Mccoy Global Inc. press release

McCOY GLOBAL ANNOUNCES THIRD QUARTER 2026 RESULTS

2026-11-06

TSX - Toronto Stock Exchange · Canada · Corporate Finance

Canada NewsWire

EDMONTON, AB, Nov. 6, 2026/CNW/ -- McCoy Global Inc.("McCoy," "McCoy Global" or "the Corporation") (TSX: MCB) today announced its operational and financial results for the three months ended September30, 2026.

Third Quarter Highlights:

Reported revenue of $13.4 million for the quarter, a decrease of 10% from the comparative period, primarily due to the continued geopolitical instability in the Middle East and the effective suspension of shipping through the Strait of Hormuz, which contributed to delays in contract awards and customer capital purchase decisions. Reported smartProduct revenue of $4.9 million, accounting for 37% of total revenue (three months ended September 30, 2025 – revenue of $4.0 million, accounting for 27% of total revenue). Subsequent to September 30, 2026, McCoy received approximately $7.6 million of smartProduct orders from customers in the Middle East, with deliveries expected from the fourth quarter of 2026 through the first half of 2027. Reported net loss of $1.0 million compared with net earnings of $0.6 million in the comparative period in 2025. Earnings in the current period were impacted by lower revenue and production throughput, which reduced the Corporation's ability to absorb fixed operating costs. Gross profit in the third quarter of 2026 was also impacted by continued smarTR™ product support and servicing of a higher volume of rental equipment returned during the second quarter of 2026. Comparability to the prior-year period was also affected by the reversal of short-term incentive accruals recognized in the third quarter of 2025. Adjusted EBITDA1for the three months ended September 30, 2026, was $1.0 million or 7% of revenue (Q3 2025 – $2.0 million or 14% of revenue). The decrease primarily reflects lower revenue and reduced absorption of fixed operating costs, partially offset by lower operating expenses. Achieved several key commercial and product development milestones during the third quarter of 2026: The Corporation successfully completed validation of its smart Tail Stabbing Arm (smartTSA™), an automated casing tailing and alignment solution designed to eliminate personnel exposure to red-zone activities during casing operations. Following validation, McCoy completed multiple smartTSA™ unit sales and has scheduled additional customer demonstrations to showcase the tool's safety, operational, and efficiency benefits. The smartTSA™, together with newly released accessories, complete the critical system elements required to eliminate red-zone exposure during casing running operations and provide an important foundation for broader adoption of the smarTR™ platform. McCoy also advanced its automation roadmap through the successful completion of its first controlled rig event utilizing sequence automation technology. The trial delivered positive results and marks an important milestone toward achieving the technology readiness required for deployment in active operations. Additional validation and development remain necessary before broader commercial deployment, and the Corporation expects adoption to progress incrementally as customers gain operating experience with the technology. Subsequent to September 30, 2026, the Corporation entered into a memorandum of understanding with Al Masaood Energy to assess potential cooperation in the United Arab Emirates aimed at supporting the deployment and broader adoption of smarTR™. The assessment includes opportunities to enhance local fulfillment capabilities and in-country customer support.

"The market environment remains challenging, but we are seeing encouraging signs from customers and continued progress in our technology roadmap," said Bing Deng, President & CEO. "The commercialization of smartTSA™, our first sequence automation rig event, and additional customer orders following quarter-end demonstrate tangible progress in executing our strategy. While the timing of customer spending remains difficult to predict, the industry's long-term need for safer, more efficient, and increasingly automated operations continues to support significant opportunities for McCoy."

"While lower customer activity levels impacted our financial results this quarter, we remained focused on the areas within our control," said Elyse Colbert, Interim CFO. "We continued to carefully manage costs, working capital, and capital expenditures while maintaining the flexibility to support our strategic priorities, manage near-term shipment timing, and continue to invest selectively in technology commercialization and customer opportunities. Our focus remains on disciplined execution through the current market environment while ensuring we are well positioned to capitalize on future opportunities as customer activity improves."

Management Update:

Effective September 28, 2026, Elyse Colbert joined McCoy Global Inc. as Interim Chief Financial Officer during the planned maternity leave of Lindsay McGill, Vice President & Chief Financial Officer. Ms. Colbert will oversee the Corporation's finance function and financial reporting activities during Ms. McGill's leave of absence. McCoy looks forward to welcoming Ms. McGill back following the conclusion of her leave.

