Reko International Group Inc.
TSX VENTURE : REK

Reko International Group Inc.

October 03, 2013 12:12 ET

Reko International Group Inc. Fourth Quarter Report and Year Ended July 31, 2013

WINDSOR, ONTARIO--(Marketwired - Oct. 3, 2013) - Reko International Group Inc. (TSX VENTURE:REK) today announced results for its fourth quarter and year ended July 31, 2013.

Financial Highlights:
Three Months Twelve Months
(unaudited) (unaudited)
Fiscal Fiscal Fiscal Fiscal
2013 2012 2013 2012
Sales $8,562 $9,085 $40,674 $42,091
Net income 498 733 1,673 1,267
EPS basic 0.08 0.11 0.26 0.20
Working capital 8,936 1,832
Shareholders' equity 27,705 26,032
Shareholders' Equity per Share 4.31 4.05

Consolidated sales for the year ended July 31, 2013, were $40.7 million, compared to $42.1 million in the prior year, a decrease of $1.4 million or 3.3%. The decrease in sales was largely related to decreases in demand in the third and fourth quarters for goods in the capital equipment market, and decreases in demand in the fourth quarter in the automotive industry.

Gross profit for the year ended July 31, 2013, was $6.5 million, or 16.0% of sales, compared to a gross profit of $7.2 million, or 17.1% of sales, in the prior year. The decrease in gross profit largely related to reduced levels of sales as well as a lack of internal capital projects in the current year.

Selling and administrative expenses for the year ended July 31, 2013 were $4.3 million, or 10.6% of sales, compared to $5.5 million, or 13.1% sales, in the prior year. The decrease in selling and administrative expenses are due to reductions in professional fees, reductions in commissions payable tied to decrease in sales, and success in our continued efforts in reducing costs such as labour and travel.

During the quarter the net realizable value of our Canadian tax credits was assessed. As a result of the assessment, $0.4 million of previously written off tax credits were reversed resulting in a $0.3 million increase in net income or $0.05 per share.

Net income for the year ended July 31, 2013 was $1.7 million or $0.26 per share, compared to net income of $1.3 million, or $0.20 per share in the prior year.

"Profitability from operations continues to show an improvement over the prior year," stated Diane Reko, chief executive officer. "Reko's fourth quarter results were impacted by a low volume of awards in both the capital equipment and automotive market, impacting our sales results and workload on our floor. During this downtime, we used this opportunity to make improvements in our facility, equipment and process to improve efficiency, thus allowing us to serve a greater portion of our current market and allow entry into new markets."

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.

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