EX-99.1 3 c77819exv99w1.txt PRESS RELEASE DATED JUNE 18, 2003 EXHIBIT 99.1 FOR FURTHER INFORMATION CONTACT: Bruce A. Klein Vice President- Finance and Chief Financial Officer Rockford, Illinois 815-962-8867 FOR IMMEDIATE RELEASE WEDNESDAY, JUNE 18, 2003 CLARCOR REPORTS RECORD SECOND QUARTER 2003 RESULTS Q2 NET EARNINGS UP 23%; EPS UP 21% UNAUDITED FISCAL SECOND QUARTER AND SIX MONTHS 2003 HIGHLIGHTS (Amounts in thousands, except per share data and percentages)
------------------------------------------------------------------------------------------------------------------------ QUARTER ENDED % SIX MONTHS ENDED % 5/31/03 6/1/02 CHANGE 5/31/03 6/1/02 CHANGE ------------------------------------------------------------------------------------------------------------------------ AS REPORTED ON A GAAP BASIS: Net Sales $185,775 $176,510 5.2 $357,269 $334,772 6.7 Operating Profit $20,538 $18,796 9.3 $36,025 $33,202 8.5 Net Earnings $13,047 $10,607 23.0 $22,643 $18,605 21.7 Diluted Earnings Per Share $0.51 $0.42 21.4 $0.89 $0.74 20.3 ------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER AND SIX MONTHS 2003 OPERATING REVIEW ROCKFORD, IL, JUNE 18, 2003 -- CLARCOR INC. (NYSE: CLC) reported today that second quarter 2003 net earnings and diluted earnings per share increased by 23% and 21%, respectively, compared to the same quarter in 2002. Sales increased by 5% compared to the prior year's second quarter and operating profit increased by 9%. An acquisition made in June 2002 increased sales by almost $5 million in this year's second quarter. Foreign currency fluctuations did not have a material impact on either sales or operating profit in the second quarter or six-month periods of 2003. For the six-month 2003 period, sales increased by 7% and net earnings and diluted earnings per share increased by 22% and 20%, respectively, compared to 2002. The June 2002 acquisition increased sales by almost $9 million in the 2003 six-month period. Norm Johnson, CLARCOR's Chairman and Chief Executive Officer, said, "We are very pleased with our second quarter results. In addition to an increase in sales of 5%, gross margins rose to 30.5% from 29.1% last year, and operating margins increased to 11.1% from 10.6% last year. Each of our filtration segments reported increased sales and operating profits compared to the same quarter last year. Our international filter operations also had a good second quarter with double-digit increases in both sales and operating profit compared to last year's second quarter. "Engine/Mobile Filtration sales rose by nearly 13% from last year's second quarter and includes the impact of the Locker acquisition in June 2002. In a period of slow growth throughout much of the U.S. economy, particularly in the manufacturing sector, the sales increase demonstrates the impact of new sales and marketing initiatives begun early last year. These initiatives focus increased attention on markets where we have had limited sales penetration with specific programs designed to add new distribution and strengthen current distribution. Operating profit grew by 8% compared to last year's second quarter and operating margin was 19.5% which includes the Locker acquisition. The Locker acquisition reduced operating margin for the second quarter by approximately one percentage point. Product demand was strong and consistent throughout the quarter in our heavy-duty engine filter and railroad filter product lines. "Industrial/Environmental Filtration sales increased by nearly 2% from the second quarter of last year and operating profit grew by 16%. We saw increased sales, both domestically and internationally, of filters sold for aviation and oil drilling applications. Based on current order indications, we expect this trend to continue for the rest of this year and next year. We saw continuing weakness in filters sold into capital goods markets and for automotive manufacturing applications. HVAC filter sales, for both residential and commercial markets, were not as strong as we had planned, but we expect this to improve as the year progresses. Operating margins improved to 5.7% compared to 5.0% last year primarily due to cost reductions and manufacturing integration efforts throughout the Industrial/Environmental segment. "We have several major organizational initiatives underway to improve operating efficiency in our Industrial/Environmental Filtration segment. We are shifting the responsibility for our Airguard and Purolator branches to our TFS organization. This will place our distribution outlets within one operation which we expect will lead to increased customer service and greater opportunities to provide our Total Filtration Program to more customers. In addition, we are combining many of the manufacturing, engineering and administrative functions of our Airguard and Purolator operations. Until this process is complete, we will incur duplicative costs in these areas. Next year, as these costs are eliminated, we expect the result will be improved margins from greater production efficiencies and lower operating costs as we continue to make progress