MCCOY GLOBAL ANNOUNCES FOURTH QUARTER AND YEAR END 2023 RESULTS AND DOUBLES ITS QUARTERLY DIVIDEND
Annual Highlights:
- Total revenue of
$69.7 million , a 33% increase from the$52.4 million reported in 2022, driven by strong demand for recently commercialized new products; - Adjusted EBITDA1 of
$13.1 million , or 19% of revenue, compared with$8.5 million , or 16% of revenue, in 2022, reaching the highest level since 2014.
Fourth Quarter Highlights :
- Revenue increased 8% to
$19.7 million , compared to$18.3 million in 2022, driven by strong demand for the newly commercialized smart products, particularly McCoy's FlushMount Spider (FMS); - Adjusted EBITDA1 increased to
$4.0 million , or 20% of revenue, compared to$3.7 million , or 20% of revenue, in 2022; - Advanced its Digital Technology Roadmap, and since
January 1, 2023 :- Reported thirty-nine (39) commercial sales for McCoy's Flush
Mount Spider (FMS) and twenty-three (23) additional tools scheduled for delivery in early 2024. With a growing number of tools delivered in the fourth quarter and coming months, we expect the increased exposure with operators will showcase the benefits of McCoy's FMS, and in turn, further accelerate adoption in the year ahead. McCoy's FMS is a hydraulic rotary flush mounted spider that when fully connected (smartFMS™), handles casing while providing information on the state of the tool to the driller's display in real-time as well as the ability to integrate with McCoy Smart Casing Running Tool (smartCRT™). - Reported two (2) commercial sale for McCoy's smartCRT™ and delivered four (4) rental tools in
Latin America to a large multinational customer committed to utilizing our technology. In addition, purchase order commitments were received from a new market entrant inLatin America . The smartCRT™ has successfully executed multiple commercial casing jobs in the Middle East North Africa ("MENA") region, proving the in-field application of the tool and display. We expect to continue to build upon the tool's in-field performance record in 2024 and further accelerate customer adoption. McCoy's smartCRT™ is an intelligent, connected enhancement of our conventional casing running tool that offers superior safety, efficiency and simplified operating procedure, with real-time data collection and analysis capabilities. This technology effectively mitigates the risk of human error, while providing actionable insights that optimize future performance. - Completed the development of the smarTR™ and have since began in-field trials with our partnering customer in
North America . We expect further advancements toward commercialization and look forward to reporting our progress on key milestones.
- Reported thirty-nine (39) commercial sales for McCoy's Flush
- Announced the doubling of its quarterly cash dividend to
$0.02 per common share payable onApril 15, 2024 , to shareholders of record as of close of business onMarch 31, 2024 .
"McCoy's strong fourth quarter results reflect the successful execution of our growth strategy. McCoy's revenue and adjusted EBITDA was driven by robust demand for the newly commercialized smart products we invested in under our Digital Technology Roadmap initiative, with particular emphasis on the success of the Flush
"For the fourth quarter of 2023, McCoy reported net earnings of
Fourth Quarter Financial Highlights:
- Total revenue of
$19.7 million , compared with$18.3 million in 2022; - Net earnings of
$2.7 million , compared to net earnings of$7.3 million in 2022, with the comparative period benefitting from a$3.9 million gain on sale and leaseback of McCoy's facility inCedar Park, TX , and$1.0 million recovery of income taxes; - Adjusted EBITDA1 increased to
$4.0 million , or 20% of revenue, compared with$3.7 million , or 20% of revenue, in 2023; - Booked backlog2 of
$22.5 million atDecember 31, 2023 , a 5% decline from the$24.7 million in the fourth quarter of 2022; and - Book-to-bill ratio3 was 0.91 for the three months ended
December 31, 2023 , compared with 0.81 in the fourth quarter of 2022.
Annual Financial Highlights:
- Total revenue of
$69.7 million , a 33% increase from the$52.4 million reported in 2022, driven by strong demand for recently commercialized new products; - Net earnings of
$6.5 million , compared to net earnings of$8.8 million in 2022, with the comparative period benefitting from a$3.9 million gain on sale and leaseback of McCoy's facility inCedar Park, TX , and$1.0 million recovery of income taxes; and - Adjusted EBITDA1 of
$13.1 million , or 19% of revenue, compared with$8.5 million , or 16% of revenue, in 2022, reaching the highest level since 2014.
