CLARCOR Board of Directors Approves Capital Spending and Restructuring Program
05 Juli 2006 - 5:26PM
Business Wire
CLARCOR Inc. (NYSE: CLC) announced today that its Board of
Directors has approved a capital spending and restructuring program
aimed at improving operating efficiencies and reducing
manufacturing costs at its CLARCOR Air Filtration Products
subsidiary (CLC Air). CLC Air manufactures and sells air filtration
products and systems through a variety of distribution channels
under such well-known brands as Purolator(R) and Airguard(R). The
program is designed to be implemented in several phases over a
three-year period. The Company plans to invest approximately $22
million in capital and incur approximately $4 million in
restructuring charges over the period and expects annualized
savings to reach approximately $14 million by the end of the
program. Norm Johnson, CLARCOR's Chairman and Chief Executive
Officer, said: "The capital investment we are making will be
focused on expanding and reorganizing our production facilities to
better serve our customers. We expect to significantly improve
plant productivity through a major investment in automation to make
our air filtration plants the most technically advanced in the
industry. We also will make a major investment to reduce our
freight costs which have risen substantially over the last 18
months. "We have made improvements in the profitability of our
Industrial/Environmental segment profit margins over the last
several years with a goal of earning an operating margin of over
10% for this segment. This program is designed to accelerate margin
improvement by focusing on the lower margin areas of this segment,
principally HVAC air filter products and systems. By the end of the
program, we expect to be the lowest cost environmental air filter
manufacturer in our industry with the highest quality product and
exemplary customer service. "We are fortunate that we are able to
completely fund this program and continue to invest to expand the
rest of our businesses, continue to seek further acquisitions and
to repurchase our common stock. Based on our current forecasts, we
expect that 2006 will be another record year for CLARCOR with
increased sales and profits, and with free cash flow exceeding $55
million." 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. Forward-Looking Statements This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements made in this press release other than statements of
historical fact, are forward-looking statements. These statements
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may include, among other things: statements and
assumptions relating to future growth, earnings, earnings per
share, cash flow and other financial performance measures, as well
as management's short-term and long-term performance goals and
management's expectations with respect to Company restructuring and
capital spending programs; statements relating to the anticipated
affects on results of operations or financial condition from recent
and expected developments or events; statements relating to
expectations about cost decreases and productivity gains to be
realized through improved technology; statements relating to the
Company's business and growth strategies; and any other statements
or assumptions that are not historical facts. The Company believes
that its expectations are based on reasonable assumptions. However,
these forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the
Company's actual results, performance or achievements, or industry
results, to differ materially from the Company's expectations of
future results, performance or achievements expressed or implied by
these forward-looking statements. In addition, the Company's past
results of operations do not necessarily indicate its future
results. These and other uncertainties are discussed in the "Risk
Factors'' section of the Company's 2005 Form 10-K. The future
results of the Company may fluctuate as a result of these and other
risk factors detailed from time to time in the Company's filings
with the Securities and Exchange Commission. You should not place
undue reliance on any forward-looking statements. These statements
speak only as of the date of this press release. Except as
otherwise required by applicable laws, the Company undertakes no
obligation to publicly update or revise any forward-looking
statements or the risk factors described in this press release,
whether as a result of new information, future events, changed
circumstances or any other reason after the date of this press
release. Free cash flow as used in this press release is defined by
the Company as operating cash flow plus purchases of short-term
securities, less capital spending and less dividends. The $55
million free cash flow estimate used in this press release does not
include capital investments required by the CLC Air restructuring
program or amounts spent for acquisitions or common share
repurchases.
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