CLARCOR Reports Third Quarter Results

  CLARCOR Reports Third Quarter Results

        Diluted EPS Negatively Impacted by $0.10 from Non-Cash Charges

Business Wire

FRANKLIN, Tenn. -- September 18, 2013

CLARCOR Inc. (NYSE: CLC):

                   Unaudited Third Quarter 2013 Highlights

         (Amounts in millions, except per share data and percentages)

GAAP Financial Results:

           Three Months Ended                 Nine Months Ended
             8/31/13    9/1/12   Change   8/31/13    9/1/12   Change
Net sales   $ 289.1      $ 286.7     1   %    $ 833.0      $ 828.9     1   %
Operating     42.0          46.2       -9  %      125.2         129.6      -3  %
profit
Net
earnings      28.7          30.3       -5  %      85.2          86.7       -2  %
– CLARCOR
Diluted
earnings    $ 0.57        $ 0.60       -5  %    $ 1.69        $ 1.70       -1  %
per share
Operating    14.5    %   16.1   %  -1.6     15.0    %   15.6   %  -0.6
margin                                 pts                                 pts

Adjusted Financial Results:

The third quarter and first nine months of 2013 contained two pre-tax,
non-cash charges aggregating $7.7 million—including a $4.6 million loss on the
disposal of equipment and a $3.1 million charge to account for a final pension
obligation. The following table reflects 2013 third quarter and year-to-date
GAAP results adjusted for these two non-cash charges. A reconciliation of
non-GAAP figures adjusting for the non-cash charges in the third quarter and
first nine months of 2013 to GAAP figures is available at the end of this
release.

           Three Months Ended                 Nine Months Ended
             8/31/13    9/1/12   Change   8/31/13    9/1/12   Change
Net sales   $ 289.1      $ 286.7     1   %    $ 833.0      $ 828.9     1   %
Operating     49.7          46.2       8   %      132.9         129.6      3   %
profit
Net
earnings      33.7          30.3       11  %      90.2          86.7       4   %
– CLARCOR
Diluted
earnings    $ 0.67        $ 0.60       12  %    $ 1.79        $ 1.70       5   %
per share
Operating    17.2    %   16.1   %  1.1      16.0    %   15.6   %  0.4
margin                                 pts                                 pts

CLARCOR Inc. (NYSE: CLC) reported that third quarter 2013 diluted earnings per
share of $0.57 declined 5% from $0.60 in the third quarter of 2012. However,
third quarter 2013 diluted earnings per share were impacted by two non-cash
charges, a $4.6 million loss on disposal of equipment and a $3.1 million
charge to account for a final pension obligation settlement. These two items
reduced diluted earnings per share by approximately $0.10 in the third quarter
of 2013. Third quarter net sales increased 1% from last year’s third quarter,
including a 2% increase at the Engine/Mobile Filtration segment and a 1%
increase at the Industrial/ Environmental Filtration segment, partially offset
by a 5% reduction at the Packaging segment. A lower effective tax rate in the
third quarter of 2013 favorably impacted diluted earnings per share by
approximately $0.02 from the third quarter of 2012.

Changes in average foreign currency exchange rates reduced net sales by $0.3
million and operating profit by $0.2 million, each less than 1%, in the third
quarter of 2013 compared with last year’s third quarter. For the first nine
months of 2013, changes in average foreign currency exchange rates lowered net
sales by $0.7 million and operating profit by $0.4 million, also each less
than 1%, from the first nine months of 2012.

