UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1998
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 ______
2,511,805 common shares were outstanding as of October 30, 1998.
2,251,703 Class B common shares were outstanding as of October 30, 1998.
The Exhibit Index appears on page 13.
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets
--September 30, 1998 and June 30, 1998...............................2
Condensed Consolidated Statements of Income
--Three Months Ended September 30, 1998 and 1997.....................3
Condensed Consolidated Statements of Cash Flows
--Three Months Ended September 30, 1998 and 1997.....................4
Notes to Condensed Consolidated Financial Statements ..............5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................7-9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.......10
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders..............11
Item 6. Exhibits and Reports on Form 8-K.................................11
SIGNATURES ...................................................................12
EXHIBIT INDEX.................................................................13
1
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
(Unaudited) (Audited)
Sept. 30, 1998 June 30, 1998
----------------- -----------------
<S> <C> <C>
Assets
Current assets
Cash and equivalents $ 12,420,761 $ 3,057,158
Accounts receivable - net 25,946,723 25,677,043
Inventories 12,253,899 12,808,532
Prepaid expenses and other 2,823,446 2,882,694
Net assets held for sale -- 18,648,000
------------- -------------
Total current assets 53,444,829 63,073,427
------------- -------------
Property, plant and equipment 61,275,300 60,901,901
Less accumulated depreciation 25,494,810 24,247,181
------------- -------------
Net property, plant and equipment 35,780,490 36,654,720
------------- -------------
Other assets 4,128,449 4,304,940
------------- -------------
$ 93,353,768 $ 104,033,087
============= =============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 11,917,695 $ 17,765,610
Other accrued liabilities 9,831,829 7,031,650
------------- -------------
Total current liabilities 21,749,524 24,797,260
------------- -------------
Long-term debt -- 9,700,000
Deferred income taxes and other long-term liabilities 7,894,148 7,779,153
------------- -------------
Total liabilities 29,643,672 42,276,413
------------- -------------
Stockholders' Equity
Common stock 11,949,758 11,871,250
Additional paid-in capital 34,292,815 33,724,990
Restricted stock grants (177,188) --
Accumulated other comprehensive income:
Foreign currency translation adjustment (92,636) --
Retained earnings 17,737,347 16,160,434
------------- -------------
Total stockholders' equity 63,710,096 61,756,674
------------- -------------
$ 93,353,768 $ 104,033,087
============= =============
See accompanying notes.
</TABLE>
2
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
Three Months Ended
Sept. 30, 1998 Sept. 30, 1997
------------------ ------------------
<S> <C> <C>
Net sales $ 43,678,644 $ 44,658,302
Cost of sales 33,784,740 33,154,397
------------ ------------
Gross profit 9,893,904 11,503,905
Selling and administrative expenses 6,208,269 7,214,268
------------ ------------
Operating income 3,685,635 4,289,637
Other expenses (income) (286,347) 422,611
------------ ------------
Income from continuing operations before income taxes
3,971,982 3,867,026
Income taxes - continuing operations 1,450,000 1,397,000
------------ ------------
Income from continuing operations 2,521,982 2,470,026
Income from discontinued operation, net of
income taxes -- 200,886
------------ ------------
Net income $ 2,521,982 $ 2,670,912
============ ============
Basic earnings per share
Income from continuing operations $ 0.42 $ 0.42
Income from discontinued operation 0.00 0.03
------------ ------------
Net income per share $ 0.42 $ 0.45
============ ============
Weighted average shares outstanding 5,963,149 5,906,710
Diluted earnings per share
Income from continuing operations $ 0.42 $ 0.42
Income from discontinued operation 0.00 0.03
------------ ------------
Net income per share $ 0.42 $ 0.45
============ ============
Weighted average shares outstanding 5,981,511 5,930,196
Cash dividend - common stock $ .165 $ .165
Cash dividend - Class B common stock $ .15 $ .15
See accompanying notes
</TABLE>
3
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Three Months Ended
Sept. 30, 1998 Sept. 30, 1997
---------------- ----------------
<S> <C> <C>
Operating Activities:
Net income $ 2,521,982 $ 2,670,912
