##### Table of Contents








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##### Table of Contents



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 SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended August 27, 2005
 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.
 (Exact name of registrant as specified in its charter)
 DELAWARE
    
    36-0922490(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)840 Crescent Centre Drive, Suite 600, Franklin, TN
    
    37067(Address of principal executive offices)
    
    (Zip Code)Registrants telephone number, including area code
    
    615-771-3100
 
  þ o
 þ o
 o þ
  51,869,626 common shares outstanding
   Page 1




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TABLE OF CONTENTS  Part I  Item 1Part I  Item 2Part I  Item 3. Quantitative and Qualitative Disclosure About Market RiskPart I  Item 4. Controls and ProceduresPart II  Other InformationItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 6. Exhibits and Reports on Form 8-KSIGNATURECertification of Norman E. JohnsonCertification of Bruce A. KleinCertification    Table of Contents  
 Part I  Item 1
  
 
 August 27,
    
    
    November 30,2005
    
    
    2004(unaudited)ASSETSCurrent assets:Cash and short-term cash investments
    
    $
    46,290
    
    
    $
    22,520Accounts receivable, less allowance for losses
of $10,205 for 2005 and $9,557 for 2004
    
    
    145,961
    
    
    
    143,719Inventories:Raw materials
    
    
    43,729
    
    
    
    39,630Work in process
    
    
    19,343
    
    
    
    14,432Finished products
    
    
    59,172
    
    
    
    61,509Total inventories
    
    
    122,244
    
    
    
    115,571Prepaid expenses and other current assets
    
    
    6,966
    
    
    
    5,111Deferred income taxes
    
    
    16,991
    
    
    
    17,069Total current assets
    
    
    338,452
    
    
    
    303,990Plant assets at cost,
    
    
    346,033
    
    
    
    331,170less accumulated depreciation
    
    
    (202,161
    )
    
    
    (188,928
    )143,872
    
    
    
    142,242Goodwill
    
    
    105,703
    
    
    
    103,174Trademarks
    
    
    29,494
    
    
    
    29,494Customer relationships, less accumulated amortization
    
    
    7,529
    
    
    
    7,845Other acquired intangibles, less accumulated amortization
    
    
    6,700
    
    
    
    7,276Pension assets
    
    
    24,339
    
    
    
    24,574Other noncurrent assets
    
    
    9,372
    
    
    
    9,202$
    665,461
    
    
    $
    627,797LIABILITIESCurrent liabilities:Current portion of long-term debt
    
    $
    186
    
    
    $
    420Accounts payable
    
    
    51,817
    
    
    
    63,605Income taxes
    
    
    14,456
    
    
    
    7,993Accrued employee compensation
    
    
    20,691
    
    
    
    23,768Other accrued liabilities
    
    
    36,572
    
    
    
    30,486Total current liabilities
    
    
    123,722
    
    
    
    126,272Long-term debt, less current portion
    
    
    16,057
    
    
    
    24,130Postretirement health care benefits
    
    
    4,287
    
    
    
    4,380Long-term pension liabilities
    
    
    14,185
    
    
    
    11,256Deferred income taxes
    
    
    26,362
    
    
    
    26,778Other long-term liabilities
    
    
    5,515
    
    
    
    4,874Minority interests
    
    
    2,123
    
    
    
    1,645ContingenciesSHAREHOLDERS EQUITYCapital stock
    
    
    51,870
    
    
    
    25,612Capital in excess of par value
    
    
    29,422
    
    
    
    23,995Accumulated other comprehensive earnings
    
    
    (953
    )
    
    
    1,671Retained earnings
    
    
    392,871
    
    
    
    377,184473,210
    
    
    
    428,462$
    665,461
    
    
    $
    627,797
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##### Table of Contents



Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    216,403
    
    
    $
    206,209
    
    
    $
    632,450
    
    
    $
    580,193Cost of sales
    
    
    149,003
    
    
    
    142,975
    
    
    
    441,945
    
    
    
    404,376Gross profit
    
    
    67,400
    
    
    
    63,234
    
    
    
    190,505
    
    
    
