McCOY GLOBAL ANNOUNCES FIRST QUARTER 2025 RESULTS AND DECLARATION OF QUARTERLY DIVIDEND

Canada NewsWire

EDMONTON, AB, May 2, 2025

EDMONTON, AB, May 2, 2025 /CNW/ - McCoy Global Inc. ("McCoy," "McCoy Global" or "the Corporation") (TSX: MCB) today announced its operational and financial results for the three months ended March 31, 2025. The Corporation also announced that its Board of Directors has declared a quarterly cash dividend of $0.025 per common share payable on July 15, 2025, to shareholders of record at close of business on June 30, 2025. The dividend per common share is a regular dividend and is an "eligible" dividend for purposes of the Income Tax Act (Canada) and any similar provincial/territorial legislation.

First Quarter Highlights:

   -- Revenue increased 17.0% to $19.3 million, compared to $16.5 million in Q1 
      2024. smartProduct revenue5 of $11.4 million accounted for 59% of total 
      revenue (three months ended March 31, 2024 -- 31%), an increase of $6.3 
      million from the comparative period. 
 
   -- Net earnings decreased 3% to $0.9 million compared to the first quarter 
      of 2024 of $1.0 million on revenues. Earnings were impacted by stronger 
      Adjusted EBITDA1 performance, largely offset by increased share-based 
      compensation expense due to the appreciation of the Corporation's share 
      price. 
 
   -- Adjusted EBITDA1 increased to $3.5 million, or 18% of revenue, compared 
      to $2.3 million, or 14% of revenue, in Q1 2024. Adjusted EBITDA growth 
      was achieved from favorable product margins from the shift towards 
      McCoy's smartProducts. 
 
   -- Backlog2 increased by 9% to $27.5 million, from backlog of $25.2 million 
      as at March 31, 2024. Subsequent to March 31, 2025, McCoy accepted an 
      additional $11.0 million of contract awards for McCoy's smarTRTM 
      hardware. In addition to the equipment award, the contract includes 
      utilization-based software-as-a-service (SaaS) revenue for the smarTRTM 
      system's remote integration and automated operational capabilities. 
 
   -- Maintained a strong statement of financial position, ending the quarter 
      with $10.6 million of net cash4 as at March 31, 2025, after returning 
      over $1.5 million to shareholders in the quarter through the repurchase 
      of 362,900 common shares under the Corporation's normal course issuer bid 
      (NCIB) and dividends. 
 
   -- Advanced its Technology Roadmap, and since January 1, 2025: 
 
          -- Successfully concluded in-field trials for its 
             innovative smarTR$(TM)$ system for land and shelf applications. The 
             trials, conducted across several geographies, consistently 
             demonstrated the system's exceptional performance and reliability 
             in live operational environments. Rigorous testing under various 
             operational scenarios confirmed the smarTR(TM) system's ability to 
             deliver superior results over conventional tubular running 
             services $(TRS)$ operations. Confidence in the system from our US 
             field-trial partners resulted in $11.0 million of contract awards 
             for hardware and utilization-based SaaS revenue for the system's 
             remote integration and automated operational capabilities, with 
             delivery expected in 2025. McCoy's smarTR(TM) system integrates 
             McCoy's proprietary hydraulic smart casing running tool 
             (smartCRTTM), McCoy's proprietary connected flush mount spider 
             (smartFMSTM), and related tubular running accessories, into a 
             first-to-market technology that significantly enhances both safety 
             and efficiency and targets up to a 67% reduction in labor costs 
             associated with TRS. 
 
          -- Delivered multiple hydraulic smartCRTTMs destined for the Middle 
             East market and secured additional orders for the US land market. 
             The McCoy hydraulic smartCRTTM enhancement was first 
             commercialized in Q4, 2024, and the tools have successfully 
             executed multiple operations with remarkable efficiency, 
             demonstrating exceptional performance and proven reliability in 
             demanding field conditions. Our unique, patented solution is a 
             hydraulic option to our smartCRTTM product suite and is designed 
             to integrate into our smarTRTM system. This technology mitigates 
             risks inherent in conventional, mechanical CRT technology, while 
             providing actionable insights that optimize future performance. 
 
