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
WEDNESDAY, JUNE 18, 2003
CLARCOR REPORTS RECORD SECOND QUARTER 2003 RESULTS
Q2 NET EARNINGS UP 23%; EPS UP 21%
UNAUDITED FISCAL SECOND QUARTER AND SIX MONTHS 2003 HIGHLIGHTS (Amounts in
thousands, except per share data and percentages)
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------
QUARTER ENDED % SIX MONTHS ENDED %
5/31/03 6/1/02 CHANGE 5/31/03 6/1/02 CHANGE
- ------------------------------------------------------------------------------------------------------------------------
AS REPORTED ON A GAAP BASIS:
Net Sales $185,775 $176,510 5.2 $357,269 $334,772 6.7
Operating Profit $20,538 $18,796 9.3 $36,025 $33,202 8.5
Net Earnings $13,047 $10,607 23.0 $22,643 $18,605 21.7
Diluted Earnings Per Share $0.51 $0.42 21.4 $0.89 $0.74 20.3
- ------------------------------------------------------------------------------------------------------------------------
</Table>
SECOND QUARTER AND SIX MONTHS 2003 OPERATING REVIEW
ROCKFORD, IL, JUNE 18, 2003 -- CLARCOR INC. (NYSE: CLC) reported today that
second quarter 2003 net earnings and diluted earnings per share increased by 23%
and 21%, respectively, compared to the same quarter in 2002. Sales increased by
5% compared to the prior year's second quarter and operating profit increased by
9%. An acquisition made in June 2002 increased sales by almost $5 million in
this year's second quarter. Foreign currency fluctuations did not have a
material impact on either sales or operating profit in the second quarter or
six-month periods of 2003.
For the six-month 2003 period, sales increased by 7% and net earnings and
diluted earnings per share increased by 22% and 20%, respectively, compared to
2002. The June 2002 acquisition increased sales by almost $9 million in the 2003
six-month period.
Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "We are very
pleased with our second quarter results. In addition to an increase in sales of
5%, gross margins rose to 30.5% from 29.1% last year, and operating margins
increased to 11.1% from 10.6% last year. Each of our filtration segments
reported increased sales and operating profits compared to the same quarter last
year. Our international filter operations also had a good second quarter with
double-digit increases in both sales and operating profit compared to last
year's second quarter.
"Engine/Mobile Filtration sales rose by nearly 13% from last year's second
quarter and includes the impact of the Locker acquisition in June 2002. In a
period of slow growth throughout much of the U.S. economy, particularly in the
manufacturing sector, the sales increase demonstrates the impact of new sales
and marketing initiatives begun early last year. These initiatives focus
increased attention on markets where we have had limited sales penetration with
specific programs designed to add new distribution and strengthen current
distribution. Operating profit grew by 8% compared to last year's second quarter
and operating margin was 19.5% which includes the Locker acquisition. The Locker
acquisition reduced operating margin for the second quarter by approximately one
percentage point. Product demand was strong and consistent throughout the
quarter in our heavy-duty engine filter and railroad filter product lines.
"Industrial/Environmental Filtration sales increased by nearly 2% from the
second quarter of last year and operating profit grew by 16%. We saw increased
sales, both domestically and internationally, of filters sold for aviation and
oil drilling applications. Based on current order indications, we expect this
trend to continue for the rest of this year and next year. We saw continuing
weakness in filters sold into capital goods markets and for automotive
manufacturing applications. HVAC filter sales, for both residential and
commercial markets, were not as strong as we had planned, but we expect this to
improve as the year progresses. Operating margins improved to 5.7% compared to
5.0% last year primarily due to cost reductions and manufacturing integration
efforts throughout the Industrial/Environmental segment.
