# UNITED STATESSECURITIES AND
EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Quarter Ended
April 2, 2005

OR

[ ] TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Transition
Period From ____________________To ____________________

Commission File Number
000-01859

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

|Michigan                 
          (State of Incorporation)         
        2700 Oak Industrial Drive, NE
           Grand Rapids, Michigan          
  (Address of principal executive offices) | 38-0722920
(IRS Employer Identification No.)
              49505
           (Zip Code)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------

(616) 459-3311 (Telephone Number)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

YES __X__  NO ______

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

YES _____ NO __X__

As
of April 2, 2005, Knape & Vogt Manufacturing Company had 2,487,752 shares of Common
Stock outstanding and 2,029,353 shares of Class B Common Stock outstanding.

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# INDEX

|                                                                      | 
|--------------------------------------------------------------------- | 
|PART I.  FINANCIAL INFORMATION                                        | 
|                                                                     
|Item 1.  Financial Statements                                         | 
|                                                                     
|Condensed Consolidated Balance Sheets                                 | 
|--April 2, 2005 and July 3, 2004                                      | 
|                                                                     
|Condensed Consolidated Statements of Income                           | 
|--Nine Months and Three Months Ended April 2, 2005 and March 27, 2004 | 
|                                                                     
|Condensed Consolidated Statement of Stockholders' Equity              | 
|--Nine Months Ended April 2, 2005                                     | 
|                                                                     
|Condensed Consolidated Statements of Cash Flows                       | 
|--Nine Months Ended April 2, 2005 and March 27, 2004                  | 
|                                                                     
|Notes to Condensed Consolidated Financial Statements                  | 
|                                                                     
|Item 2.  Management's Discussion and Analysis of Financial            | 
|Condition and Results of Operations                                   | 
|                                                                     
|Item 3.  Quantitative and Qualitative Disclosures About Market Risk   | 
|                                                                     
|Item 4.  Controls and Procedures                                      | 
|                                                                     
|PART II. OTHER INFORMATION                                            | 
|                                                                     
|Item 1.  Legal Proceedings                                            | 
|                                                                     
|Item 6.  Exhibits                                                     | 
|                                                                     
|SIGNATURES                                                            | 
|                                                                     
|EXHIBIT INDEX                                                         | 

1

---



# KNAPE & VOGT MANUFACTURING
COMPANY AND SUBSIDIARIES PART I. FINANCIAL
INFORMATION CONDENSED CONSOLIDATED
BALANCE SHEETS

|                                                                 | (Unaudited)
 April 2, 2005 | July 3, 2004  |  
|---------------------------------------------------------------- | -------------------------- | ------------- | -
|                                                                 |                            |               |  
|Assets                                                           |                            |               |  
|Current assets                                                   |                           
|Cash                                                             |                            | $   6,380,232 |  
|Accounts receivable - net                                        |                            | 20,714,954    |  
|Inventories                                                      |                            | 23,320,415    |  
|Prepaid expenses and other current assets                        |                            | 991,803       |  
|Assets held for sale                                             |                            | 1,259,967     |  
|                                                                 |                            |               |  
|Total current assets                                             |                            | 52,667,371    |  
|                                                                 |                            |               |  
|Property, plant and equipment                                    |                            | 80,905,297    |  
|Less accumulated depreciation                                    |                            | 57,981,785    |  
|                                                                 |                            |               |  
|Net property, plant and equipment                                |                            | 22,923,512    |  
|                                                                 |                            |               |  
|Goodwill                                                         |                            | 4,772,837     |  
|Prepaid pension cost                                             |                            | 11,813,652    |  
|Other assets                                                     |                            | 548,667       |  
|                                                                 |                            |               |  
|                                                                 |                            | $ 92,726,039  |  
|                                                                 |                            |               |  
|Liabilities and Stockholders' Equity                             |                           
|Current liabilities                                              |                           
|Accounts payable                                                 |                            | $ 10,180,123  |  
|Other accrued liabilities                                        |                            | 10,385,852    |  
|                                                                 |                            |               |  
|Total current liabilities                                        |                            | 20,565,975    |  
|Long-term debt and capital leases                                |                            | 24,528,648    |  
|Deferred income taxes and other long-term liabilities            |                            | 10,481,811    |  
|                                                                 |                            |               |  
|Total liabilities                                                |                            | 55,576,434    |  
|                                                                 |                            |               |  
|Stockholders' Equity                                             |                           
|Common stock (Common - 2,487,752 and 2,331,860 shares issued and |                           
|outstanding, Class B common - 2,029,353 and 2,184,489 shares     |                           
|issued and outstanding)                                          |                            | 9,034,210     |  
|Preferred stock -unissued                                        |                            | -             |  
|Additional paid-in capital                                       |                            | 7,552,997     |  
|Unearned stock grant                                             |                            | (94,500       | )
|Accumulated other comprehensive loss                             |                            | (908,507      | )
|Retained earnings                                                |                            | 21,565,405    |  
|                                                                 |                            |               |  
|Total stockholders' equity                                       |                            | 37,149,605    |  
|                                                                 |                            |               |  
|                                                                 |                            | $ 92,726,039  |  
|                                                                 |                            |               |  

See accompanying notes.

