~~SECURITIES~~UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ~~FORM 10-K~~

~~(Mark~~_________________ ~~One)~~

~~[X]~~FORM ~~Annual~~10-K ~~report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended July 3, 2004 or~~

[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to

(Mark One)
[X]	Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended July 2, 2005 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 000-01859

KNAPE & VOGT MANUFACTURING COMPANY (Exact nameName of registrantRegistrant as specifiedSpecified in itsIts charterCharter)

Michigan		38-0722920
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Michigan
(State or Other Jurisdiction of Incorporation of Organization)

38-0722920
(I.R.S. Employer Identification No.)

2700 Oak Industrial Drive, N.E., Grand Rapids, MI 49505
(Address of principal executive offices) (Zip Code)

(616) 459-3311
(Registrant’s telephone number, including area code)

Securities registered pursuant to 12(b) of the Act:

~~Title of each class Name of each exchage on which registered~~ None ~~None~~

Securities Registered pursuant to Section 12(g) of the Act:

Common Stock, par value $2.00 per share
(Title of class)

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 ~~____~~ [__]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ~~____~~ [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). ~~Yes____~~Yes [__] No [X ]

The aggregate market value of voting stock held by “nonaffiliates” of the registrant (for this purpose only, the affiliates of the registrant have been assumed to be the executive officers and directors of the registrant) was $5355,~~970~~138,~~371~~573 as of ~~December~~January 271, ~~2003~~2005 (based on $13.05 per share which was the closing sale price as reported on that date by NASDAQ).

Number of shares outstanding of each class of common stock as of August 2726, ~~2004~~2005: 2,~~339~~486,~~617~~372 shares of Common Stock, par value $2.00 per share, and 2,~~177~~024,~~488~~133 shares of Class B Common Stock, par value $2.00 per share.

Documents incorporated by reference. Certain portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on October 1521, ~~2004~~2005, are incorporated by reference into Part III of this Report.

PARTForward-Looking IStatements

~~ITEM~~ This Annual 1Report —on ~~BUSINESS~~Form 10-K contains forward-looking statements about the plans, strategies, objectives, goals, estimates, projections, or expectations of the industry, economics, or the Company itself. Statements, including without limitation, those related to: future revenue, earnings, margins, growth, cash flows, operating measurements, tax rates and tax benefits; expected economic returns; projected operating results or dividend rates; future strength of the Company; future pension costs; future new product sales; future marketing investments; and market risk are forward-looking statements. In addition, forward-looking statements are identifiable by words or phrases indicating that Knape & Vogt or its management, “expects,” “anticipates,” “believes,” “estimates,” “forecasts”, “intends,” “is likely,” “projects,” “plans,” “forecasting,” “optimistic,” “confident,” “opinion”, or has “goals,” “objectives,” or “strategies,” that a particular occurrence or event “will,” “may,” “could,” “should,” or “will likely” result in the future, that a “trend” is toward a particular result or occurrence, or other stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. These forward-looking statements are written as of the date of this Annual Report. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with respect to timing, extents, and likelihood. Actual results and outcomes may materially differ from any forward-looking statement.

Besides risks and uncertainties described in forward-looking statements contained in this Annual Report and other reports filed with the Securities and Exchange Commission, there are several important factors that may cause actual results to materially differ, including our ability to:

•

Improve sales growth;

•

Increase gross margin;

•

Control the price of raw materials;

•

Reduce operating costs;

•

Maintain/implement foreign sourcing;

•

Sell assets classified as held for sale on favorable terms;

•

Continue to meet the terms of our debt covenants; and

•

Achieve other plans, strategies, objectives, goals, or expectations described in this Annual Report.

Forecasted sales are subject to competition from many sources. Competitive pressures in these and other business segments may result in unexpected reductions in sales volumes, product prices or service fees.

Our operating and administrative expenses may be adversely affected by unexpected costs associated with, among other factors:

•

Future business acquisitions;

•

Business and asset divestures;

•

Increased transportation or fuel costs;

•

Changes in consumer preferences or spending patterns;

•

Losses or financial difficulties of customers and suppliers;

•

Changes in accounting policies, practices, or estimates;

•

Changes in federal, state or local tax laws, regulations, and interpretations.

This should not be considered as a complete list of all the economic, competitive, governmental, technological and other factors that could adversely affect our expected consolidated financial position, results of operations or liquidity.

Historical operating results are not necessarily indicative of the results that may be expected in the future. New risks emerge from time-to-time, that may cause actual results to differ materially from those contained in any forward-looking statements. Due to these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company undertakes no obligation to update or change forward-looking statements, whether as a result of new information, future events, or other information that we obtain after the date of this Annual Report.

PART I
ITEM 1 — BUSINESS

Item 1(a) — General Development of Business

~~The~~Knape & Vogt Manufacturing Company is engaged primarily in the design, manufacture, and marketing of ~~functional~~ hardware, storage-related components and ergonomic products that serve the consumer, contract builder, hardware, and original equipment manufacturer (“OEM”) markets. ~~The~~ ~~Company~~KV was incorporated in Michigan in 1906, reorganized in Delaware in 1961, and reorganized in Michigan in 1985. Unless otherwise noted or indicated by the context, the term “Company” or “KV” includes Knape & Vogt Manufacturing Company, its predecessors and its subsidiaries.

Item 1(b) — Financial Information About Industry Segments

The ~~Office~~Business Products division was segregated into two market channels: OEM and ~~dealer~~Idea. The OEM market channel sells precision drawer slides, hardware and ergonomic products to original equipment office furniture manufacturers and in fiscal ~~2004~~2005 accounted for approximately 2527.4% of consolidated net sales. The ~~dealer~~Idea market channel sells ergonomic products to independent office furniture dealers and in fiscal ~~2004~~2005 accounted for approximately 65.8% of of consolidated net sales. These dealers purchase product from office furniture ~~manufacturers~~ manufacturers and resell the furniture along with design and installation services to the end customer. These markets sell the KV® brand of hardware including drawer slides. Drawer slides include precision, Euro-style and utility slides. Precision drawer slides use ball bearings, while Euro-style and utility drawer slides use rollers. In addition, these two markets also sell the idea@WORK™ brand of ergonomic products. The ergonomic ~~products~~ products include adjustable keyboard trays, gel wrist rests, floating mousepads, flat-screen monitor arms, office lights, height adjustable tables and organization tools.

These markets develop, market, and distribute primarily in the United States and Canada. They compete with several large producers of ergonomic support systems and precision drawer slides, and many smaller domestic and foreign manufacturers that compete primarily on the basis of product quality, features, and price.

The Home & Commercial Products division was segregated into two market channels: consumer and distribution/other. The consumer market channel sells a majority of ~~the Company~~KV’s ~~product~~ product lines to retailers and in fiscal ~~2004~~2005 accounted for approximately 2620.1% of ~~consolidated~~ consolidated net sales. The distribution/other market channel sells many of ~~the Company~~KV’s product lines to kitchen and bath OEM manufacturers and full line woodworking distributors and in fiscal 2005 ~~2004~~ accounted for approximately 4346.7% of consolidated net sales. These markets sell the KV brand of products that include a complete line of decorative and wall-attached shelving systems, builders’ hardware and drawer slides. In addition, these markets also sell the Real Solutions for Real Life™ brand of kitchen and bath storage products.

These markets develop, market and distribute primarily in the United States and Canada. The markets are highly competitive. ~~The~~KV ~~Company~~ competes primarily on the basis of product design, product quality, price, on-time delivery, and customer service. The precision slide market consists of ~~one~~three large ~~manufacturer,~~domestically abased ~~number~~manufacturers, ofseveral smaller domestic manufacturers, and an increasing number of foreign manufacturers that compete primarily on the basis of product quality and price.

~~Item~~ Further information ~~1(c)~~relating —to ~~Narrative~~industry ~~Description~~segments is provided in Note 13 to the Consolidated Financial Statements included in Item 8 of ~~Business~~this Report.

Products, Services,Item Markets1(c) and—Narrative MethodsDescription of Distribution. The Company’s storage products include a complete line of decorative and utility wall-attached shelving systems and drawer slides. Precision drawer slides use ball bearings, while Euro-style and utility drawer slides use rollers. In addition, the Company’s many different hardware products include closet rods, kitchen storage products and various fixtures. The Company’s ergonomic products include adjustable keyboard trays, gel wrist rests, floating mousepads, flat-screen monitor arms, office lights and height adjustable tables. Business

~~The~~Products, ~~Company~~Services, ~~primarily~~Markets ~~employs~~and aMethods ~~direct~~of ~~sales~~Distribution. ~~force~~KV’s ~~that~~storage ~~calls~~products oninclude ~~most~~a complete line of ~~the~~decorative ~~customers~~and inutility ~~the~~wall-attached shelving systems and drawer slides. ~~consumer~~Precision drawer slides use ball bearings, ~~distribution~~while Euro-style and ~~OEM~~utility ~~markets~~drawer slides use rollers. In addition, ~~while~~KV’s ~~most~~many ofdifferent ~~the~~hardware ~~office~~products ~~furniture~~include ~~dealers~~closet ~~are~~rods, ~~served~~kitchen ~~through~~storage ~~independent~~products ~~sales~~and ~~representatives~~various fixtures. KV’s ergonomic products include adjustable keyboard trays, gel wrist rests, floating mousepads, flat-screen monitor arms, office lights and height adjustable tables.

~~New Product~~1 and Capital Spending Information. Management believes that capital spending in fiscal 2005 will be approximately $4.0 million. The fiscal 2005 spending will reflect investments made primarily to bring new products and product enhancements to the Company’s customers.

KV 2primarily employs a direct sales force that calls on most of the customers in the consumer, distribution and OEM markets, while most of the office furniture dealers are served through independent sales representatives.

~~Sources~~New Product and ~~Availability~~Capital ofSpending ~~Raw Materials~~Information. ~~Most~~Management ofbelieves ~~the~~that ~~Company’s~~capital ~~storage~~spending ~~products are~~in ~~produced~~fiscal ~~primarily~~2006 ~~from~~will ~~steel~~be orapproximately ~~wood~~$3.0 ~~Historically,~~million. ~~the~~The ~~Company~~fiscal ~~has~~2006 ~~not~~spending ~~experienced difficulty~~is inplanned ~~obtaining~~for investments ~~these~~to ~~raw~~bring ~~materials~~new products and ~~does~~product ~~not~~enhancements ~~anticipate~~to ~~any~~KV ~~difficulty~~customers inand ~~the~~for ~~future,~~investment asin ~~the~~our ~~raw~~Asian ~~materials used are not unique~~facility.

~~During~~Sources ~~the~~and ~~last~~Availability ~~half~~ of ~~fiscal~~Raw ~~2004,~~Materials. ~~the~~Most ~~Company~~of ~~began~~KV’s tostorage ~~realize~~products ~~increased~~are produced primarily from steel ~~costs~~or ~~for~~wood. ~~the domestic~~KV’s ~~production~~manufacturing ofmaterials ~~many~~are ofavailable ~~its~~from ~~products.~~a significant ~~The~~number ~~uncertainty~~of insources within the ~~steel~~United ~~market~~States, ~~makes~~Canada, ~~it difficult~~Europe, ~~for~~and ~~management~~Asia. Historically, toKV ~~predict~~has ~~whether~~not ~~steel~~experienced ~~prices~~any ~~will~~difficulties ~~continue~~in toobtaining ~~rise.~~these ~~This~~raw ~~issue~~materials. isThe ~~more~~raw ~~fully~~materials ~~addressed~~used inare ~~the~~neither ~~Management,~~unique ~~Discussion~~to ~~and~~the ~~Analysis~~industry ~~section~~nor ofare ~~this~~they ~~report~~rare.

~~Patents,~~As ~~Licenses~~a result of market conditions during the last half of fiscal 2004, ~~Etc~~KV began to realize increased steel costs for the domestic production of many of its products. ~~Patents,~~These conditions ~~trademarks~~persisted ~~and~~through ~~licenses~~the ~~play~~first ahalf ~~part~~of fiscal 2005 and then in the ~~Company’s~~last half of ~~business~~fiscal 2005, ~~but~~steel ~~the~~costs ~~Company~~decreased asslightly. aThese ~~whole~~market isfluctuations have not ~~dependent~~affected KV’s ability to ~~any~~obtain ~~material~~such ~~extent~~raw ~~upon~~materials. ~~any~~The uncertainty in the steel market makes ~~single~~it ~~patent~~difficult for management to predict steel prices. This issue is more fully addressed in the Management’s Discussion and Analysis section of this report.

~~Seasonal~~Patents, ~~Nature~~Licenses, ~~of Business~~Etc. ~~The~~ ~~Company'~~Patents, trademarks and licenses play a part in KV’s business, but KV as a whole is not ~~seasonal~~dependent to any material extent upon any single patent.

~~Working~~Seasonal ~~Capital~~Nature ~~Practices~~of Business. KV's ~~The~~business ~~Company~~is ~~does~~ not ~~believe that it, or the industry in general, has any special practices or special conditions affecting working capital items that are significant for an understanding of the Company’s business~~seasonal.

~~Importance~~Working ofCapital ~~Limited Number of Customers~~Practices. ~~The~~KV ~~Company~~does ~~sells~~not tobelieve ~~the~~that ~~consumer~~it, ~~OEM~~or ~~and specialty distributor markets, as well as direct sales to~~ the dealer network. The consumer market is comprised of a broad base of retail outlets. The specialty distributor market is more concentrated with fewer customers and is more closely tied to the construction industry. ~~The~~in ~~OEM~~general, ~~market~~has ~~is comprised of sales to kitchen and bath cabinet manufacturers~~any ~~and~~special ~~sales~~practices toor ~~the~~special ~~office~~conditions ~~furniture~~affecting ~~industry.~~working ~~The~~capital ~~dealer~~items ~~network is also closely tied to the office furniture industry. The Company estimates~~ that ~~at present it has over 1,500 active~~are ~~customers~~significant ~~with approximately 30,000 outlets, of which the five largest customers account~~ for ~~approximately~~an ~~29%~~understanding of ~~gross sales and only the Company~~KV’s ~~largest customer accounts for approximately 12% of gross sales~~business.

~~Backlog~~Importance of ~~Orders.~~Limited AsNumber of ~~July~~Customers. 3KV sells to the consumer, ~~2004~~OEM and specialty distributor markets, ~~the~~as ~~Company’s~~well ~~backlog~~as ofdirect ~~unfilled~~sales ~~orders~~to ~~was~~the $4dealer network.~~5 million.~~ AtThe ~~June~~consumer ~~28,~~market ~~2003,~~is comprised ~~the~~of ~~Company’s~~a ~~backlog~~broad ~~totaled~~base ~~$4.0~~of ~~million~~retail outlets. ItThe specialty distributor market is ~~expected~~more ~~that~~concentrated ~~substantially~~with ~~all~~fewer ~~the~~customers ~~orders~~and ~~forming~~is more closely tied to the ~~backlog~~construction atindustry. The ~~July~~OEM 3,market ~~2004,~~is ~~will~~comprised beof ~~filled~~sales to kitchen and bath cabinet manufacturers and sales ~~during~~to the ~~current~~office ~~fiscal~~furniture ~~year~~industry. ~~Accordingly,~~The ~~the~~dealer ~~amount~~network ofis also closely tied to the ~~backlog~~office furniture industry. KV estimates that at ~~any~~present ~~particular time~~it ishas ~~not~~over ~~necessarily~~2,000 ~~indicative~~active customers with approximately 30,000 outlets, of which the ~~level~~five largest customers account for approximately 31.5% of ~~net~~gross sales. ~~for~~KV’s alargest ~~particular~~customer ~~succeeding~~accounts for approximately ~~period~~13.2% of gross sales.

~~Government~~Backlog ~~Contracts~~of Orders. ~~While~~As of July 2, 2005, KV’s backlog of unfilled orders was $4.9 million. At July 3, 2004, the Company’s ~~does~~backlog ~~have~~totaled ~~two~~$4.5 ~~contracts~~million. ~~with~~It ~~the~~is ~~General~~expected ~~Services~~that ~~Administration~~substantially ~~(“GSA”)~~all ~~for~~the ~~certain~~orders offorming ~~its~~the ~~ergonomic~~backlog ~~products~~at July 2, ~~the~~2005, ~~sales~~will ~~volume~~be filled during ~~under~~the ~~these~~current ~~contracts~~fiscal ~~does~~year. ~~not~~Many ~~result~~orders received are reflected in the backlog for only a short ~~significant~~period ~~risk~~while ifother orders specify delayed shipments and are carried in the ~~government~~backlog for ~~were~~up to ~~terminate~~ ~~these~~one ~~contracts~~year. ~~These~~Accordingly, ~~contracts~~the ~~contain~~amount ~~standard~~of ~~price~~the ~~reduction~~backlog ~~provisions~~at any particular time is not necessarily indicative of the level of net sales for a particular succeeding period.

~~Competition~~Government Contracts. ~~All aspects~~While ofKV ~~the~~does ~~Company’s~~have ~~business~~a ~~are~~multiple ~~highly~~award ~~competitive.~~contract ~~Competition is based~~with ~~upon price, service and quality. In~~ the ~~various~~General ~~markets served by the~~Services ~~Company,~~Administration it(“GSA”) ~~competes~~for ~~with~~certain ~~a number~~ of ~~manufacturers~~its ~~that~~ergonomic ~~have~~products, ~~significantly greater~~the ~~resources and~~ sales, ~~including several conglomerate corporations, and~~volume ~~with~~under ~~numerous~~this ~~smaller~~contract ~~companies.~~does ~~While the Company is~~ not ~~aware~~result ofin ~~any~~a ~~reliable statistics~~significant ~~that~~risk ~~are~~if ~~available to enable~~ the ~~Company~~government towere ~~accurately determine its relative position in the industry, either overall or with respect~~ to ~~any~~ ~~particular~~terminate ~~product~~this orcontract. ~~market,~~This ~~the~~contract ~~Company~~contains ~~believes~~standard ~~that~~price itreduction ~~is one of the three leading manufacturers of drawer slides in North America~~provisions.

~~Research,~~Competition. ~~Design~~ All ~~and~~aspects ~~Development.~~of ~~Research,~~KV’s ~~design~~business ~~and~~are ~~development~~highly ~~efforts~~competitive. ~~represent~~Competition ~~one~~is ~~of the~~based ~~Company’s~~ upon ~~core~~price, ~~strengths.~~product ~~Through research~~offering, ~~the~~service ~~Company~~and ~~seeks~~quality. toIn ~~define~~the ~~and~~various ~~clarify~~markets served ~~customer~~ by ~~needs~~KV, ~~and~~it ~~problems~~competes ~~and~~with toa ~~design~~number ~~innovative~~of ~~products,~~manufacturers ~~which~~that ~~solve~~have ~~these customer~~significantly ~~needs~~ greater resources and ~~problems. Approximately $2~~sales,~~166,000~~ ~~was~~including ~~spent~~several inconglomerate ~~fiscal~~corporations, ~~2004~~and with innumerous ~~the~~smaller ~~development of~~companies. ~~new~~While ~~products~~KV ~~and~~is innot ~~the~~aware ~~improvement~~ of ~~existing~~any ~~products;~~reliable statistics ~~approximately~~that ~~$2,031,000~~are ~~was spent~~available into ~~fiscal~~enable ~~2003~~KV ~~and~~to ~~$1,977,000~~accurately indetermine ~~fiscal~~its ~~2002~~relative position ~~for~~in the ~~same~~industry, ~~purposes.~~either Inoverall ~~addition, royalties~~or ~~paid~~with respect to ~~designers~~any ofparticular product ~~the~~or ~~Company’s~~market, ~~products~~KV ~~are~~believes ~~variable~~that ~~based~~it onis ~~sales volumes~~one ~~and~~of ~~are~~the ~~not~~three ~~included~~leading inmanufacturers of ~~research~~drawer ~~and~~slides ~~development~~in ~~costs~~North America.

~~Environmental~~Research, ~~Matters~~Design and Development. ~~The~~Research, ~~Company~~design ~~does~~and ~~not~~development ~~believe~~efforts represent one of KV’s core strengths. Through research, ~~based~~KV onseeks ~~current~~to ~~facts~~define ~~known~~and clarify customer needs and problems and to ~~management~~design innovative products, ~~that~~ ~~existing~~which ~~environmental~~solve ~~laws~~these customer needs and problems. ~~regulations~~Approximately ~~have~~$1,699,000 ~~had~~was orspent ~~will~~in ~~have~~fiscal ~~any~~2005 ~~material~~in the development of new ~~effects~~products ~~upon~~and in the ~~capital~~improvement ~~expenditures~~of existing products, ~~earnings~~compared with $2,200,000 orspent ~~competitive~~in fiscal ~~position~~2004 ofand $2,031,000 in fiscal 2003 for the ~~Company~~same purposes. In addition, royalties paid to designers of KV’s products are variable based on sales volumes and are not included in research and development costs.

~~Employees. The~~Environmental ~~Company~~Matters. ~~considers~~KV ~~one~~does ofnot ~~its~~believe, ~~major~~based ~~competitive~~on ~~strengths~~current tofacts beknown ~~its~~to ~~human~~management, that ~~resources.~~existing ~~There~~environmental ~~have~~laws ~~been~~and noregulations ~~work~~have ~~stoppages~~had or ~~labor~~will ~~disputes~~have inany ~~the Company’s~~material ~~history, and its relations with its employees are considered~~effects ~~good.~~upon Atthe ~~July~~capital 3expenditures, ~~2004~~earnings, ~~the~~or ~~Company~~competitive ~~employed~~position ~~806 persons. None~~ of ~~the Company’s employees are represented by collective bargaining agents~~KV. ~~In addition to its employee work force, the Company uses purchased labor to meet uneven demand in its manufacturing operations.~~

~~Item~~ Human Resources. ~~1(d)~~KV —considers ~~Information~~one ~~About~~of ~~Foreign~~its ~~Operations~~major competitive strengths to be its human resources. There have been no work stoppages or labor disputes in KV’s history, and its relations with its employees are considered good. At July 2, 2005, KV employed 591 persons. Collective bargaining agents represent none of KV’s employees. In addition to its employee work force, KV uses purchased labor to meet uneven demand in its manufacturing operations.

~~The~~Forward-Looking ~~Company’s Canadian operations accounted for approximately 8% of consolidated net sales~~Statements. ~~Approximately~~The 3%matters ofdiscussed ~~consolidated net sales were derived from export shipments from the Company’s United States operations to customers~~ in ~~other~~this ~~foreign~~Item ~~countries.~~1 ~~The Company~~include ~~does~~forward-looking not know of any particular risks attendant thereto, except that fluctuating exchange rates between the United States and Canadian currencies and other factors beyond the control of the Company, such as tariff and foreign economic policies, may affect future results of such businessstatements. ~~Reference is made to Note 13 of the Notes to the~~ ~~Company’s~~See ~~Consolidated~~“Forward-Looking ~~Financial~~ Statements” ~~contained~~at ~~herein for~~ the ~~fiscal~~beginning ~~year ended July 3, 2004, for a presentation~~ of ~~additional~~this ~~information~~Annual ~~concerning~~Report ~~the Company’s~~on ~~foreign operations~~Form 10-K.

~~ITEM~~ Available Information. 2The —address ~~PROPERTIES~~of our web site is www.kv.com. We make our Annual Reports on form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports (and amendments to those reports) filed and furnished pursuant to Section 13(a) on the Securities Exchange Act available on our web site as soon as reasonably practicable after we electronically file or furnish such materials with the Securities and Exchange Commission. Interested persons can view such materials without charge by clicking on “Investor Info” and then “Annual Reports” on our web site.

The CompanyItem owned1(d) or—Information leasedAbout theForeign following offices and manufacturing facilities as of July 3, 2004: Operations

Location	Description	Interest
Grand Rapids, Michigan	Executive offices and manufacturing facilities;	Owned
	444,000 sq. ft. on 41 acres.
Muncie, Indiana	Manufacturing facilities and office;	Owned
	98,000 sq. ft. on 12 acres.
Mississauga, Ontario	Office; 1,900 sq. ft.	Leased
Chicago, Illinois	Showroom; 3,000 sq. ft.	Leased

KV’s Canadian operations accounted for approximately 8.5% of consolidated net sales. Approximately 2.6% of consolidated net sales were derived from export shipments from KV United States operations to customers in other foreign countries. KV does not know of any particular risks attendant thereto, except that fluctuating exchange rates between the United States and Canadian currencies and other factors beyond the control of KV, such as tariff and foreign economic policies, may affect future business results. Reference is made to Note 13 of the Notes to the Company’s Consolidated Financial Statements contained herein for the fiscal year ended July 2, 2005, for a presentation of additional information concerning the KV foreign operations.

The facilitiesITEM indicated2 as owned, are owned in fee by the Company and are subject to no material encumbrances. The Company believes that its facilities are generally adequate for its operations and are maintained in a state of good repair. The Company believes it is in compliance with all applicable state and federal air and water pollution control laws. During the five years ended July 3, 2004, the Company spent approximately $27,000,000 for expansion, modernization and improvements of its facilities and equipment. —PROPERTIES

KV owned, leased or reserved for future lease the following offices and manufacturing facilities as of July 2, 2005:

Location	Description	Interest
Grand Rapids, Michigan Muncie, Indiana (1) Mississauga, Ontario Chicago, Illinois Chicago, Illinois Ho Chi Minh City	Executive offices and manufacturing facilities; 444,000 sq. ft. on 41 acres. Held for Sale; 110,000 sq. ft. on 37 acres. Sales Office; 2,000 sq. ft. Showroom; 3,000 sq. ft. Showroom; 1,000 sq. ft. Manufacturing; 5,000 sq. mtrs.	Owned Owned/ Held for Sale Leased Leased Leased Reserved

The facilities indicated as owned, are owned by KV and are not subject to material encumbrances. KV believes that its facilities are generally adequate for its operations and are maintained in a state of good repair. The Company believes it is in compliance with all applicable state and federal air and water pollution control laws. During the five years ended July 2, 2005, KV spent approximately $21,000,000 for expansion, modernization and improvements of its facilities and equipment.

(1) Facility has been exited and marketed for sale as part of a restructuring action announced during the third quarter of fiscal 2005. This property remains listed for sale at July 2, 2005.

ITEM 3 — LEGAL PROCEEDINGS

~~The~~In ~~Canada~~1997, ~~Customs~~KV ~~and~~was ~~Revenue~~sued ~~Agency~~by ~~(“CCRA”)~~a ~~has~~former ~~performed~~employee anseeking ~~audit~~additional ofbenefits ~~the Company’s~~under ~~sales~~an toexecutive retirement ~~its wholly-owned subsidiary, Knape & Vogt Canada~~plan. ~~Preliminary results~~This ~~from~~litigation ahas ~~joint~~been ~~review~~dismissed ~~by the Company~~ and ~~its~~appealed ~~customs~~through ~~broker~~various ~~indicate that the~~courts. ~~Company~~In ~~may~~January ~~be liable for certain customs transactions~~2005, ~~however,~~ the ~~amount~~Sixth ofCircuit ~~any~~Court ~~such potential liability is unknown at this time. The Company is defending its position that Knape & Vogt Canada is the importer~~ of ~~record~~Appeals ~~for~~denied ~~all Knape & Vogt goods shipped into Canada and management believes, that based on~~ the ~~information~~plaintiff’s ~~available~~appeal ~~at this time,~~of ~~any liability owed to~~ the ~~CCRA will not have a material adverse effect on the Company’s earnings~~dismissal.

The ~~Company~~Canada ~~was~~Customs ~~sued~~and inRevenue ~~the~~Agency ~~Kent~~(“CCRA”) ~~County,~~has ~~Michigan~~performed ~~Circuit~~an ~~Court~~audit inof ~~1997 by a former employee~~KV’s ~~seeking~~sales ~~additional~~to ~~benefits~~its ~~under~~wholly-owned ansubsidiary, ~~executive~~Knape ~~retirement~~& ~~plan~~Vogt Canada. ~~The~~Preliminary ~~Circuit~~results ~~Court~~from ~~ruled in~~a ~~favor~~joint ofreview ~~the~~by ~~plaintiff,~~KV ~~but~~and inits ~~June~~customs ~~2002,~~broker ~~the~~indicate ~~Circuit~~that ~~Court~~KV ~~was~~may ~~reversed~~be onliable ~~the~~for certain ~~Company’s~~customs ~~appeal~~transactions, tohowever, the ~~Michigan~~amount ~~Court~~ of ~~Appeals.~~any Asuch ~~delayed request~~potential ~~for~~liability ~~leave~~is tounknown ~~appeal to the Michigan Supreme Court which the plaintiff filed was denied during~~at ~~the~~this ~~fourth quarter of fiscal 2003~~time. In ~~August~~KV ~~2002,~~is ~~the~~defending ~~plaintiff filed~~its aposition ~~lawsuit~~that ~~seeking~~Knape ~~these~~& ~~retirement~~Vogt ~~benefits~~Canada inis the ~~Federal~~importer ~~District~~of record ~~Court~~ for ~~the Western~~all ~~District~~Knape of& ~~Michigan.~~Vogt ~~The Company~~goods ~~moved~~shipped tointo ~~dismiss~~Canada ~~the~~and ~~federal~~management ~~litigation~~believes that based on the ~~statute~~information ofavailable ~~limitations.~~at ~~In September~~this ~~2003~~time, ~~the~~any ~~Federal~~liability ~~District~~owed ~~Court dismissed the litigation. In October 2003, the plaintiff appealed the dismissal~~ to the ~~Sixth~~CCRA ~~Circuit Court of Appeals. That appeal is pending. Management believes that any liability resulting from this case~~ will not have a material adverse ~~affect~~effect on ~~the Company~~KV’s earnings.

