CLARCOR INC - 10-K Annual Report

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

CLARCOR Inc.
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(Exact name of registrant as specified in its charter)

DELAWARE 36-0922490
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2323 Sixth Street, P.O. Box 7007, Rockford, Illinois 61125
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 815-962-8867

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None
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(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) Yes X No __

The aggregate market value (based on the closing price of registrant's Common
Stock on January 15, 2003 as reported on the New York Stock Exchange Composite
Transactions) of the voting stock held by non-affiliates of the registrant as at
January 15, 2003 is $849,881,270.

The number of outstanding shares of Common Stock as of January 15, 2003 is
24,913,905 shares.

Certain portions of the registrant's 2002 Annual Report to Shareholders are
incorporated by reference in Parts I, II and IV. Certain portions of the
registrant's Proxy Statement dated February 20, 2003 for the Annual Meeting of
Shareholders to be held on March 24, 2003 are incorporated by reference in Part
III.

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

(a) General Development of Business

CLARCOR Inc. ("CLARCOR") was organized in 1904 as an Illinois corporation
and in 1969 was reincorporated in the State of Delaware. As used herein, the
"Company" refers to CLARCOR and its subsidiaries unless the context otherwise
requires.

The Company's fiscal year ends on the Saturday closest to November 30. For
fiscal year 2002 the year ended on November 30, 2002 and included 52 weeks. For
fiscal year 2001 the year ended on December 1, 2001 and included 52 weeks. For
fiscal year 2000 the year ended on December 2, 2000 and included 53 weeks. In
this Form 10-K, all references to fiscal years are shown to begin on December 1
and end on November 30 for clarity of presentation.

(i) Certain Significant Developments.

On June 5, 2002 the Company acquired Locker Filtration Limited ("Locker").
Locker is located in Warrington, Cheshire, England and is engaged in three
primary filtration markets. For its largest market, vehicle filtration, it
manufactures air filters and filtration units for agricultural and off-road
vehicles. Its power generation unit manufactures large scale air filtration
systems primarily for diesel and gas turbine power installations. Finally, its
Lockertex segment manufactures specialty filters for industrial uses, mainly for
vacuums, pharmaceutical and incineration applications. Locker is included in the
Engine/Mobile Filtration segment of the Company's business.

The cost of the acquisition was approximately $6,500,000 in cash. The
acquisition resulted in an increase of approximately $7,500,000 in the Company's
revenues for fiscal 2002.

During fiscal 2002 the Company also acquired two smaller companies, Total
Filter Technology, Inc. ("TFT") and FilterSource. TFT is located in North
Chelmsford, Massachusetts and manufacturers string wound and meltblown
cartridges and liquid bags for use in liquid process filtration applications.
FilterSource sells, installs and services industrial and commercial air filters
primarily in West Coast markets. The TFT acquisition supports the Company's
strategy to increase its ability to supply liquid process filtration products to
industrial markets. TFT and FilterSource are included in the
Industrial/Environmental Filtration segment of the Company's business.

(ii) Summary of Business Operations.

During 2002, the Company conducted business in three principal industry
segments: (1) Engine/Mobile Filtration, (2) Industrial/Environmental Filtration
and (3) Packaging.

Engine/Mobile Filtration. Engine/Mobile Filtration includes filters for
oil, air, fuel, coolants and hydraulic fluids for trucks, automobiles,
construction, mining and industrial equipment, locomotives, marine and
agricultural equipment.

Industrial/Environmental Filtration. Industrial/Environmental Filtration
products are used primarily for commercial, residential and industrial
applications. The segment's industrial and environmental products include air
and antimicrobial treated filters and high efficiency electronic air cleaners
for commercial buildings, factories, residential buildings, paint spray booths,
gas turbine systems, medical facilities, motor vehicle cabins, clean rooms,
compressors and dust collector systems. The segment's process filtration
products include specialty filters, industrial process liquid filters, filters
for pharmaceutical processes and beverages, filtration systems for aircraft
refueling, anti-pollution and water recycling, bilge separators and sand control
filters for oil and gas drilling.

Packaging. Packaging products include a wide variety of custom styled
containers and packaging items used primarily by the food, confectionery, spice,
drug, toiletries and chemical specialties industries. The segment's products
include lithographed metal containers, flat sheet decorated metal, combination
metal and

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plastic containers, plastic closures and various specialties, such as spools for
wire and cable and outer shells for dry cell batteries and film canisters.

(b) Financial Information About Industry Segments

Business segment information for the fiscal years 2000 through 2002 is
included on pages 23 and 24 of the Company's 2002 Annual Report to Shareholders
(the "Annual Report"), is incorporated herein by reference and is filed as part
of Exhibit 13(a)(vi) to this 2002 Annual Report on Form 10-K ("2002 Form 10-K").

