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, JUNE 15, 2005
CLARCOR REPORTS RECORD SECOND QUARTER 2005 RESULTS
Q2 SALES UP 11%; OPERATING PROFIT AND NET EARNINGS UP 16%
UNAUDITED FISCAL SECOND QUARTER AND SIX MONTHS 2005 HIGHLIGHTS
(Amounts in thousands, except per share data and percentages)
- ------------------------------------------------------------------------------------------------
QUARTER ENDED % SIX MONTHS ENDED %
5/28/05 5/29/04 CHANGE 5/28/05 5/29/04 CHANGE
- ------------------------------------------------------------------------------------------------
Net Sales $219,786 $198,712 10.6 $416,047 $373,984 11.2
Operating Profit $ 27,553 $ 23,793 15.8 $ 48,633 $ 41,606 16.9
Net Earnings $ 17,346 $ 14,914 16.3 $ 30,500 $ 26,575 14.8
Diluted Earnings Per Share $ 0.33 $ 0.29 13.8 $ 0.58 $ 0.51 13.7
- ------------------------------------------------------------------------------------------------
Note: All per share amounts have been adjusted for a 2-for-1 stock split which
became effective in April 2005.
SECOND QUARTER AND SIX MONTHS 2005 OPERATING REVIEW
FRANKLIN, TN, JUNE 15, 2005 -- CLARCOR INC. (NYSE: CLC) reported today that
second quarter 2005 net earnings increased by 16% and diluted earnings per share
rose by 14% compared to the same quarter in 2004. Sales increased by 11%
compared to the prior year's second quarter, and operating profit climbed by
16%.
For the six-month 2005 period, sales increased by 11%, and net earnings and
diluted earnings per share gained 15% and 14%, respectively, compared to 2004.
Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "We are
pleased to report double-digit earnings growth in the second quarter of 2005 on
an 11% increase in sales compared to the second quarter in 2004. Operating
margins rose from 12.0% last year to 12.5% this year. Sales and operating profit
improved at each of our operating segments in the second quarter compared to the
same quarter in 2004, 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 13% from last year's second
quarter. Sales to heavy-duty aftermarket independent distributors were strong in
the first quarter of 2005 and this continued throughout the second quarter. Our
initiatives to increase sales to original equipment manufacturers and,
particularly, OEM dealers have been successful and are now at a level where the
impact on reported revenues is evident. We expect to show further growth
throughout 2005 and into next year. Sales at Baldwin Weifang, our operation in
Weifang, China, have risen nearly twofold from the second quarter last year.
Baldwin Weifang is now one of our largest international operations within this
segment. We expect double-digit revenue growth there for the foreseeable future.
"Industrial/Environmental Filtration sales increased by nearly 9% from the
second quarter of last year. This includes $7.5 million in sales from Purolator
EFP which we acquired in the fourth quarter of 2004 and from Niagara Ltd. which
we acquired in the second quarter of 2005. Operating profit grew by 3%. HVAC
filter sales, for both residential and commercial markets, are still slow. This
is particularly true for maintenance filters sold to automobile and automobile
parts manufacturers. We expect this trend will continue for the rest of 2005.
Demand remains good, however, for most of our other product lines in this
segment. Sales of waste water treatment systems, aviation fuel filtration
systems, filters for oil drilling and filters for plastic and polymer production
were particularly strong in the second quarter.
"Packaging segment sales improved by 11% this quarter compared to last year, and
operating profit increased by over 40%. Operating margins increased to 8.7% this
quarter from 6.6% in the second quarter last year, and were driven primarily by
cost reduction initiatives implemented over the last several years. Sales of
both metal and plastic products increased during the quarter. This segment's
sales have become much less seasonal over the last few years as its sales mix
has changed from promotional products sold largely in the last half of the year
to products sold on a continual basis throughout the year. We anticipate that
second half sales will be a little stronger than the sales run rate in the
second quarter of 2005. Margins are expected to be consistent with those
recorded in the second quarter.
