CLARCOR Reports Record First Quarter Diluted Earnings Per Share

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FRANKLIN, Tenn.--(Business Wire)--
CLARCOR Inc. (NYSE:CLC):

Unaudited First Quarter 2013 Highlights

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

Quarter Ended
3/02/13 3/03/12 Change
Net sales $ 256.3 $ 257.3 - %
Operating profit 33.8 34.3 - %
Net earnings - CLARCOR 23.5 23.5 1 %
Diluted earnings per share $ 0.47 $ 0.46 1 %
Operating margin 13.2 % 13.3 % -0.1 pts

CLARCOR Inc. (NYSE:CLC) reported its financial results for the first quarter of
2013. Diluted earnings per share grew 1% from the first quarter of 2012 to a
record first quarter high of $0.47. Net sales, operating profit and operating
margin were relatively flat compared with last year`s first quarter while first
quarter 2013 diluted earnings per share benefited from a lower effective tax
rate compared with the first quarter of 2012. Changes in average foreign
currency exchange rates increased net sales by $0.3 million but did not
significantly impact operating profit in the first quarter of 2013 as compared
with last year`s first quarter.

Chris Conway, CLARCOR`s Chairman, President and Chief Executive Officer,
commented, "Our first quarter consolidated results this year were in-line with
our expectations heading into the period. We anticipated relatively lower
overall top-line growth this quarter compared with last year`s first quarter due
in part to U.S. heavy-duty engine filtration aftermarket growth of 16% in the
first quarter of 2012 from the first quarter of 2011. This created a challenging
year-over-year quarterly comparable in this market. In addition, certain of our
larger heavy-duty engine filtration aftermarket distributors placed large orders
at the end of the fourth quarter of 2012, negatively impacting our first quarter
2013 sales. As a result of these factors, our U.S. heavy-duty engine filtration
aftermarket sales declined approximately 4% this quarter from the first quarter
of 2012. We anticipate that U.S. heavy-duty engine filtration aftermarket sales
will return to low single-digit year-over-year quarterly growth as we head into
the second quarter of 2013.

"Top-line growth in our oil and gas market continues to be strong as sales
increased 10% in the first quarter of 2013 compared with last year`s first
quarter. This strong performance was driven primarily by higher natural gas
filtration product sales in the Middle East, the U.S. and Southeast Asia
partially offset by lower sales in Canada and of our off-shore oil drilling
filtration products. A significant portion of this oil and gas filtration growth
was driven by higher natural gas vessel sales, which increased 30% from last
year`s first quarter. We anticipate that these natural gas vessel sales will
translate into a stream of higher margin aftermarket element sales going
forward. Strategically, it has been our long-term goal to fundamentally shift
our natural gas product mix to a greater proportion of higher margin aftermarket
elements versus first-fit vessels. To support this initiative in the long-run,
we sometimes accept a larger proportion of vessel sales in the short-run-the
case in our first quarter. Regardless of product mix, as we have noted in the
past, we believe the natural gas filtration market has as much long-term
potential as any other filtration market. Global energy needs should continue to
significantly expand going forward, and we believe natural gas-an abundant,
clean-burning fossil fuel-will play a prominent role in satisfying these
expanding needs.

"Our execution remained strong in the first quarter as our 13.2% operating
margin was slightly lower than our first quarter 2012 operating margin of 13.3%,
which was our highest first quarter operating margin in almost twenty years.
Financial performance at our Engine/Mobile Filtration segment was solid as
operating margin increased 0.5 percentage points from the first quarter of 2012
to 19.9%, our highest first quarter operating margin in this reporting segment
since 2008. Operating margin at our Industrial/Environmental Filtration segment
was negatively influenced by a higher mix of natural gas vessel sales versus
higher margin natural gas aftermarket element sales. As a result, our first
quarter operating margin in this reporting segment declined 0.9 percentage
points from last year`s first quarter. However, continued operational
improvements in our commercial and industrial HVAC filtration and Total
Filtration Services (TFS) distribution markets within our
Industrial/Environmental Filtration segment resulted in improved operating
margins in each of these markets compared with the first quarter of 2012. With
continued improved financial performance in these environmental air markets
coupled with continued growth at our higher margin process liquid markets, we
believe we are on track to meet our 15% operating margin goal in our
Industrial/Environmental Filtration segment in the next several years.