(c) Narrative Description of the Business

ENGINE/MOBILE FILTRATION

The Company's engine/mobile filtration products business is conducted by
the following wholly-owned subsidiaries: Baldwin Filters, Inc.; Clark Filter,
Inc.; Baldwin Filters (Aust.) Pty. Ltd.; Baldwin Filters N.V.; Baldwin Filters
Limited and Locker Filtration Limited (operating under the name "CLARCOR UK").
In addition, the Company owns (i) 90% of Filtros Baldwin de Mexico ("FIBAMEX"),
(ii) 75% of Baldwin-Weifang Filters Ltd., and (iii) 80% of Baldwin-Unifil S.A.

The companies market a full line of oil, air, fuel, coolant and hydraulic
fluid filters. The filters are used in a wide variety of applications and in
processes where filter efficiency, reliability and durability are essential.
Impure air or fluid flow through semi-porous paper, cotton, synthetic, chemical
or membrane filter media with varying efficiency filtration characteristics. The
impurities on the media are disposed of when the filter is changed. The
segment's filters are sold throughout the world, primarily in the replacement
market for trucks, automobiles, locomotives, marine, construction, industrial,
mining and agricultural equipment. In addition, some first-fit filters are sold
to the original equipment market.

INDUSTRIAL/ENVIRONMENTAL FILTRATION

The Company's industrial/environmental filtration products business is
conducted by the following wholly-owned subsidiaries: Airguard Industries, Inc.
("Airguard"); Airklean Engineering Pte. Ltd.; Airguard Asia Sdn. Bhd.; Facet
USA, Inc. and related Facet companies in Italy, Spain, the United Kingdom and
other European locations ("Facet"); Filter Products, Inc.; Purolator Facet, Inc.
("PFI"); Purolator Products Air Filtration Company ("Purolator"); Total
Filtration Services, Inc. ("TFS"); Total Filter Technology, Inc. ("TFT"); and
United Air Specialists, Inc. ("UAS"). Airguard also has a 70% equity interest in
Airguard de Venezuela, S.A. The segment's products are sold throughout the
world.

The companies market commercial and industrial air filters and systems,
electrostatic contamination control equipment and electrostatic high precision
spraying equipment. The air filters and systems remove contaminants from
recirculated indoor air and from process air which is exhausted outdoors. The
products represent a complete line of air filters and cleaners with a wide range
of uses for maintaining high quality standards in interior air and exterior
pollution control.

Additional products include specialty filters, filtration systems for
aircraft refueling, anti-pollution and water recycling, and bilge separators.
These products are used in a wide range of applications including commercial,
military and general aviation, marine, oil and gas drilling and refining,
chemical and pharmaceutical processes and beverages, utilities, paper mills and
general industry. The filters are used for the process filtration of liquids
using a variety of string wound, meltblown, and porous and sintered and
non-sintered metal media filters, strainers, separators, coalescers and
absorbent media. Many of these filter products and systems require special
technical approvals and product certification in order to meet commercial and
military requirements.

TFS does not manufacture filtration products or equipment. It is engaged in
the business of supplying a full range of filtration products and equipment
acquired from the Company's subsidiaries and non-affiliated manufacturers to
customers as well as providing filter maintenance and cleaning supplies and
services for the customer's filtration equipment. In addition, TFS is promoting
and developing the Company's Total Filtration Program.

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PACKAGING

The Company's consumer and industrial packaging products business is
conducted by a wholly-owned subsidiary, J. L. Clark, Inc. ("J. L. Clark").

J.L. Clark manufactures a wide variety of different types and sizes of
containers and packaging specialties. Metal, plastic and combination
metal/plastic containers and closures manufactured by the Company are used in
packaging a wide variety of dry and paste form products, such as food
specialties (tea, spices, cookies, potato chips, pretzels, candy and other
confections); beverages and juices; cosmetics and toiletries; drugs and
pharmaceuticals; and chemical specialties (hand cleaners, soaps and special
cleaning compounds). Other packaging products include shells for dry batteries,
film canisters, candles, spools for insulated and fine wire, and custom
decorated flat steel sheets.

Containers and packaging specialties are manufactured only upon orders
received from customers, and individualized containers and packaging specialties
are designed and manufactured, usually with distinctive decoration, to meet each
customer's marketing and packaging requirements and specifications.

DISTRIBUTION

Engine/Mobile Filtration and Industrial/Environmental Filtration products
are sold primarily through a combination of independent distributors, dealers
for original equipment manufacturers and directly to end-use customers such as
truck and equipment fleet users.

The engine/mobile segment also distributes filtration products worldwide
through each of its subsidiaries. Locker, Baldwin Filters N.V. and Baldwin
Filters Limited primarily serve the European markets. Baldwin Filters (Aust.)
Pty. Ltd., markets heavy duty liquid and air filters in Australia and New
Zealand. FIBAMEX manufactures filters in Mexico with distribution in Mexico and
Central and South America. Through the Company's investment in Baldwin-Weifang
Filters Ltd., heavy duty filters and electrostatic air pollution control systems
are manufactured in China for distribution in China and Southeast Asia.
Additionally, through Baldwin-Unifil S.A., air filtration products are
manufactured in South Africa with distribution throughout Africa, Great Britain,
Europe and the Middle East.

The industrial/environmental segment also distributes and services
filtration products and equipment through company-owned branches and
subsidiaries located throughout the United States and in Europe, Singapore,
Malaysia, China and Venezuela.

