Reko International Group Inc. Announces First Quarter Results for Fiscal 2006.WINDSOR, Ontario Windsor is the southernmost city in Canada and lies at the western end of the heavily populated Quebec City-Windsor Corridor. Windsor is located directly south of Detroit and is separated from that city by the Detroit River. The city has views of the Detroit skyline. -- Reko International Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :REK REK Remote Equipment Kit ) - First Quarter Report Three Months Ending October October: see month. 31, 205 The North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. is undergoing a major shakeout Shakeout A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry. Notes: During the dotcom boom and bust, numerous shakeouts occurred. . The automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of producers are seeing their credit rating downgraded and several Tier-1 suppliers are facing severe financial difficulties. In the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , it should come as no surprise that the business environment facing Reko International is less than ideal. As such, the Company announces that during the first quarter it has achieved a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. from last year's losses. During the first quarter ending October 31, 2005, Reko's revenues were $19.7 million, representing an increase of 15.9% from the $17.0 million recorded in the prior year. The sales increase was achieved through our continuous efforts to cross sell the products and services contained in the Reko "tool box." A highly competitive bidding Competitive bidding A securities offering process in which securities firms submit competing bids to the issuer for the securities the issuer wishes to sell. competitive bidding 1. environment, coupled with a weak U.S. currency, which reduced Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents prices on export orders, impeded im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped the Company's ability to expand margins. As a result, in the first quarter, the gross margin was 17.2%, in line with last year's performance. However, as a result of cost reduction programs undertaken last year, selling and administrative expenses declined 5.8% year-over-year. Consequently, net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the first quarter was $314,000, or 4 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to a loss of $80,000 (1 cent per share) in the previous year. Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. continued to be a drag on Verb 1. drag on - last unnecessarily long drag out last, endure - persist for a specified period of time; "The bad weather lasted for three days" 2. Reko's results. During the quarter ended October 31, 2005, discontinued operations lost $118,000, or 2 cents per share, compared to a loss of $88,000 (1 cent per share) in the first quarter of 2004. In total, including both continuing and discontinued operations, Reko International reported a net income of $196,000 (2 cents per share) in this year's first quarter, compared to a loss of $168,000 (2 cents per share) last year. "Although we are facing an extremely challenging business environment, I am pleased with the progress we have made," stated Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Reko, President and Chief Executive Officer. "Over the past year, we have worked hard to increase our sales while controlling costs. As well, improving cash flow has enabled the Company to reduce debt by $2.5 million during the quarter."
Financial Highlights (complete statements follow):
---------------------------------------------------------------------
Period Ended October 31, Three Months
(in $,000 except per share amounts) Unaudited
Fiscal 2006 Fiscal 2005
---------------------------------------------------------------------
Sales $19,704 $17,017
Net Income (Loss) 314 (80)
EPS (basic) 0.04 (.01)
Working Capital 20,300 24,005
Shareholders' Equity 50,801 54,787
Shareholders' Equity per Share 6.66 6.99
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Founded in 1976, Reko International Group (TSX:REK) is a highly integrated, technology driven engineering and manufacturing firm providing engineered solutions for the plastic and metal forming Metal forming Manufacturing processes by which parts or components are fabricated from metal stock. In the specific technical sense, metal forming involves changing the shape of a piece of metal. segment of the automotive, aerospace and consumer product markets. In its twelve production facilities in Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. and Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). , Reko designs and manufactures precision moulds, dies, metal stampings and other related industrial tooling, in addition to its own proprietary line of CNC (Computerized Numerical Control) See numerical control. CNC - Collaborative Networked Communication machining centres.