Chris Conway, CLARCOR’s Chief Executive Officer and Chairman, commented, “Our
third quarter results were negatively impacted by a $4.6 million non-cash loss
on disposal of equipment at our HVAC filtration operating unit and a $3.1
million non-cash pension charge pursuant to last year’s retirement of our
former CEO and Chairman. The equipment disposed of at our HVAC filter
operations was initially designed and built to automate the production of
low-end disposable air filters consistent with our ‘Project 14’ strategy
developed in 2007. However, our current strategy is focused on higher-end air
filtration products. In addition, we have recently redesigned our low-end
disposable filter products and developed technology which now allows us to
manufacture these filters more cost effectively than with the equipment
designed pursuant to ‘Project 14.’ As a result, in the third quarter we
reached the decision to dispose of this equipment. Adjusted for the financial
impact of this $4.6 million non-cash loss on disposal and the $3.1 million
non-cash charge pursuant to the final settlement accounting for the pension
obligation, diluted earnings per share would have increased 12% from last
year’s third quarter, and our operating margin would have increased 1.1
percentage points to 17.2%. Our third quarter diluted earnings per share, as
adjusted, would have been a record third quarter high, and our operating
margin, as adjusted, would have been the highest third quarter operating
margin in almost twenty years.

“Several of our core filtration markets—including our U.S. and China
heavy-duty engine markets—posted solid third quarter top-line growth. Sales in
our domestic heavy-duty engine filtration aftermarket increased 6% from the
third quarter of 2012—indicative of our continued success in developing new
distribution and introducing new products. After double-digit sales growth in
the second quarter, our third quarter heavy-duty engine filtration sales in
China increased almost 9% from last year’s third quarter. This growth was
driven almost entirely from the development of the China aftermarket, both
through independent distribution and OE dealers. Despite solid heavy-duty
engine filtration growth in the U.S. and China in the third quarter, sales in
several other foreign markets declined from the third quarter of 2012—notably
Europe, Australia and South Africa. Although some European economies have
exhibited signs of recovery, our sales in that region continue to be sluggish.
Lower third quarter heavy-duty engine filtration sales in Australia and South
Africa were negatively impacted by slowing economic growth in those countries.

“Third quarter sales in our global oil & gas filtration business increased 6%
from last year’s third quarter. We experienced solid growth on a global basis,
but our Latin American and European sales were especially strong. Oil & gas
filtration sales in Latin America increased over $4.7 million, or 300%, in
this year’s third quarter as we continued to develop key customer
relationships in this expanding market. Our European oil & gas filtration
sales grew over 12% primarily as the result of a significant natural gas
vessel project that shipped in the third quarter of 2013. We were able to grow
our global oil & gas filtration business by 6% in the third quarter despite
significantly lower sales of off-shore oil drilling filtration products, which
we expect to decline for the full year primarily due to a temporary order
delay from a major customer. Our third quarter oil & gas filtration
sales—primarily natural gas and aviation—would have increased approximately 9%
excluding the impact of lower off-shore oil drilling filtration product sales.

“Strong third quarter sales in our global oil & gas filtration business were
partially offset in our Industrial/Environmental Filtration segment by lower
sales in our domestic air filtration market and at TransWeb—which continues to
be negatively impacted by lower year-over-year sales to a major customer.
Sales in our domestic air filtration market declined approximately 10% from
last year’s third quarter, almost entirely driven by lower sales of swine
filtration products. Although we are certainly disappointed with lower than
expected third quarter sales, we recognize that we are still in the launch and
penetration stage of this higher-margin swine filtration market, and we remain
excited with its long-term growth potential.

“Our strong operational execution continued in the third quarter as evidenced
by our financial and operational metrics when adjusted for the two non-cash
charges. Gross margin, as adjusted, at each of our reporting segments
increased from the third quarter of 2012, and our selling and administrative
expenses as a percentage of net sales, as adjusted, declined 0.8 percentage
points from last year’s third quarter. Of particular note, operating margin,
as adjusted, in our Industrial/ Environmental Filtration segment was 12.5%, a
record third quarter operating margin in this reporting segment and 1.1
percentage points higher than last year’s third quarter. These solid
operational results across the Company demonstrate our on-going commitment to
expand operating margins while focusing on long-term growth.”

