##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 QUARTERLY REPORT
 Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 For
the quarter ended June 2, 2007
 REGISTRANT: CLARCOR Inc. (Delaware)




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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURTIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 2, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-11024
 CLARCOR Inc.
  DELAWARE
    
    36-0922490(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 
 615-771-3100
 
 þ o
  þ o o
 o þ




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TABLE OF CONTENTS  Part I  Item 1Part I  Item 2Part I  Item 3. Quantitative and Qualitative Disclosure About Market Risk.Part I  Item 4. Controls and Procedures.Part II  Other InformationItem 1A. Risk FactorsItem 2.    Unregistered Sales of Equity Securities and Use of Proceeds.Item 4.    Submission of Matters to a Vote of Security HoldersItem 6. ExhibitsSIGNATURESCertificationCertificationSection 1350 Certification    Table of Contents  
 Part I  Item 1
 
 June 2,
    
    
    December 2,2007
    
    
    2006(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    24,076
    
    
    $
    29,051Restricted cash
    
    
    266
    
    
    
    1,619Short-term investments
    
    
    
    
    
    
    32,195Accounts receivable, less allowance for losses
of $13,919 for 2007 and $12,548 for 2006
    
    
    162,211
    
    
    
    158,157Inventories:Raw materials
    
    
    50,602
    
    
    
    45,986Work in process
    
    
    20,914
    
    
    
    19,987Finished products
    
    
    70,421
    
    
    
    63,700Total inventories
    
    
    141,937
    
    
    
    129,673Prepaid expenses and other current assets
    
    
    8,968
    
    
    
    8,306Deferred income taxes
    
    
    21,404
    
    
    
    21,339Total current assets
    
    
    358,862
    
    
    
    380,340Plant assets at cost,
    
    
    388,206
    
    
    
    360,477less accumulated depreciation
    
    
    (223,511
    )
    
    
    (213,948
    )164,695
    
    
    
    146,529Goodwill
    
    
    117,194
    
    
    
    116,032Acquired intangibles, less accumulated amortization
    
    
    53,825
    
    
    
    53,001Pension assets
    
    
    20,429
    
    
    
    19,851Deferred income taxes
    
    
    829
    
    
    
    829Other noncurrent assets
    
    
    11,240
    
    
    
    10,934Total assets
    
    $
    727,074
    
    
    $
    727,516LIABILITIESCurrent liabilities:Current portion of long-term debt
    
    $
    58
    
    
    $
    58Accounts payable
    
    
    55,132
    
    
    
    50,273Accrued salaries, wages and commissions
    
    
    8,660
    
    
    
    14,147Compensated absences
    
    
    7,378
    
    
    
    7,333Accrued insurance liabilities
    
    
    14,013
    
    
    
    11,799Other accrued liabilities
    
    
    28,542
    
    
    
    23,577Income taxes
    
    
    11,753
    
    
    
    11,241Total current liabilities
    
    
    125,536
    
    
    
    118,428Long-term debt, less current portion
    
    
    17,112
    
    
    
    15,946Postretirement health care benefits
    
    
    3,871
    
    
    
    4,466Long-term pension liabilities
    
    
    19,256
    
    
    
    17,476Deferred income taxes
    
    
    26,822
    
    
    
    27,159Other long-term liabilities
    
    
    6,230
    
    
    
    4,876Minority interests
    
    
    2,944
    
    
    
    1,656Total liabilities
    
    
    201,771
    
    
    
    190,007ContingenciesSHAREHOLDERS EQUITYCapital stock
    
    
    49,793
    
    
    
    51,082Capital in excess of par value
    
    
    675
    
    
    
    3,400Accumulated other comprehensive earnings
    
    
    935
    
    
    
    103Retained earnings
    
    
    473,900
    
    
    
    482,924Total shareholders equity
    
    
    525,303
    
    
    
    537,509Total liabilities and shareholders equity
    
    $
    727,074
    
    
    $
    727,516




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##### Table of Contents



Quarter Ended
    
    
    Six Months EndedJune 2,
    
    
    June 3,
    
    
    June 2,
    
    
    June 3,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    235,125
    
    
    $
    227,076
    
    
    $
    444,655
    
    
    $
    440,259Cost of sales
    
    
    164,356
    
    
    
    159,959
    
    
    
    312,906
    
    
    
    309,368Gross profit
    
    
    70,769
    
    
    
    67,117
    
    
    
    131,749
    
    
    
    130,891Selling and administrative expenses
    
    
    39,269
    
    
    
    40,896
    
    
    
    76,668
    
    
    