REKO INTERNATIONAL GROUP INC. First Quarter Report
INTERIM CONSOLIDATED BALANCE SHEETS
As at October 31, 2005 with comparative
figures for July 31, 2005 (in 000's)
---------------------------------------------------------------------
October 31, July 31,
(unaudited) (audited)
2005 2005
---------------------------------------------------------------------
ASSETS
Current
Accounts receivable -trade $ 27,805 $ 25,228
-sundry 2,694 3,227
Income taxes receivable 103 --
Work-in-progress 23,087 29,018
Prepaid expenses and deposits 830 561
Discontinued operations (Note 3) 4,954 3,461
-----------------------
59,473 61,495
-----------------------
Capital assets 47,593 48,519
Discontinued operations (Note 3) 1,082 1,196
-----------------------
48,675 49,715
-----------------------
$ 108,148 $ 111,210
-----------------------
-----------------------
LIABILITIES
Current
Bank indebtedness $ 18,452 $ 19,731
Accounts payable and accrued liabilities 8,700 10,244
Income taxes payable -- 161
Future income taxes 1,033 1,034
Current portion of long-term debt 6,034 6,187
Discontinued operations (Note 3) 6,108 5,055
-----------------------
40,327 42,412
-----------------------
Long-term debt 13,183 13,911
Discontinued operations (Note 3) 1,206 1,367
-----------------------
14,389 15,278
Future income taxes 2,631 2,731
SHAREHOLDERS' EQUITY
Share capital (Note 4) 22,303 22,308
Contributed surplus (Note 2) 573 556
Retained earnings 29,261 29,065
Cumulative translation adjustment (1,336) (1,140)
-----------------------
50,801 50,789
-----------------------
$ 108,148 $ 111,210
-----------------------
-----------------------
REKO INTERNATIONAL GROUP INC. First Quarter Report
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)
AND RETAINED EARNINGS
Three months ended October 31, 2005 with comparative
figures for 2004 (in 000's except per share data)
---------------------------------------------------------------------
For the three months
ended October 31,
(unaudited)
2005 2004
---------------------------------------------------------------------
Sales $ 19,704 $ 17,017
Costs and Expenses
Cost of sales 15,128 12,783
Selling and administrative 2,405 2,552
Depreciation and amortization 1,195 1,299
-------------------
18,728 16,634
-------------------
Income from continuing operations
before the following 976 383
-------------------
Interest
Long-term debt 284 378
Other - net 198 56
-------------------
482 434
-------------------
Income (loss) before income taxes 494 (51)
-------------------
Income taxes
Current 320 1,197
Future (recovered) (140) (1,168)
-------------------
180 29
-------------------
Net income (loss) from continuing operations 314 (80)
Net loss from discontinued operations net of tax (118) (88)
-------------------
Net income (loss) for the period $ 196 $ (168)
-------------------
-------------------
Retained earnings, beginning of period
As previously reported 29,065 33,736
Adoption of new accounting standard -- (157)
-------------------
as restated 29,065 33,579
-------------------
Retained earnings, end of period $ 29,261 $ 33,411
-------------------
-------------------
Income (loss) per common share from
continuing operations
Basic $ 0.04 $ (0.01)
-------------------
-------------------
Fully Diluted $ 0.04 $ (0.01)
-------------------
-------------------
Loss per common share from
discontinued operations
Basic $ (0.02) $ (0.01)
-------------------
-------------------
Fully diluted $ (0.02) $ (0.01)
-------------------
-------------------
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended October 31, 2005 with comparative
figures for 2004 (in 000's)
---------------------------------------------------------------------
For the three months
ended October 31,
(unaudited)
2005 2004
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) for the period $ 314 $ (80)
Add non-cash items:
Depreciation and amortization 1,195 1,299
Future income taxes (140) (1,168)
Stock option expense 17 6
-------------------
1,386 57
Net change in non-cash working capital 1,715 1,137
-------------------
Cash provided - continuing operating activities 3,101 1,194
-------------------
FINANCING ACTIVITIES
Net (payments)/proceeds on bank indebtedness (1,722) 2,581
Net payments on long-term debt (763) (3,370)
Cost of repurchase of shares (5) --
-------------------
Cash used - continuing financing activities (2,490) (789)
-------------------
INVESTING ACTIVITIES
Investment in capital assets (525) (303)
-------------------
Cash used - continuing investing activities (525) (303)
-------------------
Effect of foreign exchange rate changes on
cash and cash equivalents (86) (102)
-------------------
Net change in cash and cash equivalents
during the period from continuing operations -- --
Net change in cash and cash equivalents
during the period from discontinued operations -- --
Cash and cash equivalents, beginning of period -- --
-------------------
