KNAP Knape & Vogt Manufacturing (MM)

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/

Copyright