During fiscal 2002, the Company continued its development and expansion of
its Total Filtration Program. Under the Program, the Company, primarily through
TFS, offers customers the ability to purchase all of the filters needed by that
customer for its facilities and manufacturing, transportation and construction
equipment. Customers that purchase a broad range of filtration products and
services from multiple suppliers are able, by taking advantage of the Program,
to purchase all of their filter requirements from a single source, and thereby
reducing administrative burdens and uncertainty concerning filter pricing,
availability, delivery, performance and quality. The Company is confident that
it can serve its customers' total filtration requirements because it believes
that it now manufactures and supplies the broadest range of filtration products
in the industry. Several total filtration management contracts were completed in
2001 and 2002 and negotiations continue on others. The Company expects that the
impact of these contracts will grow over the next several years as these
customers' facilities are converted to the Program. The Total Filtration Program
will serve as an added distribution channel for all of the Company's filtration
products.

Packaging salespersons call directly on customers and prospective customers
for containers and packaging specialties. Each salesperson is trained in all
aspects of J.L. Clark's manufacturing processes with respect to the products
sold and is qualified to consult with customers and prospective customers
concerning the details of their particular requirements. In addition,
salespersons with expertise in specific areas, such as flat-sheet decorating,
are focused on specific customers and markets.

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CLASS OF PRODUCTS

No class of products accounted for 10% or more of the total sales of the
Company in any of the Company's last three fiscal years.

RAW MATERIAL

Steel, filter media, cartons, aluminum sheet and coil, stainless steel,
chrome vanadium, chrome silicon, resins, gaskets, roll paper, bulk and roll
plastic materials and cotton, wood and synthetic fibers and adhesives are the
most important raw materials used in the manufacture of the Company's products.
All of these are purchased or are available from a variety of sources. The
Company has no long-term purchase commitments. The Company did not experience
shortages in the supply of raw materials during 2002.

PATENTS, TRADEMARKS AND TRADENAMES

Certain features of some of the Company's products are covered by domestic
and, in some cases, foreign patents or patent applications. While these patents
are valuable and important for certain products, the Company does not believe
that its competitive position is dependent upon patent protection. The Company
believes, however, that its trademarks and tradenames used in connection with
certain products are significant to its business.

CUSTOMERS

The largest 10 customers of the Engine/Mobile Filtration segment accounted
for 20.6% of the $263,512,000 of fiscal year 2002 sales of such segment.

The largest 10 customers of the Industrial/Environmental Filtration segment
accounted for 28.5% of the $383,613,000 of fiscal year 2002 sales of such
segment.

The largest 10 customers of the Packaging segment accounted for 62% of the
$68,438,000 of fiscal year 2002 sales of such segment.

No single customer accounted for 10% or more of the Company's consolidated
2002 sales.

BACKLOG

At November 30, 2002, the Company had a backlog of firm orders for products
amounting to approximately $71,900,000. The backlog figure for November 30, 2001
was approximately $65,500,000. Substantially all of the orders on hand at
November 30, 2002 are expected to be filled during fiscal 2003.

COMPETITION

The Company encounters strong competition in the sale of all of its
products. The Company competes in a number of filtration markets against a
variety of competitors. The Company is unable to state its relative competitive
position in all of these markets due to a lack of reliable industry-wide data.
However, in the replacement market for heavy duty liquid and air filters used in
internal combustion engines, the Company believes that it is among the top five
companies measured by annual sales. In addition, the Company believes that it is
a leading manufacturer of liquid and air filters for diesel locomotives. The
Company believes that for industrial and environmental filtration products, it
is among the top five companies measured by annual sales.

In the Packaging segment, its principal competitors include several
manufacturers whose specialty packaging segments are smaller than the Company's
and who often compete on a regional basis only. Strong competition is also
presented by manufacturers of paper, plastic and glass containers. The Company's
competitors generally manufacture and sell a wide variety of products in
addition to packaging products of the type produced by the Company and do not
publish separate sales figures relative to these competitive products.
Consequently, the Company is unable to state its relative competitive position
in those markets.

The Company believes that it is able to maintain its competitive position
because of the quality and breadth of its products and services and the broad
geographic scope of its operations.

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PRODUCT DEVELOPMENT

The Company's Technical Centers and laboratories test product components
and completed products to insure high quality manufacturing results, evaluate
competitive products, aid suppliers in the development of product components,
and conduct controlled tests of newly designed filters, filtration systems and
packaging products for particular uses. Product development departments are
concerned with the improvement and creation of new filters, filtration systems,
containers and packaging products in order to broaden the uses of these items,
counteract obsolescence and evaluate other products available in the
marketplace.

In fiscal 2002, the Company employed 81 professional employees on either a
full-time or part-time basis on research activities relating to the development
of new products or the improvement or redesign of its existing products. During
this period the Company spent approximately $6,482,000 on such activities as
compared with $5,365,000 for 2001 and $6,942,000 for 2000.

ENVIRONMENTAL FACTORS

The Company is not aware of any facts which would cause it to believe that
it is in material violation of existing applicable standards with respect to
emissions to the atmosphere, discharges to waters, or treatment, storage and
disposal of solid or hazardous wastes.

