Regional Quarterly Reports

October 24, 2003
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Following is a summary of reports issued for the last quarter by West Michigan companies.

Hastings Manufacturing Co. (AMEX: HMF) announced Oct. 17 that it had submitted the appropriate documents to voluntarily delist its common stock from the American Stock Exchange and terminated the registration of its common stock under the Securities and Exchange Act.

Upon the SEC’s acceptance of Hastings’ deregistration application, the company will discontinue filing corporate reports with the SEC.

Hastings Manufacturing shares are immediately eligible for trading through the Pink Sheets, an electronic quotation service for over-the-counter securities.

“The board of directors examined many factors in making this decision, including the nature of our shareholder base, recent trading history of our stock and, in particular, the rapidly rising costs associated with SEC reporting and compliance,” said chairman and CEO Mark Johnson.

“The elimination of these expenses should have a positive impact on our bottom line and will allow us to focus our resources on growth initiatives.”

Among those initiatives is the company’s plan to introduce a new line of pistons under the Hastings brand early next year.

According to the company, the new piston line will offer broader coverage and increased availability to engine-parts warehouses, engine rebuilders and aftermarket retailers.

Hastings will continue to represent Zollner pistons until the Hastings brand is available.

“The new Hastings-brand pistons are an important part of our effort to expand the awareness and acceptance of the Hastings name with our consistent sales and marketing approach,” said Jeffrey Guenther, vice president of sales.

Founders Financial Corp., the holding company for Founders Trust Personal Bank, announced third quarter earnings of $804,912, up 60 percent from $502,457 for the same year-ago quarter.

Basic earnings per share for the quarter were $1.06 vs. 67 cents one year ago.

Total non-interest income of $1.35 million represented a more than 75 percent increase over the $763,497 recorded for 2002’s third quarter. A 130 percent gain in mortgage fee income contributed to the increase.

X-Rite Inc. (Nasdaq: XRIT) reported a 20 percent increase in net sales to $26.8 million for the third quarter ended Sept. 27, compared with $22.2 million in last year’s third quarter.

Operating income for the quarter was $600,000, up from $300,000 the year before.

Third quarter net income was $300,000, or 1 cent per share, the same as last year.

For the first nine months, net sales were $78.6 million, or more than 16 percent higher than the first nine months of 2002.

Operating income for the first three quarters was $4.8 million, or more than three times the operating income of the same year-ago period.

Net income in the first nine months was $3.3 million, or 16 cents per diluted share vs. a net loss of $13 million, or 65 cents per share, for the comparable period last year.

The prior year loss included a $6.6 million write down of investments made by XR Ventures, and a charge for goodwill impairment of $7.6 million in connection with the adoption of new accounting rules.

X-Rite’s board also declared a third-quarter cash dividend of 2.5 cents per share on its common stock, payable Nov. 7 to shareholders of record Oct. 10.

Knape & Vogt Manufacturing Co. (Nasdaq: KNAP) reported a net sales increase of 16.5 percent to $36 million for the first quarter of 2004 ended Sept. 27, compared with net sales of $31 million during the same period a year ago.

Net income increased to $669,875, or 15 cents per share, for the just-completed quarter, up from $194,963, or 4 cents per share in fiscal 2003.

The company attributed the sales gains to new products introduced during the past year, which accounted for $5.5 million of sales in the quarter.

“During the first quarter we saw growth in almost all of the markets we serve, including the office furniture segment where we are outpacing the industry,” said Chairman and CEO Bill Dutmers.

“While the office furniture industry reported a slight decline in shipments for the months of July and August, we were successful in growing our sales to both the original equipment manufacturer channel and the dealer channel.”

Dutmers said Knape & Vogt intends to accelerate its product development initiatives in the year ahead.

Fifth Third Bancorp (NYSE:FTB) reported third quarter earnings of 76 cents per diluted share, compared with 70 cents per share for the same period in 2002.

Third quarter net income totaled $437.2 million vs. $416.5 million in the third quarter of last year.

Third quarter return on average assets and return on average equity were 1.94 percent and 20.6 percent, respectively, compared with 2.18 percent and 19.6 percent in the year-ago quarter.

The company said earnings in the just passed quarter were highlighted by strong loan and deposit sales results and demand for Fifth Third business services.

Loan and lease balance increased by $2.4 billion, or 20 percent, over last year’s third quarter. The company attributed the increase to growth in consumer lending and in commercial loans and leases.

President and CEO George Schaefer Jr. said the credit quality of the bank’s loan portfolio remains strong in the quarter and shows signs of improvement in the near term despite the lack of a meaningful rebound in economic activity.

“Our outlook for the remainder of the year and into 2004 remains upbeat as our sales force and affiliate management teams continue to focus on winning customer relationships and cross-selling additional products and services,” he said.

Spartan Stores Inc. (Nasdaq: SPTN) reported net sales of $473.3 million for the second quarter ended Sept. 13, an increase of nearly 4 percent over last year’s third quarter.

The sales increase represented the second consecutive quarter of year-over-year sales improvement, which the company attributed to positive retail comparable-store trends and an increase in distribution sales.

Spartan reported second-quarter operating earnings of $7.3 million, reversing a trend of operating losses reported in the previous three quarters.

According to the company, on a year-over-year basis, second quarter operating earnings declined by $2 million due primarily to stronger promotional programs and the performance of stores open less than a year.

Second quarter net earnings were $1.8 million, or 9 cents per diluted share, compared to a net loss of $600,000, or 3 cents per share, in the year-ago quarter.

Retail net sales for the quarter increased 3.9 percent to $230.5 million from last year’s $221.8 million.

Grocery distribution net sales increased 3.7 percent over 2002’s second quarter to $261 million.

“We are making strong progress on each of our top priorities, particularly with our sales growth initiatives,” said President and CEO Craig C. Sturken.

He said financial and operational performance improvements are a result of the many operational changes made early this year.

Sturken said the company expects sales and gross profit margins to improve during the remainder of the fiscal year.           

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