# SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (AMENDMENT NO. 1)

(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 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
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Commission file number
000-01859

# KNAPE & VOGT
MANUFACTURING COMPANY (Exact name of
registrant as specified in its charter)

|                                                                       | 
|---------------------------------------------------------------------- | 
|Michigan(State or other jurisdiction of incorporation or organization) | 

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 classNone | 

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 __.

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes____
NoX

The aggregate market value of voting
stock held by nonaffiliates of the registrant was $53,970,371 as of December 27, 2003.

Number of shares outstanding of
each class of common stock as of August 27, 2004: 2,339,617 shares of Common Stock,
par value $2.00 per share, and 2,177,488 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 15, 2004, are incorporated by reference into
Part III of this Report.

---



# EXPLANATORY NOTE

Knape
& Vogt Manufacturing Company (the Company) hereby amends Part I, Item 8,
and Part IV, Item 15, of its Annual Report on Form 10-K for the fiscal year ended July 3,
2004, as originally filed with the Securities & Exchange Commission on August 30, 2004
(the Original Form 10-K). The Company is filing this Amendment No. 1 on Form
10-K/A (this Amendment No. 1) to do the following: (a) to add the conformed
signature of its independent auditors Deloitte & Touche LLP to the Report of
Independent Registered Public Accounting Firm, with respect to the Consolidated Balance
Sheets of the Company as of July 3, 2004 and June 28, 2003 and the related Consolidated
Statements of Operations, Stockholders Equity, and Cash Flows for each of the three years
in the period ended July 3, 2004 and the related financial statement schedule (the
Report); (b) to correct the reference in the last paragraph of the Report
opining on the financial statement schedule from Item 14 to Item 15; (c) to delete the
separate Report of Independent Registered Public Accounting Firm with respect to the
financial statement schedule; and (d) to file an updated Consent of Independent Registered
Public Accounting Firm, Exhibit 23.

In
accordance with the rules of the Securities and Exchange Commission, the Company has set
forth the text of Item 8 and Item 15 in their entirety and included the updated Exhibit 23
consent. In addition, updated certifications pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 have been added as Exhibits 31.1 and 31.2 and updated certifications pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 have been added as Exhibits 32.1 and 32.2
to this Amendment No. 1.

This
Amendment No. 1 is limited in scope to the portions of the Original Form 10-K set forth
above and does not amend, update, or change any other items or disclosures contained in
the Original Form 10-K. Accordingly, all other items that remain unaffected are omitted in
this filing. None of the amendments to the Original Form 10-K reflected in this Amendment
No. 1 resulted in a change to or restatement of the financial statements or other
financial information included in the Original Form 10-K.

This
Amendment No. 1 continues to speak as of the date of the original filing of the Original
Form 10-K and we have not updated the disclosures contained therein to reflect any events
that occurred at any subsequent date. The filing of this Amendment No. 1 shall not be
deemed an admission that the Original Form 10-K, when filed, included any untrue statement
of a material fact or omitted to state a material fact necessary to make a statement
therein not misleading.

2

---



# PART I ITEM 8 
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Immediately
following are the consolidated balance sheets of the Company and its subsidiaries as of
July 3, 2004 and June 28, 2003, and the related consolidated statements of operations,
stockholders equity and cash flows for each of the three years in the period ended
July 3, 2004, the notes thereto, and the report of independent registered public
accounting firm.

3

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|Knape & Vogt Manufacturing Company and Subsidiaries
                                Consolidated Statements of Operations
|-------------------------------------------------------------------------------------------------------------------------
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|
|                                                                                                                         
|Net Sales                                                                                                                
|Cost of Sales                                                                                                            
|                                                                                                                         
|Gross Profit                                                                                                             
|                                                                                                                         
|Expenses                                                                                                                 
|Selling                                                                                                                  
|Administrative and general                                                                                               
|Other                                                                                                                    
|                                                                                                                         
|Total Expenses                                                                                                           
|                                                                                                                         
|Operating Income                                                                                                         
|                                                                                                                         
|Other Expenses (Income)                                                                                                  
|Interest                                                                                                                 
|Other, net                                                                                                               
|                                                                                                                         
|Total Other Expenses                                                                                                     
|                                                                                                                         
|Income Before Income Taxes                                                                                               
|Income Taxes                                                                                                             
|                                                                                                                         
|Net Income                                                                                                               
|                                                                                                                         
|Basic and Diluted Earnings Per Share                                                                                     
|                                                                                                                         
|Weighted-Average Shares Outstanding                                                                                      
|                                                                                                                         
|Dividends Per Share                                                                                                      
|Common stock                                                                                                             
|Class B common stock                                                                                                     
|                                                                                                                         

See accompanying notes to consolidated financial statements.

