CLARCOR Reports Fourth Quarter and Full Year 2013 Results

  CLARCOR Reports Fourth Quarter and Full Year 2013 Results

 Fourth Quarter Diluted EPS Impacted by $0.04 from Acquisition-Related Costs

Business Wire

FRANKLIN, Tenn. -- January 15, 2014

CLARCOR Inc. (NYSE: CLC):

                                           
Unaudited Fourth Quarter and Full Year 2013 Highlights

(Amounts in millions, except per share data and percentages)
                                                                                 
            Quarter Ended                     Full Year Ended
            11/30/13   12/1/12   Change  11/30/13    12/1/12     Change
Net sales   $  297.8    $ 292.9    2    %   $ 1,130.8    $ 1,121.8    1   %
Operating      49.4        53.1      -7   %     174.6         182.7       -4  %
profit
Net
earnings       32.9        36.3      -10  %     118.1         123.0       -4  %
– CLARCOR
Diluted
earnings    $  0.65      $ 0.72      -10  %   $ 2.34        $ 2.42        -3  %
per share
Operating     16.6  %   18.1  %  -1.5     15.4    %   16.3    %  -0.9
margin                               pts                                  pts
                                                                                 

CLARCOR Inc. (NYSE: CLC) reported its financial results for the fourth quarter
and full year 2013. Diluted earnings per share declined $0.07 from $0.72 in
the fourth quarter of 2012 to $0.65 in this year’s fourth quarter and declined
$0.08 from $2.42 last year to $2.34 for 2013. The diluted earnings per share
comparison between full year 2013 and 2012 was impacted by the following
pre-tax charges recognized in 2013:

  *$4.6 million third quarter loss on disposal of equipment
  *$3.1 million third quarter charge to account for a final pension
    obligation settlement
  *$2.7 million fourth quarter expense for acquisition-related costs

These three items negatively impacted 2013 operating profit by $10.4 million,
2013 diluted earnings per share by approximately $0.13 and 2013 operating
margin by approximately 1.0 percentage point. The Company’s fourth quarter
2013 diluted earnings per share were impacted by the $2.7 million of
acquisition-related costs expensed in the fourth quarter of 2013. These costs
negatively impacted fourth quarter 2013 diluted earnings per share by
approximately $0.04 and operating margin by 0.9 percentage points.

Changes in average foreign currency exchange rates negatively influenced net
sales by $1.6 million and operating profit by $0.8 million, both less than 1%,
for full year 2013 compared with full year 2012. Changes in average foreign
currency exchange rates negatively influenced net sales by $0.9 million and
operating profit by $0.4 million, both less than 1%, in the fourth quarter of
2013 compared with the fourth quarter of 2012.

Chris Conway, CLARCOR’s Chairman and Chief Executive Officer, commented,
“Although 2013 was challenging for us from several perspectives, we are
excited about the building blocks we laid during the year as foundations for
future profitable growth. We demonstrated a strong commitment to growing our
core filtration markets through significant investments in facilities,
research and development and strategic acquisitions. We completed the
expansion of our heavy-duty engine filtration manufacturing facility in
Yankton, SD and committed over $40 million to build a new distribution center
in Kearney, NE. We finished construction of our $10 million oil & gas
filtration research center in Mineral Wells, TX, and we expanded our core
filtration market portfolio by investing more than $265 million through the
December 2013 acquisitions of the GE Air Filtration and Bekaert Advanced
Filtration businesses. We believe that each of these strategic investments
positions us well to capitalize on the future expected growth in our core
global filtration markets over the next decade and beyond.

“Our 2013 consolidated financial results were below our initial guidance
heading into the year, but these results were influenced by several charges
that impacted the comparison between 2012 and 2013. These charges reduced 2013
diluted earnings per share by approximately $0.13 and operating margin by 1.0
percentage point. We are not pleased with our 2013 operating performance, but
when adjusted for these charges, our financial results did demonstrate
continued earnings and operating margin expansion from 2012—a minimum
long-term standard we establish for any fiscal year. Our financial performance
in 2013 was also impacted by continued headwinds against our top-line, as
sales grew only 1% from 2012. Although this sales growth was lower than our
expectations, there were areas of strength. Sales in our oil & gas filtration
market increased 7% compared to 2012. Higher oil & gas filtration sales
increased both within and outside the U.S. Our U.S. oil & gas market continued
to be positively influenced by the expansion of natural gas filtration product
sales to support drilling activity in shale formations. Our growth outside the
U.S. was primarily the result of a $13 million, or 230%, increase in sales of
oil & gas filtration products in Latin America—primarily Brazil. As previously
mentioned, we are as excited about our growth prospects in the oil & gas
filtration market as any other global filtration market as we continue to
expand our global footprint and leverage our technology development to expand
our presence in oil & gas liquid and upstream produced water filtration.