    78,797Operating profit
    
    
    31,500
    
    
    
    26,221
    
    
    
    55,081
    
    
    
    52,094Other income (expense):Interest expense
    
    
    (259
    )
    
    
    (202
    )
    
    
    (495
    )
    
    
    (390
    )Interest income
    
    
    295
    
    
    
    426
    
    
    
    969
    
    
    
    726Other, net
    
    
    (69
    )
    
    
    (159
    )
    
    
    (246
    )
    
    
    (312
    )(33
    )
    
    
    65
    
    
    
    228
    
    
    
    24Earnings before income taxes and
minority interests
    
    
    31,467
    
    
    
    26,286
    
    
    
    55,309
    
    
    
    52,118Provision for income taxes
    
    
    10,461
    
    
    
    9,332
    
    
    
    17,879
    
    
    
    18,852Earnings before minority interests
    
    
    21,006
    
    
    
    16,954
    
    
    
    37,430
    
    
    
    33,266Minority interests in earnings of subsidiaries
    
    
    (77
    )
    
    
    (149
    )
    
    
    (128
    )
    
    
    (260
    )Net earnings
    
    $
    20,929
    
    
    $
    16,805
    
    
    $
    37,302
    
    
    $
    33,006Net earnings per common share:Basic
    
    $
    $0.41
    
    
    $
    0.32
    
    
    $
    $0.73
    
    
    $
    0.64Diluted
    
    $
    $0.41
    
    
    $
    0.32
    
    
    $
    $0.73
    
    
    $
    0.63Average number of common shares outstanding:Basic
    
    
    50,459,481
    
    
    
    52,006,685
    
    
    
    50,801,230
    
    
    
    51,902,894Diluted
    
    
    50,950,931
    
    
    
    52,817,895
    
    
    
    51,355,724
    
    
    
    52,629,923Dividends paid per share
    
    $
    0.0725
    
    
    $
    0.0675
    
    
    $
    0.1450
    
    
    $
    0.1350




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Six Months EndedJune 2,
    
    
    June 3,2007
    
    
    2006Cash flows from operating activities:Net earnings
    
    $
    37,302
    
    
    $
    33,006Depreciation
    
    
    10,965
    
    
    
    10,846Amortization
    
    
    1,380
    
    
    
    1,079Stock-based compensation expense
    
    
    2,053
    
    
    
    1,422Excess tax benefits from stock-based compensation
    
    
    (2,047
    )
    
    
    (2,992
    )Changes in short-term investments
    
    
    32,195
    
    
    
    (17,450
    )Changes in assets and liabilities, excluding short-term
investments
    
    
    (1,215
    )
    
    
    (7,543
    )Other, net
    
    
    743
    
    
    
    159Net cash provided by operating activities
    
    
    81,376
    
    
    
    18,527Cash flows from investing activities:Business acquisitions, net of cash acquired
    
    
    (12,254
    )
    
    
    (5,241
    )Additions to plant assets
    
    
    (18,557
    )
    
    
    (7,358
    )Other, net
    
    
    163
    
    
    
    471Net cash used in investing activities
    
    
    (30,648
    )
    
    
    (12,128
    )Cash flows from financing activities:Payments on long-term debt
    
    
    (4,779
    )
    
    
    (372
    )Sale of capital stock under stock option and employee
purchase plans
    
    
    3,282
    
    
    
    4,483Excess tax benefits from stock-based compensation
    
    
    2,047
    
    
    
    2,992Purchase of treasury stock
    
    
    (49,334
    )
    
    
    Cash dividends paid
    
    
    (7,389
    )
    
    
    (7,016
    )Net cash (used in) provided by financing activities
    
    
    (56,173
    )
    
    
    87Net effect of exchange rate changes on cash
    
    
    470
    
    
    
    948Net change in cash and cash equivalents
    
    
    (4,975
    )
    
    
    7,434Cash and cash equivalents, beginning of period
    
    
    29,051
    
    
    
    18,502Cash and cash equivalents, end of period
    
    $
    24,076
    
    
    $
    25,936Cash paid during the period for:Interest
    
    $
    383
    
    
    $
    383Income taxes
    
    $
    15,716
    
    
    $
    17,861




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1.
    