Third Quarter Results:

Engine/Mobile Filtration Segment

Net sales at our Engine/Mobile Filtration segment rose 2% from the third
quarter of 2012. Higher net sales included a 5% increase in the U.S.—primarily
due to higher heavy-duty engine filter aftermarket sales driven by growth in
U.S. truck tonnage—partially offset by a 4% reduction in foreign markets
including lower heavy-duty engine filtration sales in most of our major
foreign markets including Europe and Australia.

Operating profit at our Engine/Mobile Filtration segment increased $0.1
million from the third quarter of 2012, and operating margin declined slightly
to 22.2% from 22.4% in last year’s third quarter. However, adjusted for the
impact of an allocated portion of the non-cash pension charge in the third
quarter, operating profit increased $1.5 million and operating margin
increased to 23.2%, or 0.8 percentage points, from last year’s third quarter.

Industrial/Environmental Filtration Segment

Net sales at our Industrial/Environmental Filtration segment increased 1% from
the third quarter of 2012. These higher net sales included 7% growth outside
the U.S. partially offset by a 1% reduction domestically. Higher sales outside
the U.S. were the result of strong oil & gas filtration sales in several
foreign markets—notably Brazil and Europe. The 1% decline in U.S. sales was
primarily driven by lower swine filtration sales at our HVAC operating unit
partially offset by continued growth in our domestic oil & gas filtration
market.

Operating profit at our Industrial/Environmental Filtration segment declined
$4.4 million from the third quarter of 2012, and operating margin declined to
8.1% from 11.4% in last year’s third quarter. However, adjusted for the impact
of the loss on disposal of equipment at our HVAC operations and an allocated
portion of the non-cash pension charge in the third quarter, operating profit
increased $1.7 million and operating margin increased to 12.5%, or 1.1
percentage points, from last year’s third quarter.

Packaging Segment

Net sales at our Packaging segment declined $1.0 million, or 5%, from the
third quarter of 2012 primarily due to the expected sales decline in film
packaging products in addition to lower flat sheet decorating activity.
Despite this reduction in sales, operating profit—adjusted for the impact of
an allocated portion of the non-cash pension charge—increased 15% in this
reporting segment as our operating margin, as adjusted, improved to 11.1%, a
1.9 percentage point improvement from last year’s third quarter. This higher
operating margin was primarily the continuing result of operational
improvements initiated last year pursuant to our transition from several large
volume sales programs.

Fiscal 2013 Guidance

Chris Conway commented on 2013 guidance: “Even though our third quarter
operating results—excluding the impact of the two non-cash charges—were solid
compared with last year’s third quarter, our top-line fell short of our
internal expectations heading into the quarter. Primary headwinds included
lower heavy-duty engine filtration sales outside the U.S., lower sales of
commercial and industrial HVAC and swine filtration products in the U.S. and
lower sales of off-shore oil drilling filtration products. Although we expect
continued growth in our core filtration markets in the fourth quarter,
including projected 3% to 5% growth in our domestic heavy-duty engine
filtration aftermarket and continued growth in our oil & gas business, we
believe we will continue to experience top-line headwinds in several
filtration markets. As a result, we are lowering our 2013 full-year
expectations for sales growth and diluted earnings per share. We expect our
2013 diluted earnings per share to be between $2.35 and $2.45. This range
includes the $0.10 per diluted share negative impact of both the $4.6 million
loss on disposal of equipment and the $3.1 million non-cash pension charge
recognized in the third quarter.”

Projected changes in net sales for fiscal 2013 as compared to 2012 and
operating margin by segment and on a consolidated basis are as follows:

                                     2013 Estimated  2013 Estimated
                                      Sales Change     Operating Margin
                                                       
Engine/Mobile Filtration              1.0% to 2.0%     21.5% to 22.0%
Industrial/Environmental Filtration   1.5% to 2.5%     10.5% to 11.5%
Packaging                             -4.0% to -1.0%   8.0% to 9.0%
CLARCOR                               1.0% to 2.0%     15.3% to 16.1%

We project fiscal year 2013 cash from operations to be between $120 million
and $130 million, capital expenditures to be between $45 million and $55
million and our effective tax rate to be between 31.8% and 32.2%.

