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Reko Announces Third Quarter Results for Fiscal 2013

Jun 12 2013 12:00AM

Marketwire

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WINDSOR, ONTARIO -- (Marketwired) -- 06/12/13 -- Reko International Group Inc. (TSX VENTURE: REK) today announced results for its third quarter ended April 30, 2013.

Financial Highlights: Three Months Nine Months (unaudited) (unaudited) -------------------------------------------- -------------------------------------------- Fiscal Fiscal Fiscal Fiscal 2013 2012 2013 2012--------------------------------------------------------------------------------------------------------------------------------------------------------Sales $10,871 $11,388 $32,112 $33,006Net income 224 214 1,187 534EPS basic 0.03 0.03 0.18 0.09Working capital 8,690 7,052Shareholders' equity 27,219 25,299Shareholders' Equity per Share 4.24 3.94----------------------------------------------------------------------------



Reko is pleased to report that the strategic initiatives it undertook in 2011 allowed it to report a substantial improvement in profitability and working capital, during a period when sales volumes were $1 million lower than the prior year. In addition to allowing Reko to regain profitability, the 2011 strategic initiatives also better matched Reko's capacity to normal market demand levels, focused the Company on its most productive markets, improved downside risks in periods of weaker demand and allowed us to position ourselves to respond to changing market conditions.

Consolidated sales for the quarter ended April 30, 2013, were $10.9 million, compared to $11.4 million in the prior year, a decrease of $0.5 million or 4.4%. The decrease in sales was largely related to a reduction in demand in the capital equipment market. We expect demand in this sector to continue to be lower than the prior year for at least the next quarter. Consolidated sales for the nine months ended April 30, 2013 were $32.1 million, compared to $33.0 million in the prior year, a decrease of $0.9 million, or 2.7%.

Gross profit for the three months ended April 30, 2013 was $1.7 million, or 15.6% of sales, compared to a gross profit of $2.0 million, or 17.5% of sales, in the prior year. The decrease in gross profit in the quarter is consistent with the decrease in sales. Gross profit for the nine months ended April 30, 2013 was $5.1 million, or 15.9% of sales, compared to a gross profit of $4.9 million in the prior year, or 14.8% of sales that year.

Selling and administrative expenses for the three months ended April 30, 2013 were $1.2 million, or 11.0% of sales, compared to $1.3 million, or 11.4% 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 implementing IFRS in the prior year. Selling and administrative expenses for the nine months ended April 30, 2013 were $3.5 million, or 10.9% of sales, compared to $3.9 million in the prior year, or 11.8% of sales in the prior year.

Net income for the quarter was $0.2 million or $0.03 per share, compared to net income of $0.2 million, or $0.03 per share in the prior year. Net income for the nine months ended April 30, 2013 was $1.2 million or $0.18 per share, compared to net income of $0.5 million or $0.09 per share in the prior year.

"Our third quarter results were heavily impacted by the low level of contract of awards," stated Diane Reko, chief executive officer. "The reduced demand in the capital equipment market has decreased the volumes in our custom machining facility, an impact we believe will continue into the fourth quarter. The automotive market has also delayed project awards due to launch delays. We continue to review market conditions and have increased our sales efforts to actively look for potential new opportunities."

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, OntarioN8N 4W2http://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



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