Cash and cash equivalents, end of period $ -- $ --
-------------------
-------------------
REKO INTERNATIONAL GROUP INC. First Quarter Report
Notes to Interim Consolidated Financial Statements at
October 31, 2005 (in 000's)
(Unaudited)
1. Significant accounting policies Management prepared these interim consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting using the historical cost basis of accounting and approximation approximation /ap·prox·i·ma·tion/ (ah-prok?si-ma´shun) 1. the act or process of bringing into proximity or apposition. 2. a numerical value of limited accuracy. and estimates based on professional judgments. These interim consolidated financial statements contain all adjustments that management believes are necessary for a fair presentation of the Company's financial position, results of operations and changes in cash flows. These statements should be used in conjunction with the Company's most recent annual consolidated financial statements. The accounting policies used in preparing these interim consolidated financial statements are consistent with those used in preparing the annual consolidated financial statements. The following changes were effective beginning August 1, 2004: Stock based compensation: Effective August 1, 2004, the Company adopted the revised Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. Handbook
This article is about reference works. For the subnotebook computer, see .
CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) 3870"). The Company has adopted the fair value method of accounting for stock based compensation and recognizes compensation expense for all stock options granted to employees and directors. The Company only issues stock options to employees, including directors. The fair value of the options issued in the year is determined using the Black-Scholes option-pricing model Black-Scholes option-pricing model A model for pricing call options based on arbitrage arguments. Uses the stock price, the exercise price, the risk-free interest rate, the time to expiration, and the expected standard deviation of the stock return. . The estimated fair value of the options is amortized to income over the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: period. Prior to August 1, 2004, the Company disclosed the pro-forma net income and earnings per share as if the fair value based accounting method had been used to account for stock-based compensation. Asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. : Effective August 1, 2004, the Company retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin adopted the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3110, "Asset Retirement Obligations". The new recommendations require that the recognition of the fair value of obligations associated with the retirement of tangible long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets be recorded in the period the asset is put into use with a corresponding increase to the carrying amount of the related asset. The obligations recognized are statutory, contractual or legal obligations. The liability is accreted over time for changes in the fair value of the liability through charges to accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the , which is included in depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able , depreciation and accretion expense In accounting, accretion expense is the expense created when updating the present value(PV) of a financial instrument. For example, if one originally recognizes the present value of a liability at $650, which has a future value (FV) of $1000, every year one must increase the . The costs capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. to the related assets are amortized to earnings in a manner consistent with the depletion and depreciation of the underlying asset. The impact of the adoption of the new standard on the financial statements is insignificant. 2. Stock based compensation (in thousands of dollars, except per share figures) The fair value of the stock options granted since August 1, 2002 was determined using the Black-Scholes option-pricing model based on the following underlying assumptions: - 5 year risk free interest rate of 3.9%; - Average expected life of 5 years; - Average expected volatility of 42.20%. Beginning August 1, 2004, the Company has adopted revised CICA 3870 retroactively and has chosen not to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state prior periods as permitted under the revised Handbook Section. The effect of the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. was an increase in contributed surplus in the amount of $157 for the fair value of options granted after August 1, 2002 and a reduction in the balance of opening retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. by $157 as the cumulative effect of the change on prior periods for the amount that would have been expensed. During the first quarter, 100,000 options were granted and, as at October 31, 2005, $17 was recorded as the compensation cost for the quarter. 