-----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, Gmf8pvOSTobZ8OT7KcJUqEPY97MNWvuxenpS5jmCAPQm/l5kSURrTQPhq9IVQuPX UEEynMwEW4oMKAGZ1x/ehQ== 0000056362-96-000004.txt : 19960514 0000056362-96-000004.hdr.sgml : 19960514 ACCESSION NUMBER: 0000056362-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 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: 96561290 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 March 31, 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 ______ 3,314,269 common shares were outstanding as of May 3, 1996. 2,566,800 Class B common shares were outstanding as of May 3, 1996. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES INDEX Page No. PART I FINANCIAL INFORMATION Item 1. Financial Statements. Condensed Consolidated Balance Sheets - --March 31, 1996 (Unaudited) and June 30, 1995................................2 Condensed Consolidated Statements of Income (Unaudited) - --Nine Months and Three Months Ended March 31, 1996 and 1995..................3 Condensed Consolidated Statements of Cash Flows (Unaudited) - --Nine Months Ended March 31, 1996 and 1995...................................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 5. Other information.....................................................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 March 31, 1996 June 30, 1995 -------------- ------------- (Unaudited) Assets Cash and equivalents $ 1,010,791 $ 604,106 Accounts receivable - net 27,902,290 27,045,057 Inventories 28,371,925 28,347,023 Other current assets 3,640,239 3,210,231 ----------------- ----------------- Total current assets 60,925,245 59,206,417 ---------------- ---------------- Property, plant and equipment 91,393,683 85,729,838 Less accumulated depreciation 38,585,320 33,654,435 ---------------- ---------------- Net property, plant and equipment 52,808,363 52,075,403 ---------------- ---------------- Other assets 24,354,662 24,015,737 ---------------- ---------------- $ 138,088,270 $ 135,297,557 ================ ============== Liabilities and Stockholders' Equity Accounts payable $ 8,073,302 $ 7,552,129 Accrued income and other taxes 1,112,043 1,337,920 Other accrued liabilities 4,143,541 4,519,615 ----------------- ---------------- Total current liabilities 13,328,886 13,409,664 Long-term debt 36,700,000 35,800,000 Deferred income taxes and other long-term liabilities 13,311,109 13,374,057 ---------------- ---------------- Total liabilities 63,339,995 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 (1,169,879) (1,316,765) Retained earnings 31,075,929 29,205,000 ---------------- ---------------- Total stockholders' equity 74,748,275 72,713,836 ---------------- ---------------- $ 138,088,270 $ 135,297,557 ================ ==============
See accompanying notes. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Mar. 31, 1996 Mar. 31, 1995 Mar. 31, 1996 Mar. 31, 1995 --------------- --------------- ----------------- ----------------- Net sales $ 134,103,174 $ 138,019,738 $ 48,583,411 $ 48,225,311 Cost of sales 101,934,595 103,498,248 36,662,138 36,417,293 ---------------- --------------- ---------------- ---------------- Gross profit 32,168,579 34,521,490 11,921,273 11,808,018 Selling and administrative expenses 22,796,553 23,013,720 8,020,276 7,859,055 ---------------- --------------- ---------------- ----------------- Operating income 9,372,026 11,507,770 3,900,997 3,948,963 Other expenses 1,896,731 2,001,969 594,160 704,133 ---------------- --------------- ---------------- ----------------- Income before income taxes 7,475,295 9,505,801 3,306,837 3,244,830 Income taxes 2,809,000 3,463,000 1,208,000 1,192,000 ---------------- --------------- ---------------- ----------------- Net income $ 4,666,295 $ 6,042,801 $ 2,098,837 $ 2,052,830 ================ =============== ================= ================= Per common share: Net Income $ .79 $ 1.03 $ .35 $ .35 Cash Dividend - Common stock $ .495 $ .495 $ .165 $ .165 Cash Dividend - Class B common stock $ .45 $ .45 $ .15 $ .15 Weighted average shares outstanding 5,883,594 5,893,568 5,883,099 5,889,718