2

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENTS OF INCOME(Unaudited)

|                                     | For the Nine Months Ended | For the Three Months Ended
|------------------------------------ | ------------------------- | --------------------------
|
|                                     |                           |                           
|Net sales                            |                           | $116,073,826              
|Cost of sales                        |                           | 94,572,964                
|                                     |                           |                           
|Gross profit                         |                           | 21,500,862                
|Selling and administrative expenses  |                           | 16,804,638                
|Impairment/restructuring expenses    |                           | 1,982,474                 
|                                     |                           |                           
|Operating income                     |                           | 2,713,750                 
|Interest and other expenses, net     |                           | 1,091,077                 
|                                     |                           |                           
|Income before income taxes           |                           | 1,622,673                 
|Income taxes                         |                           | 63,364                    
|                                     |                           |                           
|Net income                           |                           | $    1,559,309            
|                                     |                           |                           
|Basic and diluted earnings per share |                           | $             0.35        
|                                     |                           |                           
|Weighted average shares outstanding  |                           | 4,516,964                 
|Cash dividend - common stock         |                           | $             .495        
|Cash dividend - Class B common stock |                           | $              .45        

See accompanying notes.

3

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENT OF STOCKHOLDERS EQUITY (Unaudited)

|                              | Common 
 stock | Additional
  paid-in   
  capital | Unearned 
  stock    
  grant | Accumulated
      other
 comprehensive
          loss | Retained
 earnings | Total   
|----------------------------- | -------------- | --------------------------------- | ----------------------------- | ----------------------------------------------------- | ------------------ | --------
|                              |               
|Balance, July 3, 2004         |                | $9,032,698                        |                               | $7,544,749                                            |                    | $(94,500
|Comprehensive income          |               
|Net income                    |                | -                                 |                               | -                                                     |                    | -       
|Foreign currency translation  |                | -                                 |                               | -                                                     |                    | -       
|adjustment                    |               
|Gain on derivative instrument |                | -                                 |                               | -                                                     |                    | -       
|                              |                |                                   |                               |                                                       |                   
|Other comprehensive income    |                | -                                 |                               | -                                                     |                    | -       
|                              |                |                                   |                               |                                                       |                    |         
|Comprehensive income          |                |                                   |                               |                                                       |                    |         
|                              |                |                                   |                               |                                                       |                    |         
|Cash dividends                |                | -                                 |                               | -                                                     |                    | -       
|Restricted stock issued       |                | 1,512                             |                               | 8,248                                                 |                    | -       
|                              |               
|Balance, April 2, 2005        |                | $9,034,210                        |                               | $7,552,997                                            |                    | $(94,500
|                              |               

See accompanying notes.

4

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)

|                                                     | Nine Months Ended |            
|---------------------------------------------------- | ----------------- | -----------
|
|                                                     |                   |            
|Operating Activities:                                |                   |            
|Net income                                           |                   | $ 1,559,309
|Non-cash items:                                      |                  
|Depreciation and amortization                        |                   | 4,695,858  
|Deferred income taxes                                |                   | (1,066,209 
|Change in retirement plan cost                       |                   | 203,409    
|Impairment expenses                                  |                   | 1,778,447  
|Gain on disposal of fixed assets                     |                   | (4,205     
|Other                                                |                   | 13,011     
|Changes in operating assets and liabilities:         |                  
|Accounts receivable                                  |                   | (595,041   
|Inventories                                          |                   | 634,856    
|Other current assets                                 |                   | (38,169    
|Accounts payable and accrued expenses                |                   | (2,221,245 
|                                                     |                   |            
|Net cash provided by operating activities            |                   | 4,960,021  
|                                                     |                   |            
|Investing Activities:                                |                  
|Additions to property, plant and equipment           |                   | (2,069,050 
|Proceeds from sales of property, plant and equipment |                   | 10,250     
|Other                                                |                   | (28,257    
|                                                     |                   |            
|Net cash used for investing activities               |                   | (2,087,057 
|                                                     |                   |            
|Financing Activities:                                |                  
|Dividends paid                                       |                   | (2,141,041 
|Borrowings on long-term debt                         |                   | -          
|Payments on long-term debt and capital leases        |                   | (10,214    
|                                                     |                   |            
|Net cash used for financing activities               |                   | (2,151,255 
|                                                     |                   |            
|Effect of Exchange Rate Changes on Cash              |                   | 379,654    
|                                                     |                   |            
|Net Increase in Cash and Equivalents                 |                   | 1,101,363  
|Cash and equivalents, beginning of year              |                   | 5,278,869  
|                                                     |                   |            
|Cash and equivalents, end of period                  |                   | $ 6,380,232
|                                                     |                   |            
|Cash Paid During the Period - interest               |                   | $ 1,206,522
|- income taxes                                       |                   | 2,582,700  

See accompanying notes.

5

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

# Note 1  Summary of
Significant Accounting Policies

The condensed consolidated financial
statements have been prepared by Knape & Vogt Manufacturing Company (the
Company), without audit, in accordance with accounting principles generally
accepted in the United States of America for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. Management
believes that the disclosures made in this document are adequate so as not to make the
information presented misleading. Operating results for the nine and three month periods
ended April 2, 2005, are not necessarily indicative of the results that may be expected
for the fiscal year ending July 2, 2005. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes thereto included
in the Companys Form 10-K for the year ended July 3, 2004.

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, while the fiscal year ending July 2, 2005 will contain 52
weeks. Both nine-month periods ended on April 2, 2005 and March 27, 2004 contained 39
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 and rebates. 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 Issue 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.

Stock Based Compensation

The Company accounts for its stock
option plans in accordance with APB Opinion No.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 No. 25. In accordance with Statement of
Financial Accounting Standards (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.