The Company is party to various proceedings relating to environmental
issues. The U.S. Environmental Protection Agency (EPA) and/or other responsible
state agencies have designated the Company as a potentially responsible party
(PRP), along with other companies, in remedial activities for the cleanup of
waste sites under the federal Superfund statute.

During fiscal 2002, the Company was addressing two claims for environmental
remediation costs at two sites where it has been named a potentially responsible
party. Negotiated settlements have been reached concerning waste disposal by the
Company and other companies at these sites in Maryland and Illinois at a total
accrued cost to the Company of less than $50,000.

Although it is not certain what future environmental claims, if any may be
asserted, the Company currently believes that its potential liability for known
environmental matters does not exceed its present accruals of $50,000. However,
environmental and related remediation costs are difficult to quantify for a
number of reasons including the number of parties involved, the difficulty in
determining the extent of the contamination, the length of time remediation may
require, the complexity of environmental regulation and the continuing
advancement of remediation technology. Applicable federal law may impose joint
and several liability on each PRP for the cleanup of a contaminated site.

The Company does anticipate, however, that it may be required to install
additional pollution control equipment to augment or replace existing equipment
in the future in order to meet applicable environmental standards. During fiscal
2003, the Company expects to upgrade certain oxidizers used to remove air borne
contaminants at its Rockford, Illinois, packaging manufacturing facility. The
cost of this project is expected to be about $1.4 million. The Company is
presently unable to predict the timing or the cost of any other project of this
nature and cannot give any assurance that the cost of such projects may not have
an adverse effect on earnings. However, the Company is not aware, at this time,
of any additional significant current or pending requirements to install such
equipment at any of its facilities.

EMPLOYEES

As of November 30, 2002, the Company had approximately 4,594 employees.

(d) Financial Information About Foreign and Domestic Operations and Export
Sales

Financial information relating to export sales and the Company's operations
in the United States and other countries is set forth on page 24 of the Annual
Report and is incorporated herein by reference and filed as part of Exhibit
13(a)(vi) to this 2002 Form 10-K. The Company is not aware of any unusual risks
attendant to the conduct of its operations in other countries.

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INTERNET WEBSITE

The Company's Internet address is www.clarcor.com. The Company makes
available, free of charge, on its Internet website, its annual report on Form
10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K and
amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Exchange Act as soon as reasonably practicable after such forms are
electronically filed with the SEC.

ITEM 2. PROPERTIES.

Location

An office building owned by the Company located in Rockford, Illinois
houses the Corporate offices in 22,000 square feet of office space.

Engine/Mobile Filtration. The following is a description of the principal
properties utilized by the Company in conducting its Engine/Mobile Filtration
business:

The Baldwin Filters' Kearney, Nebraska plant contains 516,000 square feet
of manufacturing and warehousing space, 25,000 square feet of research and
development space, and 40,000 square feet of office space. The Kearney facility
is located on a site of approximately 40 acres. A manufacturing facility located
in Yankton, South Dakota has approximately 170,000 square feet of floor space on
a 21 acre tract. Both facilities are owned by the Company. In addition, Baldwin
has a capital lease for a 100,000 square foot manufacturing facility on a site
of 20 acres in Gothenburg, Nebraska.

The Company also manufactures filters in Lancaster, Pennsylvania at its
Clark Filter plant. The building, constructed about 1968 on an 11.4 acre tract
of land, contains 168,000 square feet of manufacturing and office space and is
owned by the Company.

Locker owns two facilities on four acres in Warrington, Cheshire, England,
which are used for offices, manufacturing and warehousing. These facilities
total approximately 6,600 square meters.

The Company leases various facilities in Australia, Belgium, Mexico, South
Africa and the United Kingdom for the manufacture and distribution of
engine/mobile filtration products.

Industrial/Environmental Filtration. The following is a description of the
principal properties utilized by the Company in conducting its
Industrial/Environmental Filtration business:

Airguard has nine manufacturing and warehousing locations. It leases
142,000 square feet in New Albany, Indiana, 100,000 square feet in Louisville,
Kentucky, 84,000 square feet in Corona, California, 44,500 square feet in
Dallas, Texas and 83,000 square feet in Rockford, Illinois and a smaller
facility in North Carolina. The Company owns the following three facilities. The
Airguard High Efficiency Filter plant, located in Jeffersontown, Kentucky on a
7.5 acre tract of land, contains 100,000 square feet of manufacturing and office
facilities. Airguard also produces air filtration products in a 290,000 square
foot manufacturing facility in Campbellsville, Kentucky. Airguard's ATI
manufacturing and office facility in Ottawa, Kansas, contains 31,000 square
feet.

Airguard administrative and sales offices and distribution facilities are
located in leased facilities in Louisville, Kentucky; Atlanta, Georgia;
Portland, Oregon; Commerce City, Colorado; Dallas, Texas; Corona and Sacramento,
California and New Albany, Indiana. Airguard leases facilities in Malaysia,
Singapore and Venezuela.

