-----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, C1HTp+aUKqnTmuoBrxbSSO8KWLZ3dTsHkZtoNf+FjEj6tNlhF7uZWlryJmf7Tbx0 DRcSVu9KzXa/F3Z6goXLKA== 0000950137-00-001198.txt : 20000324 0000950137-00-001198.hdr.sgml : 20000324 ACCESSION NUMBER: 0000950137-00-001198 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000226 FILED AS OF DATE: 20000323 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: SEC FILE NUMBER: 001-11024 FILM NUMBER: 576699 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 QUARTERLY REPORT 1 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 the Quarter Ended February 26, 2000 Commission File Number 1-11024 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. 24,255,740 common shares outstanding -------------------------------------- Page 1 of 15 2 CLARCOR Inc. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in thousands) -------------
February 26, November 30, ASSETS 2000 1999 -------------- ------------- (unaudited) Current assets: Cash and short-term cash investments $ 13,782 $ 14,745 Accounts receivable, less allowance for losses of $5,312 for 2000 and $5,155 for 1999 104,697 103,986 Inventories: Raw materials 35,173 32,731 Work in process 14,588 14,643 Finished products 46,635 42,476 --------- --------- Total inventories 96,396 89,850 --------- --------- Prepaid expenses and other current assets 9,181 11,830 Deferred income taxes 7,890 7,259 --------- --------- Total current assets 231,946 227,670 --------- --------- Plant assets, at cost 248,164 244,287 less accumulated depreciation (122,571) (118,261) --------- --------- 125,593 126,026 --------- --------- Excess of cost over fair value of assets acquired, less accumulated amortization 55,159 49,784 Other acquired intangibles, less accumulated amortization 40,890 41,367 Pension assets 18,658 17,879 Other noncurrent assets 11,923 10,265 --------- --------- $ 484,169 $ 472,991 ========= ========= LIABILITIES Current liabilities: Current portion of long-term debt $ 5,433 $ 5,440 Accounts payable 42,406 42,477 Income taxes 7,144 4,442 Accrued and other liabilities 45,337 45,116 --------- --------- Total current liabilities 100,320 97,475 --------- --------- Long-term debt, less current portion 145,912 145,981 Long-term pension liabilities 3,925 3,577 Other long-term liabilities 15,749 14,845 Minority interests 509 395 Contingencies SHAREHOLDERS' EQUITY Capital stock 24,256 24,020 Capital in excess of par value 4,540 948 Accumulated other comprehensive earnings (5,228) (4,151) Retained earnings 194,186 189,901 --------- --------- 217,754 210,718 --------- --------- $ 484,169 $ 472,991 ========= =========
See Notes to Consolidated Condensed Financial Statements Page 2 of 15 3 CLARCOR Inc. CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Dollars in thousands except per share data) (Unaudited) _________
Three Months Ended ------------------------------ February 26, February 27, 2000 1999 ------------ ------------ Net sales $ 150,697 $ 99,166 Cost of sales 106,414 67,787 ------------ ------------ Gross profit 44,283 31,379 Selling and administrative expenses 30,813 21,341 ------------ ------------ Operating profit 13,470 10,038 ------------ ------------ Other income (expense): Interest expense (2,560) (526) Interest income 202 360 Other, net (81) (69) ------------ ------------ (2,439) (235) ------------ ------------ Earnings before income taxes and minority interests 11,031 9,803 Provision for income taxes 3,974 3,602 ------------ ------------ Earnings before minority interests 7,057 6,201 Minority interests in loss of subsidiaries 6 9 ------------ ------------ Net earnings $ 7,063 $ 6,210 ============ ============ Net earnings per common share: Basic $ 0.29 $ 0.26 ============ ============ Diluted $ 0.29 $ 0.25 ============ ============ Average number of common shares outstanding: Basic 24,180,390 23,958,906 ============ ============ Diluted 24,435,563 24,375,879 ============ ============ Dividends paid per share $ 0.1150 $ 0.1125 ============ ============
See Notes to Consolidated Condensed Financial Statements Page 3 of 15 4 CLARCOR Inc. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) ________
