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KNAPE & VOGT MANUFACTURING 3RD-QUARTER, NINE-MONTHS SALES OFF SLIGHTLY; RESTRUCTURING CHARGE REDUCES NET INCOME BY 18 CENTS PER SHARE

 GRAND RAPIDS, Mich., April 26 /PRNewswire/ -- Strong sales gain by most U.S. operations were offset by the continued weakness in the Canadian economy resulting in a slight decline in sales for the third quarter and nine months ended March 31, 1993, Knape & Vogt Manufacturing Co. (NASDAQ-NMS: KNAP) reported today. Third-quarter results were also adversely impacted by a restructuring charge involving the company's Montreal-based Roll-it subsidiary.
 Net income in the third quarter fell 39.7 percent to $1,231,740, or $0.23 per share, from $2,041,410, or $0.39 per share, reported a year ago. Third-quarter and nine-months results include the after-tax effect of the restructuring charge of $963,000, or $0.18 per share. For the quarter, sales slipped 2.4 percent to $33.6 million from $34.4 million a year earlier.
 For the nine months earnings declined 18.2 percent to $4,150,538, or $0.78 per share, from $5,076,647, or $0.97 per share, a year earlier. Sales were off 2.7 percent in the nine months to $91.7 million from $94.3 million in the comparable period a year ago. Per-share earnings for the year-ago periods have been adjusted to reflect the 10-percent stock dividend paid on Sept. 11, 1992.
 Raymond E. Knape, chairman, president and chief executive officer, said, "During the third quarter, we announced a restructuring program designed to reduce costs and improve operating efficiencies at our Roll-it subsidiary in Montreal, Quebec, Canada. The program included closing the Vancouver, British Columbia, warehouse, a writedown of inventory, severance payments that are part of the downsizing, and costs incurred in hiring a new general manager, sales manager and controller. The restructuring program totaled $1,529,000 and resulted in the after- tax charge of $963,000, or $0.18 per share.
 "The charges connected to the restructuring overshadow our ongoing improvements," he said. "For example, our gross margin on a consolidated basis exceeded 29 percent during the quarter, the first time we have reached that level since the first quarter of fiscal 1991," Mr. Knape said.
 "The parent company facilities here in Grand Rapids had a strong quarter with sales up 5 percent and earnings climbing 23.4 percent. The margins here have increased to over 7.5 percent from less than 6.5 percent a year ago," Mr. Knape said. "Contributing to the improvement on the sales side were the higher level of sales among our drawer slide product line and the start of shipments of our new 8400 precision drawer slide series," Mr. Knape said. "On the expense side, plant improvements and cost reductions measures implemented over the past 18 months continued to show positive results, as evidenced by the improving margin.
 "Our Feeny subsidiary continues to record positive results as sales rose 7.6 percent and income increased 11.4 percent during the third quarter," Mr. Knape stated. "For the nine months, sales climbed 13.9 percent and income gained 24.3 percent, widening the margin spread by 50 basis points to nearly 6.0 percent.
 "Results at the other units, especially Knape & Vogt Canada and Roll-it, were disappointing," Mr. Knape stated. "Knape & Vogt Canada is adversely affected by the weak Canadian economy as sales continue to lag the year-ago reporting periods and operating income trails off. Roll-it has seen sales from its largest customer drop dramatically. Although Modar's sales and earnings through the first nine months are behind year-ago numbers, it appears the fourth quarter will be strong despite the sharp rise in particle board costs they have incurred."
 Mr. Knape said, "Overall, Knape & Vogt has performed very well in spite of the restructuring charge and the difficulties in Canada. Excluding the restructuring charge, net income would have been $0.96 per share for the nine months and $0.41 per share for the third quarter compared to last year's earnings of $0.97 per share for the nine months and $0.39 per share for the quarter."
 Knape & Vogt manufactures wall-attached and freestanding shelving and a wide variety of home furnishing items and also derives nearly one-half of its sales from drawer slides for OEM office furniture, kitchen and utility cabinet manufacturers.
 For more information on Knape & Vogt Manufacturing Co., simply dial 1-800-PRO-INFO and enter the company number 099.
 -0- 4/26/93
 /CONTACT: Richard C. Simkins, vice president - finance, Knape & Vogt, 616-459-3311, Ext. 203; or (FRB Chicago) Jack Queeney or Mike Arneth, 312-266-7800, or (FRB New York) Regina Ryan, 212-661-8030, all for Knape & Vogt/
 (KNAP)


CO: Knape & Vogt Manufacturing Co. ST: Michigan IN: SU: ERN

SM -- DE017 -- 0696 04/26/93 12:40 EDT
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Date:Apr 26, 1993
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