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, Eric Lubbers (616) 233-0500
Lambert, Edwards & Associates, Inc. (mail@lambert-edwards.com)
Knape & Vogt Reports Improved First Quarter Results
GRAND RAPIDS, Michigan, October 20, 2005 – 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 $38.4million 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 onwww.knapeandvogt.com.
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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 (Unaudited) | July 2, 2005 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | (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 | ) | |||