<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-Q
QUARTERLY REPORT
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PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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FOR QUARTER ENDED JUNE 3, 1995
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REGISTRANT: CLARCOR INC. (DELAWARE)
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<PAGE>
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 June 3, 1995 Commission File Number 0-3801
CLARCOR Inc.
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 815-962-8867
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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.
14,804,314 common shares outstanding
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Page 1 of 11
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CLARCOR INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
__________
<TABLE>
<CAPTION>
JUNE 3, NOVEMBER 30,
ASSETS 1995 1994
---------- --------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and short-term cash investments $ 5,157 $ 19,567
Accounts receivable less allowance for losses of
$1,501 for 1995 and $1,580 for 1994 44,361 42,545
Inventories:
Raw materials 15,113 12,009
Work-in-process 6,758 3,799
Finished product 20,253 14,450
----------- --------------
Total inventories 42,124 30,258
Prepaid expenses 3,631 2,926
Other 3,277 3,154
----------- --------------
Total current assets 98,550 98,450
----------- --------------
Plant assets, at cost 128,939 121,659
Less accumulated depreciation (72,662) (69,044)
----------- --------------
56,277 52,615
----------- --------------
Marketable equity securities, at fair value 4,272 3,655
Excess of cost over fair value of assets acquired,
less accumulated amortization 15,161 15,191
Pension assets 10,990 10,237
Other noncurrent assets 7,405 8,300
----------- --------------
$ 192,655 $ 188,448
----------- --------------
----------- --------------
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 7,580 $ 7,579
Accounts payable 20,235 13,769
Income taxes 1,582 2,051
Accrued and other liabilities 12,748 16,062
----------- --------------
Total current liabilities 42,145 39,461
Long-term debt less current portion 13,300 17,013
Long-term pension liabilities 6,064 5,616
Other long-term liabilities 8,947 8,725
Minority interest 309 171
Contingencies
SHAREHOLDERS' EQUITY
Capital stock 14,804 14,804
Foreign currency translation adjustments (1,464) (609)
Unrealized holding gain on marketable equity
securities, net of taxes 1,213 911
Other shareholders' equity 107,337 103,196
----------- --------------
121,890 118,302
Common stock in treasury, at cost - (840)
----------- --------------
121,890 117,462
----------- --------------
$ 192,655 $ 188,448
----------- --------------
----------- --------------
</TABLE>
See Notes to Consolidated Financial Statements.
Page 2 of 11
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CLARCOR INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
__________
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
JUNE 3, MAY 28, JUNE 3, MAY 28,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 70,478 $ 65,131 $ 132,615 $ 121,021
Cost of sales 50,379 46,212 94,824 85,918
----------- ----------- ----------- -----------
Gross profit 20,099 18,919 37,791 35,103
Selling and administrative expenses 11,427 11,785 22,492 22,070
----------- ----------- ----------- -----------
Operating profit 8,672 7,134 15,299 13,033
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (573) (711) (1,143) (1,469)
Interest income 156 55 382 226
Minority interest in earnings
of subsidiary (22) - (40) -
Other, net (62) 166 288 393
----------- ----------- ----------- -----------
(501) (490) (513) (850)
----------- ----------- ----------- -----------
Earnings before
income taxes 8,171 6,644 14,786 12,183
Provision for income taxes 3,265 2,469 5,908 4,593
----------- ----------- ----------- -----------
Earnings before cumulative effect
of accounting change 4,906 4,175 8,878 7,590
Cumulative effect of accounting change - - - 630
----------- ----------- ----------- -----------
Net earnings $ 4,906 $ 4,175 $ 8,878 $ 8,220
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net earnings per common share:
From operations $ 0.33 $ 0.28 $ 0.60 $ 0.51
From cumulative effect of
accounting change - - - 0.04
----------- ----------- ----------- -----------
$ 0.33 $ 0.28 $ 0.60 $ 0.55
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Average number of common shares
outstanding 14,783,915 14,826,865 14,783,915 14,826,865
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Dividends paid per share $ 0.1575 $ 0.1550 $ 0.3150 $ 0.3100
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See Notes to Consolidated Financial Statements.
Page 3 of 11
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CLARCOR INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
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JUNE 3, MAY 28,
1995 1994
---------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 8,878 $ 8,220
Depreciation and amortization 3,929 3,865
Changes in assets and liabilities (11,249) (9,105)
Other, net (24) (1,040)
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Net cash provided by operating activities 1,534 1,940
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Cash flows from investing activities:
Additions to plant assets (7,656) (4,582)
Disposition of plant assets 57 115
Other, net (91) 492
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Net cash used in investing activities (7,690) (3,975)
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Cash flows from financing activities:
Reduction of long-term debt (3,712) (3,876)
Cash dividends paid (4,644) (4,586)
Other, net 56 -
---------- ---------
Net cash used in financing activities (8,300) (8,462)
---------- ---------
Net effect of exchange rate changes on cash 46 -
---------- ---------
Net change in cash and short-term cash investments (14,410) (10,497)
Cash and short-term cash investments,
beginning of period 19,567 13,838
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Cash and short-term cash investments,
end of period $ 5,157 $ 3,341
---------- ---------
---------- ---------
Cash paid during the period for:
Interest $ 1,204 $ 1,580
---------- ---------
---------- ---------
Income taxes $ 6,103 $ 5,275
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---------- ---------
</TABLE>
See Notes to Consolidated Financial Statements.