"There was little change in other income compared to last year's second quarter
and our tax rate stayed at approximately 36.3%. Capital expenditures reached $11
million for the six-month period just ended compared to $9 million in the
six-month period a year earlier. We expect capital expenditures to be $20
million to $22 million for 2005 compared to $22 million in 2004. We are
investing significantly more capital this year in new technologies, particularly
new media development. We plan to expand the capacity of our operations in China
to manufacture a wider range of our filter products that will sell mostly in
Chinese and Southeast Asian markets. We will also complete the building of a new
aviation fuel filter testing center in Greensboro, North Carolina later this
year.
"Cash flow continues to be strong and cash from operations rose to $28 million
this quarter from $19 million in last year's second quarter. We expect to
continue to accumulate cash during the balance of this year provided we do not
make any acquisitions. We are always evaluating acquisition opportunities, and
hope to complete several later this year. With our consistent cash flow and
significant borrowing capacity we are able to fund ongoing operations and our
current development and expansion plans, and continue to pay dividends.
"Based on our first half results and current backlog, we expect diluted earnings
per share for 2005 to be $1.32 to $1.38. This estimate does not include the
impact of stock option expense as implementation of this accounting change has
been delayed until the first quarter of 2006. We estimate that, for fiscal 2006,
the impact from expensing stock options will be approximately $0.04 per share.
We continue to monitor changes in commodity prices closely, particularly for
steel and petroleum products, and have aggressively put through price increases
to reflect increases in our costs, whenever possible. We are confident that
CLARCOR will have a record 2005 and post its 13th 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 16, 2005. Interested parties can listen to the
conference call at www.clarcor.com or www.viavid.net. A replay will be available
on these websites, and also by providing access code 5149154 at 888-203-1112 or
719-457-0820. The replay will be available through June 23, 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
CLARCOR 2005 UNAUDITED SECOND QUARTER RESULTS cont'd.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
Per Share Data Restated for 2-for-1 Stock Split Effective April 29, 2005
Second Quarter Six Months
------------------------------ ------------------------------
For periods ended May 28, 2005 and May 29, 2004 2005 2004 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net sales .................................................. $ 219,786 $ 198,712 $ 416,047 $ 373,984
Cost of sales .............................................. 153,700 137,613 292,942 261,401
------------ ------------ ------------ ------------
Gross profit .......................................... 66,086 61,099 123,105 112,583
Selling and administrative expenses ........................ 38,533 37,306 74,472 70,977
------------ ------------ ------------ ------------
Operating profit ...................................... 27,553 23,793 48,633 41,606
Other income (expense) ..................................... (95) (217) (407) 368
------------ ------------ ------------ ------------
Earnings before income taxes and minority interests ... 27,458 23,576 48,226 41,974
Income taxes ............................................... 9,973 8,567 17,509 15,270
------------ ------------ ------------ ------------
Earnings before minority interests .................... 17,485 15,009 30,717 26,704
Minority interests in earnings of subsidiaries ............. (139) (95) (217) (129)
------------ ------------ ------------ ------------
Net earnings ............................................... $ 17,346 $ 14,914 $ 30,500 $ 26,575
============ ============ ============ ============
Net earnings per common share:
Basic ................................................... $ 0.34 $ 0.29 $ 0.59 $ 0.52
============ ============ ============ ============
Diluted ................................................. $ 0.33 $ 0.29 $ 0.58 $ 0.51
============ ============ ============ ============
Average shares outstanding:
Basic ................................................... 51,631,794 50,871,720 51,528,689 50,804,746
Diluted ................................................. 52,418,831 51,745,840 52,316,801 51,682,644
