SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 7, 2003
Commission File Number 0-1859
KNAPE & VOGT MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)
| Michigan (State of Incorporation) | 38-0722920 (IRS Employer Identification No.) |
| 2700 Oak Industrial Drive, NE Grand Rapids, Michigan (Address of principal executive offices) | 49505 (Zip Code) |
(616) 459-3311
(Telephone Number)
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
| (c) | Exhibits 99.1 Press Release date August 7, 2003 |
Item 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 7, 2003, Knape & Vogt Manufacturing Company issued a press release announcing results for the fourth quarter and fiscal year ended June 28, 2003. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K.
The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Knape & Vogt Manufacturing Company (Registrant) | |||
| Date: | August 7, 2003 | /s/ William R. Dutmers William R. Dutmers Chairman and Chief Executive Officer | |
| Date: | August 7, 2003 | /s/ Leslie J. Cummings Leslie J. Cummings Vice President of Finance and Treasurer |
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Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: Leslie Cummings, Vice President of Finance and Treasurer
Knape & Vogt Manufacturing Company (616) 459-3311, Ext. 225
or
Jeff Lambert, Paula MacKenzie (616) 233-0500
Lambert, Edwards & Associates, Inc. (mail@lambert-edwards.com)
Knape & Vogt Reports Fourth-Quarter and Fiscal Year Results
GRAND RAPIDS, Michigan, August 7, 2003 – Knape & Vogt Manufacturing Co. (Nasdaq: KNAP) today announced the results of its fourth quarter and fiscal year ended June 28, 2003.
The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides, shelving, storage and ergonomic office products posted net sales of $32.1 million for the fourth quarter of fiscal 2003, compared with net sales of $34.5million during the same period a year ago. KV reported net income of $788,819, or $0.17 per diluted share, for the just-completed quarter, compared with net income of $1.3 million, or $0.29 per diluted share, during the same period in fiscal 2002. During the fourth quarter of 2003, the Company recorded an additional tax benefit of $200,000 related to the amended returns filed in the third quarter of fiscal 2003.
“We have invested in both new products and our sales force. During the fourth quarter, our Home and Commercial division continued to strengthen its relationships in the distribution channel by introducing new products such as the Precision Built™ line of precision drawer slides and heavy duty shelving solutions, along with expanding our vendor managed inventory program,” said Bill Dutmers, chairman and CEO. “In addition, new products, such as the Shelf Made™ Instant shelf line, are creating interest and beginning to generate orders in other channels within this division, such as direct sales to retailers. Our focus is to provide innovative product solutions to all of the markets which we serve.”
“Our Office Products division experienced a very positive response to its new line of height adjustable tables and our Interlock™ anti-tilt system for lateral files, both of which were introduced in June at Neocon, the office furniture industry’s largest trade show,” continued Dutmers. “In fact, we are already shipping both of these new products to our customers.”
For the 2003 fiscal year, KV reported net income of $2.2 million, or $0.49 per diluted share, on net sales of $125.4 million, compared with net income of $3.8 million, or $0.83 per diluted share, on net sales of $131.9 million in fiscal 2002. The decline in sales during fiscal 2003 was partially due to sluggish sales in the Office Products division, combined with the implementation of a consignment program in the Home and Commercial Products division. The investment in the consignment program helped to further integrate the Company’s products directly with its customers ensuring that KV products are available to the customers on demand. During the current fiscal year, BIFMA reported that office furniture sales were down approximately 10 percent, while KV’s Office Products division was down only 9.3 percent.
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Knape & Vogt, page 2 of 2
KV’s gross margin, as a percentage of net sales, was 22.1 percent for fiscal 2003, compared to 23.5 percent in fiscal 2002. In part, the decline in the margins reflected higher steel costs incurred during fiscal 2003 as a result of the steel tariffs. The Company reported that selling and administrative expenses increased to 18.9 percent of sales during fiscal 2003, compared to 17.2 percent in fiscal 2002. During the past year, the Company invested heavily in its sales force, new products and market channels.
“We continue to face unpredictability in certain markets, particularly the office furniture market,” Dutmers said. “We have demonstrated our commitment to positioning KV for growth, through our investment in our sales force as well as product development. We are confident that KV will become recognized as the innovative resource to its customers.”
