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 16, 2004
CLARCOR REPORTS RECORD SECOND QUARTER 2004 RESULTS
Q2 OPERATING PROFIT UP 16%; EPS UP 14%
UNAUDITED FISCAL SECOND QUARTER AND SIX MONTHS 2004 HIGHLIGHTS
(Amounts in thousands, except per share data and percentages)
<Caption>
- -------------------------------------------------------------------------------------------------------
QUARTER ENDED % CHANGE SIX MONTHS ENDED % CHANGE
5/29/04 5/31/03 5/29/04 5/31/03
- -------------------------------------------------------------------------------------------------------
Net Sales $198,712 $185,775 7.0 $373,984 $357,269 4.7
Operating Profit $23,793 $20,538 15.8 $41,606 $36,025 15.5
Net Earnings $14,914 $13,047 14.3 $26,575 $22,643 17.4
Diluted Earnings Per Share $0.58 $0.51 13.7 $1.03 $0.89 15.7
- -------------------------------------------------------------------------------------------------------
SECOND QUARTER AND SIX MONTHS 2004 OPERATING REVIEW
ROCKFORD, IL, JUNE 16, 2004 -- CLARCOR INC. (NYSE: CLC) reported today that
second quarter 2004 net earnings and diluted earnings per share increased by 14%
compared to the same quarter in 2003. Sales increased by 7% compared to the
prior year's second quarter, and operating profit increased by 16%.
For the six-month 2004 period, sales increased by 5%, and net earnings and
diluted earnings per share increased by 17% and 16%, respectively, compared to
2003.
Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "We are
pleased to again report double-digit earnings growth in the second quarter of
2004 together with a 7% increase in sales and operating margins that rose from
11.1% last year to 12% this year. We saw improvement in sales and operating
margins at each of our operating segments this quarter compared to the same
quarter in 2003, both domestically and internationally. For this year's second
quarter and also for the six-month period, foreign currency fluctuations did not
have a material impact on either sales or operating profit.
"Engine/Mobile Filtration sales rose by nearly 14% from last year's second
quarter. Like many companies, we are beginning to benefit from increased
domestic economic activity, and this was particularly evident in our
Engine/Mobile segment. Operating profit grew by 18% compared to last year's
second quarter, and operating margin was 20.3%. 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 3% from the
second quarter of last year and operating profit grew by 8%. We saw increased
sales across most product lines. We are also beginning to see increasing demand
for filters and filtration systems that we sell into capital goods markets. HVAC
filter sales, for both residential and commercial markets, are also improving
from sluggish sales earlier this year and in 2003. Demand remains strong for
aerospace filtration products. Operating margins improved to 6.0% compared to
5.7% last year primarily due to increased sales, which allows us to leverage the
many cost reductions we have made over the last several years.
"Packaging segment sales improved by 4% this quarter compared to last year, and
operating profit increased by 29%. Operating margins improved to 6.4% this
quarter from 5.1% in the second quarter last year. Sales of metal products,
primarily flat sheet decorating, increased during the quarter while plastic
product sales remain slow. 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, and believe that margins will continue to improve as the
Packaging segment enters its traditionally stronger sales period in the second
half of this year.
"Other income (expense) declined primarily due to foreign currency gains in the
second quarter of 2003 which did not recur in this year's second quarter. The
company's tax rate should be approximately 36.5% for the remainder of 2004.
Capital expenditures grew to $9 million for the 2004 six-month period compared
to $6 million in the six-month period of 2003. We expect capital expenditures to
reach $24 million to $26 million for 2004 from $13 million in 2003, primarily to
increase production capacity and to develop new product lines in response to
customer demand.
"Cash flow continues to be strong," Johnson continued. "We have repaid
substantially all of our outstanding bank debt, and our debt to total capital
(debt plus shareholders' equity) ratio is now 4% compared to 17% at the end of
the second quarter of 2003. We expect to continue to accumulate cash during the
rest of this year if we do not make any acquisitions. We are always evaluating
acquisition opportunities, and hope to complete several either this year or
early next year. With our consistent cash flow and significant borrowing
capacity we are able to fund ongoing operations and our current development and
expansion plans, to continue to pay dividends and to aggressively seek
acquisitions we believe will increase the value of our company.
"I am particularly pleased with the quarter's results in light of the additional
costs we incurred related to our corporate relocation later this summer to
Nashville, Tennessee, as well as Sarbanes-Oxley Rule 404 compliance costs,"
noted Johnson. For the quarter, relocation costs were approximately $400,000 or
$0.01 per share and Sarbanes-Oxley costs amounted to $700,000 or $0.02 per
share. Management estimates that the relocation will not exceed $0.07 per share
this year and that Sarbanes-Oxley implementation will cost approximately $0.04
per share in 2004. The majority of the relocation costs will occur during 2004
with minor amounts continuing into 2005. Management is not able to estimate, at
this time, the amount of Sarbanes-Oxley 404 costs continuing beyond 2004.
"Based on our first half results and current backlog, we are changing our
earnings guidance for 2004 to $2.30 to $2.40 per share from the $2.25 to $2.40
range we estimated last quarter," Norm Johnson stated. "Our estimate range
includes the costs to comply with Sarbanes-Oxley Rule 404, which are
significantly higher than we originally believed they would be. The estimate
does not include our relocation costs. Even with these costs we are confident
that CLARCOR will have a record 2004 and post its 12th 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 17, 2004. Interested parties can listen to the
conference call at www.clarcor.com or www.fulldisclosure.com. A replay will be
available on these websites, and also by providing confirmation code 4831300 at
877-519-4471 or 973-341-3080. The replay will be available through June 24, 2004
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
significant risks 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, the success of sales
and marketing programs, the cost of the relocation of the Company's corporate
offices, the cost of compliance with recently enacted regulatory requirements
such as Sarbanes-Oxley Rule 404 and other factors discussed in filings made with
the Securities and Exchange Commission.
