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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 6, 1997
CLARCOR INC.
(Exact name of registrant as specified in Charter)
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<S> <C> <C>
DELAWARE 1-11024 36-0922490
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification No.)
of Incorporation)
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2323 Sixth Street, P.O. Box 7007
Rockford, Illinois 61125
(Zip Code)(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (815) 962-8867
N/A
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(Former Name or Former Address, if Changed Since Last Report.)
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ITEM 5. OTHER EVENTS.
On January 6, 1997, CLARCOR Inc., a Delaware Corporation, issued a
Press Release (the "Press Release") with respect to its fourth quarter and
fiscal 1996 results of operations.
A copy of the Press Release is filed herewith as Exhibit 20 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
2
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20 Press release issued by CLARCOR Inc., dated January 6, 1997.
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.
January 6, 1997
/S/ LAWRENCE E. GLOYD
By:
Lawrence E. Gloyd
Chairman and Chief Executive
Officer
3
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EXHIBIT INDEX
The following exhibits are filed herewith:
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EXHIBIT
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20 Press release issued by CLARCOR Inc., dated January 6, 1997
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EXHIBIT 20
FOR FURTHER INFORMATION CONTACT:
Lawrence E. Gloyd
Chairman of the Board and Chief Executive Officer
Rockford, Illinois
815-962-8867
FOR IMMEDIATE RELEASE
MONDAY, JANUARY 6, 1997
CLARCOR REPORTS RECORD FOURTH QUARTER AND
FISCAL 1996 RESULTS
FOURTH QUARTER AND FISCAL YEAR-END 1996 HIGHLIGHTS
(Amounts in thousands, except per share data and percentages)
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QUARTER ENDED % YEAR ENDED %
11/30/96 12/3/95 CHANGE 11/30/96 12/3/95 CHANGE
<S> <C> <C> <C> <C> <C> <C>
Net Sales $90,805 $85,750 5.9 $333,388 $290,194 14.9
Net Earnings $8,712 $7,190 21.2 $24,978 $21,954 13.8
Earnings Per Share $0.58 $0.48 20.8 $1.68 $1.48 13.5
Avg. Shares Outstanding 14,877 14,824 .4 14,859 14,801 .4
Return on Beginning Equity 19.1% 18.7% 2.1
Net Sales
Filtration Products $68,917 $64,586 6.7 $259,617 $221,034 17.5
Consumer Products $21,888 $21,164 3.4 $73,771 $69,160 6.7
Operating Profit $12,741 $10,337 23.3 $40,530 $35,365 14.6
Filtration Products $9,934 $7,594 30.8 $33,149 $28,698 15.5
Consumer Products $2,807 $2,743 2.3 $7,381 $6,667 10.7
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FOURTH QUARTER AND FISCAL YEAR-END OPERATING REVIEW
ROCKFORD, IL, JANUARY 6, 1997 -- CLARCOR INC. (NYSE: CLC) reported record
fiscal 1996 fourth quarter and fiscal year-end net sales, operating profit, net
earnings and earnings per share on the strength of record sales and operating
profit in the Filtration Products segment and a strong performance from the
Consumer Products segment.
Larry Gloyd, CLARCOR's Chairman and Chief Executive Officer, said, "Fiscal
1996 was a terrific year for CLARCOR as net sales increased by $43.2 million or
14.9% and net earnings by $3 million or 13.8%. Fiscal 1996 included a full year
of sales from Hastings Filters whereas fiscal 1995 included only one quarter of
sales. Excluding Hastings Filters, net sales increased by 5.5% in fiscal 1996.
More importantly, 1996 lays the foundation for an even better 1997. Our
operating companies, except for Hastings Filters, exceeded our expectations with
exceptional contributions at Baldwin Filters and Clark Filter. Significantly
improved results at Airguard Industries and J.L. Clark led to the best year in
our history.
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FILTRATION PRODUCTS SEGMENT
"Our Filtration Products segment continues to produce record sales and
operating profit. The segment was led by Baldwin Filters which had a sales
increase of over 6.5% in 1996 and an increase in operating profit of over 12%
due primarily to a continuing emphasis on productivity improvements, cost
reductions and new product introductions. We expect further progress at Baldwin
in 1997, particularly in expanding filter sales into new markets and with
customers where previously Baldwin had little presence. We also expect new
products, such as a line of desiccant filters and fuel-water separators, to
support an increased emphasis on revenue growth at Baldwin.
"We believe the problems we encountered at Hastings Filters in 1996,
though not entirely unexpected, are now largely behind us. There are really two
parts to the Hastings Filters story in 1996. First, we were disappointed in the
company's operating results. We had initially estimated a break-even year for
Hastings Filters and then later estimated an operating loss of a little over $1
million. Unfortunately, the actual operating loss was $2.2 million. This was
due to added costs for outside component manufacturing and a rust problem on
components purchased from the outside vendor. Though we did not lose any
business, the rust problem required hiring temporary workers to clean and
replace filter inventory. The second part of the story is more important. With
the completion of the expansion in Yankton, S.D. and the movement of new and
refurbished machinery into the additional space, we can now produce virtually
all of our filter components in-house and so better control manufacturing
costs, inventory levels and quality.