Three Months Ended --------------------------- February 26, February 27, 2000 1999 ------------ ------------ Cash flows from operating activities: Net earnings $ 7,063 $ 6,210 Depreciation and amortization 5,653 3,408 Changes in assets and liabilities (3,287) (3,608) Other, net 55 (7) -------- -------- Net cash provided by operating activities 9,484 6,003 -------- -------- Cash flows from investing activities: Additions to plant assets (4,254) (6,049) Business acquisitions, net of cash acquired (3,910) (375) Dispositions of plant assets 67 -- -------- -------- Net cash used in investing activities (8,097) (6,424) -------- -------- Cash flows from financing activities: Reduction of long-term debt (76) (214) Purchases of treasury stock -- (897) Cash dividends paid (2,778) (2,690) Other, net 513 38 -------- -------- Net cash used in financing activities (2,341) (3,763) -------- -------- Net effect of exchange rate changes on cash (9) (39) -------- -------- Net change in cash and short-term cash investments (963) (4,223) Cash and short-term cash investments, beginning of period 14,745 33,321 -------- -------- Cash and short-term cash investments, end of period $ 13,782 $ 29,098 ======== ======== Cash paid during the period for: Interest $ 2,894 $ 965 ======== ======== Income taxes $ 1,011 $ 3,384 ======== ========
See Notes to Consolidated Condensed Financial Statements Page 4 of 15 5 CLARCOR Inc. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (Unaudited) - ------------------------------------------------------------------------------- 1. CONSOLIDATED FINANCIAL STATEMENTS --------------------------------- The November 30, 1999 consolidated balance sheet data was derived from CLARCOR's year-end audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The consolidated condensed balance sheet as of February 26, 2000, the consolidated condensed statements of earnings and the consolidated condensed statements of cash flows for the periods ended February 26, 2000, and February 27, 1999, have been prepared by the Company without audit. The financial statements have been prepared on the same basis as those in the Company's November 30, 1999 annual report to shareholders. 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. The results of operations for the period ended February 26, 2000 are not necessarily indicative of the operating results for the full year. 2. BUSINESS COMBINATIONS --------------------- During the quarter ended February 26, 2000, the Company purchased two air filtration distributors accounted for under the purchase method. One of the acquisitions was paid for in cash. The purchase price of the other was paid in cash and stock. The Company issued 160,704 shares of its common stock (or $2,895) in connection with the acquisition. These acquisitions did not have a significant impact on the results of the Company. On September 10, 1999, the Company acquired three industrial filtration businesses, Purolator Air Filtration (Purolator), Facet International (Facet), and Purolator Facet, Inc. (PFI). The transaction was accounted for under the purchase method of accounting with the excess of the initial purchase price over the preliminary estimated fair value of the net tangible and identifiable intangible assets acquired recorded as goodwill. The initial purchase price is subject to a final adjustment based on the net assets of the businesses. A preliminary allocation of the initial purchase price was made to major categories of assets and liabilities. The allocation will be completed when the Company finalizes a closing balance sheet in accordance with the purchase agreement, completes the estimates of liabilities assumed, and finalizes the estimates associated with exit and other costs of the acquisitions. The Company expects to finalize its plans for integrating the acquired businesses with its existing operations by the end of the third quarter of fiscal 2000 and any resulting changes to the estimated $285 accrued at November 30, 1999 for severance and exit costs will be reflected as an adjustment to the allocation of the purchase price. No adjustments were made to the initial allocation during the quarter ended February 26, 2000. Page 5 of 15 6 CLARCOR Inc. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (Unaudited) Continued - ------------------------------------------------------------------------------- 3. EARNINGS PER SHARE AND TREASURY STOCK TRANSACTIONS -------------------------------------------------- The Company calculates earnings per share according to Statement of Financial Accounting Standards No. 128, "Earnings per Share." Diluted earnings per share reflects the impact of outstanding stock options as if exercised during the periods presented using the treasury stock method. The following table provides a reconciliation of the numerators and denominators utilized in the calculation of basic and diluted earnings per share.
