McCoy Global Inc. announces second quarter 2014 results
EDMONTON, Aug. 7, 2014 /CNW/ - McCoy Global Inc. ("McCoy" or "the Company") (TSX:MCB; OTCQX:MCCRF), a supplier of innovative products and services for the global energy industry, today announced its operational and financial results for the three months ended June 30, 2014.
"McCoy executed on two key initiatives toward becoming a pure-play global technology solutions provider by divesting of Mobile Solutions and officially changing our name to reflect our growing global presence," said Jim Rakievich, President and CEO. "We also continued to make progress on the international expansion and new product development elements of our growth strategy."
Since April 1, 2014, McCoy:
- Reported revenue of $27.9 million, compared to $29.0 million in 2013
- Reported net earnings of $8.3 million, compared to $3.1 million in 2013. 2014 net earnings included a one-time gain on the sale of Mobile Solutions; earnings from continuing operations were $2.3 million, compared to $2.4 million in 2013.
- Reported adjusted EBITDA1 of $3.9 million, compared to $4.6 million in 2013
- Reported a backlog2 of $44.6 million as at June 30, 2014, a $0.1 million increase from March 31, 2014
- Reported a book-to-bill ratio3 of 1.0 for the three months ended June 30, 2014, compared to 1.1 for the three months ended March 31, 2014
- Divested the Mobile Solutions segment, completing another step in becoming a pure-play global technology solutions provider
- Completed its global re-branding efforts by announcing that it had changed its name to McCoy Global Inc.
- Made significant progress towards the commercialization of the weBUCK™, which is undergoing final product testing
- Achieved an important milestone in the weHOLD™ product testing phase by successfully passing all load bearing requirements
- Continued developing operations at its first two international technical sales and service centers in Aberdeen, Scotland and Singapore
- Appointed Chris Seaver as McCoy's Chairman of the Board
Quarterly Financial Highlights
Revenue for the three months ended June 30, 2014 was $27.9 million, a $1.1 million decrease from the comparative quarter in 2013. Revenue recognition was impacted by delays in the shipment of a portion of a large customer order. The majority of this order was shipped subsequent to June 30, 2014.
Gross profit percentage for the three months ended June 30, 2014 was 43%, a 4% increase from the comparative quarter in 2013. Profitability was positively impacted by higher sales of technical products, including proprietary software products, and the weakening Canadian dollar.
Net earnings for the quarter was $8.3 million ($0.30 per basic share), compared to $3.1 million ($0.11 per basic share) in the second quarter of 2013. Net earnings were impacted by a one-time gain resulting from the sale of Mobile Solutions. Earnings from continuing operations was $2.3 million ($0.08 per basic share), compared to $2.4 million ($0.09 per basic share) in the second quarter of 2013.
Adjusted EBITDA1 for the three months ended June 30, 2014 was $3.9 million, a 16% decrease from the comparative quarter in 2013. Adjusted EBITDA was impacted by the delayed shipment as well as higher overhead expenses associated with supporting growth initiatives. These factors were partially offset by the realization of higher gross profit percentage.
As at June 30, 2014, McCoy had working capital of $66.0 million, including $23.6 million in cash and cash equivalents.
Selected Quarterly Information
|($000 except per share amounts and percentages)||Q2 2014||Q2 2013||% Change|
|Gross profit as % of revenue||43%||39%||4|
|Earnings from continuing operations||2,258||2,351||(4)|
|Earnings from discontinued operations (net of tax)||6,004||700||758|
|Net earnings per common share - basic||0.30||0.11||173|
|Net earnings per common share - diluted||0.30||0.11||173|
|Adjusted EBITDA1 per common share - basic||0.14||0.17||(18)|
|Adjusted EBITDA1 per common share - diluted||0.14||0.17||(18)|
|1 EBITDA is an additional GAAP measure presented under IFRS defined as "net earnings from continuing operations, before finance charges (net), income tax expense, depreciation, and amortization." Adjusted EBITDA is a non-GAAP measure defined as "net earnings from continuing operations before finance charges (net), income tax expense, depreciation, amortization, impairment losses, net changes in fair value related to derivative financial instruments and share-based compensation". Adjusted EBITDA is not considered an alternative to net earnings in measuring McCoy Global's performance. Adjusted EBITDA does not have a standardized meaning and is therefore not likely to be comparable to similar measures used by other issuers. However, McCoy Global calculates adjusted EBITDA consistently from period to period. Adjusted EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt changes and other sources and uses of cash, which are disclosed in the consolidated statement of cash flows.|
|2 The Corporation defines backlog as work that has a high certainty of being performed and is measured on the basis of a firm customer commitment, such as the receipt of a purchase order. Customers may default on or cancel such commitments, but many are secured by a deposit and/or require reimbursement by the customer upon default or cancellation. Backlog reflects likely future revenues; however, cancellations or reductions may occur and there can be no assurance that backlog amounts will ultimately be realized as revenue, or that the Corporation will earn a profit on backlog work. Expected delivery dates for orders recorded in backlog usually span from one to six months, and thus may not translate into revenue in the consecutive quarter.|
|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 book-to-bill ratio is not a GAAP measure and therefore the definition and calculation of the ratio may vary among other issuers reporting the book-to-bill ratio. McCoy Global calculates the book-to-bill ratio as net sales orders taken in the reporting period divided by the revenues reported for the same reporting period.|
Conference Call Information
McCoy will host a conference call and webcast at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time) on August 7, 2014. Management participants will include: Jim Rakievich, President & CEO; Jacob Coonan, CFO; Kenny Watt, Senior Vice President, McCoy Global; and Peter Watson, General Counsel and Corporate Secretary.
Participants calling from Canada or the United States should call toll-free at: 1-888-390-0605. Callers from other locations may call in at: 1-416-764-8630. A live audio webcast of the conference call will be available at the following link: http://www.newswire.ca/en/webcast/detail/1387843/1539733.
The conference call will be archived for replay until Thursday, August 14, 2014 at midnight. To access the archived conference call, dial 1-855-859-2056 or 1-416-849-0833 and enter the replay passcode 981155. The transcript of the conference call will be archived on the conference calls page of McCoy's website.
McCoy provides innovative products and services to the global energy industry. McCoy Global operates internationally through direct sales and distributors with its operations based out of Western Canada, the U.S. Gulf Coast, Europe and Asia-Pacific. McCoy Global's corporate office is located in Edmonton, Alberta, Canada with offices in Alberta, Louisiana, Texas, Aberdeen, Singapore and Luxembourg.
This News Release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this News Release contains forward-looking statements and information concerning McCoy's future financial performance. The forward-looking statements and information are based on certain key expectations and assumptions made by McCoy, including expectations and assumptions concerning fluctuations in the level of oil and gas industry capital expenditures, McCoy's ability to integrate acquired businesses and complete strategic acquisitions of additional businesses and other factors that affect demand for McCoy's products. Although McCoy believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because McCoy can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause McCoy's actual results and experience to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, fluctuations in oil and gas prices, fluctuations in the level of oil and gas industry capital expenditures and other factors that affect demand for McCoy's products, industry competition, the need to effectively integrate acquired businesses, uncertainties as to McCoy's ability to implement its business strategy effectively, labour, equipment and material costs, access to capital markets, interest and McCoy's ability to attract and retain key personnel. Additional information on these and other factors is available in continuous disclosure materials filed by McCoy with Canadian securities regulators. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this News Release or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. McCoy Global undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE McCoy Global Inc.For further information:
Mr. Peter Watson
McCoy Global Inc.
General Counsel and Corporate Secretary