See accompanying notes. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended Nine Months Ended Mar. 31, 1996 Mar. 31, 1995 ----------------- ----------------- Operating Activities: Net income $ 4,666,295 $ 6,042,801 Non-cash items: Depreciation and amortization 5,759,478 5,567,285 Deferred income taxes 264,000 324,000 Other long-term liabilities (327,445) (250,209) Changes in operating assets & liabilities: Accounts receivable (805,604) (1,235,839) Inventories 42,755 388,481 Other current assets (425,698) (871,063) Accounts payable & accrued expenses (127,127) (2,682,880) ------------------ ----------------- Net cash from operating activities 9,046,654 7,282,576 ------------------ ----------------- Investing Activities: Additions to property, plant, and equipment (5,756,953) (3,811,283) Sale of property, plant, and equipment 109,771 6,427 Payments for other assets (1,125,822) (639,054) ------------------ ----------------- Net cash used in investing activities (6,773,004) (4,443,910) ------------------ ----------------- Financing Activities: Proceeds from sale of common stock 16,624 98,852 Additions to long-term debt 900,000 -- Payments on long-term debt -- (100,000) Cash dividends paid (2,795,366) (2,791,503) ------------------ ----------------- Net cash for financing activities (1,878,742) (2,792,651) ------------------ ----------------- Effect of Exchange Rate Changes on Cash 11,777 (21,982) ------------------ ----------------- Net Increase (Decrease) in Cash & Equivalents 406,685 24,033 Cash and Equivalents: Beginning of year 604,106 620,224 ------------------ ----------------- End of period $ 1,010,791 $ 644,257 ================== ================= Cash Paid During the Period - interest $ 1,760,294 $ 1,707,909 - income taxes $ 2,799,432 $ 3,027,454
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: 3,314,269 of common stock; 2,566,800 of Class B stock at March 31, 1996; 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 his subsidiary at June 30, 1995 was $417,000 lower than it would have been under FIFO. Inventories are summarized as follows: Mar. 31, 1996 June 30, 1995 ------------- ------------- Finished products $ 16,340,889 $ 16,187,481 Work in process 3,332,942 3,538,217 Raw Materials 8,698,094 8,621,325 -------------- -------------- Total $ 28,371,925 $ 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 third quarter of fiscal year 1996 increased .7% to $48.6 million compared to $48.2 million for the same quarter last year. This is the first quarter in fiscal year 1996 that showed an increase in sales over the prior year. For the nine months ended March 31, 1996 sales were $134.1 million a decrease of 2.8% compared to $138.0 million for the same period in fiscal year 1995. Drawer slide sales increased to $15.2 million for the quarter from $14.5 million last year due to increases in sales of precision drawer slides. Store fixture and hardware product line sales increased during the quarter to $10.7 million from $10.3 million last year, due to more sales of store fixture products by Roll-it to their largest customer. Shelving sales decreased to $21.9 million during the quarter compared to $22.5 million last year, due primarily to decreased sales of wall mounted shelving products. Furniture component sales decreased slightly during the quarter to $.8 million compared to $.9 million last year. Based on internal forecasts, the Company anticipates that sales in the fourth quarter may show a slight decrease compared to the same period in fiscal 1995 when store fixture sales were very strong. Costs and Expenses Cost of sales was 75.5% of sales for the third quarter and 76.0% of sales for the first nine months of fiscal year 1996 compared to 75.5% and 75.0% of sales for the third quarter and first nine months of fiscal year 1995, respectively. Price decreases in steel and particle board prices accounted for most of the improvement in cost as a percentage of sales for the quarter compared to the costs for the nine months. The increase in the cost of sales for the nine months ended March 31, 1996 compared to last year is mainly due to material price increases throughout the last six months of fiscal year 1995 and the first six month of fiscal year 1996. Selling and administrative expenses for the quarter increased as a percentage of sales to 16.5% from 16.3% last year primarily due to selling expenses associated with the start up of the retail program at Feeny. Selling and administrative expense for the nine months decreased by $217,167 mainly due to lower administrative expenses, but increased to