Third Quarter Financial Highlights:

Total revenue of $13.4 million, compared with $14.8 million in Q3 2025; Net loss of $1.0 million, compared to net earnings of $0.6 million in Q3 2025; Adjusted EBITDA1of $1.0 million, or 7% of revenue, compared with $2.0 million, or 14% of revenue, in Q3 2025; Backlog2of $16.3 million at September 30, 2026, compared to $27.7 million in the third quarter of 2025. Subsequent to September 30, 2026, the Corporation received multiple orders from customers in the Middle East totaling approximately $7.6 million for its smartProducts. Deliveries are expected from the fourth quarter of 2026 through the first half of 2027; Book-to-bill ratio3was 0.84 for the three months ended September 30, 2026, compared with 1.18 in the third quarter of 2025.

Financial Summary

Revenue for the three and nine months ended September 30, 2026 decreased 10% and 31%, respectively, compared to the same periods in 2025. The decrease was primarily attributable to continued geopolitical instability in the Middle East and the effective suspension of shipping through the Strait of Hormuz, which continued to contribute to delays in contract awards and customer capital purchase decisions. Despite the overall decline in revenue, smartProduct revenue increased 23% in the three months ended September 30, 2026 compared to the third quarter of 2025 and represented 37% of the Corporation's revenue in the quarter, compared to 27% in the comparative period in 2025. During the quarter, the Corporation commercialized its smart Tailing and Stabbing Arm (smartTSA™), an automated casing tailing and alignment solution, and completed initial sales to multiple customers in North America.

Gross profit as a percentage of revenue for the three and nine months ended September 30, 2026, was 17% and 16% (2025 – 22% and 32%), respectively, a decrease of five and sixteen percentage points from the comparative periods in 2025. The decrease primarily reflects lower revenue and production throughput, which reduced the Corporation's ability to absorb fixed operating costs, as well as higher provisions for excess and obsolete inventory. Gross profit was also impacted by costs associated with continued smarTR™ product support and the servicing of a higher volume of rental equipment returned during the second quarter of 2026. The servicing costs were incurred to prepare the equipment for redeployment, with certain assets placed under new rental contracts during the third quarter. Gross profit for the three months ended September 30, 2026 includes a $0.3 million provision for excess and obsolete inventory (three months ended September 30, 2025 – $0.3 million). Gross profit for the nine months ended September 30, 2026 includes a $1.2 million provision for excess and obsolete inventory (nine months ended September 30, 2025 – $0.6 million).

For the three and nine months ended September 30, 2026, general and administrative expenses (G&A) totaled $1.6 million and $4.7 million, respectively. G&A expenses for the three months ended September 30, 2026 increased 4% compared to the same period in 2025. The increase is primarily attributable to the reversal of short-term incentive accruals in the comparative period in 2025, partially offset by lower salaries and benefits expense following workforce reductions implemented in March 2026. For the nine months ended September 30, 2026, G&A expenses decreased 49% compared to the same period in 2025. The decrease is mainly driven by lower stock-based compensation expense, lower salaries and benefits expense, and the recovery of previously recognized bad debt expense. Lower stock-based compensation expense was primarily attributable to the remeasurement of cash-settled awards, including the impact of share price appreciation in the comparative period in 2025 and the vesting of a previous non-recurring issuance of director performance share units in December 2025. Salaries and benefits expense decreased primarily as a result of workforce reductions implemented in March 2026. For the nine months ended September 30, 2026, the Corporation recognized a $0.1 million recovery of previously recognized bad debt expense, compared to bad debt expense of $0.9 million in the comparative period in 2025. Share-based compensation was a $0.1 million recovery for the nine months ended September 30, 2026 (nine months ended September 30, 2025 – $2.3 million expense).

For the three and nine months ended September 30, 2026, Sales & Marketing expenses were $0.5 million and $1.9 million, respectively. For the three months ended September 30, 2026, Sales & Marketing expenses increased 3% compared to the same period in 2025 due to the reversal of short-term incentive accruals in the comparative period in 2025, partially offset by lower salaries and benefits expense following workforce reductions implemented in March 2026. For the nine months ended September 30, 2026, Sales & Marketing expenses decreased 8% compared to the same period in 2025. The decrease primarily reflected lower salaries and benefits expense as a result of lower short-term incentive costs and workforce reductions implemented in March 2026, partially offset by higher marketing expenditures in the current period.

