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, MARCH 16, 2005
CLARCOR REPORTS RECORD FIRST QUARTER 2005 RESULTS
OPERATING PROFIT UP 18%, NET EARNINGS UP 13%
UNAUDITED FISCAL FIRST QUARTER 2005 HIGHLIGHTS
(Amounts in thousands, except per share data and percentages)
<Table>
<Caption>
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QUARTER ENDED %
2/26/05 2/28/04 CHANGE
- ------------------------------------------------------------------------------------------
Net Sales $196,261 $175,272 12.0
Operating Profit $21,080 $17,813 18.3
Net Earnings $13,154 $11,661 12.8
Diluted Earnings Per Share $0.50 $0.45 11.1
Average Diluted Shares Outstanding 26,160,899 25,813,606 1.3
- ------------------------------------------------------------------------------------------
</Table>
FIRST QUARTER 2005 OPERATING REVIEW
FRANKLIN TN, WEDNESDAY, MARCH 16, 2005--CLARCOR INC. (NYSE: CLC) today
reported results for the first quarter ended February 26, 2005. Sales in the
first quarter of 2005 increased by $21 million, a 12% increase compared to 2004.
Operating profit increased by 18% and net earnings by 13% compared to the same
quarter in 2004. Diluted earnings per share increased by 11%. Foreign currency
fluctuations did not materially impact sales for the quarter.
Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "We are off
to a strong start in 2005 with sales growing by 12% and operating profit by 18%.
Revenue growth was helped by our acquisition of Purolator EFP last September
which contributed $6 million to sales for the first quarter. Without Purolator
EFP and a smaller acquisition made earlier in 2004, internal sales growth would
still have been above 7% for the quarter. Operating margins continue to improve
from 10.2% in 2004 to 10.7% in 2005. Engine/Mobile segment margins were level
with last year at over 20% and our two other segments, Industrial/Environmental
and Packaging, both improved their operating margins in 2005 compared to the
same quarter in 2004. We expect continued operating margin improvement
throughout the rest of 2005. We are no longer incurring relocation costs and
regulatory costs, largely related to Sarbanes-Oxley compliance, should be
somewhat lower this year.
"During the first quarter in 2004, we sold a facility in Europe for a gain,
recorded as part of other income of approximately $700,000. Also in 2004, we
recorded a small gain from foreign currency fluctuations compared to a foreign
currency exchange loss in 2005. This is the reason for the change from other
income in 2004 to other expense in 2005, and why the growth in operating profit
was greater than the growth in earnings per share for the quarter.
"Engine/Mobile segment sales increased by 17%, driven mainly by growth in
heavy-duty filter sales through traditional distribution and to truck fleets. We
saw significant growth in filter sales to OEM's and, particularly, OEM dealers.
Internationally, Engine/Mobile segment sales were also strong throughout Europe
and Asia. We are also seeing continued sales growth of our dust collector
cartridges and expect this to continue through at least this year.
"Industrial/Environmental segment sales, including Purolator EFP, grew by 9%,
however, growth and profitability in this segment were very uneven across
different markets. Sales of filtration equipment, such as dust collectors, and
sales of filters for oil and gas drilling, aerospace and process applications
were consistently good for all of the first quarter. We do not anticipate a
decline in these sales during the rest of 2005. Sales for HVAC applications,
both residential and commercial, continue to be weak and below our expectations.
We have made certain changes in this area, such as hiring additional sales
people and instituting new cost reduction programs, which we believe will
improve sales and profits in this channel as the year progresses. Purolator EFP
is performing exceptionally well with operating profits significantly above what
we expected when we purchased the company last September.
"Our Packaging segment continues to make steady, incremental improvements with
sales growing by 3% and operating profit much higher than last year. The first
quarter is normally this segment's smallest and is not always indicative of
performance during the next three quarters. However, based on our current order
book and significant improvements made over the last two years in manufacturing
productivity, we expect higher profits in this segment for 2005 compared to
2004.
"2005 is expected to be another strong cash flow year for CLARCOR. Though cash
flow from operations in the first quarter of 2005 was $11 million compared to
$15 million in the same quarter last year, we anticipate cash flow from
operations, less capital expenditures, to be higher in 2005 than in 2004.
Capital expenditures this year will be approximately $20 million to $22 million
compared to $22 million in 2004. Our tax rate for 2005 will be approximately
36.3%.
"We expect that 2005 earnings per share will be in the $2.63 to $2.71 range,
which includes the impact of expensing stock options. We expect to adopt the
modified prospective accounting method, which will result in a charge beginning
in our fourth fiscal quarter, of approximately $0.02 to $0.03 per share for the
quarter. The lower end of the range has been raised to $2.63 from our previous
estimate of $2.61 based on our first quarter results. We have been able to pass
through most of the steel price increases we incurred last year and so far this
year, but we recognize that in addition to steel, prices for many other
commodities and manufactured materials continue to increase. Still, we remain
optimistic about 2005 based on our first quarter results and expect 2005 to be
our 13th consecutive record year of sales and profits for CLARCOR."
