Unassociated Document

FOR FURTHER INFORMATION CONTACT:

Chief Financial Officer

FOR IMMEDIATE RELEASE

WEDNESDAY, JANUARY 13, 2010

CLARCOR REPORTS FOURTH QUARTER AND FISCAL 2009 RESULTS

Fiscal Fourth Quarter and Full Year 2009 Highlights

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

	Quarter Ended				%			Year Ended				%
	11/28/09		11/29/08		Change			11/28/09		11/29/08		Change
Net Sales	$	234,392	$	265,983		(11.9	)	$	907,748	$	1,059,601		(14.3	)
Operating Profit	$	34,736	$	45,906		(24.3	)	$	105,733	$	151,923		(30.4	)
Net Earnings	$	24,678	$	29,060		(15.1	)	$	71,543	$	95,654		(25.2	)
Diluted Earnings Per Share	$	0.49	$	0.56		(12.5	)	$	1.40	$	1.86		(24.7	)
Average Diluted Shares Outstanding		50,774		51,525		(1.5	)		51,045		51,410		(0.7	)

FRANKLIN, TN, January 13, 2010-- CLARCOR Inc. (NYSE: CLC) reported its fiscal 2009 fourth quarter and full year 2009 financial results for the quarter and year ended November 28, 2009.

Norm Johnson, CLARCOR’s Chairman and Chief Executive Officer, said, “Even though our fourth quarter results were below what we achieved last year, we are pleased with our results this quarter. Our sales and profits this quarter were the highest of any quarter in 2009, and our full-year results came in at the top of our most recent earnings forecast. The trend of higher sales, operating profit and operating margins for each subsequent quarter during 2009 gives us a good start for 2010.

“Fourth quarter operating profit increased by 8% compared to the third quarter of 2009, by 38% compared to the second quarter of 2009 and by 154% compared to the first quarter of 2009. Fourth quarter operating margins in 2009 were 14.8% compared to 13.9% in the third quarter of 2009, 11.0% in the second quarter of 2009 and 6.4% in the first quarter of 2009.

“Most of our businesses, and all of our aftermarket businesses, are performing well and we expect continuing improvement in 2010. Certainly the global recession is still impacting us, but the diversity of our filtration businesses and the breadth of our product lines and customer base help to offset large differences in product demand across filtration markets. Equally, having a strong balance sheet during a recession is a great benefit. Our cash balances exceed our outstanding debt and that gives us the ability to aggressively invest in our businesses for growth, pursue acquisition opportunities, pay a dividend, which we increased by 8% in September and, when appropriate, repurchase our common stock.

“I am particularly pleased that our Industrial/Environmental operating margins were over 9% for the fourth quarter. Our goal for 2010 is to reach a full-year operating margin for this segment of 8% to 10% from 5% in 2009. Based on the improvement in profitability at CLC Air, I am optimistic that we will achieve this.

“Overall, product demand improved slightly as 2009 progressed, but varied greatly depending on the market and geography. We saw filtration demand improve during the fourth quarter in HVAC applications, heavy-duty engine, our Total Filtration Program sales to non-automotive customers, most Asian markets and aviation fuel. Filter demand was weak and largely unchanged throughout the year for dust collector systems, maintenance filter sales to automotive companies, filters for off-shore oil drilling and filters used in the fibers and resins industry. Filter sales for natural gas applications and locomotive filter sales were steady throughout the year, though still at a level below 2008. Filtration products sold to the aerospace industry throughout the first half of 2009 were level with sales at the end of 2008, but weakened towards the end of the year.

“We were able to improve our operating margins throughout 2009 largely due to cost reductions and productivity improvements at every one of our companies. Certainly increasing sequential sales during 2009 helped, but the sales increases from quarter to quarter were not enough to drive margin improvement alone. Having said that, I want to emphasize that we did not decrease spending on new product research and development programs, including the development of new, innovative filter media or on programs directly related to serving our customers. What this means is that we did not reduce spending on customer service, inventory availability or advertising and marketing programs.

“Our CLC Air restructuring program is now largely completed. CLC Air is profitable and operating margins are positive and continuing to improve. Excluding the impact of the loss of 3M sales, which I have discussed in previous press releases, CLC Air sales grew in the last half of 2009 compared to the last six months of 2008. We expect this to continue. In addition, though we were not successful at winning the Lowe’s HVAC filter account, we have won the business at smaller retail chains for our Purolator® high-performance air filters, and we are currently proposing on other retail chain accounts. We believe that our Purolator® filters are the best performing high-end air filters in the industry and offer our customers a combination of performance, quality and pricing which is exceptionally appealing.

