SOURCE: Reko International Group Inc.

Reko International Group Inc.

October 13, 2015 08:57 ET

Reko Announces Year End Results for Fiscal 2015

Reports Earnings of $0.36 per Share in the Quarter

WINDSOR, ON--(Marketwired - October 13, 2015) - Reko International Group Inc. (TSX VENTURE: REK) today announced results for its fourth quarter and year ended July 31, 2015.

Financial Highlights:

       
   Three Months  Twelve Months
   (unaudited)  (unaudited)
   Fiscal  Fiscal  Fiscal  Fiscal
   2015  2014  2015  2014
Sales  $10,868  $10,566  $48,296  $38,894
Net income  2,340  2,051  4,127  2,298
EPS basic  0.36  0.32  0.64  0.36
Working capital        12,717  10,203
Shareholders' equity        34,228  30,049
Shareholders' Equity per Share        5.32  4.67
         

Consolidated sales for the quarter ended July 31, 2015, were $10.9 million, compared to $10.6 million in the prior year, an increase of $0.3 million or 2.9%. The increase in sales in the quarter is largely related to increased foreign exchange rates and is partly offset by a decrease in demand in the quarter. Sales in the quarter were higher than anticipated at the end of the third quarter as a result of the continued strength of the U.S dollar and production efficiencies achieved in the quarter as measured against our expectations. Consolidated sales for the year ended July 31, 2015, were $48.3 million, compared to $38.9 million in the prior year, an increase of $9.4 million or 24.2%. The increase in sales year over year is a result of increased foreign exchange during the year; increased demand for our precision machined products during the year and increased demand for our automotive products in the second and third quarters of the year.

Gross profit for the quarter ended July 31, 2015, was $3.2 million, or 29.4% of sales, compared to a gross profit $2.9 million, or 27.4% of sales in the prior year. The increase in gross profit was primarily the result of increased foreign exchange rates. This was partially offset by an increase in fixed costs and decreased demand in the quarter. Gross profit for the year ended July 31, 2015, was $12.1 million, or 25% of sales compared to a gross profit of $7.1 million, or 18.3% of sales in the prior year. The increase in gross profit year over year is consistent with the increase in sales year over year partially offset by an increase in fixed costs.

Selling and administrative expenses for the quarter ended July 31, 2015 were $1.2 million, or 11.1% of sales, compared to $1.4 million, or 13.2% sales, in the prior year. The decrease in selling and administrative expenses was primarily related to the timing of certain contractual, productivity and income-based bonuses being expensed in the third quarter of this year as opposed to the fourth quarter of the prior year. Selling and administrative expenses for the year ended July 31, 2015 were $6.3 million, or 13.0% of sales, compared to $4.7 million, or 12.1% sales, in the prior year. The year over year increase in selling and administrative expenses is primarily related to wage increases including contractual, productivity and income-based bonuses, increased professional fees and an increase in the allowance for bad debts.

During the quarter, the net realizable value of our Canadian tax credits was assessed. As a result of the assessment, $1.0 million of previously written off tax credits were reversed, resulting in a $0.7 million increase in net income or $0.12 per share versus $0.16 per share in the prior year. All previously written off Canadian tax losses and credits have now been fully reflected in the Company's books and records.

Net income for the quarter ended July 31, 2015 was $2.3 million or $0.36 per share, compared to net income of $2.1 million, or $0.32 per share in the prior year. Net income for the year ended July 31, 2015 was $4.1 million or $0.64 per share, compared to net income of $2.3 million, or $0.36 per share in the prior year.

"We are pleased to report our third highest annual earnings per share since becoming a public company," stated Diane Reko, Chief Executive Officer. "These results reflect a combination of strong operational performance in all business areas and non-operational factors such as the sustained strength of the U.S. dollar and the reversal of previously written off tax losses. We will continue to focus on operational performance, which is within our control, to strengthen the Company."

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.

SUBSIDIARIES/DIVISIONS:

Canada:

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

United States:

  • Reko International Sales Inc.
  • Reko International Holdings Inc.

Contact Information

  • For more information contact:
    Carl A. Merton
    Chief Financial Officer
    (519) 727-3287
    www.rekointl.com