With total product development and support expenditures of $1.8 million and $5.3 million during the three and nine months ended September 30, 2026, respectively, McCoy continued to advance its Technology Roadmap initiative through the design, development, and field validation of additional smartProduct enhancements and system capabilities. During the three months ended September 30, 2026, the Corporation commercialized its smart Tailing and Stabbing Arm (smartTSA™), an automated casing alignment solution designed to precisely guide tubulars during stabbing and make up operations, and continued field trials for additional smarTR™ accessories that represent the final system elements required to achieve targeted labour reductions. Alongside these hardware initiatives, McCoy continued to advance software enhancements across its integrated platform, focused on improving system efficiency, automation, performance optimization, and expanding analytics and reporting capabilities. Product development and support expenses increased for the three months ended September 30, 2026 compared to the corresponding period in 2025 due to the reversal of short-term incentive accruals in the comparative period as well as higher travel costs associated with product deployment activities, partially offset by lower salaries and benefits expense following workforce reductions implemented in March 2026. Product development and support expenses decreased for the nine months ended September 30, 2026 compared to the corresponding period in 2025, primarily due to a higher proportion of labour costs being capitalized as development expenditures and lower intellectual property-related costs. Capitalized development expenditures decreased compared to the prior year due to lower prototype costs in the current periods.

Net loss for the three months ended September 30, 2026, was $1.0 million or $0.04 per basic share, compared with net earnings of $0.6 million or $0.02 per basic share in the third quarter of 2025. Adjusted EBITDA1for the three months ended September 30, 2026, was $1.0 million compared with $2.0 million for the third quarter of 2025.

As at September 30, 2026, the Corporation had $3.7 million in net cash4.

Selected Quarterly Information

| ($000 except per share amounts and percentages) | Q3 2026 | Q3 2025 | % Change | | Total revenue | 13,376 | 14,828 | (10 %) | | Gross profit | 2,265 | 3,307 | (32 %) | | as a percentage of revenue | 17 % | 22 % | (5 %) | | Net (loss) earnings | (1,026) | 554 | (285 %) | | as a percentage of revenue | (8 %) | 4 % | (12 %) | | per common share – basic | (0.04) | 0.02 | (300 %) | | per common share – diluted | (0.04) | 0.02 | (300 %) | | Adjusted EBITDA1 | 959 | 2,029 | (53 %) | | as a percentage of revenue | 7 % | 14 % | (7 %) | | per common share – basic | 0.04 | 0.08 | (50 %) | | per common share – diluted | 0.04 | 0.07 | (43 %) | | Total assets | 82,924 | 92,637 | (10 %) | | Total liabilities | 14,814 | 28,515 | (48 %) | | Total non-current liabilities | 185 | 1,671 | (89 %) |

Summary of Quarterly Results

| ($000 except per share amounts) | Q3 2026 | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | | Revenue | 13,376 | 17,239 | 9,362 | 25,554 | 14,828 | 24,051 | 19,346 | 25,222 | | Net (loss) earnings | (1,026) | 113 | (3,159) | 6,148 | 554 | 1,367 | 946 | 4,255 | | as a % of revenue | (8 %) | 1 % | (34 %) | 24 % | 4 % | 6 % | 5 % | 17 % | | per share – basic | (0.04) | - | (0.12) | 0.23 | 0.02 | 0.05 | 0.03 | 0.16 | | per share – diluted | (0.04) | - | (0.12) | 0.22 | 0.02 | 0.05 | 0.03 | 0.15 | | EBITDA1 | 240 | 1,163 | (2,258) | 8,176 | 1,630 | 2,978 | 2,276 | 5,598 | | as a % of revenue | 2 % | 7 % | (24 %) | 32 % | 11 % | 12 % | 12 % | 22 % | | Adjusted EBITDA1 | 959 | 1,926 | (1,269) | 6,498 | 2,029 | 4,817 | 3,479 | 6,534 | | as a % of revenue | 7 % | 11 % | (14 %) | 25 % | 14 % | 20 % | 18 % | 26 % |