3. Discontinued Operations During the period, the Company continued discussions to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose its operations in Superior Plastics, Inc. and Excel A full-featured spreadsheet for Windows and the Macintosh from Microsoft. It can link many spreadsheets for consolidation and provides a wide variety of business graphics and charts for creating presentation materials. Decorating & Finishing, Inc. A formal letter of intent was entered into on August 8, 2005. The results of discontinued operations have been disclosed separately within these interim financial statements. The Company has recorded non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. in the order of $4,176 comprised of approximately $1,998 reduction in equipment, $1,186 reduction in inventory, $70 reduction in sundry sun·dry adj. Various; miscellaneous: a purse containing keys, wallet, and sundry items. [Middle English sundri, from Old English syndrig, separate. receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , $836 reduction in cumulative translation adjustment, and an $85 reduction in minority interest as at July July: see month. 31, 2005. The balance sheets on October 31, 2005 and July 31, 2005 include the following assets and liabilities related to the discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: activities:
October 31, July 31,
2005 2005
------------------------
Accounts Receivable - trade $3,706 $2,399
- sundry 43 38
Work-in-progress 984 942
Prepaid expense and deposits 221 82
------------------------
4,954 3,461
Equipment 1,082 1,196
Bank indebtedness 3,653 3,137
Accounts payable and accrued liabilities 2,130 1,566
Current portion of long-term debt 325 352
------------------------
6,108 5,055
Long-term debt 1,206 1,367
The sales related to discontinued activities amount to $4,521 (2004: $6,282). In addition, an amortization value of nil (2004: $142) is included in the operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. related to discontinued operations. The Company has recognized a future tax benefit of $60 (2004: $49) netted against the loss from discontinued operations.
October 31, October 31,
2005 2004
------------------------
Sales for the period $24,225 $23,299
Sales from continuing operations 19,704 17,017
Sales from discontinued operations 4,521 6,282
Operating expenses related to
discontinued operations 4,639 6370
Net loss from discontinued operations (118) (88)
The cash flow restatement for discontinued
operations as follows:
Net cash provided by operating activities (1,123) (255)
Net cash provided by financing activities 995 344
Net cash provided by investing activities -- (22)
Effect of foreign exchange rate changes
on cash and cash equivalents 128 (67)
------------------------
Net cash and cash equivalents used in
discontinued operations $ -- $ --
------------------------
Long-term debt as related to discontinued operations is as follows:
October 31, July 31,
2005 2005
------------------------
Loan payable - 3.60% plus bank spread,
repayable $24 monthly plus interest
beginning November 2004, due in full
January 2011 $1,489 $1,616
Obligations under capital leases payable
$2 monthly including interest, bearing
interest at 6.46%, expiring January 2009 -- 61
Loan payable - U.S. bank prime plus 2%,
due on demand 42 42
------------------------
1,531 1,719
Deduct principal portion included in
current liabilities from discontinued
operations 325 352
------------------------
Long-term portion $1,206 $1,367
------------------------
------------------------
During the period, the Company disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) of The Mold Company resulting in a loss of $186, of which $70 was recorded at July 31, 2005. The estimate of the loss from discontinued operations is based on management's best estimates and assumptions with respect to a variety of items. There is a risk that the assumptions and resulting estimates may change with the passage of time and the availability of additional information and facts. Changes to the estimate of the loss on disposal will be recognized as a gain or loss on discontinued operations during the period that such changes are determinable Liable to come to an end upon the happening of a certain contingency. Susceptible of being determined, found out, definitely decided upon, or settled. determinable adj. . 4. Share capital In July 2005, the Company announced its intention to make a normal course issuer bid to re-purchase at market prices for cancellation up to 382,255 common shares representing approximately 5% of the outstanding common shares as at July 31, 2005. During the period, the Company re-purchased 2,000 shares.
