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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 27, 1999
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.
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(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
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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
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(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 11, 2000 as reported on the New York Stock Exchange Composite
Transactions) of the voting stock held by non-affiliates of the registrant as at
February 11, 2000 is $419,648,074.
The number of outstanding shares of Common Stock, as of February 11, 2000 is
24,255,740 shares.
Certain portions of the registrant's 1999 Annual Report to Shareholders are
incorporated by reference in Parts I, II and IV. Certain portions of the
registrant's Proxy Statement dated February 23, 2000 for the Annual Meeting of
Shareholders to be held on March 25, 2000 are incorporated by reference in Part
III.
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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 1999 the year ended on November 27, 1999 and for fiscal year 1998
the year ended on November 28, 1998. 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.
Acquisition of Industrial Filtration Businesses. On September 10, 1999,
CLARCOR acquired from Mark IV Industries, Inc. substantially all of the assets
(the "Industrial Filtration Acquisitions") used in the design, manufacture,
marketing and distribution of specialty filters and filtration products
primarily for residential, commercial and industrial use in a wide range of
market segments which include original equipment manufacturers, aftermarket
distributors, retail distributors, contractors and aerospace, marine and
military markets. The three businesses acquired, Purolator Air Filtration
("Purolator"), Facet International ("Facet") and Purolator Facet, Inc. ("PFI")
were added into the Company's Industrial/Environmental Filtration segment.
For financial and accounting purposes the acquisition was deemed to have
occurred on September 1, 1999. The purchase price for the assets including
acquisition expenses was approximately $142,400,000, net of cash acquired, based
on the net assets of the businesses acquired as shown on a February 28, 1999
balance sheet and is subject to a final adjustment per the purchase agreement.
The purchase price was paid in cash with available funds and $115,000,000 in
proceeds from a $185,000,000 multicurrency credit agreement entered into with
several financial institutions. Borrowings under the revolving credit agreement
are uncollateralized, but are guaranteed by certain of the Company's
subsidiaries. Reference is made to Report on Form 8-K filed by the Company on
September 17, 1999 with the Securities and Exchange Commission for a copy of the
purchase agreement and the multicurrency credit agreement. The acquisition is
also described in Note B to the Company's Consolidated Financial Statements.
Other Acquisitions. Subsequent to the end of fiscal 1999, the Company
acquired in December 1999 two distributors of air filtration products. The cost
of the acquisitions was paid for primarily with cash, but in connection with one
of the transactions the Company issued approximately 160,704 shares of Common
Stock. These acquisitions were accounted for under the purchase method of
accounting and will be included in the Company's Industrial/Environmental
Filtration segment. These acquisitions will not have a significant impact on the
results of the Company.
(ii) Summary of Business Operations.
During 1999, the Company conducted business in three principal industry
segments: (1) Engine/ Mobile Filtration, (2) Industrial/Environmental Filtration
and (3) 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, residential 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.
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Additional products related to the Industrial Filtration Acquisitions in 1999
include specialty filters, industrial process liquid filters, filtration systems
for aircraft refueling, anti-pollution and water recycling, and bilge
separators.
Packaging. Packaging products include a wide variety of custom styled
containers and packaging items used primarily by the food, confectionery, 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 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 1997 through 1999 is
included on pages 26 and 27 of the Company's 1999 Annual Report to Shareholders
(the "Annual Report"), is incorporated herein by reference and is filed as part
of Exhibit 13(a)(vi) to this 1999 Annual Report on Form 10-K ("1999 Form 10-K").
(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 filters are used in a wide variety of applications and in
processes where filter efficiency, reliability and durability are essential.
Impure air or fluid flow through semi-porous paper, cotton, synthetic, chemical
or membrane filter media with varying efficiency filtration characteristics. The
impurities on the media are disposed of when the filter is changed. The
segment's filters are sold throughout the world, 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.; Facet
International and related subsidiaries ("Facet"); Purolator Facet, Inc. ("PFI");
Purolator Products Air Filtration Company ("Purolator"); United Air Specialists,
Inc.; and United Air Specialists (U.K.) Ltd. The segment's products are sold
throughout the world.
