KNAP Knape & Vogt Manufacturing (MM)

GRAND RAPIDS, Mich., Oct. 20 /PRNewswire-FirstCall/ -- Knape & Vogt Manufacturing Co. (NASDAQ:KNAP) today announced growth in sales and net income for the first quarter ended October 1, 2005. The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides, shelving, storage and ergonomic office products reported that net sales grew 6.3 percent to $40.8 million for the first quarter of fiscal 2006, compared with net sales of $38.4 million during the same period a year ago. Sales of new products and product enhancements were $8.3 million for the first quarter of fiscal 2006 compared with $8.0 million in the first quarter of the prior year. KV reported first quarter net income of $1.2 million, or $0.26 per diluted share, increased significantly when compared with earnings of $390,511, or $0.09 per diluted share, during the same period in fiscal 2005. The net income improvement reflected efforts undertaken to address the impact of steel costs, along with the consolidation of the Company's wire product manufacturing. In addition, the Company has been successful in leveraging its operating expenses. 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/. Knape & Vogt Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Three Months Ended Oct. 1, 2005 Oct. 2, 2004 Net sales $40,806,683 $38,372,180 Cost of sales 33,036,559 31,567,404 Gross profit 7,770,124 6,804,776 Selling, general and administrative expenses 5,525,144 5,835,251 Restructuring charge 44,477 - Operating income 2,200,503 969,525 Interest and other expenses, net 323,217 307,158 Income before income taxes 1,877,286 662,367 Income taxes 720,157 271,856 Net income $1,157,129 $390,511 Weighted average shares outstanding 4,510,505 4,516,681 Basic and diluted earnings per share $0.26 $0.09 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. 1, 2005 July 2, 2005 (Unaudited) Assets Current Assets: Cash and equivalents $8,294,306 $6,349,702 Accounts receivable, net 20,794,494 19,944,781 Inventories 25,814,977 24,362,073 Assets held for sale 1,073,975 1,281,213 Prepaid expenses and other 878,293 934,711 Total current assets 56,856,045 52,872,480 Property, plant and equipment, net 21,686,272 22,120,924 Other assets 17,353,728 17,395,234 $95,896,045 $92,388,638 Liabilities and Equity Current liabilities $21,554,755 $21,633,059 Long-term debt and capital leases 25,520,541 22,524,129 Deferred income taxes & other long-term liabilities 9,751,988 10,123,573 Stockholders' equity 39,068,761 38,107,877 $95,896,045 $92,388,638 Knape & Vogt Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Oct. 1, 2005 Oct. 2, 2004 From Operating Activities: Net income $1,157,129 $390,511 Depreciation and amortization 1,244,423 1,515,294 Change in retirement plan cost 66,134 107,341 Deferred income taxes (278,000) (141,894) Changes in operating assets & liabilities (2,155,639) (1,920,677) Other, net 1,819 4,878 Net cash provided by (used for) operating activities 35,866 (44,547) From Investing Activities: Additions to property, plant & equipment net (721,638) (716,514) Other, net (17,667) (1,789) Net cash used for investing activities (739,305) (718,303) From Financing Activities: Cash dividends paid (713,872) (712,661) Net change in long-term debt/capital leases 2,996,413 969,425 Net cash provided by financing activities 2,282,541 256,764 Effect of Exchange Rates on Cash 365,502 205,770 Net increase (decrease) in cash and equivalents $1,944,604 $(300,316) DATASOURCE: Knape & Vogt Manufacturing Co. CONTACT: Leslie Cummings, Vice President of Finance and Treasurer, Knape & Vogt Manufacturing Company, +1-616-459-3311, Ext. 225, or Jeff Lambert or Ryan McGrath, both of Lambert, Edwards & Associates, Inc., +1-616-233-0500, , for Knape & Vogt Web site: http://www.knapeandvogt.com/

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