- EPS of $0.08 for Q4
- Over $3M increase in working
capital during the year.
WINDSOR, ON, Oct. 15, 2020 /CNW/ - Reko International
Group Inc. (TSXV: REKO) today announced results for its year ended
July 31, 2020.
Financial Highlights:
(in 000's, except for per share data)
|
Three
Months
|
Twelve
Months
|
(unaudited)
|
(unaudited)
|
Fiscal
|
Fiscal
|
Fiscal
|
Fiscal
|
2020
|
2019
|
2020
|
2019
|
Sales
|
$11,353
|
$10,659
|
$40,226
|
$47,989
|
Net income
|
501
|
526
|
763
|
1,577
|
EPS basic
|
0.08
|
0.08
|
0.12
|
0.25
|
Working
capital
|
|
|
20,256
|
17,182
|
Shareholders'
equity
|
|
|
46,909
|
46,418
|
Shareholders' Equity
per Share
|
|
|
7.51
|
7.31
|
Consolidated sales for the fourth quarter of 2020 were
$11.4 million compared to
$10.7 million in the same period last
year, an increase of $0.7 or 6.5%.
Consolidated sales for the year ended July
31, 2020, were $40.2 million,
compared to $47.9 million in the
prior year, a decrease of $7.7
million or 16.1%. Lower overall sales volumes in
certain sectors, particularly in automotive, impacted our
results. Diversifying sales and breaking into new markets was
challenging during the fiscal year but will continue to be pursued
as an important strategy to improve our top line. Certain
divisions also experienced a delayed timing of kick off and
completion for certain jobs throughout the year. The COVID-19
pandemic did affect the Company's ability to secure new sales,
particularly in Q4. Wide-spread shutdowns of businesses
temporarily impacted customer demand during the fourth quarter and
made overall contact with new or existing customers difficult at
times. The decrease in revenue was partially offset by an
increase in the foreign exchange rate for U.S. dollar sales,
particularly in the latter half of the year.
Gross profit for the quarter ended July
31, 2020, was $1.2 million, or
10.8% of sales, compared to $2.1
million, or 19.9% of sales in the prior year. Gross profit
for the year ended July 31, 2020, was
$4.4 million, or 11.0% of sales,
compared to $8.2 million, or 17.0% of
sales in the prior year. The decrease in gross profit was
mostly driven by the decrease in sales and earned revenue.
The COVID-19 pandemic, as previously mentioned, also influenced the
Company's profitability.
Selling and administrative expenses ("SG&A") for the quarter
ended July 31, 2020, were
$1.4 million, or 12.3% of sales,
compared to $1.2 million, or 11.1% of
sales, in the prior year. SG&A for the year ended
July 31, 2020, were $5.1 million, or 12.7% of sales, compared to
$5.3 million, or 11% of sales in the
prior year. The decrease in SG&A was mostly attributed to
efforts made by the Company to reduce discretionary and
non-production spending. Those efforts resulted in an overall
decrease in office expenses, travel, and wages.
Fourth quarter net income was $0.5
million or $0.08 per share, a
modest decline compared to the final quarter of fiscal 2019.
Net income for the year ended July 31,
2020 was $0.8 million or
$0.12 per share, compared to net
income of $1.6 million, or
$0.25 per share in the prior
year. As previously explained, the lower sales volumes and
efficiency challenges, partially a result of the COVID-19 pandemic,
significantly impacted the Company's overall
profitability.
These negatives were partially offset by foreign exchange
fluctuations, a focused reduction in discretionary spending, and
government assistance, specifically the Canada Emergency Wage Subsidy. These
factors also contributed to the Company's strong year-end cash
position.
"The impact of the COVID-19 pandemic upon Reko's sales has been
significant," stated Diane Reko,
chief executive officer. The company has made cost reductions a
focus and secured government support to reduce the
financial effects of the pandemic. We continue to prioritize
the safety of our team, customers and suppliers and are using our
innovation and flexibility to assist our customers through these
challenging times."
During the quarter, the company re-purchased 20,600 shares under
the normal course issuer bid. During fiscal 2020, the total
shares repurchased under all bids totaled 109,600.
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. (TSX-V:REKO) is a diversified,
technology-driven manufacturing organization located in
Southwestern Ontario, just minutes
from the U.S. border. Areas of expertise include robotic factory
automation solutions, the precision machining of large critical
parts, and plastic injection and low compression acoustic tooling.
Reko's family-oriented culture embraces past experience, fosters
innovation, and always ensures the highest standard of quality.
Reko believes in strengthening communities by advancing
manufacturing.
SOURCE Reko International Group Inc.