During the second quarter of fiscal 2005, a competitor filed a suit in the U.S. District Court of the Central District of California alleging that KV infringes two of the competitor’s U.S. patents. The ~~Company~~competitor is ~~also~~seeking ~~subject~~monetary todamages ~~other~~and injunctive relief. KV has ~~legal~~received ~~proceedings~~an ~~and~~opinion ~~claims,~~from ~~which~~its ~~arise~~outside inpatent counsel that KV’s products do not infringe the ~~ordinary~~competitor’s ~~course~~patents. ofKV ~~business~~has answered that it denies any liability and will vigorously defend the suit.

KV 4is also subject to other legal proceedings and claims, which arise in the ordinary course of business.

In the opinion of management, based on the information presently known and taking into account established accruals of approximately $~~455~~431,000 at July 32, ~~2004~~2005, the ultimate liability for these matters will not have a material adverse effect on ~~the Company~~KV’s financial position or the results of its operations.

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended July 32, ~~2004~~2005.

~~ADDITIONAL~~4 ~~ITEM — EXECUTIVE OFFICERS OF THE REGISTRANT~~

The executive officers of the Company, at July 3, 2004, were as follows:

Name	Age	Positions and Offices Held	Year First Electedan Executive Officer
William R. Dutmers	48	Chairman of the Board of Directors andChief Executive Officer	1998
Leslie J. Cummings	39	Vice President of Finance and Treasurer	2000
J. Scott Royal-Ferris	49	Vice President of Business Development-Consumer	2002
Raymond N. Watson	51	President of Operations	2002

Mr. Dutmers was named Chairman of the Board of Directors in January 1998. Mr. Dutmers has been a member of the Board of Directors since April 1996. He was named Chief Executive Officer in May 1999. Mr. Dutmers was the President of G & L, Inc., a business consulting firm, from 1991 to 1997.

Ms. Cummings was named Vice President of Finance and Treasurer in July 2000. Ms. Cummings joined the Company in 1998 as the Assistant Treasurer. Prior to that she was employed at Herman Miller, Inc. from 1992 to 1998.

Mr. Royal-Ferris was named Vice President of Business Development-Consumer in October 2002. Mr. Royal-Ferris joined the Company in 2001 as the Director of Business Development – Consumer. Before joining the Company, Mr. Royal –Ferris had been self-employed from September 2000 to July 2001. Prior to that, he served as the Vice President of Sales/Marketing for Keystone Manufacturing from April 2000 until August 2000; as the Vice President of Sales – Kitchen Division for Windmere Durable Holdings from January 1998 to March 2000; and as Vice President of Sales for The Rival Company from 1990 until January 1998.

Mr. Watson was named President of Operations in March 2002. Before joining the Company, he had been employed at the Marmon Group from 1993 to 2002, most recently as the Vice President of Finance of Marmon Retail Services.

All terms of office are on an annual basis and will expire on October 15, 2004.

PART II

ITEM 5 — MARKET PRICE FOR REGISTRANT’S COMMON EQUITY, AND RELATED STOCKHOLDER MATTERSAND ISSUER PURCHASES OF EQUITY SECURITIESMATTERS

Market Price. ~~The Company~~KV’s Common Stock is traded on the NASDAQ National Market under the ticker symbol KNAP. Stock price quotations can be found in major daily newspapers (listed KnapeV) and in the Wall Street Journal (listed KnapeVogt). As of August 27 26, ~~2004~~2005, there were approximately 3,000 shareholders of record of the Company’s Common Stock ~~and~~ and Class B Common Stock.

	Fiscal 2004				Fiscal 2003
	Fiscal 2005				Fiscal 2004
Quarter	High		Low		High		Low
First	$1113	.8575	$1012	.3401	$1211	.9985	$10	.0034
Second	$1214	.3609	$1011	.7050	$1112	.2536	$810	.0470
Third	$1413	.2534	$1112	.3812	$1214	.2025	$911	.9538
Fourth	$13	.9900	$1110	.4077	$1213	.1099	$911	.2640

~~Dividends.~~ As ~~The~~of ~~Company~~August ~~paid~~26, ~~quarterly~~2005, ~~per~~there ~~share~~were ~~cash~~approximately ~~dividends~~200 shareholders of $0KV’s Class B Common Stock.~~165~~ onThere ~~its~~is ~~shares~~no ~~of Common~~established ~~Stock~~public ~~and~~trading ~~$0.15~~market onfor ~~its~~this ~~shares~~class of common equity. Class B common stock is subject to certain restrictions on transfer, but is convertible into Common Stock ~~during~~on ~~the~~a ~~last~~share-for-share ~~two fiscal~~basis ~~years~~at any time.

OnDividends. ~~August~~ KV ~~13,~~paid ~~2004,~~quarterly ~~the~~per ~~Board~~share ofcash ~~Directors~~dividends ~~declared~~of a $0.165 ~~per~~on ~~share~~its ~~cash dividend on~~ shares of ~~the~~Common Stock ~~Company’s common stock~~ and $0.15 ~~per share cash dividend~~ on its shares of ~~its~~ Class B ~~common~~Common ~~stock,~~Stock ~~payable~~during ~~September~~the ~~10,~~last ~~2004,~~two ~~to shareholders of record on~~fiscal ~~August 27, 2004~~ years.

~~Securities~~On ~~Authorized~~August ~~for~~12, ~~Issuance~~2005, ~~Under~~the ~~Equity~~Board ~~Compensation~~of ~~Plans~~Directors declared a $0.165 ~~The~~per ~~Company~~share ~~had~~cash ~~the~~dividend ~~following~~on ~~equity~~shares ~~compensation~~of ~~plans~~KV’s atCommon ~~July~~Stock 3and $0.15 per share cash dividend on shares of its Class B Common Stock, ~~2004:~~payable September 9, 2005, to shareholders of record on August 26, 2005.

	Equity Compensation Plan Information
Plan category	Number of securities tobe issued upon exerciseof outstanding options(1)	Weighted-averageexercise price ofoutstanding options(2)	Number of securitiesremaining available for future issuance underequity compensationplans (excludingsecurities reflected incolumn (1))(3)
Equity compensation plans
approved by security holders	225,433	$ 18.19	443,275
Equity compensation plans
not approved by security holders	27,500	$ 14.43	-
Total	252,933	$ 17.78	443,275

While it is anticipated that KV will continue to pay quarterly cash dividends, the amount and timing of such dividends is subject to the discretion of the Board depending on KV’s future results of operations, financial condition, capital requirements, and other relevant factors.

~~These~~ Securities Authorized ~~equity~~for ~~compensation~~Issuance ~~plans~~Under ~~are more~~Equity ~~fully~~Compensation ~~described~~Plans. inKV ~~Note~~had 11the tofollowing ~~the~~equity compensation ~~Consolidated~~plans ~~Financial~~at ~~Statements.~~July 2, 2005:

6Equity Compensation Plan Information

Plan category	Number of securities to be issued upon exercise of outstanding options (1)	Weighted-average exercise price of outstanding options (2)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (1)) (3)

Equity compensation plans
approved by security holders	13,750	$13.89	-

These equity compensation plans are more fully described in Note 11 to the Consolidated Financial Statements.

ITEM 6 — SELECTED FINANCIAL DATA

For the Year Ended	~~2004~~	2005	~~2003~~		~~2002~~2004		~~2001~~	2003	~~2000~~		2002		2001
Summary of Operations
Net sales	~~$148,977,742~~	$	~~$124~~157,~~920~~365,~~476~~965		$~~131,481,631~~	148,940,674	~~$143,465,502~~	$	~~$152~~124,~~138~~874,~~646~~939		$	131,456,666	$	143,465,502
Gross profit	~~$ 30,728,343~~	$	~~$ 27~~30,~~282~~118,~~166~~067		$ ~~30,832,885~~	30,728,343	~~$ 33,390,958~~	$	~~$ 36~~27,~~287~~282,~~480~~166		$	30,832,885	$	33,390,958
Gross profit %	~~20.6~~	%	2119.81%	%	~~23.5~~	20.6%	~~23.3~~	%	2321.98%	%		23.5%		23.3%
Selling, general and administrative	~~$ 23,568,741~~	$	~~$ 23~~22,~~190~~351,~~715~~696		$ ~~22,535,538~~	23,568,741	~~$ 22,963,603~~	$	~~$ 21~~23,~~754~~190,~~692~~715		$	21,600,538	$	22,963,603
Selling, general and administrative %	~~15.8~~	%	1814.82%	%	~~17.1~~	15.8%	~~16.0~~	%	1418.36%	%		16.4%		16.0%
Operating income	$ 7,159,602		$ 3,820,126		$ 7,362,347		$ 10,127,355		$ 14,427,788
Impairment and restructure		$	2,270,021			-		$	271,325		$	935,000		-
Operating income %	4.8	%	3.1	%	5.6	%	7.0	%	9.4	%
Impairment and restructure %			1.4%			-			.2%			-		-
Net income	$ 3,734,932		$ 2,230,899		$ 3,789,046		$ 5,615,065		$ 8,423,730
Operating income		$	5,496,350		$	7,159,602		$	3,820,126		$	7,362,347	$	10,127,355
Common Stock Data
Operating income %			3.5%			4.8%			3.1%			5.6%		7.0%
Primary and diluted earnings per share	$ 0.83		$ 0.49		$ 0.83		$ 1.22		$ 1.80
Net income		$	3,080,272		$	3,734,932		$	2,230,899		$	3,789,046	$	5,615,065
Weighted-average shares outstanding-diluted	4,516,245		4,516,706		4,569,942		4,618,250		4,684,125
Common Stock Data
Dividends per share--common	$ 0.66		$ 0.66		$ 0.66		$ 0.66		$ 0.615
Basic and diluted earnings per share		$	0.68		$	0.83		$	0.49		$	0.83	$	1.22
Dividends per share--Class B common	$ 0.60		$ 0.60		$ 0.60		$ 0.60		$ 0.559
Weighted-average shares outstanding			4,514,243			4,516,245			4,516,706			4,569,942		4,618,250
Year-end stock price	$ 12.98		$ 10.47		$ 12.40		$ 12.66		$ 15.25
Dividends per share--common		$	0.66		$	0.66		$	0.66		$	0.66	$	0.66
Year-end Financial Position
Dividends per share--Class B common		$	0.60		$	0.60		$	0.60		$	0.60	$	0.60
Total assets	$ 96,251,326		$ 92,348,829		$ 87,891,418		$ 89,803,393		$ 88,287,652
Year-end stock price		$	11.95		$	12.98		$	10.47		$	12.40	$	12.66
Working capital	$ 27,338,785		$ 20,457,269		$ 17,185,811		$ 18,465,603		$ 16,378,393
Year-end Financial Position
Current ratio	2.2		2.0		1.9		2.0		1.7
Total assets		$	92,388,638		$	96,251,326		$	92,348,829		$	87,891,418	$	89,803,393
Total long-term debt and capital leases	$ 24,552,605		$ 24,065,420		$ 20,000,000		$ 23,750,000		$ 20,050,000
Working capital		$	31,239,421		$	27,338,785		$	20,457,269		$	17,185,811	$	18,465,603
Total long-term debt and capital leases as a % of total
Current ratio			2.4			2.2			2.0			1.9		2.0
capital (a)	40.0	%	40.9	%	35.6	%	39.0	%	36.6	%
Total long-term debt and capital leases		$	22,524,129		$	24,538,864		$	24,065,420		$	20,000,000	$	23,750,000
Stockholders' equity	$ 36,824,218		$ 34,761,862		$ 36,213,219		$ 37,132,697		$ 34,706,630
Total long-term debt and capital leases as a % of total capital (a)			37.2%			40.0%			40.9%			35.6%		39.0%
Other Data/Key Ratios
Stockholders' equity		$	38,107,877		$	36,824,218		$	34,761,862		$	36,213,219	$	37,132,697
Capital expenditures	$ 1,199,398		$ 3,707,536		$ 3,935,470		$ 9,282,239		$ 9,112,810
Other Data/Key Ratios
Depreciation and amortization	$ 6,400,358		$ 6,642,091		$ 6,693,293		$ 6,340,647		$ 5,862,588
Capital expenditures		$	2,416,547		$	1,199,398		$	3,707,536		$	3,935,470	$	9,282,239
Depreciation and amortization		$	5,969,522		$	6,400,358		$	6,642,091		$	6,693,293	$	6,340,647

(a) Total capital is defined as the sum of long-term debt plus stockholders’ equity.

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of ~~the Company~~KV’s results of operations ~~and~~ and financial condition. The discussion should be read in conjunction with the ~~Consolidated~~ Consolidated Financial Statements and Notes.

Basis of Presentation

When considering year-over-year growth statistics, it is important to keep in mind that fiscal 2004 contained 53 weeks, compared to 52 weeks in fiscal ~~2003~~2005 and ~~2002~~2003.

Overview

Knape & Vogt (“KV”) is a leading manufacturer of functional hardware, storage-related components and ergonomic products with a long history dating back to 1898. We complement our manufacturing capabilities with our design and distribution expertise.

~~During~~Beginning ~~the~~in ~~fourth quarter of~~ fiscal 2004, management further defined the business divisions into market channels and began making business decisions and reviewing financial information by market channel rather than by the previous Home & Commercial Products and ~~Office Products~~Business Products divisions. Due to the complexity in obtaining this information for prior years, restatement of prior year results by market is impracticable and net sales for ~~prior~~fiscal ~~years~~2003 are shown below segregated by divisions only.

The ~~Office~~Home & Commercial Products division was segregated into two market channels: ~~OEM~~ consumer and ~~dealer~~distribution/other. The ~~OEM~~ consumer market channel sells ~~precision~~a ~~drawer~~majority ~~slides,~~of ~~hardware~~the ~~and~~Company’s product ~~ergonomic~~lines ~~products~~ to ~~original equipment office furniture manufacturers~~retailers. The ~~dealer~~distribution/other market channel sells ~~ergonomic products~~many toof ~~independent~~the KV’s ~~office furniture dealers. These dealers purchase~~ product ~~from office~~lines ~~furniture~~to ~~manufacturers~~kitchen and ~~resell~~bath ~~the~~OEM ~~furniture~~manufacturers ~~along with design~~ and ~~installation services~~full toline ~~the end customer~~woodworking distributors. These markets sell the KV® brand of ~~hardware~~products ~~including drawer~~that ~~slides.~~include: ~~Drawer~~a ~~slides~~complete line ~~include~~of ~~precision,~~decorative ~~Euro-style~~ and ~~utility~~wall-attached ~~slides.~~shelving ~~Precision drawer slides use ball bearings~~systems, ~~while~~builders’ ~~Euro-style~~hardware and ~~utility~~ drawer slides ~~use rollers~~. In addition, these ~~two~~ markets also sell the ~~idea@WORK~~Real Solutions for Real Life™ brand of ~~ergonomic~~kitchen and bath storage products.

The ~~Home~~Business ~~& Commercial~~ Products division ~~was~~is segregated into two market channels: ~~consumer~~ OEM and ~~distribution/other~~Idea. The ~~consumer~~ OEM market channel sells aprecision ~~majority~~drawer ofslides, ~~the~~hardware ~~Company’s product~~and ~~lines~~ergonomic products to ~~retailers~~original equipment office furniture manufacturers. The ~~distribution/other~~Idea market channel sells ~~many~~ergonomic ~~of the~~products ~~Company’s~~to ~~product~~independent ~~lines~~office tofurniture ~~kitchen~~dealers. ~~and~~These ~~bath~~dealers ~~OEM~~purchase product from office furniture manufacturers and ~~full~~resell ~~line~~the furniture along with design and installation ~~woodworking~~services ~~distributors~~to the end customer. These markets sell the KV® brand of ~~products~~hardware ~~that~~including drawer ~~include:~~slides. ~~a complete~~Drawer ~~line~~slides ofinclude ~~decorative~~precision, Euro-style and ~~wall-attached~~utility ~~shelving~~slides. ~~systems~~Precision drawer slides use ball bearings, ~~builders’~~while ~~hardware~~ Euro-style and utility drawer slides. use rollers. In addition, these two markets also sell the ~~Real Solutions for Real Life~~idea@WORK™ brand of ~~kitchen~~ergonomic ~~and bath storage~~ products.

~~While~~In ~~net~~January ~~sales~~2005, ~~and~~KV ~~earnings~~announced ~~improved~~its ~~during~~decision ~~fiscal~~to ~~2004,~~close ~~the~~its ~~Company~~Muncie, ~~was~~Indiana ~~challenged~~facility byand arelocate ~~significant~~the ~~increase~~wire inprocessing ~~steel~~operations ~~costs~~to ~~during~~its ~~the~~Grand ~~last~~Rapids ~~half of the fiscal year~~facility. The ~~Company~~ relocation was ~~able to successfully procure sufficient quantities of steel to prevent any~~completed ~~interruption~~ in ~~production,~~June ~~however,~~2005. ~~the~~The ~~cost~~Muncie ofplant ~~raw steel increased over 50% during this time period. KV~~ was ~~able~~closed ~~to partially offset these raw material increases through a combination of price increases~~ and ~~surcharges~~is tocurrently ~~many~~being ofheld ~~its~~for ~~customers~~sale. ~~A more detailed discussion of this issue follows in the Gross Margin section of this report.~~

During the second quarter of fiscal 2005, KV recognized asset impairment charges on certain manufacturing equipment utilized for backup production of a few of its precision drawer slide products.

In total, $2.3 million pre-tax has been recorded as impairment/restructuring charges during fiscal 2005 in connection with these items.

Since January 2004, the price of steel has increased significantly and for several months during fiscal 2005 reached an increase of over 70% compared to January 2004. While the cost of steel has declined in the fourth quarter of fiscal 2005, it still remains approximately 60% higher than the January 2004 benchmark. A more detailed discussion of this issue follows in the Gross Margin section of this report.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts. On an ongoing basis, we evaluate our estimates, which are based on historical experience and on various other assumptions and factors that we believe to be reasonable under the circumstances. Based on our ongoing review, we will make adjustments, as we consider appropriate under the current facts and circumstances.

We believe that the following represent the more critical estimates and assumptions used in preparation of our consolidated statements.

• Revenue recognition – We record revenue when title to the product and risk of ownership ~~passes~~pass to the buyer. Sales are shown net of returns, discounts and any other form of sales incentive, including cooperative advertising and rebates. In certain circumstances, ~~the~~KV ~~Company~~provides ~~does provide~~ buyback programs and markdown allowances to its customers. These amounts are fixed at the start of the contract period with the customer and accounted for in accordance with Statement of Position No. 93-7, “Reporting on Advertising Costs” and Emerging Issues Task Force No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer”. The cost of these programs are either expensed at the time of the initial shipment of the goods or are expensed on a prorated basis over the sales of the contract, if ~~the~~KV ~~Company~~ has a written commitment from the customer.

• Allowance for uncollectible accounts receivable – We record allowances for losses that we may incur from the inability of certain of our customers to pay for products or services that they have purchased. In determining these allowances, we take into consideration the financial condition of our customers, previous payment history and the age of the outstanding balances. We monitor customers’ balances on a monthly basis and assess the adequacy of the allowances recorded. Certain of ~~the Company~~KV’s customers do have outstanding receivable balances that could have a material impact on the financial results in the event that those customers were unable to satisfy their obligations. Management, at this time, is not aware of any customers in this situation. Historically, ~~the~~KV ~~Company~~ has been able to effectively monitor the creditworthiness of its customers on a monthly basis and has not experienced a material loss.

•

Warranty reserve- The Company provides a limited lifetime warranty on most products sold. Depending on the product, the lifetime warranty is generally defined as a range of three to fifteen years. The Company does not sell or otherwise issue warranties or warranty extensions as stand alone products. The warranty provides replacement of the product as the resolution for any warranty claims. Reserves have been established for the various costs associated with the Company’s warranty program. General warranty reserves are based on historical claims experience and other currently available information and are periodically adjusted for business levels and other factors. Specific reserves are established if an issue is identified with the amounts for such reserves based on the estimated cost to correct the problem. The actual warranty expense could differ from the estimates made by the Company based on product performance.

•

Inventory reserves – We provide reserves for inventory that we consider obsolete or slow moving, utilizing assumptions about future demand for our products. We monitor our inventory by type, age and usage on a monthly basis to determine the reserves recorded. The majority of our products can be sold across various market channels. Therefore, we have been successful on a historic basis in minimizing our risk of slow-moving or obsolete inventory.

•

Impairment of long-lived assets – We periodically review the carrying value of our long-lived assets held and used, including goodwill and other intangible assets. This review is performed using estimated future cash flows. If the carrying value of a long-lived asset is considered to be impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value.

• Pension and Other Postretirement Benefits – Accounting for defined-benefit pension plans involves estimating the cost of benefits to be provided in the future, based on vested years of service, and attributing those costs over the time period each employee works. The most significant factor affecting our pension costs is the fair value of the plan assets and the selection of key assumptions, including the discount rate and the expected return on plan assets. In fiscal ~~2004~~2005, we ~~increased~~decreased our discount rate from 56.5025% from 65.25%. We maintained the expected return on plan assets at 8.00%. While we believe the assumptions selected are reasonable, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension obligations and our future expense. ~~For~~Refer ~~example,~~to a 50 basis point change in the long-term rate of return would change our expense by approximately $104,000 and a 50 basis point change in the discount rate would change our expense by approximately $110,000. See Note 9 to the Consolidated Financial Statements for more information regarding costs and assumptions for our employee retirement plans.

•8 Loss Contingencies – The Company is subject to legal proceedings and claims arising out of the normal course of business. The Company routinely assesses the likelihood of any adverse judgments or outcomes to these matters, as well as ranges of probable losses. A determination of the amount of the reserves required, if any, for these contingencies is made after thoughtful analysis of each known issue and an analysis of historical claims experience for incurred but not reported matters. The required reserves may change in the future due to new developments in each matter. The Company has an active risk management program consisting of numerous insurance policies secured from multiple carriers. These policies provide coverage that is utilized to minimize the impact, if any, of the legal proceedings. For further discussion, see Note 15 to the Consolidated Financial Statements.

~~Management has~~• ~~discussed~~Loss ~~the~~Contingencies ~~development~~– KV is subject to legal proceedings and ~~selection~~claims arising out of ~~these~~the ~~critical~~normal ~~accounting~~course ~~estimates~~of ~~with~~ business. KV routinely assesses the ~~Audit~~likelihood ~~Committee~~of any adverse judgments or outcomes to these matters, as well as ranges of ~~our~~probable ~~Board~~losses. A determination of ~~Directors~~the ~~and~~amount of the ~~Audit~~reserves ~~Committee~~required, ~~has~~if ~~reviewed~~any, for these contingencies is made after thoughtful analysis of each known issue and an analysis of historical claims experience for incurred but not reported matters. The required reserves may change in the ~~Company’s~~ ~~disclosures~~future ~~relating~~due to ~~them~~new developments in ~~this~~each ~~Management~~matter. ~~Discussion~~KV ~~and~~has ~~Analysis~~an active risk management program consisting of numerous insurance policies secured from multiple carriers. These policies provide coverage that is utilized to minimize the impact, if any, of the legal proceedings. For further discussion, see Note 15 to the Consolidated Financial Statements.

InManagement ~~addition,~~has wediscussed ~~have~~the ~~not~~development ~~recently~~and ~~experienced~~selection ~~changes~~of inthese ~~circumstances~~critical ~~that~~accounting ~~would~~policies ~~have~~with the ~~significantly~~Audit ~~impacted~~Committee ~~our~~of ~~inventory reserves or~~ our ~~evaluation~~Board of ~~the~~Directors ~~carrying~~and ~~value of~~ the ~~long-lived~~Audit ~~assets.~~Committee ~~Further,~~has inreviewed ~~accordance with SFAS No. 144, paragraph 8; we have not~~KV’s ~~had~~disclosures relating to ~~test~~them ~~for~~in ~~recoverability~~this ofManagement ~~our~~Discussion ~~long-lived~~and ~~assets~~Analysis.

In 9addition, we have not recently experienced changes in circumstances that would have significantly impacted any of the reserves discussed above or our evaluation of the carrying value of the long-lived assets. Further, in accordance with SFAS No. 144, paragraph 8; no events have occurred which would require us to test for recoverability of our long-lived assets, except as disclosed in Note 3.

Results of Operations

The table below shows certain items in our Consolidated Statements of Operations as a percentage of net sales:

Year Ended	July 32,~~2004~~2005		~~June~~July 283,~~2003~~2004		June 2928, ~~2002~~2003
Net sales	100	.0%	100	.0%	100	.0%
Cost of sales	7980	.49	7879	.24	7678	.52
Gross profit	2019	.61	2120	.86	2321	.58
Selling, general and administrative expenses	1514	.82	1815	.68	1718	.26
Other	-			.2		.7
Impairment/Restructure	1	.4	-			.2
Operating income	43	.85	34	.08	53	.60
Other expense	1	.19	1	.91	1	.19
Income before income taxes	32	.76	23	.17	42	.51
Income taxes	1	.26	1	.32	1	.63
Net income	2	.50%	12	.85%	21	.98%

Sales

The table below summarizes our sales by division for the past three fiscal years (in millions) and by market ~~for fiscal 2004 and 2003~~:

Year Ended	July 32,~~2004~~2005		%		~~June~~July 283,~~2003~~2004		%		June 2928,~~2002~~2003		%
Office Products OEM	$ 37	.3	25	.0%	$ 26	.9	21	.5%	N/A		N/A
Business Products OEM	$ 43	.1	27	.4%	$ 37	.2	25	.0%	$ 26	.9	21	.5%
Office Products Dealer	9	.1	6	.2%	8	.8	7	.0%	N/A		N/A
Business Products Idea	9	.1	5	.8%	9	.2	6	.2%	8	.8	7	.0%
Total Office Products	$ 46	.4	31	.2%	$ 35	.7	28	.5%	$ 39.5		30.0	%
Total Business Products	$ 52	.2	33	.2%	$ 46	.4	31	.2%	$ 35	.7	28	.5%
Consumer	$ 3831	.17	2520	.61%	$ 34	.01	2722	.29%	~~N/A~~$ 34	.0	~~N/A~~27	.2%
Distribution and Other	6473	.5	4346	.27%	5568	.24	4445	.39%	~~N/A~~55	.2	~~N/A~~44	.3%
Total Home and
Commercial Products	$ ~~102~~105	.62	6866	.8%	$ 89102	.25	7168	.58%	$ ~~92.0~~89	.2	~~70.0~~71	.5%
Total Net Sales	$ ~~149~~157	.04	10100	.0%	$ ~~124~~148	.9	10100	.0%	$ ~~131.5~~124	.9	100	.0%

Consolidated net sales for fiscal 2004 increased 19.3% when compared to fiscal 2003, which followed a decline of 5.0% when comparing fiscal 2003 to fiscal 2002. It should be noted that fiscal 2004 included 53 weeks of sales versus 52 weeks in both fiscal 2003 and 2002. Excluding the extra week of sales, sales for fiscal 2004 would have increased approximately 16.9~~% over~~ ~~fiscal 2003.~~

~~Our~~Consolidated ~~Office~~net ~~Products~~sales ~~division~~for ~~sales~~fiscal 2005 increased 305.27% when compared to fiscal ~~2003~~2004, ~~following~~which afollowed an ~~decline~~increase of 919.63% inwhen comparing fiscal ~~2003~~2004 ~~when compared~~ to fiscal ~~2002~~2003. ~~The~~It ~~office~~should ~~furniture~~be ~~industry shipments,~~noted ~~as a whole, grew slightly during the eleven-month period from July 2003 to May~~that fiscal 2004 asincluded ~~seen~~53 inweeks ~~the~~of ~~Business~~sales ~~and~~versus ~~Institutional~~52 ~~Furniture~~weeks ~~Manufacturers’ Association (BIFMA) results. For this time period they reported an increase~~ in ~~shipments~~both offiscal ~~1.5%~~2005 and an ~~increase in orders of 3.8%. This followed a decline in shipments of 10.2% in fiscal~~ 2003. ~~The Company has been successful in growing sales to the Office Product original~~ ~~equipment~~Excluding ~~manufacturers (“OEM’s”) with~~ the ~~addition~~extra week of ~~new products~~sales, ~~in particular~~fiscal ~~the~~2005 ~~addition~~sales ofwould ahave ~~number~~increased of7.8% ~~customer~~over ~~specific versions of KV’s precision~~fiscal ~~ball~~2004 ~~bearing slides~~ and ~~the~~sales ~~new~~for ~~heavy-duty~~fiscal ~~8800™~~2004 ~~precision~~would ~~slide~~have ~~with~~increased ~~the~~approximately ~~patented interlock system~~16.9% ~~The~~over ~~Company also introduced new ergonomic products, including a new line of height adjustable tables, to both markets during the~~ fiscal ~~year~~2003.