    CONSOLIDATED FINANCIAL STATEMENTSThe consolidated condensed balance sheet as of June 2, 2007, the consolidated condensed
statements of earnings and the consolidated condensed statements of cash flows for the periods
ended June 2, 2007, and June 3, 2006, have been prepared by the Company without audit. The
financial statements have been prepared on the same basis as those in the Companys Annual
Report on Form 10-K for the fiscal year ended December 2, 2006 (2006 Form 10-K). The December 2,
2006 consolidated balance sheet data was derived from the Companys year-end audited financial
statements as presented in the 2006 Form 10-K but does not include all disclosures required by
accounting principles generally accepted in the United States of America. In the opinion of
management, all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows have been made. The
results of operations for the period ended June 2, 2007, are not necessarily indicative of the
operating results for the full year.2.
    
    STOCK-BASED COMPENSATIONThe Company applies the provisions of Statement of Financial Accounting Standards (SFAS) No.
123R, Share-Based Payment (SFAS 123R), which establishes the accounting for stock-based
awards. Under this method, stock-based employee compensation cost is recognized using the
fair-value based method for all awards granted on or after the date of adoption. The Company
issues stock option awards, restricted share unit awards and restricted stock to non-employee
directors under its stock-based incentive plans. The fair value of each option grant is
estimated on the date of grant using the Black-Scholes option pricing model. Compensation cost
related to restricted share units is recorded based on the market price of the Companys common
stock on the grant date. The key provisions of the Companys stock-based incentive plans are
described in Note P of the Companys consolidated financial statements included in the 2006 Form
10-K.The Company recorded pretax compensation expense related to stock options of $872 and $1,510 and
related tax benefits of $290 and $502 for the quarter and six months ended June 2, 2007,
respectively. For the quarter and six months ended June 3, 2006, the Company recorded pretax
compensation expense related to stock options of $606 and $1,017, respectively, and related tax
benefits of $215 and $361, respectively. The Company also recorded $271 and $543 in pretax
compensation expense related to its restricted share units for the quarter and six months ended
June 2, 2007, respectively, and $184 and $405 for the quarter and six months ended June 3, 2006,
respectively. The tax benefits associated with tax deductions that exceed the amount of
compensation expense recognized in the financial statements related to stock-based compensation
were $224 and $2,047 for the quarter and six months ended June 2, 2007, respectively, and $2,088
and $2,992 for the quarter and six months ended June 3, 2006, respectively.
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2.
    
    STOCK-BASED COMPENSATION (Continued)Stock OptionsThe following table summarizes the activity for the six months ended June 2, 2007, with respect
to non-qualified stock options granted under the Companys incentive plans.
 Shares Grantedunder Incentive
    
    Weighted AveragePlans
    
    Exercise PriceOutstanding at beginning of year
    
    
    3,253,059
    
    
    $
    21.56Granted
    
    
    448,200
    
    
    
    29.80Exercised
    
    
    (372,408
    )
    
    
    18.17Surrendered
    
    
    (9,100
    )
    
    
    23.18Outstanding at June 2, 2007
    
    
    3,319,751
    
    
    $
    23.56Options exercisable at June 2, 2007
    
    
    2,818,301
    
    
    $
    22.14
 The total intrinsic value of options exercised during the six months ended June 2, 2007, and
June 3, 2006, was $5,880 and $8,888, respectively. The weighted average fair value per option at
the date of grant for options granted during the six months ended June 2, 2007, and June 3,
2006, was $9.32 and $10.71, respectively.The following table summarizes information about the Companys outstanding and exercisable
options at June 2, 2007.
 Options Outstanding
    
    Options ExercisableWeighted Average
    
    
    
    
    
    
    
    
    
    Weighted AverageRange of Exercise
    
    
    
    
    
    Weighted Average
    
    Remaining Life in
    
    
    
    
    
    Weighted Average
    
    Remaining Life inPrices
    
    Number
    
    Exercise Price
    
    Years
    
    Number
    
    Exercise Price
    
    Years$8.97 - $9.79
    
    
    274,676
    
    
    $
    9.18
    
    
    
    2.51
    
    
    
    274,676
    
    
    $
    9.18
    
    
    
    2.51$10.53 - $13.75
    
    
    227,913
    
    
    
    13.23
    
    
    
    4.29
    
    
    
    227,913
    
    
    
    13.23
    
    
    
    4.29$16.01 - $22.80
    
    
    1,159,689
    
    
    
    20.54
    
    
    
    5.27
    
    
    
    1,059,239
    
    
    
    20.32
    
    
    
    5.15$25.89 - $35.66
    
    
    1,657,473
    
    
    
    29.47
    
    
    
    7.79
    
    
    
    1,256,473
    
    
    
    28.12
    
    
    
    7.213,319,751
    
    
    $
    23.56
    
    
    
    6.23
    
    
    
    2,818,301
    
    
    $
    22.14
    
    
    
    5.75
 At June 2, 2007, the aggregate intrinsic value of options outstanding and exercisable was
$33,345 and $32,302, respectively.Restricted Share Unit AwardsDuring the six months ended June 2, 2007, and June 3, 2006, the Company granted 26,200 and
32,144 restricted units of Company common stock with fair values of $33.75 and $26.08 per unit,
respectively. Compensation expense related to restricted stock awards totaled $271 and $543 for
the quarter and six months ended June 2, 2007, respectively, and $184 and $405 for the quarter
and six months ended June 3, 2006, respectively.
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3.
    
