EXHIBIT 99.1
FOR FURTHER INFORMATION CONTACT:
Bruce A. Klein
Vice President-Finance and Chief Financial Officer
Franklin, Tennessee
615-771-3100
FOR IMMEDIATE RELEASE
WEDNESDAY, SEPTEMBER 15, 2004
CLARCOR REPORTS RECORD THIRD QUARTER 2004 RESULTS
SALES UP 8%, NET EARNINGS UP 11%
UNAUDITED FISCAL THIRD QUARTER AND NINE MONTHS 2004 HIGHLIGHTS (Amounts in
thousands, except per share data and percentages)
<Table>
<Caption>
- --------------------------------------------- ------------------------ ----------- ------------------------ ------------
QUARTER ENDED % CHANGE NINE MONTHS ENDED % CHANGE
8/28/04 8/30/03 8/28/04 8/30/03
- --------------------------------------------- ------------------------ ----------- ------------------------ ------------
Net Sales $206,209 $190,647 8.2 $580,193 $547,916 5.9
Operating Profit $25,500 $22,655 12.6 $67,106 $58,680 14.4
Net Earnings $15,875 $14,304 11.0 $42,450 $36,947 14.9
Diluted Earnings Per Share $0.61 $0.56 8.9 $1.65 $1.46 13.0
- ------------------------------------------------------------------------------------------------------------------------
</Table>
THIRD QUARTER AND NINE MONTHS 2004 OPERATING REVIEW
FRANKLIN, TN, SEPTEMBER 15, 2004--CLARCOR INC. (NYSE: CLC) reported today
that third quarter 2004 sales increased by 8%, and net earnings and diluted
earnings per share increased by 11% and 9%, respectively, compared to the same
quarter in 2003. Third quarter operating profit increased by 13%, and operating
margins improved to 12.4% in 2004 from 11.9% in 2003.
For the nine-month 2004 period, sales increased by 6%, and net earnings and
diluted earnings per share increased by 15% and 13%, respectively, compared to
2003. Nine-month operating profit increased by 14%, and operating margins
improved to 11.6% in 2004 from 10.7% in 2003.
Third quarter 2004 results were impacted by several factors:
o A $0.04 per share cost to relocate the Company's headquarters to
Franklin, Tennessee.
o Costs of $0.01 per share incurred to comply with the provisions of
Sarbanes-Oxley Section 404.
o A $0.01 per share cost to sell a distribution operation in Mexico.
Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "Our third
quarter was another record for CLARCOR with growth in sales and operating profit
in all three of our business segments. Operating margins improved in both our
Industrial/Environmental segment and in our Packaging segment by over one
percentage point each. We are pleased that we once again had a strong quarter
despite costs incurred in our recent headquarters relocation, Sarbanes-Oxley 404
compliance and the sale of a Mexican distribution operation that impacted
earnings per share this quarter by $0.06.
"Our Engine/Mobile Filtration segment sales grew by over 13% this quarter,
driven by increased product demand from independent aftermarket distribution and
a growing presence in the OEM dealer channel. Both OEM and aftermarket sales of
locomotive filtration products continue to be strong, as they have been
throughout the year. Segment operating margins declined slightly, but would have
been approximately the same as last year's third quarter excluding
Sarbanes-Oxley 404 compliance costs. Internationally, sales of our overseas
operations were strong in both U.S. and local currencies, with particularly
solid growth in China, South Africa, Mexico and continental Europe.
"Our Industrial/Environmental Filtration segment sales this quarter increased by
4% over the third quarter last year, but as has been the case throughout 2004,
sales were very uneven across different markets. Sales were very strong to the
oil drilling, aviation and aerospace industries. HVAC filter sales were weaker
than we had expected, partially due to cooler than normal weather this summer.
Dust collection cartridge sales also improved after a slow first half of the
year and we expect to see a pickup in dust collection system sales later this
year and in 2005, driven by our completely revamped product line. Sales of
specialty filters and filtration systems were also strong this quarter,
particularly small sewage filtration systems and filters used in industrial
process applications. We continue to make progress towards achieving our
objective of a 10% operating margin in this segment and several of our
operations already exceed this goal.
"Packaging segment sales rose by 9%, driven by metal product sales which offset
a decline in sales of plastic products. Improving manufacturing efficiencies led
to an increase in operating profit compared to last year's third quarter. For
the remainder of the year, we expect that sales and operating profit will exceed
last year's fourth quarter.
"We are working on numerous growth programs, probably more now than at any time
during my tenure at CLARCOR. These programs range from the development of new
filter medias for our traditional products, to new filter designs for markets
where we have not previously had a presence. We have more filters under
development in both our filtration segments than ever before. We are also
expanding our technical capabilities, including building a new aviation fuel
test center in Greensboro, North Carolina, and designing a new HVAC filter
research and product development center, which we believe will be the largest
and most sophisticated in the industry. Elsewhere, we are expanding several of
our technical facilities to support further development of our process liquid
filter products.