4

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# Knape & Vogt
Manufacturing Company and SubsidiariesConsolidated Balance Sheets

|                                                               | 
|-------------------------------------------------------------- | 
|
|                                                               | 
|Assets                                                         | 
|Current Assets                                                 | 
|Cash and equivalents                                           | 
|Accounts receivable, less allowances of $673,000 and $803,000, | 
|respectively                                                   | 
|Inventories, including inventory on consignment at customer    | 
|locations of $3,292,297 and $3,610,427, respectively           | 
|Prepaid expenses and other current assets                      | 
|                                                               | 
|Total Current Assets                                           | 
|                                                               | 
|Property and Equipment                                         | 
|Land and improvements                                          | 
|Buildings                                                      | 
|Machinery and equipment                                        | 
|Construction in progress                                       | 
|                                                               | 
|                                                               | 
|Less accumulated depreciation                                  | 
|                                                               | 
|Net Property and Equipment                                     | 
|                                                               | 
|Goodwill, net of accumulated amortization of $1,099,000        | 
|                                                               | 
|Prepaid Pension Cost                                           | 
|                                                               | 
|Other Assets                                                   | 
|                                                               | 
|                                                               | 
|                                                               | 

See accompanying notes to consolidated financial statements.

5

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# Knape & Vogt Manufacturing
Company and SubsidiariesConsolidated Balance Sheets

|                                                                      | 
|--------------------------------------------------------------------- | 
|
|                                                                      | 
|Liabilities and Stockholders' Equity                                  | 
|Current Liabilities                                                   | 
|Accounts payable                                                      | 
|Accruals:                                                             | 
|Income taxes                                                          | 
|Accrued compensation                                                  | 
|Accrued customer rebates and cooperative advertising                  | 
|Other                                                                 | 
|                                                                      | 
|Total Current Liabilities                                             | 
|Other Retirement Benefits                                             | 
|Long-Term Debt and Capital Leases                                     | 
|Deferred Income Taxes                                                 | 
|Interest Rate Swap Agreement and Other Long-Term Liabilities          | 
|                                                                      | 
|Total Liabilities                                                     | 
|                                                                      | 
|Stockholders' Equity                                                  | 
|Stock:                                                                | 
|Common, $2 par - 6,000,000 shares authorized; 2,331,860 and 2,293,433 | 
|issued and outstanding                                                | 
|Class B common, $2 par - 4,000,000 shares authorized; 2,184,489 and   | 
|2,222,202 issued and outstanding                                      | 
|Preferred - 2,000,000 shares authorized and unissued                  | 
|Additional paid-in capital                                            | 
|Unearned stock grant                                                  | 
|Accumulated other comprehensive loss:                                 | 
|Derivative instrument                                                 | 
|Minimum SERP adjustment                                               | 
|Minimum pension adjustment                                            | 
|Foreign currency translation adjustment                               | 
|                                                                      | 
|Total accumulated other comprehensive loss                            | 
|Retained earnings                                                     | 
|                                                                      | 
|Total Stockholders' Equity                                            | 
|                                                                      | 
|                                                                      | 
|                                                                      | 

See accompanying notes to consolidated financial statements.

6

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# Knape & Vogt
Manufacturing Company and SubsidiariesConsolidated Statements of Stockholders
Equity

|                                        | 
|--------------------------------------- | 
|
|                                        | 
|Balance, June 30, 2001                  | 
|Comprehensive income:                   | 
|Net income                              | 
|Foreign currency translation adjustment | 
|Minimum SERP adjustment, net of         | 
|deferred taxes of $4,000                | 
|Loss on derivative instrument, net      | 
|of Deferred taxes of $371,000           | 
|                                        | 
|Other comprehensive loss                | 
|                                        | 
|Comprehensive income                    | 
|Cash dividends                          | 
|Restricted stock issued (817 shares)    | 
|Repurchase and retirement of            | 
|shares of common stock (101,506         | 
|shares)                                 | 
|                                        | 
|Balance, June 29, 2002                  | 
|Comprehensive income:                   | 
|Net income                              | 
|Foreign currency translation adjustment | 
|Minimum SERP adjustment, net of         | 
|deferred taxes of $152,000              | 
|Minimum pension adjustment, net of      | 
|deferred taxes of $302,000              | 
|Loss on derivative instrument, net      | 
|of deferred taxes of $333,000           | 
|                                        | 
|Other comprehensive loss                | 
|                                        | 
|Comprehensive income                    | 
|Cash dividends                          | 
|Restricted stock forfeited (50 shares)  | 
|Restricted stock issued (813 shares)    | 
|Repurchase and retirement of            | 
|shares of common stock (2,280           | 
|shares)                                 | 
|                                        | 
|Balance, June 28, 2003                  | 
|Comprehensive income:                   | 
|Net income                              | 
|Foreign currency translation adjustment | 
|Minimum SERP adjustment, net of         | 
|deferred taxes of $103,000              | 
|Minimum pension adjustment, net of      | 
|deferred taxes of $157,000              | 
|Gain on derivative instrument, net      | 
|of deferred taxes of $407,000           | 
|                                        | 
|Other comprehensive loss                | 
|                                        | 
|Comprehensive income                    | 
|Cash dividends                          | 
|Restricted stock issued (714 shares)    | 
|                                        | 
|Balance, July 3, 2004                   | 
|                                        | 

See accompanying notes to consolidated financial statements.

