CLARCOR Reports Record Third Quarter 2006 Results; Operating Profit Increases 13%; Net Earnings 10%.FRANKLIN, 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 2006 Highlights
(Amounts in thousands, except per share data and percentages)
Quarter Ended Nine Months Ended
9/2/06 8/27/05 %Change 9/2/06 8/27/05 %Change
----------------------------------------------------------------------
Net Sales $231,510 $216,403 7.0 $671,769 $632,450 6.2
Operating Profit $35,079 $31,052 13.0 $87,173 $79,685 9.4
Net Earnings $22,963 $20,855 10.1 $55,969 $51,355 9.0
Diluted Earnings
Per Share $0.44 $0.40 10.0 $1.07 $0.98 9.2
----------------------------------------------------------------------
Third Quarter and Nine Months 2006 Operating Review CLARCOR Inc. (NYSE: CLC) reported today that third quarter 2006 sales increased by 7%, 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 10% compared to the same quarter in 2005. 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 13%, and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved to 15.2% in 2006 from 14.3% in 2005. For the nine-month 2006 period, sales increased by 6%, and net earnings and diluted earnings per share rose by 9% compared to 2005. Nine-month operating profit increased by 9%, and operating margins improved to 13.0% in 2006 from 12.6% in 2005. Third quarter 2006 and 2005 results were impacted by the following items: --In the third quarter 2006, CLARCOR recorded a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $790,000 or $0.01 per share from insurance proceeds received due to a tornado tornado, dark, funnel-shaped cloud containing violently rotating air that develops below a heavy cumulonimbus cloud mass and extends toward the earth. The funnel twists about, rises and falls, and where it reaches the earth causes great destruction. at one of its warehouses and a $800,000 pre-tax gain or $0.01 per share from the elimination of a reserve that was no longer necessary related to an overseas subsidiary. --In the third quarter 2005, CLARCOR realized a $1.2 million or $0.02 per share benefit arising from a settlement 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. Nine months 2006 results were adversely impacted by a provision of approximately $3.0 million in the second quarter arising from a customer's refusal to pay amounts owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the company and approximately $600,000 in the second and third quarters in severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when charges from the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of two of the company's operating facilities. 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 14% 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. We recorded 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 markets. Our international engine filter businesses also grew strongly, led by over 20% sales increases in China, Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and
Mexico Mexico, city, MexicoMexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . Operating margins for the segment improved to 24.3% in the third quarter 2006 from 22.6% in last year's third quarter. The strengthened margins stem largely from improved operating efficiencies and leverage gained from the increase in sales. We expect operating margins to continue to exceed 2005 margins in this segment, though we do not believe that we will be able to sustain operating margins in excess of 24%. "Our Industrial/Environmental Filtration segment sales this quarter increased by 1% from third quarter sales last year. However, this segment has had to absorb the loss of $10 million in annual business with AT Kearney Kearney, city (1990 pop. 24,396), seat of Buffalo co., S central Nebr., on the Platte River; inc. 1873. It is a commercial, industrial, and transportation center in an agricultural area. , which we announced last quarter, as well as the loss of approximately $11 million in annual sales from a customer who decided to begin in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. manufacturing of a product we previously sold to them. Segment sales grew strongly in such areas as aviation fuel filtration systems, aerospace filtration, dust collector cartridges
"Our restructuring plans for our HVAC operations in our Industrial/Environmental segment are proceeding well. In July we announced a plan to spend $22 million in capital and incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. up to $4 million in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. over a three-year period to significantly improve operating efficiencies and profitability in environmental air filter markets. Our goal was to reach approximately $14 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings by the end of three years. We recently announced the closing of one plant and are on schedule to achieve our planned savings. By the end of our restructuring program, we expect operating margins exceeding 10%. "Packaging segment sales rose by 6% though operating profit was approximately the same as last year's third quarter. Sales of both metal and plastic products increased from last year's third quarter, though increased sales of lower margin products this quarter affected operating profit. However, sales are up 13% and operating profit up 35% through the nine-month period compared to 2005, and we remain very pleased with the performance of our Packaging segment in 2006. "Fluctuations in currencies did not have a material impact this quarter on either sales or profitability. Our effective tax rate this quarter was 34.4%. We expect a comparable rate in the fourth quarter. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. capital expenditures in 2006 amount to $11.4 million compared to $16.8 million last year. For 2006, we expect capital expenditures to be in the $23 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 $52 million for the first nine months of 2006 compared to $49 million for the same period last year. During the third quarter, we repurchased one million shares of our common stock and will continue to look at opportunities to 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. additional shares under our current authorization The right or permission to use a system resource; the process of granting access. See access control. in light of internal growth requirements, acquisition opportunities and our stock price. "Based upon our results for the first three quarters of this year, we now expect 2006 earnings per share to be in the $1.50 to $1.55 range. I want to point out that the 2005 fourth quarter included 14 weeks while our 2006 fourth quarter will include only 13 weeks making the comparison to last year's results difficult. Similarly, fiscal year 2006 will include one less week than in 2005. Nevertheless, we are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the remainder of 2006 and believe we will end 2006 with record sales and profits, our 14th consecutive year of record results." CLARCOR will be holding a conference call to discuss third quarter results at 10:00 a.m. Central time on September 22, 2006. 