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/
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