CLARCOR Reports Record Second Quarter 2005 Results; Q2 Sales Up 11%; Operating Profit and Net Earnings up 16%.FRANKLIN Franklin, cities, United States Franklin. 1 City (1990 pop. 12,907), seat of Johnson co., S central Ind., inc. 1823. It is a farm trade center. Manufactures include auto parts, aluminum doors and windows, and copper panels. , Tenn. -- CLARCOR Inc. (NYSE NYSE See: New York Stock Exchange : CLC (The Computer Language Company Inc.) The publisher of this Encyclopedia. See About this product. ):
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
CLARCOR Inc. (NYSE: CLC) reported today that second quarter 2005 net earnings increased by 16% and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of 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 Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. 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
adj. Being between 10 and 99 percent: double-digit inflation. earnings growth in the second quarter of 2005 on an 11% increase in sales compared to the second quarter in 2004. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: 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 filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids sales rose by nearly 13% from last year's second quarter. Sales to heavy-duty heav·y-dut·y adj. Made to withstand hard use or wear. heavy-duty Adjective made to withstand hard wear, bad weather, etc. Adj. 1. aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. 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 (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and 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 Baldwin, cities, United States Baldwin. 1 Uninc. city (1990 pop. 22,719), Nassau co., SE N.Y., on the south shore of Long Island, on Baldwin Bay; settled 1640s. A fishing center and summer resort, it has varied manufactures. Weifang Weifang (Simplified Chinese: 潍坊; Pinyin: Wéifāng) is a prefecture-level city in central Shandong province, People's Republic of China. , 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 Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. within this segment. We expect double-digit revenue growth there for the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. 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 Purolator may refer to:
EFP Electronic Field Production EFP Explosively Formed Projectile EFP Exempted Fishing Permit EFP Environmental Farm Planning (Canada) EFP Exempted Fishing Permits which we acquired in the fourth quarter of 2004 and from Niagara Niagara, river, United States and Canada Niagara (nīăg`rə), river, 34 mi (55 km) long, issuing from Lake Erie between Buffalo, N.Y., and Fort Erie, Ont., Canada. Ltd. which we acquired in the second quarter of 2005. Operating profit grew by 3%. HVAC (Heating Ventilation Air Conditioning) In the home or small office with a handful of computers, HVAC is more for human comfort than the machines. In large datacenters, a humidity-free room with a steady, cool temperature is essential for the trouble-free filter sales, for both residential and commercial markets, are still slow. This is particularly true for maintenance filters sold to automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of 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 polymer (pŏl`əmər), chemical compound with high molecular weight consisting of a number of structural units linked together by covalent bonds (see chemical bond). 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 sales mix See product 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. and Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Greensboro, North Carolina (IPA: [ɡɹiːnsbʌɹəʊ]) is a city in the U.S. state of 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 Accumulate Broker/analyst recommendation that could mean slightly different things depending on the broker/analyst. In general, it means to increase the number of shares of a particular security over the near term, but not to liquidate other parts of the portfolio to buy a security 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 Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , 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 CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on June June: see month. 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . CLARCOR is based in Franklin, Tennessee Franklin is the county seat of Williamson County, Tennessee, USA. The population was 41,842 at the 2000 census. The 2007 Census Bureau Estimate places the population at 55,870. , and is a diversified diversified (di·verˑ·s 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 New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol CLC. The statements in this release concerning the Company's sales, earnings, business performance and prospects are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 total filtration, n See filtration, total. Program, the success of sales and marketing programs, the cost of compliance with recently enacted regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , the effect of changes in accounting rules and other factors discussed in filings made with the Securities and Exchange Commission. TABLES FOLLOW
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
For periods ended Second Quarter Six Months
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
======== ========
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%
======== ======== ========
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