Our ~~Home~~Business ~~and Commercial~~ Products division sales ~~for fiscal 2004~~ increased ~~by 14~~12.95% when compared to fiscal ~~2003~~2004, following an aincrease ~~slight~~of ~~decline~~30.2% in fiscal ~~2003~~2004 when compared to fiscal ~~2002~~ 2003. ~~New~~Business ~~products~~and Institutional Furniture Manufacturers’ Association (BIFMA), ~~including~~reported that the ~~Shelf~~office furniture ~~Made™~~shipments ~~Instant~~for ~~Shelves,~~the industry as a whole had grown 9.7% during the ~~new~~eleven-month period ~~line~~from July 2004 to May 2005. This followed an increase in shipments of 1.9% in ~~display~~fiscal ~~ledges,~~2004. KV has been successful in growing sales to the ~~new~~Business ~~line~~Product oforiginal equipment ~~garage~~manufacturers ~~organization~~(“OEM’s”) with the addition of new products, ~~and~~in particular the ~~4X4~~addition ~~Pocket~~of ~~Door™~~a number of customer specific versions of KV’s precision ball bearing slides and the new heavy-duty 8800™ precision ~~drawer~~slide ~~slides,~~with ~~assisted~~the inpatented interlock ~~expanding~~system. ~~sales~~The toline ~~existing~~of ~~customers~~height ~~and obtaining~~adjustable ~~new~~tables ~~customers~~received ina ~~both~~number ~~markets.~~of ~~Further~~aesthetic design changes, KVincluding ~~has~~a ~~seen~~cast ~~growth~~aluminum infoot and a quieter, faster motor on the ~~distribution~~electric ~~market~~versions ~~where~~of itthe ~~made~~tables ~~significant~~and ~~investments~~have inbeen ~~the~~well ~~prior~~received ~~fiscal~~by ~~year~~our OEM customers.

Late 10in fiscal 2005, management changed the Idea channel increasing the direct sales force. We have a number of new products in this channel and believe utilizing a direct sales focus will promote growth in this important channel of our business.

InThe ~~addition~~Business toProducts ~~ongoing~~division ~~cooperative~~has ~~advertising~~also ~~and~~begun ~~rebate programs, certain introductory promotional incentives were offered during fiscal 2004 in the Consumer market~~ to aexplore ~~few customers~~alternative tomarkets ~~encourage~~for ~~them~~its ~~to either add new product lines to their offering or to add KV~~products asincluding athe ~~vendor.~~automotive ~~These~~industry ~~incentives reduced net sales~~ and ~~gross margins by approximately $1.7 million in fiscal 2004. The Company expenses these items at~~ the ~~initial~~home ~~shipment~~appliance ~~of product to the customer or pro-rata based on sales volumes over the contract period, if the Company has firm written purchase commitments from the customers~~market. Unless new customers or significant new product lines are added during the upcoming fiscal year, management believes that these introductory promotional incentives will be significantly less in fiscal 2005.

~~During~~Our ~~the~~Home ~~first~~and ~~quarter~~Commercial ofProducts ~~fiscal~~division ~~2003,~~sales wefor ~~launched~~fiscal a2005 ~~consignment~~increased ~~inventory~~by ~~program~~2.7% ~~for certain~~when ~~customers.~~compared ~~Under~~to ~~this~~fiscal ~~program~~2004, ~~the~~following ~~customers~~an ~~are~~increase ~~not~~of ~~invoiced~~14.9% for ~~product~~fiscal ~~until~~2004 ~~the Company~~when ~~receives~~compared ~~notice~~to fiscal ~~that~~2003. ~~the~~New ~~customer~~product ~~has~~sales, ~~utilized~~including the ~~inventory~~Pir-o-et™ atheight ~~their~~adjustable ~~location.~~lazy Atsusan ~~July 3, 2004~~ and ~~June 28, 2003,~~ the ~~total~~Virtu™ ~~inventory~~line inof ~~this~~Italian-designed ~~program~~closet ~~totaled~~and ~~$3.3~~kitchen ~~and~~products, ~~$3.6~~were primarily ~~million~~the atreason ~~cost,~~for ~~respectively~~this growth.

~~New~~While ~~product~~we ~~sales~~saw ~~(those~~moderate ~~products~~growth ~~introduced~~overall ~~within~~in ~~the~~this ~~last~~division, 24our ~~months)~~U.S. ~~were~~consumer ~~approximately~~sales declined during ~~$21~~fiscal 2005.7 ~~million~~This inchannel of our business had been posting revenue growth during the past couple of fiscal ~~2004~~years, ~~compared~~but ~~with~~had ~~$11~~been unprofitable.7 ~~million~~During inthe second quarter of fiscal 2005, ~~2003~~we performed an in depth review of our top 50 customers in this channel and developed a strategy for making these customers profitable. As a result of this process, we eliminated a number of the promotional programs that had been utilized during the past few years and discontinued sales to certain smaller customers. While this rationalization process reduced net sales by approximately $81.08 million in fiscal ~~2002~~2005, the U.S. ~~New~~consumer channel ~~product~~was ~~introductions,~~profitable ~~along~~for ~~with~~the ~~value-added~~last ~~services,~~half ~~such~~of asfiscal 2005. We believe that we are now ~~vendor-managed~~positioned ~~inventory,~~to ~~remain~~post ~~key~~modest, ~~components~~profitable ofgrowth ~~our~~in ~~strategy~~this channel.

We offer a consignment inventory program for certain customers. Under this program, the customers are not invoiced for product until the Company receives notice that the customer has utilized the inventory at their location. At July 2, 2005 and July 3, 2004, the inventory in this program totaled $3.5 million and $3.3 million at cost, respectively.

New product sales were approximately $31.1 million in fiscal 2005 compared with $24.7 million in fiscal 2004 and $11.7 million in fiscal 2003. New product introductions, along with value-added services, such as vendor-managed inventory, remain key components of our strategy. The Company consistently defines new product sales, including product extensions, as those products sold within a three-year period from the date of introduction.

Gross Profit

Gross profit, as a percentage of net sales, was 2019.61% in fiscal ~~2004~~2005, compared to 2120.86% in fiscal ~~2003~~2004 and 2321.58% in fiscal ~~2002~~2003. ~~During~~Since ~~the~~January ~~third quarter of fiscal~~ 2004, the ~~Company began~~price toof ~~realize~~steel has increased significantly ~~steel~~and ~~costs~~ for ~~production~~several ofmonths ~~many~~during offiscal ~~its~~2005 ~~products.~~reached ~~The increased~~an ~~steel~~increase ~~costs~~of ~~resulted~~over in70% compared ~~the~~to ~~Company~~January ~~paying approximately $2~~2004.4 ~~million~~While ~~more~~the ~~for raw~~cost of steel ~~during~~has ~~the~~declined ~~last~~in ~~six~~the ~~months~~fourth quarter of fiscal ~~the~~2005, ~~fiscal~~it ~~year~~still ~~than~~remains itapproximately ~~would~~60% ~~have~~higher ifthan the ~~steel prices~~January ~~had~~2004 ~~remained stable~~benchmark. The ~~uncertainty~~increased insteel ~~the~~costs ~~steel~~resulted ~~market~~in ~~makes~~KV itpaying ~~difficult~~approximately ~~for management~~$9.3 tomillion ~~predict~~more ~~whether~~for raw steel ~~prices~~during ~~will~~the ~~continue~~fiscal toyear ~~rise.~~than ~~Management~~it ~~has~~would ~~been~~have ~~able to~~if ~~quantify~~the ~~that a 5% increase in raw~~ steel prices ~~will~~had ~~result~~remained instable ~~approximately a 2.5%~~at ~~decrease~~the inJanuary ~~the~~2004 ~~Company’s~~benchmark. ~~gross~~During ~~margin~~fiscal 2005, ~~assuming~~KV ~~the~~successfully ~~Company~~passed isthrough ~~unable~~all tobut $1.1 ~~pass~~million ~~these increased~~of ~~raw~~the ~~material~~added costs on to its customers. ToIn ~~date~~total, ~~the~~increased ~~Company~~steel ~~has~~costs ~~been successful~~reduced inKV’s ~~passing~~gross ~~through~~margins by approximately ~~55%~~1.8 ofpercentage ~~the~~points ~~added~~in ~~costs~~fiscal to2005 ~~its~~and ~~customers.~~were also ~~KV has seen~~ the ~~steel~~ ~~market~~primary ~~stabilize~~reason for the ~~summer~~decrease ofin ~~2004,~~gross ~~but~~margins ~~early~~in ~~indicators,~~fiscal ~~such~~2004 aswhen ~~the~~compared ~~price of~~to ~~scrap~~fiscal ~~metal, are signaling potential increases in the fall~~2003.

~~The Company~~10 has faced a competitive threat from Asian producers of both utility and precision drawers slides. KV has established solid vendor relationships with three key producers of these slides in Asia and has been utilizing product sourced from these manufacturers to successfully address pricing pressures. In addition, the Company has taken preliminary steps to establish its own manufacturing entity in mainland China. KV will be filing the necessary registrations for the entity and anticipates being in production in the early part of calendar 2005. The total initial investment is anticipated to be no more than $1.0 million. Management believes that utilizing these low-cost production resources will help it remain competitive in the U.S. marketplace and will allow it to improve the profitability of its Office Products OEM market.

~~Domestically,~~While ~~the~~it ~~Company~~is ~~remains~~difficult ~~committed~~ to ~~utilizing~~predict ~~lean~~the ~~manufacturing~~cost ~~initiatives~~of tosteel, ~~minimize~~market ~~its manufacturing~~pricing ~~costs.~~appears Toto ~~date,~~have ~~all~~stabilized ofor slightly ~~the~~declined ~~slides~~during ~~produced~~the inlast ~~Asia~~half ~~have~~of ~~represented incremental~~fiscal ~~sales~~2005. to KV ~~and~~has ~~have~~a ~~not~~contract ~~reduced~~for ~~volume~~most ~~being~~of ~~produced in the U.S. In~~its ~~addition,~~steel KVthat is ~~focusing~~adjusted ~~its~~for ~~domestic~~market ~~production~~pricing ~~capabilities~~ on ~~manufacturing~~a ~~the~~calendar ~~new products,~~quarter ~~which typically represent higher margin items~~basis.

~~The~~During ~~decline~~the insecond ~~gross~~quarter ~~margins~~of ~~when comparing~~ fiscal ~~2003~~2005, ~~to fiscal 2002 reflects the fact that~~ KV ~~has~~recorded aadditional ~~significant~~depreciation ~~investment~~expense inof ~~its manufacturing process~~$304, ~~specifically machinery and~~116 ~~tooling.~~in ~~With~~cost ~~the~~of ~~decrease~~goods insold ~~sales~~related ~~volumes~~to ~~during~~certain ~~fiscal~~equipment ~~2003,~~that it ~~was~~had ~~more~~been ~~difficult~~utilizing tofor backup ~~effectively~~production ~~leverage~~of ~~the~~certain ~~fixed~~precision ~~portion~~drawer ofslide ~~these costs~~products. InThose ~~addition,~~products KVare ~~was~~now ~~negatively~~being ~~impacted~~partially bysourced ~~increases~~from inoverseas ~~raw~~rather ~~steel~~than ~~costs~~manufactured domestically, ~~ranging~~so ~~from~~the ~~10%~~extra capacity tois ~~15%~~no ~~depending~~longer onrequired. ~~the~~The ~~grade of~~useful ~~steel,~~life ~~as a result~~ of the ~~statutory~~equipment ~~steel~~identified ~~tariffs.~~for ~~These tariffs were removed in fiscal~~disposal ~~2004,~~was ~~but~~adjusted asaccordingly ~~noted~~for ~~steel~~depreciation ~~prices still increased during the last six months of fiscal 2004~~purposes.

Domestically, KV remains committed to utilizing lean manufacturing initiatives to minimize its manufacturing costs. Utilizing the concepts of lean manufacturing, we reduced the production square footage requirements in our Grand Rapids facility, which allowed us to relocate our kitchen and bath storage accessory production from the Muncie facility to our main manufacturing site in Grand Rapids. The charges related to this relocation are discussed later in Management’s Discussion and Analysis. We estimate that this consolidation will reduce our manufacturing costs by more than $1.5 million pre-tax annually in future years.

Asian producers of both utility and precision drawer slides continue to pose a competitive threat, particularly from a pricing perspective. In response, KV has established solid vendor relationships with three key producers of these slides in Asia and has been utilizing product sourced from these manufacturers to successfully address pricing pressures. In addition, we have taken preliminary steps to establish our own manufacturing entity in Asia. We have filed the necessary registrations for the entity and anticipate the startup of production during calendar 2006. The total initial investment is anticipated to be less than $1.0 million. Management believes that utilizing these low-cost production resources will help it remain competitive in the U.S. marketplace and will allow it to improve the profitability and competitiveness of its Business Products OEM market.

To date, all of the slides produced in Asia have represented incremental sales to KV and have not reduced volume being produced in the U.S. KV’s domestic production capabilities are being focused on manufacturing the new, more complex products, which typically represent higher margin items.

During fiscal 2005, the Business Products OEM segment has recorded their cost for certain precision slides partially sourced from Asia and partially produced domestically at the Asian cost regardless of where the slides were produced. This resulted in improved profitability for this segment of the business and correspondingly reduced the profitability of the Manufacturing segment. See Note 10 to the Consolidated Financial Statements for a summary of profitability by business segment.

Selling, General and Administrative

Selling, general and administrative expenses, as a percent of net sales, were 1514.82% in fiscal ~~2004~~2005, compared to 1815.68% in fiscal ~~2003~~2004 and 1718.26% in fiscal ~~2002~~2003. In both fiscal 2005 and 2004, KV ~~was~~ has been successful in leveraging its selling and administrative costs as sales ~~volumes grew~~ increased, while still making certain that spending was sufficient to ensure its ongoing ability to develop and introduce new products to the market and have the appropriate advertising materials available to introduce those products. The ~~prior~~fiscal ~~year~~2003 results reflected additional marketing to reintroduce ~~its~~the KV line of kitchen and bath accessories under the Real Solutions for Real Life™ logo, investments in selling efforts to the distribution channel and the cost to convert from independent third party representatives to a direct sales force. Fiscal 2003 also included a pre-tax gain of $0.8 million due to the successful resolution of certain legal matters.

Impairment and Severance Costs

During fiscal 2005, KV recorded a pre-tax impairment charge of $115,088 related to the precision drawer slide equipment discussed above that will be held and used or held for sale.

In January 2005, the Board of Directors approved a restructuring plan to close its Muncie, Indiana facility and relocate its operations into existing available space in the Grand Rapids, Michigan facility. KV recorded pre-tax impairment charges for the write down of the long-lived assets; including real estate and manufacturing equipment located in the Muncie facility, to the lower of their carrying value or their estimated fair values, less the disposition costs. Fair value estimates were determined by KV management, with the assistance of independent appraisers, and were based on estimated proceeds from sale. The fair value of the real estate was determined to be $1.0 million and the equipment was adjusted to a fair value of $220,000. The facility was closed and the relocation of the operations was completed in June 2005.

KV also incurred certain exit costs in connection with the closure of the Muncie facility, including severance and the relocation of certain equipment and inventory. The severance/stay-on bonus costs and the facility exit and other costs were expensed in the Manufacturing division as incurred.

The impairment and exit costs incurred and expensed during fiscal 2005 related to the closure of the Muncie facility totaled approximately $2.3 million pre-tax.

Management believes that the decision to relocate the Muncie operations will lower KV’s overall manufacturing costs. KV will be able to utilize the pool of stable skilled employees at its Grand Rapids manufacturing facility, including the existing manufacturing expertise of its in-house kaizen staff and industrial engineers. In addition, management believes that the consolidation of operations will improve KV’s speed to market on its kitchen and bath accessories, as the new product engineers and test lab are located in Grand Rapids.

Management has estimated the payback period for the closing of the Muncie facility to be approximately a year and a half from the closure date.

During the first quarter of fiscal 2003, we recorded $271,325 (pre-tax) of severance costs, primarily related to the resignation of two of our executive officers in August 2002.

In the fourth quarter of fiscal 2002, we recorded a pre-tax impairment charge of $690,000 in accordance with Financial Accounting Standard No. 144 for certain precision drawer slide tooling. While we continue to produce the drawer slides, the future cash flows associated with the sales of this particular product line were less than the cost of the tooling recorded. In addition, during the fourth quarter of fiscal 2002, we adopted a plan to reduce our salaried workforce in the Grand Rapids, Michigan facility. We recorded $245,000 (pre-tax) in severance costs for this workforce reduction.

Interest Expense and Other Net Expenses

Interest expense was $1.6 million in both fiscal 2005 and 2004, compared to $1.5 million in fiscal year ~~years~~ 2003 ~~and 2002~~. Overall, interest expense has remained relatively stable over the past three ~~fiscal~~ fiscal years. Slight variations reflect the impact of higher or lower balances outstanding on the revolving credit facility and the increase in the short-term interest rates.

Net other ~~expense~~income was $2155,~~202~~391 in fiscal ~~2004,~~2005 compared to net other ~~income~~expense of $~~255~~2,~~854~~202 ~~and~~in fiscal ~~$34,567,~~2004. ~~respectively,~~The inother ~~fiscal~~income ~~2003~~recorded ~~and~~in fiscal ~~2002.~~2005 ~~Fiscal~~reflects ~~2004~~a ~~included~~settlement ~~exchange~~payment ~~rate losses~~received in connection ~~our~~with ~~Canadian~~one ~~entity~~of ~~and~~KV’s ~~royalty income~~patents, ~~received~~along onwith ~~certain~~favorable ~~patent~~exchange ~~settlements,~~rate gains. The ~~that~~net other expense in fiscal 2004 was ~~significantly~~negatively ~~less~~impacted ~~than~~by itexchange ~~had~~rate ~~been~~losses in ~~the~~our Canadian ~~two~~entity. ~~previous~~Net ~~fiscal~~other ~~years.~~income ~~In addition,~~in fiscal 2003 of $255,854 included interest of approximately $95,000 received ~~related to refunds~~ from the Internal Revenue Service for amounts refunded due to the filing of amended returns.

Income Taxes

The effective tax rate for fiscal 2005 was 23.9%. During the third quarter of fiscal 2005, the Company recognized one-time tax benefits of $594,000. Of this total, $372,000 related to the expiration of a certain statutory period and the related reversal of the associated tax contingencies. The remaining $222,000 of tax benefits was related to amended filings for prior year research and development credits. Excluding this benefit, the effective tax rate would have been 38.6%.

The effective tax rate for fiscal 2004 was 32.4%. The Company benefited from the adjustment of certain deferred tax valuation reserves that were deemed to no longer be necessary and from the completion of a Canadian audit of taxes for fiscal years 1998 and 1999. Excluding these items, the effective rate would have been approximately 36.5% for the fiscal year.

During fiscal 2003, KV amended its income tax returns previously filed for fiscal years 1999 and 1997. A change in the federal tax law allowed it to utilize a portion of its capital loss from fiscal years 1999 and 1997 that had been previously disallowed. As a result of this change, KV recognized an income tax benefit of $607,000 in fiscal 2003. Excluding the impact of the amended returns, the effective tax rate would have been 38.0% in fiscal 2003. See Note 10 to the Consolidated Financial Statements for a reconciliation of the effective tax rate.

~~Excluding the~~12 impact of the amended returns, the effective tax rate would have been 38.0% in fiscal 2003. Overall, rates have increased due to the ratio of foreign versus domestic income and expanded state exposure. See Note 10 to the Consolidated Financial Statements for a reconciliation of the effective tax rate.

Net Income

Net income was $3.71 million, or $0.8368 per diluted share, in fiscal ~~2004~~2005 compared towith $23.27 million, or $0.4983 per diluted share, in fiscal ~~2003~~2004 and $32.82 million, or $0.8349 per diluted share, in fiscal ~~2002~~2003. ~~Improved~~Fiscal 2005 included the impairment/restructuring charge associated with the relocation of the wire operations, which was $2.1 million pre-tax or approximately $1.3 million after-tax, or $0.29 per diluted share. Excluding this unusual item, improved sales volumes, along with better leveraging of selling and ~~administrative~~ administrative expenses, were the primary contributors to the net income improvement in both fiscal 2005 and 2004.

Liquidity and Capital Resources

Cash Flows Provided by Operating Activities

Net cash provided by operating activities in fiscal ~~2004~~2005 was $48.91 million compared to $4.59 million in fiscal ~~2003~~2004 and $13.45 million in fiscal ~~2002~~2003. ~~The~~KV ~~Company~~ has ~~invested approximately~~successfully ~~$5.0~~leveraged ~~million~~its account inreceivable ~~inventory~~balance ~~during~~outstanding in fiscal ~~2004~~2005, toalong ~~support~~with ~~the~~minimizing ~~launch of certain new products. Following~~ the ~~initial launch period for these products, management~~increase ~~will~~in beits ~~able~~inventory tolevels ~~reduce~~over ~~this~~the ~~level~~previous ofyear. ~~cash~~Management ~~invested~~believes inthat ~~inventory~~it ~~and~~can ~~accordingly, expects~~further reduce the inventory ~~balances~~levels ~~to be lower~~ in ~~fiscal~~future ~~2005.~~years Inas ~~addition,~~it ~~the~~fully ~~2004~~consolidates ~~increased~~wire ~~sales~~production ~~volume~~into its ~~resulted~~Grand inRapids ~~a $3~~facility.1 ~~million increase in accounts receivable.~~

The lower cash flow from operating activities in fiscal 2003 reflects lower earnings, a significant contribution to our defined benefit pension plans, and higher inventory levels needed to support the launch of the new products and the consignment inventory program. In addition, the payment of the legal settlements during fiscal 2003 also reduced the cash generated by operating activities.

Cash Flows Used for Investing Activities

Cash used for investing activities was $1.2.4 million in fiscal ~~2004,~~2005 compared to $31.52 million in fiscal ~~2003~~2004 and $2.3.5 million in fiscal ~~2002~~2003. The capital expenditures in fiscal ~~2004~~2005 represented ~~investments~~investment in tooling for various new products, including ~~certain~~the ~~new~~Proxi™ ~~custom~~line ~~precision~~of ~~slides~~office organization tools, the SRS/Polaris™ adjustable keyboards and the new undermount slide. ~~There~~In ~~were~~addition, noKV ~~significant~~invested in the new showrooms in the Merchandise Mart and certain key pieces of manufacturing equipment. The capital ~~expenditure~~expenditures ~~commitments~~in atfiscal ~~July~~2004 represented 3investments in tooling for new products, including certain new custom ~~2004~~precision slides. The fiscal 2003 capital expenditures represented investments in tooling for new products, including the Hopper™ and certain precision drawer slides, along ~~with~~ with investment in our web-based customer service application. ~~and~~There ~~our~~were ~~new~~no ~~office~~significant capital ~~showroom~~expenditure commitments at July 2, 2005. The cost to complete the items classified as construction in ~~Chicago~~progress at July 2, 2005 was estimated to be approximately $1.3 million, which will be derived from cash flows from operations or from the revolving credit facility.

Capital spending ~~declined~~ inhas remained at lower levels for fiscal years 2005, 2004 and 2003, due to the fact that we believe ~~that~~ our investments made in earlier years infor the manufacturing process have been sufficient to meet the anticipated capacity needs for at least the next three to five years. We believe that capital expenditures will approximate $43.0 million in fiscal ~~2005~~ 2006, as investments will be focused on bringing new products and product enhancements to our customers., ~~The cost~~along towith ~~complete~~our ~~the~~investment ~~items classified as construction~~ in ~~progress at July 3, 2004 was estimated to be approximately $919,000, which will be derived from cash flows from operations or from the revolving credit facility~~Asia.

Cash Flows Provided by (Used for) Financing Activities

Cash flows utilized for financing activities were $4.9 million in fiscal 2005 compared to $2.4 million in fiscal 2004, and compared to cash provided by financing activities of $1.1 million in fiscal 2003~~, and $7~~.8 ~~million~~Each of ~~cash flow~~the ~~used in~~ fiscal ~~2002.~~years ~~The~~included ~~use of funds in fiscal 2004 reflected~~ the ongoing costs of the ~~Company’s~~ KV dividend program, which ~~were~~approximates ~~only partially offset by~~ $2.58 million ~~of borrowings~~annually. ~~under~~Fiscal ~~the~~2005 ~~revolving~~included ~~credit facility~~$2.0 million ~~The generation of funds~~ in ~~fiscal~~repayments ~~2003 reflects~~on ~~borrowings under~~ the revolving credit facility., ~~The~~while ~~use~~in offiscal ~~funds~~2004 inand fiscal ~~2002~~ ~~reflects~~2003, ~~the~~KV ~~repayment~~borrowed of $3.85 million ofand ~~debt~~$4.0 million, respectively, under the revolving credit ~~facility along~~ ~~with the repurchase of $1~~facility.2 ~~million of our common stock.~~

KV has a stock repurchase program, under which it purchased no shares in fiscal ~~2004~~2005 and fiscal 2004 and 2,280 shares during fiscal 2003 with the price per share ranging from approximately $9 to $11. At July 32, ~~2004~~2005, KV is authorized to repurchase an additional 272,202 shares.

OnKV ~~August~~has ~~28, 2003, the Company entered into~~ a ~~new~~ $35 million ~~revolving credit facility that matures on November 1, 2006. The new~~ three-year ~~revolving credit facility is~~ unsecured ~~and replaces~~revolving ~~a $45 million~~ credit facility that would have ~~expired in 2004. Interest rates on~~matured ~~outstanding loans under the revolving credit facility are either based~~ on ~~the~~November ~~London Interbank Offering Rate (LIBOR)~~1, ~~plus~~2006. aOn ~~negotiated~~May ~~spread~~31, ~~over LIBOR~~2005, orKV atsigned the ~~U.S.~~First ~~prime rate.~~Amendment ~~The new agreement requires the Company~~ to ~~pay a non-use fee on amounts not outstanding under~~ the credit facility ~~based on a ratio of the Company’s adjusted~~ ~~total~~with ~~debt~~Comerica ~~(funded debt less cash and cash equivalents) to EBITDA (earnings before interest, income taxes, depreciation and amortization)~~Bank. InThe ~~addition,~~First KVAmendment ~~has~~extends ~~an interest rate swap agreement, which expires on June 1, 2006, in order to fix~~ the ~~interest rate on $20 million of borrowings under the~~ revolving credit ~~facility.~~maturity ~~The~~date ~~swap agreement fixed~~to ~~the~~November ~~rate~~1, at2008 ~~6.25%~~and ~~plus~~revised ~~our~~certain ~~credit~~of ~~spread on~~ the ~~revolving~~financial ~~credit agreement~~covenants.

~~At July~~13 ~~3, 2004, KV was in compliance with all of the covenants of the revolving credit agreement.~~

~~The~~Interest ~~outstanding~~rates ~~debt~~on atoutstanding ~~July~~loans 3,under ~~2004~~the ~~was~~revolving ~~$24.5~~credit ~~million,~~facility ~~compared~~are toeither ~~$24.1~~based ~~million~~on ~~at fiscal~~the ~~2003~~London ~~year-end.~~Interbank ~~The~~Offering ~~debt~~Rate to(LIBOR), ~~total~~plus ~~capital~~a ~~ratio~~negotiated ~~improved~~spread toover ~~40.0% at July 3~~LIBOR, ~~2004,~~or ~~from~~at the 40U.9%S. atprime ~~June 28, 2003~~rate. ~~Note~~The ~~that~~agreement KVrequires ~~defines~~the ~~total~~Company ~~capital~~to aspay ~~the~~a ~~sum~~non-use offee ~~long-term~~on ~~debt~~amounts not ~~plus~~outstanding ~~total~~under ~~stockholders’~~the ~~equity.~~credit ~~Management~~facility ~~continues~~based toon ~~manage~~a ratio of the Company’s adjusted total debt ~~levels~~(funded indebt anless ~~effort~~cash and cash equivalents) to ~~maintain~~EBITDA ~~its~~(earnings ~~debt~~before interest, toincome ~~total~~taxes, ~~capital~~depreciation inand aamortization). ~~range~~In ofaddition, 35KV tohas ~~45%.~~an interest ~~Anticipated~~rate ~~cash~~swap ~~flows~~agreement, ~~from~~which ~~operations~~expires ~~and~~on ~~available~~June ~~balances~~1, on2006, in order to fix the ~~revolving~~interest ~~credit~~rate ~~line~~on ~~are~~$20 ~~expected~~million toof beborrowings ~~adequate~~under tothe ~~fund~~revolving ~~working~~credit ~~capital,~~facility. ~~capital~~The ~~expenditures,~~swap ~~stock~~agreement fixed ~~repurchases~~the ~~and~~rate ~~dividend~~at ~~payments~~6.25% inplus ~~fiscal~~our ~~2005~~credit spread on the revolving credit agreement.

