Reko International earns $377,000 in Q2

Executive Summary

• Reko International Group Inc. reported financial results for its second quarter ended January 31, 2026, showing a decline in sales but an increase in net income compared to the prior year.
• Sales decreased by 5.8% to $10,165,000, driven by lower volumes and project timing, while gross profit declined slightly by 4.3% to $1,583,000.
• Net earnings rose to $377,000 (7 cents per share) from $313,000 (5 cents per share) in the prior year, significantly boosted by tax-related benefits including the rerecognition of deferred tax assets and tax recoveries.

Key Details

• Sales: Consolidated sales were $10,165,000, a decrease of $621,000 (5.8%) from $10,786,000 in the same quarter last year.
• Gross Profit: Gross profit was $1,583,000, a decline of $71,000 (4.3%) from the prior year.
• Net Income: Net earnings were $377,000, an increase of $64,000 (20.4%) from $313,000 in the prior year.
• Earnings Per Share (EPS): Reported EPS was $0.07, compared to $0.05 in the prior year.
• Tax Adjustments: Current quarter earnings included a $0.03 per share benefit from the rerecognition of deferred tax assets and a $0.03 per share recovery of current income taxes. Prior year earnings included an $0.08 per share benefit from initial deferred tax asset recognition and a charge for an accounts receivable balance.
• Comparable Earnings: Excluding tax items and the prior-year receivable charge, comparable earnings were $0.08 per share in the current quarter, compared to $0.05 per share in the prior year.
• Capital Deployment (Six-Month Period):
  • $2,700,000 for mortgage repayment.
  • $2,200,000 for growth-related capital expenditures.
  • $1,100,000 in dividends to shareholders.
• Share Buybacks: The company purchased and cancelled 1,400 shares under its normal course issuer bid, which expired on January 8, 2026. No shares were purchased under the renewed bid announced on January 6, 2026.

Notable Quotes

• "Macroeconomic conditions continue to present headwinds; however, our focus remains on what we can control and on actions that strengthen the business over time," stated Diane Reko, chief executive officer. "We will continue to deliver the high-quality engineered products and solutions our customers rely on, backed by deep technical expertise and disciplined execution. At the same time, we are driving efficiencies and managing controllable costs to build a stronger, more resilient organization. During the quarter, we returned capital to shareholders through a dividend payment, reflecting the strength of our balance sheet and confidence in the business."