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Clarcor Reports Third Quarter Financial Results
CLARCOR Inc. (NYSE: CLC):
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Unaudited Third Quarter and First Nine Months 2016 Highlights
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(Amounts in millions, except per share data and percentages)
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Third Quarter Ended
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Nine Months Ended
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8/27/16
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8/29/15
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Change
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8/27/16
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8/29/15
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Change
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Net sales
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$
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331.4
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$
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357.6
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-7
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%
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$
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1,012.6
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$
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1,108.5
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-9
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%
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Operating profit
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50.7
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50.4
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1
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%
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136.4
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148.6
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-8
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%
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Net earnings - CLC
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35.7
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36.4
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-2
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%
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110.3
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101.7
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8
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%
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Diluted EPS
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$
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0.73
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$
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0.72
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1
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%
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$
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2.25
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$
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2.00
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13
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%
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Operating margin
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15.3
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%
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14.1
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%
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1.2pts
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13.5
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%
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13.4
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%
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0.1pts
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CLARCOR Inc. (NYSE: CLC) reported that its third quarter
diluted earnings per share were $0.73, a $0.01 increase from the third
quarter of 2015. Higher diluted earnings per share were positively
impacted by a 1.2 percentage point improvement in operating margin which
more than offset the impact of a 7% reduction in net sales. Diluted
earnings per share of $0.72 in last year’s third quarter were favorably
impacted by approximately $0.15 from the net gain on the disposition of
the packaging business, J.L. Clark, which occurred in last year’s third
quarter, and unfavorably impacted by approximately $0.09 from the
impairment of the BioProcess investments noted below. Excluding the
aggregate impact of these two items, non-GAAP adjusted diluted earnings
per share increased $0.07, or 11%, from the third quarter of 2015, as
reflected in the table on the next page.
To allow investors to better compare and evaluate our historical
financial performance, we are presenting non-GAAP adjusted financial
results in the table following this paragraph. Non-GAAP adjusted
financial results for the third quarter of 2016 exclude a favorable $0.1
million net adjustment for upfront expenses for cost reduction
initiatives. Non-GAAP adjusted financial results for the third quarter
of 2015 exclude the financial results of our J.L. Clark packaging
business disposed of on June 27, 2015, a net gain on the sale of such
packaging business, and the impairment loss related to our BioProcess
H2O and Algae investments. Please refer to pages 13 through 16 of this
earnings release for reconciliations and additional information with
respect to non-GAAP adjusted financial results for the third quarter and
the first nine months of 2015 and 2016.
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Non-GAAP Adjusted Financial Results:
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Third Quarter Ended
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Nine Months Ended
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8/27/16
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8/29/15
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Change
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8/27/16
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8/29/15
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Change
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Adjusted net sales
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$
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331.4
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$
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352.2
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-6
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%
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$
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1,012.6
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$
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1,067.6
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-5
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%
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Adjusted operating profit
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50.6
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50.5
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0
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%
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138.5
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146.4
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-5
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%
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Adjusted net earnings - CLC
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35.7
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33.1
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8
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%
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93.4
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97.1
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-4
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%
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Adjusted diluted EPS
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$
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0.73
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$
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0.66
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11
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%
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$
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1.90
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$
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1.91
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-1
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%
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Adjusted operating margin
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15.3
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%
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14.3
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%
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1.0 pts
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13.7
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%
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13.7
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%
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0.0 pts
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Chris Conway, CLARCOR’s Chairman, President and Chief Executive Officer,
commented, “Our third quarter was highlighted by several significant
strategic advancements including our entry into a long-term contract
with GE in respect of its H-class gas turbine platform, our release of
the Channel Flow EXOTM heavy-duty engine air filtration
product line and strategic investments occurring in connection with our
second quarter acquisition of filtration media technology company
FibeRio. Each of these strategic advancements is indicative of our
continued efforts to establish CLARCOR as an industry leader in
innovative filtration technology development. We provide additional
detail for each of these initiatives later in this release. In addition
to this focus on long-term strategic growth, we have continued to focus
on operating execution as illustrated by our third quarter financial
results. Diluted earnings per share improved $0.01 from last year’s
third quarter despite the third quarter of 2015 being favorably
influenced by approximately $0.06 on a net basis from the J.L. Clark
disposition and the impairment of our BioProcess investments. Third
quarter 2016 operating margin improved 1.2 percentage points from last
year’s third quarter which more than offset the impact of a 7% reduction
in net sales.
“The $7 million, or 5%, decline in net sales in our Engine/Mobile
Filtration segment from last year’s third quarter was partially driven
by lower average foreign currency exchange rates which negatively
influenced net sales by $2 million, or 2%. The remaining $5 million net
sales decline was primarily due to lower sales to a large retail
customer, lower sales into the U.S. independent aftermarket and lower
sales to the automotive filtration market, partially offset by higher
fuel filtration product sales to off-road agricultural and construction
equipment markets. We believe lower third quarter net sales to the large
retail customer were due in part to a strategic reorganization taking
place at this customer, and we expect our filtration sales to such
customer to recover in the fourth quarter. Lower third quarter net sales
into the U.S. independent aftermarket compared to last year’s third
quarter was heavily impacted by continued declines in heavy-duty engine
filtration sales into oil & gas markets. We believe these lower sales
could continue into our fourth quarter and early fiscal 2017. Higher
fuel filtration product sales to off-road markets in the third quarter
were partly due to more stable demand in these end-markets compared to
this period last year and partly due to Lean operational
improvements introduced this year which enabled us to work through an
accumulation of past due customer shipments in the third quarter.
Although we do not anticipate significant sales growth in these off-road
fuel filtration markets in our fourth quarter or the first half of
fiscal 2017, these end markets have shown signs of stabilization.