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.
Additional products include specialty filters, filtration systems for
aircraft refueling, anti-pollution and water recycling, and bilge separators.
These products are used in a wide range of applications including commercial,
military and general aviation, marine, oil and gas drilling and refining,
chemical and pharmaceutical processes, utilities, paper mills and general
industry. The filters are used for the process filtration of liquids using a
variety of porous and sintered metal media filters, strainers, separators,
coalescers and absorbent media. Many of these filter products and systems
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require special technical approvals and product certification in order to meet
commercial and military requirements.
PACKAGING
The Company's consumer and industrial packaging products business is
conducted by a wholly-owned subsidiary, J. L. Clark, Inc. ("J. L. Clark").
J.L. Clark manufactures a wide variety of different types and sizes of
containers and packaging specialties. Metal, plastic and combination
metal/plastic containers and 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). Other packaging products 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 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 independent distributors and dealers
for original equipment manufacturers.
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. 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
located throughout the United States and Europe and in Singapore and Malaysia.
Packaging salespersons call directly on customers and prospective customers
for containers and packaging specialties. Each salesperson is trained in all
aspects of J.L. Clark'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
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purchase commitments. The Company did not experience shortages in the supply of
raw materials during 1999.
PATENTS, TRADEMARKS AND TRADENAMES
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. The Company
believes, however, that its trademarks and tradenames used in connection with
certain products may be significant to its business.
CUSTOMERS
The largest 10 customers of the Engine/Mobile Filtration segment accounted
for 17.1% of the $238,680,000 of fiscal year 1999 sales of such segment.
The largest 10 customers of the Industrial/Environmental Filtration segment
accounted for 14.6% of the $174,889,000 of fiscal year 1999 sales of such
segment.
The largest 10 customers of the Packaging segment accounted for 53.2% of
the $64,300,000 of fiscal year 1999 sales of such segment.
No single customer accounted for 10% or more of the Company's consolidated
1999 sales.
BACKLOG
At November 30, 1999, the Company had a backlog of firm orders for products
amounting to approximately $72,100,000 including backlog of $25,800,000 from the
Industrial Filtration Acquisitions. The backlog figure for 1998 was
approximately $36,100,000, excluding the Industrial Filtration Acquisitions.
Substantially all of the orders on hand at November 30, 1999 are expected to be
filled during fiscal 2000.
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 addition, the Company believes that it is a leading
manufacturer of liquid and air filters for diesel locomotives. The Company
believes that for industrial and environmental filtration products, it is among
the top five measured by annual sales.
In the Packaging segment, its principal competitors include several
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 product components
and completed products to insure high quality manufacturing results, aid
suppliers in the development of product
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components, and conduct controlled tests of newly designed filters, filtration
systems and containers for particular uses. Product development departments are
concerned with the improvement and creation of new filters, filtration systems,
containers and packaging products in order to broaden the uses of these items,
counteract obsolescence and evaluate other products available in the
marketplace.
In fiscal 1999, the Company employed 65 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 $5,562,000 on such activities as compared
with $4,855,000 for 1998 and $3,991,000 for 1997.
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 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, 1999, the Company had approximately 4,278 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 1999 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 owned by the Company 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 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
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office space. An expansion to the Kearney facility of approximately 106,000
square feet for distribution and manufacturing was completed in 1999. The
Kearney facility is located on a site of approximately 40 acres. A manufacturing
facility located in Yankton, South Dakota has approximately 170,000 square feet
of floor space on a 21 acre tract. Both facilities are owned by the Company. 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.
The Company leases various facilities in Australia, Belgium, Mexico, South
Africa and the United Kingdom for the manufacture and distribution of filtration
products.
