WINDSOR, ON --(Marketwired - July 04, 2016) - On September 22, 2014, Reko International Group Inc. (TSX VENTURE: REK) announced a supply agreement with a single customer for precision machining services. The contract was expected to generate $27.5 million of sales over a three-year period.
Due to a change in market conditions, the client has exercised its right to make an advance payment of $3,000,000 US in lieu of 31% of the contracted volume. Reko will include the $3,000,000 payment in revenue and profit before tax during the final quarter of fiscal 2016. Accordingly, this amount will not be earned in future periods of the contract. The modified schedule calls for delivery of the remaining 36% of the originally contracted volume through 2020.
Diane Reko, CEO of Reko International Group, stated, "Although we are disappointed that our customer felt it necessary to exercise this option, we are pleased that the modified schedule provides our company with an order backlog through fiscal 2020. The corporation's Board of Directors will carefully consider the optimal use of the proceeds."
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 Marilyn Crowley, Chief Financial Officer at (519) 727-3287.
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Chief Financial Officer