7

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# Knape & Vogt
Manufacturing Company and SubsidiariesConsolidated Statements of Cash Flows

---

|Year Ended                                                  | July 3, 2004 | June 28, 2003 | June 29, 2002
|----------------------------------------------------------- | ------------ | ------------- | -------------
|                                                            |             
|Operating Activities                                        |              |               |              
|Net income                                                  |              | $ 3,734,932   |              
|Adjustments to reconcile net income to net cash provided by |             
|operating activities:                                       |             
|Depreciation of property and equipment                      |              | 6,306,890     |              
|Amortization of other assets                                |              | 93,468        |              
|Deferred income taxes                                       |              | (370,106      | )            
|Increase (decrease) in supplemental retirement benefits     |              | (23,709       | )            
|(Increase) decrease in prepaid pension cost                 |              | 414,554       |              
|Loss on disposal of property and equipment                  |              | 1,450         |              
|Other                                                       |              | 42,098        |              
|Changes in operating assets and liabilities:                |             
|Accounts receivable                                         |              | (3,107,525    | )            
|Inventories                                                 |              | (4,976,215    | )            
|Other current assets                                        |              | (218,626      | )            
|Accounts payable                                            |              | 692,252       |              
|Accruals                                                    |              | 2,319,201     |              
|                                                            |             
|Net cash provided by operating activities                   |              | 4,908,664     |              
|                                                            |             
|Investing Activities                                        |             
|Additions to property and equipment                         |              | (1,199,398    | )            
|Proceeds from sales of property and equipment               |              | 53,975        |              
|Other, net                                                  |              | (28,114       | )            
|                                                            |             
|Net cash used for investing activities                      |              | (1,173,537    | )            
|                                                            |             
|Financing Activities                                        |             
|Dividends paid                                              |              | (2,849,192    | )            
|Principal payments on capital lease obligations             |              | (13,741       | )            
|Borrowings/(repayments) on long-term debt                   |              | 500,000       |              
|Repurchase and retirement of common stock                   |              | -             |              
|                                                            |             
|Net cash provided by (used for) financing activities        |              | (2,362,933    | )            
|                                                            |             
|Effect of Exchange Rate Changes on Cash                     |              | 60,062        |              
|                                                            |             
|Net Increase (Decrease) in Cash and Equivalents             |              | 1,432,256     |              
|Cash and equivalents, beginning of year                     |              | 3,846,613     |              
|                                                            |             
|Cash and equivalents, end of year                           |              | $ 5,278,869   |              
|                                                            |             
|Supplemental Information:                                   |             
|Interest paid                                               |              | $ 1,628,923   |              
|Income taxes paid                                           |              | 934,411       |              
|                                                            |             

See accompanying
notes to consolidated financial statements.

8

---



# 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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# 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 3, 2004 and June
28, 2003, because of the short-term nature of these financial instruments. The estimated
carrying value of long-term debt approximates its fair value at July 3, 2004 and June 28,
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 $1,391,133 at July 3,
2004 and $2,554,980 at June 28, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 3, 2004 was approximately $919,000. 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------

10

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# 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Goodwill and
Intangible Assets
| | ------------------------------

| | Goodwill
represents the excess of the purchase price over the fair value of net tangible and
identifiable intangible assets of acquired businesses and effective June 30, 2002, is not
amortized, however, in prior years it was amortized using the straight-line method over
periods ranging from 15 to 40 years. 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 income taxes by applying
statutory tax rates in effect at the balance sheet date to differences between the
financial reporting and tax basis of assets and liabilities. The resulting deferred tax
liabilities or assets are adjusted to reflect changes in tax laws or rates by means of
charges or credits to income tax expense.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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. Advertising expense, including cooperative advertising, was $1,305,000 in 2004,
$976,000 in 2003 and $1,889,000 in 2002.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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# 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
| | ------------------------------ | ---- | ---------- | ----
| |                                |     
| | Numerators:                    |      |            |     
| | Numerator for both basic and   |     
| | diluted EPS, net income        |      | $3,734,932 |     
| |                                |     
| | Denominators:                  |     
| | Denominator for both basic and |     
| | diluted EPS, weighted-average  |     
| | common shares outstanding      |      | 4,516,245  |     
| |                                |     