“The $14 million, or 7%, net sales reduction in our
Industrial/Environmental Filtration segment from last year’s third
quarter was partially driven by lower average foreign currency exchange
rates which negatively influenced net sales by $3 million, or 2%. The
remaining $11 million reduction was primarily the result of lower
natural gas and industrial air and liquid filtration sales, partially
offset by higher HVAC and gas turbine filtration sales, as well as
additional sales resulting from the acquisition of TDC Filter
Manufacturing completed in the first quarter of 2016. Natural gas
filtration sales declined approximately $16 million, or 26%, from last
year’s third quarter driven by a 51% reduction in capital vessel sales
which was partially offset by a 5% increase in aftermarket filtration
sales. Similar to recent prior quarters, a majority of the
year-over-year decline in natural gas vessel sales was driven by lower
activity in the U.S., where we benefited from natural gas shale
extraction infrastructure projects in prior years. As we will further
discuss in our updated earnings guidance, the momentum in our oil & gas
markets is not favorable. Significant projects continue to be delayed,
and we believe--due to industry as opposed to competitive dynamics--that
capital vessel filtration sales into these end markets will continue to
decline in our fourth quarter and into fiscal 2017. Sales of HVAC
filtration products increased $4 million, or 14%, from last year’s third
quarter primarily due to continued higher sales into the Middle East.
Net sales into our gas turbine filtration market increased $3 million,
or 16%, from last year’s third quarter as first-fit sales increased 32%
and aftermarket sales increased 6%. Overall, our gas turbine filtration
product sales in the first nine months of 2016 have increased 16% from
the same period last year.
“Our third quarter operating margin of 15.3% increased 1.2 percentage
points from last year’s third quarter. This increase was driven by a 1.0
percentage point improvement in gross margin percentage and a 0.2
percentage point reduction in selling and administrative expenses as a
percentage of net sales. Higher gross margin percentage compared to last
year’s third quarter was primarily driven by lower material cost as a
percentage of net sales, partly offset by lower absorption of fixed
manufacturing costs from lower net sales. The reduction in material cost
as a percentage of net sales was the result of lower commodity costs,
favorable sales mix and our company-wide purchasing cost reduction
initiative. Selling and administrative expenses declined approximately
$6 million from the third quarter of 2015. This reduction was primarily
driven by $3 million lower headcount-related costs and $3 million lower
bad debt expense from improved past due accounts receivable collections.
“Our favorable operating margin performance compared to last year’s
third quarter is indicative of the strides we are making with both our
cost reduction initiative program and our on-going Lean
implementation as part of our roll-out of the CLARCOR Management
System. We believe we are on track to realize in excess of $20
million in cost savings in fiscal 2016 pursuant to our cost reduction
initiative program. We intend to explore our ability to implement
additional cost reduction initiatives in fiscal 2017 and beyond,
including in connection with our natural gas filtration business based
upon expected continued top-line headwinds in that market, and we
anticipate providing further updates regarding cost reduction
initiatives in our fourth quarter earnings release. However, despite
recent challenges in the global oil & gas industry, we continue to
remain excited about the long-term growth prospects of our natural gas
filtration business. Natural gas continues to be the most prevalent,
clean-burning fossil fuel, and we believe its share of global energy
consumption should continue to grow for several decades. We believe our
natural gas filtration business will benefit from this anticipated
global energy trend.”
Update on Strategic Initiatives
Chris Conway, CLARCOR’s Chairman, President and Chief Executive Officer,
further commented, “We are excited about our entry into a ten-year
strategic supply and development arrangement with GE, under which we
will supply GE with 100% of its requirements for filters and SmartParts
for GE’s advanced technology H-class gas turbines and a majority of GE’s
requirements for certain other gas turbine platforms, while
simultaneously serving as the sole developer of the next-generation air
inlet filtration system for the H-class gas turbine. We believe this
long-term arrangement with a market-leading company like GE illustrates
our advancement as a filtration technology solution provider and is
indicative of the benefits that we expect to derive from our increased
investments in technology and innovation.
“In addition to deepening our ties and working closely with GE to
develop a new air inlet filtration system for the H-class, we believe we
are getting in on the ground floor as the deployment cycle for the next
generation of advanced technology turbines, the H-class, begins. We
believe this is analogous to the deployment of the F-class twenty plus
years ago. It has been our experience that, for a variety of reasons,
aftermarket sales to heavy-duty gas turbine operators are particularly
sticky, and we believe that this arrangement will increase our
opportunity to be the preferred supplier in the higher margin
aftermarket over the next ten to fifteen years. For this reason, we view
certain pricing concessions that we made for H-class products during the
initial phase of our H-class arrangement as a strategic long-term
investment. While this investment will create certain margin headwinds
for our Industrial Air Group during this initial phase, we believe it is
appropriate in light of the anticipated enhanced opportunity to serve
aftermarket customers in the years to come. Moreover, we anticipate that
the sales under our non-H-class gas turbine supply agreement--which is
at regularly negotiated pricing and also has a ten-year term--will
soften the financial impact of these initial concessions, and that
margins on our first-fit H-class product sales will return to historical
levels once the initial phase of the H-class agreement has ended.
Additional details regarding our deal with GE can be found in our 8-K
filing of this Press Release.
“In the second quarter we completed our acquisition of FibeRio, a
technology company focused on the research, development and
commercialization of advanced filtration media and performance fabrics.
Through this acquisition, we acquired proprietary technology which we
believe will enable us to develop nanofiber and other media solutions
with superior filtration capabilities at lower production costs than
traditional media. We expect this technology will support various growth
initiatives including our development efforts for the next-generation
air inlet filtration system for the GE H-class gas turbine platform. As
a result of our entering into the deal with GE, we have expedited
various FibeRio development and transition activities, and we expect to
accelerate certain costs in 2016 as a result. We believe the FibeRio
acquisition further enhances our progress in becoming a premier
innovative filtration solution provider to customers across our many
diverse filtration end-markets.
“Another significant example of our advancement as a filtration
technology solution provider is our recent release of the Channel Flow
EXOTM product line at our CLARCOR Engine Mobile Group
(“CEMG”). This aftermarket product line includes heavy-duty engine air
intake filtration products that offer our customers a compelling
alternative to the OE first-fit honeycomb filters supplied by a
competitor. The development of this product line is just one example of
our design engineers at our business units working with our
technologists at our CLARCOR Innovation Center to introduce innovative,
new products for our customers. We have released two Channel Flow EXOTM
air intake filters to market in the past several months, and we
anticipate releasing approximately fifty additional air filters to
market over the next eighteen months. We take great pride in offering
our aftermarket distribution customers one of the broadest heavy-duty
engine filtration product lines in the industry, and the introduction of
Channel Flow EXOTM demonstrates our commitment to maintain
this broad product offering.”