Reclassifications

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

6

---



# Note 2  New
Accounting Standards

In February 2005, the SEC Office of
the Chief Accountant issued a letter to clarify the staffs interpretation regarding
the accounting for operating leases under generally accepted accounting principles. Issues
covered in the letter include the amortization of leasehold improvements, rent holidays,
and landlord/tenant incentives. The SEC staff believes that its positions are based upon
existing accounting literature, and as such, any registrants who determine their
accounting for leases in prior periods to be in error should issue a restatement of
results from the correction of any such errors, if deemed significant. The Company is and
has been in compliance with regard to accounting for its leases and has determined that
there is no impact of this clarification on its financial statements in the current
quarter or prior periods. Refer to Note 8, Lease Commitments, provided in the
Companys Form 10-K for the year ended July 3, 2004, for further information
regarding the companys leases.

In December 2004, the Financial
Accounting Standards Board (FASB) issued a revision of SFAS No. 123(R),
Share-Based Payment, which supersedes APB Opinion No. 25. This statement focuses
primarily on transactions in which an entity obtains employee services in exchange for
share-based payments. Under SFAS No. 123(R), a public company generally is required to
measure the cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award, with such cost recognized
over the applicable vesting period. In addition, SFAS No. 123(R) requires an entity to
provide certain disclosures in order to assist in understanding the nature of share-based
payments transactions and the effects of those transactions on the financial statements.
The provisions of SFAS No. 123(R) require application as of the beginning of the first
fiscal year that begins after June 15, 2005. As such, the Company is required to adopt the
provisions of SFAS No. 123(R) at the beginning of fiscal year 2006. The Company has not
granted such awards over the past three years. If in the future, the Company should grant
any such awards, it will evaluate the impact of SFAS No. 123(R) on its consolidated
financial statements.

In December 2004, the FASB issued
Staff Position (FSP) No. 109-1, Application of FASB Statement No. 109,
Accounting for Income Taxes, for the Tax Deduction on Qualified Production Activities
Provided by the American Jobs Creation Act (the Act) of 2004. The FASB
also issued FSP 109-2, Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Jobs Creation Act of 2004. The Company is
currently evaluating the impact that the Act will have on its consolidated financial
statements and expects to determine such impact prior to issuing its fiscal 2005 annual
report.

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

# Note 3  Derivative
Instrument

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, which has a notional amount of $20,000,000,
was recognized as a liability on the balance sheet at its fair value of $633,100 at April
2, 2005 and $1,391,133 at July 3, 2004.

7

---



# Note 4  Common
Stock and Per Share Information

The Company has 6,000,000 shares of
common stock and 4,000,000 shares of Class B common stock authorized. All of the stock is
$2 par/share.

The following are the numerators and
denominators used in the calculations of basic and diluted earnings per share (EPS) for
each of the periods presented:

|                               | For the nine months ended | For the three months ended
|------------------------------ | ------------------------- | --------------------------
|
|                               |                           |                           
|Numerator for both basic and   |                           |                           
|diluted EPS, net income (loss) |                           | $1,559,309                
|                               |                           |                           
|Denominator for both basic and |                          
|diluted EPS,weighted-average   |                          
|common shares outstanding      |                           | 4,516,964                 
|                               |                           |                           

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.

|                       | For the three and nine months ended:
|---------------------- | ------------------------------------
|
|                       |                                     
|                       |                                     
|Exercise Price$     13 | .64                                 
|$     14               | .09                                 
|$     18               | .18                                 
|$     18               | .41                                 
|$     18               | .48                                 

# Note 5  Inventories

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

|                      | April 2, 2005 | July 3, 2004
|--------------------- | ------------- | ------------
|                      |               |             
|Finished products     |               | $14,174,267 
|Consignment inventory |               | 3,315,128   
|Work in process       |               | 2,130,929   
|Raw materials         |               | 3,700,091   
|                      |               |             
|Total                 |               | $23,320,415 
|                      |               |             
|                      |               |             

8

---



# Note 6  Impairment
Expenses

During the quarter ended January 1,
2005, the Company recognized asset impairment charges and accelerated depreciation of
$419,204 pre-tax on certain manufacturing equipment in accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. The equipment has
been utilized for backup production of certain precision drawer slide products. Now those
products are being partially sourced from a third party rather than manufactured in-house,
so the extra capacity is no longer required. Some of the equipment will be abandoned and
its useful life was adjusted accordingly for depreciation purposes. The equipment that
will be held and used or sold was written-down to its estimated fair values as determined
by the Companys management based on estimated prices of similar assets or proceeds
from sale, respectively. The equipment that will be sold has been classified as assets
held for sale on the balance sheet and on the condensed balance sheet in this document.

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

The Company will also incur certain
qualifying exit costs in connection with the closure of the Muncie facility, including
severance and the relocation of certain equipment and inventory. The severance/stay on
bonus costs and the facility exit and other costs, estimated to be approximately $650,000
pre-tax, are being expensed as they are incurred. All of the charges are being recorded in
the Manufacturing division of the Company. The exit costs incurred and expensed during the
third quarter of fiscal 2005 totaled approximately $204,000 pre-tax.