| | 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
| | ----------------- | -------- | ----- | ---- | ------- | ----
| |                   |         
| | Exercise $     13 | Price.64 | 6,050 |      | 6,875   |     
| | $     14          | .09      | 7,700 |      | 8,525   |     
| | $     16          | .74      | -     |      | 6,962   |     
| | $     18          | .18      | 5,500 |      | 6,325   |     
| | $     18          | .41      | -     |      | 130,240 |     
| | $     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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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

| | New Accounting
Standards
| | ------------------------

| | In
January 2004, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) FAS 106-2, Accounting and Disclosure Requirements
Related to the Medicare Prescription Drug, Improvement and Modernization Act of
2003". This statement permits a sponsor of a postretirement health care plan that
provides a prescription drug benefit to make a one-time election to defer accounting for
the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003
(the Act). The Act, signed into law in December 2003, introduces a
prescription drug benefit under Medicare (Medicare part D) and a federal
subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at
least actuarially equivalent to Medicare Part D. Given the cap on postretirement benefits
introduced in fiscal 2002, the Act is not expected to have a material impact on the
Companys accumulated postretirement benefit obligation or the net postretirement
benefit costs, however, the Company has elected to defer the adoption of FSP FAS 106-2
until the specific authoritative accounting guidance for the federal subsidy is issued.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company adopted SFAS No. 142 in the first quarter of fiscal 2003. The Companys
reported net income and earnings per share information, exclusive of goodwill amortization
required under previous accounting standards on an after tax basis is as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                              | Fiscal 2004 | Fiscal 2003    | Fiscal 2002
| | ---------------------------- | ----------- | -------------- | -----------
| |                              |             |               
| | Reported net income          |             | $3,734,932     |            
| | Add:  Goodwill amortization, |            
| | net of income taxes          |             | -              |            
| |                              |             |               
| | Adjusted net income          |             | $3,734,932     |            
| |                              |             |               
| | Adjusted EPS                 |             | $         0.83 |            
| |                              |             |               

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

13

---



# 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.
| | --------------------------------------------------------------------------------------------------

|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
fiscal 2002, the Company recorded an impairment charge of $690,000 in accordance with SFAS
144 for certain precision drawer slide tooling. While the Company will continue to produce
the drawer slides, the estimated future cash flows associated with sales of this
particular product line were less than the cost of the tooling recorded.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.  Inventories | Inventories are
valued at the lower of FIFO (first-in,                first-out) cost or market.
Inventories are summarized as follows:
|--------------- | ---------------------------------------------------------------------------------------------------------------------------------------

| |                   | July 3, 2004 | June 28, 2003
| | ----------------- | ------------ | -------------
| |                   |             
| | Finished products |              | $15,256,160  
| | Consignment       |              | 3,292,297    
| | Work in process   |              | 2,062,060    
| | Raw materials     |              | 3,344,754    
| |                   |             
| |                   |              | $23,955,271  
| |                   |             

|5.  Warranty | The
Company provides a limited lifetime warranty on most                products sold.
Depending on the product, the lifetime warranty is generally                defined in 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 issues replacement products 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:
|------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---



# 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    
| | Payments made for warranty costs  |              | (216,000     
| | Accrual for product warranty      |              | 228,000      
| |                                  
| | Accrued warranty costs at the end |             
| | of the year                       |              | $ 287,000    
| |                                  

|6.  Long-Term
Debt | Long-term debt obligations are summarized as follows:
|------------------ | -----------------------------------------------------

| |                            | July 3, 2004 | June 28, 2003
| | -------------------------- | ------------ | -------------
| |                            |             
| | Revolving credit agreement |              | $ 24,500,000 
| | Capital lease obligations  |              | 52,605       
| | Less: Current portion of   |             
| | capital lease obligation   |              | (13,741      
| |                            |             
| |                            |              | $ 24,538,864 
| |                            |             

| | On
August 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 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).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
July 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 of each 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-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, 2004, the
non-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) 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 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.
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Neither
the Company nor the counterparty, which is a major U.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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

---



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

| | The
Company has recognized an after-tax 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:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                        | 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 
| | Settlement to interest |                    
| | expense                |                     | (1,013,850  | )             | (659,003     | )             | (936,884 
| |                        |                    
| | Other comprehensive    |                    
| | income                 |                     | $ 1,163,847 |               | $    756,847 |               | $(952,822
| |                        |                    

|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:
|--------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Rent expense
 under  all  operating  leases  was  approximately   $1,273,000,
                                     $1,017,000 and $868,000 in fiscal 2004, 2003 and
2002, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 3, 2004                and June 28, 2003 held a combined total of 284,637 shares of
the Companys                Class B common stock.
|------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys Board of Directors annually approves contributions to the defined
contribution plans. Expense for the discretionary profit-sharing plan amounted to
$700,666, $667,192 and $750,261 in fiscal 2004, 2003 and 2002, respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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. During fiscal 2002, the Company amended the plan to place a cap on the
Company paid portion of health-care premiums for retirees.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