          -- Delivered a deep-water offshore integrated casing running system 
             destined for Latin America. Delivering this technology completes 
             the first step on a roadmap to a comprehensive smarTRTM system 
             tailored for offshore and deep-water markets. This integrated 
             deep-water system differs from our smarTRTM solution designed for 
             land and shelf that is centered around CRT technology, as 
             deep-water casing installation requires hydraulic power tongs to 
             meet technical specifications for the well profile. The Latin 
             America contract award also marks the first offshore commercial 
             SaaS purchase commitment for its Virtual Thread-RepTM technology. 
             McCoy's Virtual Thread-RepTM technology enables customers to 
             remotely monitor and control premium connection make-up. It also 
             facilitates the autonomous evaluation and confirmation of premium 
             connection make-up on location. 

"As we progress through 2025, McCoy remains steadfast in our commitment to execute on our strategic objectives. Our strong revenue growth, driven by the successful commercialization of smartProducts, underscores our ability to adapt and thrive in challenging market conditions. The completion of key milestones, such as the in-field trials of our smarTR(TM) system and the delivery of advanced hydraulic smartCRT(TM) s, positions us well to capitalize on emerging opportunities globally," said Jim Rakievich, President & CEO. "We are confident that our first-to-market technologies will continue to deliver efficiency, safety, and cost savings for our customers, ensuring sustained growth and value creation for customers and shareholders alike."

"McCoy's financial performance in the first quarter of 2025 reflects our strategic focus on innovation and operational excellence. Despite macroeconomic pressures and geopolitical tensions, we achieved a 17% increase in revenue, with smartProducts accounting for a significant portion of this growth. Our improved Adjusted EBITDA and solid net cash position highlight our ability to generate strong cash flow and maintain financial stability," said Lindsay McGill, Vice President & CFO. "During the quarter, we were pleased to return over $1.5 million to shareholders in the quarter through the repurchase of 362,900 common shares under the Corporation's normal course issuer bid (NCIB) and quarterly dividends."

First Quarter Financial Highlights:

   -- Total revenue of $19.3 million, compared with $16.5 million in Q1 2024. 
 
   -- Net earnings of $0.9 million, compared to $1.0 million in Q1 2024. 
 
   -- Adjusted EBITDA1 of $3.5 million, or 18% of revenue, compared with $2.3 
      million, or 14% of revenue, in 2024. 
 
   -- Booked backlog2 of $27.5 million at March 31, 2025, compared to $25.2 
      million as at March 31, 2024. 
 
   -- Book-to-bill ratio3 was 1.21 for the three months ended March 31, 2025, 
      compared with 1.13 in the first quarter of 2024. 

Financial Summary

Revenue of $19.3 million for the three months ended March 31, 2025, increased 17% from the comparative period. The growth in revenues was driven by strong demand for the Corporation's newly commercialized smartProducts and includes the delivery of several hydraulic smartCRT(TM) s destined for the Middle East market as well as a deep-water offshore integrated casing running system, completing the first step on a roadmap to a comprehensive smarTR(TM) system tailored for offshore and deep-water markets. As anticipated, timing delays experienced on certain customer purchase commitments, shifts in product mix, and greater than anticipated book-and-ship revenues that positively impacted Q4, 2024, resulted in a sequential fluctuation in revenue for Q4, 2024, to Q1, 2025. The depreciation of the Canadian dollar also impacted the increase in revenue as the substantial majority of the Corporation's revenue in denominated in US dollars.

Gross profit, as a percentage of revenue for the three months March 31, 2025, was 34%, an increase of two percentage points from the comparative period in 2024. This was due to a shift in product mix towards smartProduct revenues with favourable product margins and away from traditional capital equipment, as well as supply chain cost containment efforts which reduced material cost for a number of product lines. This was partially offset by increased facility costs, production overheads and freight, as well as additional headcount to support increased production throughput and customer technical support.

For the three months ended March 31, 2025, general and administrative expenses (G&A) increased by $1.0 million to $3.3 million, from the comparative period. The increase was primarily attributable to a $0.9 million increase in share-based compensation expense due to appreciation of the Corporation's stock price. To a lesser extent, the Corporation's investment in an AI platform for enhanced operational decision making also contributed to the increase in G&A. As a percentage of revenue, G&A increased 3% from the comparative period.

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