2016 Guidance
We are lowering our 2016 financial guidance for consolidated diluted
earnings per share, net sales and operating margin as detailed in the
table following this paragraph. The financial guidance included in the
table below includes the following assumptions:
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2016 diluted earnings per share guidance excludes the impact of the
$27.3 million patent litigation award received in the second quarter
of 2016;
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2016 financial guidance excludes the impact of $2.0 million in upfront
expenses from cost reduction initiatives incurred in the first nine
months of 2016; and
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2016 financial guidance excludes the impact of additional costs we may
incur in the remainder of 2016 related to any potential facility
consolidations or any other restructuring or cost savings initiatives.
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Previous Guidance
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Current Guidance
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Diluted earnings per share
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$2.60 to $2.80
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$2.57 to $2.63
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Net sales ($million)
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$1,375 to $1,415
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$1,380 to $1,390
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Operating margin
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13.9% to 14.5%
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13.7% to 13.9%
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Our estimated 2016 net sales comparison and operating margin by
reporting segment and on a consolidated basis are set forth below. The
financial guidance included in the table below includes the following
assumptions:
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Our 2015 consolidated net sales taken into account in comparing 2016
estimated net sales and 2015 net sales excludes the net sales from the
J.L. Clark business prior to its disposition in 2015;
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Our 2016 operating margin taken into account in comparing 2016
estimated operating margin and 2015 operating margin excludes the
impact of $2.0 million in upfront expenses from cost reduction
initiatives incurred in the first nine months of 2016; and
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Our 2016 operating margin taken into account in comparing 2016
estimated operating margin and 2015 operating margin excludes the
impact of additional costs we may incur in the remainder of 2016
related to any potential facility consolidations or any other
restructuring or cost savings initiatives.
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2016 Estimated
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2016 Estimated
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Sales Decline
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Operating Margin
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Engine/Mobile Filtration
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-3.6% to -3.2%
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18.0% to 18.2%
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Industrial/Environmental Filtration
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-4.4% to -3.9%
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10.6% to 10.8%
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CLARCOR
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-4.0% to -3.6%
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13.7% to 13.9%
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Consolidated net sales guidance for 2016 was lowered from our previous
guidance by approximately $10 million at the mid-point as the result of
anticipated lower net sales in our Industrial/Environmental Filtration
segment primarily as the result of expected continued headwinds in our
natural gas capital vessel filtration market and our industrial air and
liquid filtration product markets. We have lowered our previous guidance
with respect to consolidated operating margin primarily as the result of
an expected decline in our Industrial/Environmental Filtration segment,
which we lowered from 11.3% at the mid-point in our previous guidance to
10.7% at the mid-point in our current guidance. This reduction was
driven by lower anticipated fixed cost absorption in our natural gas
filtration business as a result of lower expected sales, lower
anticipated margin on first-fit gas turbine filtration products, and
higher anticipated allocated research & development expenses pursuant to
the FibeRio acquisition. We have lowered our previous guidance with
respect to operating margin in our Engine/Mobile Filtration segment from
18.3% at the mid-point in our previous guidance to 18.1% at the
mid-point in our current guidance primarily due to anticipated lower
absorption of fixed manufacturing costs.
Our 2016 earnings guidance includes approximately $7.0 million of net
interest and other expense. We project 2016 cash from operations to be
between $220 million and $230 million (excluding after-tax proceeds from
the patent litigation award). We expect capital expenditures to be
between $35 million and $45 million, our effective tax rate to be
between 30.5% and 31.0%, and 49.1 million average diluted shares
outstanding. Our 2016 fiscal calendar contains a fifty-third fiscal
week. This additional week falls in our 2016 fiscal fourth quarter.
CLARCOR will be holding a conference call to discuss the third quarter
2016 results at 10:00 a.m. CT on September 15, 2016. Interested parties
can listen to the conference call at www.clarcor.com
or http://public.viavid.com/index.php?id=120713.
A replay will be available on these websites and also at 877-870-5176 or
858-384-5517 by providing confirmation code 8759479. The replay will be
available through September 29, 2016 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 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 performance and results of operations,
including the anticipated 2016 performance of the Company and each of
its segments, our projections with respect to 2016 sales comparisons and
2016 operating margin for the Company and each of its segments, our
projections with respect to 2016 diluted earnings per share, our
projections with respect to 2016 cash from operations (excluding
after-tax proceeds from the patent litigation settlement), 2016 capital
expenditures, 2016 effective tax rate, 2016 interest expense and 2016
average diluted shares outstanding; statements regarding potential
additional costs we may incur related to any potential facility
consolidations or other restructuring and cost reduction initiatives;
statements regarding strategic investments occurring in connection with
our second quarter acquisition of FibeRio; statements regarding our
expectations with respect to fourth quarter filtration sales to the
large retail customer referenced above; statements regarding our
expectations with respect to net sales into the U.S. independent
aftermarket in our fourth quarter and early fiscal 2017; statements
regarding our expectations with respect to fuel filtration product sales
growth in off-road markets in our fourth quarter and the first half of
fiscal 2017; statements regarding the lack of momentum in our oil & gas
markets; statements regarding our expectations with respect to capital
vessel filtration sales in our fourth quarter and fiscal 2017;
statements regarding our expectation that we are on track to realize in
excess of $20 million in cost savings in fiscal 2016 pursuant to our
cost reduction program; statements regarding our intent to explore our
ability to implement additional cost reduction initiatives in fiscal