CLARCOR will be holding a conference call to discuss the third quarter 2013
results at 10:00 a.m. CST on September 19, 2013. Interested parties can listen
to the conference call at www.clarcor.com or www.viavid.net. A replay will be
available on these websites and also at 877-870-5176 or 858-384-5517 by
providing confirmation code 5657881. The replay will be available through
October 3, 2013 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 CLARCOR are traded on the New York Stock Exchange
under the symbol CLC.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements made in this press
release other than statements of historical fact, are forward-looking
statements. These statements may be identified from use of the words “may,”
“should,” “could,” “potential,” “continue,” “plan,” “forecast,” “estimate,”
“project,” “believe,” “intent,” “anticipate,” “expect,” “target,” “is likely,”
“will,” or the negative of these terms, and similar expressions. These
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements may
include, among other things: statements and assumptions relating to
anticipated future growth and results of operations, including the anticipated
2013 performance of the Company and each of its segments, our projections with
respect to 2013 estimated sales growth and 2013 estimated operating margins
for the Company and each of its segments, our projections with respect to 2013
diluted earnings per share (including our implied projected fourth quarter
diluted earnings per share range), and our projections with respect to 2013
cash from operations, 2013 capital expenditures and 2013 effective tax rates;
statements regarding management's short-term and long-term performance goals;
statements regarding anticipated order patterns from our customers or the
anticipated economic conditions of the industries and markets that we serve;
statements related to the performance of the U.S. and other economies
generally; statements relating to the anticipated effects on results of
operations or financial condition from recent and expected developments or
events; statements regarding our expectation that sales of off-shore oil
drilling filtration products will decline for fiscal year 2013 compared to
2012, primarily due to order delays from a major customer; statements
regarding our expectations regarding our long-term strategic position in
China; statements regarding the volatility and uncertainty that exists in the
China geographic market; statements regarding our long-term growth potential
in the swine filtration market; statements regarding our expectations with
respect to anticipated continued growth in our core filtration markets in the
fourth quarter, including projected 3% to 5% growth in our domestic heavy-duty
engine filtration market; statements regarding our expectations with respect
to anticipated continued growth in our oil & gas business; statements
regarding our expectations that we will continue to experience top-line
headwinds in several filtration markets; and any other statements or
assumptions that are not historical facts. The Company believes that its
expectations are based on reasonable assumptions. However, these
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause the Company's actual results,
performance or achievements, or industry results, to differ materially from
the Company's expectations of future results, performance or achievements
expressed or implied by these forward-looking statements. The Company's past
results do not necessarily indicate its future results. The Company’s future
results may differ materially from the Company’s past results as a result of
various risks and uncertainties, including the risk factors discussed in the
“Risk Factors” section of the Company’s 2012 Form 10-K and other risk factors
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. You should not place undue reliance on any
forward-looking statements. These statements speak only as of the date of this
press release. Except as otherwise required by applicable laws, the Company
undertakes no obligation to publicly update or revise any forward-looking
statements or the risk factors described in this press release, whether as a
result of new information, future events, changed circumstances or any other
reason after the date of this press release.

                                TABLES FOLLOW


CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(Dollars in thousands, except share data)
                                                
                    Quarter Ended                   Nine Months Ended
                     August 31,      September        August         September
                    2013          1,              31,          1,
                                     2012             2013           2012
Net sales         $  289,126      $  286,733       $  832,980     $  828,852
Cost of sales     197,226        191,845         561,380       549,563    
                                                                     
Gross profit      91,900          94,888           271,600        279,289
                                                                     
Selling and
administrative    49,915         48,707          146,399       149,685    
expenses
                                                                     
Operating         41,985         46,181          125,201       129,604    
profit
                                                                     
