Has CLARCOR (NYSE:CLC) underperformed? It's done a little better than the S&P 500 over the past year, so I guess the answer has to be "no." But the stock hasn't been on fire, either, and yesterday's earnings announcement had the market treating it to another bucket of cold water.

Performance wasn't terrible, but you need something a little better than "not terrible" to maintain a healthy valuation. Sales were up about 3%, though both gross and operating margins were lower for the quarter. Perhaps more troublingly, the perpetually problematic industrial/environmental business just isn't coming along as well as management (or shareholders) would like.

Making matters worse, it seems that CLARCOR has a deadbeat customer on its hands. The company had an agreement with EDS's (NYSE:EDS) AT Kearney to supply maintenance filters at DaimlerChrylser (NYSE:DCX). However, AT Kearney not only stopped paying for special orders, but wanted a refund for all such orders over the past 15 months -- plus an 8% price cut. CLARCOR essentially told them to go jump in a lake. It filed suit for about $3.6 million -- the amount of the alleged underpayment -- and had to take a $3 million charge in this quarter.

Aside from all this noise, I'm struck by a basic fact. Other industrial-filtration companies like Donaldson (NYSE:DCI) and Pall (NYSE:PLL) aren't exactly blowing the doors off the market with their performance, either. So perhaps the much-beloved filtration market wasn't quite as good as everyone had so recently hoped.

Apart from my belief that spelling out a company's name in capital letters is pompous, I've got nothing against CLARCOR. As always, my gripe is about valuation. I'm not overpaying for a company in this kind of business, even if it is well-run and sports a strong return on capital. With unimpressive growth seemingly blanketing the sector, I'm in no rush to change my mind or pump up my estimates of future growth.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).