2017 and beyond, including in connection with our natural gas filtration
business based upon expected continued top-line headwinds in that
market; statements regarding our expectation that we will provide
further updates regarding cost reduction initiatives in our fourth
quarter earnings release; statements regarding our views regarding the
long-term growth prospects of our natural gas filtration business;
statements regarding our expectations with respect to natural gas’s
share of global energy consumption over the next several decades;
statements regarding our belief that our natural gas filtration business
will benefit from anticipated global energy consumption trends with
respect to natural gas; statements regarding our expectations with
respect to the strategic supply partnership with GE, including the
benefits we expect to derive from our increased investments in
technology and innovation, our belief that we are getting in on the
ground floor as the deployment cycle for the next generation of advanced
technology turbines, the H-class, begins, our belief that this
development is analogous to the deployment of the F-class twenty plus
years ago, our belief that the arrangement with GE will increase our
opportunity to be the preferred supplier in the higher margin
aftermarket over the next ten to fifteen years, our expectation that
certain pricing concessions that we made for H-class products during the
initial phase will create margin headwinds for our Industrial Air Group
during this period, our belief that these pricing concessions are
appropriate in light of the anticipated enhanced opportunity to serve
aftermarket customers in the years to come, our expectation that sales
under our non-H-class gas turbine supply agreement will soften the
financial impact of the pricing concessions noted above, and our
expectation that margins on our first-fit H-class product sales will
return to historical levels once the initial phase of the H-class
agreement has ended; statements regarding our belief that the technology
acquired in connection with the acquisition of FibeRio will enable us to
develop nanofiber and other media solutions with superior filtration
capabilities at lower production costs than traditional media;
statements regarding our expectation that the technology acquired in
connection with the FibeRio acquisition will support various growth
initiatives including our development efforts for the next-generation
air inlet filtration system for the GE H-class gas turbine platform;
statements regarding our expectation that we will incur incremental
costs in 2016 to support FibeRio development and transition efforts;
statements regarding our belief that the FibeRio acquisition further
enhances our progress in becoming a premier innovative filtration
solution provider to customers across our many diverse filtration
end-markets; statements regarding our expectation that we will release
approximately fifty additional air filters to market over the next
eighteen months; 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, but not limited to, risks associated with
global and national macroeconomic pressures, trends with respect to the
health of the markets we serve including with respect to challenging
market conditions in various markets in the Engine/Mobile Filtration
segment and the Industrial/Environmental Filtration segment, our ability
to execute upon long-term strategic growth initiatives, our ability to
execute upon any potential facility consolidations or other cost
reduction and/or restructuring initiatives (including that the costs
associated with such initiatives may be greater than anticipated, that
we may be unable to realize anticipated cost savings or other
contemplated benefits in connection with such initiatives, and that such
initiatives may have an adverse impact on our performance), customer
concentration issues in certain geographic locations and in respect of
certain of our businesses, our ability to integrate the businesses we
have acquired, currency fluctuations, particularly increases or
decreases in the U.S. dollar against other currencies, commodity price
increases and/or limited availability of raw materials and component
products, including steel, compliance costs associated with
environmental laws and regulations, political factors, our international
operations, highly competitive markets, governmental laws and
regulations, potential information systems interruptions and intrusions,
potential global events resulting in instability and unpredictability in
the world’s markets, including financial bailouts of sovereign nations,
political changes, military and terrorist activities, health outbreaks
and other factors, changes in accounting standards or adoption of new
accounting standards, adverse effects of natural disasters, legal
challenges with respect to intellectual property, product liability
exposure, changes in tax rates or exposure to additional income tax
liabilities, potential labor disruptions, the impact on our business and
results of operations from developments related to the potential exit of
the United Kingdom from the European Union, our potential inability to
realize the anticipated benefits of the strategic supply partnership
with GE, the risks discussed in the “Risk Factors” section of the
Company’s Annual Report on Form 10-K for the fiscal year 2015 filed on
January 22, 2016, and other risks 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 or other
statements included in this press release, whether as a result of new
information, future events, changed circumstances or any other reason.
TABLES FOLLOW
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CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS
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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
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(Dollars in thousands, except share data)
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Three Months Ended
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Nine Months Ended
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August 27,
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August 29,
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August 27,
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August 29,
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2016
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2015
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2016
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2015
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Net sales
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|
$
|
331,387
|
|
|
$
|
357,557
|
|
|
$
|
1,012,627
|
|
|
$
|
1,108,479
|
|
|
Cost of sales
|
|
216,986
|
|
|
237,802
|
|
|
675,464
|
|
|
742,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
114,401
|
|
|
119,755
|
|
|
337,163
|
|
|
366,340
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative expenses
|
|
63,703
|
|
|
69,333
|
|
|
200,722
|
|
|
217,782
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
50,698
|
|
|
50,422
|
|
|
136,441
|
|
|
148,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(1,763
|
)
|
|
(1,338
|
)
|
|
(5,744
|
)
|
|
(3,965
|
)
|
|
Interest income
|
|
136
|
|
|
108
|
|
|
395
|
|
|
339
|
|
|
Other, net
|
|
574
|
|
|
5,649
|
|
|
28,022
|
|
|
5,111
|
|
|
|
|
(1,053
|
)
|
|
4,419
|
|
|
22,673
|
|
|
1,485
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
49,645
|
|
|
54,841
|
|
|
159,114
|
|
|
150,043
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
13,861
|
|
|
18,332
|
|
|
48,769
|
|
|
48,224
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
35,784
|
|
|
36,509
|
|
|
110,345
|
|
|
101,819
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling interests, net of tax
|
|
(35
|
)
|
|
(64
|
)
|
|
(79
|
)
|
|
(168
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to CLARCOR Inc.