“Sales in our global heavy-duty engine filtration market, a component of our
Engine/Mobile Filtration segment, were relatively flat in 2013 compared with
2012 as 2% higher sales in the U.S. were offset by a 2% reduction in foreign
sales. Our U.S. heavy-duty engine filtration market started the year with a
challenging first quarter as sales declined 2% from the first quarter of 2012.
However, U.S. heavy-duty engine filtration sales increased in excess of 3%
over the final three quarters of 2013 compared to the 2012 comparable period.
Although we experienced more stable overall order patterns from our customers
in the second half of the year, we still experienced some volatility during
this period especially in our independent aftermarket. We remain cautiously
optimistic as we head into 2014 regarding our U.S. heavy-duty engine
filtration sales based upon strong truck tonnage metrics in the fourth quarter
of 2013 and continued progress with our strategic initiative to expand our
domestic market presence in new distribution channels. The 2% reduction in
2013 heavy-duty engine filtration sales outside the U.S. was driven by an
almost 10% reduction in each of Europe, Australia and South Africa partially
offset by a 9% increase in China. Lower European heavy-duty engine filtration
sales were the result of lingering effects of the slow economic recovery in
the Euro zone, and although economic conditions in Europe generally improved
over the second half of the year, we still expect relatively flat European
heavy-duty engine filtration sales for 2014 compared with 2013. After
declining approximately 10% in 2012 compared to 2011, our heavy-duty engine
filtration sales in China increased 9% in 2013. These higher sales were
primarily the result of continued progress with our aftermarket initiative
including sales through independent distributors and through OE customers.
Although economic uncertainty and volatility remains in China including within
our heavy-duty engine filtration markets, we believe we are well-positioned to
capitalize on the anticipated long-term first-fit and aftermarket heavy-duty
engine filtration growth in that geographic market.

“Operating margin in our Engine/Mobile Filtration segment declined 1.2
percentage points in 2013 to 21.0% from 22.2% in 2012. Approximately 0.5
percentage points of this reduction was due to the partial allocation to this
reporting segment of the third quarter final pension obligation settlement
charge and the fourth quarter expenses for acquisition-related costs. The
remaining 0.7 percentage point reduction in 2013 operating margin was
primarily the result of lower gross margin percentage from additional fixed
manufacturing costs incurred in anticipation of future global heavy-duty
engine filtration growth including overhead costs pursuant to our Yankton
facility expansion and infrastructure costs to support growth initiatives in
China and Europe. With relatively flat heavy-duty engine filtration sales in
2013, we were unable to absorb many of these additional fixed costs—negatively
impacting our gross margin percentage.

“Our past year undoubtedly was highlighted by the December 2013 strategic
acquisitions of GE Air Filtration and Bekaert Advanced Filtration. The impact
of these acquisitions is reflected in our 2014 guidance, and strategically we
are excited about the potential opportunities these businesses bring. The GE
Air Filtration business expands our core filtration portfolio to include gas
turbine, industrial air and membrane products and technology. Consistent with
our growth expectations in our existing natural gas filtration business, we
believe that there is strong potential for long-term global growth in the gas
turbine market as natural gas is a plentiful, relatively inexpensive,
clean-burning fossil fuel. The GE Air Filtration gas turbine business has a
strong aftermarket filter base and a growing presence in first-fit
systems—which we expect to support future growth in the aftermarket going
forward. Although we anticipate GE will continue to be a core gas turbine
customer, this acquisition will allow us to now pursue other gas turbine
manufacturers as customers, a key strategic opportunity for this business
going forward. In addition, the GE Air Filtration industrial air business
introduces us to new industrial filtration markets, technologies and products,
and we believe we will be able to leverage existing CLARCOR filtration
products into this business’s highly diversified customer base. Although the
membrane products and technology business is the smallest of the three
business lines acquired in the GE Air Filtration acquisition, we believe
additional focus with membrane products and technology will allow us to unlock
value in that business. We believe these strategic investments continue to
diversify our core filtration portfolio and position us well to capture future
growth in the world-wide filtration market.”

