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 September 30, 1995
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 [ ]
3,299,918 common shares were outstanding as of November 3, 1995.
2,581,151 Class B common shares were outstanding as of November 3, 1995.
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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 three month periods ended September
30, 1995 and 1994:
<TABLE>
Three months ended September 30,
---------------------------------------------------------
1995 1994
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Shelving systems $ 21.4 47.6% $ 20.9 43.5%
Drawer slides 11.3 25.1% 13.2 27.4%
Hardware 6.3 14.0% 7.0 14.6%
Store fixtures 5.3 11.8% 5.1 10.6%
Furniture components 0.8 1.8% 1.9 4.0%
- ---------------------------------------------------------------------------------------
Total $ 45.1 100.0% $ 48.1 100.0%
=======================================================================================
</TABLE>
Net sales for the first quarter of fiscal year 1996 decreased $2.9 million, or
6.1%, over the comparable period of fiscal year 1995. Drawer slide sales
decreased by $1.9 million. Continued growth in precision slides was more than
offset by the decline in sales of utility slides. Furniture component sales
decreased $1.0 million compared to the first quarter of fiscal year 1995. In the
first quarter of fiscal year 1995 the Company had not completed its
consolidation of the wood lamination operations at Modar and furniture component
sales were filling this capacity. Hardware product line sales decreased by $.7
million due to decreased sales of work systems which include sawhorses,
toolstands, workbenches and workstations. Shelving sales increased by $.5
million compared to the first quarter of fiscal year 1995 due to an increase in
sales of free standing shelving. Store fixture sales increased only $.2 million
compared to the first quarter of fiscal year 1994 due to lower than expected
orders from Roll-it's largest customer.
Costs and Expenses
Cost of sales was 75.7% of sales for the quarter compared to 74.0% of sales for
the first quarter of 1995. The higher cost of sales is due to increases in raw
material prices that could not be passed along to our customers.
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Selling and administrative expenses increased to 17.4% of sales compared to
16.3% for the period ended September 30, 1994. Expenses actually only increased
by $6,295. Selling expense increased due to co-op advertising arrangements with
customers but were offset by decreases in administrative expense related to
Michigan taxes.
Other Expenses
Interest expense was $598,405 for the quarter compared to $579,948 for the
quarter ended September 30, 1994. The Company has reduced its level of borrowing
to $39,400,000 at September 30, 1995 from $41,300,000 at September 30, 1994
while interest rates were higher during the first quarter of fiscal 1996
compared to the same period in fiscal 1995.
Income Taxes
The effective tax rate for the quarter ended September 30, 1995 was 38.9%
compared to 37.3% for the quarter ended September 30, 1994. Lower pretax income
for the quarter ended September 30, 1995 increased the impact of permanent
differences, such as amortization of goodwill, when computing the effective tax
rate.
Net Income
Net income of $1,507,711 for the first quarter of 1996 was 3.3% of sales for the
quarter compared to 5.2% of sales in the first quarter last year. Earnings per
share decreased 39.5% to $.26 compared to $.44 in the first quarter of last
year.
Liquidity and Capital Resources
The Company's net cash position improved during the first three months to
$1,332,513 from $604,106 at June 30, 1995. Net cash from operating activities
was negatively effected by an increase in inventory balances as production could
not be slowed in conjunction with sales. Introductions of Lumber Loc and Space
Solution products also increased inventory levels. Accounts payable and accrued
expenses decreased during the quarter which is common for the first quarter due
to the timing of when payments are due. Accounts receivable also increased
during the quarter particularly at our Hirsh subsidiary since September is one
of the largest sales months.
Capital expenditures totaled $815,333 for the three months ended September 30,
1995, compared to $942,322 last year. The debt increased $3,600,000 due to the
cash used in operating activities during the quarter ended September 30, 1995.
Debt levels are expected to decrease during the remainder of fiscal year 1996.
The Company's working capital of $50,933,593 and current ratio of 5.2 to 1 at
September 30, 1995, remains strong and increased from the $45,796,753 of working
capital and 4.4 to 1 current ratio at June 30, 1995.
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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 & Vogt Manufacturing Company
(Registrant)
Date: May 1, 1997 /s/ Richard C. Simkins
Richard C. Simkins
Executive Vice President -
CFO, Secretary,
and Treasurer
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