EXHIBIT 99.1
FOR FURTHER INFORMATION CONTACT:
Bruce A. Klein
Vice President-Finance and Chief Financial Officer
Rockford, Illinois
815-962-8867
FOR IMMEDIATE RELEASE
MONDAY, MARCH 24, 2003
CLARCOR REPORTS FIRST QUARTER 2003 RESULTS
Q1 SALES AND OPERATING PROFIT UP 8%;
NET EARNINGS UP 20% OVER LAST YEAR
UNAUDITED FISCAL FIRST QUARTER 2003 HIGHLIGHTS
(Amounts in thousands, except per share data and percentages)
----------------------------------------------------------------------------------
QUARTER ENDED %
3/1/03 3/2/02 CHANGE
----------------------------------------------------------------------------------
AS REPORTED ON A GAAP BASIS:
Net Sales $ 171,494 $ 158,262 8.4
Operating Profit $ 15,487 $ 14,406 7.5
Net Earnings $ 9,596 $ 7,998 20.0
Diluted Earnings Per Share $ 0.38 $ 0.32 18.8
Average Diluted Shares Outstanding 25,348,353 25,006,604 1.4
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FIRST QUARTER 2003 OPERATING REVIEW
ROCKFORD, IL, MONDAY, MARCH 24, 2003-- CLARCOR INC. (NYSE: CLC) today
reported results for the first quarter ended March 1, 2003. Sales in the first
quarter of 2003 increased by $13 million, an 8% increase compared to 2002.
Operating profit in 2003 increased by 8% and net earnings by 20% compared to the
same quarter in 2002. Diluted earnings per share increased by 19%. A weaker U.S.
dollar improved sales by approximately $1.5 million. Overall, excluding the
impact of the favorable currency translation and an acquisition made in June
2002, sales grew by 5% from last year's first quarter. Cash flow from operations
was $13.2 million in the first quarter compared to $12.0 million in the same
quarter in 2002.
Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "We had a
very good first quarter. Sales, net earnings and cash flow from operations were
at the high end of the range we expected when the quarter began. We were able to
absorb significantly higher pension, health care and insurance costs and still
increase operating profit this quarter by 8%. Increased cash flow also enabled
us to continue to reduce our debt by over $12 million, further strengthening an
already strong balance sheet. Higher operating profit, significantly reduced
debt and lower interest rates resulted in a 20% increase in net earnings over
last year.
"Our Engine/Mobile segment had a strong first quarter with sales increasing by
over 15%, including the impact from the acquisition of Locker Filtration in June
2002. Excluding that acquisition, sales still grew by over 8%, primarily from
growth in the heavy-duty aftermarket. We also saw increased filter sales to
original equipment manufacturers. Segment operating profit grew by 13% driven by
cost controls and a favorable sales mix.
"Sales at our Industrial/Environmental segment rose by over 5%. On a product
basis, we saw increased sales of HVAC air filters, filters used in oil drilling
and liquid process filters sold to the beverage industry. The continued slow
pace of domestic and international capital spending reduced sales of air quality
systems and sales of filters used in the aerospace industry below our original
expectations. Domestic manufacturing activity generally affects sales in this
segment more than it does sales in our Engine/Mobile Filtration segment.
However, we expect recent product introductions, such as a new line of dust
collectors and additional filter products for the oil drilling industry, to
favorably impact sales later this year.
"The focus in our Industrial/Environmental segment in 2003 continues to be to
improve operating margins towards our goal of 10% on an annual basis within
three years. Although margins in the first quarter were not as strong as we
expected, we believe that margins will improve significantly as the year
progresses. As sales increase in future quarters, we will be able to leverage
our fixed manufacturing and administrative costs. In addition, we are
rationalizing product lines at several manufacturing plants and reorganizing
other facilities to improve productivity. Though we are absorbing costs from
these initiatives currently, we expect a positive impact on margins in the
future.
"Our Packaging segment had a slow first quarter with a small decline in sales
and operating profit from last year. Although metal product sales were good,
plastic product sales were below last year's levels. The first quarter is
normally the weakest for our Packaging segment and is not usually a good
indication of activity for the rest of the year. We remain confident that both
Packaging sales and profits will improve as the year progresses and will exceed
last year's levels.
"We continue to expect that diluted earnings per share for 2003 will be in the
$1.92 to $2.02 range. Most of our sales are in the filtration aftermarket, and
therefore our revenues tend to be more stable in difficult economic times than
are sales of companies that sell primarily into the OEM markets. Nevertheless,
we are not immune to the economy, and another recession so soon after the last
one would certainly affect us. Likewise, the war in the Middle East certainly
adds an uncertainty that makes the future less clear. Still, we see no reason to
change our earnings expectations at this time, particularly after a good first
quarter.
2
"We remain very optimistic regarding CLARCOR's future. The positive impact of
our Total Filtration Program is becoming more and more evident. It has enabled
us to offer more products to our current customers and to build new
relationships with companies we had never sold to previously. Our Total
Filtration Program combined with the efforts of all our operating companies to
build their individual sales through new products and new customer relationships
will clearly drive our growth this year. Even in a difficult economic
environment and with a war of uncertain duration, we remain committed to our
goal of improved sales and earnings in 2003."
