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 March 31, 1996
[ ] 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 [ ]
3,314,269 common shares were outstanding as of May 3, 1996.
2,566,800 Class B common shares were outstanding as of May 3, 1996.
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KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 nine month and three month periods
ended March 31, 1996 and 1995:
<TABLE>
Nine months ended March 31, Three months ended March 31,
------------------------------------------ ----------------------------------------
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shelving systems $ 61.6 45.9% $ 61.9 44.9% $ 21.9 45.1% $ 22.5 46.7%
Drawer slides 38.4 28.6% 39.8 28.8% 15.2 31.3% 14.5 30.1%
Hardware 20.4 15.2% 22.0 15.9% 6.9 14.2% 7.4 15.4%
Store fixtures 11.3 8.4% 10.0 7.3% 3.8 7.8% 2.9 6.0%
Furniture components 2.4 1.8% 4.3 3.1% 0.8 1.6% 0.9 1.9%
- --------------------------------------------------------------------------------------------------------------------
Total $134.1 100.0% $138.0 100.0% $ 48.6 100.0% $ 48.2 100.0%
====================================================================================================================
</TABLE>
Net sales for the third quarter of fiscal year 1996 increased .7% to $48.6
million compared to $48.2 million for the same quarter last year. This is the
first quarter in fiscal year 1996 that showed an increase in sales over the
prior year. For the nine months ended March 31, 1996 sales were $134.1 million,
a decrease of 2.8% compared to $138.0 million for the same period in fiscal year
1995. Drawer slide sales increased to $15.2 million for the quarter from $14.5
million last year due to increases in sales of precision drawer slides. Store
fixture sales increased during the quarter by $.9 million compared to the same
quarter last year due to demand from Roll-it's largest customer who had
dedicated more funds to refixturing stores than in past years' comparable
periods. Hardware product line sales decreased $.5 million for the quarter due
to decreased sales of work systems. Shelving sales decreased to $21.9 million
during the quarter compared to $22.5 million last year, due primarily to
decreased sales of wall mounted shelving products. Furniture component sales
decreased slightly during the quarter to $.8 million compared to $.9 million
last year. Based on internal forecasts, the Company anticipates that sales in
the fourth quarter may show a slight decrease compared to the same period in
fiscal 1995 when store fixture sales were very strong.
Costs and Expenses
Cost of sales was 75.5% of sales for the third quarter and 76.0% of sales for
the first nine months of fiscal year 1996 compared to 75.5% and 75.0% of sales
for the third quarter and first nine months of fiscal year 1995, respectively.
Price decreases in steel and particle board prices
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accounted for most of the improvement in cost as a percentage of sales for the
quarter compared to the costs for the nine months. The increase in the cost of
sales for the nine months ended March 31, 1996 compared to last year is mainly
due to material price increases throughout the last six months of fiscal year
1995 and the first six months of fiscal year 1996.
Selling and administrative expenses for the quarter increased as a percentage of
sales to 16.5% from 16.3% last year primarily due to selling expenses associated
with the start-up of the retail program at Feeny. Selling and administrative
expense for the nine months decreased by $217,167 mainly due to lower
administrative expenses, but increased to as a percentage of sales to 17.0%
compared to 16.7% last year due to the lower sales levels in fiscal year 1996.
Other Expenses
Interest expense decreased to $554,595 for the quarter ended March 31, 1996
compared to $646,043 for the quarter ended March 31, 1995 due to lower interest
rates. Interest expense for the nine months ended March 31, 1996 was $1,747,740
compared to $1,827,826 last year.
Income Taxes
The effective tax rate for the quarter and nine months ended March 31, 1996, was
36.5% and 37.6% compared to 36.7% and 36.4% for the quarter and nine months
ended March 31, 1995. The effective tax rate for the nine months of fiscal year
1995 is slightly lower due to a reduction in Illinois state taxes relating to
the Hirsh Company in the second quarter.
Net Income
Net income of $2,098,837 for the third quarter was 2.2% higher than the
$2,052,830 reported a year ago. For the nine months ended March 31, 1996 net
income was $4,666,295 which is 22.8% lower than the $6,042,801 reported for the
same period last year. Earnings per share for the quarter and nine months were
$.35 and $.79, respectively, compared to $.35 and $1.03 for the same periods
last year. Net income was 4.3% and 3.5% of sales for the quarter and nine
months, respectively, compared to 4.3% and 4.4% of sales for the same periods
last year. Third quarter operations of the Company's store fixture manufacturing
division resulted in an operating profit and net income of $80,000 and $58,000,
respectively, compared to breakeven results for the same period last year. The
increase in net income was mainly due to increased sales to the division's major
customer. Compared to the second quarter of fiscal year 1996, store fixture
profit for the third quarter improved due to substantially increased sales along
with the discontinuance of the sale price discounting in effect during the
second quarter.
Liquidity and Capital Resources
The Company's net cash position increased during the first nine months to
$1,010,791 from $604,106 at June 30, 1995. Net cash from operating activities
for the nine months ended March 31, 1996 was $1,764,078 better than the same
period last year due to the decreases in the accounts payable and accruals in
fiscal year 1995 that did not occur in fiscal year 1996 due to keeping these
balances low at June 30, 1995.
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Capital expenditures were $5,756,953 for the nine months ended March 31, 1996.
The Company is currently forecasting capital expenditures to be approximately $8
million for the fiscal year with the largest expenditures for drawer slide
production equipment and sawing and edgebanding equipment. The Company had total
debt of $36,700,000 at March 31, 1996, an increase of $900,000 from the balance
at June 30, 1995 of $35,800,000 due to the high level of capital expenditures
this fiscal year.
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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 & Voft Manufacutirng Company
(Registrant)
Date: May 1, 1997 /s/ Richard C. Simkins
Richard C. Simkins
Executive Vice President, Chief
Financial Officer, Secretary
and Treasurer
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