    EARNINGS PER SHARE AND TREASURY STOCK TRANSACTIONSDiluted earnings per share reflects the impact of outstanding stock options and restricted share
units as if exercised during the periods presented using the treasury stock method. The
following table provides a reconciliation of the numerators and denominators utilized in the
calculation of basic and diluted earnings per share.
 Quarter Ended
    
    
    Six Months EndedJune 2,
    
    
    June 3,
    
    
    June 2,
    
    
    June 3,2007
    
    
    2006
    
    
    2007
    
    
    2006Basic weighted average number of
common shares outstanding
    
    
    50,459,481
    
    
    
    52,006,685
    
    
    
    50,801,230
    
    
    
    51,902,894Dilutive effect of stock-based
arrangements
    
    
    491,450
    
    
    
    811,210
    
    
    
    554,494
    
    
    
    727,029Diluted weighted
average number of
common shares
outstanding
    
    
    50,950,931
    
    
    
    52,817,895
    
    
    
    51,355,724
    
    
    
    52,629,923Net earnings
    
    $
    20,929
    
    
    $
    16,805
    
    
    $
    37,302
    
    
    $
    33,006Basic earnings per share amount
    
    $
    0.41
    
    
    $
    0.32
    
    
    $
    0.73
    
    
    $
    0.64Diluted earnings per share amount
    
    $
    0.41
    
    
    $
    0.32
    
    
    $
    0.73
    
    
    $
    0.63
 Options with exercise prices greater than the average market price of the common shares
during the respective quarter and six-month periods were not included in the computation of
diluted earnings per share. For the quarter and six months ended June 2, 2007, 451,700 options
with a weighted average exercise price of $33.98 were excluded from the computation. For the
quarter and six months ended June 3, 2006, 56,300 and 57,550 options with weighted average
exercise prices of $35.57 and $35.53, respectively, were excluded from the computation.For the six months ended June 2, 2007, exercises of stock options added $3,675 to capital in
excess of par value.During the quarter and six months ended June 2, 2007, the Company repurchased and retired
1,550,000 shares of common stock for $49,334. The Company did not repurchase any shares of
common stock during the quarter or six months ended June 3, 2006. At June 2, 2007, there was
approximately $61,300 available for repurchase under the Stock Repurchase Program.4.
    
    COMPREHENSIVE EARNINGSThe Companys total comprehensive earnings and its components are as follows:
 Quarter Ended
    
    
    Six Months EndedJune 2,
    
    
    June 3,
    
    
    June 2,
    
    
    June 3,2007
    
    
    2006
    
    
    2007
    
    
    2006Net earnings
    
    $
    20,929
    
    
    $
    16,805
    
    
    $
    37,302
    
    
    $
    33,006Other comprehensive earnings, net of tax:Foreign currency translation adjustments
    
    
    557
    
    
    
    2,755
    
    
    
    832
    
    
    
    3,560Total comprehensive earnings
    
    $
    21,486
    
    
    $
    19,560
    
    
    $
    38,134
    
    
    $
    36,566
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4.
    
    COMPREHENSIVE EARNINGS (Continued)The components of the ending balances of accumulated other comprehensive earnings are as
follows:
 June 2,
    
    
    December 2,2007
    
    
    2006Minimum pension liability, net of $2,243 tax
    
    $
    (3,778
    )
    
    $
    (3,778
    )Translation adjustments, net of $155 tax
    
    
    4,713
    
    
    
    3,881Accumulated other comprehensive loss
    
    $
    935
    
    
    $
    103
 5.
    