towards our goal of a 10% operating margin in this segment. "Packaging segment sales declined by 3% this quarter compared to last year and operating profit decreased by 9%. Sales of metal products increased during the quarter while plastic product sales decreased. Based on current order rates, we expect sales and operating profit in the third and fourth quarters of this year to exceed last year's levels. Late last year, we made changes in manufacturing management in this segment and more recently we have made changes in the sales area as well. We believe that the changes in manufacturing should result in improved margins as our Packaging segment enters its traditionally stronger sales periods in the second half of this year. We also expect that the changes in the sales area will lead to increased growth beginning early next year. 2 "Other income (expense) declined primarily due to lower interest expense as a result of a decline in interest rates and reduced bank debt during 2003 and also due to currency translation gains in 2003 compared to translation losses in 2002. "Cash flow continues to be good. Debt declined by $22 million from the end of last year. Our debt to total capital (debt plus shareholders' equity) ratio is now 17% compared to 22% at the end of 2002. During the quarter, we completed the renegotiation of a $165 million credit agreement with our bank group. We maintain significant borrowing capacity to fund ongoing operations and our current development and expansion plans, to continue to pay a dividend and to aggressively seek acquisitions when we believe those opportunities will increase the value of our company. "Based on stronger first half results than we expected at the beginning of the year, we now expect 2003 earnings per share to be in the $1.97 to $2.05 range. If overall demand is stronger or if the economy noticeably improves in the second half, we would expect to hit the higher end of this range. An improved U.S. economy will certainly help, but even if the economy stays flat, we still expect CLARCOR to have a record 2003 and post its 11th consecutive year of increased earnings." CLARCOR will be holding a conference call to discuss the second quarter results at 10:00 am CDT on June 19, 2003. Interested parties can listen to the conference call at www.clarcor.com or www.companyboardroom.com. A replay will be available on these websites and also at 800-642-1687 or 706-645-9291 and providing confirmation code 1161223. The replay will be available through June 26, 2003 by telephone and for 30 days on the Internet. CLARCOR is based in Rockford, Illinois, and is a diversified 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 under the symbol CLC. The statements in this release concerning the Company's sales, earnings, business performance and prospects are forward-looking statements that involve risk and uncertainties, including the effect of changes in product demand, availability of labor, price and product competition, raw material 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 Program, market disruptions caused by domestic or international conflicts and other factors discussed in filings made with the Securities and Exchange Commission. TABLES FOLLOW - MORE - 3 CLARCOR 2003 UNAUDITED SECOND QUARTER RESULTS cont'd. Page 4 CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in thousands except per share data)
Second Quarter Six Months ------------------------------ ------------------------------ For periods ended May 31, 2003 and June 1, 2002 2003 2002 2003 2002 ------------------------------------------------------------------------------------------------------------------------------- Net sales........................................... $ 185,775 $ 176,510 $ 357,269 $ 334,772 Cost of sales....................................... 129,176 125,210 252,321 238,762 ----------- ----------- ----------- ----------- Gross profit................................... 56,599 51,300 104,948 96,010 Selling and administrative expenses................. 36,061 32,504 68,923 62,808 ----------- ----------- ----------- ----------- Operating profit............................... 20,538 18,796 36,025 33,202 Other income (expense).............................. 8 (2,172) (367) (4,062) ----------- ----------- ----------- ----------- Earnings before income taxes................... 20,546 16,624 35,658 29,140 Income taxes........................................ 7,499 6,017 13,015 10,535 ----------- ----------- ----------- ----------- Net earnings........................................ $ 13,047 $ 10,607 $ 22,643 $ 18,605 =========== =========== =========== =========== Net earnings per common share: Basic............................................ $ 0.52 $ 0.43 $ 0.91 $ 0.75 =========== =========== =========== =========== Diluted.......................................... $ 0.51 $ 0.42 $ 0.89 $ 0.74 =========== =========== =========== =========== Average shares outstanding: Basic............................................ 25,015,289 24,856,731 24,973,997 24,782,349 Diluted.......................................... 25,435,452 25,310,296 25,326,543 25,142,081
CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
May 31, November 30, 2003 2002 ----------------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash investments...................... $ 10,326 $ 13,747 Accounts receivable, net....................... 117,621 121,482 Inventories.................................... 112,680 101,846 Other 22,010 22,671 -------- -------- Total current assets.................... 262,637 259,746 Plant assets, net.................................... 129,217 132,892 Acquired intangibles, net............................ 122,559 122,529 Pension assets....................................... 21,267 21,771 Other assets......................................... 10,192 9,181 -------- -------- $545,872 $546,119 ======== ======== LIABILITIES Current liabilities: Current portion of long-term debt.............. $ 5,699 $ 68,456 Accounts payable and accrued liabilities.................................. 95,044 97,738 Income taxes................................... 9,556 8,061 -------- -------- Total current liabilities............... 110,299 174,255 Long-term debt....................................... 62,968 22,648 Long-term pension liabilities........................ 9,257 7,823 Other liabilities.................................... 27,287 25,932 -------- -------- 209,811 230,658 SHAREHOLDERS' EQUITY................................. 336,061 315,461 -------- -------- $545,872 $546,119 ======== ========
SUMMARY CASH FLOWS (Dollars in thousands)
Six Months ---------------------------- 2003 2002 ----------------------------------------------------------------------------------------------- FROM OPERATING ACTIVITIES Net earnings.................................................. $ 22,643 $ 18,605 Depreciation.................................................. 9,860 10,067 Amortization.................................................. 453 365 Changes in assets and liabilities............................. (2,534) 11,627 Other, net.................................................... 45 72 --------- -------- Total provided (used) by operating activities................................ 30,467 40,736 --------- -------- FROM INVESTING ACTIVITIES Plant asset additions......................................... (6,041) (6,078) Business acquisitions......................................... - 3,694 Other, net.................................................... 26 (1) --------- -------- Total provided (used) by investing activities................................ (6,015) (2,385) --------- -------- FROM FINANCING ACTIVITIES Proceeds from line of credit.................................. 94,111 9,500 Payments on line of credit.................................... (116,083) (39,500) Payments on long-term debt.................................... (465) (219) Cash dividends paid........................................... (6,120) (5,937) Other, net.................................................... 440 1,786 --------- -------- Total provided (used) by financing activities................................ (28,117) (34,370) --------- -------- Effect of exchange rate changes on cash.......................................... 244 25 --------- -------- CHANGE IN CASH AND CASH INVESTMENTS.......................................... $ (3,421) $ 4,006 ========= ========
CLARCOR 2003 UNAUDITED SECOND QUARTER RESULTS cont'd. Page 5 QUARTERLY INCOME STATEMENT DATA BY SEGMENT (Dollars in thousands)
2003 ---------------------------------------- QUARTER QUARTER ENDED ENDED SIX MARCH 1 MAY 31 MONTHS -------- -------- -------- NET SALES BY SEGMENT: Engine/Mobile Filtration................................... $ 66,776 $ 73,066 $139,842 Industrial/Environmental Filtration........................ 90,369 95,852 186,221 Packaging.................................................. 14,349 16,857 31,206 -------- -------- -------- $171,494 $185,775 $357,269 ======== ======== ======== OPERATING PROFIT BY SEGMENT: Engine/Mobile Filtration................................... $ 12,686 $ 14,253 $ 26,939 Industrial/Environmental Filtration........................ 2,373 5,417 7,790 Packaging.................................................. 428 868 1,296 -------- -------- -------- $ 15,487 $ 20,538 $ 36,025 ======== ======== ======== 2002 ---------------------------------------- QUARTER QUARTER ENDED ENDED SIX MARCH 2 JUNE 1 MONTHS -------- -------- -------- NET SALES BY SEGMENT: Engine/Mobile Filtration................................... $ 57,839 $ 64,760 $122,599 Industrial/Environmental Filtration........................ 85,950 94,377 180,327 Packaging.................................................. 14,473 17,373 31,846 -------- -------- -------- $158,262 $176,510 $334,772 ======== ======== ======== OPERATING PROFIT BY SEGMENT: Engine/Mobile Filtration................................... $ 11,258 $ 13,169 $ 24,427 Industrial/Environmental Filtration........................ 2,530 4,672 7,202 Packaging.................................................. 618 955 1,573 -------- -------- -------- $ 14,406 $ 18,796 $ 33,202 ======== ======== ========