Fourth Quarter Results:

Engine/Mobile Filtration Segment

Net sales in our Engine/Mobile Filtration segment increased approximately 2%
in the fourth quarter of 2013 based upon a 4% increase in domestic sales
partially offset by a 2% reduction in sales outside the U.S. The increase in
U.S. sales was primarily driven by higher sales to OE customers as we continue
to develop distribution channels outside our core independent aftermarket. Our
fourth quarter domestic aftermarket sales were flat compared with last year’s
fourth quarter after increasing 6% in the third quarter compared to the
comparable period in 2012. After a slow start to the year—with a 4% reduction
in the first quarter compared to the comparable period in 2012—our domestic
aftermarket sales were up approximately 3% over the final three quarters of
2013. The decline in sales outside the U.S. compared with the fourth quarter
of 2012 was primarily influenced by lower heavy-duty engine filter sales in
Europe and lower export sales from the U.S., partially offset by an increase
in China sales. The decline in European sales was primarily driven by lower
sales at our Morocco business due to reduced sales to a single large customer
while higher sales in China were the result of significant increases across
all market segments including OE, OE aftermarket and the independent
aftermarket. For the full year, heavy-duty engine filter sales in China
increased approximately 9%.

Operating profit at our Engine/Mobile Filtration segment declined
approximately 17% in the fourth quarter of 2013 primarily driven by a 4.4
percentage point reduction in operating margin from 24.1% in the fourth
quarter of 2012—the highest quarterly operating margin in this reporting
segment since the third quarter of 2008. Approximately 0.9 percentage points
of the reduction from last year’s fourth quarter was due to allocated
acquisition-related costs incurred in the fourth quarter of 2013. The
remaining 3.5 percentage point reduction was driven by a combination of higher
fixed and one-off manufacturing costs in the U.S., including from our Yankton
facility expansion, and lower fixed cost absorption at our international
entities.

Industrial/Environmental Filtration Segment

Net sales in our Industrial/Environmental Filtration segment rose
approximately 3% in the fourth quarter of 2013 including a 22% increase in
foreign sales partially offset by a 5% reduction in U.S. sales. More than
two-thirds of the fourth quarter increase in sales outside the U.S. was
related to higher oil & gas filtration product sales in Latin America—where
sales more than tripled in full year 2013 from last year. The remainder of the
increase in sales outside the U.S. in the fourth quarter was due to higher oil
& gas related filtration sales in the Middle East and Europe. Lower U.S. sales
in the fourth quarter were across several market segments including off-shore
oil drilling, commercial and industrial HVAC and natural gas filtration
product sales.

Operating profit at our Industrial/Environmental Filtration segment increased
approximately 10% in the fourth quarter of 2013 driven by higher sales and a
1.0 percentage point increase in operating margin, which was positively
impacted by a higher mix of higher margin oil & gas sales primarily in Latin
America and the Middle East. Fourth quarter 2013 operating margin in this
reporting segment was negatively impacted by 0.9 percentage points from the
allocation of acquisition-related costs incurred in the fourth quarter.

Packaging Segment

Net sales at our Packaging segment declined 5% in the fourth quarter of 2013
from prior year. This reduction in sales was primarily driven by lower holiday
promotional sales and continued depressed sales of film packaging products.
Operating margin declined 2.9 percentage points as a result of lower fixed
cost absorption from these lower sales in addition to a 0.9 percentage point
negative impact from the allocation of acquisition-related costs incurred in
the fourth quarter of 2013.

2014 Guidance:

Our guidance for consolidated 2014 diluted earnings per share—inclusive of
anticipated results from the GE Air Filtration and Bekaert Advanced Filtration
acquisitions—is $2.55 to $2.70. These expected results are based upon
projected consolidated net sales between $1,410 and $1,470 million and
consolidated operating margin between 13.25% and 14.5%.

Included in our consolidated 2014 guidance are estimated diluted earnings per
share of between $2.45 and $2.55 for our base business and from $0.10 to $0.15
from the GE Air Filtration and Bekaert Advanced Filtration acquisitions. Sales
and operating margin detail for our base business—excluding the GE Air
Filtration and Bekaert Advanced Filtration acquisitions—is as follows:

                                                       
                                      2014 Estimated         2014 Estimated
                                      Sales Growth           Operating Margin
                                                             
Engine/Mobile Filtration              1.0% to 3.0%           21.0% to 22.0%
Industrial/Environmental              4.5% to 8.5%           12.0% to 13.0%
Filtration^1
Packaging                             0.0% to 4.0%           8.0% to 9.0%
CLARCOR base business^1               3.0% to 5.0%           15.7% to 16.5%
                                                             