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 or 719-457-0820 by providing confirmation code 4009100. The replay will be available through September 29 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. 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. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements may include, among other things: statements and assumptions relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future growth, earnings, earnings per share and other financial performance measures, as well as management's short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and 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. performance goals; statements relating to the anticipated affects on results of operations or financial condition from recent and expected developments or events; statements relating to the Company's business and growth strategies; statements related to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. in which the Company is presently or may become engaged; statements regarding anticipated results of the Company's intended restructuring of certain operations and rationalization rationalization, in psychology: see defense mechanism. of facilities; 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or any other reason after the date of this press release. TABLES FOLLOW
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
Third Quarter Nine Months
----------------------- -----------------------
For periods ended
September 2, 2006
and August 27, 2005 2006 2005 2006 2005
----------------------------------------------------------------------
Net sales $ 231,510 $ 216,403 $ 671,769 $ 632,450
Cost of sales 159,689 149,003 469,057 441,945
----------- ----------- ----------- -----------
Gross profit 71,821 67,400 202,712 190,505
Selling and
administrative
expenses 36,742 36,348 115,539 110,820
----------- ----------- ----------- -----------
Operating profit 35,079 31,052 87,173 79,685
Other income
(expense) 96 278 120 (129)
----------- ----------- ----------- -----------
Earnings before
income taxes and
minority
interests 35,175 31,330 87,293 79,556
Income taxes 12,087 10,292 30,939 27,801
----------- ----------- ----------- -----------
Earnings before
minority
interests 23,088 21,038 56,354 51,755
Minority interests
in earnings of
subsidiaries (125) (183) (385) (400)
----------- ----------- ----------- -----------
Net earnings $ 22,963 $ 20,855 $ 55,969 $ 51,355
=========== =========== =========== ===========
Net earnings per
common share:
Basic $ 0.45 $ 0.40 $ 1.08 $ 0.99
=========== =========== =========== ===========
Diluted $ 0.44 $ 0.40 $ 1.07 $ 0.98
=========== =========== =========== ===========
Average shares
outstanding:
Basic 51,414,083 51,866,491 51,691,685 51,650,585
Diluted 51,981,546 52,678,124 52,390,283 52,328,384
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 2, December 3,
2006 2005
---------------------------------------------------------------------
Assets
Current assets:
Cash and cash investments $ 25,026 $ 18,502
Short-term investments 19,500 10,400
Accounts receivable, net 153,643 152,755
Inventories 128,738 117,508
Other 25,308 25,768
---------------- ---------------
Total current assets 352,215 324,933
Plant assets, net 145,355 149,505
Acquired intangibles, net 169,244 168,176
Pension assets 22,567 22,069
Other assets 11,290 10,589
---------------- ---------------
$ 700,671 $ 675,272
================ ===============
Liabilities
Current liabilities:
Current portion of long-term
debt $ 62 $ 233
Accounts payable and accrued
liabilities 105,955 108,693
Income taxes 11,020 12,544
---------------- ---------------
Total current
liabilities 117,037 121,470
Long-term debt 15,963 16,009
Long-term pension liabilities 19,998 16,287
Other liabilities 36,001 38,673
---------------- ---------------
188,999 192,439
Shareholders' Equity 511,672 482,833
---------------- ---------------
$ 700,671 $ 675,272
================ ===============
SUMMARY CASH FLOWS
(Dollars in thousands)
Nine Months
---------------------------
2006 2005
---------------------------------------------------------------------
From Operating Activities
Net earnings $ 55,969 $ 51,355
Depreciation 16,036 15,038
Amortization 1,636 944
Stock compensation expense 2,194 662
Excess tax benefits from stock
compensation (3,312) -
Changes in assets and liabilities (21,133) (19,521)
Other, net 629 279
------------- ------------
Total provided (used) by operating
activities 52,019 48,757
------------- ------------
From Investing Activities
Plant asset additions (11,416) (16,847)
Business acquisitions (4,627) (3,512)
Other, net 1,130 561
------------- ------------
Total provided (used) by
investing activities (14,913) (19,798)
------------- ------------
From Financing Activities
Net payments under line of credit - (7,500)
Payments on long-term debt (555) (860)
Cash dividends paid (10,490) (9,893)
Excess tax benefits from stock
compensation 3,312 -
Purchase of treasury stock (28,909) (1,986)
Other, net 5,362 (3,677)
------------- ------------
Total provided (used) by
financing activities (31,280) (23,916)
------------- ------------
Effect of exchange rate changes on cash 698 (623)
------------- ------------
Change in Cash and Cash Investments $ 6,524 $ 4,420
============= ============
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
2006
------------------------------------------------
Quarter Quarter Quarter
Ended Ended Six Ended Nine
March 4 June 3 Months Sept. 2 Months
--------- --------- --------- -------------------
Net sales by segment:
Engine/Mobile
Filtration $ 91,032 $101,429 $192,461 $103,358 $295,819
Industrial/
Environmental
Filtration 102,656 103,866 206,522 106,263 312,785
Packaging 19,495 21,781 41,276 21,889 63,165
-------- -------- -------- -------- --------
$213,183 $227,076 $440,259 $231,510 $671,769
======== ======== ======== ======== ========
Operating profit by
segment:
Engine/Mobile
Filtration $ 19,073 $ 22,446 $ 41,519 $ 25,147 $ 66,666
Industrial/
Environmental
Filtration 5,485 1,594 7,079 7,965 15,044
Packaging 1,315 2,181 3,496 1,967 5,463
-------- -------- -------- -------- --------
$ 25,873 $ 26,221 $ 52,094 $ 35,079 $ 87,173
======== ======== ======== ======== ========
Operating margin by
segment:
Engine/Mobile
Filtration 21.0% 22.1% 21.6% 24.3% 22.5%
Industrial/
Environmental
Filtration 5.3% 1.5% 3.4% 7.5% 4.8%
Packaging 6.7% 10.0% 8.5% 9.0% 8.6%
-------- -------- -------- -------- --------
12.1% 11.5% 11.8% 15.2% 13.0%
======== ======== ======== ======== ========
2005
------------------------------------------------
Quarter Quarter Quarter
Ended Ended Six Ended Nine
Feb. 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%
======== ======== ======== ======== ========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion