McCoy Global is a worldwide leader of tubular make-up and data collection technologies. With the broadest platform of tubular make-up equipment in the market, McCoy Global offers quality products, data collection technologies and custom engineered solutions for complex drilling applications.
McCoy Global provides service and support to its customers across the globe through its regional locations, offering technical support, replacement parts, and equipment rentals.
McCoy Global operates in an evolving energy market with a long-term trend towards more complex well construction, which drives demand for high quality equipment that is safe and efficient and data collection technologies that provide real-time monitoring.
McCoy Global is meeting the challenges faced by its customers by investing in its design and engineering expertise to develop market-leading technologies.
As global energy markets continued to be challenged in 2016, McCoy Global took additional measures to align its cost structure with the fundamentals of its operating environment while retaining its core competencies. Because of these efforts, McCoy Global is now a leaner and more efficient organization that has sustained its balance sheet strength without sacrificing its ability to effectively support its customers across the globe. McCoy Global is well-positioned to take advantage of improved industry fundamentals in the near term, with enhanced ability to adapt to energy market cycles in the long term.
In early 2017, McCoy Global acquired the assets of 3PS, Inc. (3PS), a company specialized in sensors, systems and services for several industry applications, including Torque and Tension Sub (TTS) technology. The strategic acquisition positions the Company as a global leader in TTS technology with enhanced design and engineering expertise that will support the McCoy Global’s development of market-leading technologies.
The energy market outlook for 2017 is more favorable compared to 2016, and although the nature and duration of a recovery is uncertain, McCoy Global is ready to take advantage of it.
Since late 2014, the global oil and gas industry has significantly reduced capital spending on exploration, drilling, new capital equipment as well as on aftermarket products and services. With an inventory of finished capital equipment that is ready to deploy, McCoy Global is prepared for a recovery, and will target aftermarket revenue opportunities in strategic regions as activity resumes.
McCoy Global is leveraging 3PS’s sales and service network to grow its North American customer base, where the onshore drilling market is leading the recovery. Similarly, the Company’s global footprint enables McCoy Global to provide 3PS’s products and services to customers in the Eastern Hemisphere, representing new international sales and service opportunities.
The capabilities of McCoy Global’s product development team has been enhanced by 3PS’s proficiency in developing highly engineered sensor and software products. The expertise of the combined research and development, design and engineering team will be an asset as McCoy Global evaluates opportunities to develop market leading products and data collection technologies, which is a key component of its long term growth strategy.
|($000 except per share amounts and percentages)||2016||2015||2014|
|Gross Profit as Percent of Revenue||(21%)||25%||38%|
|Net Loss from Continuing Operations||(35,926)||(10,977)||9,369|
|Net Loss from Continuing Operations per Common Share — Basic and Diluted||(1.30)||(0.40)||0.34|
|Adjusted EBITDA1 as Percent of Revenue||(49%)||5%||18%|
McCoy Global is committed to supporting the local communities in which it operates.
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Global energy markets hit historic activity lows in 2016. As our customers continued to aggressively minimize spending on new capital equipment and aftermarket products and services, cash preservation was the focus for McCoy Global in 2016.
The execution of our restructuring plan was a significant undertaking that involved the sale of redundant equipment, headcount reductions, consolidation of product manufacturing and the downsizing, relocation or closure of facilities. This was a difficult but necessary initiative that we carried out in a deliberate manner, so as not to compromise our core competencies or our ability to effectively support our customers. We removed a significant amount of annual expenses while retaining a strong management team and geographic presence, as well as core infrastructure and capabilities.
We continue to evaluate and implement improvements to our operating model: we are in the process of consolidating the production of Torque and Tension Sub (TTS) equipment at our facility in Austin, and transitioning from in-house manufacturing to an assembly production model at our Edmonton facility. These initiatives will increase McCoy Global’s ability to adapt to changing industry fundamentals.
Subsequent to the end of 2016, we completed the strategic asset acquisition of 3PS, Inc., a company specializing in sensors, systems and services for heavy industry applications, including TTS technology. This is an ideal business combination for McCoy Global as it positions the Company as a global TTS technology leader and enhances the technical expertise of our product development team.
We intend to leverage our complementary customer base; product and service portfolios; and skilled research and development teams in several ways to identify new revenue-generating opportunities. First, the majority of 3PS’s customers are located in the U.S., providing McCoy Global with increased exposure and customer service capabilities within that market, where onshore drilling activity appears to be leading the recovery. Second, our global footprint enables us to offer 3PS’s products and services to our customers in the Eastern Hemisphere, representing new international sales and service prospects. Finally, 3PS’s proficiency in developing highly engineered sensor and software products will be an asset as we continue to develop market leading products and data collection technologies, a key component of our long term growth strategy.
The energy market outlook is more favorable compared to 2016, and we enter 2017 as a more resilient organization with broadened capabilities, enhanced technical engineering expertise and a strong balance sheet. Now, well positioned to take advantage of a market recovery in the near term and adapt to energy market cycles in the long term, we look forward to the growth opportunities that lie ahead.
Frank Burdzy, MBA
T.D. (Terry) Freeman, FCA, ICD.D
Jim Rakievich, ICD.D
Chris Seaver, MBA, J.D. – Chair
Jim Rakievich, ICD.D – President and Chief Executive Officer
Jacob Coonan, MPAcc, CA – Senior Vice President and Chief Financial Officer
Kenny Watt – Senior Vice President, Sales and Technology
Suzanne Langier, CHRP – Senior Vice President, Corporate Services, People and Culture
The Toronto Stock Exchange: MCB
The 2017 annual general meeting of shareholders will be held on May 10, 2017, at 7:30 a.m. MDT at Acclaim Hotel Calgary Airport, 123 Freeport Blvd NE, Calgary, Alberta.