    175,817Selling and administrative expenses
    
    
    36,348
    
    
    
    37,734
    
    
    
    110,820
    
    
    
    108,711Operating profit
    
    
    31,052
    
    
    
    25,500
    
    
    
    79,685
    
    
    
    67,106Other income (expense):Interest expense
    
    
    (164
    )
    
    
    (107
    )
    
    
    (460
    )
    
    
    (334
    )Interest income
    
    
    267
    
    
    
    170
    
    
    
    556
    
    
    
    307Other, net
    
    
    175
    
    
    
    (341
    )
    
    
    (225
    )
    
    
    117278
    
    
    
    (278
    )
    
    
    (129
    )
    
    
    90Earnings before income taxes and
minority interests
    
    
    31,330
    
    
    
    25,222
    
    
    
    79,556
    
    
    
    67,196Provision for income taxes
    
    
    10,292
    
    
    
    9,257
    
    
    
    27,801
    
    
    
    24,527Earnings before minority interests
    
    
    21,038
    
    
    
    15,965
    
    
    
    51,755
    
    
    
    42,669Minority interests in earnings of subsidiaries
    
    
    (183
    )
    
    
    (90
    )
    
    
    (400
    )
    
    
    (219
    )Net earnings
    
    $
    20,855
    
    
    $
    15,875
    
    
    $
    51,355
    
    
    $
    42,450Net earnings per common share:Basic
    
    $
    0.40
    
    
    $
    0.31
    
    
    $
    0.99
    
    
    $
    0.83Diluted
    
    $
    0.40
    
    
    $
    0.31
    
    
    $
    0.98
    
    
    $
    0.82Average number of common shares outstanding:Basic
    
    
    51,866,491
    
    
    
    51,089,976
    
    
    
    51,650,585
    
    
    
    50,908,360Diluted
    
    
    52,678,124
    
    
    
    51,739,014
    
    
    
    52,328,384
    
    
    
    51,560,852Dividends paid per share
    
    $
    0.0638
    
    
    $
    0.0625
    
    
    $
    0.1913
    
    
    $
    0.1875
  Page 3




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##### Table of Contents



Nine Months EndedAugust 27,
    
    
    August 28,2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    51,355
    
    
    $
    42,450Depreciation
    
    
    15,038
    
    
    
    13,822Amortization
    
    
    944
    
    
    
    595Changes in assets and liabilities
    
    
    491
    
    
    
    (11,703
    )Other, net
    
    
    279
    
    
    
    (489
    )Net cash provided by operating activities
    
    
    68,107
    
    
    
    44,675Cash flows from investing activities:Business acquisitions, net of cash acquired
    
    
    (3,512
    )
    
    
    (4,871
    )Additions to plant assets
    
    
    (16,847
    )
    
    
    (15,089
    )Other, net
    
    
    561
    
    
    
    1,969Net cash used in investing activities
    
    
    (19,798
    )
    
    
    (17,991
    )Cash flows from financing activities:Net payments under line of credit
    
    
    (7,500
    )
    
    
    Payments on long-term debt
    
    
    (860
    )
    
    
    (292
    )Cash dividends paid
    
    
    (9,893
    )
    
    
    (9,563
    )Purchase of treasury stock
    
    
    (1,986
    )
    
    
    Other, net
    
    
    (3,677
    )
    
    
    1,101Net cash used in financing activities
    
    
    (23,916
    )
    
    
    (8,754
    )Net effect of exchange rate changes on cash
    
    
    (623
    )
    
    
    3Net change in cash and short-term cash investments
    
    
    23,770
    
    
    
    17,933Cash and short-term cash investments,
beginning of period
    
    
    22,520
    
    
    
    8,348Cash and short-term cash investments,
end of period
    
    $
    46,290
    
    
    $
    26,281Cash paid during the period for:Interest
    
    $
    458
    
    
    $
    319Income taxes
    
    $
    14,796
    
    
    $
    23,498
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1.
    
    CONSOLIDATED FINANCIAL STATEMENTS AND STOCK SPLIT
   2.
    