"We have several major organizational initiatives underway to improve operating
efficiency in our Industrial/Environmental Filtration segment. We are shifting
the responsibility for our Airguard and Purolator branches to our TFS
organization. This will place our distribution outlets within one operation
which we expect will lead to increased customer service and greater
opportunities to provide our Total Filtration Program to more customers. In
addition, we are combining many of the manufacturing, engineering and
administrative functions of our Airguard and Purolator operations. Until this
process is complete, we will incur duplicative costs in these areas. Next year,
as these costs are eliminated, we expect the result will be improved margins
from greater production efficiencies and lower operating costs as we continue to
make progress towards our goal of a 10% operating margin in this segment.
"Packaging segment sales declined by 3% this quarter compared to last year and
operating profit decreased by 9%. Sales of metal products increased during the
quarter while plastic product sales decreased. Based on current order rates, we
expect sales and operating profit in the third and fourth quarters of this year
to exceed last year's levels. Late last year, we made changes in manufacturing
management in this segment and more recently we have made changes in the sales
area as well. We believe that the changes in manufacturing should result in
improved margins as our Packaging segment enters its traditionally stronger
sales periods in the second half of this year. We also expect that the changes
in the sales area will lead to increased growth beginning early next year.
2
"Other income (expense) declined primarily due to lower interest expense as a
result of a decline in interest rates and reduced bank debt during 2003 and also
due to currency translation gains in 2003 compared to translation losses in
2002.
"Cash flow continues to be good. Debt declined by $22 million from the end of
last year. Our debt to total capital (debt plus shareholders' equity) ratio is
now 17% compared to 22% at the end of 2002. During the quarter, we completed the
renegotiation of a $165 million credit agreement with our bank group. We
maintain significant borrowing capacity to fund ongoing operations and our
current development and expansion plans, to continue to pay a dividend and to
aggressively seek acquisitions when we believe those opportunities will increase
the value of our company.
"Based on stronger first half results than we expected at the beginning of the
year, we now expect 2003 earnings per share to be in the $1.97 to $2.05 range.
If overall demand is stronger or if the economy noticeably improves in the
second half, we would expect to hit the higher end of this range. An improved
U.S. economy will certainly help, but even if the economy stays flat, we still
expect CLARCOR to have a record 2003 and post its 11th consecutive year of
increased earnings."
CLARCOR will be holding a conference call to discuss the second quarter results
at 10:00 am CDT on June 19, 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 1161223. The replay will be available through June
26, 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 -
3
CLARCOR 2003 UNAUDITED SECOND QUARTER RESULTS cont'd.
Page 4
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
Second Quarter Six Months
------------------------------ ------------------------------
For periods ended May 31, 2003 and June 1, 2002 2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
Net sales........................................... $ 185,775 $ 176,510 $ 357,269 $ 334,772
Cost of sales....................................... 129,176 125,210 252,321 238,762
----------- ----------- ----------- -----------
Gross profit................................... 56,599 51,300 104,948 96,010
Selling and administrative expenses................. 36,061 32,504 68,923 62,808
----------- ----------- ----------- -----------
Operating profit............................... 20,538 18,796 36,025 33,202
Other income (expense).............................. 8 (2,172) (367) (4,062)
----------- ----------- ----------- -----------
Earnings before income taxes................... 20,546 16,624 35,658 29,140
Income taxes........................................ 7,499 6,017 13,015 10,535
----------- ----------- ----------- -----------
Net earnings........................................ $ 13,047 $ 10,607 $ 22,643 $ 18,605
=========== =========== =========== ===========
Net earnings per common share:
Basic............................................ $ 0.52 $ 0.43 $ 0.91 $ 0.75
=========== =========== =========== ===========
Diluted.......................................... $ 0.51 $ 0.42 $ 0.89 $ 0.74
=========== =========== =========== ===========
Average shares outstanding:
Basic............................................ 25,015,289 24,856,731 24,973,997 24,782,349
Diluted.......................................... 25,435,452 25,310,296 25,326,543 25,142,081