Facet owns manufacturing and distribution facilities in Tulsa, Oklahoma and
La Coruna, Spain. The Tulsa facilities contain approximately 142,000 square feet
on a 16 acre site. The La Coruna facility is on an approximately 17,000 square
meter site and the building contains 5,700 square meters. Facet also leases
facilities in Stillwell, Oklahoma; Tulsa, Oklahoma; Italy; Germany; France;
United Kingdom and The Netherlands.

Purolator owns a 228,500 square-foot manufacturing and office facility in
Henderson, North Carolina on a site of approximately 25 acres. Purolator also
owns a 42,500 square foot manufacturing and office facility in Kenly, North
Carolina. Purolator leases sales, manufacturing and distribution facilities in
Fresno, California;

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Hayward, California; Sacramento, California; Davenport, Iowa; Wichita, Kansas;
Metuchen, New Jersey; Henderson, North Carolina; Sparks, Nevada; Fairfax,
Virginia and Auburn, Washington.

Purolator Facet, Inc. ("PFI") owns a manufacturing and distribution
facility in Greensboro, North Carolina. This facility contains approximately
88,000 square feet on a 21 acre site. PFI also leases a facility in Greensboro,
North Carolina.

TFS leases 85,000 square feet of headquarters space in Rochester Hills,
Michigan. In addition, it leases office, warehouse space or distribution
facilities in Cincinnati, Toledo and Columbus, Ohio; Fort Wayne and
Indianapolis, Indiana; Tonawanda, New York; Saginaw, Michigan; Nashville,
Tennessee; Birmingham, Alabama; Kansas City, Missouri; and several locations in
Mexico and Canada. It also owns an office and warehouse facility consisting of a
total of 33,000 square feet in Goodlettsville, Tennessee.

United Air Specialists ("UAS") has its offices and primary manufacturing
facility in Blue Ash, Ohio (a suburb of Cincinnati), on approximately 17 acres
of land. This facility was built in 1978 and was expanded in 1991 and 1993 to a
total of approximately 157,000 square feet. In addition, UAS leases sales and
service facilities in Bad Camberg, Germany; Phoenix, Arizona; Hayward,
California; Anaheim, California; Louisville, Kentucky; Troy, Michigan; Jackson,
Mississippi and Houston, Texas.

Filter Products Inc. owns a 40,000 square foot manufacturing and office
facility in Sacramento, California.

TFT leases space in North Chelmsford, Massachusetts which houses its office
and manufacturing operations.

Packaging. The following is a description of the principal properties
utilized by the Company in conducting its Packaging business:

The Company's J. L. Clark, Rockford, Illinois plant, located on 34 acres,
consists of one-story manufacturing buildings, the first of which was
constructed in 1910. Since then a number of major additions have been
constructed and an injection molding plant was constructed in 1972.
Approximately 450,000 square feet of floor area are devoted to manufacturing,
warehouse and office use. Of the 34 acres, approximately 12 are vacant.

A J. L. Clark plant is located in Lancaster, Pennsylvania on approximately
11 acres. It consists of a two-story office building containing approximately
7,500 square feet of floor space and a manufacturing plant and warehouse
containing 236,000 square feet of floor space, most of which is on one level.
These buildings were constructed between 1924 and 1964.

J. L. Clark also leases a manufacturing facility in Lathrop, California.

The various properties owned by the Company are considered by it to be in
good repair and well maintained. Plant asset additions in 2003 are estimated at
$21,000,000 to $23,000,000 for land, buildings, equipment and machinery and cost
reduction projects.

Function

Engine/Mobile Filtration. Oil, air, fuel, hydraulic fluid and coolant
filters are produced at the Baldwin facilities in Kearney and Gothenburg,
Nebraska and Yankton, South Dakota. The various processes of pleating paper,
winding cotton and synthetic fibers, placing the filter element in a metal or
fiber container and painting the containers are highly mechanized, but require
some manual assistance. The plants also maintain an inventory of special dies
and molds for filter manufacture.

Oil, air and fuel filters, primarily for use in the railroad industry, are
produced at Clark Filter in Lancaster, Pennsylvania.

At its facilities in Warrington, England, Locker produces large scale air
filtration systems primarily for diesel and gas turbine power installations, air
filters and units for agricultural and off-road vehicles and specialty filters
mainly for vacuums, pharmaceuticals and incineration applications.

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Industrial/Environmental Filtration. Air filters for the commercial,
residential and industrial markets are produced in the Airguard and Purolator
facilities. Dust collection systems, high efficiency electronic air cleaning
systems and electrostatic precision spraying systems are designed and
manufactured at the UAS facility in Cincinnati, Ohio.

Specialty filter products for aviation, oil and gas drilling, military,
marine and paper and chemical processes are manufactured and assembled at the
PFI facilities in Greensboro, North Carolina. The manufacturing processes
include bonding and sintering metal, tungsten inert gas and electron beam
welding and diffusion-bonding of wire. Facet designs, manufactures and assembles
filters and filtration systems for aircraft refueling, power generation, water
treatment and general industrial applications at its United States and European
facilities. The company also uses outside contractors for assembly and
manufacturing of some of its products. Many of these products require special
commercial or military technical approvals or product certification.

