CLARCOR Reports Record Third Quarter 2005 Results; Net Earnings up 31%; Earnings Per Share up 29%.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 Third Quarter and Nine Months 2005 Highlights
(Amounts in thousands, except per share data and percentages)
----------------------------------------------------------------------
Quarter Ended % Nine Months Ended %
8/27/05 8/28/04 Change 8/27/05 8/28/04 Change
----------------------------------------------------------------------
Net Sales $216,403 $206,209 4.9 $632,450 $580,193 9.0
Operating
Profit $31,052 $25,500 21.8 $79,685 $67,106 18.7
Net Earnings $20,855 $15,875 31.4 $51,355 $42,450 21.0
Diluted
Earnings Per
Share $0.40 $0.31 29.0 $0.98 $0.82 19.5
----------------------------------------------------------------------
Third Quarter and Nine Months 2005 Operating Review CLARCOR Inc. (NYSE: CLC) reported today that third quarter 2005 sales increased by 5%, and net earnings 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 increased by 31% and 29%, respectively, compared to the same quarter in 2004. Third quarter 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. increased by 22%, and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved to 14.3% in 2005 from 12.4% in 2004. For the nine-month 2005 period, sales increased by 9%, and net earnings and diluted earnings per share rose by 21% and 20%, respectively, compared to 2004. Nine-month operating profit increased by 19%, and operating margins improved to 12.6% in 2005 from 11.6% in 2004. Third quarter 2005 and 2004 results were impacted by two items: --In the third quarter 2005, CLARCOR recorded a $1.2 million or $0.02 per share benefit arising from a settlement with the Internal Revenue Service of a tax issue involving a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. for costs incurred at a subsidiary. --In the third quarter 2004, CLARCOR incurred $1.5 million or $0.02 per share after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , in headquarters relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. costs. There were no costs incurred in the third quarter 2005. Excluding the tax benefit and relocation costs from third quarter 2005 and 2004 results, third quarter 2005 operating profit increased by 15%, net earnings by 17% and diluted earnings per share by 15%. Operating margins improved to 14.3% from 13.1%. Norm Johnson
"Our 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 segment sales grew by over 8% this quarter with increases in most product categories, particularly 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. and locomotive locomotive, vehicle used to pull a train of unpowered railroad cars. Types of Locomotives The steam-powered locomotive played a key role during the development and golden age of railroading, but, despite its long and picturesque history, it has filtration, and also included increases in both aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. and 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 sales. Our international engine businesses also grew strongly led by over a 50% sales increase in China. Operating margins improved to 22.6% in the third quarter 2005 from 20.2% in last year's third quarter. The improved margins stem largely from increased operating efficiencies as sales grew, improvement in our operations in the U.K. and price increases in the quarter to offset raw material cost increases incurred earlier this year. "Our Industrial/Environmental Filtration segment sales this quarter increased by 2% from third quarter sales last year. The acquisition of 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 , acquired in September September: see month. 2004, added approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $7 million in sales to our third quarter 2005 results. Sales of 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 products, primarily for industrial and commercial markets, declined in the third quarter of 2005 compared to 2004. The movement of manufacturing off-shore has resulted in the closure of manufacturing plants in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. which historically has been a solid market for us. Retail sales of our HVAC filters and sales of environmental and liquid filtration equipment and dust collection cartridges
A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. filter products, but we believe this is largely due to the timing of orders. We expect to see a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in sales for these products later this year and in 2006. "Operating margins in our Industrial/Environmental segment were comparable to last year's third quarter at slightly over 8%, but we will not meet our goal of a 1% point improvement for 2005. Improving margins by 1% point per year to at least a 10% operating margin remains our objective and in certain liquid process markets we already exceed a 10% operating margin. While operating margins in our HVAC manufacturing businesses are still below 10%, they are improving. We combined the administrative functions of our HVAC businesses last year and, due to a systems conversion project, shipments during the quarter were slower than usual. Based on current order rates, we expect sales to improve in the 4th quarter. We also incurred integration costs, both this year and last year, in combining our HVAC branch network with our HVAC distribution business, but we believe these are now largely behind us. "Packaging segment sales rose by 4% and operating profit improved by over 20%, with operating margins rising to 9.8% from 8.4%. Sales of both metal and plastic products increased from last year's third quarter. We are benefiting from major changes to improve productivity and reduce costs that have been implemented over the last two to three years. We expect sales to continue to grow in the 4% to 7% range and operating profit to continue to improve. "Fluctuations in currencies did not have a material impact this quarter on either sales or profitability. Our effective tax rate this quarter was 32.9% which includes the $1.2 million tax benefit discussed earlier. We expect a 36.5% rate in the fourth quarter. Capital expenditures increased to $17 million in the third quarter compared to $15 million last year. For 2005, capital expenditures should be in the $22 million to $25 million range. "Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses continues to be solid at over $68 million for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. compared to $45 million for the same period last year. With relatively little debt and cash balances of over $46 million, we have the ability to fund all of our growth programs, continue to pay a dividend, repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. stock and explore acquisition opportunities. During the quarter, we repurchased approximately 68,000 shares of our common stock. It has been our policy over the years to maintain a strong and liquid balance sheet and we expect that this will continue. "We recognize that some of our customers, shareholders and employees and their families live and work in Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Mississippi Mississippi, state, United StatesMississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , where Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. caused such a loss for so many. Our
thoughts and prayers are with all of them.
