McCoy Corporation
TSX : MCB

McCoy Corporation

July 28, 2005 11:05 ET

McCoy Corporation Announces Record Second Quarter Results

EDMONTON, ALBERTA--(CCNMatthews - July 28, 2005) - McCoy Corporation (TSX:MCB) today announced results for the second quarter of 2005.



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3 Months Ending June 30, 2005 2005 2004
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$ $
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Total revenue 26,337,194 9,758,327
Net earnings 1,705,000 467,573
Basic earnings per share 0.10 0.03
Diluted earnings per share 0.09 0.02
EBITDA 0.17 0.05
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6 Months Ending June 30, 2005 2005 2004
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$ $
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Total revenue 47,938,776 17,673,503
Net earnings 2,597,521 591,171
Basic earnings per share 0.15 0.03
Diluted earnings per share 0.14 0.03
EBITDA 0.27 0.07
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Mr. Jim Rakievich, McCoy's President and Chief Executive Officer, said that the company expanded sales to 269% over the second quarter of 2004, resulting in a 364% increase in profits over the same period last year. This represents record breaking results for the Company. The Oilfield Products Manufacturing segment saw an increase in revenue of 55% compared to the same period last year. The Trailer Manufacturing segment saw an increase in revenue of more than five times the amount for the same period in 2004. This is a result of the addition of Peerless, which was acquired in September 2004, and the significantly improved productivity of Scona Trailer Manufacturing. The Truck & Trailer Products & Services segment doubled revenues over the second quarter of 2004, largely attributable to the Peerless operations. EBITDA is defined as follows: Earnings before interest, taxes, depreciation and stock based compensation.

During the second quarter the Company acquired Rebel Metal Fabricators Ltd based in Red Deer, Alberta. Rebel is a manufacturer of truck and trailer mounted hydrovac and vacuum tanks. The results for the month of June have been reported in the Oilfield Products Manufacturing segment.

Gross profit increased during the second quarter over the same period last year by $4,931,456 or 148% as a direct result of the increase in revenues. Consolidated gross margin as a percentage of sales decreased by approximately 2% over the second quarter 2005, due to the modified product mix resulting from the Peerless acquisition and new service centre. Salaries and commission increased by $1,778,170 or 135% to $3,098,306 compared to $1,320,136 for the second quarter of 2004. This change is attributable to both the Peerless, Rebel and Fort St. John enterprises as well as higher sales volumes in other operations. Operations expenses were $1,664,126 versus $819,283 compared with the second quarter in 2004. Nearly 89% of the increase is a direct result of the new businesses with the remainder relating to equipment repairs and utility consumption. Amortization expense increased by 75% over the same period in 2004 to $289,240 from $123,842, again largely attributable to the new businesses. Selling expenses increased by 26% to $250,312 compared to $198,542 in the second quarter of 2004 but saw very little change as a percentage of sales. Interest on debt of $103,234 was a 71% increase over $29,988 for the second quarter of 2004. This figure includes interest on long-term debt, bank indebtedness and term loans with a related party. Stock based compensation of $69,823 incurred in the second quarter of 2005 is a 474% increase over the same period in the prior year. Cash flow from operations before net change in non-cash working capital items increased by $1,732,696 as a result of increased sales volumes. The Company continued to invest in capital equipment to meet the higher demand for its manufactured products as well as the investment in the newly acquired Rebel Metal Fabricators Ltd. Cash used in financing activities increased over the same period in 2004 due to the need to increase the line of credit for the purchase of Rebel.

Mr. Rakievich commented that the outlook for the third quarter is positive as he expects that the ongoing strength in the oil and gas sector will continue to benefit the Company overall. Additionally, the third quarter will also focus on the continued implementation of Lean Manufacturing initiatives. Mr. Rakievich added that the Company will continue to pursue new growth opportunities through acquisition and geographic expansion.

The Company's main operating segments are: Truck & Trailer Products & Services, Trailer Manufacturing and Oilfield Products Manufacturing. Approximately 400 individuals are employed by the Company in Alberta and British Columbia. The Company's shares are traded on the TSX under the symbol "MCB". More information can be found on the Company's web site at www.mccoycorporation.ca
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Contact Information

  • McCoy Corporation
    Jim Rakievich
    President and Chief Executive Officer
    (780) 453-8707
    Website: www.mccoycorporation.ca.