-----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, UlwSwzjbnfGd+JsjvIcLuvHufYahUNnNHY/xolsMLB4qJxOx64DEU6o/GXSAc8nU xWAAS3i5IZxrMdkhEi8CDw== 0000056362-97-000002.txt : 19970211 0000056362-97-000002.hdr.sgml : 19970211 ACCESSION NUMBER: 0000056362-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970207 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: 97520914 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 2ND QUARTER ENDED 12/31/96 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 December 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 ______ 3,409,454 common shares were outstanding as of January 31, 1997. 2,480,473 Class B common shares were outstanding as of January 31, 1997. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES INDEX Page No. PART I FINANCIAL INFORMATION Item 1. Financial Statements. Condensed Consolidated Balance Sheets - --December 31, 1996 (Unaudited) and June 30, 1996.............................2 Condensed Consolidated Statements of Income (Unaudited) - --Six Months and Three Months Ended December 31, 1996 and 1995................3 Condensed Consolidated Statements of Cash Flows (Unaudited) - --Six Months Ended December 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 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, 1996 June 30, 1996 -------------- ------------- (Unaudited) Assets Cash and equivalents $ 743,329 $ 244,271 Accounts receivable - net 24,822,111 22,763,645 Refundable income taxes 1,000,854 1,860,191 Inventories 23,115,882 23,016,541 Other current assets 2,749,053 3,058,021 Net current assets of discontinued operation 1,516,682 1,790,740 ----------------- ----------------- Total current assets 53,947,911 52,733,409 ----------------- ----------------- Property, plant and equipment 84,403,916 82,129,435 Less accumulated depreciation 34,710,239 31,747,827 ----------------- ----------------- Net property, plant and equipment 49,693,677 50,381,608 ----------------- ----------------- Net property, plant and equipment of discontinued operation 1,658,126 1,775,225 Other assets 24,193,279 24,334.917 ----------------- ----------------- $ 129,492,993 $ 129,225,159 ================= ================= Liabilities and Stockholders' Equity Accounts payable $ 4,393,876 $ 4,825,372 Other accrued liabilities 6,573,237 8,372,046 ----------------- ----------------- Total current liabilities 10,967,113 13,197,418 Long-term debt 35,400,000 35,000,000 Deferred income taxes and other long-term liabilities 11,627,519 11,853,991 ----------------- ----------------- Total liabilities 57,994,632 60,051,409 ----------------- ----------------- Stockholders' equity Common stock 11,776,854 11,762,138 Additional paid-in capital 33,154,806 33,080,087 Foreign currency translation adjustment (1,270,843) (1,211,286) Retained earnings 27,837,544 25,542,811 ----------------- ----------------- Total stockholders' equity 71,498,361 69,173,750 ----------------- ----------------- $ 129,492,993 $ 129,225,159 ================= =================
See accompanying notes. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Six Months Ended Six Months Ended Three Months Ended Three Months Ended Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1995 ---------------- ---------------- ------------------ ------------------ Net sales $ 86,603,383 $ 77,926,405 $ 41,755,065 $ 38,122,568 Cost of sales 64,791,859 59,357,810 31,424,900 29,021,440 ----------------- ---------------- ---------------- ---------------- Gross profit 21,811,524 18,568,595 10,330,165 9,101,128 Selling and administrative expenses 14,209,014 13,112,013 6,922,933 6,183,098 ----------------- ---------------- ---------------- ---------------- Operating income 7,602,510 5,456,582 3,407,232 2,918,030 Other expenses 1,089,190 1,317,541 554,504 663,416 ----------------- ---------------- ---------------- ------------------ Income from continuing operations before income taxes 6,513,320 4,139,041 2,852,728 2,254,614 Income taxes - continuing operations 2,352,000 1,566,000 1,038,000 828,000 ----------------- ---------------- ---------------- ------------------ Income from continuing operations 4,161,320 2,573,041 1,814,728 1,426,614 Income (loss) from discontinued operation, net of taxes 0 (5,583) 0 (366,867) ----------------- ----------------- ---------------- ------------------- Net income $ 4,161,320 $ 2,567,458 $ 1,814,728 $ 1,059,747 ================= ================= ================ =================== Per common share: Income from continuing operations $ .71 $ .44 $ .31 $ .24 Income from discontinued operation .00 .00 .00 (.06) -------------- -------------- --------------- --------------- Net Income $ .71 $ .44 $ .31 $ .18 =============== ============== =============== =============== Cash Dividend - Common stock $ .33 $ .33 $ .165 $ .165 Cash Dividend - Class B common stock $ .30 $ .30 $ .15 $ .15 Weighted average shares outstanding 5,886,154 5,884,452 5,891,886 5,881,069
See accompanying notes. KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended Six Months Ended Dec. 31, 1996 Dec. 31, 1995 ----------------- ---------------- Operating Activities: Net income $ 4,161,320 $ 2,567,458 Non-cash items: Depreciation and amortization 3,769,141 3,563,828 Deferred income taxes (19,000) 31,000 Other long-term liabilities (207,029) (208,336) Changes in operating assets & liabilities: Accounts receivable (2,070,711) 2,303,143 Inventories (107,778) (1,163,385) Net assets of discontinued operation 367,028 337,714 Other current assets 1,166,926 (162,387) Accounts payable & accrued expenses (2,223,660) (1,554,156) -------------- ----------------- Net cash from operating activities 4,836,237 5,714,879 -------------- ----------------- Investing Activities: Additions to property and equipment (2,739,039) (2,864,397) Sale of property and equipment 238,183 93,756 Payments for other assets (453,295) (754,532) -------------- ----------------- Net cash for investing activities (2,954,151) (3,525,173) -------------- ----------------- Financing Activities: Proceeds from issuance of common stock 89,435 16,624 Additions to long-term debt 400,000 0 Payments on long-term debt 0 (800,000) Cash dividends paid (1,866,587) (1,863,490) -------------- ----------------- Net cash for financing activities (1,377,152) (2,646,866) -------------- ----------------- Effect of Exchange Rate Changes on Cash (5,876) 10,386 -------------- ----------------- Net Decrease in Cash & Equivalents 499,058 (446,774) Cash and Equivalents: Beginning of year 244,271 534,280 -------------- ----------------- End of period $ 743,329 $ 87,506 ============== ================= Cash Paid During the Period - interest $ 1,009,927 $ 1,183,989 - income taxes $ 1,511,663 $ 1,310,585
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, 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: 3,407,954 of common stock; 2,480,473 of Class B stock at December 31, 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: Dec. 31, 1996 June 30, 1996 ------------- ------------- Finished products $ 12,908,401 $ 13,189,032 Work in process 1,711,536 2,665,754 Raw materials 8,495,945 7,161,755 -------------- -------------- Total $ 23,115,882 $ 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 six month and three month periods ended December 31, 1996 and 1995: Six Months ended Six Months Ended Three Months ended Three Months ended December 31, 1996 December 31, 1995 December 31, 1996 December 31, 1995 ----------------------- -------------------- --------------------- --------------------- Shelving systems $ 40.6 46.9% $ 39.7 50.9% $ 18.3 43.7% $ 18.3 48.0% Drawer slides 30.1 34.8% 23.2 29.8% 15.1 36.1% 11.9 31.3% Hardware 14.1 16.3% 13.5 17.3% 7.5 18.1% 7.2 18.9% Furniture components 1.8 2.0% 1.5 2.0% 0.9 2.1% 0.7 1.8% ----------- --------- --------- -------- --------- ------- --------- -------- Total $ 86.6 100.0% $ 77.9 100.0% $ 41.8 100.0% $ 38.1 100.0% =========== ====== ========= ======== ========= ======= ========= ========
Net sales for the six months and second quarter of fiscal year 1997 increased $8.7 million, or 11.1%, and $3.7 million, or 9.5%, respectively, over the comparable periods of fiscal year 1996. Shelving sales were flat for the quarter. Drawer slide sales increased by $3.2 million for the quarter. The increased sales is due to the Company's expanding share of the precision, Euro-style and utility drawer slide markets. Hardware product line sales increased during the quarter by $.3 million from last year, due to more sales of kitchen and bath products manufactured by Feeny. Furniture component sales increased during the quarter by $.2 million compared to last year. Costs and Expenses Cost of sales was 74.8% of sales for the first six months and 75.3% of sales for the second quarter of fiscal year 1997 compared to 76.2% and 76.1% of sales for the first six months and second quarter of fiscal year 1996, respectively. Decreases in raw material prices and larger sales volumes absorbing fixed overhead costs accounted for the majority of the improvement. Selling and administrative expenses for the six months was 16.4% of sales compared to 16.8% for the same period last year and for the second quarter increased to 16.6% of sales from 16.2% for the same quarter last year. The increase as a percentage of sales for the quarter was mainly due to increases in administrative expenses such as the Michigan single business tax. Other Expenses Interest expense was $517,881 for the quarter ended December 31, 1996 compared to $594,740 for the quarter ended December 31, 1995. The decrease was due to lower borrowing levels and lower interest rates. Interest expense for the six months ended December 31, 1996 was $1,021,188 compared to $1,182,296 last year. 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 six months and quarter ended December 31, 1996, was 36.1% and 36.4% compared to 37.8% and 36.7% for the six months and quarter ended December 31, 1995. The effective tax rates are slightly lower in fiscal year 1997 due to foreign and state tax rates. Income from Continuing Operations Income from continuing operations were at record levels of $4,161,320 for the first six months and $1,814,728 for the second quarter of 1997. Earnings per share from continuing operations for the six months increased 61.4% to $.71 compared to $.44 last year and income per share for the quarter rose 29.2% to $.31 compared to $.24 in the second quarter of last year. The Company is continuing to pursue the sale of this operation. The Company announced on December 18, 1996 that the intended buyer for Modar withdrew it's offer. Modar will continue to operate at low levels until the end of the third quarter or a new buyer is secured. The Company is not anticipating a material impact due to the intended buyer of Modar withdrawing its offer, but there may be additional costs incurred in concluding an eventual sale or phasing out of the operation. 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 December 31, 1996. For the second quarter of last year the discontinued operation lost $366,867, or $0.06 per share. Net Income Net income of $4,161,320 for the six months was 4.8% of sales compared to $2,567,458, for the first six months last year which was 3.3% of sales. For the quarter ended December 31, 1996 net income was $1,814,728 which was 4.3% of sales compared to $1,059,747 which was 2.8% of sales for the second quarter of last year. Liquidity and Capital Resources The Company's net cash position increased during the first six months to $743,329 from $499,058 at June 30, 1996. Net cash from operating activities of $4,836,237 was positively affected by the increased net income and depreciation expense but negatively affected by the impact on accounts receivable of sales terms offered to customers and higher sales. The decrease in accrued restructuring costs is due mainly to the payment of severance. Capital expenditures were $2,739,039 for the six months ended December 31, 1996. The Company is currently forecasting capital expenditures to be approximately $8 million for the fiscal year. The Company had total debt of $35,400,000 at December 31, 1996, an increase of $400,000 from total debt of $35,000,000 at June 30, 1996. It is estimated that debt levels will decrease in the second half of the fiscal year. 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 4. Submission of Matters to a Vote of Security Holders (a) Knape & Vogt Manufacturing Company's Annual Meeting of Shareholders was held on October 18, 1996. (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 William R. Dutmers (1) (2) 26,356,056 -- 11,151 -- Richard S. Knape (1) (2) 26,257,724 -- 109,483 -- Michael J. Kregor (1) (2) 26,367,207 -- 10,351 -- Mary Rita Cuddohy (1) (3) 2,833,442 -- 14,555 --
(1) Term expires in 1999. (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 yetexpired are Raymond E. Knape, term expiring in 1998, Herbert F. Knape, term expiring in 1998, Richard C. Simkins, term expiring in 1998, Allen E. Perry, term expiring in 1997, John E. Fallon, term expiring in 1997, and Robert T. Kroon, term expiring in 1997. 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, 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: February 7, 1997 s/Allan E. Perry ----------------------- Allan E. Perry President and Chief Executive Officer Date: February 7, 1997 s/Richard C. Simkins ----------------------- Richard C. Simkins Executive Vice President, CFO, 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-30-1997 SEP-01-1996 DEC-31-1996 1 743,329 0 25,429,111 607,000 23,115,882 53,947,911 84,403,916 34,710,239 129,492,993 10,967,113 35,400,000 0 0 11,766,854 59,721,507 129,492,993 41,755,065 41,755,065 31,424,900 31,424,900 6,922,933 0 517,881 2,852,728 1,038,000 1,814,728 0 0 0 1,814,728 0.31 0.31
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