as a percentage of sales to 17.0% compared to 16.7% last year due to the lower sales levels in fiscal year 1996. Other Expenses Interest expense decreased to $554,595 for the quarter ended March 31, 1996 compared to $646,043 for the quarter ended March 31, 1995 due to lower interest rates. Interest expense for the nine months ended March 31, 1996 was $1,747,740 compared to $1,827,826 last year. Income Taxes The effective tax rate for the quarter and nine months ended March 31, 1996, was 36.5% and 37.6% compared to 36.7% and 36.4% for the quarter and nine months ended March 31, 1995. The effective tax rate for the nine months of fiscal year 1995 is slightly lower due to a reduction in Illinois state taxes relating to the Hirsh Company in the second quarter. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Net Income Net income of $2,098,837 for the third quarter was 2.2% higher than the $2,052,830 reported a year ago. For the nine months ended March 31, 1996 net income was $4,666,295 which is 22.8% lower than the $6,042,801 reported for the same period last year. Earnings per share for the quarter and nine months were $.35 and $.79, respectively, compared to $.35 and $1.03 for the same periods last year. Net income was 4.3% and 3.5% of sales for the quarter and nine months, respectively, compared to 4.3% and 4.4% of sales for the same periods last year. Liquidity and Capital Resources The Company's net cash position increased during the first nine months to $1,010,791 from $604,106 at June 30, 1995. Net cash from operating activities for the nine months ended March 31, 1996 was $1,764,078 better than the same period last year due to the decreases in the accounts payable and accruals in fiscal year 1995 that did not occur in fiscal year 1996 due to keeping these balances low at June 30, 1995. Capital expenditures were $5,756,953 for the nine months ended March 31, 1996. The Company is currently forecasting capital expenditures to be approximately $8 million for the fiscal year with the largest expenditures for drawer slide production equipment and sawing and edgebanding equipment. The Company had total debt of $36,700,000 at March 31, 1996, an increase of $900,000 from the balance at June 30, 1995 of $35,800,000 due to the high level of capital expenditures this fiscal year. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES PART II. OTHER INFORMATION Item 5. Other information: Raymond E. Knape, Chairman and Chief Executive Officer, announced his retirement at the April 19, 1996 Board of Directors meeting of Knape & Vogt Manufacturing Company. Mr. Knape will remain as a member of the Board. The Board decided to leave the posistion of Chaiman of the Board vacant. Allan E. Perry was elected by the Board of Directors to the position of President and Chief Executive Officer. He previously held the position of President and Chief Operating Officer. Richard C. Simkins was elected by the Board of Directors to the position of Executive Vice President, Chief Financial Officer, Secretary and Treasurer. He previously held the title of Vice President-Finance, Secretary and Treasurer. The Board of Directors also announced that it has increased its size from eight directors to ten with the election of William R. Dutmers and Michael J. Kregor, who represent the fourth generation of the Knape family to serve on the board. William R. Dutmers, 39, owns G&L Inc. of Muskegon, Michigan, a business consulting firm. Michael J. Kregor, 44, of Valencia, California, has nearly two decades of sales and marketing experience with Nestle, and currently is Vice President, Marketing, Nestle Brands. 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 March 31, 1996. 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: May 9, 1996 s\Allan E. Perry Allan E. Perry President and Chief Executive Officer Date: May 9, 1996 s\Richard C. Simkins Richard C. Simkins Executive Vice President, Chief Financial Officer, 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 Jan-01-1996 Mar-31-1996 1 1,010,791 0 28,847,290 945,000 28,371,925 60,925,245 91,393,683 38,585,320 138,088,270 13,328,886 36,700,000 0 0 11,762,138 62,986,137 138,088,270 48,583,411 48,583,411 36,662,138 36,662,138 8,020,276 0 554,595 3,306,837 1,208,000 2,098,837 0 0 0 2,098,837 0.35 0.35
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