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
May 28, November 27,
2005 2004
- --------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash investments ............. $ 27,600 $ 22,520
Accounts receivable, net .............. 145,831 143,719
Inventories ........................... 120,804 115,571
Other ................................. 22,824 22,180
-------- --------
Total current assets ........... 317,059 303,990
Plant assets, net ........................... 142,230 142,242
Acquired intangibles, net ................... 150,700 147,789
Pension assets .............................. 24,418 24,574
Other assets ................................ 9,185 9,202
-------- --------
$643,592 $627,797
======== ========
LIABILITIES
Current liabilities:
Current portion of long-term debt ..... $ 191 $ 420
Accounts payable and accrued
liabilities ......................... 105,105 117,859
Income taxes .......................... 13,998 7,993
-------- --------
Total current liabilities ...... 119,294 126,272
Long-term debt .............................. 16,029 24,130
Long-term pension liabilities ............... 13,197 11,256
Other liabilities ........................... 38,316 37,677
-------- --------
186,836 199,335
SHAREHOLDERS' EQUITY ........................ 456,756 428,462
-------- --------
$643,592 $627,797
======== ========
SUMMARY CASH FLOWS
(Dollars in thousands)
Six Months
------------------------
2005 2004
- -----------------------------------------------------------------------------
FROM OPERATING ACTIVITIES
Net earnings ................................ $ 30,500 $ 26,575
Depreciation ................................ 10,336 9,291
Amortization ................................ 630 380
Changes in assets and liabilities ........... (2,198) (2,064)
Other, net .................................. 118 (571)
-------- --------
Total provided (used) by
operating activities .............. 39,386 33,611
-------- --------
FROM INVESTING ACTIVITIES
Plant asset additions ....................... (10,562) (9,197)
Business acquisitions ....................... (3,508) (4,871)
Other, net .................................. 614 1,415
-------- --------
Total provided (used) by
investing activities .............. (13,456) (12,653)
-------- --------
FROM FINANCING ACTIVITIES
Net payments under line of credit ........... (7,500) -
Payments on long-term debt .................. (830) (280)
Cash dividends paid ......................... (6,577) (6,361)
Other, net .................................. (5,679) 871
-------- --------
Total provided (used) by
financing activities .............. (20,586) (5,770)
-------- --------
Effect of exchange rate
changes on cash ......................... (264) (20)
-------- --------
CHANGE IN CASH AND
CASH INVESTMENTS ........................ $ 5,080 $ 15,168
======== ========
CLARCOR 2005 UNAUDITED SECOND QUARTER RESULTS cont'd.
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
2005
-----------------------------------------
QUARTER QUARTER
ENDED ENDED SIX
FEBRUARY 26 MAY 28 MONTHS
----------- --------- ---------
NET SALES BY SEGMENT:
Engine/Mobile Filtration ................. $ 83,129 $ 93,722 $ 176,851
Industrial/Environmental Filtration ...... 97,198 106,668 203,866
Packaging ................................ 15,934 19,396 35,330
--------- --------- ---------
$ 196,261 $ 219,786 $ 416,047
========= ========= =========
OPERATING PROFIT BY SEGMENT:
Engine/Mobile Filtration ................. $ 16,778 $ 19,629 $ 36,407
Industrial/Environmental Filtration ...... 3,969 6,234 10,203
Packaging ................................ 333 1,690 2,023
--------- --------- ---------
$ 21,080 $ 27,553 $ 48,633
========= ========= =========
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration ................. 20.2% 20.9% 20.6%
Industrial/Environmental Filtration ...... 4.1% 5.8% 5.0%
Packaging ................................ 2.1% 8.7% 5.7%
--------- --------- ---------
10.7% 12.5% 11.7%
========= ========= =========
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 $ 16,989 $ 31,414
Industrial/Environmental Filtration ...... 3,252 6,076 9,328
Packaging ................................ 136 1,153 1,289
Relocation Costs ......................... - (425) (425)
--------- --------- ---------
$ 17,813 $ 23,793 $ 41,606
========= ========= =========
OPERATING MARGIN BY SEGMENT:
Engine/Mobile Filtration ................. 20.4% 20.5% 20.4%
Industrial/Environmental Filtration ...... 3.7% 6.2% 5.0%
Packaging ................................ 0.9% 6.6% 3.9%
--------- --------- ---------
10.2% 12.0% 11.1%
========= ========= =========