The following is a summary of the
impairment/restructuring activities for the nine months ended April 2, 2005. The following
table presents the pre-tax restructuring charges, by category,

|                            | For the Nine Months Ended | For the Three Months Ended
|--------------------------- | ------------------------- | --------------------------
|
|                            |                           |                           
|Severance & stay on bonuses |                           | $     70,368              
|Facility exit costs & other |                           | 133,659                   
|Asset impairment            |                           | 1,778,447                 
|                            |                           |                           
|Total                       |                           | $1,982,474                
|                            |                           |                           

The following summarizes the
restructuring accrual activity since the beginning of fiscal 2005. Facility exit costs
associated with the movement of equipment and inventory, as well as facility preparation
and training related to the relocation, are recognized as incurred and are not included in
the ending restructuring accrual balance.

|                               | Severance &
stay on bonuses | Facility exit
 costs & other | Total
|------------------------------ | --------------------------- | ---------------------------- | -----
|                               |                             |                              |      
|Accrual balance, July 3, 2004  |                             | $-                           |      
|Restructuring charges          |                             | 70,368                       |      
|Cash payments                  |                             | (7,894                       | )    
|                               |                             |                              |      
|Accrual balance, April 2, 2005 |                             | $ 62,474                     |      
|                               |                             |                              |      

9

---



# Note 7  Warranty
Disclosure

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 of the product as the resolution for any warranty claims. Reserves have
been established for the various costs associated with the Companys warranty
program. General warranty reserves are based on historical claims experience and other
currently available information and are periodically adjusted for business levels and
other factors. Specific reserves are established if an issue is identified with the
amounts for such reserves based on the estimated cost to correct the problem. The actual
warranty expense could differ from the estimates made by the Company based on product
performance. The following table presents the changes in the Companys product
warranty liability:

|                                              | For the Nine Months Ended | For the Three Months Ended
|--------------------------------------------- | ------------------------- | --------------------------
|
|                                              |                           |                           
|
|Accrued warranty costs at beginning of period |                           | $ 287,250                 
|Payments made for warranty costs              |                           | (354,103                  
|Accrual for product warranty                  |                           | 448,324                   
|                                              |                           |                           
|Accrued warranty costs at end of period       |                           | $ 381,471                 
|                                              |                           |                           

# Note 8 
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.

Comprehensive income and its
components consist of the following:

|                                        |  |            |  |           
|--------------------------------------- |  | ---------- |  | ----------
|
|
|                                        |  |            |  |           
|Net income                              |  | $1,559,309 |  | $2,250,123
|Other comprehensive income:             | 
|Foreign currency translation adjustment |  | 404,326    |  | 92,435    
|Gain on derivative instrument           |  | 493,033    |  | 398,197   
|                                        |  |            |  |           
|                                        |  |            |  |           
|Comprehensive income                    |  | $2,456,668 |  | $2,740,755
|                                        |  |            |  |           

Other comprehensive income related to
the interest rate swap agreement consisted of the following components:

|                               | For the Nine Months Ended | For the Three Months Ended
|------------------------------ | ------------------------- | --------------------------
|
|                               |                           |                           
|
|                               |                           |                           
|Change in fair value of        |                           |                           
|interest rate swap             |                           | $ 1,393,867               
|Settlement to interest expense |                           | (635,834                  
|                               |                           |                           
|Other comprehensive income     |                           | $    758,033              
|                               |                           |                           

# Note 9  Retirement
Plans

The Company has several
noncontributory defined benefit pension plans that provide benefits based on the
participants years of service. The Company also has a nonqualified supplemental
retirement program for designated officers of the Company, which includes death and
disability benefits. The postretirement health-care plan covers substantially all
employees. The plan is unfunded and contributory.

10

---



Components of Net
Periodic Benefit Costs:

For the three months
ended:

|                          | Pension Benefits | SERP Benefits | PostretirementHealth-Care Benefits
|------------------------- | ---------------- | ------------- | ----------------------------------
|                          |                 
|
|                          |                 
|Service cost              |                  | $ 107,527     |                                   
|Interest cost             |                  | 277,196       |                                   
|Expected return on plan   |                 
|assets                    |                  | (433,710      | )                                 
|Net amortization          |                  | 162,506       |                                   
|                          |                 
|Net periodic pension cost |                  | $ 113,519     |                                   
|                          |                 

For the nine months ended:

|                          | Pension Benefits | SERP Benefits | PostretirementHealth-Care Benefits
|------------------------- | ---------------- | ------------- | ----------------------------------
|                          |                 
|
|                          |                 
|
|Service cost              |                  | $    322,365  |                                   
|Interest cost             |                  | 831,098       |                                   
|Expected return on plan   |                 
|assets                    |                  | (1,300,587    | )                                 
|Net amortization          |                  | 487,400       |                                   
|                          |                 
|Net periodic pension cost |                  | $    340,276  |                                   
|                          |                 

Employer Contributions

The Company has contributed $166,642
for the quarter and $505,132 for the nine months ended April 2, 2005 to fund its
retirement plans compared to $171,906 and $515,088, respectively for the same periods in
the prior year. The Company anticipates contributing approximately an additional $167,000
to fund its retirement plans in fiscal 2005 for an estimated total of $672,000.

# Note 10  Income
Taxes

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

# Note 11  Segment
Information

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.

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 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.

11

---



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.

The accounting policies of the
business segments are the same as those described in the summary of significant accounting
policies in the 2004 Annual Report on Form 10-K.