CLARCOR will be holding a conference call to discuss the first quarter results
at 10:00 a.m. CST on March 17, 2005. Interested parties can listen to the
conference call at www.clarcor.com or www.viavid.com. A replay will be available
on these websites and also at 888-203-1112 or 719-457-0820 and providing
confirmation code 6836549. The replay will be available through March 24, 2005
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, health care 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 compliance with recently
enacted regulatory requirements, the effect of changes in accounting rules and
other factors discussed in filings made with the Securities and Exchange
Commission.
TABLES FOLLOW
- MORE -
CLARCOR 2005 UNAUDITED FIRST QUARTER RESULTS cont'd.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
Three Months
----------------------------------
For periods ended February 26, 2005 and February 28, 2004 2005 2004
- -----------------------------------------------------------------------------------------------------
Net sales ................................................ $ 196,261 $ 175,272
Cost of sales ............................................ 139,242 123,788
------------ ------------
Gross profit ........................................... 57,019 51,484
Selling and administrative expenses ...................... 35,939 33,671
------------ ------------
Operating profit ....................................... 21,080 17,813
Other income (expense) ................................... (312) 585
------------ ------------
Earnings before income taxes and minority interests 20,768 18,398
Income taxes ............................................. 7,536 6,703
------------ ------------
Earnings before minority interests ..................... 13,232 11,695
Minority interests in earnings of subsidiaries ........... (78) (34)
------------ ------------
Net earnings ............................................. $ 13,154 $ 11,661
============ ============
Net earnings per common share:
Basic .................................................. $ 0.51 $ 0.46
============ ============
Diluted ................................................ $ 0.50 $ 0.45
============ ============
Average shares outstanding:
Basic .................................................. 25,722,208 25,368,917
Diluted ................................................ 26,160,899 25,813,606
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
February 26, November 27,
2005 2004
- ----------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash investments ..................... $ 16,181 $ 22,520
Accounts receivable, net ...................... 138,256 143,719
Inventories ................................... 122,198 115,571
Other ......................................... 22,224 22,180
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Total current assets ................... 298,859 303,990
Plant assets, net ................................ 140,621 142,242
Acquired intangibles, net ........................ 147,673 147,789
Pension assets ................................... 24,521 24,574
Other assets ..................................... 9,326 9,202
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$ 621,000 $ 627,797
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LIABILITIES
Current liabilities:
Current portion of long-term debt ............. $ 306 $ 420
Accounts payable and accrued liabilities ...... 100,128 117,859
Income taxes .................................. 10,644 7,993
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Total current liabilities 111,078 126,272
Long-term debt 16,042 24,130
Long-term pension liabilities 12,418 11,256
Other liabilities 38,398 37,677
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177,936 199,335
SHAREHOLDERS' EQUITY 443,064 428,462
---------- ----------
$ 621,000 $ 627,797
========== ==========
</Table>
SUMMARY CASH FLOWS
(Dollars in thousands)
Three Months
------------------------------
2005 2004
- --------------------------------------------------------------------------------------
FROM OPERATING ACTIVITIES
Net earnings .................................. $ 13,154 $ 11,661
Depreciation .................................. 5,214 4,602
Amortization .................................. 315 190
Changes in assets and liabilities ............. (7,437) (993)
Other, net .................................... 75 (653)
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Total provided (used) by operating activities 11,321 14,807
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FROM INVESTING ACTIVITIES
Plant asset additions ......................... (3,575) (5,242)
Other, net .................................... 39 1,407
---------- ----------
Total provided (used) by
investing activities ..................... (3,536) (3,835)
---------- ----------
FROM FINANCING ACTIVITIES
Net proceeds (payments) under line of credit .. (7,500) 1,500
Payments on long-term debt .................... (702) (34)
Cash dividends paid ........................... (3,281) (3,175)
Other, net .................................... (2,787) 297
---------- ----------
Total provided (used) by financing activities (14,270) (1,412)
---------- ----------
Effect of exchange rate changes on cash........ 146 242
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CHANGE IN CASH AND CASH INVESTMENTS............ $ (6,339) $ 9,802
========== ==========
</Table>
CLARCOR 2005 UNAUDITED FIRST QUARTER RESULTS cont'd.
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
QUARTER ENDED
--------------------------------
FEBRUARY 26, FEBRUARY 28,
2005 2004
---------- ----------
NET SALES BY SEGMENT:
Engine/Mobile Filtration ................. $ 83,129 $ 70,800
Industrial/Environmental Filtration ....... 97,198 88,962
Packaging ................................. 15,934 15,510
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$ 196,261 $ 175,272
========== ==========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration................... $ 16,778 $ 14,425
Industrial/Environmental Filtration ....... 3,969 3,252
Packaging ................................. 333 136
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$ 21,080 $ 17,813
========== ==========
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration .................. 20.2% 20.4%
Industrial/Environmental Filtration ....... 4.1% 3.7%
Packaging ................................. 2.1% 0.9%
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10.7% 10.2%
========== ==========