Page 4 of 11
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CLARCOR INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
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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 June 3, 1995, the consolidated
statements of earnings, and the consolidated statements of cash flows for
the periods ended June 3, 1995 and May 28, 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
consolidated 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 June 3, 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 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 11
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PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CLARCOR continued to report strong operating results in the current year.
Records for second quarter levels were reported in sales, operating profit, net
earnings from continuing operations, and earnings per share. Each of these
categories was substantially higher when compared to the same period last year.
Sales and earnings gains were reported in both the Filtration Products and
Consumer Products segments. The Company's expectations for the remainder of the
year include increases in sales and profits for both of these business segments
on an annual basis when compared to last year.
Record second quarter sales of $70,478,000 increased 8.2% over the level of
$65,131,000 reported in the comparable quarter of the prior year. Sales in the
Filtration Products segment reached $54,299,000, 7.3% over sales of $50,629,000
in the prior year's quarter. This increase was chiefly the result of higher
sales in the heavy duty and railroad locomotive filter markets. Consumer
Products segment sales in the current quarter improved to $16,179,000, 11.6%
over the same quarter last year, due chiefly to increased sales of plastic
closures.
The Company's operating profit increased 21.6% over the prior year to
$8,672,000, a record level for the second quarter. Operating profit in the
Filtration segment increased 18.1% to $7,313,000, mainly attributable to the
profit contributed by the increased sales of heavy duty and railroad locomotive
products. Operating profit of $1,359,000 in the Consumer Products segment
increased 44.4% when compared to profit in the same quarter last year. The
increased profit was due to the segment's higher shipments volume, principally
in plastic closures. The consolidated operating margin improved to 12.3% in the
current quarter from 11.0% in the same period last year. Both business segments
reflected margin improvements.
When compared to the prior year's second quarter, current quarter earnings
before income taxes increased 23.0% to $8,171,000, the result of increased
earnings in both of the Company's operating segments.
The provision for income taxes in the current second quarter was $3,265,000, and
represented an effective rate of 40.0% of pre-tax earnings. This compares to
prior year second quarter income taxes totaling $2,469,000, or an effective rate
of 37.2%.
Consolidated net earnings totaled $4,906,000 for the second quarter, a record
for earnings from continuing operations. Driven by increased business in both
the groups, the Company recorded an increase of 17.5% over comparable earnings
of $4,175,000 last year.
Per share earnings in the current quarter were $.33, and compare to $.28 in the
second quarter of 1994.
Continuing the Company's record pace, year-to-date net sales of $132,615,000
increased 9.6% over sales of $121,021,000 in the comparable period last year.
Sales increases were recorded in both of the Company's segments. In the
Filtration Products segment, sales increased 9.1% over last year's second
quarter. Sales increases were recorded in the segment's heavy duty business and
in the railroad locomotive business. Year-to-date Consumer Products sales
increased 11.4% over last year. This increase reflects six month plastic closure
sales which are more than double the level of the comparable period last year.
Page 6 of 11
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PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
CLARCOR's year-to-date operating profit increased 17.4% over the prior year to
$15,299,000. Operating profit in the Filtration Products segment increased 13.0%
on strong sales increases of heavy duty and railroad locomotive products.
Consumer Products segment operating profit increased 58.1% over the comparable
period last year. Although profit was higher in the second quarter of the prior
year, year-to-date profits were lower last year because of the significantly
lower first quarter profits on reduced volume.
Other expense reflected a year-to-date net $513,000 in the current year,
compared to a net expense of $850,000 in the prior year. The current year
decrease from last year is due chiefly to lower interest expense on reduced
long-term debt balances.
Earnings before income taxes totaled $14,786,000 for the current six months.
This was a 21.4% increase over pre-tax income in the prior year six-month
period. The comparison benefited from increased current year earnings in both
the Filtration and Consumer segments.
The current six-month provision for income taxes was $5,908,000, an effective
tax rate of 40.0%. This compares to prior year six-month income tax expense of
$4,593,000, or an effective rate of 37.7%.
Net earnings from operations for the current six-month period totaled
$8,878,000, an increase of 17.0% over earnings of $7,590,000 before the
cumulative effect of an accounting change last year. Effective December of 1993,
CLARCOR adopted the provisions of Statement of Financial Accounting Standards
(SFAS) No. 109 "Accounting for Income Taxes", which resulted in a $630,000
earnings increase. This boosted prior year net earnings to a total of
$8,220,000. Current year six-month total net earnings of $8,878,000 represent an
increase of 8.0% over the prior year's six-month total.
