Knape & Vogt (NASDAQ:KNAP)
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Knape & Vogt Reports Seventh Consecutive Quarter of Revenue
Growth
GRAND RAPIDS, Mich., April 21 /PRNewswire-FirstCall/ -- Knape & Vogt
Manufacturing Co. (NASDAQ:KNAP) today announced results for the third quarter
ended April 2, 2005.
The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides,
shelving, storage and ergonomic office products reported that net sales
increased 9.0 percent to $40.2 million for the third quarter of fiscal 2005,
compared with net sales of $36.9 million during the same period a year ago.
The increase was driven by new products, which included the expanded line of
precision drawer slides, height adjustable tables and the various new kitchen
and bath storage accessories, including the Virtu(TM) collection.
"This was our seventh consecutive quarter of revenue growth," said Bill
Dutmers, chairman and CEO. "Our growth directly reflects our efforts to
develop and bring innovative products to market. This quarter, we focused our
attention on getting these products in front of both our existing customers as
well as potential customers.
"The upcoming quarter brings our two largest trade shows of the year, the
Kitchen and Bath Show in Las Vegas and the NeoCon office furniture show in
Chicago. These shows provide us with the opportunity to showcase some of our
newer product lines along with the ability to introduce extensions of these
lines and additional new products and prototypes not yet on the market."
KV reported net income of $1.7 million, or $0.37 per diluted share, for the
current quarter, compared with $1.1 million, or $0.25 per diluted share, during
the same period in fiscal 2004. The 2005 results included restructuring
charges of approximately $204,000 pre-tax related to the relocation of the
Muncie wire operations, partially offset by $594,000 in tax benefits primarily
related to the expiration of certain statutory tax periods and prior year
research and development credit claims. The net effect of these items was an
increase in earnings of $0.10 per diluted share.
"Our operating income has increased progressively each quarter of fiscal 2005,
demonstrating the steps taken to improve our efficiency and better offset the
significantly higher costs of raw materials, especially steel and resin,"
stated Dutmers. "We are also well underway in relocating our wire processing
operation to Grand Rapids, as previously announced, and expect to have this
complete prior to the end of the fiscal year."
For the first nine months of fiscal 2005, KV reported an 8.3 percent increase
in net sales to $116.1 million, compared with net sales of $107.2 million in
the prior year period. New products and product extensions accounted for $23.1
million in sales for the first nine months of fiscal 2005, compared with $18.1
million in the prior year, allowing KV to post solid growth in its Office
Products Original Equipment Manufacturer and Distribution and Other markets.
KV recorded net income of $1.6 million, or $0.35 per diluted share, compared to
$2.3 million, or $0.50 per diluted share, for the first nine months of fiscal
2004. The first nine months of fiscal 2005 included a pre-tax
impairment/restructuring charge of $2.3 million, or $0.33 per diluted share,
which was partially offset by the tax benefit recorded in the third quarter.
Excluding these unusual items, KV would have posted improved net income results
for the first nine months of fiscal 2005.
"We believe that we have addressed the various challenges in the market and
have made the right operating decisions and new product investments to position
KV for continued growth," concluded Dutmers.
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 forward," "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
April 2, 2005 March 27, 2004 April 2, 2005 March 27, 2004
Net sales $116,073,826 $107,215,636 $40,179,451 $36,859,638
Cost of sales 94,572,964 85,055,331 32,442,446 28,912,254
Gross margin 21,500,862 22,160,305 7,737,005 7,947,384
Selling and
administrative
expenses 16,804,638 17,438,069 5,437,189 5,743,051
Impairment/
restructuring
expenses 1,982,474 - 204,027 -
Operating
income 2,713,750 4,722,236 2,095,789 2,204,333
Interest and
other expenses,
net 1,091,077 1,216,043 372,732 376,416
Income before
income taxes 1,622,673 3,506,193 1,723,057 1,827,917
Income taxes 63,364 1,256,073 31,444 689,576
Net income $1,559,309 $2,250,120 $1,691,613 $1,138,341
Earnings per
common share -
basic and
diluted:
Weighted
average shares
outstanding 4,516,964 4,516,208 4,517,105 4,516,349
Net income per
share $0.35 $0.50 $0.37 $0.25
Cash dividend -
Common stock $0.495 $0.495 $0.165 $0.165
Cash dividend -
Class B common
stock $0.45 $0.45 $0.15 $0.15
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
April 2, 2005
(Unaudited) July 3, 2004
Assets
Current Assets:
Cash and equivalents $6,380,232 $5,278,869
Accounts receivable, net 20,714,954 19,959,442
Inventories 23,320,415 23,955,271
Assets held for sale 1,259,967 -
Prepaid expenses and other 991,803 950,911
Total current assets 52,667,371 50,144,493
Property, plant and equipment, net 22,923,512 28,683,714
Other assets 17,135,156 17,423,119
$92,726,039 $96,251,326
Liabilities and Equity
Current liabilities $20,565,975 $22,805,708
Long-term debt and capital leases 24,528,648 24,538,864
Deferred income taxes & other
long-term liabilities 10,481,811 12,082,536
Stockholders' equity 37,149,605 36,824,218
$92,726,039 $96,251,326
Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
April 2, 2005 March 27, 2004
From Operating Activities:
Net income $1,559,309 $2,250,120
Depreciation and amortization 4,695,858 4,857,429
Change in retirement plan cost 203,409 258,765
Deferred income taxes (1,066,209) 210,268
Impairment expenses 1,778,447 -
Gain on disposal of fixed assets (4,205) (3,758)
Changes in operating assets
& liabilities (2,219,599) (4,963,973)
Other, net 13,011 -
Net cash provided by operating activities 4,960,021 2,608,851
From Investing Activities:
Additions to property, plant &
equipment net (2,069,050) (959,030)
Proceeds from sales of property,
plant & equipment 10,250 53,975
Other, net (28,257) (24,676)
Net cash used for investing activities (2,087,057) (929,731)
From Financing Activities:
Cash dividends paid (2,141,039) (2,136,760)
Net change in long-term debt/
capital leases (10,216) 990,473
Net cash used for financing activities (2,151,255) (1,146,287)
Effect of Exchange Rates on Cash 379,654 78,519
Net increase in cash and equivalents $1,101,363 $611,352
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
of Lambert, Edwards & Associates, Inc., +1-616-233-0500, or
Web site: http://www.knapeandvogt.com/