---



# 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:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                 | Penison Benefits | SERP Benefits | PostretirementHealth-Care Benefits
| | --------------------------------------------------------------- | ---------------- | ------------- | ----------------------------------
| |                                                                 |                  |               |                                   
| |                                                                
| | Change in benefit obligations                                   |                  |              
| | Benefit obligations                                             |                  |              
| | at beginning  of year                                           |                  |               | $                                 
| | Service cost                                                    |                  |               |                                   
| | Interest cost                                                   |                  |               |                                   
| | Actuarial                                                       |                  |              
| | (gains)                                                         |                  |               |                                   
| | losses                                                          |                  |              
| | Benefits paid                                                   |                  |               |                                   
| | Plan amendment                                                  |                  |               |                                   
| | Other                                                           |                  |               |                                   
| |                                                                
| | Benefit obligation at end of year                               |                  |               | $                                 
| |                                                                 |                  |              
| |                                                                
| | Change in plan assets                                           |                  |              
| | Fair value of plan                                              |                  |              
| | assets at  beginning of year                                    |                  |               | $                                 
| | Actual return                                                   |                  |              
| | on plan assets                                                  |                  |               |                                   
| | Employer                                                        |                  |              
| | contributions                                                   |                  |               |                                   
| | Benefits paid                                                   |                  |               |                                   
| |                                                                
| | Fair value of plan assets at end of year                        |                  |               | $                                 
| |                                                                
| |                                                                 |                  |               |                                   
| |                                                                
| | Funded status                                                   |                  |               | $                                 
| | Unrecognized                                                    |                  |              
| | transition amount                                               |                  |               |                                   
| | Unrecognized net                                                |                  |              
| | actuarial loss                                                  |                  |               |                                   
| | Unrecognized prior                                              |                  |              
| | service cost                                                    |                  |               |                                   
| |                                                                
| | Net amount recognized                                           |                  |               | $                                 
| |                                                                
| | Amounts recognized in the consolidate balance sheet consist of: |                  |              
| | Prepaid pension                                                 |                  |              
| | cost                                                            |                  |               | $                                 
| | Other retirement                                                |                  |              
| | benefits                                                        |                  |               |                                   
| | Accumulated other                                               |                  |              
| | comprehensive                                                   |                  |              
| | income                                                          |                  |               |                                   
| |                                                                
| | Net amount recognized                                           |                  |               | $                                 
| |                                                                

17

---



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

| |                    | Pension Benefits | SERP Benefits | PostretirementHealth-Care Benefits
| | ------------------ | ---------------- | ------------- | ----------------------------------
| |                    |                 
|
| |                    |                 
| | Discount rate      |                  | 6             | .25%                              
| | Expected return on |                 
| | plan assets        |                  | 8             | .0%                               

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

| |                           | Pension Benefits | SERPBenefits
| | ------------------------- | ---------------- | ------------
| |                           |                 
|
| |                           |                 
| | Service cost              |                  | $    492,019
| | Interest cost             |                  | 1,101,529   
| | Expected return on        |                 
| | plan assets               |                  | (1,771,387  
| | Net amortization          |                  | 681,875     
| |                           |                 
| | Net periodic benefit cost |                  | $    504,036
| |                           |                 

| |                           | PostretirementHealth-Care Benefits
| | ------------------------- | ----------------------------------
| |                           |                                   
|
| |                           |                                   
| | Service cost              |                                   
| | Interest cost             |                                   
| | Net amortization          |                                   
| |                           |                                   
| | Net periodic benefit cost |                                   
| |                           |                                   

| | The
health care cost trend rate used to determine the postretirement health-care benefit
obligation was 9.0% for 2004 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:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | One-Percentage Point                    | Increase | Decrease
| | --------------------------------------- | -------- | --------
| |                                         |         
| | Effect on total of service and interest |          |         
| | cost components                         |          | $  1,628
| | Effect on postretirement health-care    |         
| | benefit obligation                      |          | $29,347 

| | 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:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                      | 
| | -------------------- | 
|
| |                      | 
| | Equity securities    | 
| | Debt securities      | 
| | Money market, stable | 
| | value funds and cash | 
| |                      | 
| | Total                | 
| |                      | 