CLARCOR will be holding a conference call to discuss the first quarter results
at 10:00 am CST on March 24, 2003. Interested parties can listen to the
conference call at www.clarcor.com or www.companyboardroom.com. A replay will be
available on these websites and also at 800-642-1687 or 706-645-9291 and
providing confirmation code 8970544. The replay will be available through March
31, 2003 by telephone and for 30 days on the Internet.
CLARCOR is based in Rockford, Illinois, and is a diversified marketer and
manufacturer of mobile, industrial and environmental filtration products and
consumer and industrial packaging products sold in domestic and international
markets. Common shares of the Company are traded on the New York Stock Exchange
under the symbol CLC.
The statements in this release concerning the Company's sales, earnings,
business performance and prospects are forward-looking statements that involve
risk and uncertainties, including the effect of changes in product demand,
availability of labor, price and product competition, raw material costs, energy
prices, productivity improvement and plant consolidation programs, distribution
channels, acquisitions and divestitures, general economic conditions in both
domestic and foreign markets, interest rates, currency fluctuations, the success
of our Total Filtration Program, market disruptions caused by domestic or
international conflicts and other factors discussed in filings made with the
Securities and Exchange Commission.
TABLES FOLLOW
- MORE -
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CLARCOR 2003 UNAUDITED FIRST QUARTER RESULTS cont'd.
Page 4
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
First Quarter
----------------------------
For periods ended March 1, 2003 and March 2, 2002 2003 2002
- -------------------------------------------------------------------------------
Net sales ........................................ $ 171,494 $ 158,262
Cost of sales .................................... 123,145 113,552
------------ ------------
Gross profit ................................ 48,349 44,710
Selling and administrative expenses .............. 32,862 30,304
------------ ------------
Operating profit ............................ 15,487 14,406
Other income (expense) ........................... (375) (1,890)
------------ ------------
Earnings before income taxes ................ 15,112 12,516
Income taxes ..................................... 5,516 4,518
------------ ------------
Net earnings ..................................... $ 9,596 $ 7,998
============ ============
Net earnings per common share:
Basic ......................................... $ 0.39 $ 0.32
============ ============
Diluted ....................................... $ 0.38 $ 0.32
============ ============
Average shares outstanding:
Basic ......................................... 24,920,638 24,689,170
Diluted ....................................... 25,348,353 25,006,604
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 1, November 30,
2003 2002
- -------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash investments ............. $ 8,824 $ 13,747
Accounts receivable, net .............. 113,460 121,482
Inventories ........................... 108,637 101,846
Other ................................. 22,542 22,671
-------- --------
Total current assets ........... 253,463 259,746
Plant assets, net ........................... 130,864 132,892
Acquired intangibles, net ................... 122,575 122,529
Pension assets .............................. 21,442 21,771
Other assets ................................ 9,187 9,181
-------- --------
$537,531 $546,119
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LIABILITIES
Current liabilities:
Current portion of long-term debt ..... $ 56,414 $ 68,456
Accounts payable and accrued
liabilities ......................... 88,123 97,738
Income taxes .......................... 11,686 8,061
-------- --------
Total current liabilities ...... 156,223 174,255
Long-term debt .............................. 22,426 22,648
Long-term pension liabilities ............... 8,272 7,823
Other liabilities ........................... 26,694 25,932
-------- --------
213,615 230,658
SHAREHOLDERS' EQUITY ........................ 323,916 315,461
-------- --------
$537,531 $546,119
======== ========
SUMMARY CASH FLOWS
(Dollars in thousands)
Three Months
-----------------------
2003 2002
- --------------------------------------------------------------------
FROM OPERATING ACTIVITIES
Net earnings ........................... $ 9,596 $ 7,998
Depreciation ........................... 4,967 5,006
Amortization ........................... 225 182
Changes in assets and liabilities ...... (1,570) (1,221)
Other, net ............................. - (10)
-------- --------
Total provided (used) by
operating activities ............ 13,218 11,955
-------- --------
FROM INVESTING ACTIVITIES
Plant asset additions .................. (3,017) (3,280)
Business acquisitions .................. - 3,694
Other, net ............................. 7 (48)
-------- --------
Total provided (used) by
investing activities ............ (3,010) 366
-------- --------
FROM FINANCING ACTIVITIES
Proceeds from line of credit ........... 6,250 5,500
Payments on line of credit ............. (18,333) (14,500)
Payments on long-term debt ............. (181) (197)
Cash dividends paid .................... (3,052) (2,954)
Other, net ............................. 162 1,365
-------- --------
Total provided (used) by
financing activities ............ (15,154) (10,786)
-------- --------
Effect of exchange rate
changes on cash ................... 23 (69)
-------- --------
CHANGE IN CASH AND
CASH INVESTMENTS .................. $ (4,923) $ 1,466
======== ========
CLARCOR 2003 UNAUDITED FIRST QUARTER RESULTS cont'd.
Page 5
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
QUARTER ENDED
---------------------
MARCH 1 MARCH 2
2003 2002
-------- --------
NET SALES BY SEGMENT:
Engine/Mobile Filtration ................. $ 66,776 $ 57,839
Industrial/Environmental Filtration ...... 90,369 85,950
Packaging ................................ 14,349 14,473
-------- --------
$171,494 $158,262
======== ========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration ................. $ 12,686 $ 11,258
Industrial/Environmental Filtration ...... 2,373 2,530
Packaging ................................ 428 618
-------- --------
$ 15,487 $ 14,406
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