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 Third Quarter and Nine Month Results
GRAND RAPIDS, Michigan, April 20, 2006 – 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 $40.2million 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 onwww.knapeandvogt.com.
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Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
| Nine Months Ended | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 1, 2006 | April 2, 2005 | April 1, 2006 | April 2, 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 (Unaudited) | July 2, 2005 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | (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 | ||||