|
|
$
|
35,749
|
|
|
$
|
36,445
|
|
|
$
|
110,266
|
|
|
$
|
101,651
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Basic
|
|
$
|
0.73
|
|
|
$
|
0.73
|
|
|
$
|
2.26
|
|
|
$
|
2.03
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Diluted
|
|
$
|
0.73
|
|
|
$
|
0.72
|
|
|
$
|
2.25
|
|
|
$
|
2.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding - Basic
|
|
48,653,220
|
|
|
50,099,852
|
|
|
48,723,459
|
|
|
50,188,327
|
|
|
Weighted average number of shares outstanding - Diluted
|
|
49,055,047
|
|
|
50,525,049
|
|
|
49,103,211
|
|
|
50,701,490
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per share
|
|
$
|
0.2200
|
|
|
$
|
0.2000
|
|
|
$
|
0.6600
|
|
|
$
|
0.6000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
|
|
CONSOLIDATED CONDENSED BALANCE SHEETS
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
August 27,
|
|
November 28,
|
|
|
|
2016
|
|
2015
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
119,839
|
|
|
$
|
101,529
|
|
|
Accounts receivable, less allowance for losses of $10,473 and
$14,765, respectively
|
|
234,566
|
|
|
258,280
|
|
|
Inventories
|
|
250,781
|
|
|
274,825
|
|
|
Income taxes receivable
|
|
7,822
|
|
|
3,781
|
|
|
Prepaid expenses and other current assets
|
|
21,106
|
|
|
26,380
|
|
|
Total current assets
|
|
634,114
|
|
|
664,795
|
|
|
|
|
|
|
|
|
Property, plant and equipment, at cost, less accumulated
depreciation of $302,993 and $286,335, respectively
|
|
293,659
|
|
|
301,019
|
|
|
Asset held for sale
|
|
533
|
|
|
533
|
|
|
Goodwill
|
|
506,236
|
|
|
506,265
|
|
|
Acquired intangible assets, less accumulated amortization
|
|
311,946
|
|
|
329,155
|
|
|
Deferred income taxes
|
|
3,046
|
|
|
3,651
|
|
|
Other noncurrent assets
|
|
10,257
|
|
|
13,038
|
|
|
Total assets
|
|
$
|
1,759,791
|
|
|
$
|
1,818,456
|
|
|
LIABILITIES
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
15,243
|
|
|
$
|
7,788
|
|
|
Accounts payable
|
|
84,071
|
|
|
87,546
|
|
|
Accrued liabilities
|
|
84,532
|
|
|
106,410
|
|
|
Income taxes payable
|
|
697
|
|
|
1,956
|
|
|
Total current liabilities
|
|
184,543
|
|
|
203,700
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
302,789
|
|
|
397,368
|
|
|
Long-term pension and postretirement healthcare benefits liabilities
|
|
29,703
|
|
|
31,577
|
|
|
Deferred income taxes
|
|
77,899
|
|
|
64,908
|
|
|
Other long-term liabilities
|
|
14,520
|
|
|
10,438
|
|
|
Total liabilities
|
|
609,454
|
|
|
707,991
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Capital stock
|
|
48,622
|
|
|
49,111
|
|
|
Capital in excess of par value
|
|
903
|
|
|
—
|
|
|
Accumulated other comprehensive loss
|
|
(100,128
|
)
|
|
(88,052
|
)
|
|
Retained earnings
|
|
1,200,221
|
|
|
1,148,510
|
|
|
Total CLARCOR Inc. equity
|
|
1,149,618
|
|
|
1,109,569
|
|
|
Noncontrolling interests
|
|
719
|
|
|
896
|
|
|
Total shareholders' equity
|
|
1,150,337
|
|
|
1,110,465
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
1,759,791
|
|
|
$
|
1,818,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
|
|
CONSOLIDATED CONDENSED CASH FLOWS
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
August 27, 2016
|
|
August 29, 2015
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net earnings
|
|
$
|
110,345
|
|
|
$
|
101,819
|
|
|
Depreciation
|
|
25,503
|
|
|
23,133
|
|
|
Amortization
|
|
18,465
|
|
|
19,282
|
|
|
Other noncash items
|
|
(4,533
|
)
|
|
(304
|
)
|
|
Net loss (gain) on disposition of assets
|
|
754
|
|
|
(2,132
|
)
|
|
Net gain on disposal of J.L. Clark
|
|
—
|
|
|
(12,132
|
)
|
|
Impairment of investments
|
|
—
|
|
|
6,729
|
|
|
Stock-based compensation expense
|
|
5,126
|
|
|
7,722
|
|
|
Excess tax benefit from stock-based compensation
|
|
(1,919
|
)
|
|
(1,138
|
)
|
|
Changes in assets and liabilities
|
|
54,829
|
|
|
(41,716
|
)
|
|
Net cash provided by operating activities
|
|
208,570
|
|
|
101,263
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Restricted cash
|
|
(217
|
)
|
|
—
|
|
|
Business acquisitions, net of cash acquired
|
|
(19,299
|
)
|
|
(20,881
|
)
|
|
J.L. Clark disposition, net of cash divested
|
|
—
|
|
|
47,103
|
|
|
Additions to plant assets
|
|
(18,104
|
)
|
|
(51,273
|
)
|
|
Proceeds from disposition of plant assets
|
|
775
|
|
|
7,322
|
|
|
Investment in affiliates
|
|
—
|
|
|
(525
|
)
|
|
Net cash used in investing activities
|
|
(36,845
|
)
|
|
(18,254
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Net payments on revolving credit facility
|
|
(82,000
|
)
|
|
—
|
|
|
Payments on term loan facility
|
|
(5,000
|
)
|
|
—
|
|
|
Payments on long-term debt
|
|
(226
|
)
|
|
(8,600
|
)
|
|
Sale of capital stock under stock option and employee purchase plans
|
|
30,202
|
|
|
6,441
|
|
|
Acquisition of noncontrolling interest
|
|
—
|
|
|
(1,239
|
)
|
|
Payments for repurchase of common stock
|
|
(65,402
|
)
|
|
(30,196
|
)
|
|
Excess tax benefit from stock-based compensation
|
|
1,919
|
|
|
1,138
|
|
|
Dividend paid to noncontrolling interests
|
|
(172
|
)
|
|
(206
|
)
|
|
Cash dividends paid
|
|
(32,201
|
)
|
|
(30,141
|
)
|
|
Net cash used in financing activities
|
|
(152,880
|
)
|
|
(62,803
|
)
|
|
Net effect of exchange rate changes on cash
|
|
(535
|
)
|
|
(2,090
|
)
|
|
Net change in cash and cash equivalents
|
|
18,310
|
|
|
18,116
|
|
|
Cash and cash equivalents, beginning of period
|
|
101,529
|
|
|
94,064
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
119,839
|
|
|
$
|
112,180
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
Interest
|
|
$
|
5,055
|
|
|
$
|
3,738
|
|
|
Income taxes, net of refunds
|
|
$
|
37,576
|
|
|
$
|
48,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
|
|
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
August 27,
|
|
August 29,
|
|
August 27,
|
|
August 29,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net sales by segment:
|
|
|
|
|
|
|
|
|
|
Engine/Mobile Filtration
|
|
$
|
144,710
|
|
|
$
|
151,734
|
|
|
$
|
433,283
|
|
|
$
|
457,482
|
|
|
Industrial/Environmental Filtration
|
|
186,677
|
|
|
200,496
|
|
|
579,344
|
|
|
610,088
|
|
|
Packaging
|
|
—
|
|
|
5,327
|
|
|
—
|
|
|
40,909
|
|
