8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant To Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 18, 2006

CLARCOR INC.

(Exact name of registrant as specified in its charter)

Delaware	1-11024	36-0922490
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

840 Crescent Centre Drive, Suite 600, Franklin, TN     37067
(Address of principal executive offices)              (Zip Code)

Registrant’s telephone number, including area code 615-771-3100

(Former name or former address, if changed since last report).

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b)under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

     Item 2.02 Results of Operations and Financial Condition.

(a) On January 18, 2006 CLARCOR Inc., a Delaware corporation (NYSE: CLC) (the “Company”), issued a press release disclosing the Company’s financial results for its fourth quarter and the fiscal year which ended on December 3, 2005.

Section 9 – Financial Statements & Exhibits

     Item 9.01 Financial Statements & Exhibits

Exhibit 99.1 – Press Release dated January 18, 2006.

SIGNATURES

     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 hereunto duly authorized.

CLARCOR INC.
 

By /s/ Norman E. Johnson  

Norman E. Johnson, Chairman of the Board, 

President and Chief Executive Officer 

Date: January 19, 2006

EX-99.1

Exhibit 99.1

FOR FURTHER INFORMATION CONTACT:
Bruce A. Klein
Vice President-Finance and Chief Financial Officer
Franklin, Tennessee
615-771-3100

FOR IMMEDIATE RELEASE
WEDNESDAY, JANUARY 18, 2006

CLARCOR REPORTS RECORD FOURTH QUARTER AND FISCAL 2005 RESULTS

FOURTH QUARTER 2005 SALES UP 16%; OPERATING PROFIT UP 25%;
NET EARNINGS UP 16% OVER 2004

FULL YEAR 2005 SALES UP 11%; OPERATING PROFIT UP 21%;
NET EARNINGS UP 19% OVER 2004

Fiscal Fourth Quarter and Full Year 2005 Highlights
(Amounts in thousands, except per share data and percentages)

	Quarter Ended						Year Ended
	12/3/05		11/27/04		% Change		12/3/05		11/27/04		% Change
Net Sales	$	241,524	$	207,493		16.4	$	873,974	$	787,686		11.0
Operating Profit	$	38,807	$	31,071		24.9	$	118,492	$	98,177		20.7
Net Earnings	$	25,038	$	21,547		16.2	$	76,393	$	63,997		19.4
Diluted Earnings Per Share	$	0.48	$	0.42		14.3	$	1.46	$	1.24		17.7
Average Diluted Shares Outstanding		52,353		51,918		0.8		52,216		51,507		1.4

Fourth Quarter and Full Year 2005 Operating Review
FRANKLIN, TN, January 18, 2006— CLARCOR Inc. (NYSE: CLC) reported today that fourth quarter 2005 sales and operating profit increased by 16% and 25%, respectively, compared to the same quarter in 2004. Fourth quarter net earnings and earnings per share increased by 16% and 14%, respectively, compared to 2004. Fourth quarter operating margin improved to 16.1% in 2005 compared to 15.0% in 2004.

For the full year 2005, sales increased by 11%, operating profit by 21%, net earnings by 19% and earnings per share by 18%. Operating margins improved to 13.6% from 12.5% in 2004. The impact on sales and operating profit from foreign currency fluctuations was not material.

Fiscal 2005 was a 53-week year compared to 2004 which was a 52-week year; 2005’s fourth quarter was a 14-week period compared to 2004’s fourth quarter which was a 13-week period. On a same-weeks basis, sales in the fourth quarter of 2005 rose 8% and operating profit rose 16% compared to 2004. On a same-weeks basis, full year 2005 sales rose 9% and operating profit rose 18% compared to 2004.

There were several items in the fourth quarter and for the full year of 2005 and 2004 that affected operating results:

• The Purolator EFP and Niagara acquisitions in September 2004 and March 2005 added incremental sales in 2005 of $24 million.

• In the third quarter of 2005, CLARCOR recorded a $1.2 million or $0.02 per share benefit arising from a settlement of a tax issue involving a deduction for costs incurred at a subsidiary.

• Costs to relocate the company’s headquarters to Franklin, TN were approximately $2.2 million for fiscal 2004 or approximately $0.03 per share. Relocation costs incurred in the fourth quarter of 2004 were approximately $0.3 million. There were no relocation costs incurred in 2005.

• Tax benefits arising from the American Jobs Creation Act of 2004 increased after-tax earnings in the fourth quarter and the full year of 2004 by approximately $1.2 million, or approximately $0.02 per share.