Other income
(expense):
Interest          (139        )   (176        )    (451       )   (364       )
expense
Interest income   221             156              528            459
Other, net        153            (186        )    (70        )   309        
                  235            (206        )    7             404        
                                                                     
Earnings before   42,220          45,975           125,208        130,008
income taxes
                                                                     
Provision for     13,447         15,564          39,754        43,026     
income taxes
                                                                     
Net earnings      28,773          30,411           85,454         86,982
                                                                     
Net earnings
attributable to   (66         )   (141        )    (234       )   (306       )
noncontrolling
interests
                                                                     
Net earnings
attributable to   $  28,707      $  30,270       $  85,220     $  86,676  
CLARCOR Inc.
                                                                     
Net earnings
per share
attributable to   $  0.57        $  0.60         $  1.71       $  1.72    
CLARCOR Inc. -
Basic
Net earnings
per share
attributable to   $  0.57        $  0.60         $  1.69       $  1.70    
CLARCOR Inc. -
Diluted
                                                                     
Weighted
average number
of shares         50,092,548     50,283,340      49,917,939    50,357,567 
outstanding -
Basic
Weighted
average number
of shares         50,604,809     50,863,894      50,481,049    50,979,542 
outstanding -
Diluted
                                                                     
Dividends paid    $  0.1350      $  0.1200       $  0.4050     $  0.3600  
per share
                                                                             

CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS, continued

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE EARNINGS

(Dollars in thousands)
                                                
                        Quarter Ended              Nine Months Ended
                         August       September      August 31,     September
                        31, 2013   1,            2013         1,
                                      2012                          2012
Net earnings           $ 28,773     $ 30,411       $ 85,454       $ 86,982
                                                                    
Other comprehensive
income:
Pension and other
postretirement
benefits --
Pension and other
postretirement         4,432        1,726          7,074          5,180
benefits liability
adjustments
Pension and other
postretirement
benefits liability     (1,580   )   (654      )    (2,522    )    (1,943    )
adjustments tax
amounts
Pension and other
postretirement
benefits liability     2,852       1,072         4,552         3,237     
adjustments, net of
tax
                                                                    
Foreign currency
translation --
Translation            (614     )   5,086          (4,549    )    (5,550    )
adjustments
Translation
adjustments tax        —           —             —             —         
amounts
Translation
adjustments, net of    (614     )   5,086         (4,549    )    (5,550    )
tax
                                                                    
Comprehensive          31,011       36,569         85,457         84,669
earnings
                                                                    
Comprehensive
earnings
attributable to        (27      )   (134      )    (168      )    (77       )
non-redeemable
noncontrolling
interests
Comprehensive
earnings
attributable to        (28      )   (92       )    (60       )    (150      )
redeemable
noncontrolling
interests
                                                             
Comprehensive
earnings               $ 30,956    $ 36,343      $ 85,229      $ 84,442  
attributable to
CLARCOR Inc.
                                                                            

CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS, continued

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)
                                                              
                                                  August 31,     December 1,
                                                   2013            2012
ASSETS
Current assets:
Cash and cash equivalents                        $ 206,859       $ 185,496
Restricted cash                                  9,748           566
Accounts receivable, less allowance for losses   210,182         214,474
of $10,077 and $9,554, respectively
Inventories                                      224,613         211,251
Deferred income taxes                            27,563          34,693
Income taxes receivable                          379             —
Prepaid expenses and other current assets        11,411         8,114       
Total current assets                             690,755        654,594     
                                                                   
Property, plant and equipment, at cost, less
accumulated depreciation of $326,598 and         197,473         195,101
$315,018, respectively
Assets held for sale                             —               2,000
Goodwill                                         240,686         241,924
Acquired intangibles, less accumulated           91,003          95,681
amortization
Other noncurrent assets                          15,827         16,202      
Total assets                                     $ 1,235,744    $ 1,205,502 
                                                                   
