Fourth Quarter Highlights:
- Revenue increased 93% to
$18.3 million , compared to$9.5 million in 2021; - Adjusted EBITDA1 more than doubled to
$3.7 million , or 20% of revenue, compared to$1.2 million , or 13% of revenue, in 2021; - Net earnings also more than doubled to
$7.3 million compared to the fourth quarter of 2021 of$2.5 million ; - Strengthened the statement of financial position, ending the year with
$17.8 million of net cash5 as at December, 2022, compared to$7.8 million as atDecember 31, 2021 , with additional funds available under undrawn credit facilities; and - Advanced its Digital Technology Roadmap:
- Delivered the first commercial sale for two (2) of its smartCRTTM followed by a second in early 2023. McCoy's smartCRTTM is an intelligent, connected enhancement of our conventional casing running tool that offers superior safety, efficiency and simplified operating procedure; and
- Reported the first two (2) commercial sales for McCoy's FMS, and received purchase orders for an additional five (5) tools scheduled for delivery in 2023. McCoy's FMS is a hydraulic rotary flush mounted spider that when fully connected (smartFMSTM), 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 the smartCRT™.
"McCoy's strong fourth quarter results reflect the strategic priorities we executed upon in 2020 and 2021 to first optimize cost structure and second, to advance our investments in developing smart technologies and grow key strategic customer relationships. Fourth quarter revenues included shipments of Hydraulic Power Tongs, smartCRTTM, and McCoy Torque Turn systems to a strategic new market entrant based in the
"For the fourth quarter of 2022, McCoy reported net earnings of
Fourth Quarter Financial Highlights:
- Total revenue of
$18.3 million , compared with$9.5 million in 2021; - Net earnings of
$7.3 million , of which$3.9 million was attributable to the gain on sale and leaseback of McCoy's facility inCedar Park, TX , compared to net earnings of$2.5 million in 2021, of which$2.4 million was attributable to amounts forgiven under the US Paycheck Protection Program (PPP); - Adjusted EBITDA1 increased to
$3.7 million , or 20% of revenue, compared with$1.2 million , or 13% of revenue, in 2021; - Booked backlog2 of
$23.6 million atDecember 31, 2022 , more than double$11.7 million in the fourth quarter of 2021; - Book-to-bill ratio3 was 0.81 for the three months ended
December 31, 2022 , compared with 0.96 in the fourth quarter of 2021.
Annual Financial Highlights:
- Total revenue of
$52.4 million , compared with$32.8 million in 2021; - Net earnings of
$8.8 million , of which$3.9 million was attributable to the gain on sale and leaseback of McCoy's facility inCedar Park, TX , compared to net earnings of$4.1 million in 2021, of which$4.8 million was attributable to amounts forgiven under the US Paycheck Protection Program; - Adjusted EBITDA1 of
$8.5 million , or 16% of revenue, compared with$3.4 million , or 10% of revenue, in 2021;
Financial Summary
Revenue of
Gross profit, as a percentage of revenue for the three months and year ended
For the three months and year ended
For the three months and year ended
During the 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
Subsequent to
Selected Quarterly Information
( | Q4 2022 | Q4 2021 | % Change |
Total revenue | 18,264 | 9,451 | 93 % |
Gross profit | 5,845 | 2,442 | 139 % |
as a percentage of revenue | 32 % | 26 % | 23 % |
Net earnings | 7,264 | 2,464 | 195 % |
as a percentage of revenue | 40 % | 286 % | 54 % |
per common share – basic | 0.31 | 0.09 | 107 % |
per common share – diluted | 0.31 | 0.08 | 121 % |
Adjusted EBITDA1 | 3,681 | 1,213 | 203 % |
as a percentage of revenue | 20 % | 13 % | 54 % |
per common share – basic | 0.13 | 0.04 | 225 % |
per common share – diluted | 0.13 | 0.04 | 225 % |
Total assets | 77,793 | 55,138 | 41 % |
Total liabilities | 26,079 | 15,128 | 72 % |
Total non-current liabilities | 6,680 | 6,741 | (1 %) |
Selected Annual Information
( | 2022 | 2021 | % Change |
Total revenue | 52,428 | 32,796 | 60 % |
Gross profit | 15,763 | 9,144 | 72 % |
as a percentage of revenue | 30 % | 28 % | 7 % |
Net earnings | 8,763 | 4,078 | 115 % |
as a percentage of revenue | 17 % | 12 % | 42 % |
per common share – basic | 0.31 | 0.15 | 107 % |
per common share – diluted | 0.31 | 0.14 | 121 % |
Adjusted EBITDA1 | 8,537 | 3,437 | 148 % |
as a percentage of revenue | 16 % | 10 % | 60 % |