Norm Johnson, CLARCOR’s Chairman and Chief Executive Officer, said, “Fiscal 2005 marked CLARCOR’s 13^th consecutive year of earnings growth. Fourth quarter sales and earnings were significantly stronger than we originally expected even after adjusting for the extra week this quarter. Product demand was robust, particularly for our higher margin products, in all three of our business segments, both in domestic and international markets.

“Engine/Mobile Filtration sales climbed 22% in the fourth quarter of 2005 compared to the same period in 2004 and 13% on a same-weeks basis. Sales of heavy-duty filters through our traditional aftermarket distribution and OEM dealers, both in domestic and international markets, were strong throughout the quarter. We experienced strong growth not only in the on-road truck market, but in off-road applications for construction, mining and agricultural equipment as well. Significant new product introductions, both for liquid and air filter products, and price increases spurred growth during the quarter and for the full year. Locomotive filter sales also grew driven by the increase in freight shipped on North American railroads. Based on current trends, we anticipate continued strength in 2006.

“Industrial/Environmental Filtration sales rose by 11% from last year’s fourth quarter and 3% on a same-weeks basis. Prior acquisitions had an immaterial impact on sales and operating profit during the quarter. Sales of HVAC filters rebounded after several quarters of static demand. Aviation fuel, defense and fluid power filter product demand continued to be very strong in the fourth quarter, as they have been throughout 2005. Demand was weak, and certainly below our expectations, for filters sold into the oil and gas market, but we believe this is temporary. Order patterns for oil and gas filter applications are irregular and the continuing demand and cost for oil and gas bodes well for increased drilling and production levels for many years. We expect to see an upturn in sales of these products in 2006. Demand in Europe for our sewage treatment systems and highway water runoff systems continue to be solid. We also experienced increased orders in the fourth quarter for filtration systems sold into the capital goods markets, such as dust collectors, electrostatic precipitation equipment and oil purification systems.

“We continue to improve the cost structure and manufacturing efficiencies in our Industrial/Environmental companies. We realized a small improvement in margin in 2005, though it was below the one percentage point per year goal we have set for ourselves. We expect further improvement in 2006 towards our goal of a 10% annual operating margin as we continue to rationalize our manufacturing operations to reduce cost and improve productivity, and increase sales of the higher margin products in our liquid process filtration line.

“Our Packaging segment had an exceptionally strong 2005. Sales increased 23% in the fourth quarter of 2005 compared to the fourth quarter of 2004 and operating profit improved by 27%. For

the full year, sales grew by 10% and operating profit by 32%. On a same-weeks basis, sales increased by 8% for the year and operating profit grew by 30%. The improvement in sales was due to the introduction of a wide array of new packaging designs, primarily in partnership with major consumer product companies, and price increases. Demand was strong for both metal and plastic packaging products. The improvement in operating profit was due to continuing emphasis on cost reductions and improving plant productivity. Operating margins improved to 8.7% in 2005 from 7.3% in 2004. We expect that sales will continue to grow in 2006 with further improvement in operating margins.

“During 2005, cash from operations totaled $89 million, a 24% increase over $72 million operating cash flow in 2004. Capital expenditures for the quarter and the year were $7 million and $24 million, respectively. During the fourth quarter, we repurchased approximately $8 million of our common stock and over $10 million for the full year. During 2005, our Board of Directors authorized a two-year $150 million share repurchase program and we expect to continue to repurchase additional shares in 2006.

”Our effective tax rate in the fourth quarter 2005 was 34.3%. This was an increase from the fourth quarter in 2004 due to the benefit we recorded last year from the American Jobs Creation Act of 2004. The fourth quarter 2005 rate was better than we had expected as pre-tax income in lower tax rate locales, primarily in Asia, grew more quickly than pre-tax income in higher tax countries. In 2006, we expect our effective tax rate to be approximately 35.5% to 36.0%, which is less than our historic tax rate and again due to our expectation of faster growth in Asia.

“We expect capital expenditures in the range of $25 to $30 million in 2006, up from $24 million in 2005. Capital spending will be focused on the development of new products, including the development of new filter media, additional manufacturing and warehouse space, additional production capacity and new enterprise planning systems.

“In late November 2005, we were informed by a major customer of our Industrial/Environmental segment of their plans to manufacture, at their non-US plants, products we currently sell to them manufactured at our domestic plants. We are uncertain as to the timing and extent of this change. We estimate it could amount, for 2006, to a loss approximating $11 million in sales and $1.8 million in operating profit. We plan to offset this by consolidating our manufacturing lines for these products which will improve our overhead absorption and expanding our sales of products that directly compete with this customer where we believe we have a significant manufacturing cost and freight advantage. We believe that by selling these products under our own brands and by removing one layer from the distribution channel, we will be able to increase our selling margins for these products. We are proceeding aggressively to implement these changes. In addition, we have raised the prices of products that we will continue to sell to them. As we learn more about the extent of our customer’s plans and the effect on CLARCOR, we will provide additional information in the future.

