McCoy Corporation
TSX : MCB

McCoy Corporation

March 11, 2008 21:51 ET

McCoy Corporation Announces Year End Results for 2007- Its Sixth Consecutive Year of Revenue and Earnings Growth

EDMONTON, ALBERTA--(Marketwire - March 11, 2008) - McCoy Corporation ("McCoy" or the "Corporation") (TSX:MCB) today announced results for the three and twelve months ended December 31, 2007. Revenue for the year was $161.1 million, an increase of $16.6 million or 11% compared to 2006. Cash flow from continuing operations for 2007 increased by $11.7 million over the prior year, from $2.4 million to $14.1 million. Annual net earnings were $8,103,327, up $238,470 compared to the 2006 fiscal year. Revenue for the 2007 fourth quarter increased by 2% over the 2006 fourth quarter to $43.2 million. Net earnings for the fourth quarter were down by $572,878 to $1,679,408, compared to $2,252,286 for the fourth quarter of 2006. Growth in 2007 was attributable to strong performance from the Corporation's Energy Products & Services segment, including five months of results from McCoy's recent U.S. acquisitions, Superior Manufacturing & Hydraulics, Inc. ("Superior") and Precision Die Technologies, L.L.C. ("Precision"). This was offset to a large extent by reduced sales from the Corporation's Trailer Manufacturing segment, due to the significant reduction of oil and gas activity in the Western Canadian Sedimentary Basin ("WCSB").

"We managed to grow our operating results in 2007 despite the continued weakness in conventional drilling and logging activity in Western Canada and a strong Canadian dollar," said Mr. Jim Rakievich, McCoy's President and CEO. "Revenue generated by the Energy Products & Services segment grew by $33.5 million or 79%, driving 11% growth in McCoy's 2007 consolidated revenue after including decreased revenue contributions from our other two operating segments. This growth was due to a full year of results from Inotec Coatings and Hydraulics Inc., compared to five months in 2006, five months of revenue from our recent acquisitions, Superior and Precision, and a record-breaking year from Farr Canada. Cash flow from operations improved as our lean manufacturing initiatives enabled our business units to increase throughput while better managing working capital and reducing inventories."



Financial Highlights
Year Ended December 31, 2007

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($000's, except per share amounts) 2007 2006 % increase
(decrease)
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Revenue 161,061 144,499 11
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Net earnings 8,103 7,865 3
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Basic earnings per share before
discontinued operations 0.36 0.45 (20)
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Basic earnings per share 0.34 0.42 (19)
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Diluted earnings per share before
discontinued operations 0.36 0.43 (16)
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Diluted earnings per share 0.33 0.40 (18)
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EBITDAS (1) 17,821 16,830 6
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EBITDAS (1)per share 0.75 0.90 (17)
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Cash flow from continuing
operations(2) 14,123 2,455 475
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Cash flow per share from
continuing operations(2) 0.59 0.13 354
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Total Assets 116,197 82,288 41
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Total Liabilities 40,137 52,127 (23)
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Total Long-term Liabilities 14,414 15,169 (5)
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Fourth Quarter 2007

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($000's, except per share amounts) 2007 2006 % increase
(decrease)
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Revenue 43,175 42,397 2
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Net earnings for the period 1,679 2,252 (25)
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Basic earnings per share before
discontinued operations 0.07 0.13 (46)
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Basic earnings per share 0.06 0.12 (50)
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Diluted earnings per share before
discontinued operations 0.07 0.12 (42)
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Diluted earnings per share 0.06 0.11 (45)
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Cash flow from continuing operations(2) 8,142 256 3,080
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Cash flow per share from continuing
operations(2) 0.29 0.01 2,800
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(1) EBITDAS, a non-GAAP measurement, is defined by the Corporation as
"Earnings before interest, taxes, depreciation, amortization and
stock-based compensation".
(2) After net change in non-cash working capital items


Outlook for 2008

McCoy's Energy Products & Services segment has solid growth potential from its international sales network and exposure to accelerating activity in the Alberta oil sands. The results of the Truck & Trailer Products & Services segment are expected to improve with the removal of the negative impact of the Fort St. John operation (discontinued operations) and continuing healthy demand for services at the Alberta-based operations. 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 oil and gas and logging sectors. It is anticipated that the Trailer Manufacturing segment will experience gradual revenue improvement as 2008 progresses. McCoy's international sales, which were mostly related to the oil and gas industry, increased from 16% of revenue in 2006 to 29% of revenue in 2007, and this trend is expected to continue. If the current upward trends in oil and gas commodity prices 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.

Conference Call

McCoy will host a conference call and webcast on Wednesday, March 12 at 8 a.m. Mountain time (Edmonton)(10 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 March 19, 2008 by calling +1-866-245-6755 or +1-416-915-1035. The replay passcode number is 696989. As well, the webcast 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 and dies and inserts for oilfield tools, and produces wear-reducing coatings for drilling tools and oilsands equipment. TLM is the leading Western Canadian manufacturer of custom heavy duty trailers serving the oil and gas, forestry and construction 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.

This release and McCoy's website referenced therein 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.

For further information please visit www.mccoycorporation.ca.

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