1 – Excludes the GE Air Filtration and Bekaert Advanced Filtration
acquisitions. These acquisitions do not impact the Engine/Mobile Filtration
and Packaging segments
                                                             

Our diluted earnings per share guidance for our base business includes
approximately $6.0 million of incremental costs we expect to incur at our
corporate entity and allocate to our reporting segments including for research
and development and for the investigation for the potential implementation of
a global ERP system. We anticipate these costs will impact 2014 diluted
earnings per share by approximately $0.08 and will reduce operating margin on
a consolidated basis and for each reporting segment by approximately 0.5
percentage points. We view these incremental costs as investments for the
future to facilitate the execution of our long-term strategic growth
initiatives. We believe it is critically important to continue to increase our
focus on research and development as we strive to become a global leader in
the development of filtration technology.

We also provide below initial estimates for the financial impact of the GE Air
Filtration and Bekaert Advanced Filtration acquisitions. We expect to include
each acquired business within our Industrial/Environmental Filtration segment.
We estimate that these two acquisitions will increase 2014 diluted earnings
per share between $0.10 and $0.15 and net sales between $250 and $275 million.
Projected 2014 sales and operating margin for each acquisition is as follows:

                                            
                              2014 Estimated   2014 Estimated
                              Sales            Operating
                              ($Millions)      Margin
                                               
GE Air Filtration             $235 to $255     3.0% to 5.0%
Bekaert Advanced Filtration   $15 to $20       -1.0% to 1.0%
                                               

Our expectations regarding the GE Air Filtration acquisition include
preliminary estimates for purchase accounting related items, including a $4 to
$6 million step-up in inventory basis, which we expect to expense in our first
quarter of fiscal 2014, and the depreciation and amortization associated with
the fair valuation of fixed assets and identification of definite-lived
intangible assets. In addition, we anticipate incurring approximately $5
million of integration and other acquisition-related costs during 2014. We
expect to update our estimates for these items at the end of the first
quarter. The step-up in inventory basis and integration costs are projected to
negatively impact 2014 diluted earnings per share by approximately $0.13.

We project 2014 cash from operations to be between $150 million and $165
million, capital expenditures to be between $70 million and $85 million and
our effective tax rate to be between 32.0% and 32.5%. We expect 2014 net other
expense including interest of approximately $1.5 million and assume 51.0
million diluted shares outstanding.

CLARCOR will be holding a conference call to discuss fourth quarter 2013
results at 10:00 a.m. CST on January 16, 2014. 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 6777997. The replay will be available through
January 30, 2014 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
2014 performance of the Company and each of its segments, our projections with
respect to 2014 estimated sales growth and 2014 estimated operating margins
for the Company’s base business and each of its segments excluding the GE Air
Filtration and Bekaert Advanced Filtration acquisitions, our projections with
respect to 2014 diluted earnings per share, and our projections with respect
to 2014 cash from operations, 2014 capital expenditures and 2014 effective tax
rate; 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 the building blocks laid in 2013 as foundations
for future profitable growth; statements regarding our commitment to growing
our core filtration markets through significant investments in facilities,
research and development and strategic investments; statements regarding our
belief that our strategic investments position us well to capitalize on the
future expected growth in our core global filtration markets over the next
decade and beyond; statements regarding our belief about the growth prospects
in the oil & gas filtration market; statements regarding the continued
expansion of our global footprint and the leveraging of our technology
development to expand our presence in oil & gas liquid and upstream produced
water filtration; statements regarding our cautious optimism regarding U.S.
heavy-duty engine filtration sales based upon strong truck tonnage metrics in
the fourth quarter of 2013 and continued progress with our strategic
initiative to expand our domestic market presence in new distribution
channels; statements regarding our expectation of relatively flat European
heavy-duty engine filtration sales for 2014 compared with 2013; statements
regarding our belief that we are well-positioned to capitalize on the
anticipated long-term first-fit and aftermarket heavy-duty engine filtration
growth in the China market; statements regarding the anticipated impact in
2014 and beyond of the strategic acquisitions of GE Air Filtration and Bekaert
Advanced Filtration, including the potential opportunities these businesses
bring; statements regarding our belief that, consistent with our growth
expectations in our existing natural gas filtration business, there is strong
potential for long-term global growth in the gas turbine market; statements
regarding our expectation that the GE Air Filtration gas turbine business will
support future growth in the aftermarket going forward; statements regarding
our anticipation that GE will continue to be a core gas turbine customer;
statements regarding our belief that the acquisition of GE Air Filtration will
allow us to now pursue other gas turbine manufacturers as customers;
statements regarding our belief that we will be able to leverage existing
CLARCOR filtration products into the highly diversified customer base of the
GE Air Filtration industrial air business; statements regarding our belief
that additional focus with membrane products and technology will allow us to
unlock value in the GE Air Filtration membrane products and technology
business; statements regarding our belief that our strategic investments in GE
Air Filtration and Bekaert Advanced Filtration continue to diversify our core
filtration portfolio and position us well to capture future growth in the
world-wide filtration market; statements regarding our 2014 expectations for
GE Air Filtration and Bekaert Advanced Filtration, including the 2014
estimated sales and 2014 estimated operating margin with respect to each of
these businesses; statements regarding, with respect to the GE Air Filtration
acquisition, our preliminary estimates for purchase accounting related items
including the step-up in inventory basis which is expected to be expensed in
our first quarter and the depreciation and amortization associated with the
fair valuation of fixed assets and the identification of definitive-lived
intangible assets; statements regarding our anticipated integration costs and
other anticipated acquisition-related cost; statements regarding our
expectation that estimates with respect to the GE Air Filtration and Bekaert
Advanced Filtration business will be updated at the end of the first quarter,
statements regarding our expectation that the step-up in inventory basis and
integration costs will negatively impact 2014 diluted earnings per share by
approximately $0.13; 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 of operations 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 Annual Report on Form 10-K for the fiscal year 2012
filed on January 25, 2013, 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, including estimated 2014 diluted earnings per
share, estimated 2014 sales growth and estimated 2014 operating margin levels
for the Company and its business segments and our projections with respect to
2014 cash from operations, 2014 capital expenditures, 2014 net interest
expense and 2014 effective tax rate, 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 FOURTH QUARTER RESULTS

CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share data)
                                                 
                   Quarter Ended                 Twelve Months Ended
                   November 30,  December 1,    November 30,   December 1,
                   2013           2012           2013            2012
Net sales          $  297,790     $  292,913     $ 1,130,770     $ 1,121,765
Cost of sales      199,181       191,869       760,561        741,433     
                                                                 
Gross profit       98,609         101,044        370,209         380,332
                                                                 
Selling and
administrative     49,194        47,934        195,593        197,618     
expenses
                                                                 
Operating profit   49,415        53,110        174,616        182,714     
                                                                 
Other income
(expense):
Interest expense   (164       )   (163       )   (615        )   (527        )
Interest income    162            141            690             600
Other, net         (321       )   (99        )   (391        )   210         
                   (323       )   (121       )   (316        )   283         
                                                                 
Earnings before    49,092         52,989         174,300         182,997
income taxes
                                                                 
Provision for      16,196        16,631        55,950         59,657      
income taxes
                                                                 
Net earnings       32,896         36,358         118,350         123,340
                                                                 
Net earnings
attributable to
noncontrolling     (40        )   (48        )   (274        )   (354        )
interests, net
of tax
                                                                 
Net earnings
attributable to    $  32,856     $  36,310     $ 118,076      $ 122,986   
CLARCOR Inc.
                                                                 
Net earnings per
share
attributable to    $  0.65       $  0.73       $ 2.36         $ 2.45      
CLARCOR Inc. -
Basic
Net earnings per
share
attributable to    $  0.65       $  0.72       $ 2.34         $ 2.42      
CLARCOR Inc. -
Diluted
                                                                 
Weighted average
number of shares   50,200,491    50,069,220    49,988,577     50,285,480  
outstanding -
Basic
Weighted average
number of shares   50,712,641    50,590,135    50,538,947     50,882,191  
outstanding -
Diluted
                                                                 
Dividends paid     $  0.1700     $  0.1350     $ 0.5750       $ 0.4950    
per share
                                                                             

                                                              
CLARCOR INC. 2013 UNAUDITED FOURTH QUARTER RESULTS, continued

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)
                                                                 
                                                 November 30,    December 1,
                                                 2013            2012
ASSETS
Current assets:
Cash and cash equivalents                        $ 411,562       $ 185,496
Restricted cash                                  763             566
Accounts receivable, less allowance for losses   224,829         214,474
of $9,183 and $9,554, respectively
Inventories                                      218,786         211,251
Deferred income taxes                            25,313          34,693
Income taxes receivable                          1,000           —
Prepaid expenses and other current assets        9,868          8,114       
Total current assets                             892,121        654,594     
                                                                 