Industrial/Environmental Filtration. The following is a description of the
principal properties utilized by the Company in conducting its
Industrial/Environmental Filtration business:
Airguard has seven 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 North Carolina and Wisconsin. The Company owns the following two
facilities. 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 administrative and sales offices and distribution facilities are
located in Louisville, Kentucky; Cincinnati, Ohio; Toledo, Ohio; Nashville,
Tennessee; Atlanta, Georgia; Columbus, Ohio; Birmingham, Alabama; Portland,
Oregon; Commerce City, Colorado; Kansas City, Missouri; Arlington, Texas;
Dallas, Texas; Corona, California; Wallingford, Connecticut; New Albany,
Indiana; Las Vegas, Nevada and Richmond, Virginia. Airguard also leases
facilities in Malaysia and Singapore.
Facet owns manufacturing and distribution facilities in Tulsa, Oklahoma and
La Coruna, Spain. The Tulsa facilities contain approximately 142,000 square feet
on a 16 acre site. The La Coruna facility is on an approximately 17,000 square
meter site and the building contains 5,700 square meters. Facet also leases
facilities in Stillwell, Oklahoma; Tulsa, Oklahoma; Miami, Florida; Australia;
Canada; Italy; Germany; France; United Kingdom; The Netherlands and Switzerland.
Purolator owns a 228,500 square-foot manufacturing and office facility in
Henderson, North Carolina on a site of approximately 25 acres. Purolator also
leases sales, manufacturing and distribution facilities in Fresno, California;
Hayward, California; La Mirada, California; Sacramento, California; Davenport,
Iowa; Wichita, Kansas; Metuchen, New Jersey; Henderson, North Carolina; Kenly,
North Carolina; Sparks, Nevada; Fairfax, Virginia and Auburn, Washington.
Purolator Facet, Inc. ("PFI") owns a manufacturing and distribution
facility in Greensboro, North Carolina. This facility contains approximately
88,000 square feet on a 21 acre site. PFI also leases facilities in Greensboro,
North Carolina; Hebron, Connecticut and Middletown, Rhode Island.
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. In addition, 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.
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Packaging. The following is a description of the principal properties
utilized 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.
J. L. Clark also leases a manufacturing facility in San Leandro,
California.
The various properties owned by the Company are considered by it to be in
good repair and well maintained. Plant asset additions in 2000 are estimated at
$30,000,000 for equipment and machinery, 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. 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 highly mechanized,
but require some 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 commercial,
residential and industrial markets are produced in the Airguard and Purolator
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.
Specialty filter products for aviation, oil drilling, military, marine and
paper and chemical processes are manufactured and assembled at the PFI
facilities in Greensboro, North Carolina. The manufacturing processes include
bonding and sintered metal, tungsten inert gas and electron beam welding and
diffusion-bonded wire. Facet designs, manufactures and assembles filters and
filtration systems for aircraft refueling, power generation, water treatment and
general industrial applications at its United States and European facilities.
The company also uses outside contractors for assembly and manufacturing of some
of its products. Many of these products require special commercial or military
technical approvals or product certification.
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 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.
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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.
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ADDITIONAL ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT
AGE AT YEAR ELECTED
NAME 11/30/99 TO OFFICE
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*Lawrence E. Gloyd.......................................... 67 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.......................................... 51 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. Mr. Johnson has been a Director of the
Company since June 1996.
Michael J. Tilton........................................... 50 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.
Mr. Tilton has over 25 years of experience in operations and
finance and was formerly with Pinnacle Automation and
Donaldson Company.
William B. Walker........................................... 59 1999
Executive Vice President-Industrial/Environmental
Filtration. Mr. Walker has been employed by Airguard, a
subsidiary of the Company since 1966. He was elected
President of Airguard in 1994 and Executive Vice
President-Industrial/Environmental Filtration in 1999.