Non-cash items:
Depreciation and amortization 1,698,645 1,876,628
Deferred income taxes 53,000 --
Other long-term liabilities (25,591) 81,845
Stock grants earned 59,062 --
Changes in operating assets and liabilities:
Accounts receivable (328,597) (1,418,076)
Inventories 554,633 (630,812)
Net assets of discontinued operation -- (304,332)
Other current assets 710,045 544,447
Accounts payable and accrued expenses (3,372,137) 4,389,464
----------- ----------
Net cash provided by operating activities 1,871,042 7,210,076
------------ ------------
Investing Activities:
Additions to property, plant and equipment (373,399) (1,217,248)
Sale of Hirsh subsidiary 18,129,569 --
Payments for other assets 7,493 798,787
----------- -----------
Net cash provided by (used for) investing activities 17,763,663 (418,461)
------------ ------------
Financing Activities:
Cash dividends paid (945,069) (938,031)
Proceeds from issuance of common stock 410,083 45,596
Payments on long-term debt (9,700,000) (6,600,000)
------------ -----------
Net cash used for financing activities (10,234,986) (7,492,435)
------------ ------------
Effect of Exchange Rate Changes on Cash (36,116) (645)
------------ ------------
Net Increase (Decrease) in Cash and Equivalents 9,363,603 (701,465)
Cash and equivalents, beginning of year 3,057,158 1,146,546
------------ ------------
Cash and equivalents, end of period $ 12,420,761 $ 445,081
============ ============
Cash Paid During the Period - interest $ 172,383 $ 430,445
- income taxes $ 177,773 $ 115,000
See accompanying notes.
</TABLE>
4
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Financial Statement Preparation
The accompanying unaudited condensed consolidated financial statements and
related notes have been prepared pursuant to the rules and regulations of the
Security and Exchange Commission. The information furnished reflects all
adjustments which are, in the opinion of management, necessary for a fair
statement of results of operations. Interim results are not necessarily
indicative of the results for the year end and are subject to year end
adjustments, and audit by independent public accountants. The balance sheet at
June 30, 1998, has been taken from the audited financial statements at that
date. The condensed consolidated financial statements and notes should be read
in conjunction with the Company's 1998 annual report.
Note 2 - Common Stock and Per Share Information
Income per share is determined based on weighted average number of shares
outstanding during each period. The numerator was the same for the calculation
of both basic and diluted earnings per share. The denominator was increased in
the diluted computation due to the recognition of stock options as common stock
equivalents.
Common stock is $2 par - shares authorized 6,000,000 of common stock and
4,000,000 of Class B common stock.
Note 3 - Inventories
Inventories are valued at the lower of FIFO (first-in, first-out) cost or
market. Inventories are summarized as follows:
<TABLE>
Sept. 30, 1998 June 30, 1998
-------------- -------------
<S> <C> <C>
Finished products $ 6,837,557 $ 7,369,923
Work in process 2,117,670 1,719,891
Raw materials 3,298,672 3,718,718
----------- -----------
Total $12,253,899 $12,808,532
=========== ===========
</TABLE>
Note 4 - New Accounting Standards Not Yet Adopted
Effective for fiscal years beginning after June 15, 1999, the Company must adopt
Statement of Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The statement requires companies to
recognize all derivative contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. Then based on certain
conditions, it is determined whether the derivative is considered to be a hedge
instrument, which determines when the resulting gain or loss on the derivative
is recognized. Historically, the Company has not entered into derivative
contracts either to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect adoption of this new standard to affect
its financial statements.
Note 5 - Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income", issued in June 1997, was adopted
by the Company during the three months ended September 30, 1998. This statement
requires that all components of comprehensive income and total comprehensive
income be reported in one of the following: a statement of income and
comprehensive income, a statement of comprehensive income or a statement of
stockholders' equity. Comprehensive income is comprised of net income and all
changes to stockholders' equity, except those due to investments by owners and
distributions to owners.
