McCoy Corporation
TSX : MCB

McCoy Corporation

November 08, 2006 13:22 ET

McCoy Corporation Announces Third Quarter Financial Results

EDMONTON, ALBERTA--(CCNMatthews - Nov. 8, 2006) - McCoy Corporation (TSX:MCB) ("McCoy" or the "Corporation") today announced the Corporation's results for the third quarter and first nine months of 2006.

About McCoy Corporation

The Corporation's main operating segments are: Truck & Trailer Products & Services, Trailer Manufacturing and Oilfield Products & Services. Approximately 785 individuals are employed by the Corporation and its subsidiaries in Alberta and British Columbia. The Corporation's shares are traded on the TSX under the symbol "MCB".



Financial Highlights

Three months ended September 30 2006

---------------------------------------------------------------------------
2006 ($) 2005 ($)
---------------------------------------------------------------------------
Revenue 37,781,079 29,340,320
---------------------------------------------------------------------------
Net earnings for the quarter 1,841,390 2,226,017
---------------------------------------------------------------------------
Basic earnings per share 0.10 0.12
---------------------------------------------------------------------------
Diluted earnings per share 0.08 0.12
---------------------------------------------------------------------------
EBITDA (1) 3,797,449 3,765,159
---------------------------------------------------------------------------
EBITDA (1)per share 0.21 0.21
---------------------------------------------------------------------------


Nine months ended September 30 2006

---------------------------------------------------------------------------
2006 ($) 2005 ($)
---------------------------------------------------------------------------
Revenue 104,808,201 77,279,096
---------------------------------------------------------------------------
Net earnings for the period 5,612,571 4,823,538
---------------------------------------------------------------------------
Basic earnings per share 0.30 0.27
---------------------------------------------------------------------------
Diluted earnings per share 0.29 0.25
---------------------------------------------------------------------------
EBITDA (1) 11,089,154 8,610,722
---------------------------------------------------------------------------
EBITDA (1)per share 0.60 0.48
---------------------------------------------------------------------------
Total assets 77,137,848 43,419,199
---------------------------------------------------------------------------
Total liabilities 49,299,721 26,964,603
---------------------------------------------------------------------------
Total long-term liabilities 14,323,098 3,050,101
---------------------------------------------------------------------------

(1) EBITDA, a non-GAAP measurement, is defined by the Corporation as
"Earnings before interest, taxes, depreciation, amortization and stock
based compensation".


Revenues for the three months ended September 30, 2006 increased by approximately 29% over the same period last year. This increase is directly related to higher revenues in existing businesses plus the acquisition of Inotec Coatings and Hydraulics Inc. ("Inotec") effective July 31, 2006. Revenues for the first nine months of 2006 increased by approximately 36% over the same period in 2005.

Net earnings for the nine months ended September 30, 2006 increased by 16% over the same period in 2005. Net earnings for the third quarter, however, decreased by 17%, reflecting the financial impact of several major initiatives launched earlier in the year. These initiatives are largely aimed at increasing manufacturing throughput to capture the high level of market activity and include the acquisition and installation of new equipment, physical plant reconfiguration and hiring and training of additional resources. Mr. Jim Rakievich, McCoy President and CEO, reported that management anticipates that net earnings will improve as the process enhancements take hold in the coming months.

Gross profit increased by 27%, or $2,417,600 for the third quarter of 2006 compared to the same period in 2005. Gross profit for the nine months ended September 30, 2006 increased by 32% or $7,558,157 as the results of increased manufacturing throughput began to materialize and Inotec contributed to the Corporation's performance for August and September.

The Corporation announced the completion of the purchase of the shares of Inotec on August 1, 2006. Inotec is a profitable, well-established specialized service and fabrication company currently employing approximately 140 people. Inotec is a market leader in the application of materials for prevention of wear, erosion and corrosion as well as the manufacturing and servicing of hydraulic components. Inotec's customers operate in the Oil & Gas, Oil Sands, Mining, and Pulp and Paper industries. Mr. Rakievich remarked that the acquisition was a significant step in McCoy Corporation's growth strategy because it enables direct participation in the Oil Sands projects and complements current business segments that also serve customers in the same industries. Approximately 40% of Inotec's revenues are derived from customers operating in the Oil Sands area of Northern Alberta. Inotec serves its customers from its Edmonton facility with additional sales support based in Fort McMurray, Alberta.

McCoy Corporation generates revenue primarily from the oil and gas, construction, mining and forestry sectors. Mr. Rakievich commented that during the third quarter, all of the Corporation's operations continued to experience robust sales with steady demand for their services and manufactured products. Heading into the fourth quarter, there may be some early indications of a slight retraction in the oil and gas sector, however, current and forward order books remain strong and he believes that all operations will maintain or increase their current level of activity for at least the near future. Meanwhile, management will persist in its efforts to further trim production costs and fulfill its mandate to reduce inventory levels through newly-introduced supply chain initiatives.

This release may contain forward looking statements within the meaning of the "safe harbor" provisions of U.S. and other applicable laws. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. The Corporation does not assume any obligation to update any forward looking information contained in this news release.

Contact Information