Knape & Vogt (NASDAQ:KNAP)
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Knape & Vogt Reports Fourth Quarter and Fiscal Year Sales and
Income Growth
Sales Increase 19%, Net Income Increases 67% for the Year
GRAND RAPIDS, Mich., Aug. 12 /PRNewswire-FirstCall/ -- Knape & Vogt
Manufacturing Co. (NASDAQ:KNAP) today announced double-digit growth in sales
and net income for the fourth quarter and fiscal year ending July 3, 2004.
The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides,
shelving, storage and ergonomic office products reported that net sales
increased 30.9 percent to $41.8 million for the fourth quarter of fiscal 2004,
compared with net sales of $31.9 million during the same period a year ago. KV
reported net income of $1.5 million, or $0.33 per diluted share, for the
current quarter, compared with $788,819, or $0.17 per diluted share, during the
same period in fiscal 2003. The fourth quarter of fiscal 2004 included 14
weeks versus 13 weeks in the prior year fourth quarter. The additional week
added approximately $3.0 million in sales to the 2004 fourth quarter and fiscal
year.
A focused sales effort led by KV's expanded direct sales force, along with new
product sales totaling $6.4 million in the fourth quarter of fiscal 2004, were
the primary sales growth drivers. Sales volume growth combined with KV's
ability to leverage its selling and administrative costs helped to offset the
negative impact of higher steel prices and improve net income. KV reported
selling and administrative expenses as a percent of sales declined from 18.8
percent in the prior year quarter to 14.7 percent in the current fourth
quarter.
"Our focus on new products and better penetrating our key markets resulted in
solid growth for both the fourth quarter and the fiscal year," said Bill
Dutmers, chairman and CEO. "Our focus on innovation continues to spark
interest in the marketplace. In June, we participated in NeoCon and introduced
several new products, including our Proxi(TM) office organization system; the
KV Bug, a solution that allows the users to attach USB connections under any of
our keyboard platforms; and the SRS(TM)/Polaris(TM) keyboard arm, which brings
a rigid and stable surface to the user that is easily adjusted without any
buttons or dials.
"We have also proven the value of our vendor managed inventory system with one
of our largest customers," continued Dutmers. "This system has allowed KV to
serve as a purchasing resource for our customers and improve their inventory
levels, while ensuring that they have the right product on hand when they need
it."
For the 2004 fiscal year, KV reported a 67.4 percent increase in net income on
a 19.3 percent increase in net sales compared to the prior year period. KV
posted net income of $3.7 million, or $0.83 per diluted share, on net sales of
$149.0 million in fiscal 2004, compared with net income of $2.2 million, or
$0.49 per diluted share, on net sales of $124.9 million in fiscal 2003. New
products accounted for $21.7 million in sales for fiscal 2004, compared with
$11.7 million in the prior year.
"Our focus on innovative new products will be demonstrated again at the
International Woodworking Fair scheduled to be held later this month in
Atlanta," said Dutmers. "We will introduce over 300 new items at the show,
including a new line of European-designed upscale chrome kitchen and closet
organization products. We will also show a wood and wire program of kitchen
accessories, including pullout pan storage and a waste/recycle unit that has
wood features and an undermount slide system.
"We continue to differentiate ourselves in the markets that we serve as a
partner with strong manufacturing and engineering expertise, coupled with a
focus on innovation. We believe this model will allow us to continue to grow
as we enter the new fiscal year."
About Knape & Vogt
Knape & Vogt Manufacturing Co. brings more than a century of experience to the
design, manufacture and distribution of kitchen and bath storage solutions and
office products for original equipment manufacturers, specialty distributors,
office furniture dealers, hardware chains and major home centers throughout the
country. Additional information on KV's product lines is available on
http://www.knapeandvogt.com/ .