For fiscal 2003, KV reported that new products accounted for $11.7 million in sales, compared with approximately $8.0 million in the prior year and slightly less than $4.0 million in fiscal 2001. During fiscal 2003, the Company introduced over 20 new product groups, including the Shelf Made Instant Shelf line, the Work@Ease™ line of ergonomic products for the retail market, and the height adjustable table line.
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 onwww.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” 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)
Fiscal Year Ended Three Months Ended
----------------- ------------------
(Audited) (Unaudited)
June 28, 2003 June 29, 2002 June 28, 2003 June 29, 2002
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Net sales................................. $125,398,960 $131,868,842 $32,089,762 $34,483,011
Cost of sales............................. 97,638,317 100,907,776 24,710,026 25,305,427
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Gross margin.............................. 27,760,643 30,961,066 7,379,736 9,177,584
Selling and administrative expenses....... 23,669,193 22,663,719 6,173,561 5,836,226
Other..................................... 271,325 935,000 - 935,000
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Operating income.......................... 3,820,125 7,362,347 1,206,175 2,406,358
Other expense............................. 1,202,226 1,450,301 247,356 327,067
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Income before income taxes................ 2,617,899 5,912,046 958,819 2,079,291
Income taxes.............................. 387,000 2,123,000 170,000 785,000
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Net income................................ $ 2,230,899 $ 3,789,046 $ 788,819 $ 1,294,291
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Earnings per common share - basic and diluted:
Weighted average shares outstanding 4,516,706 4,569,942 4,515,635 4,523,251
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Net income per share...................... $ .49 $ .83 $ .17 $ .29
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Cash dividend - Common stock.............. $ .66 $ .66 $ .165 $ .165
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Cash dividend - Class B common stock...... $ .60 $ .60 $ .15 $ .15
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Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
June 28, 2003 June 29, 2002
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Assets
Current Assets:
Cash & equivalents................................ $ 3,846,611 $ 5,430,543
Accounts receivable, net.......................... 16,820,601 17,025,929
Inventories....................................... 18,979,056 13,162,145
Other............................................. 635,244 1,530,967
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Total current assets.............................. 40,281,512 37,149,584
Property, plant and equipment, net................ 33,989,108 37,260,430
Other assets...................................... 17,593,702 13,481,404
-------------------- --------------------
$ 91,864,322 $ 87,891,418
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Liabilities and Equity
Current liabilities............................... $ 19,824,244 $ 19,963,773
Long-term debt and capital leases................. 24,052,605 20,000,000
Deferred income taxes & other
long-term liabilities........................... 13,225,613 11,714,426
Stockholders' equity.............................. 34,761,860 36,213,219
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$ 91,864,322 $ 87,891,418
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Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Fiscal year ended June 28, 2003 June 29, 2002
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From Operating Activities:
Net income.................................... $ 2,230,899 $ 3,789,046
Depreciation and amortization................. 6,642,091 6,693,293
Increase in prepaid pension expense........... (4,276,691) (2,519,499)
Loss on disposal of fixed assets.............. 136,746 305,279
Changes in operating assets
& liabilities........................... (4,765,011) 3,006,485
Other, net.................................... 543,284 2,079,689
--------------------- ----------------------
Net cash provided by operating activities.............. 511,318 13,354,293
From Investing Activities:
Additions to property, plant & equipment (3,707,536) (3,935,470)
Proceeds from sales of property, plant &
equipment............................... 243,527 1,784,925
Other, net.................................... (62,282) (112,532)
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Net cash used for investing activities................. (3,526,291) (2,263,077)
From Financing Activities:
Cash dividends declared....................... (2,847,316) (2,876,113)
Net change in long-term debt/capital leases... 3,993,920 (3,750,000)
Repurchase and retirement of common
stock................................... (23,949) (1,164,656)
--------------------- ----------------------
Net cash provided by (used for) financing
activities....................................... 1,122,655 (7,790,769)
Effect of Exchange Rates on Cash....................... 308,386 16,156
--------------------- ----------------------
Net increase (decrease) in cash & equivalents.......... $ (1,583,932) $ 3,316,603
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