Outlook and Forward-Looking Information

McCoy continues to view the Middle East as one of its most significant long-term growth opportunities. Across select Middle Eastern geographies, multi‑year national oil company ("NOC") development programs, active tubular running services ("TRS") tender frameworks with limited qualified suppliers, and ongoing safety and automation mandates continue to support a durable pipeline of opportunities for the Corporation's smartProduct offerings. As the Corporation enters the final quarter of 2026, management's primary focus in the region is executing on existing customer commitments, converting backlog to revenue, and advancing customer qualification and tender activities that may support future growth. Several TRS contract awards remain under consideration which, in aggregate, represent a potential opportunity involving more than 100 rigs being allocated to TRS customers; however, the timing of awards remains uncertain and management expects any significant commercial benefits to be more relevant to 2027 and beyond than to the Corporation's results for 2026. Customers remain engaged in NOC negotiations, which management views as a positive indication of continued underlying demand and ongoing advancement of the tender process. The Corporation's smartCRT™ is one of only two non‑proprietary tools currently meeting the technical qualification requirements under one of the larger regional tender frameworks, positioning McCoy favourably should awards proceed. Looking ahead to 2027, the Corporation anticipates a further NOC TRS tender cycle in a separate geography, representing an additional potential cumulative opportunity in excess of 200 rigs. Accordingly, during the remainder of 2026 and into 2027, McCoy will continue to focus on methodical market development and technical qualification efforts with key customers, including the objective of having smarTR™ eligible under relevant tenders and supporting enhanced day‑rate potential when the Corporation's technology replaces conventional tools.

Geopolitical instability in the Middle East continues to create uncertainty in the timing of customer purchasing decisions, contract awards, product shipments, and revenue recognition. The conflict has persisted longer than initially anticipated and the Corporation expects logistics disruptions, project deferrals, and slower order activity to continue until shipping corridors, insurance availability, and customer purchasing behaviours normalize. The Corporation has reasonable visibility over a significant portion of expected fourth-quarter revenue based on its existing backlog and recently received orders. However, approximately 48% of backlog at September 30, 2026 is destined for the Middle East region, and continued logistics and security constraints may impact delivery timing and revenue recognition during the remainder of 2026 and into 2027. Despite these near-term challenges, management believes underlying customer demand remains intact and that deferred activity is being postponed rather than permanently eliminated. As regional operators seek to maintain and expand production capacity, management believes demand for technologies that improve operational efficiency, safety, and workforce productivity will remain an important industry priority. Subsequent to September 30, 2026, the Corporation entered into a memorandum of understanding with Al Masaood Energy to assess potential cooperation in the United Arab Emirates aimed at supporting the deployment and broader adoption of smarTR™. The assessment includes opportunities to enhance local fulfillment capabilities and in-country customer support.

In the North American land market, drilling activity remained stable through the third quarter of 2026 with operators maintaining a disciplined approach to capital spending. Looking into 2027, the Corporation expects industry demand for technologies that improve wellsite safety, reduce labour requirements, and increase operational efficiency to remain supported by ongoing labour constraints and continued operator focus on capital efficiency.

During the third quarter of 2026, McCoy commercialized its smart Tail Stabbing Arm (smartTSA™), completed initial sales, and continued validation activities associated with its broader automation roadmap. The Corporation continues to take a targeted and deliberate approach to commercialization of its smarTR™ system, working closely with select partners to ensure the system exceeds performance expectations in the field. As a transformative solution that streamlines multiple tools, roles, and workflows into a unified system, smarTR™ marks a fundamental evolution in how tubular running services are delivered. Due to the complexity and operational impact of this innovation, McCoy expects commercialization, customer validation activities, and adoption to progress during the fourth quarter of 2026 and throughout 2027 in a deliberate and iterative manner, with continuous refinements informed by field experience and customer feedback. Importantly, customer adoption is also driven by project economics, as the smarTR™ system replaces labor-intensive conventional equipment that is often fully depreciated. Accordingly, realized labor savings, efficiency gains, and safety improvements at the wellsite remain key factors in supporting customer investment decisions.

Outside the Middle East and North America, the Corporation is selectively pursuing opportunities in Latin America, North Africa, and Asia-Pacific, where demand is supported by ongoing drilling activity, infrastructure development, and increasing interest in automation and digital technologies.