McCoy Global Inc. ("McCoy" or "the Corporation") (TSX:MCB) today announced its operational and financial results for the three months ended March 31, 2017.
"Improving market fundamentals encouraged customers to purchase both capital equipment and aftermarket products and services, which resulted in a 128% increase in customer orders and a 67% increase in revenue from the fourth quarter of 2016. This increase in revenue along with an organization wide commitment to cost reduction, resulted in McCoy achieving positive adjusted EBITDA in the quarter," said Jim Rakievich, President and CEO of McCoy Global. "We also made progress during the quarter in enhancing our technology platforms. Early in the quarter we welcomed the employees from recently acquired 3PS to our team and are encouraged by their capabilities and the outlook for data acquisition technologies. In addition, we progressed on a number of new product initiatives that are now in various stages of development and we look forward to bringing these to market over the next several quarters."
Since January 1, 2017, McCoy Global reported:
Quarterly Financial Summary
Revenue for the three months ended March 31, 2017 was $10.2 million, a 67% increase from the fourth quarter of 2016 and a 43% increase from Q1 2016. Improving industry fundamentals resulted in an increase in customers converting open quotations to purchase orders. During the first quarter of 2017, customer orders increased by 128% to $14.8 million from the fourth quarter of 2016. This resulted in an increase in revenue in both capital equipment and aftermarket products and services and was realized in North America and certain international markets. In addition, part of the increase in revenue pertains to the acquisition of 3PS.
Gross profit percentage for the three months ended March 31, 2017 increased 38 percentage points from the first quarter of 2016. Gross profit was positively impacted by the increase in revenues realized from product and service sales and the utilization of spare production capacity which reduced the impact of under-absorption.
G&A expense for the three months ended March 31, 2017 was $2.1 million, a $1.0 million decrease from the first quarter of 2016. The decrease is largely a result of the successful implementation of restructuring initiatives and continued spending discipline
Sales and marketing expense for the three months ended March 31, 2017 was $0.9 million, which was consistent with the comparative quarter.
Research and development costs increased in the first quarter of 2017 to $0.9 million, from $0.4 million in the comparative period. The acquisition of 3PS enhanced McCoy's engineering team which will contribute valuable sensor technology expertise. In addition, development and prototype costs were incurred, as several technology projects progressed and reached critical design testing phases.
Net loss for the three months ended March 31, 2017 was $3.6 million ($0.13 loss per basic share), compared to net loss of $9.4 million ($0.34 loss per basic share) in the first quarter of 2016.
Adjusted EBITDA1 for the three months ended March 31, 2017 was $0.02 million compared to ($4.1 million) in the first quarter of 2016. Adjusted EBITDA was positively impacted by improving industry fundamentals and cost containment initiatives.
During the first quarter of 2016, the Corporation cancelled its operating line of credit and entered into a new credit facility to finance the acquisition of 3PS. The Corporation borrowed $6.0 million under the facility, which is the only debt that the Corporation has outstanding.
At March 31, 2017, the Corporation had $21.2 million in cash and cash equivalents, of which $2.5 million is restricted per the conditions of the credit facility.
Conference Call Information
McCoy Global will host a conference call and webcast at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time) on May 11, 2017. Management participants will include: Jim Rakievich, President & CEO; Jacob Coonan, Senior Vice President and CFO; Kenny Watt, Senior Vice President, Sales and Technology; and Suzanne Langier, Senior Vice President, Corporate Services, People and Culture.
Participants calling from Canada or the United States should call toll-free at: 1-888-231-8191. Callers from other locations may call in at: 1-647-427-7450. A live audio webcast of the conference call will be available at the following link:
The conference call will be archived for replay until Thursday, May 18, 2017 at midnight. To access the archived conference call, dial 1-855-859-2056 or 1-416-849-0833 and enter the replay passcode 12909263.
McCoy provides innovative products and services to the global energy industry. The Corporation operates internationally through direct sales and distributors with operations in Canada, the United States of America, the United Kingdom, Singapore and the United Arab Emirates. McCoy's corporate headquarters are located in Edmonton, Alberta, Canada.
SOURCE: McCoy Global Inc
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