Cautionary Statement: This press release contains certain forward-looking
statements that involve risks and uncertainties. When used in this release,
the words "believe," "anticipates," "think," "intend," "optimistic,"
"forecast," "expect," "potential" and similar expressions identify forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not limited
to, statements concerning future improvements in net sales, margins and
profitability. Such statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those expressed or
implied by such forward-looking statements, including, but not limited to,
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products, services and prices. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release.
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Income
Fiscal Year Ended Three Months Ended
(Audited) (Unaudited)
July 3, June 28, July 3, June 28,
2004 2003 2004 2003
Net sales $148,977,742 $124,920,476 $41,762,106 $31,914,923
Cost of sales 118,249,399 97,638,310 33,194,068 24,710,028
Gross margin 30,728,343 27,282,166 8,568,038 7,204,895
Selling and
administrative
expenses 23,568,741 23,190,715 6,130,672 5,998,717
Other - 271,325 - -
Operating income 7,159,602 3,820,126 2,437,366 1,206,178
Interest and other
expenses, net 1,634,403 1,202,726 418,361 247,402
Income before
income taxes 5,525,199 2,617,400 2,019,005 958,776
Income taxes 1,790,267 386,501 534,193 169,957
Net income $3,734,932 $2,230,899 $1,484,812 $788,819
Earnings per common
share - basic and diluted:
Weighted average
shares outstanding 4,516,245 4,516,706 4,516,349 4,515,635
Net income per share $0.83 $0.49 $0.33 $0.17
Cash dividend -
Common stock $0.66 $0.66 $0.165 $0.165
Cash dividend -
Class B common stock $0.60 $0.60 $0.15 $0.15
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
(Audited)
July 3, 2004 June 28, 2003
Assets
Current Assets:
Cash and equivalents $5,278,869 $3,846,613
Accounts receivable, net 19,959,442 16,820,600
Inventories 23,955,271 18,979,056
Prepaid expenses and other 950,911 731,749
Total current assets 50,144,493 40,378,018
Property, plant and equipment, net 28,683,714 33,989,109
Other assets 17,423,119 17,981,702
$96,251,326 $92,348,829
Liabilities and Equity
Current liabilities $22,805,708 $19,920,749
Long-term debt and capital leases 24,538,864 24,052,605
Deferred income taxes & other
long-term liabilities 12,082,536 13,613,613
Stockholders' equity 36,824,218 34,761,862
$96,251,326 $92,348,829
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Audited)
Fiscal Year Ended
July 3, 2004 June 28, 2003
From Operating Activities:
Net income $3,734,932 $2,230,899
Depreciation and amortization 6,400,358 6,642,091
Change in retirement plan cost 390,845 (4,263,407)
Deferred income taxes (370,106) 480,000
Loss (gain) on disposal of fixed assets 1,450 136,746
Changes in operating
assets & liabilities (5,290,913) (4,765,011)
Other, net 42,098 50,000
Net cash provided by operating activities 4,908,664 511,318
From Investing Activities:
Additions to property, plant &
equipment net (1,199,398) (3,707,536)
Proceeds from sales of property,
plant & equipment 53,975 243,527
Other, net (28,114) (62,282)
Net cash used for investing activities (1,173,537) (3,526,291)
From Financing Activities:
Cash dividends paid (2,849,192) (2,847,316)
Net change in long-term
debt/capital leases 486,259 3,993,920
Repurchase and retirement of
common stock - (23,949)
Net cash provided by (used for)
financing activities (2,362,933) 1,122,655
Effect of Exchange Rates on Cash 60,062 308,388
Net increase (decrease) in
cash and equivalents $1,432,256 $(1,583,930)
DATASOURCE: Knape & Vogt Manufacturing Co.
CONTACT: Leslie Cummings, Vice President of Finance and Treasurer of
Knape & Vogt Manufacturing Company, +1-616-459-3311, Ext. 225; Jeff Lambert or
Eric Lubbers of Lambert, Edwards & Associates, Inc., +1-616-233-0500,
, for Knape & Vogt Manufacturing Company
Web site: http://www.knapeandvogt.com/