KNAP Knape & Vogt Manufacturing (MM)

GRAND RAPIDS, Mich., April 20 /PRNewswire-FirstCall/ -- Knape & Vogt Manufacturing Co. (NASDAQ:KNAP) today announced the results for its third quarter and nine-month period ended April 1, 2006. The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides, shelving, storage and ergonomic office products reported that net sales grew 4.4 percent to $41.9 million for the third quarter of fiscal 2006, compared with net sales of $40.2 million during the same period a year ago. Sales of new products and product enhancements were $8.0 million for the third quarter of fiscal 2006 compared with $7.6 million in the third quarter of the prior year. Net sales for the nine months ended April 1, 2006, grew to $123.6 million, up from $116.0 million for the same period in the prior year, representing a 6.5 percent increase. KV reported third quarter net income of $1.4 million, or $0.31 per basic and diluted share, compared with net income of $1.7 million, or $0.37 per basic and diluted share, in the prior year third quarter. The prior year results included a one-time tax benefit of $594,000 related to the expiration of certain statutory tax periods and prior year research and development credit claims. Net income for the nine months ended April 1, 2006, was $5.1 million, or $1.12 per basic and diluted share, compared with net income of $1.6 million, or $0.35 per basic and diluted share, for the same period in 2005. The current year results included a one-time settlement gain on one of the Company's defined benefit plans of approximately $952,000 after-tax. The year-to-date fiscal 2005 net income results included an impairment/restructuring charge of approximately $1.3 million after-tax related to the relocation of the Company's wire production operations to its Grand Rapids facility. Knape & Vogt said the improvement in net income, excluding these unusual items, reflected savings from the consolidation of the Company's wire production, better operating cost leverage due to higher sales volumes and lower steel costs. 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) Nine Months Ended Three Months Ended April 1, April 2, April 1, April 2, 2006 2005 2006 2005 Net sales $123,594,698 $116,038,344 $41,918,679 $40,169,917 Cost of sales 98,170,473 94,537,482 33,582,748 32,432,912 Gross margin 25,424,225 21,500,862 8,335,931 7,737,005 Selling and administrative expenses 16,406,712 16,804,638 5,638,711 5,437,189 Restructuring and impairment expenses 44,477 1,982,474 - 204,027 Operating income 8,973,036 2,713,750 2,697,220 2,095,789 Interest and other expenses, net 1,044,780 1,091,077 357,322 372,732 Income before income taxes 7,928,256 1,622,673 2,339,898 1,723,057 Income taxes 2,867,840 63,364 941,906 31,444 Net income $5,060,416 $1,559,309 $1,397,992 $1,691,613 Earnings per common share - basic: Weighted average shares outstanding 4,510,700 4,516,964 4,511,091 4,517,105 Earnings per common share - dilutive: Weighted average shares outstanding 4,511,175 4,516,964 4,512,121 4,517,105 Net income per share $1.12 $0.35 $0.31 $0.37 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 1, 2006 July 2, 2005 (Unaudited) Assets Current Assets: Cash and equivalents $9,886,938 $6,349,702 Accounts receivable, net 20,952,281 19,944,781 Inventories 23,212,633 24,362,073 Assets held for sale 786,328 1,281,213 Prepaid expenses and other 1,637,488 934,711 Total current assets 56,475,668 52,872,480 Property, plant and equipment, net 20,797,701 22,120,924 Other assets 17,172,430 17,395,234 $94,445,799 $92,388,638 Liabilities and Equity Current liabilities $21,311,491 $21,633,059 Long-term debt and capital leases 23,013,175 22,524,129 Deferred income taxes & other long-term liabilities 8,460,150 10,123,573 Stockholders' equity 41,660,983 38,107,877 $94,445,799 $92,388,638 Knape & Vogt Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended April 1, 2006 April 2, 2005 From Operating Activities: Net income $5,060,416 $1,559,309 Depreciation and amortization 3,683,899 4,695,858 Change in retirement plan cost (1,263,833) 203,409 Deferred income taxes 250,000 (1,066,209) Impairment expenses - 1,778,447 Changes in operating assets & liabilities (756,758) (2,219,599) Other, net (107,726) 8,806 Net cash provided by operating activities 6,865,998 4,960,021 From Investing Activities: Additions to property, plant & equipment net (2,162,717) (2,069,050) Proceeds from sales of property, plant & equip. 246,000 10,250 Other, net (103,164) (28,257) Net cash used for investing activities (2,019,881) (2,087,057) From Financing Activities: Cash dividends paid (2,145,196) (2,141,041) Stock options exercised 11,907 - Net change in long-term debt/capital leases 489,046 (10,214) Net cash used for financing activities (1,644,243) (2,151,255) Effect of Exchange Rates on Cash 335,362 379,654 Net increase in cash and equivalents $3,537,236 $1,101,363 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; Jeff Lambert or Ryan McGrath of Lambert, Edwards & Associates, +1-616-233-0500, for Knape & Vogt Manufacturing Company Web site: http://www.knapeandvogt.com/

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