EX-99 2 kv8k_102005-ex99.htm Knape & Vogt Manufacturing Company Form 8-K Exhibit 99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Leslie Cummings, Vice President of Finance and Treasurer
Knape & Vogt Manufacturing Company (616) 459-3311, Ext. 225
or
Jeff Lambert, Eric Lubbers (616) 233-0500
Lambert, Edwards & Associates, Inc. (mail@lambert-edwards.com)

Knape & Vogt Reports Improved First Quarter Results

GRAND RAPIDS, Michigan, October 20, 2005 – Knape & Vogt Manufacturing Co. (Nasdaq: KNAP) today announced growth in sales and net income for the first quarter ended October 1, 2005.

The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides, shelving, storage and ergonomic office products reported that net sales grew 6.3 percent to $40.8 million for the first quarter of fiscal 2006, compared with net sales of $38.4 million during the same period a year ago. Sales of new products and product enhancements were $8.3 million for the first quarter of fiscal 2006 compared with $8.0 million in the first quarter of the prior year.

KV reported first quarter net income of $1.2 million, or $0.26 per diluted share, increased significantly when compared with earnings of $390,511, or $0.09 per diluted share, during the same period in fiscal 2005. The net income improvement reflected efforts undertaken to address the impact of steel costs, along with the consolidation of the Company’s wire product manufacturing. In addition, the Company has been successful in leveraging its operating expenses.

About Knape & Vogt

Knape & Vogt Manufacturing Co. brings more than a century of experience to the design, manufacture and distribution of kitchen and bath storage solutions and office products for original equipment manufacturers, specialty distributors, office furniture dealers, hardware chains and major home centers throughout the country. Additional information on KV’s product lines is available on www.knapeandvogt.com.

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Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended

Oct. 1, 2005 Oct. 2, 2004


Net sales     $ 40,806,683   $ 38,372,180  
   
Cost of sales    33,036,559    31,567,404  


Gross profit    7,770,124    6,804,776  
   
Selling, general and administrative expenses    5,525,144    5,835,251  
   
Restructuring charge    44,477    -  


Operating income    2,200,503    969,525  
   
Interest and other expenses, net    323,217    307,158  


Income before income taxes    1,877,286    662,367  
   
Income taxes    720,157    271,856  


Net income   $ 1,157,129   $ 390,511  


Weighted average shares outstanding    4,510,505    4,516,681  


Basic and diluted earnings per share   $ 0.26   $ 0.09  


Cash dividend - common stock   $ 0.165   $ 0.165  


Cash dividend - Class B common stock   $ 0.15   $ 0.15  



Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets

Oct. 1, 2005
(Unaudited)
July 2, 2005


Assets            
   
Current Assets:  
Cash and equivalents   $ 8,294,306   $ 6,349,702  
Accounts receivable, net    20,794,494    19,944,781  
Inventories    25,814,977    24,362,073  
Assets held for sale    1,073,975    1,281,213  
Prepaid expenses and other    878,293    934,711  


Total current assets    56,856,045    52,872,480  
   
Property, plant and equipment, net    21,686,272    22,120,924  
   
Other assets    17,353,728    17,395,234  


    $ 95,896,045   $ 92,388,638  


   
Liabilities and Equity  
   
Current liabilities   $ 21,554,755   $ 21,633,059  
   
Long-term debt and capital leases    25,520,541    22,524,129  
   
Deferred income taxes & other long-term liabilities    9,751,988    10,123,573  
   
Stockholders' equity    39,068,761    38,107,877  


    $ 95,896,045   $ 92,388,638  



Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended

Oct. 1, 2005 Oct. 2, 2004


From Operating Activities:            
         Net income   $ 1,157,129   $ 390,511  
         Depreciation and amortization    1,244,423    1,515,294  
         Change in retirement plan cost    66,134    107,341  
         Deferred income taxes    (278,000 )  (141,894 )
         Changes in operating assets & liabilities    (2,155,639 )  (1,920,677 )
         Other, net    1,819    4,878  


Net cash provided by (used for) operating activities    35,866    (44,547 )
   
From Investing Activities:  
         Additions to property, plant & equipment    (721,638 )  (716,514 )
         Other, net    (17,667 )  (1,789 )


Net cash used for investing activities    (739,305 )  (718,303 )
   
From Financing Activities:  
         Cash dividends paid    (713,872 )  (712,661 )
         Net change in long-term debt/capital leases    2,996,413    969,425  


Net cash provided by financing activities    2,282,541    256,764  
   
Effect of Exchange Rates on Cash    365,502    205,770  


Net increase (decrease) in cash and equivalents   $ 1,944,604   $ (300,316 )