Three Months Ended -------------------------------------- February 26, February 27, 2000 1999 -------------------------------------- Net Earnings (numerator) $ 7,063 $ 6,210 Basic EPS: Weighted average number of common shares outstanding (denominator) 24,180,390 23,958,906 Basic per share amount $0.29 $0.26 ================= =================== Diluted EPS: Weighted average number of common shares outstanding 24,180,390 23,958,906 Dilutive effect of stock options 255,173 416,973 ----------------- ------------------- Diluted weighted average number of common shares outstanding (denominator) 24,435,563 24,375,879 Diluted per share amount $0.29 $0.25 ================= ===================
The following options were not included in the computation of diluted earnings per share as the options' exercise prices were greater than the average market price of the common shares during the respective quarter:
Three Months Ended ----------------------------------- February 26, February 27, 2000 1999 ----------------------------------- Options 1,109,239 508,864 Weighted Average Exercise Price $18.93 $19.86
During the three months ended February 27, 1999, the Company purchased and retired 50,000 shares of common stock held in treasury. All such shares resumed the status of authorized and unissued shares of common stock of the Company. Page 6 of 15 7 CLARCOR Inc. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (Unaudited) Continued - ------------------------------------------------------------------------------- 4. COMPREHENSIVE EARNINGS ---------------------- The Company's total comprehensive earnings and its components are as follows:
Three Months Ended ---------------------------------- February 26, February 27, 2000 1999 ---------------------------------- Net earnings $ 7,063 $ 6,210 Other comprehensive earnings, net of tax: Foreign currency translation adjustments (1,077) (450) ---------------------------------- Total comprehensive earnings $ 5,986 $ 5,760 ==================================
5. SEGMENT DATA ------------ The Company operates in three principal product segments: Engine/Mobile Filtration, Industrial/Environmental Filtration, and Packaging. The segment data for the three-month periods ended February 26, 2000 and February 27, 1999, respectively, are shown below. Net sales represent sales to unaffiliated customers as reported in the consolidated condensed statements of earnings. Intersegment sales were not material.
Three Months Ended ---------------------------- February 26, February 27, 2000 1999 ---------------------------- Net sales: Engine/Mobile Filtration $ 59,851 $ 53,576 Industrial/Environmental Filtration 75,045 32,698 Packaging 15,801 12,892 ---------------------------- $ 150,697 $ 99,166 ============================ Operating profit: Engine/Mobile Filtration $ 9,555 $ 8,854 Industrial/Environmental Filtration 2,335 626 Packaging 1,580 558 ---------------------------- 13,470 10,038 Other income (expense) (2,439) (235) ---------------------------- Earnings before income taxes and minority interests $ 11,031 $ 9,803 ============================ Identifiable assets: Engine/Mobile Filtration $ 136,531 $ 131,456 Industrial/Environmental Filtration 251,822 70,594 Packaging 37,927 31,061 Corporate 57,889 68,043 ---------------------------- $ 484,169 $ 301,154 ============================
Page 7 of 15 8 CLARCOR Inc. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (Unaudited) Continued - ------------------------------------------------------------------------------- 5. SEGMENT DATA (Continued) ------------------------ First quarter 2000 includes the results of three industrial filtration businesses acquired during the fourth quarter of 1999 as discussed in Note 2. 6. MULTICURRENCY AGREEMENT ----------------------- During the quarter ended February 26, 2000, the Company entered into an interest swap agreement to manage its interest exposure on the outstanding amount under the multicurrency credit revolver. The agreement provides for the Company to pay a 6.04% fixed interest rate on a notional amount of $115,000 and to receive interest at floating rates based on LIBOR. The agreement matured in March 2000. Page 8 of 15 9 Part I - Item 2 - --------------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: FIRST QUARTER OF 2000 COMPARED WITH FIRST QUARTER OF 1999. CLARCOR reported record sales, operating profit, net earnings and earnings per share in the first quarter of 2000 compared to the same quarter in 1999. First quarter 2000 includes the results of operations from three industrial filtration businesses that were acquired in the fourth quarter of 1999. These businesses (the "Industrial Filtration Acquisitions") are included in the Industrial/Environmental Filtration segment. Final balance sheet adjustments for the acquisitions will be determined by the end of the third quarter of fiscal 2000. No adjustments were made to the