Shares Amount
------ ------
Balance July 31, 2005 7,627,201 $22,308
Re-purchase in respect to normal
course issuer bid:
First Quarter 2,000 5
--------- -------
7,625,201 $22,303
--------- -------
--------- -------
The share re-purchases were recorded at the stated capital stated capital See legal capital. value of $2.92 per share with the difference between the amount recorded and the amount paid credited to contributed surplus. The following is management's interim discussion and analysis of operations and financial position and should be used in conjunction with the consolidated financial statements and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial included in the Company's 2005 Annual Report. Management's Discussion and Analysis Sales Revenues for the first quarter ended October 31, 2005 were $19.7 million, representing an increase of 15.9% over the $17.0 million in revenues recorded in the equivalent quarter of 2004. The sales increase was achieved through our continuous efforts to cross sell the products and services contained in the Reko "tool box." Sales of moulds, automotive services and large custom machining all increased. However, revenues from laser machining and metal dies parts were weak due to program delays. Gross Margin During the first quarter, Reko's gross margin was 17.2%, essentially in line with the same period last year. The current difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. necessitates accepting work at reduced prices in order to win the business. In addition, the continued weakness of the U.S. currency negatively impacts the Canadian dollar prices received on export orders. However, because of our ability to make more efficient use of machines and labour, we managed to maintain gross margins despite downward pressure on contract prices. Selling and Administration As a result of cost reduction programs undertaken last year, as well as the ongoing efforts to control costs, selling, general and administrative expenses were 5.8% lower in the first quarter of fiscal 2005 compared to the previous year. Relative to sales, SG&A represented 12.2% of sales in the three months ended October 31, 2005 compared to 15.0% in the same quarter last year. Reko International has a continuing program in place to reduce costs where feasible (algorithm) feasible - A description of an algorithm that takes polynomial time (that is, for a problem set of size N, the resources required to solve the problem can be expressed as some polynomial involving N). without adversely affecting sales volume. Earnings Net income from continuing operations for the first quarter of 2005 was $314,000 (4 cents a share) compared to a loss of $80,000 (1 cent per share) in the previous year. Discontinued operations continued to impede im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped Reko's overall probability. In the first quarter, discontinued operations lost $118,000 (2 cents per share) compared to a loss of $88,000 (1 cent per share) in the first quarter of last year. In total, including both continuing and discontinued operations, Reko's earnings for the first quarter of this year were $196,000 (2 cents per share) compared to a loss of $168,000 (2 cents per share) in the prior year. Liquidity and Capital Resources Cash flow after working capital adjustments was $3.1 million compared to $1.2 million for the prior year. During the quarter the Company reduced its debt by $2.5 million. We anticipate that internally generated cash, coupled with existing lines of credit will be sufficient to fund operations for the remainder of the year. Discontinued Operations As mentioned previously, despite the fact that Reko had made some progress in reducing losses at Superior Plastics and Excel Decorating, the potential benefits did not justify the management time devoted to the turnaround. As a result, a decision was made to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the operation. An agreement, in principle, has been reached whereby Reko will sell the operation. Closing of the sale is anticipated to occur during the current quarter. The Mold Company operation was sold October 31, 2005. Normal Course Issuer Bid Under it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have normal course issuer bid, Reko International purchased 2,000 shares during the fiscal first quarter at an average price of $2.76. The Company's directors believe that from time to time such purchases constitute an appropriate use of corporate funds. Outlook Given the extremely competitive environment, cost reduction is of the utmost importance. Reko continues to work very hard to control costs. Simultaneously the company's ability to offer the wider range of products and services contained in the Reko "tool box" offers a competitive advantage. Although, in the short term, North American automotive companies will continue to focus on costs, seeking price concessions from suppliers; in the longer term, the solution lies in product innovation and quality. Reko International is working hard to be a global integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. and supplier to the automotive industry so as to benefit from the design changes of the future. Information in the previous discussion relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc projected growth, changing market conditions, improvements in productivity and future results constitutes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Actual results in future periods may differ materially from the forward-looking statements because of a number of risks and uncertainties, which can be found on Page 9 of our Annual Report 2005, or www.sedar.com. REKO INTERNATIONAL GROUP INC. 5390 Brendan Lane Oldcastle, Ontario N0R 1L0 www.rekointl.com SUBSIDIARIES/DIVISIONS: Canada: ------- - Reko Tool & Mould (1987) Inc. - Reko Automation & Machine Tool - Concorde Machine Tool United States: -------------- - Proto-Techniques, Inc. - Novi Laser Inc. - Superior Plastics Inc. - Excel Decorating & Finishing Inc. Reko International Group Inc. (TSX:REK) |
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