LIABILITIES
Current liabilities:
Current portion of long-term debt                $ 224           $ 201
Accounts payable and accrued liabilities         135,558         172,262
Income taxes payable                             —              2,428       
Total current liabilities                        135,782        174,891     
                                                                   
Long-term debt, less current portion             16,469          16,391
Long-term pension and postretirement             46,263          50,680
healthcare benefits liabilities
Deferred income taxes                            53,015          51,385
Other long-term liabilities                      5,096          8,571       
Total liabilities                                256,625        301,918     
                                                                   
Contingencies
Redeemable noncontrolling interests              1,814           1,754
                                                                   
SHAREHOLDERS' EQUITY
Capital stock                                    50,094          49,653
Capital in excess of par value                   13,281          —
Accumulated other comprehensive loss             (51,705     )   (51,708     )
Retained earnings                                964,687        902,899     
Total CLARCOR Inc. equity                        976,357        900,844     
Noncontrolling interests                         948            986         
Total shareholders' equity                       977,305        901,830     
Total liabilities and shareholders' equity       $ 1,235,744    $ 1,205,502 
                                                                             

CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS, continued

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in thousands)
                                               
                                                  Nine Months Ended
                                                  August 31,   September 1,
                                                   2013           2012
Cash flows from operating activities:
Net earnings                                     $ 85,454       $ 86,982
Depreciation                                     19,885         19,387
Amortization                                     4,454          4,383
Other noncash items                              3,092          (24         )
Net loss (gain) on disposition of assets         3,824          (792        )
Stock-based compensation expense                 4,074          5,397
Excess tax benefit from stock-based              (7,313     )   (2,606      )
compensation
Deferred income taxes                            6,610          8,355
Change in assets and liabilities                 (48,884    )   (41,325     )
Net cash provided by operating activities        71,196        79,757      
                                                                  
Cash flows from investing activities:
Restricted cash                                  (9,207     )   (79         )
Business acquisitions, net of cash acquired      (3,811     )   (11,974     )
Additions to plant assets                        (25,491    )   (29,473     )
Proceeds from disposition of plant assets        2,673          502
Investment in affiliates                         (615       )   (801        )
Net cash used in investing activities            (36,451    )   (41,825     )
                                                                  
Cash flows from financing activities:
Cash dividends paid                              (20,219    )   (18,132     )
Payments on long-term debt                       (168       )   (1,253      )
Payment of financing costs                       —              (564        )
Sale of capital stock under stock option and     24,204         5,389
employee purchase plans
Payments for repurchase of common stock          (24,149    )   (16,724     )
Excess tax benefits from stock-based             7,313          2,606
compensation
Dividend paid to noncontrolling interests        (206       )   —           
Net cash used in financing activities            (13,225    )   (28,678     )
Net effect of exchange rate changes on cash      (157       )   94          
Net change in cash and cash equivalents          21,363         9,348
Cash and cash equivalents, beginning of period   185,496       155,999     
Cash and cash equivalents, end of period         $ 206,859     $ 165,347   
                                                                  
Cash paid during the period for:
Interest                                         $ 301         $ 319       
Income taxes, net of refunds                     $ 29,947      $ 27,827    
                                                                            

CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS, continued

QUARTERLY INCOME STATEMENT DATA BY SEGMENT

(Dollars in thousands)
                                                    
                            Quarter Ended              Nine Months Ended
                             August        September     August        September
                            31,         1,           31,         1,
                             2013          2012          2013          2012
Net sales by segment:
Engine/Mobile Filtration   $ 129,148     $ 126,903     $ 379,195     $ 377,863
Industrial/Environmental   139,659       138,532       398,945       394,275
Filtration
Packaging                  20,319       21,298       54,840       56,714    
                           $ 289,126    $ 286,733    $ 832,980    $ 828,852 
                                                                       