Bruce A. Klein.............................................. 52 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........................................... 61 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............................................ 44 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.
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AGE AT YEAR ELECTED
NAME 11/30/99 TO OFFICE
---- -------- ------------
Peter F. Nangle............................................. 38 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. Mr. Nangle was also elected President of United Air
Specialists, Inc., one of the Company's subsidiaries, in
June 1999.
Marcia S. Blaylock.......................................... 43 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 at the time of 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.
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*It is expected that following the Company's March 25, 2000 Annual Meeting, Mr.
Gloyd will retire as Chairman and Chief Executive Officer and Mr. Johnson will
become Chairman, President and Chief Executive Officer of the Company. Mr.
Gloyd will continue to serve as a Director of the Company.
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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.
MARKET PRICE
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QUARTER ENDED HIGH LOW DIVIDENDS
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February 27, 1999........................................... $20 13/16 $16 11/16 $.1125
May 29, 1999................................................ 19 1/4 16 7/16 .1125
August 28, 1999............................................. 21 3/8 18 1/8 .1125
November 27, 1999........................................... 18 9/16 14 1/4 .1150
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Total Dividends............................................. $.4525
======
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
======
The approximate number of holders of record of the Company's Common Stock
at February 1, 2000 is 1,650. 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 1999 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 1999 Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information required hereunder is set forth on page 13 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 1999 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, are incorporated
herein by reference and are filed as Exhibits 13(a)(ii) through 13(a)(vii) to
this 1999 Form 10-K.
12
13
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 23, 2000 (the "Proxy Statement") for
the Annual Meeting of Shareholders to be held on March 25, 2000 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 15
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.
The information required hereunder is set forth on page 4 of the Proxy
Statement under the caption "Certain Relationships and Related Transactions" and
is incorporated herein by reference.
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, 1999:
*Consolidated Balance Sheets at November 30, 1999 and 1998
*Consolidated Statements of Earnings for the years ended November 30, 1999,
1998 and 1997
*Consolidated Statements of Shareholders' Equity for the years ended
November 30, 1999, 1998 and 1997
*Consolidated Statements of Cash Flows for the years ended November 30,
1999, 1998 and 1997
*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 1999 Form 10-K
13
14
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) Related to the Industrial Filtration Acquisitions, the Company filed a
Report on Form 8-K on September 17, 1999 and on November 23, 1999 filed a Report
on Form 8-K/A.
(c) Exhibits
3.1 The registrant's Second Restated Certificate of
Incorporation. Incorporated by reference to Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1998 (the "1998 10-K").
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 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 on Form 8-A filed April 3, 1996.
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.
4.1(a) First Amendment to Stockholders Rights Agreement dated as of
March 23, 1999. Incorporated by reference to Exhibit 4 to
the Company's Form 8-A/A filed March 29, 1999.
4.2 Certain 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.
4.2(a) Multicurrency Credit Agreement dated as of September 9,
1999. Incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K filed September 17,
1999.
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.
14
15
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.
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. Incorporated by reference to Exhibit 10.4(f) to
the 1998 10-K.
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.
10.5(b) The registrant's Amendments to the 1994 Incentive Plan as
approved by the Company's Board of Directors on September
20, 1999 and December 20, 1999.
10.6 Purchase Agreement dated September 10, 1999 related to the
Industrial Filtration Acquisitions. Incorporated by
reference to Exhibit 2 to the Company's Current Report on
Form 8-K filed September 17, 1999.
