EX-99 2 kv8k_042006ex99-1.htm Knape & Vogt Manufacturing Company Form 8-K for April 20, 2006 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 Third Quarter and Nine Month Results

GRAND RAPIDS, Michigan, April 20, 2006 – Knape & Vogt Manufacturing Co. (Nasdaq: KNAP) today announced the results for its third quarter and nine-month period ended April 1, 2006.

The Grand Rapids, Mich.-based manufacturer and distributor of drawer slides, shelving, storage and ergonomic office products reported that net sales grew 4.4 percent to $41.9 million for the third quarter of fiscal 2006, compared with net sales of $40.2 million during the same period a year ago. Sales of new products and product enhancements were $8.0 million for the third quarter of fiscal 2006 compared with $7.6 million in the third quarter of the prior year.

Net sales for the nine months ended April 1, 2006, grew to $123.6 million, up from $116.0 million for the same period in the prior year, representing a 6.5 percent increase.

KV reported third quarter net income of $1.4 million, or $0.31 per basic and diluted share, compared with net income of $1.7 million, or $0.37 per basic and diluted share, in the prior year third quarter. The prior year results included a one-time tax benefit of $594,000 related to the expiration of certain statutory tax periods and prior year research and development credit claims.

Net income for the nine months ended April 1, 2006, was $5.1 million, or $1.12 per basic and diluted share, compared with net income of $1.6 million, or $0.35 per basic and diluted share, for the same period in 2005. The current year results included a one-time settlement gain on one of the Company’s defined benefit plans of approximately $952,000 after-tax. The year-to-date fiscal 2005 net income results included an impairment/restructuring charge of approximately $1.3 million after-tax related to the relocation of the Company’s wire production operations to its Grand Rapids facility. Knape & Vogt said the improvement in net income, excluding these unusual items, reflected savings from the consolidation of the Company’s wire production, better operating cost leverage due to higher sales volumes and lower steel costs.

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)

Nine Months Ended Three Months Ended
April 1, 2006 April 2, 2005 April 1, 2006 April 2, 2005

Net sales     $ 123,594,698   $ 116,038,344   $ 41,918,679   $ 40,169,917  
    
Cost of sales    98,170,473    94,537,482    33,582,748    32,432,912  

    
Gross margin    25,424,225    21,500,862    8,335,931    7,737,005  
    
Selling and administrative expenses    16,406,712    16,804,638    5,638,711    5,437,189  
    
Restructuring and impairment expenses    44,477    1,982,474    -    204,027  

    
Operating income    8,973,036    2,713,750    2,697,220    2,095,789  
   
Interest and other expenses, net    1,044,780    1,091,077    357,322    372,732  

    
Income before income taxes    7,928,256    1,622,673    2,339,898    1,723,057  
   
Income taxes    2,867,840    63,364    941,906    31,444  

    
Net income   $ 5,060,416   $ 1,559,309   $ 1,397,992   $ 1,691,613  

    
Earnings per common share - basic:  
Weighted average shares outstanding    4,510,700    4,516,964    4,511,091    4,517,105  

Earnings per common share - dilutive:          
Weighted average shares outstanding    4,511,175    4,516,964    4,512,121    4,517,105  

    
Net income per share   $ 1.12   $ 0.35   $ 0.31   $ 0.37  

    
Cash dividend - Common stock   $ 0.495   $ 0.495   $ 0.165   $ 0.165  

    
Cash dividend - Class B common stock   $ 0.45   $ 0.45   $ 0.15   $ 0.15  


Knape & Vogt Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets

April 1, 2006
(Unaudited)
July 2, 2005


Assets
           
    
Current Assets:  
Cash and equivalents   $ 9,886,938   $ 6,349,702  
Accounts receivable, net    20,952,281    19,944,781  
Inventories    23,212,633    24,362,073  
Assets held for sale    786,328    1,281,213  
Prepaid expenses and other    1,637,488    934,711  


    
Total current assets    56,475,668    52,872,480  
    
Property, plant and equipment, net    20,797,701    22,120,924  
    
Other assets    17,172,430    17,395,234  


    $ 94,445,799   $ 92,388,638  


    
Liabilities and Equity  
    
Current liabilities   $ 21,311,491   $ 21,633,059  
    
Long-term debt and capital leases    23,013,175    22,524,129  
    
Deferred income taxes & other  
  long-term liabilities    8,460,150    10,123,573  
    
Stockholders' equity    41,660,983    38,107,877  


    
    $ 94,445,799   $ 92,388,638  





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

(Unaudited)

Nine Months Ended
April 1, 2006 April 2, 2005


From Operating Activities:            
     Net income   $ 5,060,416   $ 1,559,309  
     Depreciation and amortization    3,683,899    4,695,858  
     Change in retirement plan cost    (1,263,833 )  203,409  
     Deferred income taxes    250,000    (1,066,209 )
     Impairment expenses    -    1,778,447  
     Changes in operating assets  
         & liabilities    (756,758 )  (2,219,599 )
     Other, net    (107,726 )  8,806  


    
Net cash provided by operating activities    6,865,998    4,960,021  
    
From Investing Activities:  
     Additions to property, plant & equipment    (2,162,717 )  (2,069,050 )
     Proceeds from sales of property, plant & equip    246,000    10,250  
     Other, net    (103,164 )  (28,257 )


    
Net cash used for investing activities    (2,019,881 )  (2,087,057 )
    
From Financing Activities:  
     Cash dividends paid    (2,145,196 )  (2,141,041 )
     Stock options exercised    11,907    -  
     Net change in long-term debt/capital leases    489,046    (10,214 )


    
Net cash used for financing activities    (1,644,243 )  (2,151,255 )
    
Effect of Exchange Rates on Cash    335,362    379,654  


    
Net increase in cash and equivalents   $ 3,537,236   $ 1,101,363