Depth media filters for the pharmaceutical, biotech and food and beverage
industries and other critical process filtration applications are manufactured
at the Filter Products Inc. facility in Sacramento, California.

TFT manufactures string wound and melt blown cartridges and bag filters at
its leased facility in North Chelmsford, Massachusetts.

Packaging. The Company's metal and combination metal and plastic packaging
products are produced at J. L. Clark plants located in Rockford, Illinois,
Lancaster, Pennsylvania, and Lathrop, California. The Rockford and Lancaster
plants are completely integrated facilities which include creative and
mechanical art departments and photographic facilities for color separation,
preparation of multiple-design negatives and lithographing plates. Metal sheets
are decorated on coating machines and lithographing presses connected with
conveyor ovens. Decorated sheets are then cut to working sizes on shearing
equipment, following which fabrication is completed by punch presses,
can-forming and can-closing equipment and other specialized machinery for
supplementary operations.

Plastic packaging capabilities include molding and labeling of irregular
shaped plastic containers and customized plastic closures which have
tamper-evidence as well as convenience features.

ITEM 3. LEGAL PROCEEDINGS.

The Company is involved in legal actions arising in the normal course of
business. Management is of the opinion that the outcome of these actions will
not have a material adverse effect on the Company's consolidated results of
operations or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

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ADDITIONAL ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT

Each executive officer of the Company is elected by the Board of Directors
for a term of one year which begins at the Board of Directors Meeting at which
he or she is elected, held at the time of the Annual Meeting of Shareholders,
and ends on the date of the next Annual Meeting of Shareholders or upon the due
election and qualification of his or her successor.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS.

The Company's Common Stock is listed on the New York Stock Exchange; it is
traded under the symbol CLC. The following table sets forth the high and low
market prices as quoted during the relevant periods on the New York Stock
Exchange and dividends per share paid for each quarter of the last two fiscal
years.

The approximate number of holders of record of the Company's Common Stock
at January 15, 2003 is 1,300. In addition, the Company believes that there are
approximately 5,500 beneficial owners whose shares are held in street names.

ITEM 6. SELECTED FINANCIAL DATA.

The information required hereunder is set forth on pages 26 and 27 of the
Annual Report under the caption "11-Year Financial Review," is incorporated
herein by reference and is filed as Exhibit 13(a)(ix) to this 2002 Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.

The information required hereunder is set forth on pages 7 through 11 of
the Annual Report under the caption "Financial Review," is incorporated herein
by reference and is filed as Exhibit 13(a)(x) to this 2002 Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information required hereunder is set forth on page 10 of the Annual
Report under the caption "Financial Review -- Other Matters -- Market Risk," is
incorporated herein by reference and is filed as part of Exhibit 13(a)(x) to
this 2002 Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Consolidated Financial Statements, the Notes thereto and the report
thereon of PricewaterhouseCoopers LLP, independent accountants, required
hereunder with respect to the Company and its consolidated subsidiaries are set
forth on pages 12 through 25, inclusive, of the Annual Report, are incorporated
herein by reference and are filed as Exhibits 13(a)(ii) through 13(a)(vii) to
this 2002 Form 10-K.

11

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Certain information required hereunder is set forth on pages 1 and 2 of the
Company's Proxy Statement dated February 20, 2003 (the "Proxy Statement") for
the Annual Meeting of Shareholders to be held on March 24, 2003 under the
caption "Election of Directors -- Nominees for Election to the Board of
Directors" and "-- Information Concerning Nominees and Directors" and is
incorporated herein by reference. Additional information required hereunder is
set forth on page 5 of the Proxy Statement under the caption "Beneficial
Ownership of the Company's Common Stock -- Section 16(a) Beneficial Ownership
Reporting Compliance" and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

The information required hereunder is set forth on pages 6 through 9
inclusive, of the Proxy Statement under the caption "Compensation of Executive
Officers and Other Information" and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

The information required hereunder is set forth on page 22 of the Proxy
Statement under the caption "Approval of 2004 Incentive Plan -- Equity
Compensation Plan Information" and on pages 4 and 5 of the Proxy Statement under
the caption "Beneficial Ownership of the Company's Common Stock" and is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None.

ITEM 14. CONTROLS AND PROCEDURES.

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. 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 November 30, 2002. Based
on their evaluation, they concluded that the Company's disclosure controls and
procedures were effective in achieving the objectives for which they were
designed. Since their evaluation, there have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

12

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.

(a) Financial Statements

The following financial information is incorporated herein by reference to
the Company's Annual Report to Shareholders for the fiscal year ended November
30, 2002:

*Consolidated Balance Sheets at November 30, 2002 and 2001

*Consolidated Statements of Earnings for the years ended November 30, 2002,
2001 and 2000

*Consolidated Statements of Shareholders' Equity for the years ended
November 30, 2002, 2001 and 2000

*Consolidated Statements of Cash Flows for the years ended November 30,
2002, 2001 and 2000

*Notes to Consolidated Financial Statements

*Report of Independent Accountants

*Management's Report on Responsibility for Financial Reporting
- ------------------------------
*Filed herewith as part of Exhibit 13(a) to this 2002 Form 10-K

The following items are set forth herein on the pages indicated:

Report of Independent Accountants.......................................... F-1

Financial Statement Schedules:

II. Valuation and Qualifying Accounts................................. F-2

Financial statements and schedules other than those listed above are
omitted for the reason that they are not applicable, are not required, or the
information is included in the financial statements or the footnotes therein.