|                                          | Office 
Products
  OEM | Office
Products 
 Dealer | Consumer | Distribution
  and Other | Manu-facturing | Corporateand Other | ConsolidatedTotal
|----------------------------------------- | ---------------------- | ------------------------ | -------- | ------------------------ | -------------- | ------------------ | -----------------
|                                          |                        |                         
|For the Three MonthsEnded:
April 2, 2005: |                        |                          |          |                          |                |                    |                  
|Net sales to external                     |                       
|Customers                                 |                        | $ 10,547,547             |          | $2,177,152               |                | $7,957,309         |                  
|Operating profit (loss)                   |                       
|before administrative                     |                       
|costs, other expenses and                 |                       
|income taxes                              |                        | 1,031,277                |          | 297,450                  |                | 512,138            |                  
|Administrative costs,                     |                       
|impairment charges and                    |                       
|other expenses                            |                        | -                        |          | -                        |                | -                  |                  
|Income tax expense                        |                        | -                        |          | -                        |                | -                  |                  
|Net income (loss)                         |                        | 1,031,277                |          | 297,450                  |                | 512,138            |                  
|                                         
|March 27, 2004:                           |                       
|Net sales to external                     |                       
|Customers                                 |                        | 8,080,603                |          | 2,023,784                |                | 8,308,462          |                  
|Operating profit (loss)                   |                       
|before administrative                     |                       
|costs, other expenses and                 |                       
|income taxes                              |                        | (512,793                 | )        | 277,719                  |                | 241,594            |                  
|Administrative costs,                     |                       
|other expenses                            |                        | -                        |          | -                        |                | -                  |                  
|Income tax expense                        |                        | -                        |          | -                        |                | -                  |                  
|Net income (loss)                         |                        | (512,793                 | )        | 277,719                  |                | 241,594            |                  

12

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|                                        |  |              |   |            |  |             | 
|--------------------------------------- |  | ------------ | - | ---------- |  | ----------- | 
|                                       
|                                        |  |             
|For the Nine MonthsEnded:April 2, 2005: |  |              |   |            |  |             | 
|Net sales to external                   | 
|customers                               |  | $ 30,973,309 |   | $6,958,019 |  | $21,371,416 | 
|Operating profit (loss)                 | 
|before administrative                   | 
|costs, other expenses and               | 
|income taxes                            |  | 2,224,473    |   | 981,203    |  | 214,651     | 
|Administrative costs,                   | 
|impairment charges and                  | 
|other expenses                          |  | -            |   | -          |  | -           | 
|Income tax expense                      |  | -            |   | -          |  | -           | 
|Net income (loss)                       |  | 2,224,473    |   | 981,203    |  | 214,651     | 
|March 27, 2004:                         | 
|Net sales to external                   | 
|customers                               |  | 26,049,798   |   | 6,761,462  |  | 22,347,618  | 
|Operating profit (loss)                 | 
|before administrative                   | 
|costs, other expenses and               | 
|income taxes                            |  | (2,031,346   | ) | 819,369    |  | 207,309     | 
|Administrative costs,                   | 
|other expenses                          |  | -            |   | -          |  | -           | 
|Income tax expense                      |  | -            |   | -          |  | -           | 
|Net income (loss)                       |  | (2,031,346   | ) | 819,369    |  | 207,309     | 

# Note 12  Legal
Contingencies

Two pending legal matters are
described in Note 10  Legal Contingencies in the 2004 Annual Report on Form 10-K.
There has been no change in the Canada Customs and Revenue Agency matter. In the case
involving the former employees claim for additional benefits under an executive
retirement plan, the Sixth Circuit Court of Appeals, in January 2005, denied the
plaintiffs appeal of the dismissal.

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

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

13

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# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Certain matters discussed in this
section include forward-looking statements involving risks and uncertainties. When used in
this document, the words believes, expects,
anticipates, goal, think, forecast,
project, may, and similar expressions identify forward-looking
statements. Forward-looking statements include, but are not limited to, statements
concerning future revenue, net income growth, cash flows and capital expenditures. Such
statements are subject to certain risks and uncertainties, which could cause actual
results to differ materially from those expressed or implied by such forward-looking
statements. Readers are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date of this report.

# RESULTS OF OPERATIONS

# Net Sales

Net sales for the third quarter of
fiscal 2005 were $40.2 million compared to $36.9 million for the same period in the prior
year. This was the seventh consecutive quarter of revenue growth for the Company. Net
sales for the first nine months of fiscal 2005 were $116.1 million compared to $107.2
million for the same period in the prior year. In total, the Company had new product sales
of $6.5 million and $19.3 million for the quarter and nine months ended April 2, 2005.
This compared to new product sales of $5.9 million and $16.3 million for the same periods
respectively in fiscal 2004. The Company consistently defines new product sales, including
product extensions, as those products sold within a three-year period from the date of
introduction.

The Distribution and Other segment
net sales of $19.6 million for the third quarter and $56.9 million for the first nine
months of fiscal 2005 represented growth of 6.4% and 9.3%, respectively, over the same
periods in the prior year. The growth resulted primarily from the addition of several new
products. These include the Virtu line of upscale kitchen and bath accessories,
several new wood and wire storage accessory products and the expanded line of precision
ball bearing drawer slides, including the Precision Built family of slides. The
Company continues to identify new product solutions for this key market channel.

The Consumer segment net sales of
$8.0 million for the third quarter and $21.4 million for the first nine months of fiscal
2005 represented a decline of 4.2% and 4.4%, respectively, over the same periods in the
prior year. Last year, the Company launched a number of new products to several key
customers during the first nine months and filled the initial stocking orders during this
same period resulting in higher than normal sales. While this segment of the business
continues to market its new products to both its existing and potential customers, the
Company has been focusing on improving the profitability of this channel, particularly in
the U.S. portion of the market. This focus on improved profitability has limited the
number of promotional programs that the Company has participated in with its customers and
has reduced the overall gross sales.

The Office Products Original
Equipment Manufacturer (OEM) segment net sales of $10.5 million for the third
quarter and $31.0 million for the first nine months of fiscal 2005 represented growth of
30.5% and 18.9%, respectively, over the same periods in the prior year. The Business and
Institutional Furniture Manufacturers Association (BIFMA) results for the eight
months ended February 2005, reported increased shipments of 8.4% compared to the same
period in the prior year. The Companys ability to provide customer specific versions
of KVs precision ball bearing drawer slides at competitive prices has been the
primary reason for its ability to outperform the overall market in this channel. In
addition, the Company is beginning to see more sales revenue generated from its line of
height adjustable tables in this market.

