-----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, V6Ada6uZEmZitZYjViL+LbsEdeSXa6tO46mFJTROTjajMMYwX8AFRPRY7Taoh9al xhwvx3rVBWsYoQdDsoruIQ== 0000926044-97-000060.txt : 19970505 0000926044-97-000060.hdr.sgml : 19970505 ACCESSION NUMBER: 0000926044-97-000060 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970502 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-01859 FILM NUMBER: 97594448 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/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A [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 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 December 31, Three months ended December 31, ---------------------------------------- ---------------------------------------- 1996 1995 1996 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. 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 its 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 includes 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 as current estimates of the loss from disposal approximate prior estimates. For the second quarter of last year the discontinued operation lost $366,867, or $.06 per share. It is the Company's intent to sell the Roll-it division during fiscal year 1997 through an independent broker. 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. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized. Knape & Vogt Manufacturing Company (Registrant) Date: May 1, 1997 /s/ Richard C. Simkins Richard C. Simkins Executive Vice President, CFO, Secretary and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----