5
<PAGE>
Comprehensive income and its components consist of the following:
<TABLE>
Sept. 30, 1998 Sept. 30, 1997
-------------- --------------
<S> <C> <C>
Net income $ 2,521,982 $ 2,670,912
Other comprehensive income:
Foreign currency translation adjustment (92,636) (4,523)
--------- -------------
Comprehensive income $2,429,346 $ 2,666,389
========== =============
</TABLE>
Accumulated other comprehensive income (loss) totaled $(92,636) and $-0- at
September 30, 1998 and June 30, 1998, respectively. During the three month
periods ended September 30, 1998, and September 30, 1997, translation
adjustments of $(92,636) and $(4,523), respectively, resulting from foreign
currency denominated assets and liabilities of the Company's foreign
subsidiaries and related to fluctuations in exchange rates, were charged
directly to a component of stockholders' equity in the accompanying condensed
consolidated balance sheets.
Note 6 - Sale of The Hirsh Company
On September 1, 1998, the Company sold The Hirsh Company (Hirsh), a wholly owned
subsidiary. This resulted in a pre-tax loss of $11,800,000, which was included
in the June 30, 1998, financial results. The loss includes the write-off of the
unamortized balance of goodwill recorded in connection with the purchase of
Hirsh. In connection with the sale, the Company recognized an additional tax
cost of $1,000,000, resulting in a total loss related to the sale of Hirsh of
$12,800,000.
Note 7 - Stock Repurchase
On September 1, 1998, the Company announced the purchase of up to 1,200,000
shares of the Company's common stock pursuant to a Dutch Auction self-tender
offer at a price range of $19 to $22 per share. The Board of Directors also
approved a purchase in the open market or in privately negotiated transactions,
following the completion of the Dutch Action, of shares of common stock in an
amount which when added to the number of shares of common stock purchased in the
Dutch Auction would equal 1,350,000. Th Dutch Action was concluded on October 7,
1998, with the purchase of 1,230,784 shares at a price of $21 per share. The
following unaudited pro forma data summarizes the impact the Dutch Auction would
have had on stockholders' equity if the transaction had been completed prior to
the end of the first quarter of fiscal 1999.
<TABLE>
Actual Pro forma
Sept. 30, 1998 Sept. 30, 1998
-------------- ---------------
Stockholders' equity:
<S> <C> <C>
Common stock ................................... $ 11,949,758 $ 9,488,190
Additional paid in capital ..................... 34,292,815 10,907,919
Restricted stock grants ........................ (177,188) (177,188)
Accumulated other comprehensive income:
Foreign currency translation adjustment (92,636) (92,636)
Retained earnings .............................. 17,737,347 17,737,347
----------- ------------
Total stockholders' equity ..................... $ 63,710,096 $ 37,863,632
=========== =============
</TABLE>
Note 8 - Stock Dividend
Beginning in the third quarter of fiscal 1999, the Company will issue stock
dividends rather than cash dividends. In connection with this change, the
Company filed a registration statement on September 30, 1998 for a Stock
Dividend Sale Plan (the "Plan"). The Plan provides stockholders an opportunity
to sell the stock dividends received on a quarterly basis at a reduced brokerage
charge.
6
<PAGE>
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
involving risks and uncertainties. When used in this document, the words
"believes," "expected," "anticipates," "goal" and similar expressions identify
forward-looking statements. Forward-looking statements include, but are not
limited to, statements concerning future improvements in gross margin, the
benefits of the KVOPS effort, and the expected ability of the Company and its
key customers, dealers and suppliers to successfully manage Year 2000 Issues.
Such statements are subject to certain risks and uncertainties which would cause
actual results to differ materially from those expressed or implied by such
forward-looking statements. Readers are cautioned not to place undue reliance on
those forward-looking statements which speak only as of the date of this report.