initial allocation during the quarter ended February 26, 2000. Net sales of $150,697,000 increased 52.0% from $99,166,000 reported for the first quarter of 1999, or an increase of approximately 12.6% excluding the effect of the Industrial Filtration Acquisitions. Each of the Company's business segments reported increased sales for the quarter compared to the prior year quarter. The Engine/Mobile Filtration segment reported increased sales of 11.7% to $59,851,000 from $53,576,000 recorded in 1999. The segment's domestic and international sales were strong for the quarter and included increased sales volume for heavy-duty, light-duty and railroad filters. The Company's Industrial/Environmental Filtration segment recorded a 129.5% increase in sales for the 2000 first quarter or an increase of approximately 9.7% excluding the Industrial Filtration Acquisitions. Sales of environmental air filters were particularly strong for the quarter and sales of air quality equipment and systems were nearly level with the first quarter 1999. In the first quarter of 2000, two distributors of air filtration products were acquired. The additional sales and operating results from these two distributors did not have a significant impact on the Industrial/Environmental Filtration segment or the Company. The Packaging segment reported a 22.6% increase in sales for the 2000 quarter primarily as a result of increased sales of plastic closures and lithographed metal containers and sheets. This sales increase was anticipated as a result of a refocus that began in 1998 on non-promotional packaging products for food and other consumer and industrial products. Operating profit for the first quarter 2000 was $13,470,000 compared to $10,038,000 in 1999, an increase of 34.2%, or approximately 25.6% excluding the results from the Industrial Filtration Acquisitions. Operating profit was 8.9% of net sales in 2000 compared to 10.1% in 1999. The reduction in operating profit margin compared to 1999 resulted primarily from the 1999 business acquisitions and includes the effect of increased amortization and depreciation from the acquisitions. The Engine/Mobile Filtration segment recorded an operating profit increase in 2000 of 7.9% compared to 1999. The increased profit for first quarter 2000 resulted primarily from higher sales volumes and continued productivity improvements that were partially offset by competitive pricing discounts and costs related to temporary inefficiencies from combining distribution facilities. The distribution facilities are expected to be fully combined and operating at expected levels by the third quarter. As a result of the higher than expected distribution costs and continued price discounting, the first quarter operating margin of 16.0% was lower than the 16.5% recorded in 1999. The Industrial/Environmental Filtration segment reported an increase in operating profit in 2000 to Page 9 of 15 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued $2,335,000 from $626,000 recorded in 1999. Excluding the effect of the 1999 acquisitions, operating profit increased approximately $850,000 primarily due to the increased sales volume of air filtration products and reduced overhead and administrative costs related to the segment's air quality equipment business. The Packaging segment's increase in operating profit to $1,580,000 from $558,000 recorded in the 1999 quarter resulted from significantly higher sales volume and improved capacity utilization. For the quarter, operating margin improved to 10.0% compared to 4.3% for the 1999 quarter. Net other expense for the quarter of $2,439,000 included higher interest expense and reduced interest income as a result of higher debt and lower cash balances due to the Industrial Filtration Acquisitions. Interest expense increased to $2,560,000 in 2000 compared to $526,000 in 1999. Net other expense for first quarter 1999 totaled $235,000. Earnings before income taxes and minority interests for the first quarter of 2000 totaled $11,031,000, up from $9,803,000 in the comparable quarter last year. The increase resulted from improved results of operations from the Company's businesses and the operating results from the Industrial Filtration Acquisitions offset by the increased interest expense on the debt related to the acquisitions. The provision for income taxes in 2000 was $3,974,000, an effective rate of 36.0%, and compares to an effective tax rate of 36.7% of pre-tax earnings in the 1999 quarter. The reduction in the effective rate is principally due to reduced state income taxes. Net earnings in the first quarter of the current year were $7,063,000, or $0.29 per share on a diluted basis. The 1999 net earnings for the quarter of $6,210,000 resulted in diluted earnings per share of $0.25. Basic average shares outstanding were 24,180,390 and diluted average shares outstanding were 24,435,563 at the end of the