    STOCK-BASED COMPENSATION
   Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Net earnings, as reported
    
    $
    20,855
    
    
    $
    15,875
    
    
    $
    51,355
    
    
    $
    42,450Add stock-based
compensation expense,
net of tax, included in
net earnings
    
    
    137
    
    
    
    136
    
    
    
    420
    
    
    
    367Less total stock-based
compensation expense
under the fair
value-based method, net
of tax
    
    
    (2,308
    )
    
    
    (2,475
    )
    
    
    (6,020
    )
    
    
    (4,036
    )Pro forma net earnings
    
    $
    18,684
    
    
    $
    13,536
    
    
    $
    45,755
    
    
    $
    38,781Basic EPS, as reported
    
    $
    0.40
    
    
    $
    0.31
    
    
    $
    0.99
    
    
    $
    0.83Pro forma basic EPS
    
    $
    0.36
    
    
    $
    0.26
    
    
    $
    0.89
    
    
    $
    0.76Diluted EPS, as reported
    
    $
    0.40
    
    
    $
    0.31
    
    
    $
    0.98
    
    
    $
    0.82Pro forma diluted EPS
    
    $
    0.35
    
    
    $
    0.26
    
    
    $
    0.87
    
    
    $
    0.75
 Page 5




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##### Table of Contents



2.
    
    STOCK-BASED COMPENSATION (Continued)
  3.
    
    EARNINGS PER SHARE AND TREASURY STOCK TRANSACTIONS
  Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Basic weighted average number of
common shares outstanding
    
    
    51,866,491
    
    
    
    51,089,976
    
    
    
    51,650,585
    
    
    
    50,908,360Dilutive effect of stock options and
restricted stock
    
    
    811,633
    
    
    
    649,038
    
    
    
    677,799
    
    
    
    652,492Diluted weighted
average number of
common shares
outstanding
    
    
    52,678,124
    
    
    
    51,739,014
    
    
    
    52,328,384
    
    
    
    51,560,852Net earnings
    
    $
    20,855
    
    
    $
    15,875
    
    
    $
    51,355
    
    
    $
    42,450Basic earnings per share amount
    
    $
    0.40
    
    
    $
    0.31
    
    
    $
    0.99
    
    
    $
    0.83Diluted earnings per share amount
    
    $
    0.40
    
    
    $
    0.31
    
    
    $
    0.98
    
    
    $
    0.82
    Page 6




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4.
    
    COMPREHENSIVE EARNINGS
  Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August, 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Net earnings
    
    $
    20,855
    
    
    $
    15,875
    
    
    $
    51,355
    
    
    $
    42,450Other comprehensive earnings:Foreign currency
translation
adjustments, net of
$155 tax in 2005,
none in 2004
    
    
    (1,620
    )
    
    
    10
    
    
    
    (2,624
    )
    
    
    1,050Total comprehensive earnings
    
    $
    19,235
    
    
    $
    15,885
    
    
    $
    48,731
    
    
    $
    43,500
  August 27,
    
    
    November 30,2005
    
    
    2004Minimum pension liability, net of $1,089 tax
    
    $
    (1,834
    )
    
    $
    (1,834
    )Translation adjustments, net of $155 tax in
2005, none in 2004
    
    
    881
    
    
    
    3,505Accumulated
other comprehensive earnings (loss)
    
    $
    (953
    )
    
    $
    1,671
 5.
    
    INCOME TAXES
  6.
    
    GUARANTEES AND WARRANTIES
     Page 7




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##### Table of Contents



6.
    
    GUARANTEES AND WARRANTIES (Continued)
  Balance at November 27, 2004
    
    $
    1,200Accruals for warranties issued during the period
    
    
    950Accruals related to pre-existing warranties, net
    
    
    24Settlements made during the period
    
    
    (922
    )Other adjustments, including currency translation
    
    
    70Balance at August 27, 2005, included in other current liabilities
    
    $
    1,322
 7.
    
