Reko International Group Inc.
TSX VENTURE : REK

Reko International Group Inc.

March 08, 2012 11:49 ET

Reko Announces Second Quarter Results for Fiscal 2012

WINDSOR, ONTARIO--(Marketwire - March 8, 2012) - Reko International Group Inc. (TSX VENTURE:REK) today announced results for its second quarter ended January 31, 2012.

Financial Highlights:
Three Months Six Months
(unaudited) (unaudited)
Fiscal Fiscal Fiscal Fiscal
2012 2011 2012 2011
Sales $ 11,108 $ 8,255 $ 21,618 $ 17,940
Net income (loss) 139 (1,140 ) 281 (2,300 )
EPS basic 0.02 (0.18 ) 0.04 (0.36 )
Working capital 7,210 7,595
Shareholders' equity 27,453 27,170
Shareholders' Equity per Share 4.28 4.23

Consolidated sales for the quarter ended January 31, 2012, were $11.1 million, compared to $8.3 million in the prior year, an increase of $2.8 million or 34.6%. The increase in sales in the quarter related to improving conditions both in the general economy and the capital equipment market. Consolidated sales for the six months ended January 31, 2012, were $21.6 million, compared to $17.9 million in the prior year, an increase of $3.7 million, or 20.7%.

Gross profit for the three months ended January 31, 2012 was $1.7 million, or 15.3% of sales, compared to a gross profit of $0.5 million, or 6.0% of sales, in the prior year. The increase in gross profit over the prior year is related to increased sales in the quarter, lower fixed costs, and reduced wages and benefits as a result of implementing our business transformation project. Gross profit for the six months ended January 31, 2012, was $2.8 million, or 13.0% of sales, compared to a gross profit of $1.1 million, or 6.1% of sales in the prior year.

Selling and administrative expenses for the three months ended January 31, 2012 were $1.3 million, or 11.7% of sales, compared to $1.5 million, or 18.1% sales, in the prior year. The decrease in selling and administrative expenses in the quarter relates to reduction in wages and benefits as part of the business transformation project. Selling and administrative expenses for the six months ended January 31, 2012 were $2.5 million, or 11.6% of sales, compared to $3.0 million, or 16.8% of sales, a decrease of 15.6% from the prior year.

Net income for the quarter was $0.1 million or $0.02 per share, compared to a net loss of $1.1 million, or $0.18 per share in the prior year. Net income for the six months ended January 31, 2012, was $0.3 million, or $0.04 per share, compared to a net loss of $2.3 million or $0.36 per share, the same period last year.

"We are very pleased to announce a second consecutive quarter of profitability," stated Diane Reko, Chief Executive Officer. "Changes in our market strategy, along with improvements in the general economy have produced larger volumes of profitable work on our floor, a situation we see continuing through the current quarter. The commitment from our workforce for continuous improvements in efficiency and productivity, as well as the reduction in costs resulting from implementation of the business transformation project have accelerated our return to profitability. We are looking forward to continually increasing our financial strength."

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