Operating profit by
segment:
Engine/Mobile Filtration   $ 28,611      $ 28,478      $ 81,156      $ 81,403
Industrial/Environmental   11,315        15,741        39,404        44,193
Filtration
Packaging                  2,059        1,962        4,641        4,008     
                           $ 41,985     $ 46,181     $ 125,201    $ 129,604 
                                                                       
Operating margin by
segment:
Engine/Mobile Filtration   22.2      %   22.4      %   21.4      %   21.5      %
Industrial/Environmental   8.1       %   11.4      %   9.9       %   11.2      %
Filtration
Packaging                  10.1      %   9.2       %   8.5       %   7.1       %
                           14.5      %   16.1      %   15.0      %   15.6      %
                                                                               

CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS, continued
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except share data)

In addition to the GAAP results provided in this release, we are providing
non-GAAP gross profit, non-GAAP selling and administrative expense, non-GAAP
operating profit, non-GAAP net earnings and non-GAAP diluted earnings per
share for the third quarter and nine months ended August 31, 2013. These
non-GAAP financial measures are not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. The GAAP
measures most directly comparable to non-GAAP gross profit, non-GAAP selling
and administrative expense, non-GAAP operating profit, non-GAAP net earnings
and non-GAAP diluted earnings per share are gross profit, selling and
administrative expense, operating profit, net earnings and diluted earnings
per share, respectively.

The quarter ended and nine months ended August 31, 2013 non-GAAP financial
measures provided in this release exclude the impact of two non-cash items
that occurred during the third quarter of 2013, a $4.6 million loss on the
disposal of equipment and a $3.1 million charge to account for a final pension
obligation. Although the comparison of data excluding these selected items in
our quarter ended and nine months ended August 31, 2013 is not a measure of
financial performance under GAAP, we believe that providing these non-GAAP
financial measures better enables investors to understand and evaluate our
historical and prospective operating performance. We believe that removing the
impact of these selected items provides a more comparable measure of the
changes in gross profit, selling and administrative expense, operating profit,
net earnings and diluted earnings per share in the quarter ended and nine
months ended August 31, 2013 compared to the quarter ended and nine months
ended September 1, 2012.

These non-GAAP financial measures may have limitations as analytical tools,
and we do not intend these measures to be considered in isolation or as a
substitute for the related GAAP measures. Following are reconciliations to the
most comparable GAAP financial measures of these non-GAAP financial measures.


                 Quarter Ended                   Nine Months Ended        
                   August      September             August       September 
                   31,          1,                     31,           1,
                 2013         2012          Change   2013          2012          Change
Consolidated
Gross profit,
as reported      $ 91,900     $ 94,888      -3  %    $ 271,600     $ 279,289     -3  %
(GAAP)
Impact of        4,631       —                     4,631        —         
selected items
Non-GAAP gross   $ 96,531    $ 94,888     2   %    $ 276,231    $ 279,289    -1  %
profit
                                                                                 
Selling and
administrative
expense, as      $ 49,915     $ 48,707      2   %    $ 146,399     $ 149,685     -2  %
reported
(GAAP)
Impact of        (3,111   )   —                     (3,111    )   —         
selected items
Non-GAAP
selling and      $ 46,804    $ 48,707     -4  %    $ 143,288    $ 149,685    -4  %
administrative
expense
                                                                                 
Operating
profit, as       $ 41,985     $ 46,181      -9  %    $ 125,201     $ 129,604     -3  %
reported
(GAAP)
Impact of        7,742       —                     7,742        —         
selected items
Non-GAAP
operating        $ 49,727    $ 46,181     8   %    $ 132,943    $ 129,604    3   %
profit
                                                                                 
Net earnings -
CLARCOR, as      $ 28,707     $ 30,270      -5  %    $ 85,220      $ 86,676      -2  %
reported
(GAAP)
Impact of        4,955       —                     4,955        —         
selected items
Non-GAAP net
earnings -       $ 33,662    $ 30,270     11  %    $ 90,175     $ 86,676     4   %
CLARCOR
                                                                                 