Financial Summary
Revenue of
Gross profit, as a percentage of revenue for both the three months and year ended
For the three months
During the three months and year ended
For the three months and year ended
For the three months and year ended
Net earnings for the three months ended
Adjusted EBITDA1 for the three months ended
As at
Selected Quarterly Information
( |
Q4 2023 |
Q4 2022 |
% Change |
Total revenue |
19,699 |
18,264 |
8 % |
Gross profit |
6,423 |
5,845 |
10 % |
as a percentage of revenue |
33 % |
32 % |
1 % |
Net earnings |
2,674 |
7,264 |
(63 %) |
as a percentage of revenue |
14 % |
40 % |
(26 %) |
per common share – basic |
0.10 |
0.26 |
(62 %) |
per common share – diluted |
0.10 |
0.26 |
(60 %) |
Adjusted EBITDA1 |
3,987 |
3,682 |
8 % |
as a percentage of revenue |
20 % |
20 % |
- % |
per common share – basic |
0.15 |
0.13 |
15 % |
per common share – diluted |
0.14 |
0.13 |
8 % |
Total assets |
77,241 |
77,793 |
(1 %) |
Total liabilities |
23,257 |
26,079 |
(11 %) |
Total non-current liabilities |
3,208 |
6,680 |
(52 %) |
Selected Annual Information
( |
2023 |
2022 |
% Change |
Total revenue |
69,689 |
52,428 |
33 % |
Gross profit |
22,830 |
15,763 |
45 % |
as a percentage of revenue |
33 % |
30 % |
3 % |
Net earnings |
6,529 |
8,763 |
(25 %) |
as a percentage of revenue |
9 % |
17 % |
(8 %) |
per common share – basic |
0.23 |
0.31 |
(26 %) |
per common share – diluted |
0.23 |
0.31 |
(26 %) |
Adjusted EBITDA1 |
13,125 |
8,537 |
54 % |
as a percentage of revenue |
19 % |
16 % |
3 % |
per common share – basic |
0.47 |
0.30 |
57 % |
per common share – diluted |
0.46 |
0.30 |
53 % |
Summary of Quarterly Results
( |
Q4 2023 |
Q3 2023 |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022 |
Q1 2022 |
Revenue |
19,699 |
16,878 |
12,571 |
16,864 |
18,264 |
12,410 |
12,863 |
8,891 |
Net earnings |
2,674 |
1,900 |
2,996 |
528 |
7,264 |
274 |
1,051 |
174 |
as a % of revenue |
14 % |
11 % |
24 % |
3 % |
40 % |
2 % |
8 % |
2 % |
per share - basic |
0.10 |
0.07 |
0.10 |
0.02 |
0.26 |
0.01 |
0.04 |
0.01 |
per share - diluted |
0.10 |
0.07 |
0.10 |
0.02 |
0.25 |
0.01 |
0.04 |
0.01 |
EBITDA1 |
3,001 |
3,641 |
3,618 |
1,954 |
7,319 |
1,149 |
1,943 |
1,146 |
as a % of revenue |
15 % |
22 % |
29 % |
12 % |
40 % |
9 % |
15 % |
13 % |
Adjusted EBITDA1 |
3,988 |
3,856 |
3,739 |
2,419 |
3,681 |
1,099 |
2,296 |
1,461 |
as a % of revenue |
20 % |
23 % |
30 % |
14 % |
20 % |
9 % |
18 % |
16 % |
Outlook and Forward-Looking Information
Over the short and medium term, oil & gas market fundamentals remain robust for international markets, especially in the
Turning to the
As we progress through the commercialization stage of our 'Digital Technology Roadmap' initiative, we expect future revenues to become less dependent on the cyclicality of drilling activity, and more driven by technology adoption, demand from new local and regional market entrants, and market share gains in new geographies.
From
- Accelerating market adoption of new and recently developed 'smart' portfolio products;
- Taking advantage of the current market trajectory by focusing on revenue generation from new and existing customers;
- Focusing on capital allocation priorities; a) investment in growth through both organic and strategic M&A opportunities where returns are favourable and b) return excess cash to our shareholders in the form of share buybacks and quarterly dividends.