    GOODWILL AND INTANGIBLES
  2005CurrencyBeginning
    
    
    
    
    
    
    Translation
    
    
    
    
    
    
    End ofof Year
    
    
    Acquisitions
    
    
    Adjustments
    
    
    Amortization
    
    
    QuarterGoodwill:Engine/Mobile Filtration
    
    $
    16,249
    
    
    $
    
    
    
    $
    (415
    )
    
    $
    
    
    
    $
    15,834Industrial/Environmental
Filtration
    
    
    86,925
    
    
    
    2,877
    
    
    
    67
    
    
    
    
    
    
    
    89,869Packaging
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    103,174
    
    
    $
    2,877
    
    
    $
    (348
    )
    
    $
    
    
    
    $
    105,703Trademarks:Engine/Mobile Filtration
    
    $
    603
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    603Industrial/Environmental
Filtration
    
    
    28,891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,891Packaging
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    29,494
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    29,494Customer Relationships, gross:Engine/Mobile Filtration
    
    $
    943
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    943Industrial/Environmental
Filtration
    
    
    7,844
    
    
    
    53
    
    
    
    1
    
    
    
    
    
    
    
    7,898Packaging
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,787
    
    
    
    53
    
    
    
    1
    
    
    
    
    
    
    
    8,841Less accumulated amortization
    
    
    942
    
    
    
    
    
    
    
    
    
    
    
    370
    
    
    
    1,312$
    7,845
    
    
    $
    53
    
    
    $
    1
    
    
    $
    370
    
    
    $
    7,529Other acquired intangibles, gross:Engine/Mobile Filtration
    
    $
    209
    
    
    $
    
    
    
    $
    (2
    )
    
    $
    
    
    
    $
    207Industrial/Environmental
Filtration
    
    
    11,024
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,024Packaging
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,233
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    11,231Less accumulated amortization
    
    
    3,957
    
    
    
    
    
    
    
    
    
    
    
    574
    
    
    
    4,531$
    7,276
    
    
    $
    
    
    
    $
    (2
    )
    
    $
    574
    
    
    $
    6,700
  Page 8




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##### Table of Contents



8.
    
    RETIREMENT BENEFITS
  Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Pension BenefitsComponents of net periodic benefit cost:Service cost
    
    $
    944
    
    
    $
    879
    
    
    $
    2,837
    
    
    $
    2,637Interest cost
    
    
    1,561
    
    
    
    1,475
    
    
    
    4,696
    
    
    
    4,423Expected return on plan assets
    
    
    (1,874
    )
    
    
    (1,739
    )
    
    
    (5,634
    )
    
    
    (5,215
    )Amortization of unrecognized:Prior service cost
    
    
    40
    
    
    
    40
    
    
    
    120
    
    
    
    119Net actuarial loss
    
    
    523
    
    
    
    344
    
    
    
    1,570
    
    
    
    1,032Net periodic benefit cost
    
    $
    1,194
    
    
    $
    999
    
    
    $
    3,589
    
    
    $
    2,996Contributions
    
    $
    160
    
    
    $
    166
    
    
    $
    401
    
    
    $
    336Postretirement Healthcare BenefitsComponents of net periodic benefit cost:Service cost
    
    $
    8
    
    
    $
    31
    
    
    $
    24
    
    
    $
    93Interest cost
    
    
    26
    
    
    
    54
    
    
    
    78
    
    
    
    163Amortization of unrecognized:Prior service cost
    
    
    (31
    )
    
    
    
    
    
    
    (93
    )
    
    
    Net actuarial gain
    
    
    (19
    )
    
    
    (8
    )
    
    
    (57
    )
    
    
    (24
    )Net periodic benefit cost / (income)
    
    $
    (16
    )
    
    $
    77
    
    
    $
    (48
    )
    
    $
    232Contributions
    
    $
    66
    
    
    $
    64
    
    
    $
    198
    
    
    $
    192
   Page 9




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##### Table of Contents



9.
    
    CONTINGENCIES
     10.
    