Diluted
earnings per
share, as        $ 0.57       $ 0.60        -5  %    $ 1.69        $ 1.70        -1  %
reported
(GAAP)
Impact of        0.10        —                     0.10         —         
selected items
Non-GAAP
diluted
earnings per     $ 0.67      $ 0.60       12  %    $ 1.79       $ 1.70       5   %
share -
CLARCOR
                                                                                     



CLARCOR INC. 2013 UNAUDITED THIRD QUARTER RESULTS, continued

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(Dollars in thousands, except share data)
                                                                           
                  Quarter Ended                    Nine Months Ended       
                   August      September              August      September
                   31,          1,                     31,          1,
                 2013         2012          Change   2013         2012          Change
Consolidated
(continued)
Gross margin,                               -1.3                                -1.1
as reported      31.8     %   33.1      %   pts      32.6     %   33.7      %   pts
(GAAP)
Non-GAAP gross   33.4     %   33.1      %   0.3      33.2     %   33.7      %   -0.5
margin                                      pts                                 pts
                                                                                
Selling and
administrative
expense as %     17.3     %   17.0      %   0.3      17.6     %   18.1      %   -0.5
of sales, as                                pts                                 pts
reported
(GAAP)
Non-GAAP
Selling and                                 -0.8                                -0.9
administrative   16.2     %   17.0      %   pts      17.2     %   18.1      %   pts
expense as a %
of sales
                                                                                
Operating
margin, as       14.5     %   16.1      %   -1.6     15.0     %   15.6      %   -0.6
reported                                    pts                                 pts
(GAAP)
Non-GAAP                                    1.1                                 0.4
operating        17.2     %   16.1      %   pts      16.0     %   15.6      %   pts
margin
                                                                                
Segment Data
Engine/Mobile
Filtration
Operating
profit, as       $ 28,611     $ 28,478      0    %   $ 81,156     $ 81,403      0    %
reported
(GAAP)
Impact of        1,384       —                     1,384       —         
selected items
Non-GAAP
operating        $ 29,995    $ 28,478     5    %   $ 82,540    $ 81,403     1    %
profit
                                                                                
Operating
margin, as       22.2     %   22.4      %   -0.2     21.4     %   21.5      %   -0.1
reported                                    pts                                 pts
(GAAP)
Non-GAAP                                    0.8                                 0.3
operating        23.2     %   22.4      %   pts      21.8     %   21.5      %   pts
margin
                                                                                
Industrial
Environmental
Filtration
Operating
profit, as       $ 11,315     $ 15,741      -28  %   $ 39,404     $ 44,193      -11  %
reported
(GAAP)
Impact of        6,165       —                     6,165       —         
selected items
Non-GAAP
operating        $ 17,480    $ 15,741     11   %   $ 45,569    $ 44,193     3    %
profit
                                                                                
Operating
margin, as       8.1      %   11.4      %   -3.3     9.9      %   11.2      %   -1.3
reported                                    pts                                 pts
(GAAP)
Non-GAAP                                    1.1                                 0.2
operating        12.5     %   11.4      %   pts      11.4     %   11.2      %   pts
margin
                                                                                
Packaging
Operating
profit, as       $ 2,059      $ 1,962       5    %   $ 4,641      $ 4,008       16   %
reported
(GAAP)
Impact of        193         —                     193         —         
selected items
Non-GAAP
operating        $ 2,252     $ 1,962      15   %   $ 4,834     $ 4,008      21   %
profit
                                                                                
Operating
margin, as       10.1     %   9.2       %   0.9      8.5      %   7.1       %   1.4
reported                                    pts                                 pts
(GAAP)
Non-GAAP                                    1.9                                 1.7
operating        11.1     %   9.2       %   pts      8.8      %   7.1       %   pts
margin

Contact:

CLARCOR Inc.
David J. Fallon, 615-771-3100
Chief Financial Officer