-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HHfPuXKN3V29b/XJgWzELqWuzG8+51VUfF0BKTvS0pMwuMHI21NWy9cPHUszbERW wqxlrq7ea1MHG14/eIImwg== 0000912057-95-008482.txt : 19951012 0000912057-95-008482.hdr.sgml : 19951012 ACCESSION NUMBER: 0000912057-95-008482 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950902 FILED AS OF DATE: 19951011 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLARCOR INC CENTRAL INDEX KEY: 0000020740 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 360922490 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11024 FILM NUMBER: 95579887 BUSINESS ADDRESS: STREET 1: 2323 SIXTH ST STREET 2: PO BOX 7007 CITY: ROCKFORD STATE: IL ZIP: 61125 BUSINESS PHONE: 8159628867 MAIL ADDRESS: STREET 1: 2323 SIXTH STREET CITY: ROCKFORD STATE: IL ZIP: 61125 FORMER COMPANY: FORMER CONFORMED NAME: CLARK J L MANUFACTURING CO /DE/ DATE OF NAME CHANGE: 19871001 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 2, 1995 Commission File Number 0-3801 CLARCOR INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 36-0922490 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2323 Sixth Street, P. O. Box 7007, Rockford, Illinois 61125 - ----------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 815-962-8867 ------------ No Change - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. 14,821,862 common shares outstanding ------------------------------------ Page 1 of 12 PART I - ITEM 1 CLARCOR Inc. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) ------------
September 2, November 30, ASSETS 1995 1994 ----------- ----------- (Unaudited) Current assets: Cash and short-term cash investments $ 26,320 $ 19,567 Accounts receivable less allowance for losses of $1,569 for 1995 and $1,580 for 1994 45,640 42,545 Inventories: Raw materials 15,008 12,009 Work-in-process 6,922 3,799 Finished product 20,017 14,450 ----------- ----------- Total inventories 41,947 30,258 Prepaid expenses 3,217 2,926 Other 3,348 3,154 ----------- ----------- Total current assets 120,472 98,450 ----------- ----------- Plant assets, at cost 131,872 121,659 Less accumulated depreciation (74,549) (69,044) ----------- ----------- 57,323 52,615 ----------- ----------- Marketable equity securities, at fair value 4,432 3,655 Excess of cost over fair value of assets acquired, less accumulated amortization 15,042 15,191 Pension assets 11,428 10,237 Other noncurrent assets 7,569 8,300 ----------- ----------- $ 216,266 $ 188,448 ----------- ----------- ----------- ----------- LIABILITIES Current liabilities: Current portion of long-term debt $ 7,580 $ 7,579 Accounts payable 14,940 13,769 Income taxes 3,345 2,051 Accrued and other liabilities 13,060 16,062 ----------- ----------- Total current liabilities 38,925 39,461 Long-term debt less current portion 36,333 17,013 Long-term pension liabilities 5,998 5,616 Other long-term liabilities 8,886 8,725 Minority interest 341 171 Contingencies SHAREHOLDERS' EQUITY Capital stock 14,822 14,804 Retained earnings 110,364 103,013 Other shareholders' equity 597 485 ----------- ----------- 125,783 118,302 Common stock in treasury, at cost - (840) ----------- ----------- 125,783 117,462 ----------- ----------- $ 216,266 $ 188,448 ----------- ----------- ----------- -----------
See Notes to Consolidated Financial Statements. Page 2 of 12 CLARCOR Inc. CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) (Unaudited) -----------
Three Months Ended Nine Months Ended --------------------------- --------------------------- September 2, August 27, September 2, August 27 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Net sales $ 71,829 $ 67,724 $ 204,444 $ 188,745 Cost of sales 51,349 47,724 146,173 133,642 ------------ ------------ ------------ ------------ Gross profit 20,480 20,000 58,271 55,103 Selling and administrative expenses 10,751 10,318 33,243 32,388 ------------ ------------ ------------ ------------ Operating profit 9,729 9,682 25,028 22,715 ------------ ------------ ------------ ------------ Other income (expense): Interest expense (661) (659) (1,804) (2,128) Interest income 227 113 609 339 Minority interest in earnings of subsidiary 21 - 61 - Other, net 20 357 228 750 ------------ ------------ ------------ ------------ (393) (189) (906) (1,039) ------------ ------------ ------------ ------------ Earnings before income taxes 9,336 9,493 24,122 21,676 Provision for income taxes 3,450 3,614 9,358 8,207 ------------ ------------ ------------ ------------ Earnings before cumulative effect of accounting change 5,886 5,879 14,764 13,469 Cumulative effect of accounting change - - - 630 ------------ ------------ ------------ ------------ Net earnings $ 5,886 $ 5,879 $ 14,764 $ 14,099 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net earnings per common share: From operations $ 0.40 $ 0.40 $ 1.00 $ 0.91 From cumulative effect of accounting change - - - 0.04 ------------ ------------ ------------ ------------ $ 0.40 $ 0.40 $ 1.00 $ 0.95 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Average number of common shares outstanding 14,813,088 14,813,169 14,793,544 14,821,256 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Dividends paid per share $ 0.1575 $ 0.1550 $ 0.4725 $ 0.4650 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
