McCoy Corporation
TSX : MCB

McCoy Corporation

August 07, 2008 08:00 ET

McCoy Corporation Announces Second Quarter 2008 Results-Record Quarterly Revenues Result From Sales Growth in All Segments

EDMONTON, ALBERTA--(Marketwire - Aug. 7, 2008) - McCoy Corporation ("McCoy" or "the Corporation") (TSX:MCB) today announced results for the three and six months ended June 30, 2008. Second quarter net earnings were $2.8 million, an increase of $0.8 million compared to the 2007 second quarter, and up $1.0 million compared to the prior quarter ended March 31, 2008. Revenue for the quarter was $44.2 million, a record high for McCoy, up $4.8 million compared to the second quarter of 2007, and up $8.3 million compared to the first quarter of 2008. McCoy's second quarter results reflect the impact of improved conventional oil and gas activity in western Canada on the Trailer Manufacturing and Truck & Trailer Products & Services segments, as well as 87% sales growth in the Corporation's Energy Products & Services segment, compared to the second quarter of 2007. This growth is attributable to the inclusion of results from Superior Manufacturing & Hydraulics, Inc. ("Superior") and Precision Die Technologies, L.L.C. ("PDT"), which were acquired effective July 31, 2007, and increased sales from Farr Canada partly due to the recognition of revenue for product that was completed in the first quarter and shipped in the second quarter. McCoy expects the conventional oil and natural gas drilling activity in western Canada to show a gradual recovery. Our expectation is based on increased customer quoting and improvement in the natural gas prices compared to a year ago.

"We expect our results in the second half of 2008 to show an improvement over the first half of 2008," said Mr. Jim Rakievich, McCoy's President and CEO. "Our efforts to improve the efficiency of our operations through lean manufacturing practices served us well in 2007 and the first half of 2008 and these practices will continue to improve the stability and performance of our operating companies going forward. With natural gas and oil prices having improved from one year ago and a developing trend towards drilling in unconventional natural gas plays such as shale formations, we expect to show continued organic sales growth from our core international, offshore and domestic energy markets. Also, our strong balance sheet has leverage capacity for acquisitions of well managed and profitable businesses that complement our current business lines as appropriate opportunities arise.



Financial Highlights
Three Months Ended June 30

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2007 to 2008 2008 2007 2006

% Increase $ $ $
(decrease)
----------------------------------------------------------------------------
Total revenue 12 44,201,247 39,370,135 33,128,232

Net earnings for the period
before discontinued operations 33 2,798,162 2,105,989 1,658,224

Net earnings for the period 44 2,798,162 1,942,370 1,404,570

Basic earnings per share before
discontinued operations 10 0.11 0.10 0.09

Basic earnings per share 22 0.11 0.09 0.08

Diluted earnings per share
before discontinued operations 10 0.11 0.10 0.09

Diluted earnings per share 22 0.11 0.09 0.07

EBITDAS(1) 30 5,663,121 4,356,839 3,028,398

EBITDAS per share (5) 0.20 0.21 0.16

Six Months Ended June 30

---------------------------------------------------
2007 to 2008 2008 2007 2006

% Increase $ $ $
(decrease)
----------------------------------------------------------------------------
Total revenue (2) 80,143,375 81,509,674 63,269,170

Net earnings for the period
before discontinued operations (11) 4,598,646 5,175,186 4,473,306


Net earnings for the period (6) 4,598,646 4,881,704 3,771,181

Basic earnings per share before
discontinued operations (35) 0.17 0.26 0.24


Basic earnings per share (29) 0.17 0.24 0.20

Diluted earnings per share
before discontinued operations (35) 0.17 0.26 0.23

Diluted earnings per share (29) 0.17 0.24 0.20

EBITDAS (2) 9,703,123 9,942,738 7,243,875

EBITDAS per share (29) 0.35 0.49 0.39

Total Assets 6 116,376,057 109,975,351 51,085,293

Total Liabilities (1) 37,395,133 37,962,616 29,477,619

Total Long-term Liabilities (8) 13,240,658 14,347,658 2,771,345

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(1) EBITDAS is a non-GAAP measurement defined as "earnings before interest,
taxes, depreciation, amortization and stock-based compensation".


Outlook for the Remainder of 2008

McCoy's Energy Products & Services segment is believed to have solid growth potential from its international sales network and exposure to accelerating activity in the Alberta oil sands. The Trailer Manufacturing segment is modifying its product offering to target the infrastructure, international oil and gas, construction and non-oil & gas transportation markets and reduce its dependence on the western Canadian oilfield and logging sectors. It is anticipated that the Trailer Manufacturing segment will experience gradual revenue improvement as 2008 progresses. Results of the Truck & Trailer Products & Services segment are expected to gradually improve in tandem with trailer sales. If the current high prices in oil and gas commodities persist, this will have a positive impact on McCoy's 2008 results. The Corporation has a strong balance sheet that positions it well for the acquisition of growing, profitable, complementary companies as such opportunities arise.

The Corporation's continued implementation of "lean manufacturing" processes is expected to continue to show positive results for the remainder of 2008. McCoy is committed to continuously improving efficiencies and moving ever closer to its goal of having its operations become centres of excellence for manufacturing. The Corporation intends to continue to integrate Superior into its operations, specifically with Farr. The Corporation will also continue to integrate McCoy's two trailer manufacturing business units in order to gain efficiencies.

Conference Call

McCoy will host a conference call and webcast on Thursday, August 7 at 9 a.m. Mountain time (11 a.m. Eastern). Management participants will be:

- Jim Rakievich, President & Chief Executive Officer;

- Milica Stolic, Chief Financial Officer;

- Ted Redmond, Vice President, Energy Products & Services; and

- Peggy Robertson, Vice President, Corporate Affairs.

Participants calling from Canada or the United States should call toll-free: +1-866-400-3310. Callers from other locations may access the call at: +1-416-850-9144. For those who prefer to join by webcast, a link will be displayed on the home page of McCoy's website at www.mccoycorporation.ca.

A recording of the call will be available via telephone until midnight on August 14, 2008 by calling +1-866-245-6755 or +1-416-915-1035. The replay passcode number is 980557. As well, the transcript of the conference call will be posted on the investor page of McCoy's website.

About McCoy Corporation

McCoy Corporation is a well-established services and equipment provider focused primarily on the global oil and gas sector. McCoy has three operating segments: Energy Products & Services ("EP&S"), Trailer Manufacturing ("TLM") and Truck & Trailer Products & Services ("TT&S"). McCoy's EP&S segment is the leading worldwide manufacturer of tubular make-up power tongs used on drill rigs to thread sections of drill and casing pipe together. EP&S also manufactures vacuum tanks, hydrovac systems, dies and inserts for oilfield tools, and produces wear-reducing coatings for drilling tools and oil sands equipment. TLM is the leading Western Canadian manufacturer of custom heavy duty trailers serving the global oil and gas, forestry, construction, infrastructure and transportation markets. TT&S is engaged in heavy duty truck and trailer repairs, maintenance, parts distribution and sales. McCoy employs approximately 750 individuals in Alberta, British Columbia and Louisiana.

Forward-Looking Information

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 it's business strategy effectively in Canada and the United states, 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 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.

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