Reko International Group Inc.
TSX VENTURE : REK

Reko International Group Inc.

December 08, 2011 12:27 ET

Reko Announces First Quarter Results for Fiscal 2012

WINDSOR, ONTARIO--(Marketwire - Dec. 8, 2011) - Reko International Group Inc. (TSX VENTURE:REK) today announced results for its first quarter ended October 31, 2011.

Financial Highlights (complete statements follow):

Three Months
(unaudited)
2011 2010
Sales $ 10,510 $ 9,685
Net income (loss) 139 (1,160 )
EPS basic 0.02 (0.18 )
Working capital 7,264 131
Shareholders' equity 27,310 37,624
Shareholders' Equity per Share 4.25 5.86

Consolidated sales for the quarter ended October 31, 2011, were $10.5 million, compared to $9.7 million in the prior year. This represents an increase of approximately 8.5%. Reko's sales increase is tied to the recovery of the capital equipment market.

The gross profit earned in the three months ended October 31, 2011, was $1.1 million, or 10.5% of sales, compared to a gross profit of $0.6 million, or 6.2% of sales, in the prior year. The increase in gross profit for the quarter relates primarily to a reduction in overhead costs as a result of the consolidation of operations.

Selling and administrative expenses for the three months ended October 31, 2011 were $1.2 million, or 11.3% of sales, compared to $1.5 million or 15.4% of sales in the prior year. The decrease in selling and administrative expenses in the quarter relates primarily to changes announced as part of our business transformation project.

Adjusted net loss for the quarter was $0.2 million, or $0.04 per share, compared to an adjusted net loss of $1.2 million, or $0.18 per share in the prior year. Adjusted net loss is defined as net income (loss) plus business transformation expenses plus asset impairment charges (as a result of implementing the business transformation project) less gain on sale of capital assets subject to the business transformation project.

Net income for the quarter was $0.1 million or $0.02 per share, compared to a net loss of $1.2 million, or $0.18 per share in the prior year.

"We are pleased with the return to profitability in the quarter," said Diane Reko, Chief Executive Officer. "The implementation of our business transformation project and the tough decisions that we made have improved our operating results. As the capital equipment market continues to slowly recover, Reko is working to identify and secure new business opportunities that will position us to further improve sales and profitability levels."

Founded in 1976, Reko International Group (TSX VENTURE:REK) is a manufacturing firm providing high precision machining of very large parts, as well as tooling and automated solutions for the transportation, energy, automotive, aerospace and consumer product markets, all delivered through its two production facilities in Ontario.

REKO INTERNATIONAL GROUP INC.
469 Silver Creek Industrial Drive
Lakeshore, Ontario
N8N 4W2
www.rekointl.com
SUBSIDIARIES/DIVISIONS:
Canada:
Reko Tool and Mould (1987) Inc.
- Concorde Machine Tool
Reko Manufacturing Group Inc.
United States:
Reko International Sales Inc.
Reko International Holdings Inc.
- Reko Global Services, LLC

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Reko International Group Inc.
    Carl A. Merton
    Chief Financial Officer
    (519) 727-3287
    www.rekointl.com