(b) None

(c) Exhibits

3.1 The registrant's Second Restated Certificate of
Incorporation. Incorporated by reference to Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1998.

3.1(a) Amendment to ARTICLE FOURTH of the Second Restated
Certificate of Incorporation. Incorporated by reference to
the Company's Proxy Statement dated February 18, 1999 for
the Annual Meeting of Shareholders held on March 23, 1999.

3.2 The registrant's By-laws, as amended. Incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1995.

3.3 Certificate of Designation of Series B Junior Participating
Preferred Stock of CLARCOR as filed with the Secretary of
State of the State of Delaware on April 2, 1996.
Incorporated by reference to Exhibit 4.5 to the Registration
Statement on Form 8-A filed April 3, 1996.

4.1 Stockholder Rights Agreement dated as of March 28, 1996
between the registrant and the First Chicago Trust Company
of New York. Incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K filed April 3, 1996.

4.1(a) First Amendment to Stockholders Rights Agreement dated as of
March 23, 1999. Incorporated by reference to Exhibit 4 to
the Company's Form 8-A/A filed March 29, 1999.

13

4.2 Certain instruments defining the rights of holders of
long-term debt securities of CLARCOR and its subsidiaries
are omitted pursuant to Item 601(b)(4)(iii)(A) of Regulation
S-K. CLARCOR hereby agrees to furnish copies of these
instruments to the SEC upon request.

4.2(a) Multicurrency Credit Agreement dated as of September 9,
1999. Incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K filed September 17,
1999.

10.1 The registrant's Deferred Compensation Plan for Directors.
Incorporated by reference to Exhibit 10.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended
November 30, 1984 (the "1984 10-K").

10.2 The registrant's Supplemental Retirement Plan. Incorporated
by reference to Exhibit 10.2 to the 1984 10-K.

10.2(a) The registrant's 1994 Executive Retirement Plan.
Incorporated by reference to Exhibit 10.2(a) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 3, 1994 ("1994 10-K").

10.2(b) The registrant's 1994 Supplemental Pension Plan.
Incorporated by reference to Exhibit 10.2(b) to the 1994
10-K.

10.2(c) The registrant's Supplemental Retirement Plan (as amended
and restated effective December 1, 1994). Incorporated by
reference to Exhibit 10.2(c) to the 1994 10-K.

10.3 The registrant's 1984 Stock Option Plan. Incorporated by
reference to Exhibit A to the Company's Proxy Statement
dated March 2, 1984 for the Annual Meeting of Shareholders
held on March 31, 1984.

10.4 Employment Agreements with certain officers. Incorporated by
reference to Exhibit 5 to the Company's Current Report on
Form 8-K filed July 25, 1989.

10.4(a)(1) Form of Amended and Restated Employment Agreement with each
of David J. Anderson, Marcia S. Blaylock, David J. Boyd,
Bruce A. Klein, David J. Lindsay, Norman E. Johnson, Peter
F. Nangle, and William B. Walker. Incorporated by Reference
to Exhibit 10.4(a)(1) to the Company's Annual Report on Form
10-K for the fiscal year ended December 2, 2000 (the "2000
10-K").

10.4(b) Employment Agreement with Lawrence E. Gloyd dated July 1,
1997. Incorporated by reference to Exhibit 10.4(b) to the
Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1997 ("1997 10-K").

10.4(c) Employment Agreement with Norman E. Johnson dated July 1,
1997. Incorporated by reference to Exhibit 10.4(c) to the
1997 10-K.

10.4(c)(1) Amended and Restated Employment Agreement with Norman E.
Johnson dated as of December 17, 2000. Incorporated by
Reference to Exhibit 10.4(c)(1) to the 2000 10-K.

10.4(d) Trust Agreement dated December 1, 1997. Incorporated by
reference to Exhibit 10.4(d) to the 1997 10-K.

10.4(e) Executive Benefit Trust Agreement dated December 22, 1997.
Incorporated by reference to Exhibit 10.4(e) to the 1997
10-K.

10.5 The registrant's 1994 Incentive Plan (the "Plan") as amended
through June 30, 2000. Incorporated by Reference to Exhibit
10.5 to the 2000 10-K.

10.5(a) Amendment to the Plan adopted December 18, 2000.
Incorporated by Reference to Exhibit 10.5(a) to the 2000
10-K.

10.5(b) The registrant's 2004 Incentive Plan as proposed to be
adopted by the shareholders of the Company at the Annual
Meeting of Shareholders on March 24, 2003. Incorporated by
reference to Exhibit A to the Proxy Statement.

*12.1 Computation of Certain Ratios.