first quarter of 2000. LIQUIDITY AND CAPITAL RESOURCES Cash provided by operating activities totaled $9,484,000 and included increased net earnings, depreciation and amortization. The increase in depreciation and amortization was primarily due to the effect of the 1999 acquisitions. Net changes in assets and liabilities of $3,287,000 for the quarter compared to $3,608,000 recorded in the 1999 quarter. Cash flows used in investing activities increased in the first quarter of 2000 primarily due to the cash used for the acquisition of two distributors for approximately $3,910,000 in cash. In addition, the Company issued 160,704 common shares related to one of the acquisitions. Additions to plant assets totaled $4,254,000 compared to $6,049,000 in 1999. Cash flows used by financing activities of $2,341,000 in 2000 included payments on long-term debt of $76,000 compared to $214,000 in 1999. Dividends paid totaled $2,778,000 during the 2000 quarter. In the 1999 quarter, the Company repurchased 50,000 shares of common stock for $897,000 and paid dividends of $2,690,000. CLARCOR's current operations continue to generate cash and sufficient lines of credit remain available to fund current operating needs, pay dividends, and provide for interest payments and required principal payments related to the Company's long-term debt. In fiscal 1999, the Company entered into a $185,000,000 multicurrency revolving credit facility against which $115,000,000 was Page 10 of 15 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued used related to the Industrial Filtration Acquisitions. Principal payments on long-term debt will be approximately $5,400,000 in fiscal 2000; however, no payments are required in fiscal 2000 on the multicurrency revolving credit facility. The Company is in compliance with restrictive covenants related to the facility. EBITDA, or operating profit before depreciation and amortization, increased to $19,123,000 compared to $13,446,000 in 1999. Capital expenditures in fiscal year 2000 are expected to be approximately $29,000,000 compared to the total of $21,822,000 in 1999. The 2000 amounts will be used to increase production capacity, reduce manufacturing costs, integrate and improve the businesses acquired in 1999, and develop new products. The Company's financial position at the end of the first quarter was not significantly different from fiscal year-end 1999. Cash and short-term investments totaled $13,782,000 at the end of the quarter, a decrease from $14,745,000 at year-end. Inventory increased to $96,396,000 at the end of the first quarter 2000 due to higher sales activities planned for fiscal 2000. The current ratio at the end of the first quarter was 2.3:1 which was the same level as at the end of fiscal 1999. The current year ratio of long-term debt to total capitalization was 40.1% compared to the level at year-end of 40.9%. At February 26, 2000, CLARCOR had 24,255,740 shares of common stock outstanding and includes the 160,704 shares issued related to an acquisition in December 1999. OTHER MATTERS Market Risk The Company's interest expense on long-term debt is sensitive to changes in interest rates. In addition, changes in foreign currency exchange rates may affect assets, liabilities and commitments that are to be settled in cash and are denominated in foreign currencies. Subsequent to the end of the first quarter 2000, the Company entered into a new interest rate swap agreement at a fixed interest rate of 6.565% on a notional amount of $60,000,000 and the Company will receive interest at floating rates based on LIBOR. These market risks are similar to those discussed in the Company's Annual Report and Form 10-K for the year ended November 30, 1999 (the "Annual Report") in the Financial Review on page 13. Year 2000 The Company is not aware of any significant business interruption as a result of a Year 2000 issue. In addition, no significant additional costs or remediation activities are expected with respect to Year 2000 issues. The Company's Year 2000 activities were discussed more fully in the Financial Review on page 13 of the Annual Report. Recent Accounting Pronouncements The Company currently expects to adopt Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," in fiscal year 2001 as discussed in the Financial Review on page 13 of the Annual Report. Page 11 of 15 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements," relating to revenue recognition under generally accepted accounting principles in financial statements. The Company expects to fully review the guidance provided in SAB 101 during fiscal 2000 and management does not expect this review to result in any material effect on the Company's financial position and results of operations. Outlook The order rate in each of the Company's business segments continues to be strong, and as a result, sales and operating profit are expected to continue to increase