See Notes to Consolidated Financial Statements. Page 3 of 12 CLARCOR Inc. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) -----------
Nine Months Ended --------------------------- September 2, August 27, 1995 1994 ---------- ------- Cash flows from operating activities: Net earnings $ 14,764 $ 14,099 Depreciation and amortization 5,998 5,759 Changes in assets and liabilities (15,857) (8,091) Other, net (6) (1,418) ---------- ------- Net cash provided by operating activities 4,899 10,349 ---------- ------- Cash flows from investing activities: Additions to plant assets (10,687) (7,838) Disposition of plant assets 57 268 Other, net (209) 483 ---------- ------- Net cash used in investing activities (10,839) (7,087) ---------- ------- Cash flows from financing activities: Proceeds from long-term debt 25,000 - Reduction of long-term debt (5,679) (5,899) Purchase of treasury stock - (487) Cash dividends paid (6,967) (6,874) Other, net 281 - ---------- ------- Net cash provided by (used in) financing activities 12,635 (13,260) ---------- ------- Net effect of exchange rate changes on cash 58 - ---------- ------- Net change in cash and short-term cash investments 6,753 (9,998) Cash and short-term cash investments, beginning of period 19,567 13,838 ---------- ------- Cash and short-term cash investments, end of period $ 26,320 $ 3,840 ---------- ------- ---------- ------- Cash paid during the period for: Interest $ 1,699 $ 2,228 ---------- ------- ---------- ------- Income taxes $ 7,894 $ 6,627 ---------- ------- ---------- -------
See Notes to Consolidated Financial Statements. Page 4 of 12 CLARCOR INC . NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. CONSOLIDATED FINANCIAL STATEMENTS The November 30, 1994 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The consolidated balance sheet as of September 2, 1995, the consolidated statements of earnings, and the consolidated statements of cash flows for the periods ended September 2, 1995 and August 27, 1994, have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the consol- idated financial statements and notes thereto included in the Company's November 30, 1994 annual report to shareholders. The results of operations for the period ended September 2, 1995 are not necessarily indicative of the operating results for the full year. 2. SHAREHOLDERS' EQUITY During the quarter ended March 4, 1995, the Company retired all of the shares of common stock held in treasury. All such shares resumed the status of authorized and unissued shares of common stock of the Company. 3. INCOME TAXES In December 1993, the Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes". SFAS No. 109 requires a change from the deferred to the liability method of computing deferred income taxes. The liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax basis and financial reporting basis of assets and liabilities. The cumulative effect of adoption as of the beginning of fiscal 1994 was to increase net earnings by $630. Page 5 of 12 CLARCOR INC . NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, CONTINUED (UNAUDITED) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. SUBSEQUENT EVENT The Company purchased certain assets of Hastings Manufacturing Company constituting its filtration products business on September 3, 1995, for $14.2 million, subject to adjustment based on physical inventory results. The assets acquired included filtration inventories, property and equipment, and three brand names. The acquisition has been accounted for by the purchase method of accounting and the operating results of the business named Hastings Filters, Inc., a wholly owned subsidiary of the Company, will be included in the Company's consolidated results of operations from the date of acquisition. The Company has not yet completed an evaluation of the fair value of the acquired assets, but believes, at this time, that the excess of cost over the fair value of the acquired assets will not be material. Page 6 of 12 PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CLARCOR's operations in the third quarter reflected increased sales, operating profit and net earnings when compared to the prior year. Earnings per share were unchanged from the third quarter of 1994 to the comparable quarter in 1995. For the nine months, current year-to-date operations reflected increases in sales, operating profit, net earnings and earnings per share when compared to the same period last year. The Company continued to maintain a strong and liquid balance sheet, and cash flow remained adequate to meet CLARCOR's current operating needs, to provide for additional productive assets, and to service and repay the Company's debt. Consolidated net sales of $71,829,000 in the third quarter of 1995 increased 6.1% over sales of $67,724,000 reported in the third quarter of last year. Compared to the prior year's quarter, sales in both the Filtration Products and the Consumer Products segments increased by 6.5% and 4.8%, respectively. Sales increases in the Filtration Products segment were led by strong gains in the segment's heavy duty and railroad locomotive markets. Current quarter sales of the Consumer Products segment were above those of the prior year's third quarter due to growth in plastics and metals business offsetting a decline in the aluminum tube market. CLARCOR's third quarter