14

*13 (a) The following items incorporated by reference herein from
the Company's 2002 Annual Report to Shareholders ("2002
Annual Report"), are filed as Exhibits to this Annual Report
on Form 10-K:

(i) Business segment information for the fiscal years 2000
through 2002 set forth on pages 23 and 24 of the 2002
Annual Report (included in Exhibit 13(a)(vi) -- Note P
of Notes to Consolidated Financial Statements);
(ii) Consolidated Balance Sheets of the Company and its
Subsidiaries at November 30, 2002 and 2001 set forth on
page 12 of the 2002 Annual Report;
(iii) Consolidated Statements of Earnings of the Company and
its Subsidiaries for the years ended November 30, 2002,
2001 and 2000 set forth on page 13 of the 2002 Annual
Report;
(iv) Consolidated Statements of Shareholders' Equity for the
Company and its Subsidiaries for the years ended
November 30, 2002, 2001 and 2000 set forth on page 14
of the 2002 Annual Report;
(v) Consolidated Statements of Cash Flows of the Company
and its Subsidiaries for the years ended November 30,
2002, 2001 and 2000 set forth on page 15 of the 2002
Annual Report;
(vi) Notes to Consolidated Financial Statements set forth on
pages 16 through 24 of the 2002 Annual Report;
(vii) Report of Independent Accountants set forth on page 25
of the 2002 Annual Report;
(viii) Management's Report on Responsibility for Financial
Reporting set forth on page 25 of the 2002 Annual
Report;
(ix) Information under the caption "11-Year Financial
Review" set forth on pages 26 and 27 of the 2002 Annual
Report; and
(x) Management's Discussion and Analysis of Financial
Condition and Results of Operation set forth under the
caption "Financial Review" on pages 7 through 11 of the
2002 Annual Report.

*21 Subsidiaries of the Registrant.

*23 Consent of Independent Accountants.

*99.1 Certifications pursuant to Section 1350 of Chapter 63 of
Title 18 of the United States Code.

- ---------------

* Filed herewith.

15

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date: February 20, 2003 CLARCOR Inc.
(Registrant)

By: /s/ NORMAN E. JOHNSON
--------------------------------------
Norman E. Johnson
Chairman of the Board, President
& Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Date: February 20, 2003 By: /s/ NORMAN E. JOHNSON
------------------------------------------------
Norman E. Johnson
Chairman of the Board, President &
Chief Executive Officer and Director

Date: February 20, 2003 By: /s/ BRUCE A. KLEIN
------------------------------------------------
Bruce A. Klein
Vice President -- Finance &
Chief Financial Officer

Date: February 20, 2003 By: /s/ MARCIA S. BLAYLOCK
------------------------------------------------
Marcia S. Blaylock
Vice President, Controller & Chief Accounting
Officer

Date: February 20, 2003 By: /s/ J. MARC ADAM
------------------------------------------------
J. Marc Adam
Director

Date: February 20, 2003 By: /s/ ROBERT J. BURGSTAHLER
------------------------------------------------
Robert J. Burgstahler
Director

Date: February 20, 2003 By: /s/ LAWRENCE E. GLOYD
------------------------------------------------
Lawrence E. Gloyd
Director

Date: February 20, 2003 By: /s/ ROBERT H. JENKINS
------------------------------------------------
Robert H. Jenkins
Director

16

Date: February 20, 2003 By: /s/ PHILIP R. LOCHNER, JR.
------------------------------------------------
Philip R. Lochner, Jr.
Director

Date: February 20, 2003 By: /s/ JAMES L. PACKARD
------------------------------------------------
James L. Packard
Director

Date: February 20, 2003 By:
------------------------------------------------
Roseann Stevens
Director

Date: February 20, 2003 By: /s/ KEITH E. WANDELL
------------------------------------------------
Keith E. Wandell
Director

17

CERTIFICATIONS

I, Norman E. Johnson, certify that:

1. I have reviewed this annual report on Form 10-K of CLARCOR Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal controls;
and

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

/s/ NORMAN E. JOHNSON
--------------------------------------
Norman E. Johnson
Chairman of the Board, President and
Chief
Executive Officer

Date: February 20, 2003

18

CERTIFICATIONS

I, Bruce A. Klein, certify that:

1. I have reviewed this annual report on Form 10-K of CLARCOR Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal controls;
and

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

/s/ BRUCE A. KLEIN
--------------------------------------
Bruce A. Klein
Vice President-Finance and Chief
Financial Officer

Date: February 20, 2003

19

REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Shareholders
CLARCOR Inc.
Rockford, Illinois

Our audits of the consolidated financial statements referred to in our report
dated January 8, 2003 appearing on page 25 in the 2002 Annual Report to
Shareholders of CLARCOR Inc. and Subsidiaries (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the financial statement schedule listed in Item
15(a) of this Form 10-K (page 13, index of exhibits). In our opinion, the
financial statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
January 8, 2003

F-1

CLARCOR INC.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED NOVEMBER 30, 2002, 2001 AND 2000
(DOLLARS IN THOUSANDS)

NOTES:

(A) Due to business acquisitions.

(B) Bad debts written off during year, net of recoveries.

F-2