"We are excited about the long-term outlook in our core filtration markets, and
we continue to promote strategic initiatives to drive long-term profitable
growth. During the first quarter, in support of our heavy-duty engine filtration
market, we announced our plan to invest $40.0 million to build a new warehouse
and distribution center at our facility in Kearney, Nebraska. We also brought
on-line additional capacity at our manufacturing facility in Yankton, South
Dakota, that includes automated production capabilities, which we believe will
enhance our ability to continue to improve our operating efficiencies. These
investments will provide additional capacity and infrastructure to support our
expected domestic and export market growth in heavy-duty engine filtration over
the next decade. We expect this growth to be generated in part from the
continued penetration of new distribution channels in the U.S. and overseas
including global OE aftermarket programs, and we expect to continue to introduce
new heavy-duty filtration products into new market sectors. In addition, we
broke ground in the first quarter on our new oil and gas filtration research
center in Mineral Wells, Texas. This facility will support our continued
leadership in developing innovative technologies to address the most rigorous
filtration needs in oil and gas extraction, transmission and processing. We
believe these significant investments demonstrate our strong commitment to
protect and develop our competitive position in our core filtration markets."

First Quarter Results:

Engine/Mobile Filtration Segment

Net sales at our Engine/Mobile Filtration segment declined 2% compared with the
first quarter of 2012 including relatively proportionate decreases domestically
and outside the U.S. Lower domestic sales were driven by a 4% decline in the
heavy-duty engine filtration aftermarket, but this is compared against a first
quarter 2012 when aftermarket sales increased 16% from the previous year`s first
quarter. Lower foreign sales were driven by reductions in Europe and China, both
of which continue to be influenced by economic uncertainty, offset in part by
increased sales in each Mexico and South Africa.

Operating profit at our Engine/Mobile Filtration segment increased 1% from the
first quarter of 2012 due to a 0.5 percentage point improvement in operating
margin from last year`s first quarter despite the reduction in heavy-duty engine
filter sales. This increase in operating margin from the first quarter of 2012
was led by lower selling and administrative expenses as a percentage of net
sales due to lower legal and other costs driven by the settlement of various
legal proceedings in the first quarter of 2012. Gross margin percentage was
lower than the first quarter of 2012 primarily due to lower fixed overhead
absorption influenced by additional costs associated with the expansion of the
Yankton heavy-duty engine filtration manufacturing facility.

Industrial/Environmental Filtration Segment

Net sales at our Industrial/Environmental Filtration segment increased 1% from
the first quarter of 2012. Geographically, domestic net sales increased 2% while
net sales outside the U.S. declined less than 1%. Our growth in domestic sales
was heavily influenced by a 26% increase in natural gas filtration product sales
as we continue to develop our capability to support the natural gas extraction
and transportation process from shale formations. These higher natural gas
filtration product sales were supplemented by a 5% increase in net sales at our
Total Filtration Services (TFS) distribution business but partially offset by
lower net sales at our commercial and industrial HVAC business due to general
softness and at TransWeb, our filtration media business, which has been
negatively impacted commercially from uncertainty surrounding the 3M litigation.
The relatively flat net sales outside the U.S. were driven by an increase in
natural gas filtration vessel sales in several international markets including
Southeast Asia and the Middle East, offset by lower off-shore oil platform
drilling filtration product sales due to shipments delayed until later in the
fiscal year.

Despite the increase in net sales, operating profit at our
Industrial/Environmental Filtration segment declined 10%, or $1.0 million,
primarily due to a 0.9 percentage point reduction in operating margin from the
first quarter of 2012. Operating margin in this reporting segment was impacted
by a higher mix of natural gas vessels as opposed to higher margin natural gas
aftermarket elements and lower operational performance at TransWeb compared with
last year`s first quarter.

Packaging Segment

Net sales at our Packaging segment increased less than 1% from the first quarter
of 2012. This increase was due to an increase in spice packaging sales to both
branded and private label customers partially offset by lower sales of decorated
flat sheet metal products due to timing of certain promotional programs and
lower film packaging sales attributed to lower general demand for film products
and also influenced by the Kodak bankruptcy. Operating profit increased $0.4
million from the first quarter of 2012 primarily due to a 2.3 percentage point
improvement in operating margin driven by a 2.7 percentage point decline in
selling and administrative expenses as a percentage of net sales. Lower selling
and administrative expenses were due in part to a $0.2 million bad debt expense
recognized in the first quarter of 2012 related to the Kodak bankruptcy.

