FOR IMMEDIATE RELEASE
CONTACT: Leslie Cummings, Vice President of Finance and Treasurer
Knape & Vogt Manufacturing Company (616) 459-3311, Ext. 225
or
Jeff Lambert (616) 233-0500
Lambert, Edwards & Associates, Inc. (mail@lambert-edwards.com)
Knape & Vogt Reports Seventh Consecutive Quarter of Revenue Growth
GRAND RAPIDS, Michigan, April 21, 2005 – 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 .2 million for the third quarter of fiscal 2005, compared with net sales of .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 Virtuä 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 .7 million, or .37 per diluted share, for the current quarter, compared with .1 million, or .25 per diluted share, during the same period in fiscal 2004. The 2005 results included restructuring charges of approximately 4,000 pre-tax related to the relocation of the Muncie wire operations, partially offset by 4,000 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 .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.”
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Knape & Vogt, page 2 of 2
For the first nine months of fiscal 2005, KV reported an 8.3 percent increase in net sales to 6.1 million, compared with net sales of 7.2 million in the prior year period. New products and product extensions accounted for .1 million in sales for the first nine months of fiscal 2005, compared with .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 .6 million, or .35 per diluted share, compared to .3 million, or .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 .3 million, or .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 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.
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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 |
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|
|
|
 |
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