOTES:
(A) Due to business acquisitions in 1998 and 1997.
(B) Bad debts written off during year, net of recoveries.
F-2