"Despite the loss, we have not changed any of our plans for Hastings nor
have we reduced the capital we intend to invest in the business. With the
expansion and additional equipment, we expect substantial cost savings and
productivity improvements in 1997. Our goal is to be one of the lowest cost
producers of automotive filters in the United States. Also, the added capacity
at Hastings Filters alleviates a major concern at Baldwin Filters where we were
running out of manufacturing capacity. Indeed, without Hastings Filters, we
would have had to build a new facility at Baldwin or substantially expand the
present one in Kearney, Nebraska.
"The loss at Hastings underscores the strength of our other operating
companies. We estimate that, absent the Hastings loss and interest expense on
the Hastings acquisition debt, CLARCOR's operating margins would have been more
than two percentage points higher and earnings per share would have been $.12
to $.13 per share higher than actually reported. In 1997, we believe Hastings
will be profitable and we remain confident that the operation will, by 1999,
reach an operating margin of 8% to 10%.
"Our smallest domestic filter company, Clark Filter turned in a superior
performance in 1996 with operating profit increasing by more than 20% on an
8.6% increase in sales. We were particularly pleased as these results were
achieved with almost no change in average net managed assets. In 1997, we plan
to accelerate new product introductions, to build upon products introduced in
1996 and to expand internationally as the principal drivers to maintain Clark
Filter's performance.
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"Airguard Industries improved dramatically over its results in 1995.
Airguard improved its operating margins by over three percentage points on an
increase in sales of 3.8%. Considering that Airguard had purposely turned away
negative and low margin business in 1996, we were satisfied with the company's
sales increase for the year. Nevertheless, we expect continued improvement in
operating margins in 1997 on a stronger rise in sales than in 1996. Like Clark
Filter, the Airguard management turned in a superb performance as average net
managed assets actually declined by nearly $1.5 million.
"Our international operations and export sales have grown to nearly 15% of
total consolidated sales and we expect further progress in the years ahead.
Each one of our foreign operations, except in China, recorded operating profit
in 1996, the first time ever. Our Mexican operation, FIBAMEX, struggled
throughout 1996 due to a weak Mexican economy but still managed a small profit
on no change in sales. Our two European operations, Baldwin Ltd. (UK) and
Baldwin N.V. (Belgium) together reported a rise in sales of over 12% and
reported an operating margin of over 7%. Our new South African operation,
Baldwin-Unifil, which was acquired early in 1996, met our expectations for
sales revenues and had an operating margin of over 4%. Baldwin-Australia had
another excellent year with sales improving by 9% and operating profit by over
50%. Our China joint venture, Baldwin-Weifang Ltd., began manufacturing
filters, on schedule, in late 1996. Filters manufactured at Baldwin-Weifang are
primarily for the domestic Chinese market and we expect the operation to turn
profitable in 1997.
CONSUMER PRODUCTS SEGMENT
"J.L. Clark had a good 1996 with sales increases of 7.9% on the metals
side of the business and 9% on the plastics side. Operating margins improved in
both areas as well, with overall margins of 10% being the highest the segment
has reached since 1993. The metals results were driven by new product
introductions and good demand from traditional metals customers for flat sheet
decorating, specialty containers and commemorative tins. Despite the decline we
have experienced in recent years in the metals business, we are optimistic that
it will continue the growth it showed in 1996. On the plastics side, continual
growth in specialty closures, particularly the combiTop(R) and SST Series(TM)
closures, were important factors in the year's success.
FINANCIAL
"Our cash position remains very strong with over $17 million at year-end.
In November 1996, we sold approximately one-half of our investment in GUD
Holdings Ltd., an Australian company, for an after-tax gain of approximately
$1,072,000 or $.07 per share. In December 1996, we sold our remaining GUD
investment for another after-tax gain of approximately $1,089,000 or $.07 per
share. This latter gain will be reported in our first quarter 1997 results.
"Inventories were unusually high at the end of the third quarter 1996 and
declined at year end by $4.9 million to $49.8 million compared to $43 million
at the end of fiscal 1995. This amount is also higher than normal due to a
planned inventory build-up at Hastings during the transition to the new
facility and we expect a further decline during the first quarter 1997. Capital
expenditures increased to $21.7 million in 1996 compared to $13.9 million in
1995 due to the Hastings plant expansion and new equipment, completion of a new
plastics facility at J.L. Clark and additional capital expenditures at
Corporate. Looking forward, we expect the level of capital expenditures over
the next year to be less than it has been in either of the last two years.
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"Shareholders' equity reached $146.1 million, an increase of over $15.2
million or 11.7% from year-end 1995 after paying dividends of $9.5 million to
our shareholders. Dividends increased again in 1996, our thirteenth consecutive
year of dividend increases. Return on beginning equity reached 19.1% in 1996
from 18.7% in 1995.
