-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uxtya57pFbQBXtx7VKFTr7SNjIJLRsGZzkZ/xM0w650AhTVkhPE0LpO00GviaIQG lLCLA8zDhM3QLHpqlGzbiw== 0000056362-96-000002.txt : 19960129 0000056362-96-000002.hdr.sgml : 19960129 ACCESSION NUMBER: 0000056362-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960126 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNAPE & VOGT MANUFACTURING CO CENTRAL INDEX KEY: 0000056362 STANDARD INDUSTRIAL CLASSIFICATION: PARTITIONS, SHELVING, LOCKERS & OFFICE AND STORE FIXTURES [2540] IRS NUMBER: 380722920 STATE OF INCORPORATION: MI FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01859 FILM NUMBER: 96507187 BUSINESS ADDRESS: STREET 1: 2700 OAK INDUSTRIAL DR NE CITY: GRAND RAPIDS STATE: MI ZIP: 49505 BUSINESS PHONE: 6164593311 MAIL ADDRESS: STREET 1: 2700 OAK INDUSTRIAL DRIVE, NE CITY: GRAND RAPIDS STATE: MI ZIP: 49505 10-Q 1 KNAPE & VOGT SECOND QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 1995 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 ______ 3,311,146 common shares were outstanding as of January 19, 1996. 2,569,923 Class B common shares were outstanding as of January 19, 1996. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES INDEX Page No. PART I FINANCIAL INFORMATION Item 1. Financial Statements. Condensed Consolidated Balance Sheets --December 31, 1995 (Unaudited) and June 30, 1995............................2 Condensed Consolidated Statements of Income (Unaudited) --Six Months and Three Months Ended December 31, 1995 and 1994...............3 Condensed Consolidated Statements of Cash Flows (Unaudited) --Six Months Ended December 31, 1995 and 1994................................4 Notes to Condensed Consolidated Financial Statements (Unaudited).............5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................6-7 PART II OTHER INFORMATION Item 4. Submission of Matters to a vote of Security Holders..................8 Item 6. Exhibits and Reports on Form 8-K.....................................8 SIGNATURES ...................................................................9 KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS Dec. 31, 1995 June 30, 1995 -------------- ------------- (Unaudited) Assets Cash and equivalents $ 333,557 $ 604,106 Accounts receivable - net 22,476,164 27,045,057 Inventories 28,751,067 28,347,023 Other current assets 3,547,739 3,210,231 ---------------- ---------------- Total current assets 55,108,527 59,206,417 ---------------- ---------------- Property, plant and equipment 88,612,949 85,729,838 Less accumulated depreciation 36,924,632 33,654,435 ---------------- ---------------- Net property, plant and equipment 51,668,317 52,075,403 ---------------- ---------------- Other assets 24,233,488 24,015,737 ---------------- ---------------- $ 131,030,332 $ 135,297,557 ================ ================ Liabilities and Stockholders' Equity Accounts payable $ 5,045,640 $ 7,552,129 Accrued income and other taxes 954,940 1,337,920 Other accrued liabilities 3,302,503 4,519,615 ---------------- --------------- Total current liabilities 9,303,083 13,409,664 Long-term debt 35,000,000 35,800,000 Deferred income taxes and other long-term liabilities 13,196,988 13,374,057 ---------------- --------------- Total liabilities 57,500,071 62,583,721 ---------------- --------------- Stockholders' equity Common stock 11,762,138 11,759,828 Additional paid-in capital 33,080,087 33,065,773 Foreign currency translation adjustment (1,220,932) (1,316,765) Retained earnings 29,908,968 29,205,000 ---------------- ---------------- Total stockholders' equity 73,530,261 72,713,836 ---------------- ---------------- $ 131,030,332 $ 135,297,557 ================ ================ See accompanying notes.
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1994 -------------- ------------- -------------- -------------- Net sales $ 85,519,763 $ 89,794,427 $ 40,371,133 $ 41,737,379 Cost of sales 65,272,457 67,080,955 31,084,300 31,504,609 ----------------- ---------------- ---------------- ---------------- Gross profit 20,247,306 22,713,472 9,286,833 10,232,770 Selling and administrative expenses 14,776,277 15,154,665 6,928,539 7,313,222 ---------------- ---------------- ----------------- ---------------- Operating income 5,471,029 7,558,807 2,358,294 2,919,548 Other expenses 1,302,571 1,297,836 658,547 660,935 ----------------- ---------------- ----------------- ----------------- Income before income taxes 4,168,458 6,260,971 1,699,747 2,258,613 Income taxes 1,601,000 2,271,000 640,000 778,000 ----------------- ---------------- ------------------ ----------------- Net income $ 2,567,458 $ 3,989,971 $ 1,059,747 $ 1,480,613 ================= ================ ================== ================= Per common share: Net Income $ .44 $ .68 $ .18 $ .25 Cash Dividend - Common stock $ .33 $ .33 $ .165 $ .165 Cash Dividend - Class B common stock $ .30 $ .30 $ .15 $ .15 Weighted average shares outstanding 5,884,452 5,896,632 5,885,144 5,900,769 See accompanying notes.
