UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _______________ To _______________
Commission File Number 2-18868
KNAPE & VOGT MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)
Michigan 38-0722920
(State of Incorporation) (IRS Employer Identification No.)
2700 Oak Industrial Drive, NE
Grand Rapids, Michigan 49505
(Address of principal executive offices) (Zip Code)
(616) 459-3311
(Telephone Number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
3,336,889 Common shares were outstanding as of November 8, 1996.
2,548,619 Class B common shares were outstanding as of November 8, 1996.
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain matters discussed in this section include forward looking statements
which include risks and uncertainties including but not limited to economic,
competitive, governmental and technological factors affecting Knape & Vogt
Manufacturing Companies operations, markets, products, services and prices.
RESULTS OF OPERATIONS
Net Sales
The following table indicates the Company's sales (in millions) and percentage
of total sales by product category for the three month periods ended September
30, 1996 and 1995:
Three Months Ended September 30,
-----------------------------------------------------
1996 1995
- ------------------------------------------------------------------------------------
Shelving systems $ 22.4 50.0% $ 21.6 54.3%
Drawer slides 15.1 33.7% 11.1 27.9%
Hardware 6.4 14.3% 6.3 15.8%
Furniture components 0.9 2.0% 0.8 2.0%
- ----------------------------------------- ------------------------------- -----------
Total $ 44.8 100.0% $ 39.8 100.0%
========================================= =============================== ===========
Net sales for the first quarter of fiscal year 1997 increased $5.0 million, or
12.7%, over the comparable period of fiscal year 1996. Shelving sales increased
by $.8 million, or 3.7%, compared to the first quarter of fiscal year 1996
primarily due to an increase in sales of wall attached shelving. Drawer slide
sales increased by $4.0 million, or 36%. The increase in drawer slide sales was
primarily due to increases in the sale of precision drawer slides. Hardware
sales increased slightly compared to the prior year with kitchen products
manufactured by Feeny continuing to be introduced into the retail market.
Furniture component sales increased slightly. This category of sales is expected
to decrease in the future, as the Company announced on October 24, 1996 it
signed a letter of intent to sell Modar to Fournier Furniture.
Costs and Expenses
Cost of sales was 74.4% of sales for the quarter compared to 76.2% of sales for
the first quarter of 1996. The lower cost of sales is due to decreases in raw
material prices, and improved absorption of overhead costs due to the higher
sales volumes.
Selling and administrative expenses decreased to 16.2% of sales compared to
17.4% for the period ended September 30, 1995. The Company was able to maintain
selling expense at approximately the same level as the prior year with a large
increase in sales. Administrative expense relating to Michigan taxes increased
compared to the prior year when the expense was low due to overpayments in
fiscal year 1995.
Other Expenses
Interest expense was $503,307 for the quarter compared to $592,655 for the
quarter ended September 30, 1995. The Company has reduced its level of borrowing
to $36,000,000 at September 30, 1996 from $39,400,000 at September 30, 1995.
Income Taxes
The effective tax rate for the quarter ended September 30, 1996 was 35.9%
compared to 39.2% for the quarter ended September 30, 1995. Lower pretax income
for the quarter ended September 30, 1995 increased the impact of permanent
differences, when computing the effective tax rate.
Income from Continuing Operations
Income from continuing operations of $2,346,592 for the first quarter of 1997
was a first quarter record. Earnings per share from continuing operations
increased 100.0% to $.40 compared to $.20 in the first quarter of last year.
Income from Discontinued Operation
The estimated loss on discontinued operation recorded at June 30, 1996 includes
an estimate of the operating loss until the Roll-it facility is disposed of.
There was no income, or loss, recorded on discontinued operation for the quarter
ended September 30, 1996 as current estimates of the loss from disposal
approximate prior estimates. For the first quarter of last year the discontinued
operation earned $361,284, or $0.06 per share. It is the Company's intent to
sell the Roll-it division during fiscal year 1997 through an independent broker.
Net Income
Net income for the quarter of $2,346,592, was 5.2% of sales compared to
$1,507,711, for the first quarter of last year which was 3.8% of sales. Net
income per share increased by 53.8% to $.40 compared to $.26 for the first
quarter of fiscal year 1996.
Liquidity and Capital Resources
The Company's net cash position decreased during the first three months to
$215,264 from $527,572 at June 30, 1996. Net cash from operating activities
provided $1,605,947. Higher earnings and a decrease in accounts payable was
partially offset by an increase in accounts receivable due to the sales terms
offered to customers and the higher sales levels.
Capital expenditures totaled $1,538,118 for the three months ended September 30,
1996, compared to $766,371 last year. Capital expenditures for the fiscal year
are expected to be at approximately the same levels as last year. The debt
increased $1,000,000 due to the increase in accounts receivable and the capital
expenditures. Debt levels are expected to decrease during the remainder of
fiscal year 1997. Anticipated cash flow from operations will substantially fund
working capital, capital expenditures and dividend payments.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
Knape & Vogt Manufacturing Company
(Registrant)
Date: May 1, 1997 /s/ Richard C. Simkins
Richard C. Simkins
Executive Vice President,
CFO, Secretary, and
Treasurer