"Our biggest immediate challenge is the cost and availability of certain raw
materials. Like many industrial companies we are facing increased steel costs,
but we also see increasing costs for other commodities. Similarly, costs for
energy and health care also continue to rise. To offset these, we have and will
continue to raise prices where possible, but also expect to improve productivity
through increased training, automation and facilities integration.
"Fluctuations in currencies did not have a material impact this quarter on
either sales or profitability. Our effective tax rate this quarter was 36.7% and
we expect a 36.5% rate in the fourth quarter. Capital expenditures increased in
the third quarter compared to capital spending earlier this year. For 2004,
capital expenditures should be in the $23 million to $26 million range.
"Cash flow from operations continues to be solid at over $44 million for the
year-to date. With relatively little debt and cash balances of over $26 million,
we have the ability to fund all of our growth programs, continue to pay a
dividend and explore acquisition opportunities. It has been our policy over the
years to maintain a strong and liquid balance sheet and we expect that this will
continue.
"In our previous guidance, we estimated that 2004 earnings per share would be in
the range of $2.30 to $2.40, excluding relocation costs estimated at $0.07 per
share. We now expect 2004 diluted earnings per share to be $2.36 to $2.41, again
excluding relocation costs, which we now estimate will be $0.05 per share. We do
not believe that relocation costs going forward will be significant. Including
all relocation costs, our full year 2004 earnings per share estimate is in the
range of $2.31 to $2.36, and $0.66 to $0.71 for the fourth quarter.
Sarbanes-Oxley implementation costs will continue, but these costs are included
in our estimate for the year.
"We previously announced the acquisition of United EFP, which we expect we will
complete later today. We do not expect that this acquisition will have a
material impact on fourth quarter 2004 results."
CLARCOR will be holding a conference call to discuss third quarter results at
10:00 am CDT on September 15, 2004. Interested parties can listen to the
conference call through the Internet at www.clarcor.com or
www.companyboardroom.com. A replay will be available on these websites and also
at 877-519-4471 or 973-341-3080 by providing confirmation code 5131895. The
replay will be available through September 22nd by telephone and for 30 days on
the Internet.
CLARCOR is based in Franklin, Tennessee, 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
and other factors discussed in filings made with the Securities and Exchange
Commission.
TABLES FOLLOW
- MORE -
CLARCOR 2004 THIRD QUARTER RESULTS cont'd
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
For periods ended August 28, 2004 and August 30, 2003 Third Quarter Nine Months
---------------------------- ----------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------------------------------------------------------
Net sales ............................................. $ 206,209 $ 190,647 $ 580,193 $ 547,916
Cost of sales ......................................... 142,975 134,493 404,376 386,814
------------ ------------ ------------ ------------
Gross profit ....................................... 63,234 56,154 175,817 161,102
Selling and administrative expenses ................... 37,734 33,499 108,711 102,422
------------ ------------ ------------ ------------
Operating profit .................................. 25,500 22,655 67,106 58,680
Other income (expense) ................................ 278 (71) 90 (400)
------------ ------------ ------------ ------------
Earnings before income taxes and minority earnings . 25,222 22,584 67,196 58,280
Income taxes .......................................... 9,257 8,239 24,527 21,254
------------ ------------ ------------ ------------
Earnings before minority earnings .................. 15,965 14,345 42,669 37,026
Minority interests in earnings of subsidiaries ........ (90) (41) (219) (79)
------------ ------------ ------------ ------------
Net earnings .......................................... 15,875 $ 14,304 $ 42,450 $ 36,947
============ ============ ============ ============
Net earnings per common share:
Basic .............................................. $ 0.62 $ 0.57 $ 1.67 $ 1.48
============ ============ ============ ============
Diluted ............................................ $ 0.61 $ 0.56 $ 1.65 $ 1.46
============ ============ ============ ============
Average shares outstanding:
Basic .............................................. 25,544,988 25,174,259 25,454,180 25,046,912
Diluted ............................................ 25,869,507 25,534,741 25,780,426 25,280,719
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
August 28, November 29,
2004 2003
- --------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash investments ...................... $ 26,281 $ 8,348
Accounts receivable, net ....................... 136,267 127,546
Inventories .................................... 109,688 99,673
Other .......................................... 20,357 21,835
-------- --------
Total current assets .................. 292,593 257,402
Plant assets, net ................................. 129,987 129,572
Acquired intangibles, net ......................... 125,589 122,351
Pension assets .................................... 21,022 20,153
Other assets ...................................... 7,906 8,759
-------- --------
$577,097 $538,237
======== ========
LIABILITIES
Current liabilities:
Current portion of long-term debt............... $ 542 $ 674
Accounts payable and accrued liabilities ....... 105,149 102,322
Income taxes .................................. 4,460 8,377
-------- --------
</Table>
SUMMARY CASH FLOWS
(Dollars in thousands)
Nine Months
----------------------
2004 2003
- ----------------------------------------------------------------
FROM OPERATING ACTIVITIES
Net earnings .......................... $ 42,450 $ 36,947
Depreciation .......................... 13,822 14,554
Amortization .......................... 595 681
Changes in assets and liabilities...... (11,703) 1,306
Other, net ............................ (489) 82
--------- ---------
Total provided (used) by
operating activities ............ 44,675 53,570
--------- ---------
FROM INVESTING ACTIVITIES
Plant asset additions ................. (15,089) (8,877)
Business acquisition .................. (4,871) 1,969
Other, net ............................ 1,969 (3)
--------- ---------
Total provided (used) by
investing activities ............ (17,991) (8,880)
--------- ---------
FROM FINANCING ACTIVITIES
Proceeds from line of credit .......... 1,500 108,565
Payments on line of credit ............ (1,500) (148,444)
Payments on long-term debt ............ (292) (5,310)
</Table>
CLARCOR 2004 THIRD QUARTER RESULTS cont'd.