Plant assets, at cost, less accumulated
depreciation of $332,787 and $315,018,           208,953         195,101
respectively
Assets held for sale                             —               2,000
Goodwill                                         241,299         241,924
Acquired intangible assets, less accumulated     89,881          95,681
amortization
Other noncurrent assets                          16,589         16,202      
Total assets                                     $ 1,448,843    $ 1,205,502 
LIABILITIES
Current liabilities:
Current portion of long-term debt                $ 50,223        $ 201
Accounts payable and accrued liabilities         157,538         172,262
Income taxes payable                             —              2,428       
Total current liabilities                        207,761        174,891     
                                                                 
Long-term debt, less current portion             116,413         16,391
Long-term pension and postretirement             19,792          50,680
healthcare benefits liabilities
Deferred income taxes                            64,415          51,385
Other long-term liabilities                      5,753          8,571       
Total liabilities                                414,134        301,918     
                                                                 
Contingencies
Redeemable noncontrolling interests              1,836           1,754
SHAREHOLDERS' EQUITY
Capital stock                                    50,371          49,653
Capital in excess of par value                   22,278          —
Accumulated other comprehensive loss             (29,814     )   (51,708     )
Retained earnings                                989,013        902,899     
Total CLARCOR Inc. equity                        1,031,848      900,844     
Noncontrolling interests                         1,025          986         
Total shareholders' equity                       1,032,873      901,830     
Total liabilities and shareholders' equity       $ 1,448,843    $ 1,205,502 
                                                                             

                                                  
CLARCOR INC. 2013 UNAUDITED FOURTH QUARTER RESULTS, continued

CONSOLIDATED CASH FLOWS

(Dollars in thousands)
                                                    
                                                    Twelve Months Ended
                                                    November 30,  December 1,
                                                    2013           2012
Cash flows from operating activities:
Net earnings                                        $  118,350     $ 123,340
Depreciation                                        26,329         25,925
Amortization                                        5,904          5,890
Other noncash items                                 1,754          (26       )
Net loss (gain) on disposition of plant assets      3,862          (725      )
Stock-based compensation expense                    5,060          6,226
Excess tax benefit from stock-based compensation    (8,528     )   (2,007    )
Deferred income taxes                               1,216          9,272
Changes in assets and liabilities, net of           (18,706    )   (32,046   )
business acquisitions
Net cash provided by operating activities           135,241       135,849   
                                                                   
Cash flows from investing activities:
Restricted cash                                     (197       )   240
Business acquisitions, net of cash acquired         —              (5,411    )
Additions to plant assets                           (44,651    )   (36,468   )
Proceeds from disposition of plant assets           3,373          534
Investment in affiliates                            (615       )   (1,023    )
Net cash used in investing activities               (42,090    )   (42,128   )
                                                                   
Cash flows from financing activities:
Borrowings under multicurrency revolving credit     50,000         —
agreement
Borrowings under term loan facility                 100,000        —
Payments on long-term debt, including acquisition   (4,037     )   (10,500   )
costs
Payments of financing costs                         (298       )   (564      )
Sale of capital stock under stock option and        35,047         6,415
employee purchase plans
Payments for repurchase of common stock             (27,708    )   (37,320   )
Excess tax benefit from stock-based compensation    8,528          2,007
Dividend paid to noncontrolling interests           (206       )   —
Cash dividends paid                                 (28,744    )   (24,911   )
Net cash provided by (used in) financing            132,582       (64,873   )
activities
Net effect of exchange rate changes on cash         333           649       
Net change in cash and cash equivalents             226,066        29,497
Cash and cash equivalents, beginning of period      185,496       155,999   
Cash and cash equivalents, end of period            $  411,562    $ 185,496 
                                                                   
Cash paid during the period for:
Interest                                            $  374        $ 397     
Income taxes, net of refunds                        $  42,602     $ 43,821  
                                                                             

                         
CLARCOR INC. 2013 UNAUDITED FOURTH QUARTER RESULTS, continued

QUARTERLY INCOME STATEMENT DATA BY SEGMENT

(Dollars in thousands)
                           
                           2013
                           Quarter       Quarter       Quarter       Quarter
                           Ended        Ended        Ended        Ended        Twelve Months

                           March 2       June 1        August 31     November 30
Net sales by segment:                                                           
Engine/Mobile Filtration   $ 117,675     $ 132,372     $ 129,148     $ 127,829     $ 507,024
Industrial/Environmental   122,626       136,660       139,659       150,801       $ 549,746
Filtration
Packaging                  15,970       18,551       20,319      19,160      $ 74,000    
                           $ 256,271    $ 287,583    $ 289,126   $ 297,790   $ 1,130,770 
                                                                                   
