CLARCOR Inc. Q2 2008 Earnings Call Transcript

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2008-06-18 12:39:13.0

Tags: Clarcor Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Richard Eastman - Robert W. Baird.

Richard Eastman - Robert W. Baird & Co.

Can I just ask you, on the Engine/Mobile side of the business, I think the domestic/international split is around 75/25? But could you give us a sense of what the sales did in each of those two regions?

Bruce A. Klein

I can’t, I just don’t have it. I’ve got to calculate it. If you give me a moment, we’ll get back to you.

Richard Eastman - Robert W. Baird & Co.

Let me just ask you about the gross profit margin at 32%. What was the single biggest influence there? Was it Peco that drove that up? Again, with your raw material commentary and the mix here in the quarter I would have thought, that gross margin looks very good.

Norman E. Johnson

There were two things. One is that we maintained our Engine/Mobile margin, but what drove it really was Peco. But also we have another company that is in the aerospace and aviation business, what we call Purolator and Facet. I know all these names get confusing but they are doing very well and improving margins, in addition.

As I said before, it’s really companies that are serving the oil and gas and aerospace businesses that drove the margins. There was some improvement in our CLC Air business.

Richard Eastman - Robert W. Baird & Co.

Could you just give us a sense of how much revenue that maybe was pushed into the third quarter here from the lost shipping days?

Norman E. Johnson

It’s a tough one. It was not significant, $2 million to $3 million perhaps.

Bruce A. Klein

To get back to you, in the first quarter international sales Engine/Mobile was probably under 25% and in the second quarter they were certainly over 26%.

Richard Eastman - Robert W. Baird & Co.

Bruce, what I was actually looking for was just the change in sales in the second quarter year-over-year domestic versus international. Was the domestic business down, Engine/Mobile sales?

Bruce A. Klein

Just slightly, yes.

Operator

Your next question comes from Matt McGarry - Central Asset Management.

Matt McGarry - Central Asset Management

I thought you did a really good job maintaining margins with Engine/Mobile. As you look at that business and your ability to adjust the cost structure, how confident are you, knowing that the economy is still a long part at this point, but how much dry powder do you have left to play with on the cost side to mitigate some potential continued pressure from the revenue side?

 

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