McCoy specializes in tubular handling, make-up and measurement. Its mission is to become the leading global tubular make-up solutions provider. By building products with innovative technologies and bringing them to customers around the world, McCoy is realizing its vision of becoming the trusted provider of innovative products and services for the global energy industry.
McCoy provides oil and gas service companies, rig manufacturers and contract drillers with products, consumables, parts and technical service across the globe. In 2013, McCoy delivered products and services to customers in 53 countries.
McCoy specializes in tubular handling, make-up and measurement. McCoy designs and manufactures equipment to handle and make-up well casing, drill pipe and tubing; as well as software technologies to collect the make-up torque data during the casing running process.
The international oil and gas industry is changing. The amount of tubular connections requiring make-up on each well and the complexity of casing make-up are increasing. This has resulted in an increase in both torque requirements and the use of premium connections. McCoy’s products and services ensure these connections are made efficiently with precision and accuracy, because the success of McCoy’s customers depends on it.
It’s a testament to McCoy’s commitment and a reminder of the Company’s evolution. What started as a blacksmith shop in 1914 grew into a business that supported a variety of industries. 100 years after inception, McCoy will once again be a pure-play, providing innovative products and services for the international energy industry.
The two key elements of McCoy’s organic growth strategy include developing innovative products based on customer needs, and establishing operations around the world to optimize customer responsiveness.
McCoy developed its “we” product line to support customer success, with technologies that are first-to-market or feature improvements to currently available products. In 2013, McCoy increased its research and development expenditures by 19 percent compared to 2012 because investments today will yield value for customers and shareholders with each successful product launch.
McCoy has customers around the world that regularly require new equipment as well as parts and service, and being closer to these international customers is important. McCoy has made investments to establish international sales and service centers which will enable McCoy to effectively and efficiently respond to customers’ need for consumables, replacement parts and technical service throughout the life of their equipment.
McCoy also pursues opportunities to augment its product and service offerings by acquiring complementary businesses and technologies. With the financial strength of a strong balance sheet, McCoy targets accretive acquisitions that present new market opportunities with the objective of expanding and diversifying of its portfolio.
McCoy’s “we” product line was developed to address specific customer needs and support their success. The “we” product line includes technologies designed to increase efficiency and safety, and improve accuracy and precision. McCoy commercially launched the first product in its “we” line, the weCATTTM in 2012, and launched two additional products, the weVERIFYTM and the weTORQ85TM in 2013.
An extremely mobile torque, turn and hook load monitoring system with wireless data transmission and an extended battery life
Enables real-time tubular connection monitoring and control of tubular make - up
Enables remote calibration of make-up equipment with real-time data transmission; used in conjunction with the WINCATT® software
Integrated wrench and spinner with enhanced torque, motion range and precision, which reduces the need to have people on the rig floor
McCoy continues to invest in the development of additional “we” products and is on track to commercialize the weBUCK12TM and weHOLD in 2014. The weBUCK12TM will be the first commercially available electrically powered bucking unit in the market, with several advantages over conventional hydraulic-powered bucking units. The weHOLD is McCoy’s first casing handling tool and is complementary to the products in McCoy’s power tong line.
A next-generation electrically powered bucking unit for eco-friendly and highly efficient tubular make-up
A system with flush mount spider, conventional spider and elevator configurations, featuring a technology design that can be developed into a “platform” product with a multitude of sizes for both land and offshore application
Runs tubular with high rotational speed and mixed-string capabilities
McCoy is establishing operations around the world. McCoy’s international sales and service centers will not only enable more efficient customer support throughout the entire lifecycle of the equipment they depend on, but will build an international distribution network for McCoy’s new and existing products. To reflect its international, pure-play strategy, McCoy introduced its new brand, “McCoy Global”.
In 2013, McCoy established two international sales and service centers in Aberdeen, Scotland and Singapore to support customers in Africa, the North Sea, continental Europe, and Asia Pacific regions. In addition to investing in these centers, McCoy increased its plant capacity in its dies and inserts manufacturing facility in Louisiana to ensure international locations are able to meet customer demand for these consumables. Being close to customers enables McCoy to more efficiently meet its customers’ equipment servicing, consumable and replacement parts needs throughout the entire lifecycle of their equipment. McCoy has targeted the Middle East and Latin America as well as additional key regions of customer concentration for future expansion.
($000 except per share amounts and percentages)
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”. For comparative purposes, in financial disclosures previous to the first quarter of 2013 ‘adjusted EBITDA’ was referred to as “EBITDAS”. Adjusted EBITDA is not considered an alternative to net earnings in measuring McCoy’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 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.