    ACQUISITIONS AND PURCHASE OF MINORITY INTERESTOn March 5, 2007, the Company acquired an 80% ownership share in Sinfa SA, a manufacturer of
automotive and heavy-duty engine filters based in Casablanca, Morocco, for approximately $5,651
in cash, net of cash received, plus debt of approximately $5 million which the Company paid after
the acquisition date. The business is included in the Engine/Mobile Filtration segment from the
date of acquisition and was not material to the results of the Company. As part of the purchase
agreement, the Company and the minority owners have an option to trigger the purchase of the
remaining 20% ownership share by the Company after December 2012. As of the end of the second
quarter, the purchase price for such 20% ownership share is estimated to be $2 million.As of the quarter ended June 2, 2007, an independent appraisal of the assets of Sinfa SA has not
been completed. In addition, the purchase price was based on a preliminary balance sheet as of
the acquisition date and has not been finalized with the sellers. An allocation of the final
purchase price to major categories of assets and liabilities will be completed once the
appraisal has been completed and the purchase price and assumed liabilities are finalized. This
is expected to occur during fiscal 2007.During February 2007, the Company acquired a synthetic fibers filtration business from Newton
Tool & Mfg. Company, Inc., a privately-owned engineering and machining company based in
Swedesboro, New Jersey, for $6,603 in cash, including acquisition expenses. The synthetic fibers
filtration business, including all of the related production equipment, will be moved into the
Companys operations in Houston, Texas, and Shelby, North Carolina. The business is included in
the Industrial/Environmental Filtration segment from the date of acquisition.A preliminary allocation of the initial purchase price for the acquisition has been made to
major categories of assets and liabilities. The $715 excess of the initial purchase price over
the preliminary estimated fair value of the net tangible and identifiable intangible assets
acquired was recorded as goodwill. Other acquired intangibles included noncompete agreements
valued at $100 and customer relationships valued at $2,100, which will be amortized on a
straight-line basis over three years and thirteen years, respectively. The preliminary
allocation will be finalized when the Company completes an independent appraisal of the assets
acquired and finalizes the purchase price with the sellers. The
Company expects to finalize the purchase price allocation during fiscal 2007. The
acquisition is not material to the results of the Company.
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5.
    
    ACQUISITIONS AND PURCHASE OF MINORITY INTEREST (Continued)In April 2006, the Company acquired two businesses for approximately $2,957 in cash, net of cash
received. One was a filter distributorship based in Minnesota which became a wholly-owned
subsidiary of the Company and was included in the Industrial/Environmental Filtration segment
beginning in the second quarter of 2006. In the other transaction, the Company acquired certain
assets of a manufacturer and distributor of heavy-duty engine air filters based in Oklahoma.
These assets were combined into an existing subsidiary of the Company within the Engine/Mobile
Filtration segment, and the results were included in the Companys consolidated results of
operations from the date of acquisition. An allocation of the final purchase prices for these
two acquisitions totaling $2,843 was made to major categories of assets and liabilities during
fiscal 2006. The $672 excess of the final purchase price over the estimated fair value of the
net tangible and identifiable intangible assets acquired was recorded as goodwill. Other
acquired intangibles included noncompete agreements valued at $91 and customer relationships
valued at $1,195, which are being amortized on a straight-line basis over three years and ten to
twenty years, respectively. The acquisitions were not material to the results of the
Company.On June 1, 2006, the Company purchased the minority owners interest in a consolidated
affiliate in South Africa for approximately $2,230 of which $1,644 was paid during the second
quarter of 2006. The remainder will be paid during fiscal 2008 based on fiscal 2006 results. In
addition, there may be a payment estimated not to exceed $100 to be paid in 2008 based on fiscal
2007 results. As a result of this transaction, the Company recorded $113 as goodwill. The
purchase was not material to the results of the Company.On November 1, 2005, the Company acquired Martin Kurz & Co., Inc. (MKI), a privately-owned
Mineola, New York, manufacturer of sintered porous metal laminates used in screening and
filtration products for a wide array of industries for approximately $24,621 net of cash
received, including acquisition expenses. During the first six months of 2006, the Company paid
an additional $640 related to a working capital adjustment and final settlement with the
sellers. MKI is included in the Industrial/Environmental Filtration segment from the date of
acquisition. Allocation of the final purchase price to major categories of assets and
liabilities for MKI was finalized during fiscal 2006.6.
    
    ACQUIRED INTANGIBLESThe following table reconciles the activity for goodwill by reporting unit for the six months
ended June 2, 2007.
 Industrial/Engine/ Mobile
    
    
    EnvironmentalFiltration
    
    
    Filtration
    
    
    Packaging
    
    
    TotalBalance at December 2, 2006
    
    $
    16,747
    
    
    $
    99,285
    
    
    $
    
    
    
    $
    116,032Acquisitions
    
    
    
    
    
    
    715
    
    
    
    
    
    
    
    715Currency translation adjustments
    
    
    272
    
    
    
    175
    
    
    
    
    
    
    
    447Balance at June 2, 2007
    
    $
    17,019
    
    
    $
    100,175
    
    
    $
    
    
    