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 months ended September 30, 1998
and 1997:
<TABLE>
Three Months Ended September 30,
1998 1997
---- ----
<S> <C> <C> <C> <C>
Shelving systems $ 19.4 44.4% $ 21.7 48.6%
Drawer slides 17.6 40.3% 15.7 35.1%
Hardware 6.7 15.3% 7.3 16.3%
---------- ----- ----------- -----
Total $ 43.7 100.0% $ 44.7 100.0%
========== ====== ========== ======
</TABLE>
Net sales for the first quarter of fiscal 1999 decreased $1.0 million, or 2.2%,
over the comparable period of fiscal 1998. Excluding the impact of the sale of
Hirsh on September 1, 1998, net sales for the first quarter of fiscal 1999
increased approximately 4% compared to the same period in the prior year. The
decrease of 10.6% in the shelving systems reflects the sale of Hirsh. The
increase of 12.1% in drawer slides was attributable to a double-digit volume
increase in precision drawer slides, primarily for the metal office furniture
market. Management believes that sales of precision drawer slides to the metal
office furniture market represent a sizable opportunity for the Company and is
continuing to pursue this market after its initial entrance into it one year
ago.
Gross Profit and Expenses
Gross profit, as a percentage of net sales, was 22.7% for the first quarter of
fiscal 1999 compared to 25.8% for the first quarter of fiscal 1998. The decline
in gross profit is due to increased pricing pressure in the retail market and to
the Company's ongoing investment in production and sales to position the Company
for continued growth in the metal office furniture market. Management believes
that gross profit will improve during the second half of the year due to two
factors. First, the investment costs incurred to enter the metal office
furniture market are expected to decline. Second, the Company should begin to
realize some of the early benefits of its continuous flow manufacturing effort,
KVOPS, which is currently underway. This ongoing improvement process is intended
to simplify manufacturing operations, increase capacity, reduce shipping times
and decrease inventory levels.
Selling and administrative expenses, as a percentage of net sales, decreased to
14.2% for the first quarter of fiscal 1999 from 16.2% of sales for the same
period in the prior year. Fiscal 1999 results were favorably impacted by a
one-time Michigan Single Business Tax refund of $557,460, or $.09 per diluted
share, after-tax. Excluding the refund, selling and administrative expenses were
at the same level as in the prior year.
Other Expenses
Interest expense was $117,165 for the current quarter compared to $409,191 for
the quarter ended September 30, 1997. Following the sale of Hirsh, the Company
was able to repay all of its outstanding debt. This compares to $22,400,000 of
outstanding debt at September 30, 1997.
7
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Other net income of $403,512 was recognized in the first quarter of fiscal 1999,
compared to other net expense of $13,420 in the first quarter of the prior year.
Fiscal 1999 results included two patent infringement settlements and interest
earned on the Michigan Single Business Tax refund. These items totaled $256,122,
or $.04 per diluted share, after-tax.
Income Taxes
The effective tax rate for the quarter ended September 30, 1998, remained
relatively constant at 36.5% as compared to 36.1% for the quarter ended
September 30, 1997.
Income from Continuing Operations
Income from continuing operations was $2,521,982 for the first quarter of fiscal
1999, compared to $2,470,026 in the prior year. Earnings per share from
continuing operations were $0.42 per share for both the first quarter of fiscal
1999 and fiscal 1998.
Income from Discontinued Operation
The quarter ended September 30, 1998, does not include any income, or loss,
recorded on discontinued operation, due to the fact that the discontinued
operation, Roll-it, was sold in fiscal 1998. Income from discontinued operation
for the first quarter of fiscal 1998 was $200,886 or $.03 per diluted share.
Net Income
Net income for the quarter of $2,521,982 was 5.8% of net sales compared to
$2,670,912 for the first quarter of last year which was 6.0% of net sales. Net
income per share was $0.42 per diluted share in the first quarter of fiscal
1999, compared to $0.45 per diluted share for the first quarter of fiscal 1998.
Liquidity and Capital Resources
Net cash from operating activities for the first quarter of fiscal 1999 provided
$1,871,042 as compared to $7,210,076 for the first quarter of fiscal 1998. In
fiscal 1999, the current liabilities are substantially lower than at June 30,
1998, due to two factors. First, several of the liabilities of Hirsh were
transferred to the parent company at the time the subsidiary was sold. Hirsh
typically had 60 days of payables recorded on the balance sheet; however, at the
end of September 1998, only 30 days remained. Second, in the prior year, the
Company adopted a more aggressive payment policy with its vendors which resulted
in a higher accounts payable balance and a significant one-time increase in cash
flows. Utilizing the philosophy of Economic Value Added, the Company will
continue to search for opportunities such as this to improve cash flow.