operating profit of $9,729,000 increased $47,000, or 0.5%, over operating profit of $9,682,000 reported last year. Operating profit in the Filtration Products segment increased 4.2%. This increase reflected strong current quarter profits in the heavy-duty mobile filtration market overcoming poor operating results in industrial and environmental businesses and compares to last year's quarter which included strong operating results from both heavy-duty and industrial operations. In the Consumer Products segment, operating profits were lower than last year. This was the result of delays in shipping commemorative metal containers, a weak aluminum tube market and temporary technical problems encountered in manufacturing plastic containers. Other income (expenses) was a net expense of $393,000, compared to expense of $189,000 in the third quarter of 1994. The current year expense increase principally reflected increased interest expense from a new $25 million term loan which more than offset increases in interest income. Also, the third quarter in 1995 did not include equity earnings from an overseas affiliate which contributed to other income in 1994. CLARCOR reduced its ownership position in the overseas affiliate from 20% to 5% in 1994. The provision for income taxes in the third quarter totaled $3,450,000, reflecting an effective rate of 37.0%. This compares to a total of $3,614,000 in the prior year's quarter, an effective rate of 38.1%. The lower rate in the current year reflected a reduction in previously established accruals for taxes which was not recorded in the previous quarter. Consolidated net earnings in the third quarter totaled $5,886,000 in the current year, an increase of $7,000, or 0.1% compared to earnings of $5,879,000 recorded in the same quarter last year. Earnings per share from operations were $.40 in the current quarter, unchanged from the $.40 reported in the third quarter of the prior year. Page 7 of 12 PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED Consolidated net sales for the nine months year-to-date totaled $204,444,000, an increase of $15,699,000 or 8.3%, over year-to-date net sales of $188,745,000 recorded in 1994. Compared to the prior year, net sales in both the Filtration Products segment and the Consumer Products segment increased. Sales in the Company's Filtration Products segment increased 8.2% over the prior year's total. This increase is attributed to increased sales in the heavy duty and railroad locomotive markets offsetting a small decline for the nine-month period in the industrial and environmental air filtration market. Consumer Products segment sales increased 8.8% from the level of the prior year-to-date. This increase reflected strong growth in the segment's plastic business which increased its sales by nearly 77%. The segment's metal and tube business recorded small declines in sales for the nine-month period from the comparable period in 1994. Consolidated current year-to-date operating profit totaled $25,028,000 and was $2,313,000, or 10.2% higher than profit of $22,715,000 recorded last year. The increase reflected higher profits in both the Filtration Products and Consumer Products segments. Profits in the Filtration Products segment increased by 9.6% or $1,841,000 over 1994. Consumer Products operating profit was higher than in the prior nine-month period by $472,000 or 13.7% due primarily to profits in the plastic container business line which operated at a loss in 1994. Other income (expenses) for the current nine months was a net expense of $906,000, compared to expense of $1,039,000 in 1994. The current year net expense was a combination of reduced equity earnings from an overseas affiliate, lower interest expense and higher interest income compared to amounts recorded in 1994. Consolidated net earnings for the current nine months totaled $14,764,000, an increase of $665,000 or 4.7% over net earnings of $14,099,000 in the prior nine months. The 1994 earnings were increased by $630,000 due to the cumulative effect of an accounting change from the adoption of SFAS No. 109. Earnings per share from operations for the nine-month period totaled $1.00, compared to $.95 per share earned during the comparable period last year. The prior year per share earnings were increased by $.04 from the adoption of SFAS No. 109. The Company maintained a strong and liquid consolidated balance sheet through the nine-month period of the current year. Current assets increased to $120,472,000 from $98,450,000 at the beginning of fiscal 1995. Within the current assets, cash increased due to funds received from a new $25,000,000 long-term borrowing. Accounts receivable increased from $42,545,000 at the beginning of the year to $45,640,000 at the end of the third quarter, an amount in line with the increase in sales for the nine-month period. Inventories increased $11,689,000 to $41,947,000 in preparation for heavy fourth quarter shipments and a new Filtration Products segment distribution center which was completed and stocked in the summer of 1995. Working capital totaled $81,547,000 at the end of the current nine months and compares to $58,989,000 at November 30, 1994, an increase due primarily to the new long-term borrowing agreement. The current ratio was 3.1:1 at September 2, 