    $
    117,194
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ACQUIRED INTANGIBLES (Continued)
  Industrial/Engine/ Mobile
    
    
    EnvironmentalFiltration
    
    
    Filtration
    
    
    Packaging
    
    
    TotalBalance at June 2, 2007:Trademarks, gross
    
    $
    603
    
    
    $
    29,157
    
    
    $
    
    
    
    $
    29,760Less accumulated amortization
    
    
    
    
    
    
    242
    
    
    
    
    
    
    
    242Trademarks, net
    
    $
    603
    
    
    $
    28,915
    
    
    $
    
    
    
    $
    29,518Customer relationships, gross
    
    $
    1,970
    
    
    $
    18,773
    
    
    $
    
    
    
    $
    20,743Less accumulated amortization
    
    
    480
    
    
    
    2,965
    
    
    
    
    
    
    
    3,445Customer relationships, net
    
    $
    1,490
    
    
    $
    15,808
    
    
    $
    
    
    
    $
    17,298Other acquired intangibles, gross
    
    $
    243
    
    
    $
    12,882
    
    
    $
    
    
    
    $
    13,125Less accumulated amortization
    
    
    222
    
    
    
    5,894
    
    
    
    
    
    
    
    6,116Other acquired intangibles, net
    
    $
    21
    
    
    $
    6,988
    
    
    $
    
    
    
    $
    7,009
  GUARANTEES AND WARRANTIES
    Page 10




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GUARANTEES AND WARRANTIES (Continued)
  Balance at December 2, 2006
    
    $
    1,486Accruals for warranties issued during the period
    
    
    547Accruals related to pre-existing warranties
    
    
    130Settlements made during the period
    
    
    (519
    )Other adjustments, including currency translation
    
    
    (126
    )Balance at June 2, 2007, included in other accrued liabilities
    
    $
    1,518
 RETIREMENT BENEFITS
  Quarter Ended
    
    
    Six Months EndedJune 2,
    
    
    June 3,
    
    
    June 2,
    
    
    June 3,2007
    
    
    2006
    
    
    2007
    
    
    2006Pension Benefits:Components of net periodic benefit
cost:Service cost
    
    $
    725
    
    
    $
    846
    
    
    $
    1,449
    
    
    $
    1,693Interest cost
    
    
    1,794
    
    
    
    1,685
    
    
    
    3,586
    
    
    
    3,368Expected return on plan assets
    
    
    (2,145
    )
    
    
    (1,957
    )
    
    
    (4,288
    )
    
    
    (3,910
    )Amortization of unrecognized:Prior service cost
    
    
    44
    
    
    
    43
    
    
    
    88
    
    
    
    87Net actuarial loss
    
    
    301
    
    
    
    501
    
    
    
    603
    
    
    
    1,003Net periodic benefit cost
    
    $
    719
    
    
    $
    1,118
    
    
    $
    1,438
    
    
    $
    2,241Cash contributions
    
    $
    120
    
    
    $
    125
    
    
    $
    228
    
    
    $
    249Postretirement Healthcare Benefits:Components of net periodic benefit
cost:Service cost
    
    $
    
    
    
    $
    5
    
    
    $
    
    
    
    $
    11Interest cost
    
    
    18
    
    
    
    21
    
    
    
    36
    
    
    
    41Amortization of unrecognized:Prior service cost
    
    
    (31
    )
    
    
    (31
    )
    
    
    (62
    )
    
    
    (62
    )Net actuarial gain
    
    
    (32
    )
    
    
    (26
    )
    
    
    (64
    )
    
    
    (51
    )Net periodic benefit income
    
    $
    (45
    )
    
    $
    (31
    )
    
    $
    (90
    )
    
    $
    (61
    )Cash contributions
    
    $
    70
    
    
    $
    70
    
    
    $
    140
    
    
    $
    140
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RETIREMENT BENEFITS (Continued)
  CONTINGENCIES
     SEGMENT DATA
  Page 12




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##### Table of Contents



SEGMENT DATA (Continued)
 Quarter Ended
    
    
    Six Months EndedJune 2,
    
    
    June 3,
    
    
    June 2,
    
    
    June 3,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales:Engine/Mobile Filtration
    
    $
    108,504
    
    
    $
    101,429
    
    
    $
    205,200
    
    
    $
    192,461Industrial/Environmental Filtration
    
    
    106,185
    
    
    
    103,866
    
    
    
    202,424
    
    
    
    206,522Packaging
    
    
    20,436
    
    
    
    21,781
    
    
    