The Office Products Dealer segment
net sales increased slightly to $2.2 million for the third quarter and $7.0 million for
the first nine months of fiscal 2005.The Company expects new products to help it
continue to record sales growth as it enters into the last three months of the fiscal
year. These products include the ProLiftix line of height adjustable tables, the
Polaris lever free adjustable keyboard system and the Proxi line of office
organization tools.

14

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# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

# Gross Profit

Gross profit, as a percentage of net
sales, was 19.3% for the third quarter and 18.5% for the first nine months of fiscal 2005
compared to 21.6% and 20.7%, respectively, for the same periods in the prior year. The
gross profit was negatively impacted by the increased cost of steel. Since the beginning
of the calendar year 2004, the average price of steel has increased over 70%. The
increased steel costs resulted in the Company paying approximately $2.3 million during the
third quarter and $6.9 million for the nine months ended April 2, 2005 more for steel if
compared to steel pricing at the beginning of the calendar year 2004. During the third
quarter of fiscal 2005, the Company was able to pass along most of the increased steel
cost to its customers. The additional revenue generated from passing along the higher
steel costs had no gross margin associated with it and effectively lowered the gross
margin by approximately 1.1% for the quarter and 2.1% for the first nine months.

While it is difficult to predict the
cost of steel, market pricing appears to have stabilized or slightly declined during the
third quarter of fiscal 2005.

During the second quarter of fiscal
2005, the Company recorded additional depreciation expense of $304,115 in cost of goods
sold related to certain equipment that it had been utilizing for backup production of
precision drawer slide products. Those products are now being partially sourced from
overseas rather than manufactured in house, so the extra capacity is no longer required.
The useful life of the equipment identified for disposal was adjusted accordingly for
depreciation purposes.

During the first nine months of
fiscal 2005, the Office Products OEM segment has recorded their cost for certain precision
slides partially sourced from Asia and partially produced domestically at the Asian cost
regardless of where the slides were produced. This resulted in improved profitability for
this segment of the business and correspondingly reduced the profitability of the
Manufacturing segment.

# Operating Expenses

Selling and administrative expenses,
as a percentage of net sales, were 13.5% for the third quarter and 14.5% for the first
nine months of fiscal 2005 compared to 15.6% and 16.3%, respectively, for the same periods
in the prior year. The decrease in selling and administrative expense, as a percentage of
sales, reflects the fact that the Company has been successful in its ability to leverage
the fixed portion of its selling and administrative expenses while sales have grown.
Ongoing investments are being made in those products and markets where it believes that
such investments will generate future growth.

# Impairment Expenses

During the second quarter of fiscal
2005, the Company recorded a pre-tax impairment charge of $115,089 related to the
precision drawer slide equipment discussed above that will be held and used or held for
sale.

In January 2005, the Board of
Directors approved a restructuring plan to close its Muncie, Indiana facility and relocate
its operations into existing available space in the Grand Rapids, Michigan facility. KV
recorded pre-tax impairment charges of $1,663,359, in the second quarter of fiscal 2005,
consisting of the write down of the long-lived assets; including real estate and
manufacturing equipment located in the Muncie facility, to the lower of their carrying
value or their estimated fair values, less the disposition costs. Fair value estimates
were determined by the Companys management, with the assistance of independent
appraisers, and were based on estimated proceeds from sale. The fair value of the real
estate was determined to be $1.0 million and the equipment was adjusted to a fair value of
$220,000. Management anticipates that the closure of the facility and the relocation of
the operations will be completed prior to the end of its fiscal year.

15

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS(Continued)

The Company will also incur certain
qualifying exit costs in connection with the closure of the Muncie facility, including
severance and the relocation of certain equipment and inventory. The severance/stay on
bonus costs and the facility exit and other costs, estimated to be approximately $650,000
pre-tax, are being expensed as they are incurred. All of the charges are being recorded in
the Manufacturing division of the Company. The exit costs incurred and expensed during the
third quarter of fiscal 2005 totaled approximately $204,000 pre-tax.

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

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

# Interest and Other
Expenses, net

Interest expense was $411,560 and
$1,207,684 for the quarter and nine months ended April 2, 2005, compared to $412,760 and
$1,202,698 for the same periods in the prior year, respectively.

Other income was $38,828 for the
third quarter of fiscal 2005 compared to $36,344 for the same quarter in the prior year.
For the first nine months of fiscal 2005, other income was $116,607 compared to other
expenses of $13,345 for the same period in the prior year. The other income for the first
nine months of fiscal 2005 reflects a settlement payment received in connection with one
of the Companys patents, along with favorable exchange rate gains. The other expense
shown in the prior year resulted from exchange rate losses recorded on certain Canadian
sales.

# Income Taxes

The effective tax rate was 36.3% for
the third quarter of fiscal 2005, excluding the one-time tax benefits of $594,000 related
to the expiration of a certain tax statutory period and the related reversal of tax
contingencies and the amended filings for research credits. This compared to 37.7% for the
same period in the prior year. The effective tax rate for the first nine months of fiscal
2005 was 3.9% compared to 35.8% for the same period in fiscal 2004. The tax rate for the
first nine months of fiscal 2005 was lower due to the one-time tax benefits recorded in
the third quarter.