1995. This compares to 2.5:1 at the beginning of the year. Continued investment in productive assets increased the level of net plant assets $4,708,000 to $57,323,000. Total assets of $216,266,000 increased $27,818,000, or 14.8%, over total assets of $188,448,000 at the beginning of the year. Page 8 of 12 PART I - ITEM MANAGEMENT'S DISCUSSION AND ANALYSTS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED The long-term portion of notes payable increased to $36,333,000 from $17,013,000, principally the result of a new long-term borrowing of $25,000,000 offset by payments made on the Company's other fixed rate debt. The new borrowing will be used to fund acquisitions, an increased level of capital equipment purchases in 1995 and for general corporate purposes. The new borrowing bears interest at a fixed rate of 6.69% and pays interest only for four years with amortization of $5,000,000 per year in the succeeding five year period. CLARCOR increased the shareholders' equity balance by $8,321,000 to $125,783,000. This increase results from current year operations, net of dividend payments to shareholders. The Company's capitalization remained healthy at the end of the third quarter. Total capitalization at the end of the current quarter was $162,116,000 (equity plus long-term debt). Equity capital was 77.6% of the total, while debt capital was 22.4%. This compares to total capitalization at the end of the prior year of $134,475,000. Of this total, equity capital was 87.3% while debt capital was 12.7% The Company's ability to generate cash remains strong. CLARCOR continues to generate sufficient cash to maintain the current level of operations, to fund needed capital additions, and to meet current debt obligations. Adequate lines of credit remain open to the Company as needed. Net cash produced from operating activities in the nine months of the current year totaled $4,899,000, compared to net cash of $10,349,000 from operating activities in the prior year. The decrease in the cash produced is chiefly the result of increased investment in inventories. Net cash of $10,839,000 was used in the current nine months for investing activities, principally plant asset additions. Cash provided by current year financing activities totaled $12,635,000, compared to cash used in financing activities of $13,260,000 in 1994. The current year usage reflects $5,679,000 of long-term debt payments, dividend payments of $6,967,000 offset by $25,000,000 from the new borrowing agreement. CLARCOR's core businesses remain healthy and are projected to generate continued growth in sales, operating profit and cash flow. On September 3, 1995, CLARCOR purchased the filtration products business of Hastings Manufacturing Company. CLARCOR acquired inventories, production and distribution facilities in Yankton, South Dakota and Knoxville, Tennessee, and filtration machinery and equipment for approximately $14,200,000. The asset purchase price may be changed based upon a physical count and valuation of inventories. The acquisition will be accounted for in the fourth quarter of 1995 and has not been reflected in the accounting records for the nine months ended September 2, 1995. Costs associated with integrating the acquired filtration business into CLARCOR's other filtration operations are expected to lower earnings by approximately $0.05 per share in the fourth quarter of 1995. Page 9 of 12 PART II - OTHER INFORMATION Item 6a - Exhibit (11), Computations of Per Share Earnings are presented on page 11. Item 6b - A Form 8-K was filed on June 26, 1995. It announced the Board of Directors' appointment of Norman E. Johnson as President and Chief Operating Officer. Also, a Form 8-K was filed subsequent to the quarter ending September 2, 1995 to report the acquisition of Hastings Filters, Inc. Page 10 of 12 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CLARCOR INC. (Registrant) October 10, 1995 By /s/ Bruce A. Klein - ----------------------------- ----------------------------------------- (Date) Bruce A. Klein, Vice President - Finance and Chief Financial Officer Page 12 of 12 EX-11 2 EXHIBIT 11 CLARCOR INC. EXHIBIT (11) - COMPUTATIONS OF PER SHARE EARNINGS ---
NINE MONTHS ENDED -------------------------- SEPTEMBER 2, AUGUST 27, 1995 1994 -------------------------- AVERAGE SHARES OUTSTANDING - -------------------------- 1. Average number of shares 14,793,544 14,821,256 2. Net additional shares resulting from assumed exercise of stock options* 372,223 222,219 -------------------------- 3. Adjusted average shares outstanding for fully diluted computation (1 plus 2) 15,165,767 15,043,475 -------------------------- -------------------------- Earnings per share of common stock: Primary $1.00 $ .95 ----- ----- ----- ----- Assuming full dilution $ .97 $ .94 ----- ----- ----- -----
* Assumes proceeds from exercise of stock options used to purchase treasury shares at the greater of the quarter-end or the average market price during the period. Page 11 of 12 EX-27 3 EXHIBIT 27 -- FDS
5 1,000 9-MOS DEC-02-1995 DEC-04-1994 SEP-02-1995 26,320 0 47,209 1,569 41,947 120,472 131,872 74,549 216,266 38,925 36,333 14,822 0 0 110,961 125,783 204,444 204,444 146,173 146,173 0 0 1,804 24,122 9,358 14,764 0 0 0 14,764 1.00 .97
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