Year-to-date net earnings per share from operations, before the cumulative
effect of an accounting change, were $.60, and compare to $.51 in the second
quarter of 1994. The 1994 per share earnings were increased by $.04 from the
cumulative effect of adopting the income tax accounting standard. Year-to-date
total earnings per share reached $.60, compared to total earnings per share of
$.55 in 1994.
CLARCOR continued to maintain a strong balance sheet and sufficient liquidity
for its current level of operations.
Total assets were $192,655,000 at June 3, 1995, 2.2% higher than year-end total
assets of $188,448,000. At June 3, 1995, consolidated working capital totaled
$56,405,000, down slightly from the level at year-end 1994. Working capital
declined as current assets remained at comparable levels, but current
liabilities grew. The current ratio at the end of the second quarter was 2.3:1,
compared to 2.5:1 at November 30, 1994.
During the first six months, net plant assets increased $3,662,000 to
$56,277,000, as the Company invested $7,656,000 in new productive capacity.
Page 7 of 11
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
Long-term debt less the current portion continued to decline in the current six
months to $13,300,000, as scheduled debt repayments were made during the period.
Reflecting the first six month's results, consolidated shareholders' equity
increased $4,428,000 to $121,890,000. This compares to the November 30, 1994
level of $117,462,000.
Total capitalization at the end of the second quarter increased $715,000 to
$135,190,000. This compares to $134,475,000 at the prior year-end. As a percent
of total capitalization, long-term debt at the end of the second quarter was
9.8%, compared to 12.7% at the end of fiscal 1994.
CLARCOR's cash declined $14,410,000, to $5,157,000 at June 3, 1995. This
compares to a year-to-date cash reduction of $10,497,000 in 1994.
Net cash provided by year-to-date operating activities totaled $1,534,000
compared to a total of $1,940,000 in the first six months of 1994. Although the
current six months reflected greater net earnings, most of these earnings were
invested in operating assets.
Net cash used in current year investing activities totaled $7,690,000, compared
to $3,975,000 of net cash generated in the first six months of the prior year.
The increase is attributable to current year investment in plant assets, which
is $3,074,000 higher than in the prior year's six-month period.
Current year financing activities used net cash of $8,300,000, compared to
$8,462,000 of net cash used in the prior year. Both years reflect comparable
amounts for long-term debt reduction and cash dividend payments.
CLARCOR's current operations continue to generate sufficient cash to fund
operating needs, to fund normal levels of additions to productive capacity, and
to provide for the repayment of the Company's long-term debt. In the current
year, the Company plans to add plant and equipment totaling nearly $17,000,000,
compared to normal levels of approximately $11,000,000. Sufficient lines of
credit are available to the Company to meet the needs of its current operations.
Page 8 of 11
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PART II - OTHER INFORMATION
Item 6a - Exhibit (11), Computations of Per Share Earnings are presented on
page 10.
Item 6b - No reports on Form 8-K have been filed during the
quarter ended June 3, 1995. However, 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.
Page 9 of 11
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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)
July 14, 1995 By /s/ Bruce A. Klein
- ----------------------- ----------------------------------------
(Date) Bruce A. Klein, Vice President - Finance
and Chief Financial Officer
Page 11 of 11
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CLARCOR INC.
EXHIBIT (11) - COMPUTATIONS OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------------
JUNE 3, MAY 28,
1995 1994
--------------------------------
AVERAGE SHARES OUTSTANDING
- --------------------------
<S> <C> <C>
1. Average number of shares 14,783,915 14,826,865
2. Net additional shares resulting from assumed
exercise of stock options* 320,544 249,398
--------------------------------
3. Adjusted average shares outstanding for fully
diluted computation (1 plus 2) 15,104,459 15,076,263
--------------------------------
--------------------------------
Earnings per share of common stock:
Primary $.60 $.55
==== ====
Assuming full dilution $.59 $.55
==== ====
<FN>
* 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.
</TABLE>
Page 10 of 11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-02-1995
<PERIOD-START> DEC-04-1994
<PERIOD-END> JUN-03-1995
<CASH> 5,157
<SECURITIES> 0
<RECEIVABLES> 45,862
<ALLOWANCES> 1,501
<INVENTORY> 42,124
<CURRENT-ASSETS> 98,550
<PP&E> 128,939
<DEPRECIATION> 72,662
<TOTAL-ASSETS> 192,655
<CURRENT-LIABILITIES> 42,145
<BONDS> 13,300
<COMMON> 14,804
0
0
<OTHER-SE> 107,086
<TOTAL-LIABILITY-AND-EQUITY> 192,655
<SALES> 132,615
<TOTAL-REVENUES> 132,615
<CGS> 94,824
<TOTAL-COSTS> 94,824
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,143
<INCOME-PRETAX> 14,786
<INCOME-TAX> 5,908
<INCOME-CONTINUING> 8,878
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,878
<EPS-PRIMARY> .60
<EPS-DILUTED> .59
</TABLE>