    37,031
    
    
    
    41,276$
    235,125
    
    
    $
    227,076
    
    
    $
    444,655
    
    
    $
    440,259Operating profit:Engine/Mobile Filtration
    
    $
    24,445
    
    
    $
    22,446
    
    
    $
    44,722
    
    
    $
    41,519Industrial/Environmental Filtration
    
    
    5,498
    
    
    
    1,594
    
    
    
    8,372
    
    
    
    7,079Packaging
    
    
    1,557
    
    
    
    2,181
    
    
    
    1,987
    
    
    
    3,49631,500
    
    
    
    26,221
    
    
    
    55,081
    
    
    
    52,094Other income (expense)
    
    
    (33
    )
    
    
    65
    
    
    
    228
    
    
    
    24Earnings before income taxes and minority earnings
    
    $
    31,467
    
    
    $
    26,286
    
    
    $
    55,309
    
    
    $
    52,118Identifiable assets:Engine/Mobile Filtration
    
    
    
    
    
    
    
    
    
    $
    265,367
    
    
    $
    207,957Industrial/Environmental Filtration
    
    
    
    
    
    
    
    
    
    
    395,403
    
    
    
    370,767Packaging
    
    
    
    
    
    
    
    
    
    
    44,269
    
    
    
    44,018Corporate
    
    
    
    
    
    
    
    
    
    
    22,035
    
    
    
    82,349$
    727,074
    
    
    $
    705,091
  RECENT ACCOUNTING PRONOUNCEMENTS
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RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
     Page 14




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Management Discussion Snapshot(Dollars in Thousands)Second Quarter Ended
    
    Six Months EndedJune 2, 2007
    
    June 3, 2006
    
    % Change
    
    June 2, 2007
    
    June 3, 2006
    
    % ChangeNet Sales
    
    $
    235,125
    
    
    $
    227,076
    
    
    
    3.5
    %
    
    $
    444,655
    
    
    $
    440,259
    
    
    
    1.0
    %Operating Profit
    
    
    31,500
    
    
    
    26,221
    
    
    
    20.1
    %
    
    
    55,081
    
    
    
    52,094
    
    
    
    5.7
    %Operating Margin
    
    
    13.4
    %
    
    
    11.5
    %
    
    1.9 pts.
    
    
    12.4
    %
    
    
    11.8
    %
    
    0.6 pts.Other Income/(Expense)
    
    
    (33
    )
    
    
    65
    
    
    
    (150.8
    )%
    
    
    228
    
    
    
    24
    
    
    
    850.0
    %Provision for Income Taxes
    
    
    10,461
    
    
    
    9,332
    
    
    
    12.1
    %
    
    
    17,879
    
    
    
    18,852
    
    
    
    -5.2
    %Net Earnings
    
    
    20,929
    
    
    
    16,805
    
    
    
    24.5
    %
    
    
    37,302
    
    
    
    33,006
    
    
    
    13.0
    %Diluted Earnings per Share
    
    $
    0.41
    
    
    $
    0.32
    
    
    
    28.1
    %
    
    $
    0.73
    
    
    $
    0.63
    
    
    
    15.9
    %
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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
          Page 16




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
      Page 17




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
         Page 18




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
          Page 19




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
        Page 20




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
     Payments Due by Period(Dollars in thousands)
    
    Total
    
    Less than 1 Year
    
    1-3 Years
    
    3-5 Years
    
    More than 5 YearsLong-Term Debt
    
    $
    17,170
    
    
    $
    58
    
    
    $
    65
    
    
    $
    6
    
    
    $
    17,041Operating Leases
    
    
    46,025
    
    
    
    9,467
    
    
    
    16,804
    
    
    
    9,855
    
    
    
    9,899Total
    
    $
    63,195
    
    
    $
    9,525
    
    
    $
    16,869
    
    
    $
    9,861
    
    
    $
    26,940
    Page 21




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
         th
   Page 22




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
      
    
    statements and assumptions relating to future growth, earnings, earnings per share
and other financial performance measures, as well as managements short-term and
long-term performance goals;
    
    statements relating to the anticipated effects on results of operations or financial
condition from recent and expected developments or events;
    
    statements relating to the Companys business and growth strategies; and
    
    any other statements or assumptions that are not historical facts.
  Page 23




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
   Page 24




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The information required hereunder is set forth on Page 22 of the Quarterly Report under
the captions Managements Discussion and Analysis  Other Matters  Market Risk.
 