Capital expenditures totaled $373,399 for the three months ended September 30,
1998, compared to $1,217,248 last year. The Company expects capital expenditures
for the remainder of the current year to outpace the prior year as a result of
the Company's ongoing investment in new product tooling and the KVOPS effort. In
fiscal 1999, the Company recorded $18,129,569 of proceeds from the sale of the
Hirsh subsidiary. The related loss was recorded in fiscal 1998.
The Company was able to repay all of its outstanding debt in the first quarter
of fiscal 1999, utilizing the proceeds from the sale of Hirsh. In early October
1998, the Company completed the Dutch Auction tender offer with the repurchase
of 1,230,784 shares of stock at $21 per share. This transaction was financed
using existing cash balances and approximately $13 million of long-term
borrowings.
Anticipated cash flow from operations and available balances on the revolving
credit line will be utilized to fund working capital, capital expenditures and
dividend payments.
8
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Year 2000
The Year 2000 issue is the result of computer systems that use two digits rather
than four to define the applicable year, which may prevent such systems from
accurately processing dates ending in the year 2000 and after. This could result
in system failures or in miscalculations, causing disruption of operations,
including, but not limited to, an inability to process transactions, to send and
receive electronic data, or to engage in routine business activities and
operations.
In 1995, the Company established a Year 2000 task force for Information
Technology ("IT") to develop and implement a Year 2000 readiness program. The
Company has developed a Year 2000 readiness plan, and has completed the audit,
assessment and scope phases of its plan. The Company has completed an inventory
of the software applications that it uses. The Company has also installed its
Corporate Information System software at its subsidiaries to improve efficiency
and to facilitate Year 2000 compliance. The Company estimates that the readiness
program phase is approximately 60% complete for the Company's IT systems. The
company's readiness program includes installing software releases designed to
cause the software to be Year 2000 compliant. The Company is in the process of
testing its IT systems for Year 2000 compliance, and expects testing activities
to continue into 1999. The Company's goal is to be substantially Year 2000
compliant by December 1998, to allow for testing all systems during 1999.
In addition, in 1997 the Company began evaluating non-IT systems such as
imbedded chips in production equipment and personal computer hardware and
software. With respect to these non-IT systems, the company has completed the
audit phase, and the assessment and scope phases are approximately 60% complete.
The company is presently in the process of testing and implementation, and is
upgrading its non-IT systems to become Year 2000 compliant. The Company's goal
is to complete the remediation of non-IT systems by June 30, 1999.
Finally, the Company has had formal communications with its significant
customers, vendors and freight companies concerning Year 2000 compliance,
including electronic commerce. There can be no assurance that the systems of
other companies that interact with the Company will be sufficiently Year 2000
compliant so as to avoid an adverse impact on the Company's operations,
financial condition and results of operations. The Company does not believe that
its products and services involve any Year 2000 risks.
To date, the Company has spent approximately $458,000 on Year 2000 and expects
to spend an additional $404,000 to complete this work.
The Company presently anticipates that it will complete its Year 2000 assessment
and remediation by December 31, 1999. However, there can be no assurance that
the Company will be successful in implementing its Year 2000 remediation plan
according to the anticipated schedule. In addition, the Company may be adversely
affected by the inability of other companies whose systems interact with the
Company to become Year 2000 compliant and by potential interruptions of utility,
communication or transportation systems as a result of Year 2000 issues.
Although the Company expects its internal systems to be Year 2000 compliant as
described above, the Company intends to prepare a contingency plan that will
specify what it plans to do if it or important external companies are not Year
2000 compliant in a timely manner. The Company expects to prepare its
contingency plan during 1999.
9
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The Company is exposed to market risks, which include changes in U.S. interest
rates and changes in foreign currency exchange rates as measured against the
U.S. dollar.