per common share – basic | 0.30 | 0.12 | 150 % |
per common share – diluted | 0.30 | 0.12 | 150 % |
Summary of Quarterly Results
( | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 |
Revenue | 18,264 | 12,410 | 12,863 | 8,891 | 9,451 | 9,855 | 6,086 | 7,374 |
Net earnings (loss) | 7,264 | 274 | 1,051 | 174 | 2,464 | 621 | 1,151 | (158) |
as a % of revenue | 40 % | 2 % | 8 % | 2 % | 26 % | 6 % | 19 % | (2 %) |
per share - basic | 0.26 | 0.01 | 0.04 | 0.01 | 0.09 | 0.02 | 0.04 | (0.01) |
per share - diluted | 0.25 | 0.01 | 0.04 | 0.01 | 0.08 | 0.02 | 0.04 | (0.01) |
EBITDA1 | 7,319 | 1,149 | 1,943 | 1,146 | 3,504 | 1,550 | 2,077 | 749 |
as a % of revenue | 40 % | 9 % | 15 % | 13 % | 37 % | 16 % | 34 % | 10 % |
Adjusted EBITDA1 | 3,681 | 1,099 | 2,296 | 1,461 | 1,213 | 1,376 | 174 | 673 |
as a % of revenue | 20 % | 9 % | 18 % | 16 % | 13 % | 14 % | 3 % | 9 % |
Outlook and Forward-Looking Information
As at
Despite current economic uncertainty and threats of a looming recession, over the medium term, global oil & gas market fundamentals continue to be robust, particularly in international regions. Increased drilling activity levels, paired with new international market entrants will serve to further enhance commercial opportunities not only for our legacy capital equipment, but for our "smart" product offerings. With respect to international markets, we continue to see a growing trend of drilling contractors, new local and regional market entrants, and in some cases national oil companies, entering the Tubular Running Services space, taking market share from large multinational service companies. This trend benefits McCoy considerably as it creates additional capital equipment demand over and above market growth from increased drilling activity alone, as these new entrants require a significant investment in capital equipment to take on tubular running service contracts. McCoy is aptly positioned to respond to this demand with its strong brand of product quality and responsive, local customer support. Among its competitors, McCoy offers the broadest portfolio of TRS equipment and now, offer market leading technologies that provide superior safety, efficiency and simplified operating procedures. One such example of our recent success in this area is the
Turning to the
- Accelerating market adoption of new and recently developed 'smart' portfolio products;
- Taking advantage of the current market trajectory by focusing on revenue generation from key strategic customers;
- Continue to seek acquisition opportunities where the strategic and financial returns make sense;
- Generating cashflow from operations through fiscal discipline and continued working capital efficiency; and
- Evaluating the requirements to reduce the Corporation's
Stated Capital to meet the requirements under theAlberta Business Corporation's Act (ABCA) solvency test and allow for declaring a regular dividend. This would require shareholders' approval at the Annual General and Special Meeting.
We believe this strategy, together with our committed and agile team, McCoy's global brand recognition, intimate customer knowledge 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 2022 |
Q4 2021 |
Net earnings | 7,264 | 2,464 |
Depreciation of property, plant and equipment | 407 | 659 |
Amortization of intangible assets | 407 | 199 |
Income tax recovery | (974) | - |
Finance charges, net | 215 | 182 |
EBITDA | 7,319 | 3,504 |
(Recovery of) provisions for excess and obsolete inventory | (5) | 46 |
Other gains, net | (3,810) | (2,450) |
Share-based compensation | 177 | 113 |
Adjusted EBITDA | 3,681 | 1,213 |
( | 2022 | 2021 |
Net earnings | 8,763 | 4,078 |
Depreciation of property, plant and equipment | 1,846 | 2,167 |
Amortization of intangible assets | 1,151 | 792 |
Income tax recovery | (974) | - |
Finance charges, net | 771 | 843 |
EBITDA | 11,557 | 7,880 |
Provisions for (recovery of) excess and obsolete inventory | 486 | (230) |
Other gains, net | (4,072) | (4,805) |
Share-based compensation | 566 | 592 |
Adjusted EBITDA1 | 8,537 | 3,437 |
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 New product and technology offerings as products or technologies introduced to our portfolio in the past 36 months.
5 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.
Website: www.mccoyglobal.com
SOURCE
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