  The Company has established disclosure controls and procedures which are designed to ensure
that information required to be disclosed in reports filed or submitted under the Securities
Exchange Act of 1934 are recorded, processed, summarized, and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms. The
Companys management, with the participation of Norman E. Johnson, Chairman of the Board,
President, and Chief Executive Officer and Bruce A. Klein, Vice President  Finance and
Chief Financial Officer, evaluated the effectiveness of the Companys disclosure controls
and procedures as of June 2, 2007. Based on their evaluation, such officers concluded that
the Companys disclosure controls and procedures were effective as of June 2, 2007, in
achieving the objectives for which they were designed. No change in the Companys internal
control over financial reporting occurred during the Companys most recent fiscal quarter
ended June 2, 2007, that has materially affected, or is reasonably likely to materially
affect, the Companys internal control over financial reporting.
 Page 25




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##### Table of Contents



There were no material changes in the risk factors discussed in the Companys 2006 Form
10-K.
 
  On June 17, 2005, the Companys Board of Directors approved a two-year Stock Repurchase
Program, pursuant to which the Company from time to time may purchase up to $150 million
worth of shares of the Companys Common Stock in the open market or through privately
negotiated transactions. The Company has no obligation to repurchase stock under the
program, and the timing, actual number and value of shares to be purchased depend on
market conditions and the Companys then-current liquidity needs. As set forth in the
table below, the Company repurchased 1,550,000 shares during the fiscal quarter ended June
2, 2007, and shares in the amount of $61,295,487 remained available for purchase under
such program at the end of this fiscal quarter.
 COMPANY PURCHASES OF EQUITY SECURITIES (1)(c)
    
    (d)Total number of
    
    Approximate dollarshares purchased as
    
    value of shares(a)
    
    (b)
    
    part of publicly
    
    that may yet beTotal number of
    
    Average price paid
    
    announced plans or
    
    purchased under thePeriod
    
    shares purchased
    
    per share
    
    programs
    
    plans or programsMarch 4, 2007 through March 31,
2007
    
    
    764,200
    
    
    $
    31.75
    
    
    
    764,200
    
    
    $
    86,363,831April 1, 2007 through April 30,
2007
    
    
    785,800
    
    
    $
    31.90
    
    
    
    785,800
    
    
    $
    61,295,487May 1, 2007 through June 2, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    61,295,487Total
    
    
    1,550,000
    
    
    
    
    
    
    
    1,550,000
 
 (1)
    
    Stock Repurchase Program announced June 20, 2005, for aggregate
purchases up to $150 million. Program expired June 16, 2007. The Company expects the
Board of Directors to approve a new stock repurchase program at its meeting on June
25, 2007. 
  At the annual meeting of shareholders of CLARCOR Inc. held on
March 26, 2007, all of The Companys nominees for director,
as listed in the proxy statement dated February 9, 2007, were
elected. The Company had 51,270,695 shares of common stock
outstanding as of the close of business on the February 2,
2007 record date, and the holders of 47,453,752 shares of
common stock were present at the meeting, in person or by
proxy.The three nominees elected received votes as follows:
 For
    
    
    WithheldRobert J. Burgstahler
    
    
    45,099,994
    
    
    
    2,353,758Paul Donovan
    
    
    46,568,626
    
    
    
    885,126Norman E. Johnson
    
    
    46,441,089
    
    
    
    1,012,663
 Page 26




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##### Table of Contents



Part II 
    Other Information (Continued)Item 4.
    
    Submission of Matters to a Vote of Security Holders (Continued)Directors of the Company previously elected by its shareholders and whose terms in office
continued after the annual meeting are Messrs. J. Marc Adam, James W. Bradford, Jr.,
Robert H. Jenkins, Philip R. Lochner, Jr. and James L. Packard.Also at the annual meeting, the shareholders approved the Companys 2007 Value Added
Incentive Plan with a vote of 44,981,287 in favor, 722,332 against and 1,750,127 withheld.
 
 Item 6.
    
    Exhibits
 a.
    
    Exhibits:31(i)
    
    Certification of Norman E. Johnson pursuant to Section 302 of the Sarbanes-Oxley Act of 200231(ii)
    
    Certification of Bruce A. Klein pursuant to Section 302 of the Sarbanes-Oxley Act of 200232(i)
    
    Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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##### Table of Contents



SIGNATURES
  CLARCOR Inc.
(Registrant)June 22, 2007
    By
    /s/ Norman E. Johnson(Date)
    
    Norman E. JohnsonChairman of the Board, President and Chief Executive OfficerJune 22, 2007
    By
    /s/ Bruce A. Klein(Date)
    
    Bruce A. KleinVice President  Finance and Chief Financial Officer Page 28