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
2004
---------------------------------------------------------------------------
QUARTER QUARTER QUARTER
ENDED ENDED SIX ENDED NINE
FEBRUARY 28 MAY 29 MONTHS AUGUST 28 MONTHS
----------- --------- --------- --------- ---------
NET SALES BY SEGMENT:
Engine/Mobile Filtration ... $ 70,800 $ 82,992 $ 153,792 $ 83,771 $ 237,563
Industrial/Environmental
Filtration ............... 88,962 98,249 187,211 102,646 289,857
Packaging .................. 15,510 17,471 32,981 19,792 52,773
--------- --------- --------- --------- ---------
$ 175,272 $ 198,712 $ 373,984 $ 206,209 $ 580,193
========= ========= ========= ========= =========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration ... $ 14,425 $ 16,989 $ 31,414 $ 16,892 $ 48,306
Industrial/Environmental
Filtration ............... 3,252 6,076 9,328 8,457 17,785
Packaging .................. 136 1,153 1,289 1,665 2,954
Relocation Costs ........... -- (425) (425) (1,514) (1,939)
--------- --------- --------- --------- ---------
$ 17,813 $ 23,793 $ 41,606 $ 25,500 $ 67,106
========= ========= ========= ========= =========
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration ... 20.4% 20.5% 20.4% 20.2% 20.3%
Industrial/Environmental
Filtration ............... 3.7% 6.2% 5.0% 8.2% 6.1%
Packaging .................. 0.9% 6.6% 3.9% 8.4% 5.6%
--------- --------- --------- --------- ---------
10.2% 12.0% 11.1% 12.4% 11.6%
========= ========= ========= ========= =========
2003
------------------------------------------------------------------------
QUARTER QUARTER QUARTER
ENDED ENDED SIX ENDED NINE
MARCH 1 MAY 31 MONTHS AUGUST 30 MONTHS
------- ------ ------ --------- ------
NET SALES BY SEGMENT:
Engine/Mobile Filtration ... $ 66,776 $ 73,066 $ 139,842 $ 73,815 $ 213,657
Industrial/Environmental
Filtration ............... 90,369 95,852 186,221 98,683 284,904
Packaging .................. 14,349 16,857 31,206 18,149 49,355
--------- --------- --------- --------- ---------
$ 171,494 $ 185,775 $ 357,269 $ 190,647 $ 547,916
========= ========= ========= ========= =========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration ... $ 12,686 $ 14,253 $ 26,939 $ 15,137 $ 42,076
Industrial/Environmental
Filtration ............... 2,373 5,417 7,790 6,218 14,008
Packaging .................. 428 868 1,296 1,300 2,596
--------- --------- --------- --------- ---------
$ 15,487 $ 20,538 $ 36,025 $ 22,655 $ 58,680
========= ========= ========= ========= =========
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration ... 19.0% 19.5% 19.3% 20.5% 19.7%
Industrial/Environmental
Filtration ............... 2.6% 5.7% 4.2% 6.3% 4.9%
Packaging .................. 3.0% 5.1% 4.2% 7.2% 5.3%
--------- --------- --------- --------- ---------
9.0% 11.1% 10.1% 11.9% 10.7%
========= ========= ========= ========= =========
Note: Operating profit by segment for the quarter and six-months ended May 29,
2004, was restated to show relocation costs as a separate line item in
this table.