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended Dec. 31, 1995 Dec. 31, 1994 ------------- ------------- Operating Activities: Net income $ 2,567,458 $ 3,989,971 Non-cash items: Depreciation and amortization 3,819,232 3,666,888 Deferred income taxes 31,000 185,000 Other long-term liabilities (208,336) (168,299) Changes in operating assets & liabilities: Accounts receivable 4,615,423 3,354,196 Inventories (358,977) 1,386,194 Other current assets (333,178) (190,969) Accounts payable & accrued expenses (4,153,304) (6,155,558) --------------- --------------- Net cash from operating activities 5,979,318 6,067,423 --------------- --------------- Investing Activities: Additions to property and equipment (2,952,611) (2,296,318) Sale of property and equipment 93,756 3,334 Payments for other assets (754,532) (339,121) --------------- --------------- Net cash for investing activities (3,613,387) (2,632,105) --------------- --------------- Financing Activities: Proceeds from issuance of common stock 16,624 30,848 Purchase of common stock 0 (10,548) Payments on long-term debt (800,000) (1,700,000) Cash dividends paid (1,863,490) (1,860,271) --------------- --------------- Net cash for financing activities (2,646,866) (3,539,971) --------------- --------------- Effect of Exchange Rate Changes on Cash 10,386 (38,418) --------------- --------------- Net Decrease in Cash & Equivalents (270,549) (143,071) Cash and Equivalents: Beginning of year 604,106 620,224 --------------- --------------- End of period $ 333,557 $ 477,153 =============== =============== Cash Paid During the Period - interest $ 1,189,725 $ 1,143,894 - income taxes $ 1,865,951 $ 2,138,342
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 - Basis of Financial Statement Preparation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Security and Exchange Commission. The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair statement of results of operations. Interim results are not necessarily indicative of the results for the year end and are subject to year end adjustments, and audit by independent public accountants. The balance sheet at June 30, 1995, has been taken from the audited financial statements at that date. The condensed consolidated financial statements and notes should be read in conjunction with the Company's 1995 annual report. Note 2 - Common Stock and Per Share Information Income per share is determined based on weighted average number of shares outstanding during each period. Common stock is $2 par - shares authorized 6,000,000 of common stock and 4,000,000 of Class B common stock. Shares issued: 3,311,146 of common stock; 2,569,923 of Class B stock at December 31, 1995; and 3,295,496 of common stock and 2,584,418 of Class B common stock at June 30, 1995. Note 3 - Inventories Inventories are valued at the lower of FIFO (first-in, first-out) cost or market. The Company has one subsidiary on LIFO (last-in, first-out) cost. The Company has decided to change to FIFO cost for this subsidiary during fiscal year 1996. The inventory value at this subsidiary at June 30, 1995 was $418,000 lower than it would have been under FIFO. Inventories are summarized as follows: Dec. 31, 1995 June 30, 1995 ------------- ------------- Finished products $ 16,284,274 $ 16,187,481 Work in process 3,929,908 3,538,217 Raw Materials 8,536,885 8,621,325 ---------------- ---------------- Total $ 28,751,067 $ 28,347,023 ============== ============== KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net Sales Net sales for the second quarter and six months of fiscal year 1996 decreased $1.3 million, or 3.3%, and $4.3 million, or 4.8%, respectively, over the comparable periods of fiscal year 1995. Shelving sales decreased by $.2 million for the quarter, due primarily to the competitive retail markets which demanded lower prices for our products. Drawer slide sales decreased by $.2 million for the quarter. Continued increases in the precision drawer slides did not offset the decrease in sales of utility slides. Store fixture and hardware product line sales decreased during the quarter by $.2 million from last year, due to lower sales of hardware products by Knape & Vogt Canada in the Canadian market. Furniture component sales decreased during the quarter by $.7 million compared to last year as Modar concentrated on producing wood products for Hirsh and Knape & Vogt. Based on internal forecasts, the Company anticipates that sales may match the results of the third and fourth quarters of fiscal year 1995. Costs and Expenses Cost of sales was 77.0% of sales for the second quarter and 76.3% of sales for the first six months of fiscal year 1996 compared to 75.5% and 74.7% of sales for the second quarter and first six months of fiscal year 1995, respectively. Discounting of prices to retail customers and increases in raw material prices accounted for the majority of the increase in cost as a percentage of sales for the quarter. The impact of recent decreases in steel