At July 2, 2005, KV was in compliance with all of the covenants of the revolving credit agreement.

The outstanding debt at July 2, 2005 was $22.5 million, compared to $24.5 million at the end of fiscal 2004. The debt to total capital ratio improved to 37.2% at July 2, 2005, from 40.0% at July 3, 2004. Note that KV defines total capital as the sum of long-term debt plus total stockholders’ equity. Management continues to manage KV’s debt levels in an effort to maintain its debt to total capital in a range of 35 to 45%. Anticipated cash flows from operations and available balances on the revolving credit line are expected to be adequate to fund working capital, capital expenditures, stock repurchases and dividend payments in fiscal 2006.

Legal Contingencies

~~The~~In ~~Canada~~1997, ~~Customs~~KV ~~and~~was ~~Revenue~~sued ~~Agency~~by ~~(“CCRA”)~~a ~~has~~former ~~performed~~employee anseeking ~~audit~~additional ofbenefits ~~the Company’s~~under ~~sales~~an toexecutive retirement ~~its wholly-owned subsidiary, Knape & Vogt Canada~~plan. ~~Preliminary results~~This ~~from~~litigation ahas ~~joint~~been ~~review~~dismissed ~~by the Company~~ and ~~its~~appealed ~~customs~~through ~~broker~~various ~~indicate that the~~courts. ~~Company~~In ~~may~~January ~~be liable for certain customs transactions~~2005, ~~however,~~ the ~~amount~~Sixth ofCircuit ~~any~~Court ~~such potential liability is unknown at this time. The Company is defending its position that Knape & Vogt Canada is the importer~~ of ~~record~~Appeals ~~for~~denied ~~all Knape & Vogt goods shipped into Canada and management believes that based on~~ the ~~information~~plaintiff’s ~~available~~appeal ~~at this time,~~of ~~any liability owed to~~ the ~~CCRA will not have a material adverse effect on the Company’s earnings~~dismissal.

The 13Canada Customs and Revenue Agency (“CCRA”) has performed an audit of KV’s sales to its wholly-owned subsidiary, Knape & Vogt Canada. Preliminary results from a joint review by KV and its customs broker indicate that KV may be liable for certain customs transactions, however, the amount of any such potential liability is unknown at this time. KV is defending its position that Knape & Vogt Canada is the importer of record for all Knape & Vogt goods shipped into Canada and management believes that based on the information available at this time, any liability owed to the CCRA will not have a material adverse effect on KV’s earnings.

~~The~~During ~~Company~~the ~~was~~second ~~sued~~quarter inof ~~the~~fiscal ~~Kent County~~2005, ~~Michigan~~a ~~Circuit~~competitor ~~Court~~filed ~~in 1997 by~~ a ~~former~~suit ~~employee seeking additional benefits under an executive retirement plan. The Circuit Court ruled~~ in ~~favor~~ of the ~~plaintiff,~~U.S. ~~but~~District ~~in June 2002, the Circuit~~ Court ~~was reversed on the~~of ~~Company’s appeal to~~ the ~~Michigan~~Central ~~Court~~District of ~~Appeals.~~California Aalleging ~~delayed request~~that ~~for~~KV ~~leave~~infringes totwo ~~appeal~~of to the ~~Michigan Supreme Court which the plaintiff filed was denied during~~competitor’s ~~the fourth quarter of fiscal 2003~~U. InS. ~~August 2002, the plaintiff filed a lawsuit seeking these retirement benefits in the Federal District Court for the Western District of Michigan~~patents. The ~~Company~~ ~~moved~~competitor tois ~~dismiss~~seeking ~~the~~monetary ~~federal~~damages ~~litigation~~and ~~based~~injunctive ~~on the statute of limitations~~relief. InKV has ~~September~~received ~~2003,~~an ~~the~~opinion ~~Federal~~from ~~District~~its ~~Court~~outside ~~dismissed~~patent ~~the~~counsel ~~litigation.~~that InKV’s ~~October~~products ~~2003,~~do ~~the~~not ~~plaintiff~~infringe ~~appealed~~ the ~~dismissal~~competitor’s ~~to the Sixth Circuit Court of Appeals~~patents. ~~That~~ ~~appeal~~KV ishas ~~pending. Management~~answered ~~believes~~ that ~~any liability~~it ~~resulting~~denies ~~from~~any ~~this~~liability ~~case~~ and will ~~not~~vigorously ~~have~~defend ~~a material adverse affect on~~ the ~~Company’s~~ ~~earnings~~suit.

WeKV ~~are~~is also subject to other legal proceedings and claims, which arise in the ordinary course of business.

In the opinion of management, based on the information presently known and taking into account established accruals of approximately $~~455~~431,000 at July 32, ~~2004~~2005, the ultimate liability for these matters will not have a material adverse effect on ~~our~~KV’s financial position or the results of ~~our~~its operations.

Contractual Obligations

As more fully described in the Notes to the Consolidated Financial Statements, we are obligated to make future payments under certain debt and lease agreements, and are a party to other commitments. The following table summarizes these obligations as of July 32, ~~2004~~2005.

	Payments due by period
	Total	Less than 1year	1-3 years	4-5 years
Long-term debt	$24,500,000	-	$24,500,000	-
Capital lease	59,458	16,988	42,470	-
Operating leases	866,080	134,966	259,053	472,061
Interest rate swap agreement	1,391,133	1,250,000	141,133
Purchase obligations	1,053,600	1,053,600	-	-
Total contractual cash obligations	$27,870,271	$2,455,554	$24,942,656	$472,061

	Payments due by period

	Total	Less than 1 year	1-3 years	4-5 years

Long-term debt	$22,500,000	$ -	$ -	$22,500,000
Capital lease	38,864	16,988	21,876	-
Operating leases	895,305	198,860	496,948	199,497
Interest rate swap agreement	434,763	434,763	-	-
Purchase obligations	4,493,270	4,493,270	-	-

Total contractual cash obligations	$28,362,202	$ 5,143,881	$ 518,824	$22,699,497

In addition, we are a party to certain other agreements that contractually and unconditionally commit us to pay certain amounts in the future. While we believe it is probable that amounts will be spent in the future under such contracts, the amount and/or the timing of such future payments will vary depending on certain provisions of the applicable contract. The agreements to which we are a party that fall into this category include certain royalty agreements under which we pay a royalty based on the sales volume of certain products that we manufacture and sell.

Further, we expect to contribute approximately $600,000 to our defined benefit retirement plans in fiscal 2006. Cash contributions beyond fiscal 2006 are not included, as the amounts are uncertain.

Inflation

Inflation, excluding the increase in steel discussed in the Gross Margin section of this report, has not had a significant effect on KV over the past three years, nor is it expected to have a significant effect in the foreseeable future. KV continuously attempts to minimize the effect of inflation through cost reductions and improved productivity.

Recently Issued Accounting Standards

In ~~January~~December 2004, the Financial Accounting Standards Board (“FASB”) issued ~~FASB~~a ~~Staff~~revision ~~Position~~of SFAS No. 122(~~“FSP”~~R), ~~FAS 106~~Share-2Based Payment, ~~“Accounting~~which ~~and~~supersedes ~~Disclosure~~APB ~~Requirements~~Opinion No. ~~Related~~25. toThis ~~the~~statement ~~Medicare~~focuses ~~Prescription~~primarily ~~Drug,~~on ~~Improvement~~transactions ~~and~~in ~~Modernization~~which ~~Act~~an ofentity obtains employee ~~2003".~~services ~~This~~in ~~statement~~exchange ~~permits~~for ashare-based ~~sponsor~~payments. ofUnder aSFAS ~~postretirement~~No. ~~health~~123(R), ~~care~~a ~~plan~~public ~~that~~company ~~provides~~generally ais ~~prescription~~required ~~drug~~to ~~benefit~~measure tothe ~~make~~cost aof ~~one-time~~employee ~~election~~services toreceived ~~defer~~in ~~accounting~~exchange for an ~~the~~award ~~effects~~ of ~~the~~equity ~~Medicare~~instruments ~~Prescription~~based ~~Drug,~~on ~~Improvement~~the ~~and~~grant-date ~~Modernization~~fair ~~Act~~value of ~~2003 (‘~~the ~~Act”).~~award, ~~The~~with ~~Act,~~such cost ~~signed~~recognized ~~into~~over ~~law~~the inapplicable ~~December~~vesting ~~2003~~period. In addition, ~~introduces~~SFAS aNo. 123(R) requires ~~prescription~~an ~~drug~~entity ~~benefit~~to ~~under~~provide ~~Medicare~~certain ~~(“Medicare~~disclosures ~~part~~in ~~D”)~~order ~~and~~to aassist ~~federal subsidy~~in tounderstanding ~~sponsors~~the nature of share-based ~~retiree~~payment ~~health~~transactions ~~care~~and ~~benefit~~the ~~plans~~effects ~~that~~of ~~provide~~those atransactions ~~benefit~~on ~~that~~the ~~is at~~financial ~~least~~statements. ~~actuarially~~The ~~equivalent~~provisions toof ~~Medicare~~SFAS ~~Part D~~No. ~~Given~~123(R) ~~the~~require ~~cap~~application onas ~~postretirement~~of ~~benefits~~the beginning of ~~introduced~~the infirst fiscal ~~2002~~year that begins after June 15, 2005. As such, the ~~Act~~Company is ~~not~~required ~~expected~~ to adopt ~~have~~the aprovisions ~~material~~of ~~impact~~SFAS onNo. ~~the Company’s~~123(R) ~~accumulated~~at ~~postretirement~~the ~~benefit~~beginning ~~obligation~~of orfiscal ~~the~~year ~~net~~2006. ~~postretirement~~The Company ~~benefit~~has ~~costs,~~not ~~however,~~granted such awards over the ~~Company~~past ~~has~~three ~~elected~~years. toIf ~~defer~~in the ~~adoption~~future, ofthe ~~FSP~~Company should ~~FAS~~grant ~~106-2 until~~any ~~the~~such ~~specific~~awards, ~~authoritative~~it ~~accounting~~will ~~guidance~~account for ~~the~~such ~~federal~~awards ~~subsidy~~in isaccordance ~~issued~~with SFAS No. 123(R).

In 14December 2004, the FASB issued Staff Position (“FSP”) No. 109-1, Application of FASB Statement No. 109, Accounting for Income Taxes for the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act (“the Act”) of 2004. This had no impact on the Company for fiscal 2005. The Company has not completed its assessment of the impact the Act will have on its financial statements in fiscal 2006.

~~In December~~15 2003, the FASB issued a revision of Statement of Financial Accounting Standards (“SFAS”) No. 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to improve financial disclosures for defined benefit plans. The revised SFAS requires that companies provide more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. The Company is now required to provide additional disclosures, including, but not limited to, a breakdown of plan assets by category, a description of investment policies and strategies and target allocation percentages for these asset categories. The Company adopted the revised disclosure provisions in the third quarter of fiscal 2004.

InFASB ~~April~~Staff ~~2003,~~Position ~~the~~(“FSP”) ~~FASB issued SFAS~~ No. ~~149~~ 109-2, ~~“Amendment~~Accounting ofand ~~Statement~~Disclosure ~~133~~Guidance onfor the ~~Derivative~~Foreign ~~Instruments~~Earnings ~~and~~Repatriation ~~Hedging~~Provision ~~Activities.”~~within ~~SFAS~~the ~~149~~American ~~amends~~Jobs ~~and~~Creation ~~clarifies~~Act of 2004 ~~financial~~(“FSP ~~accounting~~109-2”), ~~and~~provides ~~reporting~~guidance ~~for~~under ~~derivative~~FASB ~~instruments~~Statement No. 109, ~~including~~Accounting ~~certain~~for ~~derivative~~Income ~~instruments~~Taxes, ~~embedded~~with inrespect ~~other~~to ~~contracts~~recording ~~and~~the ~~for~~potential ~~hedging~~impact ~~activities~~of ~~under~~the ~~SFAS~~repatriation ~~No. 133,~~provisions of the American Jobs Creation Act of 2004 (the “~~Accounting~~Jobs ~~for~~Act”) ~~Derivative~~on enterprises’ ~~Instruments~~income tax expense and ~~Hedging~~deferred ~~Activities~~tax liability.” ItThe Jobs Act was enacted on October 22, 2004. FSP 109-2 states that an enterprise is ~~effective~~allowed ~~for~~time ~~contracts~~beyond ~~entered~~the financial ~~into~~reporting orperiod ~~modified~~of ~~after~~enactment ~~June 30,~~to ~~2003,~~evaluate ~~except~~the aseffect of the Jobs Act on its plan ~~stated~~for ~~within~~reinvestment or repatriation of foreign earnings for the ~~statement,~~purposes ~~and~~of ~~should~~applying beFASB Statement ~~applied~~No. ~~prospectively~~109. ~~This~~The ~~statement~~Company ~~had~~has ~~no material~~not ~~effect~~completed onan evaluation of the ~~consolidated~~impact ~~financial~~of repatriating ~~statements~~funds from its Canadian subsidiary.

WeIn ~~adopted~~November 2004, the FASB issued SFAS No. ~~142~~151, inInventory Cost. This Statement amends the ~~first~~guidance ~~quarter~~in ofAccounting ~~fiscal~~Research ~~2003~~Bulletin No. ~~Application~~43, ofChapter ~~the~~4, Inventory Pricing, ~~nonamortization~~to ~~provisions~~clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (scrap). SFAS No. ~~142~~151 ~~resulted~~requires inthat anthose ~~increase~~items inbe ~~net~~recognized as ~~earnings~~current-period charges. In addition, this Statement requires that the allocation of ~~approximately~~fixed ~~$237,000~~production ~~($0~~overhead to the costs of conversion be based on the normal capacity of the production facilities.05 ~~per~~The ~~diluted~~provisions ~~share)~~of inSFAS ~~both~~No. 151 are effective for inventory costs incurred in fiscal ~~2004~~years ~~and~~beginning ~~2003~~after June 15, 2005. ~~We performed~~As such, the Company is required ~~impairment~~to ~~tests~~adopt ofthese ~~goodwill~~provisions asat of the ~~first~~beginning ~~day~~ of ~~each~~ fiscal year ~~and~~2006. ~~determined~~The Company believes that the ~~recorded~~impact ~~goodwill~~of ~~was~~SFAS ~~not~~No. ~~impaired~~151 will be immaterial to its consolidated statements.

~~Forward-Looking~~16 ~~Statements~~

This reportITEM contains7A certain—QUANTITATIVE forward-lookingAND statements,QUALITATIVE whichDISCLOSURES involveABOUT risksMARKET and uncertainties. When used in this report, the words “believe,” “anticipate,” “think,” “intend,” “goal,” “forecast,” “expect” and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning new product introductions, future revenue growth, gross margin improvement and the impact of steel price increases. Such statements are subject to certain risks and uncertainties, which could 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. RISK

~~Risk~~KV ~~Factors~~is ~~include,~~exposed ~~but~~to ~~are~~market ~~not limited to~~risks, ~~uncertainties~~which ~~relating~~include to changes in ~~demand~~the ~~for~~Canadian dollar foreign currency ~~our~~exchange ~~products;~~rate as measured against the ~~cost~~U.S. dollar and ~~availability~~changes ofin ~~materials,~~U.S. ~~including~~interest ~~but~~rates. ~~not~~KV holds ~~limited~~a toderivative ~~steel; changes~~instrument in ~~trading~~the ~~policies~~form orof ~~import~~an ~~and~~interest ~~export~~rate ~~regulations;~~swap, ~~fluctuation~~which ofis ~~foreign~~viewed ~~currency~~as a ~~exchange~~risk ~~rates;~~management ~~changes~~tool inand ~~duties,~~is ~~tariffs, quotas~~not used for trading or ~~applicable~~speculative ~~assessments;~~purposes. The intent of the ~~ability~~interest torate ~~secure~~swap ~~and~~is ~~protect~~to ~~patents~~effectively ~~and~~fix ~~other intellectual~~the ~~property;~~interest ~~foreign~~rate ~~competition;~~on ~~loss~~part of ~~significant~~the ~~customers;~~borrowings under ~~and~~KV’s ~~changes in~~variable ~~the~~rate ~~general~~revolving ~~U.S.~~credit ~~economy~~agreement. ~~These~~The ~~matters~~derivative ~~are~~was ~~representative~~recognized ofas a liability on the ~~Risk~~balance ~~Factors~~sheet ~~that could~~at ~~cause~~its afair ~~difference~~value ~~between~~of an$434,763 ~~ultimate~~at ~~actual~~July ~~outcome~~2, 2005 and $1,391,133 aat ~~forward-looking statement~~July 3, 2004.

A 15discussion of KV’s accounting policies for derivative financial instruments is included in Note 2 of the Notes to Consolidated Financial Statements. Additional information relating to financial instruments and debt is included in Notes 6 and 7.

~~ITEM~~ The following 7Atable —provides ~~QUANTITATIVE~~information ~~AND~~on ~~QUALITATIVE~~KV’s ~~DISCLOSURES~~fixed ~~ABOUT~~maturity ~~MARKET~~investments ~~RISK~~as of July 2, 2005 and July 3, 2004 that are sensitive to changes in interest rates. The table also presents the corresponding interest rate swap on this debt. Since the interest rate swap effectively fixes the interest rate on the notional amount of debt, changes in interest rates have no current effect on the interest expense recorded by KV on the portion of the debt covered by the interest rate swap.

The Company is exposed to market risks, which include changes in the Canadian dollar foreign currency exchange rate as measured against the U.S. dollar and changes in U.S. interest rates. The Company holds a derivative instrument in the form of an interest rate swap, which is viewed as a risk management tool and is not used for trading or speculative purposes. The intent of the interest rate swap is to effectively fix the interest rate on part of the borrowings under the Company’s variable rate revolving credit agreement. The derivative was recognized as a liability on the balance sheet at its fair value of $1,391,133 at July 3, 2004 and $2,554,980 at June 28, 2003.

Fiscal 2005:
Liability	Amount	Maturity Date
Variable rate revolving credit agreement	$22,500,000	November 1, 2008
First $20,000,000 at an interest rate of 3.3375% (90 day LIBOR)
plus weighted average credit spread of .85%
Next $2,500,000 at an interest rate of 3.34% (1 month LIBOR)
plus weighted average credit spread of .85%;
Amounts in excess of $22,500,000 at the prime rate,
Currently 6.25%

Interest Rate Swaps
Notional amount	$20,000,000	June 1, 2006
Pay fixed/Receive variable
At 3 Month LIBOR - 3.33%
Pay fixed interest rate - 6.25%
Fair value - liability	$ 434,763

Fiscal 2004:
Liability
Variable rate revolving credit agreement	$24,500,000	November 1, 2006
First $20,000,000 at an interest rate of 1.315% (90 day LIBOR)
plus weighted average credit spread of .85%
Next $4,500,000 at an interest rate of 1.369% (1 month LIBOR)
plus weighted average credit spread of .85%;
Amounts in excess of $24,500,000 at the prime rate,
Currently 4.0%

Interest Rate Swaps
Notional amount	$20,000,000	June 1, 2006
Pay fixed/Receive variable
At 3 Month LIBOR - 1.31%
Pay fixed interest rate - 6.25%
Fair value - liability	$ 1,391,133

AKV ~~discussion~~has ofa ~~the~~sales ~~Company’s~~office ~~accounting~~located ~~policies~~in ~~for~~Canada. ~~derivative~~Sales ~~financial~~are ~~instruments~~typically denominated in Canadian dollars, isthereby ~~included~~creating exposures to changes in ~~Note~~exchange 2rates. ofThe changes in the ~~Notes~~Canadian/U.S. exchange torate ~~Consolidated~~may ~~Financial~~positively ~~Statements.~~or ~~Additional~~negatively affect KV’s sales, gross profits and ~~information~~retained ~~relating~~earnings. KV attempts to ~~financial~~minimize ~~instruments~~currency ~~and~~exposure ~~debt~~risk isthrough ~~included~~working incapital management. ~~Notes~~KV 6does not hedge its exposure to translation gains and 7losses relating to foreign currency net asset exposures.

~~The following~~17 table provides information on the Company’s fixed maturity investments as of July 3, 2004 and June 28, 2003 that are sensitive to changes in interest rates. The table also presents the corresponding interest rate swap on this debt. Since the interest rate swap effectively fixes the interest rate on the notional amount of debt, changes in interest rates have no current effect on the interest expense recorded by the Company on the portion of the debt covered by the interest rate swap.

Fiscal 2004:Liability	Amount	Maturity Date
Variable rate revolving credit
agreement	$24,500,000	November 1, 2006
First $20,000,000 at an interest rate of 1.315%
plus weighted average credit spread of .85%
Next $4,500,000 at an interest rate of
1.369% (1 month LIBOR)
plus weighted average
credit spread of .85%;
Amounts in excess of $24,500,000
at the prime rate, currently 4.0%
Interest Rate Swaps
Notional amount	$20,000,000	June 1, 2006
Pay fixed/Receive variable
At 3 month LIBOR - 1.31%
Pay fixed interest rate - 6.25%
Fair value - liability	$1,391,133
Fiscal 2003:
Liability
Variable rate revolving credit
agreement	$24,000,000	November 1, 2004
First $20,000,000 at an interest rate of 1.28%
plus weighted average credit spread of .75%
Amounts in excess of $20,000,000 had an interest rate
ranging from 2.00% to 2.22%
Interest Rate Swaps
Notional amount	$20,000,000	June 1, 2006
Pay fixed/Receive variable
at 3 month LIBOR - 1.28%
Pay fixed interest rate - 6.25%
Fair value - liability	$2,554,980

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 profits and retained earnings. The Company attempts to minimize currency exposure risk through working capital management. The Company does not hedge its exposure to translation gains and losses relating to foreign currency net asset exposures.

ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Immediately following are the consolidated balance sheets of ~~the~~KV ~~Company~~ and its subsidiaries as of July 32, 2005 ~~2004~~ and ~~June~~July 283, ~~2003~~2004, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended July 32, ~~2004~~2005, the notes thereto, and the report of independent registered public accounting firm.

18Knape & Vogt Manufacturing Company and SubsidiariesConsolidated Statements of Operations

Knape & Vogt Manufacturing Company and Subsidiaries Consolidated Statements of Operations
Year Ended	July 2, 2005		July 3, 2004		June 28, 2003
Year Ended	July 3, 2004		June 28, 2003		June 29, 2002
Net Sales	$ 157,365,965		$ 148,940,674		$ 124,874,939
Net Sales	$148,977,742		$ 124,920,476		$ 131,481,631
Cost of Sales	127,247,898		118,212,331		97,592,773
Cost of Sales	118,249,399		97,638,310		100,648,746
Gross Profit	30,118,067		30,728,343		27,282,166
Gross Profit	30,728,343		27,282,166		30,832,885
Expenses
Selling	1917,~~312~~846,~~542~~181		1719,~~961~~312,~~595~~542		17,~~626~~961,~~073~~595
Administrative and general	4,~~256~~505,~~199~~515		54,~~229~~256,~~120~~199		45,~~909~~229,~~465~~120
Other	-		271,325		935,000
Impairment and restructure	2,270,021		-		271,325
Total Expenses	2324,~~568~~621,~~741~~717		23,~~462~~568,~~040~~741		23,~~470~~462,~~538~~040
Operating Income	75,~~159~~496,~~602~~350		37,~~820~~159,~~126~~602		73,~~362~~820,~~347~~126
Other Expenses (Income)
Interest	1,~~632~~605,~~201~~340		1,~~458~~632,~~580~~201		1,~~484~~458,~~868~~580
Other, net	2(155,~~202~~391	)	~~(255~~2,~~854~~202	)	(34255,~~567~~854	)
Total Other Expenses	1,~~634~~449,~~403~~949		1,~~202~~634,~~726~~403		1,~~450~~202,~~301~~726
Income Before Income Taxes	54,~~525~~046,~~199~~401		25,~~617~~525,~~400~~199		52,~~912~~617,~~046~~400
Income Taxes	1966,~~790,267~~129		~~386~~1,~~501~~790,267		2386,~~123,000~~501
Net Income	$ 3,~~734~~080,~~932~~272		$ 23,~~230~~734,~~899~~932		$ 32,~~789~~230,~~046~~899
Basic and Diluted Earnings Per Share	$ 0.8368		$ 0.4983		$ 0.8349
Weighted-Average Shares Outstanding	4,~~516~~514,~~245~~243		4,516,~~706~~245		4,~~569~~516,~~942~~706
Dividends Per Share
Common stock	$ .66		$ .66		$ .66
Class B common stock	$ .60		$ .60		$ .60

See accompanying notes to consolidated financial statements.

1918

Knape & Vogt Manufacturing Company and Subsidiaries
Consolidated Balance Sheets

	July 3, 2004	June 28, 2003
	July 2, 2005	July 3, 2004
Assets
Current Assets
Cash and equivalents	$ 56,~~278~~349,~~869~~702	$ 35,~~846~~278,~~613~~869
Accounts receivable, less allowances of $673,000 and $803,000,
Accounts receivable, less allowances of $533,000 and $673,000,
respectively	19,~~959~~944,~~442~~781	1619,~~820~~959,~~600~~442
Inventories, including inventory on consignment at customer
locations of $3,292,297 and $3,610,427, respectively	23,955,271	18,979,056
locations of $3,486,000 and $3,292,000 respectively	24,362,073	23,955,271
Prepaid expenses and other current assets	~~950~~934,~~911~~711	~~731~~950,~~749~~911
Total Current Assets	50,144,493	40,378,018
Assets held for sale	-	1,281,213
Total Current Assets	52,872,480	50,144,493
Property and Equipment
Land and improvements	1,~~175~~081,~~614~~531	1,175,614
Buildings	1614,~~589~~132,~~054~~309	16,~~630~~589,~~343~~054
Machinery and equipment	6664,~~043~~748,~~000~~607	6566,~~368~~043,~~888~~000
Construction in progress	~~407~~1,~~863~~311,568	~~485~~407,~~520~~863
	84,215,531	83,660,365
	81,274,015	84,215,531
Less accumulated depreciation	5559,~~531~~153,~~817~~091	4955,~~671~~531,~~256~~817
Net Property and Equipment	2822,~~683~~120,~~714~~924	3328,~~989~~683,~~109~~714
Goodwill, net of accumulated amortization of $1,099,000	4,772,837	4,772,837
Prepaid Pension Cost	12,~~088~~194,~~937~~574	12,~~503~~088,~~491~~937
Other Assets	~~561~~427,~~345~~823	~~705~~561,~~374~~345
	$96,251,326	$92,348,829
	$92,388,638	$96,251,326

See accompanying notes to consolidated financial statements.

2019

Knape & Vogt Manufacturing Company and Subsidiaries
Consolidated Balance Sheets

	July 3, 2004		June 28, 2003
	July 2, 2005		July 3, 2004
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$ 11,~~299~~085,~~675~~322		$ 1011,~~746~~299,~~892~~675
Accruals:
Income taxes	1978,~~829,986~~801		~~753~~1,~~088~~829,986
Accrued compensation	32,~~005~~781,~~614~~447		23,~~338~~005,~~927~~614
Accrued customer rebates and cooperative advertising	12,~~975~~149,~~397~~025		1,~~289~~975,~~946~~397
Other	4,~~695~~638,~~036~~464		4,~~791~~695,~~896~~036
Total Current Liabilities	2221,~~805~~633,~~708~~059		1922,~~920~~805,~~749~~708
Other Retirement Benefits	4,~~753~~930,~~797~~626		54,~~393~~753,~~633~~797
Long-Term Debt and Capital Leases	2422,~~538~~524,~~864~~129		24,~~052~~538,~~605~~864
Deferred Income Taxes	54,~~896~~707,000		5,~~665~~896,000
Interest Rate Swap Agreement and Other Long-Term Liabilities	1485,~~432,739~~947		21,~~554~~432,~~980~~739
Total Liabilities	5954,~~427~~280,~~108~~761		5759,~~586~~427,~~967~~108
Stockholders' Equity
Stock:
Common, $2 par - 6,000,000 shares authorized; 2,331,860 and 2,293,433
Common, $2 par - 6,000,000 shares authorized; 2,482,663 and
issued and outstanding	4,663,720		4,586,866
2,331,860 issued and outstanding	4,965,326		4,663,720
Class B common, $2 par - 4,000,000 shares authorized; 2,184,489 and
Class B common, $2 par - 4,000,000 shares authorized; 2,027,842
2,222,202 issued and outstanding	4,368,978		4,444,404
and 2,184,489 issued and outstanding	4,055,684		4,368,978
Preferred - 2,000,000 shares authorized and unissued	-		-
Additional paid-in capital	7,~~544~~471,~~749~~697		7,~~538~~544,~~684~~749
Unearned stock grant	~~(94,500~~-	)	(94,500	)
Accumulated other comprehensive loss:
Derivative instrument	(~~904~~282,~~133~~763	)	(1904,~~660,980~~133	)
Minimum SERP adjustment	(1,~~047~~184,~~874~~366	)	(1,~~255~~047,~~168~~874	)
Minimum pension adjustment	~~(250,015~~-	)	(~~384~~250,~~677~~015	)
Foreign currency translation adjustment	~~396~~708,~~156~~658		~~325~~396,~~836~~156
Total accumulated other comprehensive loss	(1758,~~805,866~~471	)	(21,~~974~~805,~~989~~866	)
Retained earnings	22,~~147~~373,~~137~~641		2122,~~261~~147,~~397~~137
Total Stockholders' Equity	3638,~~824~~107,~~218~~877		3436,~~761~~824,~~862~~218
	$ 96,251,326		$ 92,348,829
	$ 92,388,638		$ 96,251,326

See accompanying notes to consolidated financial statements.