“We are concerned, as are many other U.S. companies, at increasing costs for certain raw materials, energy and health care. Each of these costs grew by double-digit percentages in 2005 and this may continue in 2006. We have been able to increase our prices to offset much of these cost increases and will continue to do so in 2006. Although continuing increases in interest rates will not be good for the economy, either in the U.S. or abroad, we are fortunate to have low levels of debt and strong cash flow. Yet, even with these headwinds and the potential loss of sales discussed in the preceding paragraph, we expect 2006 to be our 14^th record year in both sales and earnings for CLARCOR, with continued strong cash flow and diluted earnings per share in the range of $1.52 to $1.60. This estimate includes the effect of the recently enacted requirement to expense stock options, which will impact CLARCOR in 2006 by approximately $0.03 per share.”

CLARCOR will be holding a conference call to discuss the fourth quarter and full year results at 10:00 am CST on January 19, 2006. Interested parties can listen to the conference call at www.clarcor.com or www.viavid.com. A replay will be available on these websites and also at 888-203-1112 or 719-457-0820 and providing confirmation code 9047445. The replay will be available through January 26, 2006 by telephone and for 30 days on the Internet.

CLARCOR is based in Franklin, Tennessee, 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 significant risks and uncertainties, including the effect of changes in product demand, availability of labor, price and product competition, raw material costs, health care costs, energy prices, productivity improvement and plant consolidation programs, distribution channels, acquisitions and divestitures, general economic conditions in both domestic and foreign markets, interest rates, currency fluctuations, the success of our Total Filtration Program, the success of sales and marketing programs, the cost of compliance with recently enacted regulatory requirements, the effect of changes in accounting rules, the economic impact from natural disasters such as hurricanes, tornados and flooding and other factors discussed in filings made with the Securities and Exchange Commission.

TABLES FOLLOW
- -more-

CLARCOR 2005 UNAUDITED FOURTH QUARTER RESULTS cont’d

CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
Per Share Data Restated for 2-for-1 Stock Split Effective April 29, 2005

	Fourth Quarter						Twelven Months
For periods ended December 3, 2005 and November 27, 2004	2005			2004			2005			2004
Net sales	$	241,524		$	207,493		$	873,974		$	787,686
Cost of sales		166,297			142,682			608,242			547,058
Gross profit		75,227			64,811			265,732			240,628
Selling and administrative expenses		36,420			33,740			147,240			142,451
Operating profit		38,807			31,071			118,492			98,177
Other income (expense)		(441	)		793			(570	)		883
Earnings before income taxes and minority interests		38,366			31,864			117,922			99,060
Income taxes		13,167			10,190			40,968			34,717
Earnings before minority interests		25,199			21,674			76,954			64,343
Minority interests in earnings of subsidiaries		(161	)		(127	)		(561	)		(346	)
Net earnings	$	25,038		$	21,547		$	76,393		$	63,997
Net earnings per common share:
Basic	$	0.48		$	0.42		$	1.48		$	1.26
Diluted	$	0.48		$	0.42		$	1.46		$	1.24
Average shares outstanding:
Basic		51,751,603			51,224,676			51,658,347			50,984,314
Diluted		52,353,021			51,917,884			52,215,689			51,506,738

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	December 3,		November 27,
	2005		2004
Assets
Current assets:
Cash and cash investments	$	18,502	$	17,420
Short-term investments		10,400		5,100
Accounts receivable, net		152,755		143,719
Inventories		117,508		115,571
Other		25,768		22,180
Total current assets		324,933		303,990
Plant assets, net		149,505		142,242
Acquired intangibles, net		168,176		147,789
Pension assets		22,069		24,574
Other assets		10,589		9,202
	$	675,272	$	627,797
Liabilities
Current liabilities:
Current portion of long-term debt	$	233	$	420
Accounts payable and accrued liabilities		108,693		117,859
Income taxes		12,544		7,993
Total current liabilities		121,470		126,272
Long-term debt		16,009		24,130
Long-term pension liabilities		16,287		11,256
Other liabilities		38,673		37,677
		192,439		199,335
Shareholders’ Equity		482,833		428,462
	$	675,272	$	627,797

SUMMARY CASH FLOWS
(Dollars in thousands)