|
|
|
$
|
331,387
|
|
|
$
|
357,557
|
|
|
$
|
1,012,627
|
|
|
$
|
1,108,479
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit by segment:
|
|
|
|
|
|
|
|
|
|
Engine/Mobile Filtration
|
|
$
|
29,337
|
|
|
$
|
27,728
|
|
|
$
|
77,904
|
|
|
$
|
83,038
|
|
|
Industrial/Environmental Filtration
|
|
21,361
|
|
|
22,765
|
|
|
58,537
|
|
|
63,377
|
|
|
Packaging
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
2,143
|
|
|
|
|
$
|
50,698
|
|
|
$
|
50,422
|
|
|
$
|
136,441
|
|
|
$
|
148,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin by segment:
|
|
|
|
|
|
|
|
|
|
Engine/Mobile Filtration
|
|
20.3
|
%
|
|
18.3
|
%
|
|
18.0
|
%
|
|
18.2
|
%
|
|
Industrial/Environmental Filtration
|
|
11.4
|
%
|
|
11.4
|
%
|
|
10.1
|
%
|
|
10.4
|
%
|
|
Packaging
|
|
—
|
%
|
|
(1.3
|
)%
|
|
—
|
%
|
|
5.2
|
%
|
|
|
|
15.3
|
%
|
|
14.1
|
%
|
|
13.5
|
%
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
Reconciliation
of Third Quarter 2016 GAAP Financial Results to Non-GAAP Adjusted Results
In addition to the GAAP results, this earnings release presents
information with respect to non-GAAP cost of sales, non-GAAP gross
profit, non-GAAP selling and administrative expenses, non-GAAP operating
profit, non-GAAP other, net, non-GAAP other income (expense), non-GAAP
earnings before income taxes, non-GAAP provision for income taxes,
non-GAAP net earnings, non-GAAP basic and diluted earnings per share,
non-GAAP gross margin percentage, non-GAAP selling and administrative
expenses as a percentage of net sales and non-GAAP operating margin, for
the quarter ended August 27, 2016. 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 these non-GAAP measures are cost of sales, gross
profit, selling and administrative expenses, operating profit, other,
net, other income (expense), earnings before income taxes, provision for
income taxes, net earnings, basic and diluted earnings per share, gross
margin percentage, selling and administrative expenses as a percentage
of net sales and operating margin, respectively.
The quarter ended August 27, 2016 non-GAAP financial measures provided
in this release exclude upfront expenses for cost reduction initiatives.
Although these financial measures excluding this item in the quarter
ended August 27, 2016 are not measures 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. In addition,
the Company believes that removing the impact of this item provides a
more comparable measure of the changes in these financial measures for
the quarter ended August 27, 2016 compared to the quarter ended August
29, 2015.
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
Upfront
|
|
Third Quarter
|
|
|
|
|
|
Expenses for
|
|
2016 Non-
|
|
|
|
Third Quarter
|
|
Cost Reduction
|
|
GAAP
|
|
(Dollars in thousands, except per share data)
|
|
2016 GAAP
|
|
Initiatives
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
331,387
|
|
|
$
|
—
|
|
|
$
|
331,387
|
|
|
Cost of sales
|
|
216,986
|
|
|
(280
|
)
|
1
|
216,706
|
|
|
Gross profit
|
|
114,401
|
|
|
280
|
|
|
114,681
|
|
|
Selling and administrative expenses
|
|
63,703
|
|
|
384
|
|
1
|
64,087
|
|
|
Operating profit
|
|
50,698
|
|
|
(104
|
)
|
|
50,594
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
Interest expense
|
|
(1,763
|
)
|
|
—
|
|
|
(1,763
|
)
|
|
Interest income
|
|
136
|
|
|
—
|
|
|
136
|
|
|
Other, net
|
|
574
|
|
|
—
|
|
|
574
|
|
|
|
|
(1,053
|
)
|
|
—
|
|
|
(1,053
|
)
|
|
Earnings before income taxes
|
|
49,645
|
|
|
(104
|
)
|
|
49,541
|
|
|
Provision for income taxes
|
|
13,861
|
|
|
(36
|
)
|
|
13,825
|
|
|
Net earnings
|
|
35,784
|
|
|
(68
|
)
|
|
35,716
|
|
|
Net earnings attributable to noncontrolling interests, net of tax
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|
Net earnings attributable to CLARCOR Inc.
|
|
$
|
35,749
|
|
|
$
|
(68
|
)
|
|
$
|
35,681
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Basic
|
|
$
|
0.73
|
|
|
$
|
0.00
|
|
|
$
|
0.73
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Diluted
|
|
$
|
0.73
|
|
|
$
|
0.00
|
|
|
$
|
0.73
|
|
|
Gross margin percentage
|
|
34.5
|
%
|
|
0.1
|
%
|
|
34.6
|
%
|
|
Selling and administrative expenses as a percentage of net sales
|
|
19.2
|
%
|
|
0.1
|
%
|
|
19.3
|
%
|
|
Operating margin
|
|
15.3
|
%
|
|
0.0
|
%
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
1 - Upfront expenses for cost reduction initiatives incurred in
the third quarter of 2016 as noted above.
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
Reconciliation
of Third Quarter 2015 GAAP Financial Results to Non-GAAP Adjusted Results
In addition to the GAAP results, this earnings release presents
information with respect to non-GAAP net sales, non-GAAP cost of sales,
non-GAAP gross profit, non-GAAP selling and administrative expenses,
non-GAAP operating profit, non-GAAP other, net, non-GAAP other income
(expense), non-GAAP earnings before income taxes, non-GAAP provision for
income taxes, non-GAAP net earnings, non-GAAP basic and diluted earnings
per share, non-GAAP gross margin percentage, non-GAAP selling and
administrative expenses as a percentage of net sales and non-GAAP
operating margin, for the quarter ended August 29, 2015. 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 these non-GAAP measures are net
sales, cost of sales, gross profit, selling and administrative expenses,
operating profit, other, net, other income (expense), earnings before
income taxes, provision for income taxes, net earnings, basic and
diluted earnings per share, gross margin percentage, selling and
administrative expenses as a percentage of net sales and operating
margin, respectively.
The quarter ended August 29, 2015 non-GAAP financial measures provided
in this release exclude the financial results of our J.L. Clark
packaging business disposed of during the third quarter of 2015, a net
gain on the sale of such packaging business, and an impairment loss
related to our BioProcess H2O and Algae investments. Although these
financial measures excluding these items are not measures 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.