2120

Knape & Vogt Manufacturing Company and SubsidiariesConsolidatedSubsidiaries Consolidated Statements of Stockholders’ Equity

	Common stock		Additionalpaid-incapital		Restrictedstockgrants		Accumulatedothercomprehensiveincome (loss)		Retainedearnings		Total
		CommonStock			Additionalpaid-incapital			Restrictedstockgrants			Accumulatedothercomprehensiveincome (loss)			Retainedearnings			Total
Balance, June 30, 2001	$ 9,235,682		$ 8,502,727		$(94,500	)	$(1,476,092	)	$ 20,964,881		$ 37,132,698
Balance, June 29, 2002		$	9,034,304		$	7,550,062		$	(94,500	)	$	(2,154,460	)	$	21,877,814		$	36,213,220
Comprehensive income:
Net income	-		-		-	-	-		~~3,789,046~~-		~~3,789,046~~	-			2,230,899			2,230,899
Foreign currency translation adjustment	-		-		-		930		-
Foreign currency translation			-			-			-			411,635			-
Minimum SERP adjustment, net of
adjustment
deferred taxes of $4,000	-		-		-		8,559		-
Minimum SERP adjustment, net of
Loss on derivative instrument, net
deferred taxes of $152,000			-			-			-			(227,665	)		-
of Deferred taxes of $371,000	-		-		-		(687,857	)	-
Minimum pension adjustment, net of
Other comprehensive loss	-		-		-		(678,368	)	-		(678,368	)
deferred taxes of $302,000			-			-			-			(384,677	)		-
Comprehensive income	-		-		-		-		-		3,110,678
Loss on derivative instrument, net
Cash dividends	-		-		-		-		(2,876,113	)	(2,876,113	)
of deferred taxes of $333,000			-			-			-			(619,822	)		-
Restricted stock issued (817 shares)	1,634		8,979		-		-		-		10,613
Other comprehensive loss			-			-			-			(820,529	)		-			(820,529	)
Repurchase and retirement of
Comprehensive income			-			-			-			-			-			1,410,370
shares of common stock (101,506
Cash dividends			-			-			-			-			(2,847,316	)		(2,847,316	)
shares)	(203,012	)	(961,644	)	-		-		-		(1,164,656	)
Restricted stock forfeited (50 shares)			(100	)		(601	)		-			-			-			(701	)
Balance, June 29, 2002	9,034,304		7,550,062		(94,500	)	(2,154,460	)	21,877,814		36,213,220
Restricted stock issued (813 shares)			1,626			8,612			-			-			-			10,238
Comprehensive income:
Repurchase and retirement of shares of
Net income	-		-		-		-		2,230,899		2,230,899
common stock (2,280 shares)			(4,560	)		(19,389	)		-			-			-			(23,949	)
Foreign currency translation adjustment	-		-		-		411,635		-
Balance, June 28, 2003			9,031,270			7,538,684			(94,500	)		(2,974,989	)		21,261,397			34,761,862
Minimum SERP adjustment, net of
Comprehensive income:
deferred taxes of $152,000	-		-		-		(227,665	)	-
Net income			-			-			-			-			3,734,932			3,734,932
Minimum pension adjustment, net of
Foreign currency translation			-			-			-			70,320			-
deferred taxes of $302,000	-		-		-		(384,677	)	-
adjustment
Loss on derivative instrument, net
Minimum SERP adjustment, net of
of deferred taxes of $333,000	-		-		-		(619,822	)	-
deferred taxes of $103,000			-			-			-			207,294			-
Other comprehensive loss	-		-		-		(820,529	)	-		(820,529	)
Minimum pension adjustment, net of
Comprehensive income	-		-		-		-		-		1,410,370
deferred taxes of $157,000			-			-			-			134,662			-
Cash dividends	-		-		-		-		(2,847,316	)	(2,847,316	)
Gain on derivative instrument, net
Restricted stock forfeited (50 shares)	(100	)	(601	)	-		-		-		(701	)
of deferred taxes of $407,000			-			-			-			756,847			-
Restricted stock issued (813 shares)	1,626		8,612		-		-		-		10,238
Other comprehensive income			-			-			-			1,169,123			-			1,169,123
Repurchase and retirement of
Comprehensive income			-			-			-			-			-			4,904,055
shares of common stock (2,280	(4,560	)	(19,389	)	-		-		-		(23,949	)
Cash dividends			-			-			-			-			(2,849,192	)		(2,849,192	)
shares)
Restricted stock issued (714 shares)			1,428			6,065			-			-			-			7,493
Balance, June 28, 2003	9,031,270		7,538,684		(94,500	)	(2,974,989	)	21,261,397		34,761,862
Balance, July 3, 2004			9,032,698			7,544,749			(94,500	)		(1,805,866	)		22,147,137			36,824,218
Comprehensive income:
Net income	-		-		-	-	-		~~3,734,932~~-		~~3,734,932~~	-			3,080,272			3,080,272
Foreign currency translation adjustment	-		-		-		70,320		-
Foreign currency translation			-			-			-			312,502			-
Minimum SERP adjustment, net of
adjustment
deferred taxes of $103,000	-		-		-		207,294		-
Minimum SERP adjustment, net of
Minimum pension adjustment, net of
deferred taxes of $76,000			-			-			-			(136,492	)		-
deferred taxes of $157,000	-		-		-		134,662		-
Minimum pension adjustment, net of
Gain on derivative instrument, net
deferred taxes of $157,000			-			-			-			250,015			-
of deferred taxes of $407,000	-		-		-		756,847		-
Gain on derivative instrument, net
Other comprehensive loss	-		-		-		1,169,123		-		1,169,123
of deferred taxes of $335,000			-			-			-			621,370			-
Comprehensive income	-		-		-		-		-		4,904,055
Other comprehensive income			-			-			-			1,047,395			-			1,047,395
Cash dividends	-		-		-		-		(2,849,192	)	(2,849,192	)
Comprehensive income			-			-			-			-			-			4,127,667
Restricted stock issued (714 shares)	1,428		6,065		-		-		-		7,493
Cash dividends			-			-			-			-			(2,853,768	)		(2,853,768	)
Balance, July 3, 2004	$ 9,032,698		$ 7,544,749		$(94,500	)	$(1,805,866	)	$ 22,147,137		$ 36,824,218
Restricted stock forfeited (6,600 shares)			(13,200	)		(81,300	)		94,500			-			-			-
Restricted stock issued (756 shares)			1,512			8,248			-			-			-			9,760
Balance, July 2, 2005		$	9,021,010		$	7,471,697		$	0		$	(758,471	)	$	22,373,641		$	38,107,877

See accompanying notes to consolidated financial statements.

2221

Knape & Vogt Manufacturing Company and Subsidiaries
Consolidated Statements of Cash Flows

Year Ended	July 32,~~2004~~ 2005		~~June~~July 283,~~2003~~ 2004		June 2928,~~2002~~ 2003
Operating Activities
Net income	$ 3,~~734~~080,~~932~~272		$ 23,~~230~~734,~~899~~932		$ 32,~~789~~230,~~046~~899
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation of property and equipment	65,~~306~~904,~~890~~792		6,~~605~~306,~~516~~890		6,~~260~~605,~~983~~516
Amortization of other assets	9364,~~468~~730		3693,~~575~~468		~~432~~36,~~310~~575
Deferred income taxes	(~~370~~1,~~106~~498,627	)	~~480~~(370,~~000~~106	)	1480,~~153,~~000
Increase (decrease) in supplemental retirement benefits	~~(23~~53,~~709~~334	)	13(23,~~284~~709	)	(813,~~311~~284	)
(Increase) decrease in prepaid pension cost	~~414~~233,~~554~~112		(4414,~~276,691~~554	)	(24,~~519~~276,~~499~~691	)
Loss on disposal of property and equipment	1,450		136,746		305,279
Impairment loss	1,778,447		-		-
Other	42,098		50,000		935,000
Loss (gain) on disposal of property and equipment	(9,111	)	1,450		136,746
Other	12,526		42,098		50,000
Changes in operating assets and liabilities:
Accounts receivable	(3137,~~107,525~~080	)	~~439~~(3,~~638~~107,525	)	1439,~~030,341~~638
Inventories	(4406,~~976,215~~802	)	(54,~~816~~976,~~911~~215	)	1(5,~~127~~816,~~951~~911	)
Other current assets	~~(218~~18,~~626~~504	)	~~898~~(218,~~337~~626	)	~~141~~898,~~012~~337
Accounts payable	~~692~~(218,~~252~~952	)	~~943~~692,~~130~~252		~~(495~~943,~~865~~130	)
Accruals	2(1,~~319~~029,~~201~~616	)	(12,~~229~~319,~~205~~201	)	(1,~~203~~229,~~046~~205	)
Net cash provided by operating activities	48,~~908~~119,~~664~~689		~~511~~4,~~318~~908,664		13511,~~354,293~~318
Investing Activities
Additions to property and equipment	(12,~~199~~416,~~398~~547	)	(31,~~707~~199,~~536~~398	)	(3,~~935~~707,~~470~~536	)
Proceeds from sales of property and equipment	5315,~~975~~453		~~243~~53,~~527~~975		1243,~~784,925~~527
Other, net	(2847,~~114~~351	)	(6228,~~282~~114	)	(~~112~~62,~~532~~282	)
Net cash used for investing activities	(12,~~173~~448,~~537~~445	)	(31,~~526~~173,~~291~~537	)	(23,~~263~~526,~~077~~291	)
Financing Activities
Dividends paid	(2,~~849~~853,~~192~~768	)	(2,~~847~~849,~~316~~192	)	(2,~~876~~847,~~113~~316	)
Principal payments on capital lease obligations	(1314,~~741~~734	)	(613,~~080~~741	)	-(6,080	)
Borrowings/(repayments) on long-term debt	~~500~~(2,000,000	)	4500,000~~,000~~		(34,~~750~~000,000	)
Repurchase and retirement of common stock	-		~~(23,949~~-	)	(123,~~164,656~~949	)
Net cash provided by (used for) financing activities	(24,~~362~~868,~~933~~502	)	1(2,~~122~~362,~~655~~933	)	(71,~~790~~122,~~769~~655	)
Effect of Exchange Rate Changes on Cash	60268,~~062~~091		~~308~~60,~~388~~062		16308,~~156~~388
Net Increase (Decrease) in Cash and Equivalents	1,~~432~~070,~~256~~833		(1,~~583~~432,~~930~~256	)	3(1,~~316~~583,~~603~~930	)
Cash and equivalents, beginning of year	35,~~846~~278,~~613~~869		53,~~430~~846,~~543~~613		25,~~113~~430,~~940~~543
Cash and equivalents, end of year	$ 56,~~278~~349,~~869~~702		$ 35,~~846~~278,~~613~~869		$ 53,~~430~~846,~~543~~613
Supplemental Information:
Interest paid	$ 1,~~628~~608,~~923~~859		$ 1,~~448~~628,~~663~~923		$ 1,~~512~~448,~~746~~663
Income taxes paid	~~934~~4,~~411~~704,130		~~316~~934,~~000~~411		2316,~~015,~~000

See accompanying notes to consolidated financial statements.

2322

Knape & Vogt Manufacturing Company and Subsidiaries

Notes to Consolidated Financial Statements

1. Nature of Operations Knape & Vogt Manufacturing Company and its wholly owned subsidiaries (the Company) design, manufacture and distribute kitchen and bath storage solutions and office products for original equipment manufacturers, specialty distributors, hardware chains and major home centers. During fiscal 2004, the Company further defined its operating segments by the major markets that it serves. Products are sold worldwide through the Company’s own sales personnel and through independent sales representatives. The Company is headquartered in Grand Rapids, Michigan.

2. Summary of Significant Accounting Policies Principles of Consolidation

The consolidated financial statements include the accounts of Knape & Vogt Manufacturing Company and its wholly owned domestic and foreign subsidiaries. All material intercompany balances, transactions and stockholdings have been eliminated in consolidation.

The Company utilizes a 52- or 53-week fiscal year, which ends on the Saturday nearest the end of June. The fiscal year ended July 3, 2004 contained 53 weeks and the fiscal years ended June 28, 2003 and June 29, 2002 each contained 52 weeks.

Revenue Recognition

The Company records revenue when title to the product and risk of ownership passes to the buyer. Sales are shown net of returns, discounts and any other form of sales incentive, including cooperative advertising, rebates and merchandising displays. In certain circumstances, the Company does provide buyback programs and markdown allowances to its customers. These amounts are fixed at the start of the contract period with the customer and accounted for in accordance with Statement of Position No. 93-7, “Reporting on Advertising Costs” and Emerging Issues Task Force No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer”. The cost of these programs are either expensed at the time of the initial shipment of the goods or are expensed on a prorated basis over the sales of the contract, if the Company has a written commitment from the customer.

Concentration of Credit Risk

The Company performs ongoing credit evaluations and maintains reserves for potential credit losses.

Shipping and Handling Costs

Shipping and handling costs that are charged to and reimbursed by the customer are recognized as revenue, while the related expenses incurred by the Company are recorded as cost of sales in the consolidated statements of operations.

Foreign Currency Translation

The accounts of the foreign subsidiary are translated into U.S. dollars in accordance with Statement of Financial Accounting Standards (SFAS) No. 52. Assets and liabilities are translated at year-end exchange rates. Income and expense accounts are translated at average exchange rates in effect during the year. Translation adjustments resulting from fluctuations in the exchange rates are recorded in accumulated other comprehensive income, a separate component of stockholders’ equity. Foreign currency exchange gains were $149,398 in fiscal 2004, $6,432 in fiscal 2003 and $30,335 in fiscal 2002.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

NOTE 1. Nature of Operations.

Knape & Vogt Manufacturing Company and its wholly owned subsidiaries (the Company) design, manufacture and distribute kitchen and bath storage solutions and office products for original equipment manufacturers, specialty distributors, hardware chains and major home centers. During fiscal 2004, the Company further defined its operating segments by the major markets that it serves. Products are sold worldwide through the Company’s own sales personnel and through independent sales representatives. The Company is headquartered in Grand Rapids, Michigan.

NOTE 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America and include the accounts of Knape & Vogt Manufacturing Company and its wholly owned foreign subsidiary. All material intercompany balances, transactions and stockholdings have been eliminated in consolidation.

The Company utilizes a 52- or 53-week fiscal year, which ends on the Saturday nearest the end of June. The fiscal years ended July 2, 2005 and June 28, 2003 contained 52 weeks and the fiscal year ended July 3, 2004 contained 53 weeks.

Revenue Recognition

The Company records revenue when title to the product and risk of ownership passes to the buyer. Sales are shown net of returns, discounts and any other form of sales incentive, including cooperative advertising, rebates and merchandising displays. In certain circumstances, the Company provides buyback programs and markdown allowances to its customers. These amounts are fixed at the start of the contract period with the customer and accounted for in accordance with Statement of Position No. 93-7, “Reporting on Advertising Costs” and Emerging Issues Task Force No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer”. The cost of these programs are either expensed at the time of the initial shipment of the goods or are expensed on a prorated basis over the sales of the contract, if the Company has a written commitment from the customer.

Concentration of Credit Risk

The Company performs ongoing credit evaluations and maintains reserves for potential credit losses.

Shipping and Handling Costs

Foreign Currency

The accounts of the foreign subsidiary are translated into U.S. dollars in accordance with Statement of Financial Accounting Standards (SFAS) No. 52. Current assets and liabilities are translated at year-end exchange rates, while long-term assets and liabilities are translated at historical month-end rates. Income and expense accounts are translated at average exchange rates in effect during the year. Translation adjustments resulting from fluctuations in the exchange rates are recorded in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses from foreign currency transactions, such as those resulting from the settlement of foreign receivables or payables are included in the consolidated statements of operations. These foreign currency exchange net gains were $23,423 in fiscal 2005, $149,398 in fiscal 2004 and $6,432 in fiscal 2003.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Fair Value Disclosures of Financial Instruments

Financial instruments include cash and equivalents, accounts receivable, accounts payable, long-term debt and an interest rate swap agreement. The carrying amounts of cash and equivalents, accounts receivable, and accounts payable approximate fair value at July 32, ~~2004~~2005 and ~~June 28~~July 3, ~~2003~~2004, because of the short-term nature of these financial instruments. The estimated carrying value of long-term debt approximates its fair value at July 32, ~~2004~~2005 and ~~June~~July 283, 2004 ~~2003~~ due to variable interest rates associated with the revolving line of credit. The interest rate swap is valued based on a quoted market price.

Derivative Financial Instruments

The Company uses an interest rate swap agreement to modify a portion of the variable rate revolving line of credit to a fixed rate obligation, thereby reducing the exposure to market rate fluctuations. The interest rate swap agreement is designated as a hedge, and effectiveness is determined by matching the principal balance and terms with that specific obligation. Amounts currently due to or from interest rate swap counter parties are recorded in interest expense in the period in which they accrue. The derivative was recognized as a liability on the balance sheet at its fair value of $1434,~~391,133~~763 at July 32, 2005 ~~2004~~ and $21,~~554~~391,~~980~~133 at ~~June~~July 282, ~~2003~~2004.

Cash and Equivalents

Cash and equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase.

Inventories

Inventories are stated at the lower of FIFO (first-in, first-out) cost or market. The Company also has inventory provided to certain of its major customers on a consignment basis. When the Company receives notice that the customer has utilized the consigned inventory, it invoices the customer for the inventory and recognizes revenue on the sale of that inventory.

Property, Equipment and Depreciation

Property and equipment are stated at cost and depreciated, for financial reporting purposes, using the straight-line method over the estimated useful lives of the assets. For income tax purposes, accelerated depreciation methods and shorter useful lives are used. Management estimates that the cost to complete the items classified in construction in progress at July 32, ~~2004~~2005 was approximately $~~919,000~~1.3 million. Estimated depreciable lives are as follows: land and improvements, 3 to 20 years; buildings, 3 to 40 years; machinery and equipment, 3 to 20 years.

Leased Property Under Capital Leases

Property under capital leases is amortized over the shorter of the lives of the respective leases or the estimated useful lives of the assets. Amortization of capital leases for the years ending July 2, 2005, July 3, 2004 and June 28, 2003 were $15,319, $15,319 and $7,660, respectively.

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Stock Based Compensation

The Company accounts for its stock option plans in accordance with APB Opinion 25, Accounting for Stock Issued to Employees. Since the exercise price of the Company’s employee stock options equals or exceeds the market price of the underlying stock on the date of the grant, no compensation cost is recognized under APB Opinion 25. In accordance with SFAS No. 123, Accounting for Stock-Based Compensation, the Company is required to provide pro forma information regarding net income and earnings per share as if compensation costs for the Company’s stock option plan had been determined using a fair value based estimate. Had SFAS No. 123 been adopted, there would be no change in either net income or earnings per share as no options have been granted to employees during the past three fiscal years.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Goodwill and Intangible Assets

~~Goodwill~~ In accordance ~~represents~~with ~~the~~SFAS ~~excess~~No. of142, ~~the~~“Goodwill ~~purchase~~and ~~price~~Other ~~over~~Intangible Assets,” the Company ~~fair~~is ~~value~~required ofto ~~net~~test ~~tangible~~the ~~and~~carrying ~~identifiable~~value ~~intangible assets~~ of ~~acquired~~goodwill ~~businesses~~for ~~and~~impairment ~~effective~~at ~~June~~the ~~30,~~reporting unit ~~2002,~~level isannually ~~not~~or ~~amortized,~~more ~~however,~~frequently inif ~~prior~~an ~~years~~event itoccurs. ~~was~~Goodwill ~~amortized~~represents ~~using~~the excess of the ~~straight-line~~purchase ~~method~~price over ~~periods~~the ~~ranging~~fair ~~from~~value 15of tonet 40identifiable ~~years~~intangible assets. The recorded goodwill primarily relates to the acquisition of Idea Industries. ~~Other intangibles consist primarily of trademarks, brand names and patents that are being amortized using the straight-line method over periods up to 15 years.~~

Other intangibles consist primarily of trademarks, brand names and patents that are being amortized using the straight-line method over periods up to 15 years. Other intangibles were $172,202, net of accumulated amortization of $183,832 as of July 2, 2005 and $189,581, net of accumulated amortization of $119,103 as of July 3, 2004.

Self-Insurance

The Company is partially self-insured for workers’ compensation and certain employee health benefits. The Company is self-insured for environmental issues. The Company purchases stop-loss coverage in order to limit its exposure to any significant levels of workers’ compensation or employee health benefit claims. Losses are recorded when reported and consist of individual case elements. Insurance reserves also include a provision for incurred but not reported losses determined using certain actuarial assumptions followed in the insurance industry and the Company’s own historical experience.

Income Taxes

~~The Company utilizes the liability method to account for deferred~~ Deferred income taxes byare ~~applying~~recognized ~~statutory~~for ~~tax~~all ~~rates~~temporary ~~in effect at the balance sheet date to~~ differences between ~~the~~tax ~~financial~~and financial reporting, and ~~tax~~are ~~basis~~measured ofusing ~~assets~~the ~~and~~enacted ~~liabilities. The resulting deferred~~ tax ~~liabilities~~rates orexpected ~~assets~~to ~~are~~apply ~~adjusted~~ to ~~reflect~~the ~~changes~~taxable income in ~~tax~~the ~~laws~~years orin ~~rates~~which bythose ~~means~~temporary ofdifferences ~~charges~~are orexpected ~~credits~~ to ~~income tax expense~~reverse.

Advertising

The Company offers cooperative advertising to certain customers. The advertising costs are recorded in accordance with Statement of Position No. 93-7, “Reporting on Advertising Costs” and Emerging Issues Task Force No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer”. The cost of these programs is expensed at the same time that the corresponding sales are recognized and are recorded as a reduction of gross sales. Other advertising costs are included in selling, general, and administrative expenses. Advertising expense, including cooperative advertising, was $1,~~305~~300,000 in ~~2004~~2005, $~~976~~1,305,000 in ~~2003~~2004 and $1976,~~889,~~000 in ~~2002~~2003.

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Earnings Per Share

Basic earnings per share (EPS) is computed by dividing net income by the weighted-average number of common shares outstanding in each year. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding, plus all shares that would have been outstanding if every potentially dilutive common share had been issued. The numerators and denominators used in the calculations of basic and diluted EPS for each of the last three years are as follows:

			2004		2003		2002
		2005		2004		2003
Numerators:	~~Numerators:~~
Numerator for both basic and	~~Numerator for both basic and~~
diluted EPS, net income	~~diluted EPS, net income~~	$3,080,272	~~$3,734,932~~	$3,734,932	~~$2,230,899~~	$2,230,899	~~$3,789,046~~
Denominators:	~~Denominators:~~
Denominator for both basic and	~~Denominator for both basic and~~
diluted EPS, weighted-average	~~diluted EPS, weighted-average~~
common shares outstanding	~~common shares outstanding~~	4,514,243	~~4,516,245~~	4,516,245	~~4,516,706~~	4,516,706	~~4,569,942~~

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The following exercisable stock options were not included in the computation of diluted EPS because the option prices were greater than average quarterly market prices.

			2004		2003		2002
		2005		2004		2003
	Exercise $ 13	Price.64	6,050		6,875		19,254
Exercise Price
	$ 14	.09	7,700		8,525		19,800
$13.64		6,050		6,050		6,875
	$ 16	.74	-		6,962		9,988
$14.09		7,700		7,700		8,525
	$ 18	.18	5,500		6,325		9,075
$16.74		-		-		6,962
	$ 18	.41	-		130,240		-
$18.18		-		5,500		6,325
	$ 18	.48	-		206,183		-
$18.41		-		-		130,240
	$ 26	.54	-		61,413		61,413
$18.48		-		206,183		-
$26.54		-		-		61,413

Comprehensive Income

Comprehensive income represents net income and other revenues, expenses, gains and losses that are excluded from net income and recognized directly as a component of stockholders’ equity.

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

New Accounting Standards

In December ~~January~~ 2004, the Financial Accounting Standards Board (“FASB”) issued ~~FASB~~a revision ~~Staff~~of ~~Position~~SFAS No. 123(~~“FSP”~~R), ~~FAS 106~~Share-2Based Payment, ~~“Accounting~~which ~~and~~supersedes ~~Disclosure~~APB ~~Requirements~~Opinion ~~Related~~No. 25. toThis ~~the~~statement ~~Medicare~~focuses ~~Prescription~~primarily ~~Drug,~~on ~~Improvement~~transactions ~~and~~in ~~Modernization~~which ~~Act~~an ofentity ~~2003".~~obtains ~~This~~employee services ~~statement~~in ~~permits~~exchange afor ~~sponsor~~share-based ofpayments. aUnder ~~postretirement~~SFAS ~~health~~No. ~~care~~123(R), ~~plan~~a ~~that~~public ~~provides~~company generally ais ~~prescription~~required ~~drug~~to ~~benefit~~measure tothe ~~make~~cost aof ~~one-time~~employee ~~election~~services toreceived ~~defer~~in ~~accounting~~exchange for ~~the~~an award ~~effects~~ of ~~the~~equity ~~Medicare~~instruments ~~Prescription~~based ~~Drug,~~on ~~Improvement~~the ~~and~~grant-date ~~Modernization~~fair ~~Act~~value of ~~2003~~the (‘award, with such cost recognized over the ~~Act”)~~applicable vesting period. ~~The~~In ~~Act~~addition, ~~signed~~SFAS ~~into~~No. ~~law~~123(R) inrequires an ~~December~~entity ~~2003,~~to ~~introduces~~provide acertain ~~prescription~~disclosures ~~drug~~in ~~benefit~~order ~~under~~to ~~Medicare~~assist ~~(“Medicare~~in ~~part~~understanding ~~D”)~~the ~~and~~nature aof share-based ~~federal~~payment ~~subsidy~~transactions toand ~~sponsors~~the effects of ~~retiree~~those ~~health~~transactions ~~care~~on ~~benefit~~the ~~plans~~financial statements. ~~that~~The ~~provide~~provisions aof ~~benefit~~SFAS ~~that~~No. is123(R) atrequire ~~least~~application ~~actuarially~~as ~~equivalent~~of tothe ~~Medicare~~beginning ~~Part~~of the D.first ~~Given~~fiscal ~~the~~year ~~cap~~that onbegins ~~postretirement~~after ~~benefits~~June ~~introduced~~15, in2005. ~~fiscal~~As ~~2002~~such, the ~~Act~~Company is ~~not~~required ~~expected~~ to adopt ~~have~~the aprovisions ~~material~~of ~~impact~~SFAS onNo. 123(R) at the ~~Company’s~~beginning ~~accumulated~~of ~~postretirement~~fiscal ~~benefit~~year ~~obligation~~2006. orThe ~~the~~Company has ~~net~~not ~~postretirement~~granted ~~benefit~~such ~~costs,~~awards ~~however,~~over the ~~Company~~past ~~has~~three ~~elected~~years. toIf ~~defer~~in the ~~adoption~~future, ofthe ~~FSP~~Company should ~~FAS~~grant ~~106-2~~any ~~until~~such ~~the~~awards, ~~specific~~it ~~authoritative~~will ~~accounting~~account ~~guidance~~ for ~~the~~such ~~federal~~awards ~~subsidy~~in isaccordance ~~issued~~with SFAS No. 123(R).