We believe this strategy, together with our committed and agile team, McCoy's global brand recognition, application expertise, strong balance sheet, and global footprint will further advance McCoy's competitive position and generate strong returns on invested capital.
About
Throughout McCoy's 100-year history, it has proudly called
1
EBITDA is calculated under IFRS and is reported as an additional subtotal in the Corporation's consolidated statements of cash flows. EBITDA is defined as net earnings (loss), before depreciation of property, plant, and equipment; amortization of intangible assets; income tax expense (recovery); and finance charges, net. Adjusted EBITDA is a non-GAAP measure defined as net (loss) earnings, before: depreciation of property, plant, and equipment; amortization of intangible assets; income tax expense (recovery); finance charges, net; provisions for excess and obsolete inventory; other (gains) losses, net; restructuring charges; share-based compensation; and impairment losses. The Corporation reports on EBITDA and adjusted EBITDA because they are key measures used by management to evaluate performance. The Corporation believes adjusted EBITDA assists investors in assessing |
( |
Q4 2023 |
Q4 2022 |
Net earnings |
2,674 |
7,264 |
Depreciation of property, plant, and equipment |
571 |
407 |
Amortization of intangible assets |
472 |
407 |
Income tax recovery |
(708) |
(974) |
Finance charges, net |
(8) |
215 |
EBITDA |
3,001 |
7,319 |
Provisions (recovery of) for excess and obsolete inventory |
280 |
(4) |
Other losses (gains), net |
176 |
(3,810) |
Share-based compensation |
530 |
177 |
Adjusted EBITDA |
3,987 |
3,682 |
( |
2023 |
2022 |
Net earnings |
6,529 |
8,763 |
Depreciation of property, plant, and equipment |
1,985 |
1,846 |
Amortization of intangible assets |
1,823 |
1,151 |
Income tax expense (recovery) |
558 |
(974) |
Finance charges, net |
340 |
771 |
EBITDA |
11,235 |
11,557 |
Provisions for (recovery of) excess and obsolete inventory |
279 |
486 |
Other losses (gains), net |
304 |
(4,072) |
Share-based compensation |
1,307 |
566 |
Adjusted EBITDA1 |
13,125 |
8,537 |
2
|
3
The book-to-bill ratio is a measure of the amount of net sales orders received to revenues recognized and billed in a set period of time. The ratio is an indicator of customer demand and sales order processing times. The book-to-bill ratio is not a GAAP measure and therefore the definition and calculation of the ratio will vary among other issuers reporting the book-to-bill ratio. |
4 Net cash is a non-GAAP measure defined as cash and cash equivalents, plus: restricted cash, less: borrowings. |
Forward-Looking Information
This News Release contains forward looking statements and forward-looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward looking information is often, but not always, identified by the use of words such as "could", "should", "can", "anticipate", "expect", "objective", "ongoing", "believe", "will", "may", "projected", "plan", "sustain", "continues", "strategy", "potential", "projects", "grow", "take advantage", "estimate", "well positioned" or similar words suggesting future outcomes. This New Release contains forward looking statements respecting the business opportunities for the Corporation that are based on the views of management of the Corporation and current and anticipated market conditions; and the perceived benefits of the growth strategy and operating strategy of the Corporation are based upon the financial and operating attributes of the Corporation as at the date hereof, as well as the anticipated operating and financial results. Forward looking statements regarding the Corporation are based on certain key expectations and assumptions of the Corporation concerning anticipated financial performance, business prospects, strategies, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the ability to obtain financing on acceptable terms, which are subject to change based on market conditions and potential timing delays. Although management of the Corporation consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in the forward looking statements, including inability to meet current and future obligations; inability to complete or effectively integrate strategic acquisitions; inability to implement the Corporation's business strategy effectively; access to capital markets; fluctuations in oil and gas prices; fluctuations in capital expenditures of the Corporation's target market; competition for, among other things, labour, capital, materials and customers; interest and currency exchange rates; technological developments; global political and economic conditions; global natural disasters or disease; and inability to attract and retain key personnel. Readers are cautioned that the foregoing list is not exhaustive. The reader is further cautioned that the preparation of financial statements in accordance with IFRS requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. These judgments and estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes. The information contained in this News Release identifies additional factors that could affect the operating results and performance of the Corporation. We urge you to carefully consider those factors. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this News Release are made as of the date of this New Release and the Corporation does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
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