Knape & Vogt (NASDAQ:KNAP)
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Knape & Vogt Reports Increased Third Quarter Sales and Income
GRAND RAPIDS, Mich., April 22 /PRNewswire-FirstCall/ -- Knape & Vogt
Manufacturing Co. today announced net income more than doubled on solid net
sales growth for the third quarter ended March 27, 2004.
The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides,
shelving, storage and ergonomic office products reported that net sales
increased 15.3 percent to $36.9 million for the third quarter of fiscal 2004,
compared with net sales of $32.0 million during the same period a year ago. KV
reported net income of $1.1 million, or $0.25 per diluted share, for the
current quarter, compared with $395,387, or $0.09 per diluted share, during the
same period in fiscal 2003. The net income for the prior year third quarter
included a one-time tax benefit of approximately $400,000 or $0.09 per diluted
share related to the Company amending certain prior year tax returns and taking
advantage of a recent change in the tax law related to capital losses, which
had been previously disallowed.
KV attributed the sales growth to the addition of both new products and new
customers. During the third quarter of fiscal 2004, the Company reported $5.4
million in sales of new products. KV said the sales increase and resulting
improved overhead absorption, coupled with a positive change in its sales mix
to higher margin market channels, drove the higher income growth.
"We are pleased to report growth in all of our key markets, cumulating in
double-digit growth at the consolidated level for both the third quarter and
the first nine months of fiscal 2004," said Bill Dutmers, chairman and CEO.
"Our new products are at the core of this growth. We have added custom
precision slides for our office furniture OEM customers, introduced the
tool-free Shelf-Made(TM) Instant shelves product line for our retail customers
and developed the line of Precision Built(TM) precision slides for our
distribution customers. We also introduced a new garage organization program
during this past quarter that earned KV the business of a major new retailer
and opens up a key opportunity for this and other product lines."
"We are also learning to utilize our knowledge of certain key products -- such
as our ergonomic line of office accessories -- to create market-specific
versions of these products for each of the markets that we serve," continued
Dutmers. "In fact, we recently modified several products from this line and
have successfully placed them in the retail market, a new channel for KV in
this product category."
For the first nine months of fiscal 2004, KV reported a 56.0 percent increase
in net income on a 15.3 percent increase in net sales compared to the prior
year period. KV posted net income of $2.3 million, or $0.50 per diluted share,
on net sales of $107.2 million in the 2004 nine-month period, compared with net
income of $1.4 million, or $0.32 per diluted share, on net sales of $93.0
million for the first nine months of fiscal 2003. New products accounted for
$15.2 million in sales for the first nine months of fiscal 2004, compared with
$8.1 million in the year-ago period.
"We remained focused on developing new product ideas, listening to our
customers and challenging ourselves to keep our costs competitive. Using this
model, we believe there is further room for growth in all of our key markets,"
said Dutmers.
"Our focus on the customer extends from how we develop product to how it's
packaged and merchandised to the selling tools we provide our retailer and
dealer partners like our online Virtual Kitchen program and our KV Van mobile
showrooms. And we are seeing these initiatives pay off as evidenced by the
positive response to our new product introductions at the Kitchen/Bath Industry
Show earlier this month in Chicago and at the just-completed National Hardware
Show. At these shows, we introduced products such as our pir.o.et(TM),
height-adjustable lazy susan, the Blind Base corner organization system, the
line of upscale glass shelf kits and a new line of solid surface shelf kits."
KV introduced several new kitchen and bath storage and organizational products
at the Kitchen/Bath Industry Show and many innovative storage and shelving
products at the Hardware Show, including a new Slat Wall Kit for home and
garage storage and a broadened assortment of its Shelf-Made Instant shelves.
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
(Unaudited)
Nine Months Ended Three Months Ended
March 27, March 29, March 27, March 29,
2004 2003 2004 2003
Net sales $107,215,636 $93,005,553 $36,859,638 $31,956,451
Cost of sales 85,055,330 72,928,282 28,912,254 25,344,793
Gross margin 22,160,306 20,077,271 7,947,384 6,611,658
Selling and administrative
expenses 17,438,067 17,191,998 5,743,051 6,289,079
Other -- 271,325 -- --
Operating income 4,722,239 2,613,948 2,204,333 322,579
Interest and other expenses,
net 1,216,043 955,324 376,416 318,509
Income before income taxes 3,506,196 1,658,624 1,827,917 4,070
Income taxes 1,256,073 216,544 689,576 (391,317)
Net income $2,250,123 $1,442,080 $1,138,341 $395,387
Earnings per common share -
basic and diluted:
Weighted average shares
outstanding 4,516,208 4,517,063 4,516,349 4,516,244
Net income per share $0.50 $0.32 $0.25 $0.09
Cash dividend - Common stock $.495 $.495 $.165 $.165
Cash dividend - Class B
common stock $.45 $.45 $.15 $.15
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
March 27, 2004
(Unaudited) June 28, 2003
Assets
Current Assets:
Cash $4,457,963 $3,846,611
Accounts receivable, net 20,619,473 16,820,600
Inventories 21,411,431 18,979,056
Prepaid expenses and other 1,348,544 731,751
Total current assets 47,837,411 40,378,018
Property, plant and equipment, net 29,881,471 33,989,109
Other assets 17,618,310 17,981,702
$95,337,192 $92,348,829
Liabilities and Equity
Current liabilities $21,535,011 $19,920,749
Long-term debt and capital leases 25,043,078 24,052,605
Deferred income taxes & other
long-term liabilities 13,385,753 13,613,613
Stockholders' equity 35,373,350 34,761,862
$95,337,192 $92,348,829
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
March 27, 2004 March 29, 2003
From Operating Activities:
Net income $2,250,123 $1,442,080
Depreciation and amortization 4,857,429 5,016,707
Change in retirement plan cost 258,765 85,632
Deferred income taxes 210,268 47,000
Loss (gain) on disposal of
fixed assets (3,758) 103,720
Changes in operating assets
& liabilities (4,963,971) (2,879,133)
Other, net -- 271,325
Net cash provided by operating
activities 2,608,856 4,087,331
From Investing Activities:
Additions to property,
plant & equipment (959,030) (2,763,875)
Proceeds from sales of
property, plant & equipment 53,975 243,527
Other, net (24,676) (33,123)
Net cash used for investing activities (929,731) (2,553,471)
From Financing Activities:
Cash dividends paid (2,136,760) (2,135,573)
Net change in long-term
debt/capital leases 990,473 (3,013)
Repurchase and retirement
of common stock -- (23,949)
Net cash used for financing
activities (1,146,287) (2,162,535)
Effect of Exchange Rates on Cash 78,514 78,462
Net increase (decrease) in cash $611,352 $(550,213)
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; or Jeff
Lambert, or Paula MacKenzie, +1-616-233-0500, both of Lambert, Edwards &
Associates, Inc., , for Knape & Vogt Manufacturing
Co.
Web site: http://www.knapeandvogt.com/