TABLES FOLLOW
- MORE -
CLARCOR 2004 SECOND QUARTER RESULTS cont'd.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
Second Quarter Six Months
-------------------------------------- ------------------------------------
For periods ended May 29, 2004 and May 31, 2003 2004 2003 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------------
Net sales $ 198,712 $ 185,775 $ 373,984 $ 357,269
Cost of sales 137,613 129,176 261,401 252,321
----------------- ----------------- ---------------- -----------------
Gross profit 61,099 56,599 112,583 104,948
Selling and administrative expenses 37,306 36,061 70,977 68,923
----------------- ----------------- ---------------- -----------------
Operating profit 23,793 20,538 41,606 36,025
Other income (expense) (312) 8 239 (367)
----------------- ----------------- ---------------- -----------------
Earnings before income taxes 23,481 20,546 41,845 35,658
Income taxes 8,567 7,499 15,270 13,015
----------------- ----------------- ---------------- -----------------
Net earnings $ 14,914 $ 13,047 $ 26,575 $ 22,643
================= ================= ================ =================
Net earnings per common share:
Basic $ 0.59 $ 0.52 $ 1.05 $ 0.91
================= ================= ================ =================
Diluted $ 0.58 $ 0.51 $ 1.03 $ 0.89
================= ================= ================ =================
Average shares outstanding:
Basic 25,435,860 25,015,289 25,402,373 24,973,997
Diluted 25,872,920 25,435,452 25,841,322 25,326,543
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
May 29, November 29,
2004 2003
- ----------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash investments $ 23,516 $ 8,348
Accounts receivable, net 127,815 127,546
Inventories 108,502 99,673
Other 20,447 21,835
-------------------- --------------------
Total current assets 280,280 257,402
Plant assets, net 129,139 129,572
Acquired intangibles, net 124,752 122,351
Pension assets 20,732 20,153
Other assets 7,827 8,759
-------------------- --------------------
$ 562,730 $ 538,237
==================== ====================
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 518 $ 674
Accounts payable and accrued
liabilities 103,393 102,322
Income taxes 7,586 8,377
-------------------- --------------------
Total current liabilities 111,497 111,373
Long-term debt 16,789 16,913
Long-term pension liabilities 9,313 7,813
Other liabilities 31,448 31,746
-------------------- --------------------
169,047 167,845
SHAREHOLDERS' EQUITY 393,683 370,392
-------------------- --------------------
$ 562,730 $ 538,237
==================== ====================
SUMMARY CASH FLOWS
(Dollars in thousands)
Six Months
------------------------------------------
2004 2003
-----------------------------------------------------------------------------------------------------------------
FROM OPERATING ACTIVITIES
Net earnings $ 26,575 $ 22,643
Depreciation 9,291 9,860
Amortization 380 453
Changes in assets and liabilities (2,064) (2,534)
Other, net (571) 45
------------------- --------------------
Total provided (used) by
operating activities 33,611 30,467
------------------- --------------------
FROM INVESTING ACTIVITIES
Plant asset additions (9,197) (6,041)
Business acquisition (4,871) -
Other, net 1,415 26
------------------- --------------------
Total provided (used) by
investing activities (12,653) (6,015)
------------------- --------------------
FROM FINANCING ACTIVITIES
Proceeds from line of credit 1,500 94,111
Payments on line of credit (1,500) (116,083)
Payments on long-term debt (280) (465)
Cash dividends paid (6,361) (6,120)
Other, net 871 440
------------------- --------------------
Total provided (used) by
financing activities (5,770) (28,117)
------------------- --------------------
Effect of exchange rate
changes on cash (20) 244
------------------- --------------------
CHANGE IN CASH AND
CASH INVESTMENTS $ 15,168 $ (3,421)
=================== ====================
4
CLARCOR 2004 SECOND QUARTER RESULTS cont'd.
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
2004
------------------------------------------------------------------
QUARTER QUARTER
ENDED ENDED SIX
FEBRUARY 28 MAY 29 MONTHS
------------------- ------------------- --------------------
NET SALES BY SEGMENT:
Engine/Mobile Filtration $ 70,800 $ 82,992 $ 153,792
Industrial/Environmental Filtration 88,962 98,249 187,211
Packaging 15,510 17,471 32,981
------------------- ------------------- --------------------
$ 175,272 $ 198,712 $ 373,984
=================== =================== ====================
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration $ 14,425 $ 16,812 $ 31,237
Industrial/Environmental Filtration 3,252 5,864 9,116
Packaging 136 1,117 1,253
------------------- ------------------- --------------------
$ 17,813 $ 23,793 $ 41,606
=================== =================== ====================
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration 20.4% 20.3% 20.3%
Industrial/Environmental Filtration 3.7% 6.0% 4.9%
Packaging 0.9% 6.4% 3.8%
------------------- ------------------- --------------------
10.2% 12.0% 11.1%
=================== =================== ====================
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
=================== =================== ====================
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration 19.0% 19.5% 19.3%
Industrial/Environmental Filtration 2.6% 5.7% 4.2%
Packaging 3.0% 5.1% 4.2%
------------------- ------------------- --------------------
9.0% 11.1% 10.1%
=================== =================== ====================
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