18

---



# 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 $189,000 to its defined benefit pension plan, $324,000 to
its SERP plan and $203,000 to its other post retirement benefit plan in fiscal 2005. Our
estimated future benefit payments under our benefit plans are as follows:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |           | 
| | --------- | 
|
| |           | 
| | 2005      | 
| | 2006      | 
| | 2007      | 
| | 2008      | 
| | 2009      | 
| | 2010-2014 | 
| |           | 

|10.  Income Taxes | Income tax expense (benefit) consists of:
|----------------- | -----------------------------------------

| | Year Ended               | July 3,2004 | June 28,2003 | June 29,2002
| | ------------------------ | ----------- | ------------ | ------------
| |                          |            
| | Current:                 |             |              |             
| | United States            |             | $ 1,991,267  |             
| | Foreign, state and local |             | 437,942      |             
| |                          |            
| | Total current            |             | 2,429,209    |             
| |                          |            
| | Deferred:                |            
| | United States            |             | (638,000     | )           
| | Foreign                  |             | (100,942     | )           
| | State and local          |             | 100,000      |             
| |                          |            
| | Total deferred           |             | (638,942     | )           
| |                          |            
| | Income tax expense       |             | $ 1,790,267  |             
| |                          |            

19

---



# 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                   | July 3,2004 | June 28,2003 | June 29,2002
| | ---------------------------- | ----------- | ------------ | ------------
| |                              |            
| | Federal income taxes at the  |             |              |             
| | statutory rate               |             | $ 1,879,000  |             
| | Foreign earnings taxed at    |            
| | foreign statutory rate       |             | -            |             
| | State and local income taxes |             | 22,000       |             
| | Tax audit settlement         |             | (169,000     | )           
| | Utilization of previously    |            
| | disallowed loss              |             | -            |             
| | Other                        |             | 58,267       |             
| |                              |            
| | Income tax expense           |             | $ 1,790,267  |             
| |                              |            

| | 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 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 3, 2004                             | June 28, 2003
| | ---------------------------------------- | -------------
| |                                          |              
| | Property and equipment                   |              
| | Pension accrual                          |              
| | Supplemental retirement plan             |              
| | Benefit related accruals                 |              
| | Inventory reserves                       |              
| | Rebates, advertising and royalty accrual |              
| | Derivative instrument                    |              
| | Other                                    |              
| |                                          |              
| |                                          |              
| |                                          |              

| | No
provision has been made for taxes that may result from future remittances of $3.5 million in
undistributed earnings of foreign subsidiaries as of July 3, 2004 because it is expected
that such earnings will be reinvested overseas indefinitely. Determination of the amount
of any unrecognized deferred income tax liability on earnings not remitted is not
practicable.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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.
|----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

---



# 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                      
|Forfeited                  |             | (201,090                      | )            | $     20                      | .92          | (94,825                      
|                           |            
|Options outstanding at end |            
|of year                    |             | 252,933                       |              | $     17                      | .78          | 454,023                      
|                           |            
|Options exercisable at end |            
|of year                    |             | 225,433                       |              | $     18                      | .19          | 220,340                      
|                           |            
|Options available for      |            
|grant, end of year         |             | 443,275                       |              |                               |              | 240,657                      
|                           |            

21

---



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

| | A summary
of stock options outstanding at July 3, 2004 follows:
| | ---------------------------------------------------------------

| | Outstanding     | Exercisable
| | --------------- | -----------
|
| |                
| | $12.50 - $14.50 |            
| | $16.50 - $18.50 |            
| |                 |            
| |                 |            
| |                 |            

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 Company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.
|------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has a stock repurchase program under which it purchased no shares in fiscal 2004
and 2,280 shares during fiscal 2003 with the price per share ranging from approximately $9
to $11. At July 3, 2004, the Company has remaining authorization to repurchase an
additional 272,202 shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13.  Business Segments | During the fourth quarter of fiscal 2004, management                began
managing the business and reviewing financial information by market
               channel rather than by the previous Home & Commercial Products and
Office                Products divisions.
|---------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---



# 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 prior year results by channel is impracticable.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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
|------------------------------------------ | ------------------ | -------------------- | -------- | --------------------- | ------------- | ------------------- | -----------------
|                                           |                    |                      |         
|Year Ended July 3, 2004:  Net  sales to    |                    |                      |          |                       |               |                     |                  
|external customers                         |                    | $ 37,278,233         |          | $9,141,248            |               | $38,138,743         |                  
|Operating profit                           |                   
|before administrative                      |                   
|costs, other expenses     and income taxes |                    | (2,521,640           | )        | 1,279,954             |               | 1,402,569           |                  
|Administrative costs,                      |                   
|other expenses                             |                    | -                    |          | -                     |               | -                   |                  
|Income tax expense                         |                   
|(benefit)                                  |                    | -                    |          | -                     |               | -                   |                  
|Net income (loss)                          |                    | (2,314,788           | )        | 1,279,954             |               | 1,402,569           |                  

| | 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
| | ------------------------------------------------- | --------------- | -------------------------- | ------------------ | -----------------
| |                                                   |                 |                            |                   
| | Year Ended June 28, 2003:  Net  sales to external |                 |                            |                    |                  
| | customers                                         |                 | $ 35,659,838               |                    | $89,260,638      
| | Income tax expense                                |                
| | (benefit)                                         |                 | (37,000                    | )                  | 4,751,000        
| | Net income (loss)                                 |                 | (76,048                    | )                  | 7,964,928        

