Reko International Group Inc.
TSX : REK

Reko International Group Inc.

September 24, 2009 14:09 ET

Reko Announces Profitable Operations for the Year

WINDSOR, ONTARIO--(Marketwire - Sept. 24, 2009) - Reko International Group Inc. (TSX:REK) announced today the results for the quarter and year-ended July 31, 2009.



Financial Highlights (complete statements follow):

Three Months Twelve Months
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Fiscal Fiscal Fiscal Fiscal
2009 2008 2009 2008
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Sales $10,128 $13,692 $55,280 $55,729
Net (loss) income (1,353) (1,056) 199 (3,529)
EPS basic (0.20) (0.14) .03 (0.49)
Shareholders' equity 43,617 44,108
Shareholders' equity per share 6.79 6.20
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Sales for the quarter ended July 31, 2009 were $10.1 million compared to $13.7 million in the prior year. During the quarter, the Company experienced its first impacts of the global recession as its operations most impacted by the credit market crisis realized significant volume reductions. Sales for the year ended July 31, 2009 were $55.3 million compared to $55.7 million in the prior year, reflecting only a minor decrease in sales year over year even with the significant decline in sales in the fourth quarter, compared to the prior year.

The gross margin for the quarter ended July 31, 2009 declined $1.0 million to $0.2 million, or 1.9% of sales, from $1.2 million or 9.0% of sales in the prior year. The decrease in gross margin during the quarter is largely related to significant foreign exchange losses tied to dramatic currency fluctuations and the acceptance of a program with a new customer under extreme pricing conditions that involved greater complexity than anticipated. The gross margin for the year ended July 31, 2009 increased $5.3 million to $9 million, or 16.3% of sales, compared to $3.7 million or 6.6% of sales in the prior year. The increase in gross margin largely related to increased work volumes in the first three quarters of the year resulting in improved overhead absorption as well as productivity and efficiency improvements from the prior year.

Selling and administrative expenses for the quarter ended July 31, 2009 decreased $0.3 million or 16.4% to $1.5 million, or 15% of sales, as compared to $1.9 million or 13.5% of sales in the same period of the prior year. The decrease during the quarter was largely related to labour savings as a result of our second quarter sales restructuring. Selling and administrative expenses for the year ended July 31, 2009 decreased by $0.1 million or 1.8% to $7.1 million or 12.8% of sales, as compared to $7.2 million or 13.0% of sales in the prior year. The decrease in selling and administrative expenses was impacted by a number of items both positively and negatively that ultimately netted to a $0.1 million difference.

Net loss for the quarter ended July 31, 2009 was $1.4 million or $0.20 per share, compared to a net loss of $1.0 million or $0.14 per share, in the prior year. Net income for the year was $0.2 million or $0.03 per share compared to a net loss of $3.5 million or $0.49 per share, in the prior year.

"We are very pleased to report our success in achieving our most important goal for fiscal 2009, a return to profitability," said Diane St. John, Chief Executive Officer of Reko. "Our decision three years ago to concentrate on our core competencies was a wise one; although our financial results suffered as we exited those business operations. With all of our active U.S. business operations disposed of, we have concentrated our efforts in the last two years on strengthening our existing market position. Those efforts were rewarded during our first, second and third quarters as we reported profitability. While the fourth quarter was disappointing, we suffered significantly from the impact of the global credit crisis upon the market for capital equipment. We continue to look for opportunities to improve as we await a return to normalcy in the credit markets."

Founded in 1976, Reko International Group (TSX:REK) is a highly integrated, technology driven engineering and manufacturing firm providing engineered solutions for the plastics segment of the automotive, aerospace and consumer product markets. In its nine production facilities in Ontario, Reko designs and manufactures precision moulds and other related industrial tooling, in addition to its own proprietary line of CNC machining centres.



REKO INTERNATIONAL GROUP INC.
5390 Brendan Lane
Oldcastle, Ontario
N0R 1L0
www.rekointl.com


SUBSIDIARIES/DIVISIONS:

Canada:
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- Reko Tool & Mould (1987) Inc.
Divisions -
- Reko Automation and Machine Tool
- Concorde Machine Tool

United States:
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- Reko International Sales Inc.
- Reko International Holdings Inc.

Contact Information

  • Reko International Group Inc.
    Carl A. Merton
    Chief Financial Officer
    (519) 737-6974
    www.rekointl.com