Interest Rate Risk -- The interest payable for the Company's revolving credit
agreement is principally between 40 and 50 basis points above the federal funds
rate and therefore affected by changes in market interest rates. However, the
Company has the option to pay the balance in full at any time without penalty.
As a result, the Company believes that the market risk is minimal.
Foreign Currency Risk -- The Company has a sales office located in Canada. Sales
are typically denominated in Canadian dollars, thereby creating exposures to
changes in exchange rates. The changes in the Canadian/U.S. exchange rate may
positively or negatively affect the Company's sales, gross margins, and retained
earnings. The Company attempts to minimize currency exposure risk through
working capital management. There can be no assurance that such an approach will
be successful, especially in the event of a significant and sudden decline in
the value of the Canadian dollar. The Company does not hedge against foreign
currency risk.
10
<PAGE>
KNAPE & VOGT MANUFACTURING COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) Knape & Vogt Manufacturing Company's Annual Meeting of Shareholders
was held on October 16, 1998.
(b) Proxies were distributed by Knape & Vogt Manufacturing Company
pursuant to Regulation 14A under the Securities Exchange Act of 1934.
There was no opposition to management's nominees as listed in the
proxy statement, and all nominees were elected.
The vote on the nominees was:
For Withheld
Herbert F. Knape (1) (2) 21,920,654 1,061,666
Raymond E. Knape (1) (3) 2,925,375 59,415
(1) Term expires in 2001.
(2) Elected by vote of holders of Common stock and Class B Common
stock voting as a class.
(3) Elected by vote of holders of Common stock voting as a class.
Members of the board of directors whose terms have not yet
expired are William R. Dutmers, term expiring in 1999, Richard S.
Knape, term expiring in 1999, Michael J. Kregor, term expiring in
1999, Mary Rita Cuddohy, term expiring in 1999, John E. Fallon,
term expiring in 2000, and Allen E. Perry, term expiring in 2000.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index
(b) Reports on Form 8-K
A Form 8-K, dated September 1, 1998, was filed to report the sale of
the Company's wholly-owned subsidiary, The Hirsh Company. The Form 8-K
contained pro forma financial statements for the period ended June 30,
1998.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Knape & Vogt Manufacturing Company
(Registrant)
Date: November 6, 1998 /s/ Allan E. Perry
Allan E. Perry
President and
Chief Executive Officer
Date: November 6, 1998 /s/ Jack D. Poindexter
Jack D. Poindexter
Chief Financial Officer,
Treasurer and Secretary
12
<PAGE>
EXHIBIT INDEX
10.1 Asset Purchase Agreement dated as of August 31, 1998, among
Steelworks, Inc., the Hirsh Company and Knape & Vogt Manufacturing
Company (incorporated by reference to Exhibit 2.1 to the Company's
current report on Form 8-K dated September 1, 1998).
10.2 Noncompetition Agreement dated as of September 1, 1998, among
Steelworks, Inc. and Knape & Vogt Manufacturing Company (incorporated
by reference to Exhibit 2.2 to the Company's current report on Form
8-K dated September 1, 1998).
(27) Financial Data Schedule (Exhibit available upon request)
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 12,420,761
<SECURITIES> 0
<RECEIVABLES> 26,335,655
<ALLOWANCES> 388,932
<INVENTORY> 12,253,899
<CURRENT-ASSETS> 53,444,829
<PP&E> 61,275,300
<DEPRECIATION> 25,494,810
<TOTAL-ASSETS> 93,353,768
<CURRENT-LIABILITIES> 21,749,524
<BONDS> 0
0
0
<COMMON> 11,949,758
<OTHER-SE> 51,760,338
<TOTAL-LIABILITY-AND-EQUITY> 93,353,768
<SALES> 43,678,644
<TOTAL-REVENUES> 43,678,644
<CGS> 33,784,740
<TOTAL-COSTS> 33,784,740
<OTHER-EXPENSES> 5,804,757
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 117,165
<INCOME-PRETAX> 3,971,982
<INCOME-TAX> 1,450,000
<INCOME-CONTINUING> 2,521,982
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,521,982
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