In December ~~2003~~2004, the FASB issued aStaff ~~revision~~Position ~~of Statement of Financial Accounting Standards~~ (“~~SFAS~~FSP”) No. ~~132~~109-1, ~~Employers’~~Application of ~~Disclosures~~FASB ~~about~~Statement ~~Pensions~~No. ~~and Other Postretirement Benefits~~109,” toAccounting ~~improve~~for ~~financial~~Income ~~disclosures~~Taxes for ~~defined~~the ~~benefit~~Tax ~~plans.~~Deduction ~~The~~on ~~revised~~Qualified Production ~~SFAS~~Activities ~~requires~~Provided ~~that~~by ~~companies~~the ~~provide~~American ~~more~~Jobs ~~details~~Creation ~~about~~Act ~~their~~(“the ~~plan~~Act”) ~~assets,~~of 2004. ~~benefit~~This ~~obligations,~~had ~~cash~~no ~~flows,~~impact ~~benefit~~on ~~costs~~the ~~and~~Company ~~other~~for ~~relevant~~fiscal ~~information~~2005. The Company ishas ~~now required to provide additional disclosures, including, but~~ not ~~limited~~completed its ~~to,~~assessment ~~a breakdown~~ of ~~plan~~the ~~assets~~impact ~~by category, a description~~ of ~~investment~~the ~~policies~~Act ~~and~~will ~~strategies~~have ~~and~~on ~~target~~its ~~allocation~~financial ~~percentages~~statements ~~for these asset categories. The Company adopted the revised disclosure provisions~~ in ~~the third quarter of~~ fiscal ~~2004~~ 2006.

~~The~~ FASB Staff ~~Company~~Position ~~adopted~~(“FSP”) ~~SFAS~~ No. ~~142~~109-2, inAccounting and Disclosure Guidance for the Foreign ~~first~~Earnings ~~quarter~~Repatriation Provision within the American Jobs Creation Act of ~~fiscal~~2004 (“FSP ~~2003~~109-2”), provides guidance under FASB Statement No. ~~The~~109, ~~Company’s~~Accounting ~~reported~~for Income ~~net~~Taxes, with respect to recording the potential impact of the repatriation provisions of the American Jobs Creation Act of 2004 (the “Jobs Act”) on enterprises’ income tax expense and ~~earnings~~deferred ~~per~~tax ~~share~~liability. ~~information~~The Jobs Act was enacted on October 22, ~~exclusive~~2004. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period of ~~goodwill~~enactment ~~amortization~~to ~~required~~evaluate ~~under~~the ~~previous~~effect ~~accounting~~of ~~standards~~the Jobs Act on anits ~~after~~plan for reinvestment or repatriation of foreign earnings for the purposes of applying FASB Statement No. 109. The Company has evaluated the impact of repatriating funds from its Canadian subsidiary and determined that the impact to its tax ~~basis~~expense isand deferred tax liability will be immaterial. A formal plan has not been approved as ~~follows:~~of the date of this report to repatriate funds back to the United States, however the Company anticipates that this action will occur in fiscal 2006.

	Fiscal 2004	Fiscal 2003	Fiscal 2002
Reported net income	$3,734,932	$2,230,899	$3,789,046
Add: Goodwill amortization,
net of income taxes	-	-	237,159
Adjusted net income	$3,734,932	$2,230,899	$4,026,205
Adjusted EPS	$ 0.83	$ 0.49	$ 0.88

In November 2004, the FASB issued SFAS No. 151, Inventory Cost. This Statement amends the guidance in Accounting Research Bulletin No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (scrap). SFAS No. 151 requires that those items be recognized as current-period charges. In addition, this Statement requires that the allocation of fixed production overhead to the costs of conversion be based on the normal capacity of the production facilities. The provisions of SFAS No. 151 are effective for inventory costs incurred in fiscal years beginning after June 15, 2005. As such, the Company is required to adopt these provisions at the beginning of fiscal year 2006. The Company believes that the impact of SFAS No. 151 will be immaterial to its consolidated statements.

~~The~~26 ~~Company has performed the required impairment tests of goodwill and determined that the recorded goodwill is not impaired.~~

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior year information has been reclassified to conform to the current year presentation.

NOTE 3. Impairment/ Severance During 2003, the Company recorded $271,325 pre-tax of severance costs in other expense on the consolidated statement of operations, primarily related to the resignation of two of its executive officers in August 2002.

~~During~~ The following ~~fiscal~~presents ~~2002,~~a ~~the~~summary ~~Company~~of ~~recorded~~pre-tax an impairment/restructuring ~~charge of $690~~activities,~~000~~ inby ~~accordance with SFAS 144~~ category for ~~certain precision drawer slide tooling. While~~ the ~~Company~~three ~~will~~years ~~continue~~ended toJuly ~~produce the drawer slides~~2, ~~the estimated future cash flows associated with sales of this particular product line were less than the cost of the tooling recorded~~2005.

During fiscal 2002, the Company also decided to reduce its workforce in its Grand Rapids, Michigan facility. Those reductions were committed to by top management prior to the fiscal year end and occurred during the month of July 2002. The Company recorded $245,000 in severance costs at June 29, 2002 in other expense on the consolidated statement of operations.

	2005		2004		2003

Severance & stay on bonuses	$	105,202	$	-	$	271,325
Facility exit costs & other		386,372		-		-
Asset impairment		1,778,447		-		-

Total	$	2,270,021	$	-	$	271,325

4. During fiscal ~~Inventories~~2005, ~~Inventories~~the ~~are~~Company ~~valued~~recognized atasset ~~the~~impairment ~~lower~~charges and accelerated depreciation of ~~FIFO~~$419,204 ~~(first~~pre-tax on certain manufacturing equipment. The asset impairment component of $115,088 was recorded in accordance with SFAS No. 144, ~~first~~Accounting for the Impairment or Disposal of Long-~~out)~~Lived Assets. The accelerated depreciation of $304,116 was recorded in cost orof ~~market~~goods sold as it is excluded from SFAS No. ~~Inventories~~144. The manufacturing equipment had been utilized for backup production of precision drawer slide products. Those products are now ~~summarized~~being partially sourced from overseas rather than manufactured in house, so the extra capacity is no longer required. Some of the equipment will be abandoned and the useful life was adjusted accordingly for depreciation purposes. The equipment that will be held and used or sold was written-down to its estimated fair values as ~~follows:~~determined by the Company’s management based on estimated prices of similar assets or proceeds from sale, respectively. The equipment that will be sold has been classified as assets held for sale on the balance sheet.

	July 3, 2004	June 28, 2003
Finished products	$15,256,160	$10,309,184
Consignment	3,292,297	3,610,427
Work in process	2,062,060	1,745,812
Raw materials	3,344,754	3,313,633
	$23,955,271	$18,979,056

In January 2005, the Board of Directors approved a restructuring plan to close its Muncie, Indiana facility and relocate its operations into existing available space in the Grand Rapids, Michigan facility. In accordance with SFAS No. 144, the Company recorded pre-tax impairment charges of $1,663,359 in fiscal 2005, consisting of the write down of the long-lived assets; including real estate and manufacturing equipment located in Muncie facility, to the lower of their carrying value or their estimated fair values, less the disposition costs. Fair value estimates were determined by the Company’s management, with the assistance of independent appraisers, and were based on estimated proceeds from sale. The fair value of the real estate was determined to be $1.0 million and the equipment was adjusted to a fair value of $220,000. The closure of the facility and relocation of the operations was completed in June 2005.

~~5. Warranty~~ The Company ~~provides~~incurred acertain ~~limited~~qualifying ~~lifetime~~exit ~~warranty~~costs onin ~~most~~connection ~~products~~with ~~sold.~~the ~~Depending~~closure onof the Muncie ~~product~~facility, ~~the~~including ~~lifetime~~severance ~~warranty~~and isthe ~~generally~~relocation ~~defined in a range~~ of ~~three~~certain toequipment ~~fifteen years~~and inventory. The ~~Company~~severance/stay-on ~~does~~bonus not sell or otherwise issue warranties or warranty extensions as stand alone products. The warranty issues replacement products as the resolution for any warranty claims. Reserves have been established for the various costs ~~associated~~and ~~with~~ the ~~Company’s~~facility ~~warranty~~exit ~~program. General warranty reserves are based on historical claims experience~~ and other ~~currently~~costs ~~available~~of $491,574 ~~information~~were ~~and~~expensed ~~are~~as ~~periodically~~they ~~adjusted~~were ~~for business levels and other factors~~incurred. ~~Specific~~All ~~reserves~~of ~~are established if an issue is identified with~~ the ~~amounts~~charges ~~for~~were ~~such~~recorded ~~reserves~~in ~~based on~~ the Manufacturing ~~estimated~~division ~~cost~~of ~~to correct~~ the ~~problem. The actual warranty expense could differ from the estimates made by the~~ Company ~~based on product performance~~. ~~The following table presents the changes in the Company’s product warranty liability:~~

2927

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

	July 3, 2004		June 28, 2003
Accrued warranty costs at the
beginning of the year	$ 275,000		$ 235,000
Payments made for warranty costs	(216,000	)	(198,000	)
Accrual for product warranty	228,000		238,000
Accrued warranty costs at the end
of the year	$ 287,000		$ 275,000

During 2003, the Company recorded $271,325 pre-tax of severance costs primarily related to the resignation of two of its executive officers in August 2002.

6 The following summarizes the restructuring accrual for the fiscal year ended July 2, 2005. Fiscal ~~Long-Term~~years ~~Debt~~ended ~~Long-term~~July ~~debt~~3, ~~obligations~~2004 and June 28, 2003 did not have any accrual activity. Facility exit costs associated with the movement of equipment and inventory, as well as facility preparation and training related to the relocation, are ~~summarized~~recognized as ~~follows:~~incurred and are not included in the ending restructuring accrual balance.

		July 3, 2004		June 28, 2003
		Severance & Stay on bonuses			Facility exit Costs & other			Total
	Revolving credit agreement	$ 24,500,000		$ 24,000,000
Accrual balance, July 3, 2004		$	-		$	-		$	-
	Capital lease obligations	52,605		65,420
Restructuring charges			105,202			386,372			491,574
	Less: Current portion of
Cash payments			(55,507	)		(386,372	)		(441,879	)
	capital lease obligation	(13,741	)	(12,815	)
Accrual balance, July 2, 2005		$	49,695		$	-		$	49,695
		$ 24,538,864		$ 24,052,605

OnNOTE August 28, 2003, the Company entered into a new $35 million revolving credit facility that matures on November 1, 20064. The new three-year revolving credit facility is unsecured and replaces a $45 million credit facility that would have expired in 2004. Interest rates on outstanding loans under the revolving credit facility are either based on the London Interbank Offering Rate (LIBOR), plus a negotiated spread over LIBOR, or at the U.S. prime rate. The new agreement requires the Company to pay a non-use fee on amounts not outstanding under the credit facility based on a ratio of the Company’s adjusted total debt (funded debt less cash and cash equivalents) to EBITDA (earnings before interest, income taxes, depreciation and amortization).Inventories

At Inventories are ~~July~~valued 3, 2004, there was a $24,500,000 balance outstanding under this agreement. The interest rate on the first $20,000,000 of the outstanding balance was 1.315% plus an additional 85 basis points credit spread. The interest rate is adjusted to market rates at the ~~end~~lower of ~~each~~FIFO ~~interest period and is based on the 90 day LIBOR rate. The interest rate on the remaining balance of $4,500,000 was 1.369%, which was the 30~~(first-~~day LIBOR rate plus an additional 85 basis points credit spread. The agreement requires the Company to pay a non-use fee on amounts not outstanding under the credit facility. At July 3~~in, ~~2004, the non~~first-~~use fee was .15%. Both the interest rate and the non-use fees on this agreement fluctuate according to the ratio of the Company’s adjusted total debt (funded debt less cash and cash equivalents~~out) tocost ~~EBITDA~~or ~~(earnings before interest, income taxes, depreciation and amortization)~~market. ~~Compensating~~Inventories ~~balances~~ are summarized ~~not~~as ~~required~~follows: ~~by this agreement. The Company is required under this agreement to maintain certain financial ratios and, at July 3, 2004, was in compliance with these covenants.~~

7. Derivative Financial Instruments The Company has entered into an interest rate swap agreement designated as a partial hedge of the Company’s variable rate revolving credit agreement. The purpose of this swap is to fix the interest rate on the variable rate debt and reduce the exposure to interest rate fluctuations. At July 3, 2004, the notional amount of the swap was $20,000,000. Under this agreement, the Company pays the counterparty interest at a fixed rate of 6.25%, and the counterparty pays the Company interest at a variable rate equal to LIBOR. The LIBOR rate on this agreement was 1.31% at July 3, 2004.

	July 2, 2005		July 3, 2004

Finished products	$	15,038,354	$	15,256,160
Consignment		3,485,891		3,292,297
Work in process		2,154,142		2,062,060
Raw materials		3,683,686		3,344,754

	$	24,362,073	$	23,955,271

NeitherNOTE the Company nor the counterparty, which is a major U5.S. bank, is required to collateralize its obligation under the swap. The Company is exposed to loss if the counterparty should default. At July 3, 2004, the Company had no exposure to credit loss on the interest rate swap. The Company does not believe that any reasonably likely change in interest rates would have a material adverse effect on the financial position, results of operations or cash flows of the Company.Warranty

The 30Company provides a limited lifetime warranty on most products sold. Depending on the product, the lifetime warranty is generally defined as a range of three to fifteen years. The Company does not sell or otherwise issue warranties or warranty extensions as stand alone products. The warranty provides replacement of the product as the resolution for any warranty claims. Reserves have been established for the various costs associated with the Company’s warranty program. General warranty reserves are based on historical claims experience and other currently available information and are periodically adjusted for business levels and other factors. Specific reserves are established if an issue is identified with the amounts for such reserves based on the estimated cost to correct the problem. The actual warranty expense could differ from the estimates made by the Company based on product performance. The following table presents the changes in the Company’s product warranty liability:

	July 2, 2005			July 3, 2004			June 23, 2003

Accrued warranty costs at the beginning
of the year	$	287,000		$	275,000		$	235,000
Payments made for warranty costs		(427,000	)		(216,000	)		(198,000	)
Accrual for product warranty		534,000			228,000			238,000

Accrued warranty costs at the end of the
year	$	394,000		$	287,000		$	275,000

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

TheNOTE Company6. has recognized an afterLong-taxTerm gain of $756,847 in fiscal 2004 and loss of $619,822 in fiscal 2003 in other comprehensive income on the swap agreement. The gain/(loss) is made up of the following components:Debt

	July 3, 2004Pre-Tax		After-Tax		June 28, 2003		After-Tax		June 29, 2002		After-Tax
Change in fair value
of interest rate swap	$ 2,177,697		$ 1,415,850		$(15,938	)	$(10,360	)	$ (344,273	)	$(223,356	)
Settlement to interest
expense	(1,013,850	)	(659,003	)	(936,884	)	(609,462	)	(714,584	)	(464,501	)
Other comprehensive
income	$ 1,163,847		$ 756,847		$(952,822	)	$(619,822	)	$(1,058,857	)	$(687,857	)

Long-term debt obligations are summarized as follows:

8. Lease Commitments The Company leases certain real property and equipment under various lease agreements. Future minimum lease payments under operating and capital leases that have initial or remaining noncancelable lease terms in excess of one year are summarized as follows:

	July 2, 2005			July 3, 2004

Revolving credit agreement	$	22,500,000		$	24,500,000
Capital lease obligations		38,864			52,605
Less: Current portion of capital lease
obligations		(14,735	)		(13,741	)

	$	22,524,129		$	24,538,864

Fiscal Year	Operating	Capital
2005	$134,966	$ 16,988
2006	101,142	16,988
2007	80,323	16,988
2008	77,588	8,494
2009 and thereafter	472,061	-
Total minimum payments	$866,080	$ 59,458
Less - interest on capital leases	-	(6,853	)
Total principal payable on capital leases
(included in Note 6)		$ 52,605

The Company has a $35 million three-year unsecured revolving credit facility that would have matured on November 1, 2006. On May 31, 2005, the Company signed the First Amendment to the credit facility with Comerica Bank. The First Amendment extends the revolving credit maturity date to November 1, 2008 and revised certain of the financial covenants.

~~Rent~~ Interest rates ~~expense~~on outstanding loans under ~~all~~the ~~operating~~revolving ~~leases~~credit ~~was~~facility ~~approximately~~are ~~$1,273,000,~~either ~~$1,017,000~~based ~~and~~on ~~$868~~the London Interbank Offering Rate (LIBOR),~~000~~ inplus ~~fiscal~~a ~~2004~~negotiated spread over LIBOR, ~~2003~~or at the U.S. prime rate. The agreement requires the Company to pay a non-use fee on amounts not outstanding under the credit facility based on a ratio of the Company’s adjusted total debt (funded debt less cash and ~~2002~~cash equivalents) to EBITDA (earnings before interest, ~~respectively~~income taxes, depreciation and amortization).

9. At July ~~Retirement~~2, ~~Plans~~2005, there was a $22,500,000 balance outstanding under this agreement. The interest ~~Company~~rate ~~has~~on ~~several~~the ~~noncontributory~~first ~~defined~~$20,000,000 ~~benefit~~of ~~pension~~the ~~plans~~outstanding ~~and~~balance ~~defined~~was ~~contribution~~3.3375% ~~plans~~plus ~~covering~~an additional ~~substantially~~85 ~~all~~basis ofpoints ~~its~~credit ~~employees~~spread. The ~~defined~~interest ~~benefit~~rate ~~plans~~is ~~provide~~adjusted ~~benefits~~to market rates at the end of each interest period and is based on the ~~participants’~~90 ~~years~~day ofLIBOR ~~service~~rate. The ~~Company’s~~interest ~~funding~~rate on ~~policy~~the ~~for~~remaining ~~defined~~balance ~~benefit~~of ~~plans~~$2,500,000 iswas to3.34%, ~~make~~which ~~annual~~was ~~contributions~~the 30-day LIBOR rate, ~~which~~plus ~~equal~~an additional or85 ~~exceed~~basis ~~regulatory~~points ~~requirements~~credit spread. The ~~pension~~agreement ~~and~~requires ~~profit~~the Company to pay a non-~~sharing~~use ~~plans~~fee aton amounts not outstanding under the credit facility. At July 32, ~~2004~~2005, the non-use fee was .15%. Both the interest rate and ~~June~~the ~~28,~~non-use ~~2003~~fees ~~held~~on athis ~~combined~~agreement fluctuate ~~total~~according ofto ~~284,637~~the ~~shares~~ratio of the Company’s ~~Class~~adjusted Btotal ~~common~~debt ~~stock~~(funded debt less cash and cash equivalents) to EBITDA (earnings before interest, income taxes, depreciation and amortization). Compensating balances are not required by this agreement. The Company is required under this agreement to maintain certain financial ratios and, at July 2, 2005, was in compliance with these covenants.

TheNOTE Company’s Board of Directors annually approves contributions to the defined contribution plans7. ExpenseDerivative forFinancial the discretionary profit-sharing plan amounted to $700,666, $667,192 and $750,261 in fiscal 2004, 2003 and 2002, respectively.Instruments

The Company ~~also~~ has aentered ~~nonqualified~~into ~~supplemental~~an ~~retirement~~interest ~~program~~rate ~~(“SERP”)~~swap ~~for~~agreement ~~designated~~to ~~officers~~modify a portion of the variable ~~Company~~rate revolving line of credit to a fixed rate obligation, ~~which~~thereby ~~includes~~reducing ~~death~~the exposure ~~and~~to ~~disability~~market ~~benefits~~rate fluctuations. The ~~plan~~interest rate swap agreement is ~~funded~~designated as a hedge, and effectiveness is determined by matching the principal balance and terms with that specific obligation. Amounts currently due to or from interest-rate-swap counter-party are recorded in interest expense in the ~~general~~period ~~assets~~in which they accrue. The derivative, which has a notional amount of $20,000,000, was recognized as a liability on the balance sheet at its fair value of $434,763 at July 2, 2005 and $1,391,133 at July 3, 2004. Under this agreement, the Company pays the counterparty interest at a fixed rate of 6.25%, and the counterparty pays the Company interest at a variable rate equal to LIBOR. The LIBOR rate on this agreement was 3.33% at July 2, 2005.

~~The~~ Neither the ~~postretirement~~Company ~~health-care~~nor ~~plan~~the ~~covers~~counterparty, ~~substantially~~which ~~all~~is ~~employees~~a major U.S. bank, is required to collateralize its obligation under the swap. The ~~plan~~Company is ~~unfunded~~exposed ~~and~~to ~~contributory~~loss if the counterparty should default. ~~During~~At ~~fiscal~~July ~~2002~~2, 2005, the Company ~~amended~~had ~~the~~no ~~plan~~exposure to ~~place~~credit loss on the interest rate swap. The Company does not believe that any reasonably likely change in interest rates would have a ~~cap~~material adverse effect on the ~~Company~~financial ~~paid~~position, ~~portion~~results of ~~health-care~~operations ~~premiums~~or cash ~~for~~flows ~~retirees~~of the Company.

~~The~~29 Company also provides a 401(k) plan for all of its employees. Employees may contribute up to 100 percent of their pay up to Internal Revenue Service limits. For all hourly employees, the Company will match 50 percent of the first 4 percent that an employee contributes. The amount expensed for the Company match provision of the plan was $218,481, $225,473, and $246,229 in fiscal 2004, 2003 and 2002, respectively.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The gain/(loss) recognized in other comprehensive income on the interest rate swap is made up of the following components:

	July 2, 2005						July 3, 2004						June 28, 2003
	Pre-Tax			After-Tax			Pre-Tax			After-Tax			Pre-Tax			After-Tax
Change in fair value
of interest rate swap	$	1,703,537		$	1,107,029		$	2,177,697		$	1,415,850		$	(15,938	)	$	(10,360	)
Settlement to
interest expense		(747,167	)		(485,659	)		(1,013,850	)		(659,003	)		(936,884	)		(609,462	)

Other comprehensive
income (loss)	$	956,370		$	621,370		$	1,163,847		$	756,847		$	(952,822	)	$	(619,822	)

NOTE 8. Lease Commitments

The Company leases certain real property and equipment under agreements which expire on various dates. Future minimum lease payments under operating and capital leases that have initial or remaining noncancelable lease terms in excess of one year are summarized as follows:

Fiscal Year	Operating		Capital

2006	$	198,860	$	16,988
2007		182,491		16,988
2008		180,530		8,501
2009		133,927		-
2010 and thereafter		430,359		-

Total minimum payments	$	1,126,167	$	42,477
Less - interest on capital leases				3,613

Total principal payable on capital leases
(included in Note 6)			$	38,864

Rent expense under all operating leases was approximately $1,194,000, $1,273,000 and $1,017,000 in fiscal 2005, 2004 and 2003, respectively.

NOTE 9. Retirement Plans

The Company has several noncontributory defined benefit pension plans and defined contribution plans covering substantially all of its employees. The defined benefit plans provide benefits based on the participants’ years of service. The Company’s funding policy for defined benefit plans is to make annual contributions, which equal or exceed regulatory requirements. The pension and profit-sharing plans at July 2, 2005 and July 3, 2004 held a combined total of 284,637 shares of the Company’s Class B common stock.

The Company also has a nonqualified supplemental retirement program (“SERP”) for designated officers of the Company, which includes death and disability benefits. The plan is funded from the general assets of the Company.

The postretirement health-care plan covers substantially all employees. The plan is unfunded and contributory. The plan was capped in fiscal 2002 to limit the amount that the Company would pay toward the of health-care premiums for retirees.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The Company uses a June 30 measurement date for the majority of its plans. The following provides a reconciliation of benefit obligations, plan assets and funded status of the Company’s noncontributory pension plans, SERP and postretirement plans:

	Pension Benefits						SERP Benefits						Postretirement Health-Care Benefits
	2005			2004			2005			2004			2005			2004

Change in benefit obligations
Benefit obligations at
beginning of year	$	19,099,349		$	20,324,552		$	3,359,139		$	3,511,333		$	2,252,625		$	2,346,600
Service cost		411,801			492,019			8,220			7,022			82,141			88,547
Interest cost		1,184,774			1,101,529			201,639			195,358			130,313			125,997
Actuarial (gains)/losses		2,270,307			(1,994,348	)		336,440			(31,959	)		32,821			(136,613	)
Benefits paid		(905,206	)		(827,264	)		(307,044	)		(322,615	)		(161,294	)		(171,906	)
Exchange rate		281,263			2,861			67,547			-			-			-

Benefit obligations at end of
year	$	22,342,288		$	19,099,349		$	3,665,941		$	3,359,139		$	2,336,606		$	2,252,625

Change in plan assets
Fair value of plan assets at
beginning of year	$	21,772,819		$	20,028,261			-			-			-			-
Actual return on plan assets		1,680,106			2,383,935			-			-			-
Employer contributions		192,362			187,887			307,044			322,615			161,294			171,906
Benefits paid		(905,206	)		(827,264	)		(307,044	)		(322,615	)		(161,294	)		(171,906	)
Exchange rate and other		274,228			-			-			-			-			-

Fair value of plan assets at
end of year	$	23,014,309		$	21,772,819			-			-			-			-

Funded status	$	672,020		$	2,673,470		$	(3,665,941	)	$	(3,359,139	)	$	(2,336,606	)	$	(2,252,625	)
Unrecognized transition amount		(9,813	)		(11,039	)		-			-			336,265			384,302
Unrecognized net actuarial loss		11,133,371			9,197,332			2,135,874			1,905,281			2,618,270			2,747,136
Unrecognized prior service cost
		398,995			537,759			(113,540	)		(123,211	)		(2,117,917	)		(2,339,897	)

Net amount recognized	$	12,194,574		$	12,397,522		$	(1,643,607	)	$	(1,577,069	)	$	(1,499,988	)	$	(1,461,084	)

Amounts recognized in the
consolidated balance sheets
consist of:
Prepaid pension cost	$	12,194,574		$	12,088,937			-			-			-			-
Other retirement benefits		-			(90,092	)		(3,430,637	)		(3,202,620	)		(1,499,988	)		(1,461,084	)
Accumulated other
comprehensive income		-			398,677			1,787,030			1,625,551			-			-

Net amount recognized		12,194,574		$	12,397,522		$	(1,643,607	)	$	(1,577,069	)	$	(1,499,988	)	$	(1,461,084	)

The following table represents the weighted average actuarial assumptions used to develop the projected benefit obligation at June 30, 2005 (“Plan year-end”) and to develop net periodic benefit cost for the subsequent fiscal year. Actuarial assumptions used in calculating benefit obligations at the end of a given fiscal year are determined at that time. The assumptions used to determine the net periodic benefit cost in a given year, however, are established at the end of the previous Plan year-end.

Weighted-average assumptions


Discount rate	5	.25%	6	.25%	5	.25%	6	.25%	5	.25%	6	.25%
Expected return on plan assets	8	.0%	8	.0%	N	/A	N	/A	N	/A	N	/A

Knape & Vogt Manufacturing Company and Subsidiaries

Notes to Consolidated Financial Statements

	Penison Benefits						SERP Benefits						PostretirementHealth-Care Benefits
		2004			2003			2004			2003			2004			2003
Change in benefit obligations
Benefit obligations
at beginning of year	$	20,324,552		$	15,790,925		$	3,511,333		$	3,153,183		$	2,346,600		$	1,869,855
Service cost		492,019			348,632			7,022			1,850			88,547			64,437
Interest cost		1,101,529			1,111,277			195,358			191,440			125,997			135,608
Actuarial
(gains)		(1,994,348			3,829,278			(31,959	)		485,108			(136,613	)		449,288
losses
Benefits paid		(827,264	)		(807,430	)		(322,615	)		(326,314	)		(171,906	)		(172,588	)	)
Plan amendment		-			-			-			-			-			-
Other		2,861			51,870			-			6,066			-			-
Benefit obligation at end of year	$	19,099,349		$	20,324,552		$	3,359,139		$	3,511,333		$	2,252,625		$	2,346,600
Change in plan assets
Fair value of plan
assets at beginning of year	$	20,028,261		$	15,945,339		$	-		$	-		$	-		$	-
Actual return
on plan assets		2,383,935			439,211			-			-			-			-
Employer
contributions		187,887			4,451,141			322,615			326,314			171,906			172,588
Benefits paid		(827,264	)		(807,430	)		(322,615	)		(326,314	)		(171,906	)		(172,588	)
Fair value of plan assets at end of year	$	21,772,819		$	20,028,261		$	-		$	-		$	-		$	-
		2004			2003			2004			2003			2004			2003
Funded status	$	2,673,470		$	(296,291	)		($3,359,139	)	$	(3,511,333	)	$	(2,252,625	)	$	(2,346,600	)
Unrecognized
transition amount		(11,039	)		(34,368	)		-			-			384,302			432,339
Unrecognized net
actuarial loss		9,197,332			12,371,129			1,905,281			2,077,436			2,747,136			3,067,335
Unrecognized prior
service cost		537,759			676,522			(123,211	)		(132,190	)		(2,339,897	)		(2,561,877	)
Net amount recognized	$	12,397,522		$	12,716,992		$	(1,577,069	)	$	(1,566,087	)	$	(1,461,084	)	$	(1,408,803	)
Amounts recognized in the consolidate balance sheet consist of:
Prepaid pension
cost	$	12,088,937		$	12,503,491		$	-		$	-		$	-		$	-
Other retirement
benefits		(90,092	)		(473,496	)		(3,202,620	)		(3,511,333	)		(1,461,084	)		(1,408,803	)
Accumulated other
comprehensive
income		398,677			686,997			1,625,551			1,945,246			-			-
Net amount recognized	$	12,397,522		$	12,716,992		$	(1,577,069	)	$	(1,566,087	)	$	(1,461,084	)	$	(1,408,803	)

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

	Pension Benefits				SERP Benefits				PostretirementHealth-Care Benefits
Weight-average assumptions	2004		2003		2004		2003		2004		2003
Discount rate	6	.25%	5	.5%	6	.25%	5	.5%	6	.25%	5	.5%
Expected return on
plan assets	8	.0%	8	.0%		N/A		N/A		N/A		N/A

The Company evaluates the reasonableness of these assumptions on an annual basis taking into consideration long-term trends and overall market conditions that may affect the cost of providing the benefits under its pension and post-retirement plans.