23

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# 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  |              
| | Canada        |              | 12,450,557    |              
| | Other foreign |              | 5,078,340     |              

| | 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     
| | Gross profit               |             | $   7,052,310     |             | $   7,160,611    
| | Operating income           |             | $   1,264,086     |             | $   1,253,817    
| | Net income                 |             | $      669,874    |             | $      441,905   
| | Earnings per share-basic   |            
| | and diluted                |             | $            0.15 |             | $            0.10
| | Cash dividend-common stock |             | $          0.165  |             | $          0.165 
| | Cash dividend-Class B      |            
| | common stock               |             | $            0.15 |             | $            0.15
| |                            |            
| | Year Ended June 28, 2003   |            
| |                            |            
| | Net sales                  |             | $ 30,931,347      |             | $ 30,117,755     
| | Gross profit               |             | $   6,987,093     |             | $   6,478,520    
| | Operating income           |             | $      632,164    |             | $   1,659,205    
| | Net income                 |             | $      194,963    |             | $      851,730   
| | Earnings per share-basic   |            
| | and diluted                |             | $            0.04 |             | $            0.19
| | Cash dividend-common stock |             | $          0.165  |             | $          0.165 
| | Cash dividend-Class B      |            
| | common stock               |             | $            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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

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# 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 to the Michigan Court of Appeals. A delayed
request for leave to appeal to the Michigan Supreme 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 of limitations. In
September 2003, the Federal District Court dismissed the litigation. In October 2003, the
plaintiff appealed the dismissal to the Sixth Circuit Court of Appeals.  That appeal is pending.
Management 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.
| | ------------------------------------------------------------------------------------------------------------------

| | In
the opinion of management, based on the information presently known and taking into
account established accruals of approximately $455,000 at July 3, 2004, the ultimate
liability for these matters will not have a material adverse effect on the Companys
financial position or the results of its operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25

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REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

Board of DirectorsKnape
& Vogt Manufacturing CompanyGrand Rapids, Michigan

We have audited the accompanying
consolidated balance sheets of Knape & Vogt Manufacturing Company and subsidiaries
(the Company) as of July 3, 2004 and June 28, 2003 and the related
consolidated statements of operations, stockholders equity, and cash flows for each
of the three years in the period ended July 3, 2004. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements 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. An audit 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
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 Company as of July 3, 2004 and June 28, 2003, and the results of its operations and
its cash flows for each of the three years in the period ended July 3, 2004, in conformity
with accounting principles generally accepted in the United States of America.

Our audits also included the
financial statement schedule of Knape & Vogt Manufacturing Company, listed in Item 15.
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.

/s/ Deloitte & Touche
LLPGrand Rapids, Michigan August 6, 2004

26

---



# 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/A Report Amendment No. 1
|------------------------------------------------------- | -------------------------------------------------
|Consolidated Statements of Operations                   |                                                  
|Consolidated Balance Sheets                             |                                                  
|Consolidated Statements of Stockholders' Equity         |                                                  
|Consolidated Statements of Cash Flows                   |                                                  
|Notes to Consolidated Financial Statements              |                                                  
|Report of Independent Registered Public Accounting Firm |                                                  

(2)
  Financial Statement Schedule

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

|                                                             | Page Number in Form 10-K/A Report Amendment No. 1
|------------------------------------------------------------ | -------------------------------------------------
|                                                            
|Schedule II - Valuation and Qualifying Accounts and Reserves |                                                  

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

Reference
is made to the Exhibit Index, which is found on pages 31 and 32 of this Form 10-K/A
Amendment No. 1.