“As is typical, fluctuations in foreign currency did not materially impact us in the fourth quarter, though overall a weaker U.S. dollar will increase our reported sales and earnings. Foreign currency fluctuations increased sales and operating profit by approximately $3 million and $1 million, respectively, for the quarter just ended.

“While we realized an overall reduction in material costs in 2009 compared to 2008, it was an unusual year for raw material costs. There were significant decreases in prices for most metals, oil and natural gas, resins and adhesives, packaging materials and filter media during the first half of 2009. Towards the end of the year, raw material prices stabilized and in some categories, such as oil, certain filter media, packaging and steel, began to increase. Though this had little impact on our overall material costs during the fourth quarter, we are watchful of this trend and intend to respond quickly if costs continue to increase.

“Our packaging business had a strong second half of 2009 and a very strong fourth quarter. Increased demand from current customers and new product roll-outs hit in the last half of 2009 and provide a good foundation for 2010. Operating margins in the third quarter of 2009 improved to 11.6% from 8.8% in the third quarter of 2008 and fourth quarter 2009 margins increased to 13.3% from 11.3% in the fourth quarter of 2008.

“Fiscal 2009 was a strong cash flow year for CLARCOR. Cash provided by operating activities was $114 million for 2009 compared to $107 million in 2008. During 2009, we repurchased nearly $20 million of our common stock, though there were no repurchases in the fourth quarter. We continue to reduce our outstanding debt, and by year-end our debt to total capital ratio was 7.1% compared to 11.4% in 2008. Our cash balances and short-term investments exceeded our outstanding debt by $39 million at the end of 2009. We are also fortunate to have a credit facility enabling us to borrow up to $250 million at an attractive borrowing rate. Our credit facility matures in December 2012.

“Our effective tax rate in 2009 was 32.0% compared to 33.9% in 2008. The decrease in the rate reflected the increasing percentage of our taxable income from lower tax regions outside the U.S. Capital expenditures for 2009 were approximately $22 million; in 2008, capital expenditures were $35 million.

Fiscal 2010 Expectations

“Looking forward to 2010, we expect filtration markets to gradually improve, more slowly in the first half of the year, and then more quickly in the latter half of 2010. We are fortunate to be primarily an aftermarket filtration company as we expect the domestic OEM market, particularly for heavy-duty engine filtration, to remain flat throughout 2010. As over-the-road trucking improves, the impact upon our heavy-duty engine filter sales should be relatively quick. We expect Asian markets, for most product lines, will grow more quickly than U.S. or European markets.

“We expect the decline in natural gas prices will impact the ability of natural gas companies to build new pipelines and transmission facilities, but quoting activity for our natural gas filtration systems remains robust. We believe this is due to major natural gas finds during 2009, both in the U.S. and overseas. It certainly appears that natural gas will play an increasing role in the U.S. and the world’s energy supply. Moreover, our emphasis on building our natural gas filtration aftermarket business is gaining momentum and should grow faster than our natural gas vessel business.

“The impact of losing the 3M HVAC filter business in 2009 will result in a drop of $13 to $14 million in sales in 2010 compared to 2009 for CLC Air, but this will be somewhat offset by recent sales initiatives and successes. We are very excited about the opportunities to grow our high-end HVAC retail product sales using our Purolator® brand.

“We expect the following 2010 growth rates in net sales by segment:

Engine/Mobile - 5% to 7% with roughly the same growth rate in over-the-road trucking, agricultural, construction, mining and locomotive markets

Industrial/Environmental - 6% to 8% with stronger growth in dust collector systems, oil drilling and natural gas filtration products. Excluding the loss of the 3M business, we also expect HVAC filtration to grow at an above-average rate in 2010. We expect slower than average growth in aerospace and aviation fuel filtration.

Packaging - 8% to 11% with somewhat faster than average growth in tobacco, confectionary and HBA markets.

“We expect continuing improvement in operating margins throughout 2010 with projected operating margins for the full year by segment as follows:

Engine/Mobile - 20% to 22% compared to 20.1% in 2009

Industrial/Environmental - 8% to 10% compared to 5.4% in 2009

Packaging - 7% to 8% compared to 7.9% in 2009

“We expect the full-year effective tax rate to be 32% to 33% and we expect capital spending to be approximately $35 to $40 million.

“A strong balance sheet with strong and consistent cash flows was and remains a great advantage to have during a recession. Not only do we maintain large cash balances for an industrial company of our size, but expect operating cash flows in 2010 to provide approximately $80 to $100 million in additional cash to pay for 2010 capital spending and dividends. Our ability to generate consistent positive cash flows also enables us to pursue acquisition opportunities and share repurchases. We have $167 million available under our current share repurchase authorization.