Income Taxes and Other Income

The 2.4 percentage point decrease in our effective tax rate to 30.4% in the
first quarter of 2013 from 32.8% in last year`s first quarter was primarily due
to the extension of the research and experimentation tax credit for 2012 in
January 2013. Other income in the first quarter of 2013 declined approximately
$0.7 million from last year`s first quarter, which included the receipt of a
one-time $1.2 million dividend pursuant to our investment in BioProcess Algae
LLC and a $0.5 million foreign currency loss which did not recur in the first
quarter of 2013.

2013 Guidance

Chris Conway commented on 2013 guidance: "We entered 2013 with cautious optimism
in light of the economic uncertainty in many of our significant geographic
markets including the U.S., Europe and China. Our sales growth was relatively
flat in the first quarter but was in-line with our internal expectations due in
part to the challenging comparable in our U.S. heavy-duty filtration aftermarket
growth in last year`s first quarter. Despite headwinds from economic uncertainty
in many of our markets, we were able to grow our global oil and gas business by
approximately 10% in the first quarter, and we believe this growth will be
sustained as we proceed through the year. Our execution remained solid in the
first quarter, as our 13.2% operating margin fell just short of the record first
quarter operating margin in 2012. Looking ahead, we are optimistic that global
macroeconomic activity will accelerate in the second half of 2013, but we remain
cautious. Accordingly, we are confirming our current 2013 diluted earnings per
share guidance of $2.45 to $2.60."

Anticipated sales growth from 2012 and operating margin by segment and on a
consolidated basis are as follows:

2013 Estimated 2013 Estimated
Sales Growth Operating Margin

Engine/Mobile Filtration 2.0% to 3.0% 21.5% to 22.5%
Industrial/Environmental Filtration 4.0% to 6.0% 12.0% to 12.5%
Packaging -5.0% to -1.0% 8.0% to 9.0%
CLARCOR 2.5% to 4.0% 16.0% to 17.0%

We project 2013 cash from operations to be between $125 million and $135
million, capital expenditures to be between $60 million and $70 million and our
effective tax rate to be between 32.0% and 32.5%.

CLARCOR will be holding a conference call to discuss the first quarter 2013
results at 10:00 a.m., Central Time, on March 21, 2013. Interested parties can
listen to the conference call at www.clarcor.com or www.viavid.net. A replay
will be available on these websites and also at 1-877-870-5176 or 1-858-384-5517
by providing confirmation code 3604721. The replay will be available through
April 4, 2013 by telephone and for 30 days on the Internet.