	Twelve Months
	2005			2004
From Operating Activities
Net earnings	$	76,393		$	63,997
Depreciation		19,749			18,241
Amortization		1,338			910
Changes in assets and liabilities		(8,642	)		(11,166	)
Other, net		508			(176	)
Total provided (used) by operating activities		89,346			71,806
From Investing Activities
Plant asset additions		(24,032	)		(22,352	)
Business acquisitions		(28,133	)		(41,893	)
Other, net		653			2,036
Total provided (used) by investing activities		(51,512	)		(62,209	)
From Financing Activities
Net (payments) proceeds under line of credit		(7,500	)		7,500
Payments on long-term debt		(811	)		(519	)
Cash dividends paid		(13,385	)		(12,834	)
Purchase of treasury stock		(10,461	)		—
Other, net		(3,542	)		6,916
Total provided (used) by financing activities		(35,699	)		1,063
Effect of exchange rate changes on cash		(1,053	)		912
Change in Cash and Cash Investments	$	1,082		$	11,572

5

CLARCOR 2005 UNAUDITED FOURTH QUARTER RESULTS cont’d.

QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)

	2005
	Quarter			Quarter						Quarter						Quarter
	Ended			Ended			Six			Ended			Nine			Ended			Twelve
	February 26			May 28			Months			August 27			Months			December 3			Months
Net sales by segment:
Engine/Mobile Filtration	$	83,129		$	93,722		$	176,851		$	90,686		$	267,537		$	100,646		$	368,183
Industrial/Environmental Filtration		97,198			106,668			203,866			105,153			309,019			118,429			427,448
Packaging		15,934			19,396			35,330			20,564			55,894			22,449			78,343
	$	196,261		$	219,786		$	416,047		$	216,403		$	632,450		$	241,524		$	873,974
Operating profit by segment:
Engine/Mobile Filtration	$	16,778		$	19,629		$	36,407		$	20,500		$	56,907		$	23,507		$	80,414
Industrial/Environmental Filtration		3,969			6,234			10,203			8,544			18,747			12,519			31,266
Packaging		333			1,690			2,023			2,008			4,031			2,781			6,812
	$	21,080		$	27,553		$	48,633		$	31,052		$	79,685		$	38,807		$	118,492
Operating margin by segment:
Engine/Mobile Filtration		20.2	%		20.9	%		20.6	%		22.6	%		21.3	%		23.4	%		21.8	%
Industrial/Environmental Filtration		4.1	%		5.8	%		5.0	%		8.1	%		6.1	%		10.6	%		7.3	%
Packaging		2.1	%		8.7	%		5.7	%		9.8	%		7.2	%		12.4	%		8.7	%
		10.7	%		12.5	%		11.7	%		14.3	%		12.6	%		16.1	%		13.6	%

	2004
	Quarter			Quarter						Quarter						Quarter
	Ended			Ended			Six			Ended			Nine			Ended			Twelve
	February 28			May 29			Months			August 28			Months			November 27			Months
Net sales by segment:
Engine/Mobile Filtration	$	70,800		$	82,992		$	153,792		$	83,771		$	237,563		$	82,479		$	320,042
Industrial/Environmental Filtration		88,962			98,249			187,211			102,646			289,857			106,772			396,629
Packaging		15,510			17,471			32,981			19,792			52,773			18,242			71,015
	$	175,272		$	198,712		$	373,984		$	206,209		$	580,193		$	207,493		$	787,686
Operating profit by segment:
Engine/Mobile Filtration	$	14,425		$	16,989		$	31,414		$	16,892		$	48,306		$	18,258		$	66,564
Industrial/Environmental Filtration		3,252			6,076			9,328			8,457			17,785			10,886			28,671
Packaging		136			1,153			1,289			1,665			2,954			2,197			5,151
Relocation Costs		—			(425	)		(425	)		(1,514	)		(1,939	)		(270	)		(2,209	)
	$	17,813		$	23,793		$	41,606		$	25,500		$	67,106		$	31,071		$	98,177
Operating margin by segment:
Engine/Mobile Filtration		20.4	%		20.5	%		20.4	%		20.2	%		20.3	%		22.1	%		20.8	%
Industrial/Environmental Filtration		3.7	%		6.2	%		5.0	%		8.2	%		6.1	%		10.2	%		7.2	%
Packaging		0.9	%		6.6	%		3.9	%		8.4	%		5.6	%		12.0	%		7.3	%
		10.2	%		12.0	%		11.1	%		12.4	%		11.6	%		15.0	%		12.5	%

6
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