Knape & Vogt (NASDAQ:KNAP)
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Knape & Vogt Reports First Quarter Results
GRAND RAPIDS, Mich., Oct. 14 /PRNewswire-FirstCall/ -- Knape & Vogt
Manufacturing Co. (NASDAQ:KNAP) today announced growth in sales for the first
quarter ended October 2, 2004.
The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides,
shelving, storage and ergonomic office products reported that net sales
increased 6.6 percent to $38.4 million for the first quarter of fiscal 2005,
compared with net sales of $36.0 million during the same period a year ago. KV
reported that new products such as its expanded precision drawer slide line,
Shelf Made(TM) instant shelf line and enhanced line of kitchen and bath storage
products continued to fuel growth in most of its market channels. New product
sales were $6.1 million for the first quarter of fiscal 2005 compared with $5.5
million in the first quarter of the prior year, KV's ninth consecutive quarter
of higher new product contribution.
"Our focus on new product development continues to deliver the opportunity for
growth in the markets that we serve," said Bill Dutmers, KV chairman and CEO.
"In late August, we participated in the International Woodworking Fair held in
Atlanta. At this show, we introduced Virtu(TM), our new line of
Italian-designed upscale kitchen and closet storage accessories. Between this
line and our other new products, we introduced over 300 items at this show and
were pleased with the excitement generated by all of the new offerings."
KV reported net income of $390,511, or $0.09 per diluted share, for the fiscal
2005 first quarter, compared with net income of $669,875, or $0.15 per diluted
share, during the same period in fiscal 2004. The first quarter of fiscal 2005
included higher steel costs of approximately $700,000 pre-tax, which equates to
$420,000, or $0.09 per diluted share.
Steel is the most significant raw material purchased by KV. Average steel
costs have risen by over 70 percent since the start of the calendar year
resulting in higher material costs for KV during the first quarter of
approximately $2.5 million. The Company reported that it was only able to pass
through approximately $1.8 million of the increased costs to its customers.
Going forward, KV's profitability will benefit from price increases that were
agreed to by its customers late in the first quarter. In addition, KV has been
working closely with its steel vendors to identify lower-cost solutions, and
the Company is utilizing alternative sourcing options when available.
"Unfortunately, our higher sales were offset by the rapid increase in steel
costs, which lowered our earnings," said Dutmers. "We have been successful in
working with our customers to pass along a portion of this increase. While we
do not foresee any significant relief in steel costs in the coming quarter, we
continue to evaluate opportunities to reduce the impact that higher steel costs
will have on our bottom line moving forward.
"Looking ahead, we are optimistic about the new products that will be
introduced in the second quarter," concluded Dutmers. "We are working on an
undermount slide that we believe will be well received by most of our furniture
and cabinet makers, and we anticipate further traction in our new product lines
introduced over the past 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," "looking ahead," "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 as to optimism about or future success of
new products. 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)
Three Months Ended
Oct. 2, 2004 Sept. 27, 2003
Net sales $38,385,770 $36,013,012
Cost of sales 31,580,994 28,960,702
Gross margin 6,804,776 7,052,310
Selling and administrative expenses 5,835,251 5,788,224
Operating income 969,525 1,264,086
Interest and other expenses, net 307,158 392,929
Income before income taxes 662,367 871,157
Income taxes 271,856 201,282
Net income $390,511 $669,875
Earnings per common share - basic
and diluted:
Weighted average shares outstanding 4,516,681 4,515,925
Net income per share $0.09 $0.15
Cash dividend - Common stock $0.165 $0.165
Cash dividend - Class B common stock $0.15 $0.15
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
Oct. 2, 2004 July 3, 2004
(Unaudited) (Audited)
Assets
Current Assets:
Cash and equivalents $4,978,553 $5,278,869
Accounts receivable, net 18,985,824 19,959,442
Inventories 24,085,155 23,955,271
Prepaid expenses and other 714,110 950,911
Total current assets 48,763,642 50,144,493
Property, plant and equipment, net 27,773,825 28,683,714
Other assets 17,303,028 17,423,119
$93,840,495 $96,251,326
Liabilities and Equity
Current liabilities $19,648,511 $22,805,708
Long-term debt and capital leases 25,508,289 24,538,864
Deferred income taxes & other
long-term liabilities 11,852,976 12,082,536
Stockholders' equity 36,830,719 36,824,218
$93,840,495 $96,251,326
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
Oct. 2, 2004 Sept. 27, 2003
From Operating Activities:
Net income $390,511 $669,875
Depreciation and amortization 1,515,294 1,630,766
Change in retirement plan cost 107,341 64,800
Deferred income taxes (141,894) 354,373
Loss (gain) on disposal of
fixed assets (1,103) 26,661
Changes in operating assets
& liabilities (1,920,677) (2,792,436)
Other, net 5,981 -
Net cash used for operating activities (44,547) (45,961)
From Investing Activities:
Additions to property, plant &
equipment net (716,514) (440,487)
Proceeds from sales of property,
plant & Equipment - 800
Other, net (1,789) (17,765)
Net cash used for investing activities (718,303) (457,452)
From Financing Activities:
Cash dividends paid (712,661) (712,174)
Net change in long-term debt/
capital leases 969,425 1,185,920
Net cash provided by financing activities 256,764 473,476
Effect of Exchange Rates on Cash 205,770 (3,473)
Net decrease in cash and equivalents $(300,316) $(33,140)
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 Eric Lubbers of Lambert, Edwards & Associates, Inc.,
+1-616- 233-0500, , for Knape & Vogt Manufacturing
Co.
Web site: http://www.knapeandvogt.com/