Ms. Diane Reko reports

REKO ANNOUNCES YEAR END RESULTS FOR FISCAL 2014

Reko International Group Inc. has released results for its fourth quarter and year ended July 31, 2014.

                             FINANCIAL HIGHLIGHTS

                                        Three months           12 months
                                     Fiscal     Fiscal     Fiscal     Fiscal
                                       2014       2013       2014       2013

Sales                             $  10,566  $   8,562  $  38,894  $  40,674
Net income                            2,051        498      2,298      1,673
Earnings per share, basic              0.32       0.08       0.36       0.26

Consolidated sales for the quarter ended July 31, 2014, were $10.6-million, compared with $8.6-million in the prior year, an increase of $2.0-million or 23.3 per cent. The increase in sales is largely related to a significant increase in demand in the capital equipment market. Consolidated sales for the year ended July 31, 2014, were $38.9-million, compared with $40.7-million in the prior year, a decrease of $1.8-million or 4.4 per cent. The decrease in sales year over year is due to low demand in all markets during the first two quarters of the year.

Gross profit for the quarter ended July 31, 2014, was $2.9-million, or 27.4 per cent of sales, compared with a gross profit $1.4-million, or 16.3 per cent of sales, in the prior year. The increase in gross profit was primarily the result of increased volumes in the capital equipment market. This was offset by an increase in fixed costs, primarily due to an increase in amortization recorded as a result of revising the expected useful life on several older CNC machines at the company's mould-making facility. Gross profit for the year ended July 31, 2014, was $7.1-million, or 18.3 per cent of sales, compared with a gross profit of $6.5-million, or 15.9 per cent of sales, in the prior year.

Selling and administrative expenses for the quarter ended July 31, 2014, were $1.4-million, or 13.2 per cent of sales, compared with $900,000, or 10.5 per cent of sales, in the prior year. The increase in selling and administrative expenses relates to increased employment to manage an increased level of demand in the capital equipment market and an increase in professional fees, partly offset by reduced sales commissions and receivable insurance premiums, consistent with the company's lower sales during the year. Selling and administrative expenses for the year ended July 31, 2014, were $4.7-million, or 12.1 per cent of sales, compared with $4.3-million, or 10.6 per cent of sales, in the prior year.

During the quarter, the net realizable value of the company's Canadian tax credits was assessed. As a result of the assessment, $1.3-million of previously written-off tax credits was reversed, resulting in a $1.0-million increase in net income or 16 cents per share.

Net income for the quarter ended July 31, 2014, was $2.1-million, or 32 cents per share, compared with net income of $500,000, or eight cents per share, in the prior year. Net income for the year ended July 31, 2014, was $2.3-million, or 36 cents per share, compared with net income of $1.7-million, or 26 cents per share, in the prior year.

"We are pleased to announce an excellent end to our fiscal year," stated Diane Reko, chief executive officer. "Volumes in all areas of our business have improved significantly, and our recently announced contract will positively impact fiscal 2015. We look forward with anticipation to a strong 2015."