Reko International Group Inc.
TSX VENTURE : REK

Reko International Group Inc.

June 07, 2012 12:47 ET

Reko Announces Third Quarter Results for Fiscal 2012

WINDSOR, ONTARIO--(Marketwire - June 7, 2012) - Reko International Group Inc. (TSX VENTURE:REK) today announced results for its third quarter ended April 30, 2012.

Financial Highlights:
Three Months Nine Months
(unaudited) (unaudited)
Fiscal Fiscal Fiscal Fiscal
2012 2011 2012 2011
Sales $ 11,388 $ 10,890 $ 33,006 $ 28,830
Net income (loss) 193 (7,501 ) 471 (9,801 )
EPS basic 0.03 (1.17 ) 0.07 (1.53 )
Working capital 7,052 7,595
Shareholders' equity 27,644 27,825
Shareholders' Equity per Share 4.31 4.33

Consolidated sales for the quarter ended April 30, 2012, were $11.4 million, compared to $10.9 million in the prior year, an increase of $0.5 million or 4.6%. 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 nine months ended April 30, 2012, were $33.0 million, compared to $28.8 million in the prior year, an increase of $4.2 million, or 14.6%.

Gross profit for the three months ended April 30, 2012, was $2.0 million, or 17.5% of sales, compared to a gross profit of $0.8 million, or 7.3% of sales, in the prior year. The increase in gross profit over the prior year is related to lower fixed costs, and reduced wages and benefits as a result of implementing our business transformation project. Gross profit for the nine months ended April 30, 2012, was $4.8 million, or 14.5% of sales, compared to a gross profit of $1.9 million, or 6.6% of sales in the prior year. The year over year improvement in gross profit is 152% for the nine months.

Selling and administrative expenses for the three months ended April 30, 2012 were $1.3 million, or 11.4% of sales, compared to $1.5 million, or 13.8% 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 and reductions in the amount of bad debts incurred in the quarter. Selling and administrative expenses for the nine months ended April 30, 2012, were $3.9 million, or 11.8% of sales, compared to $4.5 million, or 15.6% of sales.

Net income for the quarter was $0.2 million or $0.03 per share, compared to a net loss of $7.5 million, or $1.17 per share in the prior year. Net income for the nine months ended April 30, 2012, was $0.5 million, or $0.07 per share, compared to a net loss of $9.8 million or $1.53 per share, the same period last year. The results from fiscal 2011 were negatively impacted by charges of $1.07 per share, related to Reko's restructuring.

"Reko's third quarter results are further evidence of our determination to return to a profitable state," stated Diane Reko, chief executive officer. "Our ability to not only maintain a third consecutive profitable quarter, but to surpass our previous results, can be attributed to changes made to our cost structure over the past year to allow us to compete successfully in our market. The recovery of the capital equipment market has given us a steady volume of work in all divisions, and has allowed us to improve profitability. While we are currently experiencing a steady volume of work, we are continuing to identify and secure new business opportunities. We are optimistic that our positive financial results will continue for the balance of the year."

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
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