The net periodic benefit cost related to the defined benefit plans is made up of the following components:

		Pension Benefits						~~SERPBenefits~~			SERP Benefits
		2004		2003		2002		2004		2003		2002
		2005			2004			2003			2005		2004		2003
Service cost	~~Service cost~~	$ ~~492,019~~	411,801	~~$ 348,632~~	$	~~$ 330~~492,~~579~~019		$ ~~7,022~~	348,632	~~$ 1,850~~	$	~~$ 1~~8,~~747~~220	$	7,022	$	1,850
Interest cost	~~Interest cost~~	~~1,101,529~~	1,184,774	~~1,111,277~~		1,~~056~~101,~~040~~529		~~195,358~~	1,111,277	~~191,440~~		~~225~~201,~~298~~639		195,358		191,440
	Expected return on
Expected return on plan assets			(1,783,324	)		(1,771,387	)		(1,561,435	)		-		-		-
	plan assets	(1,771,387	)	(1,561,435	)	(1,389,192	)	-		-		-
Net amortization			611,260			681,875			275,976			111,856		144,191		123,876
	Net amortization	681,875		275,976		152,033		144,191		123,876		99,708
Net periodic benefit cost		$	424,511		$	504,036		$	174,450		$	321,715	$	346,571	$	317,166
	Net periodic benefit cost	$ 504,036		$ 174,450		$ 149,460		$346,571		$317,166		$326,753

		PostretirementHealth-Care Benefits
		PostretirementHeath Care Benefits
		2004		2003		2002
		2005			2004		2003
Service cost	~~Service cost~~	$ ~~88,547~~	82,141	~~$ 64,437~~	$	~~$174~~88,~~406~~547	$	64,437
Interest cost	~~Interest cost~~	~~125,997~~	130,313	~~135,608~~		~~230~~125,~~373~~997		135,608
Net amortization	~~Net amortization~~	~~9,643~~	(12,256	~~(4,739~~)	)	679,~~335~~643		(4,739	)
Net periodic benefit cost	~~Net periodic benefit cost~~	$~~224,187~~	200,198	~~$ 195,306~~	$	~~$472~~224,~~114~~187	$	195,306

The health care cost trend rate used to determine the postretirement health-care benefit obligation was 98.0% for ~~2004~~2005 and gradually decreases to 5.0% in 2008. The trend rate is a significant factor in determining the amounts reported. A one-percentage-point change in these assumed health-care cost trend rates would have the following effect on net periodic benefit cost:

One-Percentage Point	~~One-Percentage Point~~	Increase		~~Decrease~~	Decrease
	Effect on total of service and interest
Effect on total of service and interest cost		$	2,044		$	(1,775	)
	cost components	$ 1,628		$(1,504	)
components
	Effect on postretirement health-care
Effect on postretirement health-care benefit		$	46,996		$	(40,219	)
	benefit obligation	$29,347		$(27,136	)
obligation

The expected long-term rate of return used to determine the net periodic benefit cost was 8.0% for both years. The Company’s pension plan weighted-average asset allocation, by asset category was as follows:

		2004		2003
		2005			2004
Equity securities	~~Equity securities~~	57	~~.2%~~64	39.2%	~~.5%~~	57	.2%
Debt securities	~~Debt securities~~	6	~~.0%~~16	39.0%	~~.3%~~	6	.0%
	Money market, stable
Money market, stable value funds
	value funds and cash	36	.8%	21	.2%
and cash			19	.8%		36	.8%
Total	~~Total~~	~~100~~	~~.0%~~100	~~100~~.0%	~~.0%~~	100	.0%

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio is comprised of a diversified blend of equity investments, including a mix of large and small capital mutual funds, as well as growth, value, international mutual funds and Company stock. Fixed income investments include both individual debt issues, along with short-term and intermediate term bond funds.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The Company reviews historical market data and long-term historical relationships, along with current market factors, such as inflation and interest rates when determining the long-term rate of return for plan assets. Peer data and historical returns are also reviewed to check the reasonableness and appropriateness of the long-term rates.

The Company expects to contribute approximately $~~189~~105,000 to its Canadian defined benefit pension plan, $~~324~~312,000 to its SERP plan and $~~203~~186,000 to its other post retirement benefit plan in fiscal ~~2005~~2006. ~~Our~~The U.S. defined pension plan will only be funded if it becomes necessary under SFAS No. 87 to avoid an additional minimum liability from being recorded on the consolidated financial statements. The estimated future benefit payments under our benefit plans are as follows:

		Pension		~~SERP~~	SERP	~~PostretirementHealth-Care~~	PostretirementHealth-Care
	2005	$ 934,909		$ 322,895		$ 217,087
2006		$	949,061		$	311,975	$	186,126
	2006	937,657		319,161		196,594
2007			929,261			308,914		173,847
	2007	978,141		315,081		182,226
2008			986,639			305,477		169,720
	2008	1,039,758		310,632		182,305
2009			1,035,984			301,636		170,655
	2009	1,092,865		305,805		184,338
2010			1,088,048			297,371		168,314
	2010-2014	6,307,388		1,435,414		967,575
2011-2015			6,362,956			1,450,316		898,523

10 The Company’s Board of Directors annually approves contributions to the defined contribution plans. ~~Income~~Expense ~~Taxes~~for ~~Income~~the ~~tax~~discretionary ~~expense~~profit-sharing ~~(benefit)~~plan ~~consists~~amounted ~~of:~~to $759,869, $700,666 and $667,192 in fiscal 2005, 2004 and 2003, respectively.

Year Ended	July 3,2004		June 28,2003		June 29,2002
Current:
United States	$ 1,991,267		$ (581,499	)	$ 716,000
Foreign, state and local	437,942		(53,000	)	12,000
Total current	2,429,209		(634,499	)	728,000
Deferred:
United States	(638,000	)	508,000		1,266,000
Foreign	(100,942	)	499,000		83,000
State and local	100,000		14,000		46,000
Total deferred	(638,942	)	1,021,000		1,395,000
Income tax expense	$ 1,790,267		$ 386,501		$2,123,000

The Company also provides a 401(k) plan for all of its employees. Employees may contribute 100 percent of their pay up to Internal Revenue Service limits. For hourly employees, the Company will match 50 percent of the first 4 percent that an employee contributes. The amount expensed for the Company match provision of the plan was $203,053, $218,481, and $225,473 in fiscal 2005, 2004 and 2003, respectively.

34NOTE 10. Income Taxes

Income tax expense (benefit) consists of:

Year Ended	July 2, 2005			July 3, 2004			June 28, 2003

Current:
United States	$	1,415,892		$	1,991,267		$	(581,499	)
Foreign, state and local		1,151,454			437,942			(53,000	)

Total current		2,567,346			2,429,209			(634,499	)

Deferred:
United States		(1,311,848	)		(638,000	)		508,000
Foreign		(116,143	)		(100,942	)		499,000
State and local		(173,226	)		100,000			14,000

Total deferred		(1,601,217	)		(638,942	)		1,021,000

Income tax expense	$	966,129		$	1,790,267		$	386,501

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The difference between the federal statutory tax rate and the effective tax rate ~~on continuing operations~~ was as follows:

Year Ended	~~Year Ended~~	July 32,~~2004~~2005		~~June 28,2003~~	July 3,2004	~~June 29,2002~~	June 28,2003
	Federal income taxes at the
Federal income taxes at the statutory
	statutory rate	$ 1,879,000		$ 890,000		$2,010,000
rate		$	1,376,000		$	1,879,000	$	890,000
	Foreign earnings taxed at
Foreign earnings taxed at foreign
	foreign statutory rate	-		113,000		19,000
statutory rate			40,000			-		113,000
State and local income taxes	~~State and local income taxes~~	~~22,000~~	(18,000	~~(15,000~~)	)	1922,000		(15,000	)
Tax audit settlement	~~Tax audit settlement~~	~~(169,000~~	)(169,000	-)		-
	Utilization of previously
Utilization of previously disallowed
	disallowed loss	-		(607,000	)	-
loss			-			-		(607,000	)
	Other	58,267		5,501		75,000
Valuation reserve for subsidiary
	Income tax expense	$ 1,790,267		$ 386,501		$2,123,000
state taxes			123,000
Expiration of statutory period/R&D
credits			(594,000	)
Other			39,129			58,267		5,501
Income tax expense		$	966,129		$	1,790,267	$	386,501

During the third quarter of fiscal ~~2003~~2005, the Company ~~amended~~recognized ~~its~~one-time ~~income~~ tax ~~returns~~benefits ~~previously filed for fiscal years 1997 and 1999~~of $594,000. AOf ~~change~~this intotal, ~~the~~$372,000 ~~federal~~related ~~tax~~to ~~law allowed~~ the ~~Company~~expiration toof ~~utilize~~ a ~~portion~~certain ofstatutory ~~its~~period and ~~capital~~the ~~loss~~related ~~from~~reversal ~~fiscal~~of ~~1999~~the ~~that~~associated ~~had~~tax ~~been previously disallowed~~contingencies. AsThe aremaining ~~result~~$222,000 of tax ~~this~~benefits ~~change,~~was ~~the~~related ~~Company~~to ~~recognized~~amended anfilings ~~income~~for ~~tax~~prior ~~benefit~~year ofresearch ~~$607,000~~and development credits.

During fiscal 2003, the Company amended its income tax returns previously filed for fiscal years 1997 and 1999. A change in the federal tax law allowed the Company to utilize a portion of its capital loss from fiscal 1999 and 1997 that had been previously disallowed. As a result of this change, the Company recognized an income tax benefit of $607,000.

The sources of the net deferred income tax liability were as follows:

		July 2, 2005			July 3, 2004
		July 3, 2004		June 28, 2003
Property and equipment	~~Property and equipment~~	$ ~~6,592,000~~	4,664,000	~~$ 7,097,000~~	$	6,592,000
Pension accrual	~~Pension accrual~~	~~4,594,000~~	4,444,000	~~4,533,000~~		4,594,000
	Supplemental retirement plan	(1,213,000		(1,208,000
Subsidiary state tax NOL			398,000			-
	Benefit related accruals	(1,000,000		(1,445,000
Supplemental retirement plan			(1,249,000	)		(1,213,000	)
	Inventory reserves	(2,145,000		(1,607,000
Benefit related accruals			(1,026,000	)		(1,000,000	)
	Rebates, advertising and royalty accrual	(251,000		(186,000
Inventory reserves			(1,472,000	)		(2,145,000	)
	Derivative instrument	(487,000		(894,000
Rebates, advertising and royalty accrual			(293,000	)		(251,000	)
	Other	(503,325		(1,013,000
Derivative instrument			(165,000	)		(487,000	)
		$ 5,586,675		$ 5,277,000
Other, including valuation allowances			(787,181	)		(503,325	)
		$	4,513,819		$	5,586,675

No The ~~provision~~American Jobs ~~has~~Creation ~~been~~Act ~~made~~of 2004 (the “Jobs Act”), enacted on October 22, 2004, provides for ~~taxes~~a ~~that~~temporary ~~may~~85% ~~result~~dividends ~~from~~received ~~future~~deduction ~~remittances~~on ofcertain $3foreign earnings repatriated during a one-year period.5 ~~million~~To inqualify ~~undistributed~~for the deduction, the earnings ofmust ~~foreign~~be reinvested ~~subsidiaries~~in asthe ofUnited ~~July~~States 3,pursuant ~~2004~~to ~~because~~a itdomestic isreinvestment ~~expected~~plan ~~that~~established ~~such~~by ~~earnings~~a Company’s ~~will~~Chief beExecutive ~~reinvested~~Office ~~overseas~~and ~~indefinitely.~~approved ~~Determination~~by the Company’s Board of Directors. Certain other criteria in the ~~amount~~Jobs ofAct ~~any~~must ~~unrecognized~~be ~~deferred~~satisfied ~~income~~as ~~tax~~well. ~~liability~~The Company’s onperiod ~~earnings~~during ~~not~~which ~~remitted~~the isqualifying ~~not~~distributions ~~practicable~~can be made includes fiscal 2006.

~~11.~~34 Stock Option Plans The 1987 Stock Option Plan provided for the grant of options to key employees of the Company, which provided the ability to purchase shares of common stock. Options were granted at or above the market price of the Company’s common stock on the date of the grant, were exercisable from that date and terminated 10 years from the grant date. The plan, as amended in October 1991 and in October 1994, authorized a total of 300,000 shares to be available for issuance under the plan. Grants can no longer be made under the 1987 Stock Option Plan.

Knape & Vogt Manufacturing Company and SubsidiariesNotes to Consolidated Financial Statements

Under the Company’s 1997 Stock Incentive plan, up to 660,000 shares of the Company’s common stock are available for issuance. Issuance can be in the form of stock options or restricted stock; however, no more than 55,000 shares can be issued as restricted stock. Stock options can be granted as incentive stock options or nonqualified stock options. The number of shares of common stock subject to an option granted to a participant under this plan is determined based on the amount of the participant’s election under the Company’s bonus plan. Each participant may elect to receive options by electing to forego a portion of the cash bonus that may be earned by the participant, with the option price determined in accordance with the plan. The exercise price per share of common stock purchasable under an option is a single fixed exercise price equal to 100% of the fair market value of the common stock at the award date increased by a fixed percentage (based on U.S. Treasury Securities plus 2% less a projected dividend yield) compounded annually over the term of the option. In general, the options vest three years after the date the option was granted and expire five years after the grant date. During fiscal 2004, 2003 and 2002, no options were granted to participants.

The Executive Compensation Committee, subject to the approval of the Board of Directors, determines the eligible persons to whom restricted shares are granted and the price (if any) to be paid by the participant, the conditions under which the participants’ interest in the stock may be forfeited and the period of time during which the participant is not permitted to sell, transfer, pledge, or assign the shares of the restricted stock awarded under this Plan. Except as provided above, upon issuance of the restricted stock, the participant will have all the rights of a shareholder with respect to the shares, including the right to vote them and to receive all dividends and other related distributions. If termination of employment occurs within the restricted period, all shares of stock still subject to restriction will vest or be forfeited in accordance with the terms and conditions established by the Committee.

The Company’s CEO has 6,600 shares of restricted common stock and the option to purchase an additional 27,500 shares of the Company’s common stock at a price of $14.43 per share. The grant and the options will vest if the Company achieves specific financial objectives within a five-year performance period. During the performance period, the CEO may vote and receive dividends on the restricted shares, but the shares are subject to transfer restrictions and are forfeited if the CEO terminates employment or the Company does not achieve its financial objectives.

Transactions under the plans are as follows:

Year Ended	July 3,2004		Weighted-AverageExercisePrice		June 28,2003		Weighted-AverageExercisePrice		June 29,2002		Weighted-AverageExercisePrice
Options outstanding,
beginning of year	454,023		$ 19	.12	548,848		$ 18	.80	563,214		$ 18	.73
Forfeited	(201,090	)	$ 20	.92	(94,825	)	$ 17	.26	(14,366	)	$ 16	.34
Options outstanding at end
of year	252,933		$ 17	.78	454,023		$ 19	.12	548,848		$ 18	.80
Options exercisable at end
of year	225,433		$ 18	.19	220,340		$ 20	.30	119,530		$ 20	.94
Options available for
grant, end of year	443,275				240,657				175,262

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The Company is in the process of determining the amount of foreign earnings that will be expatriated, if any, under the repatriation provisions of FSP 109-2, however, the Company has not completed an evaluation of the impact of repatriating funds from its Canadian subsidiary. A ~~summary~~formal plan has not been approved as of ~~stock~~the ~~options~~date ~~outstanding~~of atthis ~~July~~report 3to repatriate funds back to the United States, ~~2004~~however, ~~follows:~~the Company anticipates that this action will occur in fiscal 2006. The Company is considering $2.0 million to $4.0 million to be repatriated. The related anticipated income tax effect of such repatriation is not estimable at this time.

Outstanding				Exercisable
Price Ranges	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Shares	Weighted-Average Exercise Price
$12.50 - $14.50	41,250	$ 14	.25	1.98	13,750	$ 13	.89
$16.50 - $18.50	211,683	$ 18	.47	1	211,683	$ 18	.47
	252,933	$ 17	.78	1.0	225,433	$ 18	.19

The Company’s Indiana subsidiary incurred a net operating loss in fiscal 2005. The Company has total state net operating loss carryforwards in the amount of $820,000, which expire from 2022 to 2024. Due to the fact that the Company is no longer manufacturing in that state and will most likely have very little income tax expense payable to that state, it is unlikely that the NOL will be utilized. Accordingly, management has recorded a valuation reserve for the entire balance.

NOTE 11. Stock Option Plans

The 1987 Stock Option Plan provided for the grant of options to key employees of the Company, which provided the ability to purchase shares of common stock. Options were granted at or above the market price of the Company’s common stock on the date of the grant, were exercisable from that date and terminated 10 years from the grant date. The plan, as amended in October 1991 and in October 1994, authorized a total of 300,000 shares to be available for issuance under the plan. Grants can no longer be made under the 1987 Stock Option Plan.

The Company’s 1997 Stock Incentive plan provided 660,000 shares of the Company’s stock for issuance. Issuance could be in the form of stock options or restricted stock; however, no more than 55,000 shares could be issued as restricted stock. No options have been granted during fiscal 2005, 2004 and 2003.

The Company’s CEO had been granted 6,600 shares of restricted common stock and the option to purchase an additional 27,500 shares of the Company’s common stock at a price of $14.43 per share. The grant and the options were subject to specific financial objectives within a five-year performance period that ended on February 1, 2005. The objectives were not met and the restricted stock and the options were forfeited.

All of the options previously granted under this plan have expired and effective July 2, 2005, this plan has been terminated.

Transactions under the plans are as follows:

Year Ended	July 2, 2005			Weighted Average Exercise Price		July 3, 2004			Weighted Average Exercise Price		June 28, 2003			Weighted Average Exercise Price

Options outstanding,
beginning of year		252,933		$	17.78		454,023		$	19.12		548,848		$	18.80

Forfeited		(239,183	)	$	18.01		(201,090	)	$	20.92		(94,825	)	$	17.26

Options outstanding at
end of year		13,750		$	13.89		252,933		$	17.78		454,023		$	19.12

Options exercisable at
end of year		13,750		$	13.89		225,433		$	18.19		220,340		$	20.30

Options available for
grant, end of year		-					443,275					240,657

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

A summary of stock options outstanding at July 2, 2005 follows:

Price
$13.64	6,050		0.50
$14.09	7,700		1.00

	13,750	$ 13.89	.75

The Company uses the Black-Scholes option-pricing model to determine the fair value of each option at the grant date, however no options have been granted for the years presented above.

NOTE 12. Stockholder' Equity The Company has three classes of stock: common stock, Class B common stock and unissued preferred stock. Each share of common stock entitles the holder thereof to one vote on all matters submitted to the shareholders. Each share of Class B common stock entitles the holder to 10 votes on all such matters, except that the holders of common stock are entitled to elect, voting separately as a class, at least one-quarter of the CompanyStockholders’s directors to be elected at each meeting held for the election of directors. In all other instances, holders of common stock and Class B common stock vote together, except for matters affecting the powers, preferences or rights of the respective classes or as otherwise required under the Michigan Business Corporation Act. With respect to dividend rights, each share of common stock is entitled to cash dividends at least 10% higher than those payable on each share of Class B common stock. Class B common stock is subject to certain restrictions on transfer, but is convertible into common stock on a share-for-share basis at any time.Equity

The Company has athree classes of stock: ~~repurchase~~common ~~program~~stock, ~~under~~Class ~~which~~B itcommon ~~purchased~~stock noand ~~shares~~unissued preferred instock. ~~fiscal~~Each ~~2004~~share ~~and~~of ~~2,280~~common ~~shares~~stock ~~during~~entitles ~~fiscal~~the ~~2003~~holder ~~with~~thereof to one vote on all matters submitted to the ~~price~~shareholders. ~~per~~Each share ~~ranging~~of ~~from~~Class ~~approximately~~B $9common stock entitles the holder to ~~$11~~10 votes on all such matters, except that the holders of common stock are entitled to elect, voting separately as a class, at least one-quarter of the Company’s directors to be elected at each meeting held for the election of directors. In Atall ~~July~~other 3instances, ~~2004~~holders of common stock and Class B common stock vote together, except for matters affecting the ~~Company~~powers, ~~has~~preferences ~~remaining~~or ~~authorization~~rights of the respective classes or as otherwise required under the Michigan Business Corporation Act. With respect to dividend ~~repurchase~~rights, aneach ~~additional~~share ~~272~~of common stock is entitled to cash dividends at least 10% higher than those payable on each share of Class B common stock. Class B common stock is subject to certain restrictions on transfer,~~202~~ ~~shares~~but is convertible into common stock on a share-for-share basis at any time.

~~13.~~ The Company ~~Business~~has ~~Segments~~a ~~During~~stock ~~the~~repurchase ~~fourth quarter of fiscal 2004~~program, ~~management~~but ~~began~~has ~~managing~~not ~~the~~purchased ~~business~~any ~~and~~shares ~~reviewing~~in ~~financial~~either ~~information~~fiscal 2005 byor ~~market~~2004. ~~channel~~At ~~rather~~July ~~than~~2, by2005, the ~~previous~~Company ~~Home~~has &remaining ~~Commercial~~authorization ~~Products~~to ~~and~~repurchase 272,202 ~~Office Products divisions~~shares.

37NOTE 13. Business Segments

During fiscal 2004, management began managing the business and reviewing financial information by market channel rather than by the previous Business Products and Home & Commercial Products divisions.

The Business Products division was segregated into two market channels: OEM and Idea. The OEM market channel sells precision drawer slides, hardware and ergonomic products to original equipment office furniture manufacturers. The Idea market channel sells ergonomic products to independent office furniture dealers. These dealers purchase product from office furniture manufacturers and resell the furniture along with design and installation services to the end customer.

The Home & Commercial Products division was segregated into two market channels: consumer and distribution/other. The consumer market channel sells a majority of the Company’s product lines to retailers. The distribution/other market channel sells many of the Company’s product lines to kitchen and bath OEM manufacturers and full line woodworking distributors.

The Manufacturing division manufactures or sources all products and sells them to the four market channels. The selling price to the market channels is equal to the standard cost of the product. Manufacturing cost variances from standard result in an operating profit or loss for the Manufacturing division.

Management has limited its review of the channels to net sales to external customers and operating profit before administrative costs as shown below. In accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”, only those measures prepared on an ongoing basis and reviewed by the chief operating decision maker are disclosed. Due to the complexity in obtaining this information for prior years, restatement of fiscal 2003 results by channel is impracticable.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The Office Products division was segregated into two market channels: OEM and dealer. The OEM market channel sells precision drawer slides, hardware and ergonomic products to original equipment office furniture manufacturers. The dealer market channel sells ergonomic products to independent office furniture dealers. These dealers purchase product from office furniture manufacturers and resell the furniture along with design and installation services to the end customer.

The Home & Commercial Products division was segregated into two market channels: consumer and distribution/other. The consumer market channel sells to a majority of the Company’s product lines to retailers. The distribution/other market channel sells many of the Company’s product lines to kitchen and bath OEM manufacturers and full line woodworking distributors.

The accounting policies of the business segments are the same as those described in the summary of significant accounting policies.

	OfficeProducts OEM		OfficeProductsDealer		Consumer		Distributionand Other		Manufacturing	Corporate and Other		ConsolidatedTotal
		BusinessProductsOEM			BusinessProductsIdea			Consumer		Distributionand Other			Manufacturing			Corporateand Other			ConsolidatedTotal
Year Ended July 3, 2004: Net sales to
Year Ended July 2, 2005:
external customers	$ 37,278,233		$9,141,248		$38,138,743		$64,419,518		-	$ -		$148,977,742
Net sales to
Operating profit
external customers		$	43,120,858		$	9,086,172		$	31,670,916	$	73,700,944		$	(212,925	)		-		$	157,365,965
before administrative
Operating profit before
costs, other expenses and income taxes	(2,521,640	)	1,279,954		1,402,569		10,456,455		798,463	-		11,415,801
administrative costs, other
Administrative costs,
expenses and income taxes		$	3,096,687		$	1,172,306		$	1,141,620	$	12,078,853		$	(5,217,580	)		-		$	12,271,886
other expenses	-		-		-		-		-	5,890,602		5,890,602
Administrative costs,
Income tax expense
other expenses			-			-			-		-		$	2,270,021		$	5,955,464		$	8,225,485
(benefit)	-		-		-		-		-	1,790,267		1,790,267
Income tax expense			-			-			-		-			-			966,129			966,129
Net income (loss)	~~(2,314,788~~	)$	13,~~279~~096,~~954~~687		~~1,402,569~~$	1,172,306	~~10,456,455~~	$	~~591~~1,~~411~~141,620	~~(7,680,669~~$	)12,078,853	~~3,734,932~~	$	(7,487,601	)	$	(6,921,593	)	$	3,080,272
Year Ended July 3, 2004:
Net sales to
external customers		$	37,161,339		$	9,258,142		$	34,119,746	$	68,438,515		$	(37,068	)	$	-		$	148,940,674
Operating profit before
administrative costs, other
expenses and income taxes		$	(2,543,392	)	$	1,301,708		$	345,203	$	11,513,820		$	798,463			-		$	11,415,802
Administrative costs,
other expenses			-			-			-		-			-		$	5,890,603		$	5,890,603
Income tax expense			-			-			-		-			-			1,790,267			1,790,267
Net income (loss)		$	(2,543,392	)	$	1,301,708		$	345,203	$	11,513,820		$	798,463		$	(7,680,870	)	$	3,734,932

In fiscal year 2003, the Company segregated its business segments into the Office Products and Home & Commercial Products divisions. This information is provided below:

		Office Products		Home andCommercialProducts		Corporateand Other		ConsolidatedTotal
		OfficeProducts			Home andCommercialProducts			Corporateand Other			ConsolidatedTotal
	Year Ended June 28, 2003: Net sales to external
Year Ended June 28, 2003:
	customers	$ 35,659,838		$89,260,638		-		$124,920,476
Net sales to external
	Income tax expense
Customers		$	35,659,838		$	89,215,$			-		$	124,874,939
	(benefit)	(37,000	)	4,751,000		(4,327,499	)	386,501
Income tax expense
	Net income (loss)	(76,048	)	7,964,928		(5,657,981	)	2,230,899
(benefit)		$	(37,000	)	$	4,751,000		$	(4,327,499	)	$	386,501
Net income (loss)		$	(76,048	)	$	7,964,928		$	(5,657,981	)	$	2,230,899

3837

Knape & Vogt Manufacturing Company and SubsidiariesNotes to Consolidated Financial Statements

Geographic information related to net sales, based on location of our customers is summarized between domestic and foreign locations as follows:

Year Ended	July 3, 2004	June 28, 2003	June 29, 2002
Net sales:
United States	$131,448,845	$109,926,057	$115,948,838
Canada	12,450,557	10,048,356	9,552,947
Other foreign	5,078,340	4,946,063	5,979,846

All property and equipment is held in the United States.

The Company does not believe that it is dependent upon any single customer, however the Company’s largest customer accounts for approximately 12% of consolidated gross sales.

14. Quarterly Results (Unaudited) The table below sets forth summary unaudited information on a quarterly (Unaudited) basis. The first three quarters of fiscal 2004 each contained 13 weeks and the fourth quarter contained 14 weeks.

