Reko International Group Inc.
TSX VENTURE : REK

Reko International Group Inc.

March 06, 2014 12:14 ET

Reko Announces Second Quarter Results for Fiscal 2014

WINDSOR, ONTARIO--(Marketwired - March 6, 2014) - Reko International Group Inc. (TSX VENTURE:REK) today announced results for its second quarter ended January 31, 2014.

Financial Highlights:
Three Months Six Months
(unaudited) (unaudited)
Fiscal Fiscal Fiscal Fiscal
2014 2013 2014 2013
Sales $ 9,298 $ 10,504 $ 17,767 $ 21,241
Net income 54 212 96 963
EPS basic 0.01 0.03 0.02 0.15
Working capital 8,682 8,395
Shareholders' equity 27,819 26,995
Shareholders' Equity per Share 4.33 4.20

Consolidated sales for the quarter ended January 31, 2014, were $9.3 million, compared to $10.5 million in the prior year, a decrease of $1.2 million or 11.4%. The decrease in sales was largely related to decreases in demand across all markets. Consolidated sales for the six months ended January 31, 2014 were $17.8 million, compared to $21.2 million in the prior year, a decrease of $3.4 million, or 16.0%.

Gross profit for the quarter ended January 31, 2014, was $1.5 million, or 16.1% of sales, compared to a gross profit of $1.6 million, or 15.2% of sales, in the prior year. Gross profit for the six months ended January 31, 2014 was $2.7 million, or 15.2% of sales, compared to a gross profit of $3.4 million in the prior year, or 16.0% of sales in the prior year.

Selling and administrative expenses for the quarter ended January 31, 2014 were $ 1.1 million, or 11.8% of sales, compared to $1.2 million, or 11.4% sales, in the prior year. The decrease in SG&A relates to the recovery of a receivable that had previously been written off, partly offset by an increase in sales commission due to a change in customer mix. Selling and administrative expenses for the six months ended January 31, 2014 were $2.3 million, or 12.9% of sales, compared to $2.2 million in the prior year, or 10.4% of sales in the prior year.

Net income for the quarter ended January 31, 2014 was $0.1 million or $0.01 per share, compared to net income of $0.2 million, or $0.03 per share in the prior year. The decrease in net income for the three month period was primarily the result of foreign exchange losses incurred during the period as emanating from marking to market the company's foreign exchange hedge position. The foreign exchange loss equated to $0.04 per share, or $0.3 million. Net income for the six months ended January 31, 2014 was $0.1 million or $0.02 per share, compared to net income of $0.9 million or $0.15 per share in the prior year.

"Sales volumes in both the capital equipment market and automotive market started to improve late in the quarter," stated Diane Reko, chief executive officer. "This increase in sales allowed us to show a significant improvement in our operating profitability compared to last quarter. Overall financial results were impacted by foreign exchange losses due to a stronger U.S. dollar, and our policy of hedging our currency exposure resulting from our large book of U.S. dollar receivables. While this had an impact upon our financial results in the quarter, a stronger U.S. dollar will improve our profitability going forward."

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.

About Reko International Group Inc.

Reko International Group Inc. is a publicly traded, certified woman owned manufacturing company located in Southwestern, Ontario. Established in 1976, Reko International Group Inc. is a diverse value-added designer and manufacturer of customized machining and engineering solutions to OEMs and their Tier I suppliers in dynamic sectors as rail equipment, oil and gas distribution, mining, military, capital equipment, and automotive. For more information, visit www.rekointl.com.

REKO INTERNATIONAL GROUP INC.
469 Silver Creek Industrial Drive Lakeshore, Ontario
N8N 4W2
http://www.rekointl.com/

SUBSIDIARIES/DIVISIONS:

Canada:

  • Concorde Precision Machining Inc.
  • Reko Manufacturing Group Inc.

United States:

  • Reko International Sales Inc.
  • Reko International Holdings Inc.
    • Reko Global Services, LLC

Contact Information

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