"Our second quarter 2005 estimate of diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for fiscal 2005 was in the $1.32 to $1.38 range. Based upon our results for the three quarters of this year, we now expect earnings per share to be in the $1.38 to $1.42 range, excluding any impact from Katrina KATRINA Keeping All the Resources in New Orleans Alive KATRINA Krewe Aiding Trash Removal In the New Orleans Area . We are not able to determine how the hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. will impact CLARCOR for the rest of this year or next. Our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. goal is to average a compound annual growth rate in earnings of 10% to 15%, a target we have maintained since 1992." CLARCOR will be holding a conference call to discuss third quarter results at 9:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on September 15, 2005. Interested parties can listen to the conference call through 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 at www.clarcor.com or www.viavid.net. A replay will be available on these websites and also at 888-203-1112 by providing confirmation code 5909749. The replay will be available through September 22nd by telephone and for 30 days on the Internet. 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, the economic impact from natural disasters such as hurricanes, tornados and flooding 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
August 27, 2005 Third Quarter Nine Months
and ------------------------ -----------------------
August 28, 2004 2005 2004 2005 2004
----------------------------------------------------------------------
Net sales $ 216,403 $ 206,209 $ 632,450 $ 580,193
Cost of sales 149,003 142,975 441,945 404,376
----------- ----------- ----------- -----------
Gross profit 67,400 63,234 190,505 175,817
Selling and
administrative
expenses 36,348 37,734 110,820 108,711
----------- ----------- ----------- -----------
Operating profit 31,052 25,500 79,685 67,106
Other income
(expense) 278 (278) (129) 90
----------- ----------- ----------- -----------
Earnings before
income taxes and
minority
interests 31,330 25,222 79,556 67,196
Income taxes 10,292 9,257 27,801 24,527
----------- ----------- ----------- -----------
Earnings before
minority
interests 21,038 15,965 51,755 42,669
Minority interests
in earnings of
subsidiaries (183) (90) (400) (219)
----------- ----------- ----------- -----------
Net earnings $ 20,855 $ 15,875 $ 51,355 $ 42,450
=========== =========== =========== ===========
Net earnings per
common share:
Basic $ 0.40 $ 0.31 $ 0.99 $ 0.83
=========== =========== =========== ===========
Diluted $ 0.40 $ 0.31 $ 0.98 $ 0.82
=========== =========== =========== ===========
Average shares
outstanding:
Basic 51,866,491 51,089,976 51,650,585 50,908,360
Diluted 52,678,124 51,739,014 52,328,384 51,560,852
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
August 27, November 27,
2005 2004
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash investments $ 46,290 $ 22,520
Accounts receivable, net 145,961 143,719
Inventories 122,244 115,571
Other 23,957 22,180
------------ ------------
Total current assets 338,452 303,990
Plant assets, net 143,872 142,242
Acquired intangibles, net 149,426 147,789
Pension assets 24,339 24,574
Other assets 9,372 9,202
------------ ------------
$ 665,461 $ 627,797
============ ============
Liabilities
Current liabilities:
Current portion of long-term debt $ 186 $ 420
Accounts payable and accrued
liabilities 109,080 117,859
Income taxes 14,456 7,993
------------ ------------
Total current liabilities 123,722 126,272
Long-term debt 16,057 24,130
Long-term pension liabilities 14,185 11,256
Other liabilities 38,287 37,677
------------ ------------
192,251 199,335
Shareholders' Equity 473,210 428,462
------------ ------------