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
May 31, November 30,
2003 2002
- -----------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash investments...................... $ 10,326 $ 13,747
Accounts receivable, net....................... 117,621 121,482
Inventories.................................... 112,680 101,846
Other 22,010 22,671
-------- --------
Total current assets.................... 262,637 259,746
Plant assets, net.................................... 129,217 132,892
Acquired intangibles, net............................ 122,559 122,529
Pension assets....................................... 21,267 21,771
Other assets......................................... 10,192 9,181
-------- --------
$545,872 $546,119
======== ========
LIABILITIES
Current liabilities:
Current portion of long-term debt.............. $ 5,699 $ 68,456
Accounts payable and accrued
liabilities.................................. 95,044 97,738
Income taxes................................... 9,556 8,061
-------- --------
Total current liabilities............... 110,299 174,255
Long-term debt....................................... 62,968 22,648
Long-term pension liabilities........................ 9,257 7,823
Other liabilities.................................... 27,287 25,932
-------- --------
209,811 230,658
SHAREHOLDERS' EQUITY................................. 336,061 315,461
-------- --------
$545,872 $546,119
======== ========
SUMMARY CASH FLOWS
(Dollars in thousands)
Six Months
----------------------------
2003 2002
- -----------------------------------------------------------------------------------------------
FROM OPERATING ACTIVITIES
Net earnings.................................................. $ 22,643 $ 18,605
Depreciation.................................................. 9,860 10,067
Amortization.................................................. 453 365
Changes in assets and liabilities............................. (2,534) 11,627
Other, net.................................................... 45 72
--------- --------
Total provided (used) by
operating activities................................ 30,467 40,736
--------- --------
FROM INVESTING ACTIVITIES
Plant asset additions......................................... (6,041) (6,078)
Business acquisitions......................................... - 3,694
Other, net.................................................... 26 (1)
--------- --------
Total provided (used) by
investing activities................................ (6,015) (2,385)
--------- --------
FROM FINANCING ACTIVITIES
Proceeds from line of credit.................................. 94,111 9,500
Payments on line of credit.................................... (116,083) (39,500)
Payments on long-term debt.................................... (465) (219)
Cash dividends paid........................................... (6,120) (5,937)
Other, net.................................................... 440 1,786
--------- --------
Total provided (used) by
financing activities................................ (28,117) (34,370)
--------- --------
Effect of exchange rate
changes on cash.......................................... 244 25
--------- --------
CHANGE IN CASH AND
CASH INVESTMENTS.......................................... $ (3,421) $ 4,006
========= ========
CLARCOR 2003 UNAUDITED SECOND QUARTER RESULTS cont'd.
Page 5
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
2003
----------------------------------------
QUARTER QUARTER
ENDED ENDED SIX
MARCH 1 MAY 31 MONTHS
-------- -------- --------
NET SALES BY SEGMENT:
Engine/Mobile Filtration................................... $ 66,776 $ 73,066 $139,842
Industrial/Environmental Filtration........................ 90,369 95,852 186,221
Packaging.................................................. 14,349 16,857 31,206
-------- -------- --------
$171,494 $185,775 $357,269
======== ======== ========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration................................... $ 12,686 $ 14,253 $ 26,939
Industrial/Environmental Filtration........................ 2,373 5,417 7,790
Packaging.................................................. 428 868 1,296
-------- -------- --------
$ 15,487 $ 20,538 $ 36,025
======== ======== ========
2002
----------------------------------------
QUARTER QUARTER
ENDED ENDED SIX
MARCH 2 JUNE 1 MONTHS
-------- -------- --------
NET SALES BY SEGMENT:
Engine/Mobile Filtration................................... $ 57,839 $ 64,760 $122,599
Industrial/Environmental Filtration........................ 85,950 94,377 180,327
Packaging.................................................. 14,473 17,373 31,846
-------- -------- --------
$158,262 $176,510 $334,772
======== ======== ========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration................................... $ 11,258 $ 13,169 $ 24,427
Industrial/Environmental Filtration........................ 2,530 4,672 7,202
Packaging.................................................. 618 955 1,573
-------- -------- --------
$ 14,406 $ 18,796 $ 33,202
======== ======== ========