Year Ended July 3, 2004	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Net sales	$ 36,013,012	$ 34,342,986	$ 36,859,638	$ 41,762,106
Gross profit	$ 7,052,310	$ 7,160,611	$ 7,947,384	$ 8,568,038
Operating income	$ 1,264,086	$ 1,253,817	$ 2,204,333	$ 2,437,366
Net income	$ 669,874	$ 441,905	$ 1,138,341	$ 1,484,812
Earnings per share-basic
and diluted	$ 0.15	$ 0.10	$ 0.25	$ 0.33
Cash dividend-common stock	$ 0.165	$ 0.165	$ 0.165	$ 0.165
Cash dividend-Class B
common stock	$ 0.15	$ 0.15	$ 0.15	$ 0.15
Year Ended June 28, 2003	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Net sales	$ 30,931,347	$ 30,117,755	$ 31,956,451	$ 31,914,923
Gross profit	$ 6,987,093	$ 6,478,520	$ 6,611,658	$ 7,204,895
Operating income	$ 632,164	$ 1,659,205	$ 322,579	$ 1,206,178
Net income	$ 194,963	$ 851,730	$ 395,387	$ 788,819
Earnings per share-basic
and diluted	$ 0.04	$ 0.19	$ 0.09	$ 0.17
Cash dividend-common stock	$ 0.165	$ 0.165	$ 0.165	$ 0.165
Cash dividend-Class B
common stock	$ 0.15	$ 0.15	$ 0.15	$ 0.15

15. Commitments and Contingencies The Canada Customs and Revenue Agency (“CCRA”) has performed an audit of the Company’s sales to its wholly-owned subsidiary, Knape & Vogt Canada.

Preliminary results from a joint review by the Company and its customs broker indicate that the Company may be liable for certain customs transactions, however, the amount of any such potential liability is unknown at this time. The Company is defending its position that Knape & Vogt Canada is the importer of record for all Knape & Vogt goods shipped into Canada and management believes, that based on the information available at this time, any liability owed to the CCRA will not have a material adverse effect on the Company’s earnings.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

The Company was sued in the Kent County, Michigan Circuit Court in 1997 by a former employee seeking additional benefits under an executive retirement plan. The Circuit Court ruled in favor of the plaintiff, but in June 2002, the Circuit Court was reversed on the Company’s appeal Sales to ~~the~~customers ~~Michigan~~are ~~Court~~attributed ~~of Appeals. A delayed request for leave~~ to ~~appeal to~~ the ~~Michigan~~geographic ~~Supreme~~areas Court which the plaintiff filed was denied during the fourth quarter of fiscal 2003. In August 2002, the plaintiff filed a lawsuit seeking these retirement benefits in the Federal District Court for the Western District of Michigan. The Company moved to dismiss the federal litigation based on the ~~statute~~location of ~~limitations. In September 2003,~~ the ~~Federal District Court dismissed the litigation~~customer. Long-lived Inassets ~~October~~consist ~~2003,~~of ~~the~~property ~~plaintiff~~and ~~appealed the dismissal to the Sixth Circuit Court of Appeals~~equipment. ~~That~~Geographic ~~appeal~~information is ~~pending.~~as ~~Management~~follows: ~~believes that any liability resulting from this case will not have a material adverse affect on the Company’s earnings.~~

The Company is also subject to other legal proceedings and claims, which arise in the ordinary course of business.

Year Ended	July 2,2005		July 3, 2004		June 28, 2003

Net sales:
United States	$	139,787,470	$	131,412,021	$	109,880,520
Canada		13,418,013		12,450,557		10,048,356
Other foreign		4,160,482		5,078,096		4,946,063

	$	157,365,965	$	148,940,674	$	124,874,939

Long-lived assets:
United States	$	21,116,604	$	28,617,333	$	33,962,862
Other foreign		1,004,320		66,381		26,247

	$	22,120,924	$	28,683,714	$	33,989,109

In The Company ~~the~~does ~~opinion~~not ofbelieve ~~management,~~that ~~based~~it onis ~~the~~dependent ~~information~~upon ~~presently~~any ~~known~~single ~~and taking into account established accruals of approximately $455~~customer,~~000~~ athowever ~~July~~the Company’s 3,largest ~~2004~~customer, ~~the~~who ~~ultimate~~is ~~liability~~in ~~for these matters will not have a material adverse effect on~~ the ~~Company’s~~Distribution/Other ~~financial~~channel, ~~position~~accounts orfor approximately ~~the~~13.2% ~~results~~ of ~~its~~consolidated ~~operations~~gross sales.

40NOTE 14. Quarterly Results (Unaudited)

The table below sets forth summary unaudited information on a quarterly basis. All of the fiscal quarters contain 13 weeks, except for the fourth quarter of fiscal 2004, which contained 14 weeks.

Year Ended July 2, 2005	1st Quarter		2nd Quarter			3rd Quarter		4th Quarter

Net sales	$	38,372,180	$	37,496,247		$	40,169,917	$	41,327,621
Gross profit	$	6,804,776	$	6,959,082		$	7,737,003	$	8,617,206
Operating income (loss)	$	969,525	$	(351,563	)	$	2,095,787	$	2,782,601
Net income (loss)	$	390,511	$	(522,814	)	$	1,691,611	$	1,520,964
Earnings (loss) per share-basic and
diluted	$	0.09	$	(0.12	)	$	0.37	$	.34
Cash dividend-common stock	$	0.165	$	0.165		$	0.165	$	0.165
Cash dividend-Class B common stock	$	0.15	$	0.15		$	0.15	$	0.15

Year Ended July 3, 2004	1st Quarter		2nd Quarter			3rd Quarter		4th Quarter

Net sales	$	36,005,957	$	34,333,759		$	36,850,156	$	41,750,802
Gross profit	$	7,052,310	$	7,160,611		$	7,947,384	$	8,568,038
Operating income	$	1,264,086	$	1,253,817		$	2,204,333	$	2,437,366
Net income	$	669,874	$	441,905		$	1,138,341	$	1,484,811
Earnings per share-basic and diluted	$	0.15	$	0.10		$	0.25	$	0.33
Cash dividend-common stock	$	0.165	$	0.165		$	0.165	$	0.165
Cash dividend-Class B common stock	$	0.15	$	0.15		$	0.15	$	0.15

NOTE 15. Commitments and Contingencies

In 1997, KV was sued by a former employee seeking additional benefits under an executive retirement plan. This litigation has been dismissed and appealed through various courts. In January 2005, the Sixth Circuit Court of Appeals denied the plaintiff’s appeal of the dismissal.

The Canada Customs and Revenue Agency (“CCRA”) has performed an audit of KV’s sales to its wholly-owned subsidiary, Knape & Vogt Canada. Preliminary results from a joint review by KV and its customs broker indicate that KV may be liable for certain customs transactions, however, the amount of any such potential liability is unknown at this time. KV is defending its position that Knape & Vogt Canada is the importer of record for all Knape & Vogt goods shipped into Canada and management believes that based on the information available at this time, any liability owed to the CCRA will not have a material adverse effect on KV’s earnings.

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

During the second quarter of fiscal 2005, a competitor filed a suit in the U.S. District Court of the Central District of California alleging that KV infringes two of the competitor’s U.S. patents. The competitor is seeking monetary damages and injunctive relief. KV has received an opinion from its outside patent counsel that KV’s products do not infringe the competitor’s patents. KV has answered that it denies any liability and will vigorously defend the suit.

KV is also subject to other legal proceedings and claims, which arise in the ordinary course of business.

In the opinion of management, based on the information presently known and taking into account established accruals of approximately $431,000 at July 2, 2005, the ultimate liability for these matters will not have a material adverse effect on KV’s financial position or the results of its operations.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Knape & Vogt Manufacturing Company
Grand Rapids, Michigan

We have audited the accompanying consolidated balance sheets of Knape & Vogt Manufacturing Company and subsidiaries (the “Company”) as of July 32, ~~2004~~2005 and ~~June~~July 283, ~~2003~~2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended July 32, ~~2004~~2005. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements., ~~An audit also includes~~ assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall ~~financial~~ financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of ~~the~~Knape & Vogt Manufacturing Company and subsidiaries as of July 32, ~~2004~~2005 and ~~June~~July 283, ~~2003~~ 2004, and the results of ~~its~~their operations and ~~its~~ their cash flows for each of the three years in the period ended July 32, ~~2004~~2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

~~Our~~/s/ ~~audits~~Deloitte ~~also included the financial statement schedules of Knape~~ & ~~Vogt Manufacturing Company, listed in Item~~Touche ~~14.~~LLPGrand ~~This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion~~Rapids, ~~such~~Michigan ~~financial~~August ~~statement schedule~~10, ~~when~~2005 ~~considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.~~

~~Grand~~40 ~~Rapids, MichiganAugust 6, 2004~~

PART III

ITEM 9A — CONTROLS AND PROCEDURES

(a) Evaluations of Disclosure Controls and Procedures

In order to ensure that the information that we must disclose in our filings with the Securities and Exchange Commission is recorded, processed, summarized and reported on a timely basis, we have adopted disclosure controls and procedures. ~~Our~~With ~~Chief~~the ~~Executive~~participation ~~Officer~~of management, ~~William~~the R.Company’s ~~Dutmers,~~Chief Executive Officer and our Vice President of Finance and Treasurer, ~~Leslie J. Cummings,~~ have reviewed and evaluated the Company’s disclosure controls ~~and~~ and procedures (as defined in Exchange Act Rules 13a-1415(ce) and 15d-1415(ce) as of ~~the~~July ~~end of the~~2, ~~period~~2005 ~~covered by the Annual Report on Form 10-K~~ (the “Evaluation Date”)), and have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures ~~are~~were ~~appropriate~~adequate and effective to ensure that nomaterial ~~changes~~information ~~are~~relating ~~required~~to atthe ~~this~~Company ~~time~~would be made known to them in connection with the Company’s filing of its Annual Report on Form 10-K for the annual period ended July 2, 2005.

(b)

Changes in Internal Controls

There were no significant changes in the Company’s internal controls over financial reporting or in other factors that could significantly affect internal controls subsequent to the date of the most recent evaluation, nor any significant deficiencies or material weaknesses in such internal controls requiring corrective actions. As a result, no corrective actions were taken.

ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

~~Directors of Registrant.~~ Information relating to directors and director nominees and executive officers of the Company, contained in the Company’s definitive Proxy Statement for its Annual Meeting of Shareholders to be held October 1521, ~~2004~~2005, and filed pursuant to Regulation 14A, is incorporated herein by reference.

Executive OfficersITEM of11 Registrant.—EXECUTIVE Information relating to the executive officers of the Company is included in Part I of this Form 10-K. COMPENSATION

~~ITEM~~ The information 11under —the ~~EXECUTIVE~~captions ~~COMPENSATION~~“Summary Compensation Table,” “Option Grants in Last Fiscal Year,” “Aggregated Stock Option Exercises in Fiscal 2005 and Year End Option Values,” and “Stock Performance Graph” is incorporated herein by reference from the Company’s definitive Proxy Statement for its annual Meeting of Shareholders to be held October 21, 2005, filed pursuant to Regulation 14A.

The information under the captions “Summary Compensation Table,” “Option Grants in Last Fiscal Year,” and “Aggregated Stock Option Exercises in Fiscal 2002 and Year End Option Values,” is incorporated herein by reference from the Company’s definitive Proxy Statement for its annual Meeting of Shareholders to be held October 15, 2004, filed pursuant to Regulation 14A.

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The informationEquity underCompensation thePlan captions “Voting Securities and Principal Shareholders” and “Directors and Nominees” is incorporated herein by reference from the Company’s definitive Proxy Statement for the Company’s Annual Meeting of Shareholders to be held October 15, 2004, filed pursuant to Regulation 14A. Information

Plan category		Weighted-average exercise price of outstanding options (2)

Equity compensation plans
approved by security holders	13,750	$	13	.89	-

The information under the caption “Ownership of Knape & Vogt Stock” is incorporated herein by reference from the Company’s definitive Proxy Statement for the Company’s Annual Meeting of Shareholders to be held October 21, 2005, filed pursuant to Regulation 14A.

The information under the caption “~~Directors~~Change in Control Arrangements and ~~Nominees~~Severance Agreements” is incorporated herein by reference from the Company’s definitive Proxy Statement for the Company’s Annual Meeting of Shareholders to be held October 1521, ~~2004~~2005, filed pursuant to Regulation 14A.

ITEM 14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information under the caption “Independent Registered Public Accountants” is incorporated herein by reference from the Company’s definitive Proxy Statement for the Company’s Annual Meeting of Shareholders to be held October 1521, ~~2004~~2005, filed pursuant to Regulation 14A.

4342

PART IV

ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1) Financial Statements

The following financial statements, all of which are set forth in Item 8, are filed as part of this report.

		Page Number in Form 10-K Report
			Report Number inForm 10-K Report
~~Consolidated Statements of Operations~~	Consolidated Statements of Operations	19		18
~~Consolidated Balance Sheets~~	Consolidated Balance Sheets	~~20-21~~		19-20
~~Consolidated Statements of Stockholders' Equity~~	Consolidated Statements of Stockholders' Equity	22		21
~~Consolidated Statements of Cash Flows~~	Consolidated Statements of Cash Flows	23		22
~~Notes to Consolidated Financial Statements~~	Notes to Consolidated Financial Statements	~~24-40~~		23-39
~~Report of Independent Registered Public Accounting Firm~~	Report of Independent Registered Public Accounting Firm	41		40

(2) Financial Statement Schedule

The following financial statement schedule is included in this Form 10-K on the page noted.

~~Page~~Report Number ininForm ~~Form~~ 10-K Report Schedule II - Valuation and Qualifying Accounts and Reserves 4744

All other schedules are not submitted because they are not applicable or not required, or because the required information is included in the financial statements or notes thereto.

(3) ~~Exhibits~~ Exhibits

Reference is made to the Exhibit Index, which is found on ~~pages~~page 4946 ~~and 50~~ of this Form 10-K Annual Report.

4443

(b) ReportsKnape on& Form 8-KVogt Manufacturing Company and SubsidiariesSchedule II — Valuation and Qualifying Accounts and Reserves

Knape & Vogt filed the following report on Form 8-K during the quarter ended July 3, 2004.

Column A	Column B		Column C			Column D		Column E

Description	Balance beginning period		Charged to costs and expenses			Deductions/ Claims Paid		Balance end of period

Year ended July 2, 2005:

Allowance for:
Doubtful accounts	$	462,000	$	(98,000	)	$	25,000	$	339,000
Cash discounts		211,000		1,778,000			1,795,000		194,000

		673,000		1,680,000			1,820,000		533,000
Returned goods reserve		330,000		755,000			741,000		344,000
Warranty reserve		287,000		534,000			427,000		394,000
Inventory obsolescence		1,648,000		900,000			493,000		2,055,000

Year ended July 3, 2004:

Allowance for:
Doubtful accounts	$	658,000	$	(54,000	)	$	142,000	$	462,000
Cash discounts		145,000		1,753,000			1,687,000		211,000

		803,000		1,699,000			1,829,000		673,000
Returned goods reserve		184,000		1,455,000			1,309,000		330,000
Warranty reserve		275,000		228,000			216,000		287,000
Inventory obsolescence		1,144,000		1,203,000			699,000		1,648,000

Year ended June 28, 2003:

Allowance for:
Doubtful accounts	$	633,000	$	80,000		$	55,000	$	658,000
Cash discounts		122,000		1,169,000			1,146,000		145,000

		755,000		1,249,000			1,201,000		803,000
Returned goods reserve		147,000		656,000			619,000		184,000
Warranty reserve		235,000		238,000			198,000		275,000
Inventory obsolescence		1,439,000		213,000			508,000		1,144,000

Date of Report		Filing Date		Items Reported
April 22, 2004		April 22, 2004		Under Item 9, this Form 8-K included a press release that reported Knape & Vogt’s financial results for the third quarter of fiscal 2004, which ended March 27, 2004. The press release included summary consolidated financial data for the quarters ended March 27, 2004 and March 29, 2003 and the year-to-date periods ended March 27, 2004 and March 29, 2003. The press release also contained balance sheet information as of March 27, 2004 and March 29, 2003.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and StockholdersKnape & Vogt Manufacturing CompanyGrand Rapids, Michigan

We have audited the financial statements of Knape & Vogt Manufacturing Company as of July 3, 2004 and June 28, 2003, and for each of the three years in the period ended July 3, 2004, and have issued our report thereon dated August 6, 2004; such financial statements and report are included in your 2004 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial statement schedules of Knape & Vogt Manufacturing Company, listed in Item 14. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

Deloitte & Touche LLPGrand Rapids, Michigan August 6, 2004

Knape & Vogt Manufacturing Company and Subsidiaries Schedule II — Valuation and Qualifying Accounts and Reserves

Column A	Column B	Column C		Column D	Column E
Description	Balancebeinningof period	Charged tocosts andexpenses		Deductions	Balanceend ofperiod
Year ended July 3, 2004:
Allowance for:
Doubtful accounts	$ 658,000	$ (54,000	)	$ 142,000	$ 462,000
Cash discounts	145,000	1,753,000		1,686,000	212,000
	803,000	1,699,000		1,828,000	674,000
Returned goods reserve	184,000	1,455,000		1,309,000	330,000
Warranty reserve	275,000	228,000		216,000	287,000
Inventory obsolescence	1,144,000	1,203,000		699,000	1,648,000
Year ended June 28, 2003:
Allowance for:
Doubtful accounts	$ 633,000	$ 80,000		$ 55,000	$ 658,000
Cash discounts	122,000	1,169,000		1,146,000	145,000
	755,000	1,249,000		1,201,000	803,000
Returned goods reserve	147,000	656,000		619,000	184,000
Warranty reserve	235,000	238,000		198,000	275,000
Inventory obsolescence	1,439,000	213,000		508,000	1,144,000

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 ~~COMPANYBy~~COMPANY By /s/ William R. Dutmers —————————————— William R. Dutmers, Chairman of the ~~Boardand~~Board and Chief Executive Officer By /s/ Leslie J. Cummings —————————————— Leslie J. Cummings, Vice President of ~~Financeand~~Finance and Treasurer

Date: August 3031, ~~2004~~2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on August 3031, ~~2004~~2005, by the following persons on behalf of the registrant in the capacities indicated.

/s/ William R. Dutmers—————————————— William R. Dutmers, Chairman of the Board and Chief Executive Officer /s/ ~~Thomas A. Hilborn Thomas A. Hilborn, Director /s/ Richard S. Knape Richard S. Knape, Director /s/ Gregory Lambert Gregory Lambert, Director /s/~~ John E. Fallon—————————————— John E. Fallon, Director ~~/s/ Michael J. Kregor Michael J. Kregor, Director /s/ Robert J. Knape Robert J. Knape, Director /s/ Christopher Norman Christopher Norman, Director~~

48/s/ Thomas A. Hilborn—————————————— Thomas A. Hilborn, Director /s/ Michael J. Kregor—————————————— Michael J. Kregor, Director

/s/ Richard S. Knape
——————————————
Richard S. Knape, Director

/s/ Robert J. Knape
——————————————
Robert J. Knape, Director

/s/ Gregory Lambert
——————————————
Gregory Lambert, Director

/s/ Christopher Norman
——————————————
Christopher Norman, Director

KNAPE & VOGT MANUFACTURING COMPANY
ANNUAL REPORT — FORM 10-K

EXHIBIT INDEX

3(a)

Certificate of Amendment to the Articles of Incorporation, and the Restated Articles of Incorporation of the Company, which were filed as Exhibit 3(a) of the Registrant’s Form 10-K Annual Report for the fiscal year ended June 30, 1987, are incorporated by reference.

3(b) Bylaws as amended ~~April~~October 2315, ~~1999~~2004, filed herewith as Exhibit 3(b).1 ofAmended ~~the~~section ~~Registrant’s~~was ~~Form~~filed ~~10-Q~~on ~~Third~~October ~~Quarter~~15, ~~Report~~2004 ~~for~~in the ~~fiscal~~Registrant’s ~~year~~Form ~~ended June 30, 1999, are incorporated by reference~~8K.

10(a)

Supplemental Executive Retirement Plan, which was filed as Exhibit 10 of the Registrant’s Form 10-K Annual Report for the fiscal year ended June 30, 1981, is incorporated by reference.

10(b)

Knape & Vogt Manufacturing Company 1987 Stock Option Plan, effective October 16, 1987, which was filed as Exhibit I to Registrant’s definitive Proxy Statement dated September 23, 1987, is incorporated by reference.

10(c)

Knape & Vogt Manufacturing Company Employees’ Retirement Savings Plan (July 1, 1989 Restatement), as amended, which was filed as Exhibit 99 to Registrant’s Registration Statement on Form S-8 (Reg. No. 33-88212), is incorporated by reference.

10(d)

Loan agreement with Comerica Bank dated August 28, 2003, which was filed as Exhibit 10(a) of the Registrant’s Form 10-Q Quarterly Report for the first quarter ended September 27, 2003, is incorporated by reference.

10(h)

Interest swap agreement with Bank One dated June 1, 1999, which was filed as Exhibit 10(e) of the Registrant’s Form 10-K Annual Report for the fiscal year ended June 30, 1999, is incorporated by reference.

10(i)

Knape & Vogt Manufacturing Company 1997 Stock Incentive Plan, which was filed as Appendix A to the Registrant’s proxy statement dated September 17, 1997, is incorporated by reference.

10(j) ~~Restricted~~Supplemental ~~Share~~Executive ~~Grant~~Retirement ~~Agreement dated February 1~~Plan, ~~2000,~~adopted ~~between~~effective ~~Knape & Vogt Manufacturing Company and William R. Dutmers, filed~~ as ~~Exhibit 10.1~~ of ~~the~~June ~~Registrant’s Form 10-Q Third Quarter Report of the fiscal year ended July 1~~29, ~~2000~~2005, is ~~incorporated~~filed ~~by reference~~herewith.

4910(k) Annual Incentive Plan, adopted effective as of July 3, 2005, is filed herewith.

10(kl) ~~Stock~~Form ~~Option~~of ~~Agreement~~Management ~~for~~Continuity ~~Nonqualified~~Agreements ~~Stock~~adopted ~~Option~~effective ~~dated~~as ~~February~~of 1June 30, ~~2000~~2005, between Knape & Vogt Manufacturing Company and William R. Dutmers, ~~filed~~Raymond asN. ~~Exhibit~~Watson, 10Leslie J.2 ofCummings, ~~the~~John ~~Registrant’s~~J. ~~Form~~Master, ~~10-Q~~Daniel ~~Third~~D. ~~Quarter~~Pickett, ~~Report~~Robert ~~for~~J. ~~the~~Knape ~~fiscal~~and ~~year~~Timothy ~~July~~R. 1Graber, ~~2000,~~ is ~~incorporated~~filed ~~by reference~~herewith.

10(m)

Agreement dated October 29, 2002 between Knape & Vogt Manufacturing Company and William R. Dutmers is filed herewith.

10(n)

First Amendment to the Credit Agreement with Comerica Bank dated May 31, 2005 is filed herewith.

Subsidiaries of Registrant.

Consent of Deloitte & Touche LLP, independent registered public accountants.

31.1

Certificate of the Chairman of the Board and Chief Executive Officer of Knape & Vogt Manufacturing Company pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certificate of the Executive Vice President of Finance and Treasurer of Knape & Vogt Manufacturing Company pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certificate of the Chairman of the Board and Chief Executive Officer of Knape & Vogt Manufacturing Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~32.2~~46 Certificate of the Vice President of Finance and Treasurer of Knape & Vogt Manufacturing Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EXHIBIT 21

SCHEDULE OF SUBSIDIARIES OF KNAPE & VOGT MANUFACTURING COMPANY

Knape & Vogt Canada, Inc. (organized under the laws of Ontario, Canada)

Feeny Manufacturing Company (organized under the laws of Michigan)

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 33-20227, 33-43794 and 33-88212 of Knape & Vogt Manufacturing Company on Form S-8 of our report dated August 6, 2004, appearing in this Annual Report on Form 10-K of Knape & Vogt Manufacturing Company for the year ended July 3, 2004.

DELOITTE & TOUCHE LLP Grand Rapids, MichiganAugust 6, 2004

EXHIBIT 31.1

I, William R. Dutmers, certify that:

1. I have reviewed this annual report on Form 10-K of Knape & Vogt Manufacturing Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting;

Dated: August 30, 2004 /s/ William R. Dutmers William R. Dutmers Chairman of the Board and Chief Executive Officer

EXHIBIT 31.2

I, Leslie J. Cummings, certify that:

1. I have reviewed this annual report on Form 10-K of Knape & Vogt Manufacturing Company;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting;

Dated: August 30, 2004 /s/ Leslie J. CummingsLeslie J. CummingsVice President of Finance and Treasurer

EXHIBIT 32.1

I, William R. Dutmers, Chairman of the Board and Chief Executive Officer of Knape & Vogt Manufacturing Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Annual Report on Form 10-K for the fiscal year ended July 3, 2004 which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934, and

(2) the information contained in the Annual Report on Form 10-K for the fiscal year ended July 3, 2004 fairly presents, in all material respects, the financial condition and results of operations of Knape & Vogt Manufacturing Company.

Dated: August 30, 2004 /s/ William R. Dutmers William R. Dutmers Chairman of the Board and Chief Executive Officer

EXHIBIT 32.2

I, Leslie J. Cummings, Vice President of Finance and Treasurer of Knape & Vogt Manufacturing Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

Dated: August 30, 2004 /s/ Leslie J. CummingsLeslie J. CummingsVice President of Finance andTreasurer

Commission file number 000-01859

KNAPE & VOGT MANUFACTURING COMPANY (Exact nameName of registrantRegistrant as specifiedSpecified in itsIts charterCharter)

PARTForward-Looking IStatements

PART IITEM 1 — BUSINESS

Item 1(a) — General Development of Business

Item 1(b) — Financial Information About Industry Segments

The CompanyItem owned1(d) or—Information leasedAbout theForeign following offices and manufacturing facilities as of July 3, 2004: Operations

ITEM 3 — LEGAL PROCEEDINGS

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

PART II

ITEM 5 — MARKET PRICE FOR REGISTRANT’S COMMON EQUITY, AND RELATED STOCKHOLDER MATTERSAND ISSUER PURCHASES OF EQUITY SECURITIESMATTERS

6Equity Compensation Plan Information

ITEM 6 — SELECTED FINANCIAL DATA

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Basis of Presentation

Overview

Critical Accounting Policies

Results of Operations

Sales

Gross Profit

Selling, General and Administrative

Impairment and Severance Costs

Interest Expense and Other Net Expenses

Income Taxes

Net Income

Liquidity and Capital Resources

Legal Contingencies

Contractual Obligations

Inflation

Recently Issued Accounting Standards

ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

18Knape & Vogt Manufacturing Company and SubsidiariesConsolidated Statements of Operations

Knape & Vogt Manufacturing Company and SubsidiariesConsolidated Balance Sheets

Knape & Vogt Manufacturing Company and SubsidiariesConsolidated Balance Sheets

Knape & Vogt Manufacturing Company and SubsidiariesConsolidatedSubsidiaries Consolidated Statements of Stockholders’ Equity

Knape & Vogt Manufacturing Company and SubsidiariesConsolidated Statements of Cash Flows

Knape & Vogt Manufacturing Company and Subsidiaries

Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

NOTE 1. Nature of Operations.

NOTE 2. Summary of Significant Accounting Policies

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

NOTE 3. Impairment/ Severance During 2003, the Company recorded $271,325 pre-tax of severance costs in other expense on the consolidated statement of operations, primarily related to the resignation of two of its executive officers in August 2002.

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

TheNOTE Company6. has recognized an afterLong-taxTerm gain of $756,847 in fiscal 2004 and loss of $619,822 in fiscal 2003 in other comprehensive income on the swap agreement. The gain/(loss) is made up of the following components:Debt

TheNOTE Company’s Board of Directors annually approves contributions to the defined contribution plans7. ExpenseDerivative forFinancial the discretionary profit-sharing plan amounted to $700,666, $667,192 and $750,261 in fiscal 2004, 2003 and 2002, respectively.Instruments

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

NOTE 8. Lease Commitments

NOTE 9. Retirement Plans

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries

Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

34NOTE 10. Income Taxes

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and SubsidiariesNotes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

NOTE 11. Stock Option Plans

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

37NOTE 13. Business Segments

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and SubsidiariesNotes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

40NOTE 14. Quarterly Results (Unaudited)

NOTE 15. Commitments and Contingencies

Knape & Vogt Manufacturing Company and Subsidiaries Notes to Consolidated Financial Statements

PART III

ITEM 9A — CONTROLS AND PROCEDURES

ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Executive OfficersITEM of11 Registrant.—EXECUTIVE Information relating to the executive officers of the Company is included in Part I of this Form 10-K. COMPENSATION

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

PART I
ITEM 1 — BUSINESS

Knape & Vogt Manufacturing Company and Subsidiaries
Consolidated Balance Sheets

Knape & Vogt Manufacturing Company and Subsidiaries
Consolidated Balance Sheets

Knape & Vogt Manufacturing Company and Subsidiaries
Consolidated Statements of Cash Flows

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

Knape & Vogt Manufacturing Company and Subsidiaries
Notes to Consolidated Financial Statements

KNAPE & VOGT MANUFACTURING COMPANY
ANNUAL REPORT — FORM 10-K

Filing Compare · KNAPE & VOGT MANUFACTURING CO