# Net Income

Net income for the third quarter of
fiscal 2005 was $1.7 million or $0.37 per diluted share compared to net income of $1.1
million, or $0.25 per diluted share for the same quarter of last year. Net income for the
first nine months of fiscal 2005 was $1.6 million or $0.34 per diluted share compared with
$2.3 million or $0.50 per diluted share in the first nine months of fiscal 2004. The first
nine months of fiscal 2005 included the pre-tax impairment/restructuring charges and
additional depreciation of $2.3 million associated with the relocation of the wire
operation, along with higher steel costs, partially offset by the one-time tax benefits.

# Liquidity and Capital
Resources

Net cash provided by operating
activities for the first nine months of fiscal 2005 was $5.0 million compared to $2.6
million for the first nine months of fiscal 2004. In fiscal 2005, the Company has been
successful in reducing its days outstanding in accounts receivable and improving its
inventory turns.

16

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIESMANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Cash used for investing activities
was $2.1 million for the first nine months of fiscal 2005, compared to $929,731 used in
the same period in the prior year. Capital expenditures totaled $2.1 for the nine months
ended April 2, 2005, compared to $959,030 for the first nine months of the prior year. The
capital expenditures for the first nine months of fiscal 2005 represented investments in
tooling for new products, a new showroom in Chicago and equipment for Asian production.

There were capital expenditure
commitments of approximately $1,245,000 for new product tooling and Asian production
equipment at April 2, 2005. Capital expenditures for the fiscal year are anticipated to be
approximately $3.0 million.

Cash used for financing activities
was $2.2 million for the first nine months of fiscal 2005, compared to $1.1 million used
in the same period in the prior year. The expenditures represent the Companys
dividend payments to its shareholders.

Anticipated cash flows from
operations and available balances on the revolving credit line are expected to be adequate
to fund working capital, capital expenditures, stock repurchases and dividend payments.

# Legal Proceedings

Two pending legal matters are
described in Note 10  Legal Contingencies in the 2004 Annual Report on Form 10-K.
There has been no change in the Canada Customs and Revenue Agency matter. In the case
involving the former employees claim for additional benefits under an executive
retirement plan, the Sixth Circuit Court of Appeals, in January 2005, denied the
plaintiffs appeal of the dismissal.

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

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

# New Accounting Standards

In February 2005, the SEC Office of
the Chief Accountant issued a letter to clarify the staffs interpretation regarding
the accounting for operating leases under generally accepted accounting principles. Issues
covered in the letter include the amortization of leasehold improvements, rent holidays,
and landlord/tenant incentives. The SEC staff believes that its positions are based upon
existing accounting literature, and as such, any registrants who determine their
accounting for leases in prior periods to be in error should issue a restatement of
results from the correction of any such errors, if deemed significant. The Company is and
has been in compliance with regard to accounting for its leases and has determined that
there is no impact of this clarification on its financial statements in the current
quarter or prior periods. Refer to Note 8, Lease Commitments, provided in the
Companys Form 10-K for the year ended July 3, 2004, for further information
regarding the companys leases.

17

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

In December 2004, the Financial
Accounting Standards Board (FASB) issued a revision of SFAS No. 123(R),
Share-Based Payment, which supersedes APB Opinion No. 25. This statement focuses
primarily on transactions in which an entity obtains employee services in exchange for
share-based payments. Under SFAS No. 123(R), a public company generally is required to
measure the cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award, with such cost recognized
over the applicable vesting period. In addition, SFAS No. 123(R) requires an entity to
provide certain disclosures in order to assist in understanding the nature of share-based
payments transactions and the effects of those transactions on the financial statements.
The provisions of SFAS No. 123(R) require application as of the beginning of the first
fiscal year that begins after June 15, 2005. As such, the Company is required to adopt the
provisions of SFAS No. 123(R) at the beginning of fiscal year 2006. The Company has not
granted such awards over the past three years. If in the future, the Company should grant
any such awards it will evaluate the impact of SFAS No. 123(R) on its consolidated
financial statements.

In December 2004, the FASB issued
Staff Position (FSP) No. 109-1, Application of FASB Statement No. 109,
Accounting for Income Taxes, for the Tax Deduction Provided to U.S. Based Manufacturers by
the American Jobs Creation Act of 2004 (the Act).The FASB also issued FSP
109-2, Accounting and Disclosure Guidance for the Foreign Earnings Repatriation
Provision within the American Jobs Creation Act of 2004. The Company is currently
evaluating the impact that the Act will have on its consolidated financial statements and
expects to determine such impact prior to issuing its fiscal 2005 annual report.

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

# Critical Accounting
Policies

This discussion and analysis of the
Companys financial condition and results of its operations is based upon its
consolidated financial statements. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts. On an
ongoing basis, management evaluates the estimates, including those related to bad debts,
inventories, long-lived assets, income taxes, self-insurance reserves, retirement benefits
and contingencies and litigation. Management bases the estimates on historical experience
and on various other assumptions and factors that they believe to be reasonable under the
circumstances. Based on managements ongoing review, adjustments are made that are
considered appropriate under the facts and circumstances. The accompanying condensed
consolidated financial statements are prepared using the same critical accounting policies
discussed in the 2004 Annual Report on Form 10-K.

18

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Item 3.  Quantitative and
Qualitative Disclosures About Market Risk

The Company is exposed to market
risks, which include changes in the Canadian dollar foreign currency exchange rate as
measured against the U.S. dollar and changes in U.S. interest rates. The Company holds a
derivative instrument in the form of an interest rate swap, which is viewed as a risk
management tool and is not used for trading or speculative purposes. The intent of the
interest rate swap is to effectively fix the interest rate on part of the borrowings under
the Companys variable rate revolving credit agreement. The derivative was recognized
as a liability on the balance sheet at its fair value of $633,100 at April 2, 2005 and
$1,391,133 at July 3, 2004.

