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Reko Announces Second Quarter Results for Fiscal 2013

Mar 7 2013 12:00AM

Marketwire

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WINDSOR, ONTARIO -- (Marketwire) -- 03/07/13 -- Reko International Group Inc. (TSX VENTURE: REK) today announced results for its second quarter ended January 31, 2013.

Financial Highlights: Three Months Six Months (unaudited) (unaudited) ----------------------------------- Fiscal Fiscal Fiscal Fiscal 2013 2012 2013 2012----------------------------------------------------------------------------Sales $ 10,504 $ 11,108 $ 21,241 $ 21,618Net income 212 160 963 320EPS basic 0.03 0.03 0.15 0.06Working capital 8,395 7,210Shareholders' equity 26,995 25,084Shareholders' Equity per Share 4.20 3.91----------------------------------------------------------------------------



Consolidated sales for the quarter ended January 31, 2013, were $10.5 million, compared to $11.1 million in the prior year, a decrease of $0.6 million or 5.4%. The decrease in sales was largely related to a reduced demand in the capital equipment market tied to uncertainty in the U.S as a result of government policy issues. Consolidated sales for the six months ended January 31, 2013 were $21.2 million, compared to $21.6 million in the prior year, a decrease of $0.4 million, or 1.9%.

Gross profit for the three months ended January 31, 2013 was $1.6 million, or 15.2% of sales, compared to a gross profit of $1.7 million, or 15.3% of sales in the prior year. The decrease in gross profit in the quarter relates to sales decrease and an increase in overhead costs. Gross profit for the six months ended January 31, 2013 were $3.4 million, or 16.0% of sales, compared to a gross profit of $2.9 million in the prior year, or 13.4% of sales in the prior year.

Selling and administrative expenses for the three months ended January 31, 2013 were $1.2 million, or 11.4% of sales, compared to $1.3 million, or 11.7% sales, in the prior year. The decrease in selling and administrative expenses in the quarter relates to reduced wages and expenses from fewer administration employees, reductions in professional fees associated with IFRS, and reductions in commission expenses due to lower sales levels. Selling and administrative expenses for the six months ended January 31, 2013 were $2.2 million, or 10.4% of sales, compared to $2.5 million in the prior year, or 11.6% of sales.

Net income for the quarter was $0.2 million or $0.03 per share, compared to net income of $0.2 million, or $0.02 per share in the prior year. Net income for the six months ended January 31, 2013 were $0.9 million or $0.15 per share, compared to net income of $0.3 million or $0.05 per share in the prior year.

"Our second quarter remained profitable despite the uncertainties in the U.S. market," stated Diane Reko, chief executive officer. "While our sales level has fallen slightly from last year, we continue to show an improvement in profitability. New orders at our manufacturing facility have remained steady and are currently at capacity, while our custom machining facility has seen a decrease in volumes due to capital market conditions. In turn, we have broadened our market strategy and have been able to secure work in other areas to keep our spindles turning."

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 DriveLakeshore, OntarioN8N 4W2www.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



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.



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





Source: Marketwire