13 (a) The following items incorporated by reference herein from
the Company's 1999 Annual Report to Shareholders ("1999
Annual Report"), are filed as Exhibits to this Annual Report
Form 10-K:
(i) Business segment information for the fiscal years 1997
through 1999 set forth on pages 26 and 27 of the 1999
Annual Report (included in Exhibit 13(a)(vi) -- Note Q
of Notes to Consolidated Financial Statements);
(ii) Consolidated Balance Sheets of the Company and its
Subsidiaries at November 30, 1999 and 1998 set forth on
page 15 of the 1999 Annual Report;
(iii) Consolidated Statements of Earnings of the Company and
its Subsidiaries for the years ended November 30, 1999,
1998 and 1997 set forth on page 16 of the 1999 Annual
Report;
(iv) Consolidated Statements of Shareholders' Equity for the
Company and its Subsidiaries for the years ended
November 30, 1999, 1998 and 1997 set forth on page 17
of the 1999 Annual Report;
(v) Consolidated Statements of Cash Flows of the Company
and its Subsidiaries for the years ended November 30,
1999, 1998 and 1997 set forth on page 18 of the 1999
Annual Report;
15
16
(vi) Notes to Consolidated Financial Statements set forth on
pages 19 through 27 of the 1999 Annual Report;
(vii) Report of Independent Accountants set forth on page 28
of the 1999 Annual Report;
(viii) Management's Report on Responsibility for Financial
Reporting set forth on page 28 of the 1999 Annual
Report;
(ix) Information under the caption "11-Year Financial
Review" set forth on pages 30 and 31 of the 1999 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 1999 Annual Report.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
27 Financial Data Schedule.
16
17
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 23, 2000 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 23, 2000 By: /s/ LAWRENCE E. GLOYD
------------------------------------------------
Lawrence E. Gloyd
Chairman of the Board &
Chief Executive Officer and Director
Date: February 23, 2000 By: /s/ BRUCE A. KLEIN
------------------------------------------------
Bruce A. Klein
Vice President -- Finance &
Chief Financial Officer
Date: February 23, 2000 By /s/ MARCIA S. BLAYLOCK
------------------------------------------------
Marcia S. Blaylock
Vice President, Controller, Corporate Secretary
& Chief Accounting Officer
Date: February 23, 2000 By /s/ J. MARC ADAM
------------------------------------------------
J. Marc Adam
Director
Date: February 23, 2000 By /s/ MILTON R. BROWN
------------------------------------------------
Milton R. Brown
Director
Date: February 23, 2000 By /s/ CARL J. DARGENE
------------------------------------------------
Carl J. Dargene
Director
Date: February 23, 2000 By /s/ ROBERT H. JENKINS
------------------------------------------------
Robert H. Jenkins
Director
17
18
Date: February 23, 2000 By /s/ NORMAN E. JOHNSON
------------------------------------------------
Norman E. Johnson
Director
Date: February 23, 2000 By /s/ PHILIP R. LOCHNER, JR.
------------------------------------------------
Philip R. Lochner, Jr.
Director
Date: February 23, 2000 By /s/ JAMES L. PACKARD
------------------------------------------------
James L. Packard
Director
Date: February 23, 2000 By /s/ STANTON K. SMITH, JR.
------------------------------------------------
Stanton K. Smith, Jr.
Director
Date: February 23, 2000 By /s/ DON A. WOLF
------------------------------------------------
Don A. Wolf
Director
18
19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
CLARCOR Inc.
Rockford, Illinois
Our audits of the consolidated financial statements referred to in our report
dated January 7, 2000 appearing on page 28 in the 1999 Annual Report to
Shareholders of CLARCOR Inc. and Subsidiaries (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the financial statement schedule listed in Item
14(a) of this Form 10-K (page 13, index of exhibits). In our opinion, the
financial statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
January 7, 2000
F-1
20
CLARCOR INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED NOVEMBER 30, 1999, 1998 AND 1997
(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
- ------------------------------------- ---------- ---------- ---------- ---------- ----------
1999:
Allowance for losses on accounts
receivable......................... $2,711 $ 975 $2,255(A) $ 786(B) $5,155
====== ====== ====== ====== ======
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
====== ====== ====== ====== ======
NOTES:
(A) Due to business acquisitions.
(B) Bad debts written off during year, net of recoveries.
F-2