The following table provides
information on the Companys fixed maturity investments as of April 2, 2005 that are
sensitive to changes in interest rates. The table also presents the corresponding interest
rate swap on this debt. Since the interest rate swap effectively fixes the interest rate
on the notional amount of debt, changes in interest rates have no current effect on the
interest expense recorded by the Company on the portion of the debt covered by the
interest rate swap.

|Liability                              | Amount | Maturity Date
|-------------------------------------- | ------ | -------------
|Variable rate revolving credit         |        |              
|agreement                              |        | $24,500,000  
|First $20,000,000 at an interest rate  |       
|of 2.93% (3 month LIBOR)               |       
|plus weighted average                  |       
|credit spread of .85%;                 |       
|Next $4,500,000 at an interest rate of |       
|2.87% (1 month LIBOR)                  |       
|plus weighted average                  |       
|credit spread of .85%;                 |       
|                                      
|Interest Rate Swap                     |       
|Notional amount                        |        | $20,000,000  
|Pay/Receive variable                   |       
|at 3 month LIBOR - 2.91%               |       
|Pay fixed interest rate - 6.25%        |       

The Company has a sales office
located in Canada. Sales are typically denominated in Canadian dollars, thereby creating
exposures to changes in exchange rates. The changes in the Canadian/U.S. exchange rate may
positively or negatively affect the Companys sales, gross margins and retained
earnings. The Company attempts to minimize currency exposure through working capital
management. The Company does not hedge its exposure to translation gains and losses
relating to foreign currency net asset exposures.

19

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES CONTROLS AND PROCEDURES

Item 4. Controls and
Procedures

(a) Evaluation of
Disclosure Controls and Procedures

| | The
Companys Chief Executive Officer and the Vice President of Finance, after evaluating
the effectiveness of the Companys disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15(d)-15(e)) as of the end of the period covered by this
Form 10-Q Quarterly Report have concluded that the Companys disclosure controls and
procedures were adequate and effective to ensure that material information relating to the
Company would be made known to them by others within the Company, particularly during the
period in which this Form 10-Q Quarterly Report was being prepared.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b) Changes in Internal
Controls

| | During
the period covered by this report, there have been no changes in the Company's
         internal control over financial reporting that have materially affected or are
reasonably likely to materially  affect the Companys internal control over
financial reporting.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

---



# KNAPE & VOGT
MANUFACTURING COMPANY AND SUBSIDIARIES

# PART II. OTHER
INFORMATION

Item 1. Legal Proceedings

| | Two
 pending legal matters are described in Note 10  Legal Contingencies in the
2004 Annual Report on Form 10-K. There has been no change in the Canada Customs and
Revenue Agency matter. In the case involving the former employees claim for
additional benefits under an executive retirement plan, the Sixth Circuit Court of
Appeals, in January 2005, denied the plaintiffs appeal of the dismissal.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

Item 6. Exhibits and
Reports on Form 8-K

| | (a) | Exhibits
| | --- | --------

| | 31.1 | Certificate
of the Chairman 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 Vice President of Finance 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 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 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.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

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# SIGNATURES

Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

|Date:  April 29, 2005  
Date:  April 29, 2005 | Knape & Vogt Manufacturing Company
                          (Registrant)/s/ William R. Dutmers       
 William R. Dutmers
 Chairman of the Board and
 Chief Executive Officer/s/ Leslie J. Cummings       
 Leslie J. Cummings
 Vice President of Finance and
 Treasurer
|--------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

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EXHIBIT INDEX

|Exhibit | Description
|------- | -----------

|31.1 | Certificate
of the Chairman 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 Vice President of Finance 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 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 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.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

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# EXHIBIT 31.1

I, William R. Dutmers, certify that:

|1. |  | I have reviewed this quarterly report on Form 10-Q 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: April 29, 2005 | /s/ William R. Dutmers
William R. Dutmers
Chairman of the Board and Chief Executive Officer
|-------------------- | -------------------------------------------------------------------------------------------

24

---



# EXHIBIT 31.2

I, Leslie J. Cummings, certify that:

|1. |  | I have reviewed this quarterly report on Form 10-Q 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:  April 29, 2005 | /s/ Leslie J. Cummings
Leslie J. Cummings
Vice President of Finance and Treasurer
|--------------------- | ---------------------------------------------------------------------------------

25

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# EXHIBIT 32.1

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

|(1) |  | the Quarterly Report on Form 10-Q for the three months ended April 2, 2005 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 Quarterly Report on Form 10-Q for the three
               months ended April 2, 2005 fairly presents, in all material respects, the
               financial condition and results of operations of Knape & Vogt Manufacturing
               Company.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: April 29, 2005 | /s/ William R. Dutmers
William R. Dutmers
Chairman of the Board and Chief Executive Officer
|-------------------- | -------------------------------------------------------------------------------------------

26

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# EXHIBIT 32.2

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

|(3) |  | the Quarterly Report on Form 10-Q for the three months ended April 2, 2005 which
               this statement accompanies fully complies with the requirements of Section 13(a)
               or 15(d) of the Securities Act of 1934, and
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | the information contained in the Quarterly Report on Form 10-Q for the three
               months ended April 2, 2005 fairly presents, in all material respects, the
               financial condition and results of operations of Knape & Vogt Manufacturing
               Company.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date:  April 29, 2005 | /s/ Leslie J. Cummings
Leslie J. Cummings
Vice President of Finance andTreasurer
|--------------------- | --------------------------------------------------------------------------------

27