Reko Reports Results for First Quarter of Fiscal 2026

Executive Summary

• Reko International Group reported Q1 FY 2026 sales of $9.052 M, down 11.6% YoY, but net income surged to $0.384 M (+336%) and EPS rose to $0.07 from $0.02 a year earlier.
• Gross profit fell 23.4% to $1.53 M, with gross margin contracting to 16.9% versus 19.5% in the prior period, impacted by lower sales and timing‑related maintenance costs.
• The company maintained a strong cash position after repaying a $2.721 M mortgage and making $2.152 M progress payments on capital equipment slated for installation in Q4 FY 2026.

Key Details

• Sales: $9,052 K (down $1,186 K or 11.6% YoY).
• Earned Revenue: $7,313 K (down $843 K or 10.3%). Earned revenue margin improved to 80.8% from 79.7%.
• Gross Profit: $1,530 K (down $468 K or 23.4%). Gross profit margin declined to 16.9% from 19.5%, reflecting $133 K of non‑recurring maintenance costs.
• Net Income: $384 K (+$296 K; +336.4% YoY).
• EPS (Basic): $0.07 per share (up from $0.02).
• Adjusted EPS: $0.06 per share (down $0.03 or –33.3% YoY).
• Adjusted EBITDA: $1,383 K (down $143 K or –9.4%).
• Working Capital: $20,984 K (vs. $25,925 K prior year).
• Shareholders’ Equity: $42,487 K (up from $41,509 K).
• Equity per Share: $7.75 (vs. $7.47).
• Foreign Exchange Impact: Net foreign exchange loss improved by $359 K, contributing to higher net earnings.
• Deferred Tax Asset Recognition: Added a $0.01 per share benefit to earnings.
• Share Repurchase: Cancelled 24,200 shares under normal course issuer bid at a net cost of $94.
• Mortgage Repayment: $2,721 K fully repaid during the quarter.
• Capital Equipment Progress Payments: $2,152 K made; financing expected before installation in Q4 FY 2026.

Notable Quotes

“Macroeconomic conditions continue to present some challenges, but our team remains focused and disciplined in managing the business,” said Diane Reko, CEO. “We are navigating softer demand … while advancing initiatives that strengthen our operations and support long‑term growth.”