OUTLOOK FOR 1997
"We are very positive about CLARCOR for 1997. The strength of our
operations can be seen by the fact that we achieved record results and met our
original earnings forecast for 1996 even after absorbing $2.2 million in
unanticipated losses at Hastings Filters. Baldwin Filters, Airguard Industries,
Clark Filter and J.L. Clark continue to demonstrate a superior ability to
exceed industry growth rates and maintain strong operating margins. Their
prospects are excellent. As Hastings Filters improves throughout 1997 and
reaches the level of profitability that we expect, we fully believe that 1997
can be another record year for CLARCOR. During the first quarter 1997, we will
work through the excess, higher-cost Hastings inventory; therefore, we do not
expect to realize the benefits of a lower cost structure at Hastings until the
second quarter 1997.
UAS ACQUISITION
"In September, we announced the signing of a definitive agreement to
acquire United Air Specialists, Inc., a manufacturer of air quality equipment
based in Cincinnati, Ohio. We have filed a registration statement connected
with this transaction and expect it to become effective shortly. Until then we
are limited in commenting on the merger under Securities and Exchange
Commission rules. We remain very excited about the combination of UAS with
CLARCOR and are looking forward to the closing of the merger in February 1997."
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 changes in the overall economy, product
demand, price competition, the success of new product introductions, the
effectiveness of plant conversions and productivity programs, and the
management of both growth and acquisitions.
CLARCOR is based in Rockford, Illinois, and is a diversified marketer and
manufacturer of mobile and environmental filtration products and consumer
products sold to domestic and international markets. Common shares of the
Company are traded on the New York Stock Exchange under the symbol CLC.
TABLES FOLLOW
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CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
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Fourth Quarter Twelve Months
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For periods ended November 30, and December 2, 1996 1995 1996 1995
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Net sales........................................ $ 90,805 $ 85,750 $ 333,388 $ 290,194
Cost of sales..................................... 64,885 63,480 239,119 209,653
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Gross profit................................. 25,920 22,270 94,269 80,541
Selling and administrative expenses............... 13,179 11,933 53,739 45,176
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Operating profit............................. 12,741 10,337 40,530 35,365
Other income (expense)............................ 1,226 (323) (656) (1,229)
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Earnings before income taxes................. 13,967 10,014 39,874 34,136
Income taxes...................................... 5,255 2,824 14,896 12,182
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Net earnings..................................... $ 8,712 $ 7,190 $ 24,978 $ 21,954
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Net earnings per common share.................... $ 0.58 $ 0.48 $ 1.68 $ 1.48
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Average shares outstanding........................ 14,876,951 14,824,438 14,859,252 14,800,872
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CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
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November 30, December 2,
1996 1995
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ASSETS
Current assets:
Cash and cash investments.............$ 17,372 $ 18,769
Accounts receivable, net.............. 52,509 50,034
Inventories........................... 49,773 42,972
Other................................. 4,725 5,795
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Total current assets........ 124,379 117,570
Plant assets, net........................... 78,586 67,036
Excess of cost over fair value
of assets acquired, net............... 15,120 14,893
Pension assets.............................. 12,453 11,218
Other assets................................ 13,426 12,545
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$ 243,964 $ 223,262
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LIABILITIES
Current liabilities.........................$ 45,156 $ 42,460
Long-term debt.............................. 35,522 34,417
Long-term pension liabilities............... 6,607 5,226
Other liabilities........................... 10,620 10,344
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97,905 92,447
SHAREHOLDERS' EQUITY........................ 146,059 130,815
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$ 243,964 $ 223,262
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SUMMARY CASH FLOWS
(Dollars in thousands)
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Fourth Quarter Twelve Months
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1996 1995 1996 1995
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FROM OPERATING ACTIVITIES
Net earnings.......................... $ 8,712 $ 7,190 $ 24,978 $ 21,954
Depreciation and amortization......... 2,434 2,247 9,796 8,245
Changes in assets and liabilities..... 12,369 5,225 (6,540) (10,632)
Gain on sale of investment............ (1,675) - (1,675) -
Other, net............................ (338) (346) (690) (352)
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Total provided (used) by
operating activities........ 21,502 14,316 25,869 19,215
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FROM INVESTING ACTIVITIES
Plant asset additions................. (3,579) (3,223) (21,652) (13,910)
Business acquisition.................. - (14,125) (1,298) (14,125)
Investment in affiliate............... (190) - (530) -
Proceeds from sale of investment...... 3,067 - 3,067 -
Other, net............................ (423) (166) 2,290 (318)
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Total provided (used) by
investing activities........ (1,125) (17,514) (18,123) (28,353)
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FROM FINANCING ACTIVITIES
Borrowings under long-term debt....... - - 8,410 25,000
Reduction of long-term debt, net...... (2,100) (1,900) (8,016) (7,579)
Purchase of treasury stock............ - - (430) -
Cash dividends paid................... (2,412) (2,364) (9,512) (9,331)
Other, net............................ - (3) 421 278
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Total provided (used) by
financing activities........ (4,512) (4,267) (9,127) 8,368
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Effect of exchange rate
changes on cash.................. (14) (86) (16) (28)
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CHANGE IN CASH AND
CASH INVESTMENTS.................. $ 15,851 $ (7,551) $ (1,397) $ (798)
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