$ 665,461 $ 627,797
============ ============
SUMMARY CASH FLOWS
(Dollars in thousands)
Nine Months
----------------------------
2005 2004
----------------------------------------------------------------------
From Operating Activities
Net earnings $ 51,355 $ 42,450
Depreciation 15,038 13,822
Amortization 944 595
Changes in assets and liabilities 491 (11,703)
Other, net 279 (489)
------------ ------------
Total provided (used) by operating
activities 68,107 44,675
------------ ------------
From Investing Activities
Plant asset additions (16,847) (15,089)
Business acquisitions (3,512) (4,871)
Other, net 561 1,969
------------ ------------
Total provided (used) by investing
activities (19,798) (17,991)
------------ ------------
From Financing Activities
Net payments under line of credit (7,500) -
Payments on long-term debt (860) (292)
Cash dividends paid (9,893) (9,563)
Purchase of treasury stock (1,986) -
Other, net (3,677) 1,101
------------ ------------
Total provided (used) by financing
activities (23,916) (8,754)
------------ ------------
Effect of exchange rate changes on cash (623) 3
------------ ------------
Change in Cash and Cash Investments $ 23,770 $ 17,933
============ ============
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
2005
---------------------------------------------------
Quarter Quarter Quarter
Ended Ended Six Ended Nine
February 26 May 28 Months August 27 Months
----------- --------- --------- --------- ---------
Net sales by
segment:
Engine/Mobile
Filtration $ 83,129 $ 93,722 $176,851 $ 90,686 $267,537
Industrial/
Environmental
Filtration 97,198 106,668 203,866 105,153 309,019
Packaging 15,934 19,396 35,330 20,564 55,894
--------- --------- --------- --------- ---------
$196,261 $219,786 $416,047 $216,403 $632,450
========= ========= ========= ========= =========
Operating profit
by segment:
Engine/Mobile
Filtration $ 16,778 $ 19,629 $ 36,407 $ 20,500 $ 56,907
Industrial/
Environmental
Filtration 3,969 6,234 10,203 8,544 18,747
Packaging 333 1,690 2,023 2,008 4,031
--------- --------- --------- --------- ---------
$ 21,080 $ 27,553 $ 48,633 $ 31,052 $ 79,685
========= ========= ========= ========= =========
Operating margin
by segment:
Engine/Mobile
Filtration 20.2% 20.9% 20.6% 22.6% 21.3%
Industrial/
Environmental
Filtration 4.1% 5.8% 5.0% 8.1% 6.1%
Packaging 2.1% 8.7% 5.7% 9.8% 7.2%
--------- --------- --------- --------- ---------
10.7% 12.5% 11.7% 14.3% 12.6%
========= ========= ========= ========= =========
2004
--------------------------------------------------
Quarter Quarter Quarter
Ended Ended Six Ended Nine
February 28 May 29 Months August 28 Months
----------- --------- --------- --------- ---------
Net sales by
segment:
Engine/Mobile
Filtration $ 70,800 $ 82,992 $153,792 $ 83,771 $237,563
Industrial/
Environmental
Filtration 88,962 98,249 187,211 102,646 289,857
Packaging 15,510 17,471 32,981 19,792 52,773
--------- --------- --------- --------- ---------
$175,272 $198,712 $373,984 $206,209 $580,193
========= ========= ========= ========= =========
Operating profit
by segment:
Engine/Mobile
Filtration $ 14,425 $ 16,989 $ 31,414 $ 16,892 $ 48,306
Industrial/
Environmental
Filtration 3,252 6,076 9,328 8,457 17,785
Packaging 136 1,153 1,289 1,665 2,954
Relocation
Costs - (425) (425) (1,514) (1,939)
--------- --------- --------- --------- ---------
$ 17,813 $ 23,793 $ 41,606 $ 25,500 $ 67,106
========= ========= ========= ========= =========
Operating margin
by segment:
Engine/Mobile
Filtration 20.4% 20.5% 20.4% 20.2% 20.3%
Industrial/
Environmental
Filtration 3.7% 6.2% 5.0% 8.2% 6.1%
Packaging 0.9% 6.6% 3.9% 8.4% 5.6%
--------- --------- --------- --------- ---------
10.2% 12.0% 11.1% 12.4% 11.6%
========= ========= ========= ========= =========
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