compared to the prior year levels. New product introductions and additional distribution of the Company's product lines are expected to increase sales during fiscal 2000. In addition, the Company's emphasis on cost control and productivity improvements will continue throughout fiscal 2000. Overall, operating margins are expected to decline in 2000 from 1999 due to the Industrial Filtration Acquisitions and related depreciation and amortization. On an EBITDA basis, the new acquisitions generate higher margins than the historical results from the Industrial/Environmental segment, but are generally lower than the Company's other business segments. Without the additional depreciation and amortization from those acquisitions, operating margins would have improved significantly for the Industrial/Environmental segment. The Engine/Mobile segment's margins are already very strong, but the margins are expected to improve somewhat during the remainder of fiscal 2000. The Industrial Filtration Acquisitions will continue to be integrated into the Industrial/Environmental Filtration segment and additional cost savings and synergies are expected to be recognized, net of integration costs. In first quarter 2000, these businesses achieved many of the operating goals originally set at the acquisition date, and the integration activities are on schedule and will continue throughout 2000 and 2001. The Packaging segment will continue with its transition to a business model focused on growth in its core strength of flat sheet metal lithography, and this repositioning is expected to result in improved sales overall for 2000 compared to fiscal 1999. The Packaging segment's operating margin for the year is expected to approximate the 11.5% recorded for fiscal 1999. Although higher petroleum prices and higher interest rates may affect the economy as the year progresses, record sales and profits are expected for fiscal 2000 with the goal of achieving growth in earnings per share of 10% to 15%. CLARCOR continues to produce a very strong, stable cash flow. EBITDA should exceed $90 million, a 25% increase over 1999. Capital expenditure spending is expected to continue at the planned rate, as these investments remain important for the Company's future growth. FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY Certain statements quoted in the body of this report, and statements in the "Outlook" section of this report are forward-looking. These statements involve risk and uncertainty. Actual future results and trends may differ materially depending on a variety of factors including: the volume and timing of orders received during the quarter; the mix of changes in distribution channels through which the Company's products are sold; the timing and acceptance of new products and product Page 12 of 15 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued enhancements by the Company or its competitors; changes in pricing, labor availability, product life cycles, raw material costs, petroleum prices, and purchasing patterns of distributors and customers; competitive conditions in the industry; business cycles affecting the markets in which the Company's products are sold; the effectiveness of plant conversions and productivity improvement programs; the management of both growth and acquisitions; the fluctuation in interest rates, primarily LIBOR, which affect the cost of borrowing under the revolving credit facility; extraordinary events, such as litigation or acquisitions or divestitures including related charges; and economic conditions generally or in various geographic areas. All of the foregoing matters are difficult to forecast. The future results of the Company may fluctuate as a result of these and the other risk factors detailed from time to time in the Company's Securities and Exchange Commission reports. Due to the foregoing items it is possible that in some future quarters the Company's operating results will be below the expectation of some stock market analysts and investors. In such event, the price of CLARCOR common stock could be materially adversely affected. Page 13 of 15 14 Part II - Other Information Item 6a - Exhibit 27 Financial Data Schedule. Item 6b - The Company did not file a Form 8-K during the quarter ended February 26, 2000. Page 14 of 15 15 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) March 23, 2000 By /s/ Bruce A. Klein - --------------------------------- ---------------------------------- (Date) Bruce A. Klein, Vice President - Finance and Chief Financial Officer Page 15 of 15 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 USD 3-MOS DEC-02-2000 NOV-28-1999 FEB-26-2000 1.0 13,782 0 110,009 5,312 96,396 231,946 248,164 122,571 484,169 100,320 145,912 0 0 24,256 193,498 484,169 150,697 150,697 106,414 106,414 0 209 2,560 11,031 3,974 7,063 0 0 0 7,063 0.29 0.29
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