CLARCOR is based in Franklin, Tennessee, and is a diversified marketer and
manufacturer of mobile, industrial and environmental filtration products and
consumer and industrial packaging products sold in domestic and international
markets. Common shares of CLARCOR are traded on the New York Stock Exchange
under the symbol CLC.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements made in this press
release other than statements of historical fact, are forward-looking
statements. These statements may be identified from use of the words "may,"
"should," "could," "potential," "continue," "plan," "forecast," "estimate,"
"project," "believe," "intent," "anticipate," "expect," "target," "is likely,"
"will," or the negative of these terms, and similar expressions.These statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements may include,
among other things: statements and assumptions relating to anticipated future
growth and results of operations, including the anticipated 2013 performance of
the Company and each of its segments, our projections with respect to 2013
estimated sales growth and 2013 estimated operating margins for the Company and
each of its segments, and our projections with respect to 2013 cash from
operations, 2013 capital expenditures and 2013 effective tax rates; statements
regarding management's short-term and long-term performance goals; statements
regarding anticipated order patterns from our customers or the anticipated
economic conditions of the industries and markets which we serve; statements
related to the performance of the U.S. and other economies generally; statements
relating to the anticipated effects on results of operations or financial
condition from recent and expected developments or events; statements regarding
our anticipation that U.S. heavy-duty engine filtration aftermarket sales will
return to low single-digit year-over-year quarterly growth as we head into the
second quarter of 2013; statements regarding our anticipation that natural gas
vessel sales will translate into a stream of higher margin aftermarket elements
sales going forward; statements regarding our belief that the natural gas
filtration market has as much long-term potential as any other filtration
market; statements regarding our expectation that global energy needs should
continue to significantly expand going forward, and our belief that natural gas
will play a prominent role in satisfying these expanding needs; statements that,
with continued improved financial performance in our environmental air markets
coupled with continued growth at our higher margin liquid markets, we believe we
are on track to meet our 15% operating margin goal at our
Industrial/Environmental Filtration segment in the next several years;
statements regarding the long-term outlook in our core filtration markets, and
the promotion of strategic initiatives to drive long-term profitable growth;
statements regarding our belief that our commitment of $40.0 million to build a
new warehouse and distribution center at our facility in Kearney, Nebraska, and
the development of on-line additional capacity at our manufacturing facility in
Yankton, South Dakota, including automated production capabilities, will enhance
our continuous drive to improve our operating efficiencies and will provide
additional capacity and infrastructure to supported our expected growth in
heavy-duty engine filtration growth over the next decade; statements regarding
our belief that the new oil and gas filtration research center in Mineral Wells,
Texas should support our continued leadership in developing innovative
technologies to address the most rigorous filtration needs in oil and gas
extraction, transmission and processing; statements regarding our belief that
these significant investments demonstrate our strong commitment to protect and
develop our competitive position in our core filtration markets; and any other
statements or assumptions that are not historical facts. The Company believes
that its expectations are based on reasonable assumptions. However, these
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause the Company's actual results,
performance or achievements, or industry results, to differ materially from the
Company's expectations of future results, performance or achievements expressed
or implied by these forward-looking statements. The Company's past results of
operations do not necessarily indicate its future results.The Company`s future
results may differ materially from the Company`s past results as a result of
various risks and uncertainties, including the risk factors discussed in the
"Risk Factors" section of the Company`s 2012 Form 10-K and other risk factors
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. You should not place undue reliance on any forward-looking
statements. These statements speak only as of the date of this press release.
Except as otherwise required by applicable laws, the Company undertakes no
obligation to publicly update or revise any forward-looking statements or the
risk factors described in this press release, including estimated sales growth
and estimated operating margin levels for 2013 for the Company and its business
segments, whether as a result of new information, future events, changed
circumstances or any other reason after the date of this press release.

TABLES FOLLOW

CLARCOR INC. 2013 UNAUDITED FIRST QUARTER RESULTS

CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)

Three Months
March 2, March 3,
2013 2012

Net sales $ 256,271 $ 257,264
Cost of sales 174,785 171,049

Gross profit 81,486 86,215

Selling and administrative expenses 47,671 51,903

Operating profit 33,815 34,312

Other income (expense):
Interest expense (150 ) (100 )
Interest income 139 134
Other, net - 612

(11 ) 646

Earnings before income taxes 33,804 34,958

Provision for income taxes 10,276 11,466

Net earnings 23,528 23,492

Net earnings attributable to noncontrolling interests, net of tax (66 ) (13 )

Net earnings attributable to CLARCOR Inc. $ 23,462 $ 23,479

Net earning per share attributable to CLARCOR Inc. - Basic $ 0.47 $ 0.47
Net earning per share attributable to CLARCOR Inc. - Diluted $ 0.47 $ 0.46

Weighted average number of shares outstanding - Basic 49,834,701 50,411,196
Weighted average number of shares outstanding - Diluted 50,409,464 51,094,385

Dividends paid per share $ 0.1350 $ 0.1200

CLARCOR INC. 2013 UNAUDITED FIRST QUARTER RESULTS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands except per share data)

Three Months Ended
March 2, March 3,
2013 2012

Net earnings $ 23,528 $ 23,492

Other comprehensive income:
Pension and other postretirement benefits --
Pension and other postretirement benefits liability adjustments 1,321 1,727
Pension and other postretirement benefits liability adjustments tax amounts (510 ) (646 )
Pension and other postretirement benefits liability adjustments, net of tax 811 1,081

Foreign currency translation --
Translation adjustments (2,225 ) 2,010
Translation adjustments tax amounts - -
Translation adjustments, net of tax (2,225 ) 2,010

Comprehensive earnings 22,114 26,583

Comprehensive earnings attributable to non-redeemable noncontrolling interests (62 ) (16 )

Comprehensive earnings attributable to redeemable noncontrolling interests (21 ) (28 )

