CLC Clarcor Inc. (delisted)

CLARCOR Reports Record Second Quarter 2004 Results Q2 Operating Profit Up 16%; EPS Up 14% ROCKFORD, Ill., June 16 /PRNewswire-FirstCall/ -- Unaudited Fiscal Second Quarter and Six Months 2004 Highlights (Amounts in thousands, except per share data and percentages) Quarter Ended % Six Months Ended % 5/29/04 5/31/03 Change 5/29/04 5/31/03 Change 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 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 http://www.clarcor.com/ or http://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. CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in thousands except per share data) For periods ended May 29, Second Quarter Six Months 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) 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% DATASOURCE: CLARCOR Inc. CONTACT: Bruce A. Klein, Vice President - Finance and Chief Financial Officer of CLARCOR, +1-815-962-8867 Web site: http://www.clarcor.com/

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