Operating profit by
segment:
Engine/Mobile Filtration   $ 23,449      $ 29,096      $ 28,611      $ 25,189      $ 106,345
Industrial/Environmental   9,678         18,411        11,315        22,592        $ 61,996
Filtration
Packaging                  688          1,894        2,059       1,634       $ 6,275     
                           $ 33,815     $ 49,401     $ 41,985    $ 49,415    $ 174,616   
                                                                                   
Operating margin by
segment:
Engine/Mobile Filtration   19.9      %   22.0      %   22.2      %   19.7      %   21.0        %
Industrial/Environmental   7.9       %   13.5      %   8.1       %   15.0      %   11.3        %
Filtration
Packaging                  4.3       %   10.2      %   10.1      %  8.5       %  8.5         %
                           13.2      %   17.2      %   14.5      %  16.6      %  15.4        %
                                                                                   
                                                                                   
                           2012
                           Quarter       Quarter       Quarter       Quarter
                           Ended         Ended         Ended        Ended        Twelve Months

                           March 3       June 2        September 1   December 1
Net sales by segment:
Engine/Mobile Filtration   $ 120,283     $ 130,677     $ 126,903     $ 125,744     $ 503,607
Industrial/Environmental   121,114       134,629       138,532       147,089       541,364
Filtration
Packaging                  15,867       19,549       21,298      20,080      76,794      
                           $ 257,264    $ 284,855    $ 286,733   $ 292,913   $ 1,121,765 
                                                                                   
Operating profit by
segment:
Engine/Mobile Filtration   $ 23,297      $ 29,628      $ 28,478      $ 30,250      $ 111,653
Industrial/Environmental   10,705        17,747        15,741        20,573        64,766
Filtration
Packaging                  310          1,736        1,962       2,287       6,295       
                           $ 34,312     $ 49,111     $ 46,181    $ 53,110    $ 182,714   
                                                                                   
Operating margin by
segment:
Engine/Mobile Filtration   19.4      %   22.7      %   22.4      %   24.1      %   22.2        %
Industrial/Environmental   8.8       %   13.2      %   11.4      %   14.0      %   12.0        %
Filtration
Packaging                  2.0       %   8.9       %   9.2       %  11.4      %  8.2         %
                           13.3      %   17.2      %   16.1      %  18.1      %  16.3        %
                                                                                               

                                                                            
CLARCOR INC. 2013 UNAUDITED FOURTH 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 fourth quarter
and twelve months ended November 30, 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 twelve months ended November 30, 2013 non-GAAP financial measures
provided in this release exclude the impact of the $4.6 million third quarter pre-tax
loss on disposal of equipment, the $3.1 million third quarter pre-tax charge to account
for a final pension obligation settlement, and the $2.7 million fourth quarter pre-tax
expense for acquisition-related costs. Although the comparison of data excluding these
charges in our quarter ended and twelve months ended November 30, 2013 is not a measure
of financial performance under GAAP, the Company believes that providing these non-GAAP
financial measures better enables investors to understand and evaluate the Company's
historical and prospective operating performance. Management believes that removing the
impact of these selected items provides a more useful measure of the changes in gross
profit, selling and administrative expense, operating profit, net earnings and diluted
earnings per share at the consolidated level and operating profit at the segment level
in the quarter ended and twelve months ended November 30, 2013 compared to the quarter
ended and twelve months ended December 1, 2012.
                                                                                 
These non-GAAP financial measures may have limitations as analytical tools, and
management does 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                     Twelve Months Ended        
                 November    December 1,            November     December 1,
                 30,                                 30,
                 2013         2012          Change   2013          2012          Change
Consolidated
Gross Profit,
as reported      $ 98,609     $ 101,044     -2   %   $ 370,209     $ 380,332     -3  %
(GAAP)
Impact of        —           —                     4,631        —         
non-cash items
Non-GAAP gross   $ 98,609    $ 101,044    -2   %   $ 374,840    $ 380,332    -1  %
profit
                                                                                 
Selling and
administrative
expense, as      $ 49,194     $ 47,934      3    %   $ 195,593     $ 197,618     -1  %
reported
(GAAP)
Impact of        (2,736   )   —                     (5,847    )   —         
non-cash items
Non-GAAP
selling and      $ 46,458    $ 47,934     -3   %   $ 189,746    $ 197,618    -4  %
administrative
expense
                                                                                 