“We remain strongly optimistic about our company and its prospects. The recession during 2009 was more severe than we had expected, and certainly affected our financial results in the past year. But as we complete our 105th year, our future continues to look bright with significant growth opportunities throughout the world. Assuming the economy does not worsen, we expect diluted earnings per share to be in the range of $1.55 to $1.70 in 2010. Though this is still below our high of $1.86 in 2008, it represents an increase of 11% to 21% over 2009 results.”

CLARCOR will be holding a conference call to discuss the fourth quarter and full year results at 10:00 am CST on January 14, 2010. Interested parties can listen to the conference call at www.clarcor.com or www.viavid.net. A replay will be available on these websites or at 1-888-203-1112 or 1-719-457-0820 and providing confirmation code 4947707. The replay will be available through January 21, 2010 by telephone and for 30 days on the Internet.

CLARCOR is based in Franklin, Tennessee, and is a diversified marketer and manufacturer of mobile, industrial and environmental filtration products and consumer and industrial packaging products sold in domestic and international markets. Common shares of the Company 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 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 future growth, as well as management's short-term and long-term performance goals; statements regarding anticipated order patterns from our customers or the anticipated economic conditions of the industries and markets that we serve; statements related to the performance of the U.S. and other economies generally; statements relating to the anticipated effects on results of operations or financial condition from recent and expected developments or events; statements relating to the Company's business and growth strategies; 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. In addition, the Company's past results of operations do not necessarily indicate its future results. These and other uncertainties are discussed in the "Risk Factors'' section of the Company’s 2008 Form 10-K. The future results of the Company may fluctuate as a result of these and other risk factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release. Except as otherwise required by applicable laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements or the risk factors described in this press release, including projected sales and profit levels for any business segment in any given quarter, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release.

CLARCOR 2009 FOURTH QUARTER RESULTS cont'd.

CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands except per share data)

	Fourth Quarter					Twelve Months
For periods ended November 28, 2009 and November 29, 2008	2009		2008			2009			2008

Net sales	$	234,392	$	265,983		$	907,748		$	1,059,601
Cost of sales		159,628		176,422			628,460			719,726
Gross profit		74,764		89,561			279,288			339,875
Selling and administrative expenses		40,028		43,655			173,555			187,952
Operating profit		34,736		45,906			105,733			151,923
Other income (expense)		860		(1,877	)		(84	)		(6,552	)
Earnings before income taxes and minority interests		35,596		44,029			105,649			145,371
Income taxes		10,933		14,888			33,819			49,310
Earnings before minority interests		24,663		29,141			71,830			96,061
Minority interests in earnings of subsidiaries		15		(81	)		(287	)		(407	)
Net earnings	$	24,678	$	29,060		$	71,543		$	95,654

Net earnings per common share:
Basic	$	0.49	$	0.57		$	1.41		$	1.88
Diluted	$	0.49	$	0.56		$	1.40		$	1.86

Average shares outstanding:
Basic		50,474,916		50,908,849			50,779,594			50,783,862
Diluted		50,773,562		51,524,905			51,045,131			51,410,436

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	November 28,		November 29,
	2009		2008
Assets
Current assets:
Cash and cash equivalents	$	59,277	$	40,715
Short-term investments		32,171		7,269
Accounts receivable, net		164,545		194,864
Inventories		157,416		158,201
Other		33,118		31,522
Total current assets		446,527		432,571
Plant assets, net		188,091		192,599
Acquired intangibles, net		324,172		319,053
Other assets		13,099		13,659
	$	971,889	$	957,882
Liabilities
Current liabilities:
Current portion of long-term debt	$	99	$	128
Accounts payable and accrued liabilities		120,978		138,292
Income taxes		5,419		5,083
Total current liabilities		126,496		143,503
Long-term debt		52,096		83,822
Long-term pension liabilities		67,192		27,307
Other liabilities		39,486		51,491
		285,270		306,123
Shareholders' Equity		686,619		651,759
	$	971,889	$	957,882

SUMMARY CASH FLOWS

(Dollars in thousands)

