-----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, DSq/7d0NCBvDMYg3krfqIw3KfW0TAUXhqHJIh0f/3d+TSjH1RdEthY0pqOm6Ruws PF0Hd6iKFjnwUIZyLn/bnQ== 0000056362-96-000006.txt : 19961118 0000056362-96-000006.hdr.sgml : 19961118 ACCESSION NUMBER: 0000056362-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 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: 96663775 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 10-Q FOR 1ST QUARTER ENDED 9/30/96 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 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 INDEX Page No. PART I FINANCIAL INFORMATION Item 1. Financial Statements. Condensed Consolidated Balance Sheets - --September 30, 1996 (Unaudited) and June 30, 1996............................2 Condensed Consolidated Statements of Income (Unaudited) - --Three Months Ended September 30, 1996 and 1995..............................3 Condensed Consolidated Statements of Cash Flows (Unaudited) - --Three Months Ended September 30, 1996 and 1995..............................4 Notes to Condensed Consolidated Financial Statements..........................5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.........................................6-7 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K......................................8 SIGNATURES ...................................................................8 KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 1996 June 30, 1996 ------------------ ------------- (Unaudited) Assets Cash and equivalents $ 215,264 244,271 Accounts receivable - net 26,967,723 22,763,645 Refundable income taxes 1,271,549 1,860,191 Inventories 22,376,299 23,016,541 Other current asset 3,013,478 3,058,021 Net current assets of discontinued operation 1,773,215 1,790,740 ---------------- ---------------- Total Current assets 55,617,528 52,733,409 ---------------- ---------------- Property, plant and equipment 83,674,083 82,129,435 Less accumulated depreciation 33,307,550 31,747,827 ---------------- ---------------- Net property, plant and equipment 50,366,533 50,381,608 ---------------- ---------------- Net property, plant and equipment of discontinued operation 1,700,677 1,775,225 Other assets 24,219,515 24,334,917 ---------------- ---------------- $ 131,904,253 $ 129,225,159 ================ ================ Liabilities and Stockholder Equity Accounts payable $ 6,166,386 $ 4,825,372 Other accrued liabilities 7,192,646 8,372,046 ---------------- ---------------- Total current liabilities 13,359,032 13,197,418 Long-term debt 36,000,000 35,000,000 Deferred income taxes and other long-term liabilities 11,927,079 11,853,991 ---------------- ---------------- Total liabilities 61,286,111 60,051,409 ---------------- ---------------- Stockholders equity Common stock 11,765,010 11,762,138 Additional paid-in capital 33,091,453 33,080,087 Foreign currency translation adjustment (1,195,524) (1,211,286) Retained earnings 26,957,203 25,542,811 ---------------- ---------------- Total stockholders equity 70,618,142 69,173,750 ---------------- ---------------- $ 131,904,253 $ 129,225,159 ================ ================
See accompanying notes. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Sept. 30, 1996 Sept. 30, 1995 Net Sales $ 44,848,318 $ 39,803,837 Cost of sales 33,366,959 30,336,370 ---------------- ---------------- Gross profit 11,481,359 9,467,467 Selling and administrative expenses 7,286,081 6,928,915 ---------------- ---------------- Operating income 4,195,278 2,538,552 Other expenses 534,686 654,125 ---------------- ---------------- Income from continuing operations before income taxes 3,660,592 1,884,427 Income taxes - continuing operations 1,314,000 738,000 ---------------- ---------------- Income from continuing operations 2,346,292 1,146,427 Income from discontinued operation, net of tax 0 361,284 ---------------- ---------------- Net income $ 2,346,592 $ 1,507,711 ================ ================ Per common shares: Income from continuing operations $ .40 $ .20 Income from discontinued operation $ .00 $ .06 ---------------- ---------------- Net income $ .40 $ .26 ================ ================ Cash Dividend - Common stock $ .165 $ .165 Cash Dividend - Class B common stock $ .15 $ .15 Weighted average shares outstanding 5,882,280 5,885,466 See accompanying notes. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended Sept. 30, 1996 Sept. 30, 1995 --------------- --------------- Operating Activities: Net income $ 2,346,592 $ 1,507,711 Non-cash items: Depreciation and amortization 1,850,377 1,757,310 Deferred income taxes 171,000 238,000 Other long-term liabilities (98,019) (103,495) Changes in operating assets & liabilities: Accounts and other receivables (3,609,699) (1,521,191) Inventories 642,811 (2,163,677) Net assets of discontinued operation 100,095 (219,650) Other current assets 44,643 (257,174) Accounts payable & accrued expenses 158,147 20,188 -------------- ---------------- Net cash provided (used) by operating activities 1,605,947 (741,978) -------------- ---------------- Investing Activities: Additions to property, plant, and equipment (1,538,118) (766,371) Payments for other assets (177,619) (437,855) -------------- ----------------- Net cash used in investing activities (1,715,737) (1,204,226) -------------- ----------------- Financing Activities: Proceeds from sale of common stock 14,238 16,624 Additions to long-term debt 1,000,000 3,600,000 Cash dividends paid (932,200) (931,661) -------------- ----------------- Net cash provided by financing activities 82,038 2,684,963 -------------- ----------------- Effect of Exchange Rate Changes on Cash (1,255) 4,153 -------------- ----------------- Net Increase (Decrease) in Cash & Equivalents (29,007) 742,912 Cash and Equivalents: Beginning of year 244,271 534,280 -------------- ----------------- End of period $ 215,264 $ 1,277,192 ============== ================= Cash Paid During the Period - interest $ 497,329 $ 209,603 - income taxes $ 1,721,642 $ 558,936
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 Securities 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, 1996, 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 1996 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: 3,333,886 of common stock; 2,548,619 of Class B stock at September 30, 1996; and 3,327,918 of common stock and 2,553,151 of Class B common stock at June 30, 1996. Note 3 - Inventories Inventories are valued at the lower of FIFO (first-in, first-out) cost or market. Inventories are summarized as follows: September 30, 1996 June 30, 1996 ------------------ ---------------- Finished products $ 11,932,126 $ 13,189,032 Work in process 2,656,702 2,665,754 Raw Materials 7,787,471 7,161,755 -------------- -------------- Total $ 22,376,299 $ 23,016,541 ============== ============== 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 $0.8 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 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. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) 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 include 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. For the first quarter of last year the discontinued operation earned $361,284, or $0.06 per share. 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 $0.40 compared to $0.26 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 $1,000,000 due to the increase in accounts receivable and the capital expenditures. Debt levels are expected to decrease during the remainder of fiscal year 1997. Anticipated cash flow from operations will substantially fund working capital, capital expenditures and dividend payments. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K (a) Exhibits - none (b) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended September 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Knape & Vogt Manufacturing Company (Registrant) Date: November 13, 1996 s/Allan E. Perry ------------------------- Allan E. Perry President and Chief Executive Officer Date: November 13, 1996 s/Richard C. Simkins ------------------------- Richard C.Simkins Executive Vice President, CFO, Secretary, and Treasurer EX-27 2 ARTICLE 5 FDS FOR KNAPE & VOGT 1ST QUARTER 10-Q
5 0000056362 Knape & Vogt Manufacturing Company 1 US$ 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 1 215,264 0 24,447,723 480,000 22,376,299 55,617,528 83,674,083 33,307,550 131,904,253 13,359,032 36,000,000 0 0 11,765,010 58,853,132 131,904,253 44,848,318 44,848,318 33,366,959 33,336,959 7,286,081 0 503,307 3,660,592 1,314,000 2,346,592 0 0 0 2,346,592 0.40 0.40
-----END PRIVACY-ENHANCED MESSAGE-----