Operating
profit, as       $ 49,415     $ 53,110      -7   %   $ 174,616     $ 182,714     -4  %
reported
(GAAP)
Impact of        2,736       —                     10,478       —         
non-cash items
Non-GAAP
operating        $ 52,151    $ 53,110     -2   %   $ 185,094    $ 182,714    1   %
profit
                                                                                 
Net earnings -
CLARCOR, as      $ 32,856     $ 36,310      -10  %   $ 118,076     $ 122,986     -4  %
reported
(GAAP)
Impact of        1,833       —                     6,788        —         
non-cash items
Non-GAAP net
earnings –       $ 34,689    $ 36,310     -4   %   $ 124,864    $ 122,986    2   %
CLARCOR
                                                                                 
Diluted
earnings per
share, as        $ 0.65       $ 0.72        -10  %   $ 2.34        $ 2.42        -3  %
reported
(GAAP)
Impact of        0.04        —                     0.13         —         
non-cash items
Non-GAAP
diluted
earnings per     $ 0.69      $ 0.72       -5   %   $ 2.47       $ 2.42       2   %
share –
CLARCOR
                                                                                     

                                                                           
CLARCOR INC. 2013 UNAUDITED FOURTH QUARTER RESULTS, continued

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(Dollars in thousands, except share data)
                                                                                
                 Quarter Ended                    Twelve Months Ended        
                 November    December              November     December 1,
                 30,          1,                    30,
                 2013         2012         Change   2013          2012          Change
Consolidated
(continued)
Gross margin,                              -1.4                                 -1.2
as reported      33.1     %   34.5     %   pts      32.7      %   33.9      %   pts
(GAAP)
Non-GAAP gross   33.1     %   34.5     %   -1.4     33.1      %   33.9      %   -0.8
margin                                     pts                                  pts
                                                                                
Selling and
administrative
expense as %     16.5     %   16.4     %   0.1      17.3      %   17.6      %   -0.3
of sales, as                               pts                                  pts
reported
(GAAP)
Non-GAAP
Selling and                                -0.8                                 -0.8
administrative   15.6     %   16.4     %   pts      16.8      %   17.6      %   pts
expense as a %
of sales
                                                                                
Operating
margin, as       16.6     %   18.1     %   -1.5     15.4      %   16.3      %   -0.9
reported                                   pts                                  pts
(GAAP)
Non-GAAP                                   -0.6                                 0.1
operating        17.5     %   18.1     %   pts      16.4      %   16.3      %   pts
margin
                                                                                
Segment Data
Engine/Mobile
Filtration
Operating
profit, as       $ 25,189     $ 30,250     -17  %   $ 106,345     $ 111,653     -5  %
reported
(GAAP)
Impact of        1,146       —                    2,530        —         
non-cash items
Non-GAAP
operating        $ 26,335    $ 30,250    -13  %   $ 108,875    $ 111,653    -2  %
profit
                                                                                
Operating
margin, as       19.7     %   24.1     %   -4.4     21.0      %   22.2      %   -1.2
reported                                   pts                                  pts
(GAAP)
Non-GAAP                                   -3.5                                 -0.7
operating        20.6     %   24.1     %   pts      21.5      %   22.2      %   pts
margin
                                                                                
Industrial
Environmental
Filtration
Operating
profit, as       $ 22,592     $ 20,573     10   %   $ 61,996      $ 64,766      -4  %
reported
(GAAP)
Impact of        1,425       —                    7,590        —         
non-cash items
Non-GAAP
operating        $ 24,017    $ 20,573    17   %   $ 69,586     $ 64,766     7   %
profit
                                                                                
Operating
margin, as       15.0     %   14.0     %   1.0      11.3      %   12.0      %   -0.7
reported                                   pts                                  pts
(GAAP)
Non-GAAP                                   1.9                                  0.7
operating        15.9     %   14.0     %   pts      12.7      %   12.0      %   pts
margin
                                                                                
Packaging
Operating
profit, as       $ 1,634      $ 2,287      -29  %   $ 6,275       $ 6,295       0   %
reported
(GAAP)
Impact of        164         —                    357          —         
non-cash items
Non-GAAP
operating        $ 1,798     $ 2,287     -21  %   $ 6,632      $ 6,295      5   %
profit
                                                                                
Operating
margin, as       8.5      %   11.4     %   -2.9     8.5       %   8.2       %   0.3
reported                                   pts                                  pts
(GAAP)
Non-GAAP                                   -2.0                                 0.8
operating        9.4      %   11.4     %   pts      9.0       %   8.2       %   pts
margin
                                                                                

Contact:

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