	Twelve Months
	2009			2008
From Operating Activities
Net earnings	$	71,543		$	95,654
Depreciation		26,005			25,231
Amortization		4,957			5,157
Other non-cash		(332	)		-
Stock compensation expense		4,088			4,474
Excess tax benefits from stock compensation		(1,854	)		(2,469	)
Changes in short-term investments		(24,902	)		(2,385	)
Changes in assets and liabilities, excluding short-term investments		32,959			(18,651	)
Other, net		1,440			125
Total provided by operating activities		113,904			107,136
From Investing Activities
Plant asset additions		(21,740	)		(34,908	)
Business acquisitions		(11,918	)		(74,921	)
Investment in affiliate		(1,794	)		(2,000	)
Proceeds from insurance claims		-			2,025
Other, net		750			904
Total used in investing activities		(34,702	)		(108,900	)
From Financing Activities
Net (payments) proceeds under revolving credit agreement		(40,000	)		75,000
Borrow ings under long-term debt		8,410			-
Payments on long-term debt		(838	)		(16,092	)
Cash dividends paid		(18,682	)		(16,845	)
Excess tax benefits from stock compensation		1,854			2,469
Purchase of treasury stock		(19,767	)		(37,260	)
Other, net		3,616			8,883
Total provided by (used in) financing activities		(65,407	)		16,155
Effect of exchange rate changes on cash		4,767			(9,735	)
Change in Cash and Cash Equivalents	$	18,562		$	4,656

CLARCOR 2009 FOURTH QUARTER RESULTS cont'd.

QUARTERLY INCOME STATEMENT DATA BY SEGMENT

(Dollars in thousands)

	2009
	Quarter			Quarter						Quarter						Quarter
	Ended			Ended			Six			Ended			Nine			Ended			Twelve
	February 28			May 30			Months			August 29			Months			November 28			Months
Net sales by segment:
Engine/Mobile Filtration	$	85,380		$	92,277		$	177,657		$	96,445		$	274,102		$	99,193		$	373,295
Industrial/Environmental Filtration		113,458			119,889			233,347			114,630			347,977			113,023			461,000
Packaging		14,852			17,229			32,081			19,196			51,277			22,176			73,453
	$	213,690		$	229,395		$	443,085		$	230,271		$	673,356		$	234,392		$	907,748
Operating profit by segment:
Engine/Mobile Filtration	$	13,301		$	18,457		$	31,758		$	21,904		$	53,662		$	21,554		$	75,216
Industrial/Environmental Filtration		663			5,864			6,527			7,944			14,471			10,241			24,712
Packaging		(277	)		909			632			2,232			2,864			2,941			5,805
	$	13,687		$	25,230		$	38,917		$	32,080		$	70,997		$	34,736		$	105,733
Operating margin by segment:
Engine/Mobile Filtration		15.6	%		20.0	%		17.9	%		22.7	%		19.6	%		21.7	%		20.1	%
Industrial/Environmental Filtration		0.6	%		4.9	%		2.8	%		6.9	%		4.2	%		9.1	%		5.4	%
Packaging		-1.9	%		5.3	%		2.0	%		11.6	%		5.6	%		13.3	%		7.9	%
		6.4	%		11.0	%		8.8	%		13.9	%		10.5	%		14.8	%		11.6	%

	2008
	Quarter			Quarter						Quarter						Quarter
	Ended			Ended			Six			Ended			Nine			Ended			Twelve
	March 1			May 31			Months			August 30			Months			November 29			Months
Net sales by segment:
Engine/Mobile Filtration	$	105,109		$	108,658		$	213,767		$	117,753		$	331,520		$	107,513		$	439,033
Industrial/Environmental Filtration		126,422			139,326			265,748			138,708			404,456			138,656			543,112
Packaging		18,650			19,153			37,803			19,839			57,642			19,814			77,456
	$	250,181		$	267,137		$	517,318		$	276,300		$	793,618		$	265,983		$	1,059,601
Operating profit by segment:
Engine/Mobile Filtration	$	22,342		$	24,450		$	46,792		$	28,669		$	75,461		$	23,959		$	99,420
Industrial/Environmental Filtration		4,285			11,444			15,729			10,404			26,133			19,715			45,848
Packaging		1,112			1,564			2,676			1,747			4,423			2,232			6,655
	$	27,739		$	37,458		$	65,197		$	40,820		$	106,017		$	45,906		$	151,923
Operating margin by segment:
Engine/Mobile Filtration		21.3	%		22.5	%		21.9	%		24.3	%		22.8	%		22.3	%		22.6	%
Industrial/Environmental Filtration		3.4	%		8.2	%		5.9	%		7.5	%		6.5	%		14.2	%		8.4	%
Packaging		6.0	%		8.2	%		7.1	%		8.8	%		7.7	%		11.3	%		8.6	%
		11.1	%		14.0	%		12.6	%		14.8	%		13.4	%		17.3	%		14.3	%

###