2013 was a year of investing in McCoy’s future. McCoy continued to execute on the two key elements of our growth strategy: we expanded our global footprint by establishing and commencing operations at two international sales and service centers, and continued to develop innovative products for the international oil and gas industry. We invested in the expansion of our dies and inserts manufacturing facility to prepare for demand from our international locations, and in the implementation of a new Enterprise Resource Planning system that will enable McCoy to realize operational efficiencies over the long-term. We believe that our investments will yield long-term growth as we optimize customer responsiveness, grow our lifecycle product revenues and bring new products to market.
McCoy’s expertise lies in tubular handling, make-up and measurement, and we are focusing on our strengths. At the end of 2013, McCoy formally committed to divest of our non-core businesses, an important step in realizing our vision of becoming a pure-play, trusted provider of innovative products and services for the global energy industry.
In 2013, McCoy generated revenues from continuing operations of $110.2 million, an increase of eight percent over 2012, and maintained a gross profit of 37 percent. This revenue growth and stable profitability were driven by increased sales of our “we” products, as well as consumables, service and replacement parts. We believe that commercializing new products and ramping-up our international operations will be key drivers of revenue growth and profitability going forward.
McCoy commercialized two new products and celebrated the sale of the 1000th WINCATT® system in 2013. We launched the weVERIFYTM, a remote calibration tool used in conjunction with the WINCATT® software to calibrate customers’ equipment remotely, and the weTORQ85TM roughneck. McCoy also made significant progress on two new products, the weBUCK12TM and the weHOLD. The weBUCK12TM will be the first commercially available electrically powered bucking unit on the market, with several advantages over conventional hydraulic-powered bucking units. The weHOLD is McCoy’s first handling tool, and is complementary to our line of power tong products.
McCoy began executing on our international expansion strategy in 2013. We commenced operations at two international sales and service centers in Aberdeen, Scotland and Singapore. These locations will support our customers in Africa, the North Sea, continental Europe, and Asia Pacific regions, respectively. An integral part of our growth strategy, expanding our international footprint will enable McCoy to more efficiently meet the service needs of our customers and generate additional revenue from increased product lifecycle sales. In 2013, McCoy successfully expanded our dies and inserts manufacturing facility in Louisiana in order to meet the expected demand generated by these international locations.
To reflect this key element of our growth strategy, we rebranded our subsidiaries and products as “McCoy Global”, which we believe is an important step in growing our brand with our customers around the world.
2014 marks McCoy’s 100 year anniversary, as well as a pivotal year for the Company as we approach our goal of becoming a pure-play, trusted provider of innovative products and services for the global energy industry.
The industry outlook remains positive, particularly for the international land and offshore markets. Increasing wellbore depths and complexity that require precise and accurate make-up of premium connections will continue to drive demand for McCoy’s products and technologies.
We continue to develop and commercialize products in response to industry trends and customer needs. In addition to the planned launch of the weBUCK12TM and the weHOLD in 2014, we continue to progress the development of additional “we” products, including the weRUN350 Casing Running Tool. We are on a path to open two additional international sales and service centers in the Middle East and South America so we can meet our international customers’ service and parts requirements, and we continue to pursue opportunities to acquire complementary products and services to strengthen our portfolio.
McCoy’s success is based on the success of our customers. McCoy enters 2014 strengthened by the investments we made in 2013, and we are confident that as we continue to execute on our growth strategy, additional near-term investments will yield long-term value to both our customers and our shareholders.
Kerry Brown, CA – Chair
Frank Burdzy, MBA
T.D. (Terry) Freeman, FCA, ICD.D
John Howard, CA
Jim Rakievich, ICD.D
Chris Seaver, MBA, J.D.
Jim Rakievich, ICD.D
President and Chief Executive Officer
Jacob Coonan, MPAcc, CA
Chief Financial Officer
Senior Vice President, McCoy Global
Vice President, Human Resources
Peter Watson, Esq.
General Counsel and Corporate Secretary
Valiant Trust Company
The Toronto Stock Exchange: MCB
#301, 9618 42 Avenue
Edmonton, Alberta T6E 5Y4
T 780.453.8451 F 780.453.8756
The Equicom Group
The 2014 annual meeting of shareholders will be held on May 22, 2014, at 4:00 p.m. MDT, at The Delta Edmonton South Hotel, Diamond/Emerald Room, 4404 Gateway Boulevard, Edmonton, Alberta.