WINDSOR, ON -- (Marketwired) -- 10/02/14

Reko International Group Inc. (TSX VENTURE: REK) today announced results for its fourth quarter and year ended July 31, 2014.

                                                                            
Financial Highlights:                                                       
                                      Three Months         Twelve Months    
                                      (unaudited)           (unaudited)     
                                 -------------------------------------------
                                   Fiscal     Fiscal     Fiscal     Fiscal  
                                    2014       2013       2014       2013   
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Sales                             $  10,566  $   8,562  $  38,894  $  40,674
Net income                            2,051        498      2,298      1,673
EPS basic                              0.32       0.08       0.36       0.26
Working capital                                            10,203      8,936
Shareholders' equity                                       30,049     27,705
Shareholders' Equity per Share                               4.67       4.31
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Consolidated sales for the quarter ended July 31, 2014, were $10.6 million, compared to $8.6 million in the prior year, an increase of $2.0 million or 23.3%. 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 to $40.7 million in the prior year, a decrease of $1.8 million or 4.4%. 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% of sales, compared to a gross profit $1.4 million, or 16.3% 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 our mould making facility. Gross profit for the year ended July 31, 2014, was $7.1 million, or 18.3% of sales, compared to a gross profit of $6.5 million, or 15.9% of sales, in the prior year.

Selling and administrative expenses for the quarter ended July 31, 2014 were $1.4 million, or 13.2% of sales, compared to $0.9 million, or 10.5% sales, in the prior year. The increase in selling and administrative expenses relates to increased employment to manage 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 our lower sales during the year. Selling and administrative expenses for the year ended July 31, 2014 were $4.7 million, or 12.1% of sales, compared to $4.3 million, or 10.6% sales, in the prior year.

During the quarter, the net realizable value of our Canadian tax credits was assessed. As a result of the assessment, $1.3 million of previously written off tax credits were reversed, resulting in a $1.0 million increase in net income or $0.16 per share.

Net income for the quarter ended July 31, 2014 was $2.1 million or $0.32 per share, compared to net income of $0.5 million, or $0.08 per share in the prior year. Net income for the year ended July 31, 2014 was $2.3 million or $0.36 per share, compared to net income of $1.7 million, or $0.26 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."

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. For more information, visit www.rekointl.com, or contact Carl A. Merton, Chief Financial Officer at (519) 727-3287.

REKO INTERNATIONAL 
GROUP INC.
469 Silver Creek Industrial Drive
Lakeshore, Ontario
N8N 4W2
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

Carl A. Merton
Chief Financial Officer
(519) 727-3287
www.rekointl.com