In addition, the Company believes that removing the impact of the
financial results of these items provides a more comparable measure of
the changes in these financial measures for the quarter ended August 29,
2015 compared to the quarter ended August 27, 2016.
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
J.L. Clark
|
|
|
|
Third Quarter
|
|
|
|
|
|
Results and
|
|
BioProcess
|
|
2015 Non-
|
|
|
|
Third Quarter
|
|
Gain on
|
|
Investment
|
|
GAAP
|
|
(Dollars in thousands, except per share data)
|
|
2015 GAAP
|
|
Disposition
|
|
Impairment
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
357,557
|
|
|
$
|
(5,327
|
)
|
1
|
$
|
—
|
|
|
$
|
352,230
|
|
|
Cost of sales
|
|
237,802
|
|
|
(4,588
|
)
|
1
|
—
|
|
|
233,214
|
|
|
Gross profit
|
|
119,755
|
|
|
(739
|
)
|
|
—
|
|
|
119,016
|
|
|
Selling and administrative expenses
|
|
69,333
|
|
|
(810
|
)
|
1
|
—
|
|
|
68,523
|
|
|
Operating profit
|
|
50,422
|
|
|
71
|
|
|
—
|
|
|
50,493
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(1,338
|
)
|
|
—
|
|
|
—
|
|
|
(1,338
|
)
|
|
Interest income
|
|
108
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
Other, net
|
|
5,649
|
|
|
(12,131
|
)
|
2
|
6,729
|
|
|
247
|
|
|
|
|
4,419
|
|
|
(12,131
|
)
|
|
6,729
|
|
|
(983
|
)
|
|
Earnings before income taxes
|
|
54,841
|
|
|
(12,060
|
)
|
|
6,729
|
|
|
49,510
|
|
|
Provision for income taxes
|
|
18,332
|
|
|
(4,339
|
)
|
|
2,355
|
|
|
16,348
|
|
|
Net earnings
|
|
36,509
|
|
|
(7,721
|
)
|
|
4,374
|
|
|
33,162
|
|
|
Net earnings attributable to noncontrolling interests, net of tax
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
Net earnings attributable to CLARCOR Inc.
|
|
$
|
36,445
|
|
|
$
|
(7,721
|
)
|
|
$
|
4,374
|
|
|
$
|
33,098
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Basic
|
|
$
|
0.73
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.09
|
|
|
$
|
0.66
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Diluted
|
|
$
|
0.72
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.09
|
|
|
$
|
0.66
|
|
|
Gross margin percentage
|
|
33.5
|
%
|
|
0.3
|
%
|
|
0.0
|
%
|
|
33.8
|
%
|
|
Selling and administrative expenses as a percentage of net sales
|
|
19.4
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
|
19.5
|
%
|
|
Operating margin
|
|
14.1
|
%
|
|
0.2
|
%
|
|
0.0
|
%
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 - Third quarter 2015 results for J.L. Clark through disposition
date of June 27, 2015 (approximately one month of operations
during the third quarter of 2015).
|
|
2 - Net gain on third quarter 2015 disposition of J.L. Clark.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
Reconciliation
of First Nine Months 2016 GAAP Financial Results to Non-GAAP Adjusted
Results
In addition to the GAAP results, this earnings release presents
information with respect to non-GAAP cost of sales, non-GAAP gross
profit, non-GAAP selling and administrative expenses, non-GAAP operating
profit, non-GAAP other, net, non-GAAP other income (expense), non-GAAP
earnings before income taxes, non-GAAP provision for income taxes,
non-GAAP net earnings, non-GAAP basic and diluted earnings per share,
non-GAAP gross margin percentage, non-GAAP selling and administrative
expenses as a percentage of net sales and non-GAAP operating margin, for
the first nine months ended August 27, 2016. 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 these non-GAAP measures are cost of sales,
gross profit, selling and administrative expenses, operating profit,
other, net, other income (expense), earnings before income taxes,
provision for income taxes, net earnings, basic and diluted earnings per
share, gross margin percentage, selling and administrative expenses as a
percentage of net sales and operating margin, respectively.
The first nine months ended August 27, 2016 non-GAAP financial measures
provided in this release exclude the patent litigation award received
from 3M Company, upfront expenses for cost reduction initiatives
including lease termination payments related to our exit of a natural
gas filtration vessel manufacturing facility in Australia, costs
associated with the exit of an HVAC filtration facility in the U.S., and
severance and other employee termination benefit costs pursuant to
reductions in force. Although these financial measures excluding these
items are not measures 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. In addition, the Company believes
that removing the impact of these items provides a more comparable
measure of the changes in these financial measures for the first nine
months ended August 27, 2016 compared to the first nine months ended
August 29, 2015.
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upfront
|
|
First Nine
|
|
|
|
First Nine
|
|
Patent
|
|
Expenses for
|
|
Months 2016
|
|
|
|
Months 2016
|
|
Litigation
|
|
Cost Reduction
|
|
Non-GAAP
|
|
(Dollars in thousands, except per share data)
|
|
GAAP
|
|
Award
|
|
Initiatives
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,012,627
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,012,627
|
|
|
Cost of sales
|
|
675,464
|
|
|
—
|
|
|
(2,181
|
)
|
1
|
673,283
|
|
|
Gross profit
|
|
337,163
|
|
|
—
|
|
|
2,181
|
|
|
339,344
|
|
|
Selling and administrative expenses
|
|
200,722
|
|
|
—
|
|
|
144
|
|
1
|
200,866
|
|
|
Operating profit
|
|
136,441
|
|
|
—
|
|
|
2,037
|
|
|
138,478
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(5,744
|
)
|
|
—
|
|
|
—
|
|
|
(5,744
|
)
|
|
Interest income
|
|
395
|
|
|
—
|
|
|
—
|
|
|
395
|
|
|
Other, net
|
|
28,022
|
|
|
(27,250
|
)
|
|
—
|
|
|
772
|
|
|
|
|
22,673
|
|
|
(27,250
|
)
|
|
—
|
|
|
(4,577
|
)
|
|
Earnings before income taxes
|
|
159,114
|
|
|
(27,250
|
)
|
|
2,037
|
|
|
133,901
|
|
|
Provision for income taxes
|
|
48,769
|
|
|
(9,102
|
)
|
|
713
|
|
|
40,380
|
|
|
Net earnings
|
|
110,345
|
|
|
(18,148
|
)
|
|
1,324
|
|
|
93,521
|
|
|
Net earnings attributable to noncontrolling interests, net of tax
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
Net earnings attributable to CLARCOR Inc.