prices should reduce costs as a percentage of sales during the second half of fiscal year 1996. Selling and administrative expenses for the quarter decreased $384,683, and decreased as a percentage of sales to 17.2% from 17.5% last year, mainly due to decreases in administrative expenses such as the Michigan single business tax. Selling and administrative expense for the six months decreased $378,388, but increased to 17.3% of sales compared to 16.9% in fiscal year 1995. Other Expenses Interest expense was $594,740 for the quarter ended December 31, 1995 compared to $601,835 for the quarter ended December 31, 1994. The decrease was due to lower borrowing levels. Interest expense for the six months ended December 31, 1995 was $1,193,145 compared to $1,181,783 last year. Income Taxes The effective tax rate for the quarter and six months ended December 31, 1995, was 37.6% and 38.4% compared to 34.4% and 36.2% for the quarter and six months ended December 31, 1994. The effective tax rate in the second quarter of fiscal year 1995 was lower than normal due to reductions in Illinois state taxes relating to the Hirsh Company. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Net Income Net income of $1,059,747 for the second quarter was 28.4% lower than the $1,480,613 reported a year ago. For the six months ended December 31, 1995 net income was $2,567,458 which is 35.7% lower than the $3,989,971 reported for the same period last year. Earnings per share for the quarter and six months was $.18 and $.44, respectively, compared to $.25 and $.68 for the same periods last year. Net income was 2.6% and 3.0% of sales for the quarter and six months, respectively. The decrease in net income was mainly due to higher cost of sales. Liquidity and Capital Resources The Company's net cash position decreased during the first six months to $333,557 from $604,106 at June 30, 1995. Net cash from operating activities was positively affected by decreases in accounts receivable, but partially offset by an increase in accounts payable. Accounts receivable balances were lower at the end of December than at the end of June because sales in December were lower than in June. Payable balances increased because purchases related to January 1996 production and sales which were higher than the June purchases related to July 1995 production and sales. Capital expenditures were $2,952,611 for the six months ended December 31, 1995. The Company is currently forecasting capital expenditures to be approximately $8 million for the fiscal year. The Company had total debt of $35,000,000 at December 31, 1995, a decrease of $800,000 from total debt of $35,800,000 at June 30, 1995. It is estimated that debt levels will remain at approximately these levels in the second half of the fiscal year due to the increase in capital expenditures. The Company's balance sheet remained strong with working capital of $45,805,444 and current ratio of 5.9 to 1 at December 31, 1995, compared to the $45,796,753 of working capital and a 4.4 to 1 current ratio at June 30, 1995. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) Knape & Vogt Manufacturing Company's Annual Meeting of Shareholders was held on October 20, 1995. (b) Proxies were distributed by Knape & Vogt Manufacturing Company pursuant to Regulation 14A under the Securities Exchange Act of 1934. There was no opposition to management's nominees as listed in the proxy statement, and all nominees were elected. The vote on the nominees was: For Against Abstain Non-vote Raymond E. Knape (1) (2) 26,443,381 -- 29,043 -- Herbert F. Knape (1) (2) 26,442,281 -- 30,143 -- Richard C. Simkins (1) (3) 2,717,071 -- 28,983 --
(1) Term expires in 1998. (2) Elected by vote of holders of Common stock and Class B common stock voting as a class. (3) Elected by vote of holders of Common stock voting as a class. Members of the board of directors whose terms have not yet expired are Allen E. Perry, term expiring in 1997, John E. Fallon, term expiring in 1997, Robert T. Kroon, term expiring in 1997, Richard S. Knape, term expiring in 1996 and Mary Rita Cuddohy, term expiring in 1996. Item 6. Exhibits and reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended December 31, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Knape & Vogt Manufacturing Company (Registrant) Date: January 26, 1996 s/Raymond E. Knape Raymond E. Knape Chairman and Chief Executive Officer Date: January 26, 1996 s/Richard C. Simkins Richard C. Simkins Vice President - Finance, Secretary and Treasurer EX-27 2 ARTICLE 5 FDS FOR KNAPE & VOGT 2ND QUARTER 10-Q
5 0000056362 Knape & Vogt Manufacturing Company 1 US$ 3-Mos Jun-30-1996 Oct-01-1995 Dec-31-1995 1 333,557 0 23,197,164 721,000 28,751,067 55,108,527 88,612,949 36,924,632 131,030,332 9,303,083 35,000,000 0 0 11,762,138 61,768,123 131,030,332 40,371,133 40,371,133 31,084,300 31,084,300 6,928,539 0 594,740 1,699,747 640,000 1,059,747 0 0 0 1,059,747 0.18 0.18
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