    SEGMENT DATA
  Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales:Engine/Mobile Filtration
    
    $
    90,686
    
    
    $
    83,771
    
    
    $
    267,537
    
    
    $
    237,563Industrial/Environmental Filtration
    
    
    105,153
    
    
    
    102,646
    
    
    
    309,019
    
    
    
    289,857Packaging
    
    
    20,564
    
    
    
    19,792
    
    
    
    55,894
    
    
    
    52,773$
    216,403
    
    
    $
    206,209
    
    
    $
    632,450
    
    
    $
    580,193
 Page 10




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##### Table of Contents



10.
    
    SEGMENT DATA (Continued)
 Quarter Ended
    
    
    Nine Months EndedAugust 27,
    
    
    August 28,
    
    
    August 27,
    
    
    August 28,2005
    
    
    2004
    
    
    2005
    
    
    2004Operating profit:Engine/Mobile Filtration
    
    $
    20,500
    
    
    $
    16,892
    
    
    $
    56,907
    
    
    $
    48,306Industrial/Environmental Filtration
    
    
    8,544
    
    
    
    8,457
    
    
    
    18,747
    
    
    
    17,785Packaging
    
    
    2,008
    
    
    
    1,665
    
    
    
    4,031
    
    
    
    2,954Relocation Costs
    
    
    
    
    
    
    (1,514
    )
    
    
    
    
    
    
    (1,939
    )31,052
    
    
    
    25,500
    
    
    
    79,685
    
    
    
    67,106Other income (expense)
    
    
    278
    
    
    
    (278
    )
    
    
    (129
    )
    
    
    90Earnings before income taxes and
minority earnings
    
    $
    31,330
    
    
    $
    25,222
    
    
    $
    79,556
    
    
    $
    67,196Identifiable assets:Engine/Mobile Filtration
    
    
    
    
    
    
    
    
    
    $
    191,891
    
    
    $
    167,964Industrial/Environmental Filtration
    
    
    
    
    
    
    
    
    
    
    349,089
    
    
    
    301,119Packaging
    
    
    
    
    
    
    
    
    
    
    43,054
    
    
    
    41,924Corporate
    
    
    
    
    
    
    
    
    
    
    81,427
    
    
    
    66,090$
    665,461
    
    
    $
    577,097
  11.
    
    RECENT RELEVANT ACCOUNTING STANDARDS
   Page 11




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11.
    
    RECENT RELEVANT ACCOUNTING STANDARDS (Continued)
  12.
    
    BUSINESS ACQUISITIONS
   Page 12




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



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




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MANAGEMENTS DISCUSSION AND ANALYSIS
 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
   (Dollars in thousands)
    
    2005
    
    2006 & 2007
    
    2008 & 2009
    
    ThereafterLong-Term Debt
    
    $
    1,010
    
    
    $
    220
    
    
    $
    
    
    
    $
    15,820Credit Facility
    
    $
    7,500
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating Leases
    
    $
    9,645
    
    
    $
    15,860
    
    
    $
    8,407
    
    
    $
    9,608




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



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




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(c)Totalnumber of
    
    (d)shares
    
    Approximatepurchased
    
    dollar value ofas part of
    
    shares that may(a)
    
    (b)
    
    publicly
    
    yet beTotal number
    
    Average
    
    announced
    
    purchasedof shares
    
    price paid
    
    plans or
    
    under the plansPeriod
    
    purchased
    
    per share
    
    programs
    
    or programsMay 29, 2005 through June 30, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    150,000,000July 1, 2005 through July 31, 2005
    
    
    68,200
    
    
    $
    29.12
    
    
    
    68,200
    
    
    $
    148,013,817August 1, 2005 through August 27, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    148,013,817Total
    
    
    68,200
    
    
    
    
    
    
    
    68,200
  
  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
 c.
    
    Reports Filed on Form 8-K During the Third Quarter Ended August 27, 2005.




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##### Table of Contents



SIGNATURE
  CLARCOR Inc.
 September 15, 2005
    
    By
    
    /s/ Norman E. Johnson(Date)
    
    
    
    Norman E. JohnsonChairman of the Board, President andChief Executive OfficerSeptember 15, 2005
    
    By
    
    /s/ Bruce A. Klein(Date)
    
    
    
    Bruce A. KleinVice President  Finance andChief Financial Officer