27

---



(b)    
Reports on Form 8-K

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

|                             |  |                          
|---------------------------- |  | -------------------------
|Date of ReportApril 22, 2004 |  | Filing DateApril 22, 2004

28

---



# Knape & Vogt
Manufacturing Company and SubsidiariesSchedule II  Valuation and Qualifying
Accounts and Reserves

|Column A                  | Column B | Column C    | Column D | Column E     
|------------------------- | -------- | ----------- | -------- | -------------
|                          |         
|
|                          |         
|Year ended July 3, 2004:  |          |             |          |              
|                          |         
|Allowance for:            |         
|Doubtful accounts         |          | $   658,000 |          | $   (54,000  
|Cash discounts            |          | 145,000     |          | 1,753,000    
|                          |          |            
|                          |          | 803,000     |          | 1,699,000    
|Returned goods reserve    |          | 184,000     |          | 1,455,000    
|Warranty reserve          |          | 275,000     |          | 228,000      
|Inventory obsolescence    |          | 1,144,000   |          | 1,203,000    
|                          |         
|Year ended June 28, 2003: |         
|Allowance for:            |         
|Doubtful accounts         |          | $   633,000 |          | $      80,000
|Cash discounts            |          | 122,000     |          | 1,169,000    
|                          |          |            
|                          |          | 755,000     |          | 1,249,000    
|Returned goods reserve    |          | 147,000     |          | 656,000      
|Warranty reserve          |          | 235,000     |          | 238,000      
|Inventory obsolescence    |          | 1,439,000   |          | 213,000      

29

---



# 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.

| | 
| | 
| | 

# Date: October 15, 2004

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed
below on October 15, 2004, by the following persons on behalf of the registrant in the
capacities indicated. Each director of the registrant, whose signature appears below,
hereby appoints William R. Dutmers and Leslie J. Cummings, and each of them severally, as
his attorney-in-fact, to sign in his name and on his behalf, as a director of the
registrant, and to file with the Commission any and all Amendments to this Report on Form
10-K.

|                                                                                                                                                                                                                         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|/s/ William R. DutmersWilliam R. Dutmers, Chairman of the Board and Chief Executive Officer

Thomas A. Hilborn, Director

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

/s/ Gregory Lambert
Gregory Lambert, Director | 

30

---



# KNAPE & VOGT
MANUFACTURING COMPANYFORM 10-K/A AMENDMENT NO. 1 TO ANNUAL REPORT ON 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 23, 1999, filed as Exhibit 3.1 of the Registrants           Form
10-Q Third Quarter Report for the fiscal year ended June 30, 1999, are
          incorporated by reference.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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
Share Grant Agreement dated February 1, 2000, between Knape &          Vogt
Manufacturing Company and William R. Dutmers, filed as Exhibit 10.1 of the
          Registrants Form 10-Q Third Quarter Report of the fiscal year ended July
          1, 2000, is incorporated by reference.
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

31

---



|10(k) |  | Stock
Option Agreement for Nonqualified Stock Option dated February 1, 2000,           between
Knape & Vogt Manufacturing Company and William R. Dutmers, filed as           Exhibit
10.2 of the Registrants Form 10-Q Third Quarter Report for the           fiscal
year ended July 1, 2000, is incorporated by reference.
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21 |  | Subsidiaries
of Registrant by reference to the 2004 Form 10-K, Exhibit 21, as originally filed.
|-- |  | -----------------------------------------------------------------------------------------------

|23 |  | Consent
of Deloitte & Touche LLP, independent registered public accounting firm.*
|-- |  | ---------------------------------------------------------------------------------

|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 |  | 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.*
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

*Filed herewith

32

---



# 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 Form 10-K/A Amendment No. 1 to the Annual Report on Form 10-K of Knape & Vogt
Manufacturing Company for the year ended July 3, 2004.

/s/ Deloitte & Touche
LLPGrand Rapids, MichiganOctober 18, 2004

33

---



# EXHIBIT 31.1

I, William R. Dutmers, certify that:

|1. | I have reviewed this Form 10-K/A Amendment No. 1 to the 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;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: October 15, 2004

| | 
| | 
| | 

34

---



# EXHIBIT 31.2

I, Leslie J. Cummings, certify that:

|1. | I have reviewed this Form 10-K/A Amendment No. 1 to the 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;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: October 15, 2004

| | 
| | 
| | 

35

---



# EXHIBIT 32.1

In connection with Form 10-K/A
Amendment No. 1 to the Annual Report on Form 10-K of Knape & Vogt Manufacturing
Company for the fiscal year ended July 3, 2004 as filed with the Securities and Exchange
Commission on the date hereof (the Report), 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 Report 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 Report fairly presents, in all material
               respects, the financial condition and results of operations of Knape & Vogt
               Manufacturing Company.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: October 15, 2004

| | 
| | 
| | 

36

---



# EXHIBIT 32.2

In connection with Form 10-K/A
Amendment No. 1 to the Annual Report on Form 10-K of Knape & Vogt Manufacturing
Company for the fiscal year ended July 3, 2004 as filed with the Securities and Exchange
Commission on the date hereof (the Report), 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:

|(1) |  | the Report 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 Report fairly presents, in all material
               respects, the financial condition and results of operations of Knape & Vogt
               Manufacturing Company.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: October 15, 2004

| | 
| | 
| | 

37

---