Comprehensive earnings attributable to CLARCOR Inc $ 22,031 $ 26,539

CLARCOR INC. 2013 UNAUDITED FIRST QUARTER RESULTS, continued

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 2, December 1,
2013 2012
ASSETS
Current assets:
Cash and cash equivalents $ 173,264 $ 185,496
Restricted cash 470 566
Accounts receivable, less allowance for losses of $9,301 and $9,554, respectively 200,599 214,474
Inventories 219,485 211,251
Deferred income taxes 32,759 34,693
Income tax receivable - -
Prepaid expenses and other current assets 9,590 8,114
Total current assets 636,167 654,594

Property, plant and equipment, at cost, less accumulated depreciation of $318,855 and $315,018, respectively 196,951 195,101
Assets held for sale 2,000 2,000
Goodwill 241,288 241,924
Acquired intangible assets, less accumulated amortization 94,063 95,681
Deferred income taxes - -
Other noncurrent assets 15,701 16,202
Total assets $ 1,186,170 $ 1,205,502

LIABILITIES
Current liabilities:
Current portion of long-term debt $ 201 $ 201
Accounts payable and accrued liabilities 138,043 172,262
Income taxes payable 970 2,428
Total current liabilities 139,214 174,891

Long-term debt, less current portion 16,407 16,391
Long-term pension and postretirement healthcare benefits liabilities 49,066 50,680
Deferred income taxes 54,081 51,385
Other long-term liabilities 8,832 8,571
Total liabilities 267,600 301,918

Contingencies
Redeemable noncontrolling interests 1,775 1,754

SHAREHOLDERS' EQUITY
Capital stock 49,698 49,653
Capital in excess of par value 372 -
Accumulated other comprehensive loss (53,139 ) (51,708 )
Retained earnings 918,816 902,899
Total CLARCOR Inc. equity 915,747 900,844
Noncontrolling interests 1,048 986
Total shareholders' equity 916,795 901,830
Total liabilities and shareholders' equity $ 1,186,170 $ 1,205,502

CLARCOR INC. 2013 UNAUDITED FIRST QUARTER RESULTS, continued

CONSOLIDATED CASH FLOWS
(Dollars in thousands)

Three Months Ended
March 2, March 3,
2013 2012
Cash flows from operating activities:
Net earnings $ 23,528 $ 23,492
Depreciation 6,581 6,568
Amortization 1,500 1,426
Other noncash items 24 (102 )
Net gain on disposition of plant assets (276 ) 16
Stock-based compensation expense 1,146 2,906
Excess tax benefit from stock-based compensation (1,731 ) (2,302 )
Deferred income taxes 8,424 9,522
Changes in assets and liabilities, excluding short-term investments (32,748 ) (40,301 )
Net cash provided by operating activities 6,448 1,225

Cash flows from investing activities:
Restricted cash 76 51
Business acquisitions, net of cash acquired (2,281 ) (2,144 )
Additions to plant assets (8,644 ) (9,797 )
Proceeds from disposition of plant assets 25 59
Investment in affiliates (223 ) (132 )
Net cash used in investing activities (11,047 ) (11,963 )

Cash flows from financing activities:
Cash dividends paid (6,725 ) (6,046 )
Payments on long-term debt (55 ) (26 )
Sale of capital stock under stock option and employee purchase plans 3,628 2,958
Purchase of treasury stock (5,964 ) (3,635 )
Excess tax benefits from stock-based compensation 1,731 2,302
Net cash used in financing activities (7,385 ) (4,447 )

Net effect of exchange rate changes on cash (248 ) 1,249

Net change in cash and cash equivalents (12,232 ) (13,936 )

Cash and cash equivalents, beginning of period 185,496 155,999

Cash and cash equivalents, end of period $ 173,264 $ 142,063

Cash paid during the period for:
Interest $ 78 $ 68
Income taxes, net of refunds $ 5,742 $ 2,879

CLARCOR INC. 2013 UNAUDITED FIRST QUARTER RESULTS, continued

QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)

Three Months
March 2 March 3
2013 2012
Net sales by segment:
Engine/Mobile Filtration $ 117,675 $ 120,283
Industrial/Environmental Filtration 122,626 121,114
Packaging 15,970 15,867
$ 256,271 $ 257,264

Operating profit by segment:
Engine/Mobile Filtration $ 23,449 $ 23,297
Industrial/Environmental Filtration 9,678 10,705
Packaging 688 310
$ 33,815 $ 34,312

Operating margin by segment:
Engine/Mobile Filtration 19.9 % 19.4 %
Industrial/Environmental Filtration 7.9 % 8.8 %
Packaging 4.3 % 2.0 %
13.2 % 13.3 %

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

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