|
|
$
|
110,266
|
|
|
$
|
(18,148
|
)
|
|
$
|
1,324
|
|
|
$
|
93,442
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Basic
|
|
$
|
2.26
|
|
|
$
|
(0.37
|
)
|
|
$
|
0.03
|
|
|
$
|
1.92
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Diluted
|
|
$
|
2.25
|
|
|
$
|
(0.37
|
)
|
|
$
|
0.03
|
|
|
$
|
1.90
|
|
|
Gross margin percentage
|
|
33.3
|
%
|
|
0.0
|
%
|
|
0.2
|
%
|
|
33.5
|
%
|
|
Selling and administrative expenses as a percentage of net sales
|
|
19.8
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
19.8
|
%
|
|
Operating margin
|
|
13.5
|
%
|
|
0.0
|
%
|
|
0.2
|
%
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 - Upfront expenses for cost reduction initiatives incurred in
the first nine months of 2016 as noted above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARCOR INC. 2016 UNAUDITED THIRD QUARTER RESULTS, continued
Reconciliation
of First Nine Months 2015 GAAP Financial Results to Non-GAAP Adjusted
Results
In addition to the GAAP results, this earnings release presents
information with respect to non-GAAP net sales, non-GAAP cost of sales,
non-GAAP gross profit, non-GAAP selling and administrative expenses,
non-GAAP operating profit, non-GAAP other, net, non-GAAP other income
(expense), non-GAAP earnings before income taxes, non-GAAP provision for
income taxes, non-GAAP net earnings, non-GAAP basic and diluted earnings
per share, non-GAAP gross margin percentage, non-GAAP selling and
administrative expenses as a percentage of net sales and non-GAAP
operating margin, for the first nine months ended August 29, 2015. 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 these non-GAAP
measures are net sales, cost of sales, gross profit, selling and
administrative expenses, operating profit, other, net, other income
(expense), earnings before income taxes, provision for income taxes, net
earnings, basic and diluted earnings per share, gross margin percentage,
selling and administrative expenses as a percentage of net sales and
operating margin, respectively.
The first nine months ended August 29, 2015 non-GAAP financial measures
provided in this release exclude the financial results of our J.L. Clark
packaging business disposed of during the third quarter of 2015, a net
gain on the sale of such packaging business recognized in the third
quarter of 2015, and an impairment loss related to our BioProcess H2O
and Algae investments recognized in the third quarter of 2015. Although
these financial measures excluding these items are not measures 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. In addition, the Company believes that removing the impact
of these items provides a more comparable measure of the changes in
these financial measures for the first nine months ended August 29, 2015
compared to the first nine months ended August 27, 2016.
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
J.L. Clark
|
|
|
|
First Nine
|
|
|
|
First Nine
|
|
Results and
|
|
BioProcess
|
|
Months 2015
|
|
|
|
Months 2015
|
|
Gain on
|
|
Investment
|
|
Non-GAAP
|
|
(Dollars in thousands, except per share data)
|
|
GAAP
|
|
Disposition
|
|
Impairment
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,108,479
|
|
|
$
|
(40,909
|
)
|
1
|
$
|
—
|
|
|
$
|
1,067,570
|
|
|
Cost of sales
|
|
742,139
|
|
|
(33,954
|
)
|
1
|
—
|
|
|
708,185
|
|
|
Gross profit
|
|
366,340
|
|
|
(6,955
|
)
|
|
—
|
|
|
359,385
|
|
|
Selling and administrative expenses
|
|
217,782
|
|
|
(4,812
|
)
|
1
|
—
|
|
|
212,970
|
|
|
Operating profit
|
|
148,558
|
|
|
(2,143
|
)
|
|
—
|
|
|
146,415
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(3,965
|
)
|
|
—
|
|
|
—
|
|
|
(3,965
|
)
|
|
Interest income
|
|
339
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
Other, net
|
|
5,111
|
|
|
(12,131
|
)
|
2
|
6,729
|
|
|
(291
|
)
|
|
|
|
1,485
|
|
|
(12,131
|
)
|
|
6,729
|
|
|
(3,917
|
)
|
|
Earnings before income taxes
|
|
150,043
|
|
|
(14,274
|
)
|
|
6,729
|
|
|
142,498
|
|
|
Provision for income taxes
|
|
48,224
|
|
|
(5,305
|
)
|
|
2,355
|
|
|
45,274
|
|
|
Net earnings
|
|
101,819
|
|
|
(8,969
|
)
|
|
4,374
|
|
|
97,224
|
|
|
Net earnings attributable to noncontrolling interests, net of tax
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|
Net earnings attributable to CLARCOR Inc.
|
|
$
|
101,651
|
|
|
$
|
(8,969
|
)
|
|
$
|
4,374
|
|
|
$
|
97,056
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Basic
|
|
$
|
2.03
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.09
|
|
|
$
|
1.94
|
|
|
Net earnings per share attributable to CLARCOR Inc. - Diluted
|
|
$
|
2.00
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.09
|
|
|
$
|
1.91
|
|
|
Gross margin percentage
|
|
33.0
|
%
|
|
0.6
|
%
|
|
0.0
|
%
|
|
33.7
|
%
|
|
Selling and administrative expenses as a percentage of net sales
|
|
19.6
|
%
|
|
0.3
|
%
|
|
0.0
|
%
|
|
19.9
|
%
|
|
Operating margin
|
|
13.4
|
%
|
|
0.3
|
%
|
|
0.0
|
%
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 - 2015 financial results for J.L. Clark through disposition date
of June 27, 2015 (approximately seven months of operations during
this nine month period).
|
|
2 - Net gain on third quarter 2015 disposition of J.L. Clark.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160914006412/en/ Copyright Business Wire 2016
Source: Business Wire
(September 14, 2016 - 5:50 PM EDT)
News by QuoteMedia
www.quotemedia.com
|
