EDMONTON, AB, Aug. 7, 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 June 30, 2026.

Second Quarter Highlights:

• Revenue decreased 28% to $17.2 million, compared to $24.1 million in Q2 2025. The overall decline in revenue was primarily due to geopolitical instability in the Middle East and the effective suspension of shipping through the Strait of Hormuz, which resulted in delayed customer shipments and deferred customer capital purchase decisions. smartProduct revenue of $10.5 million accounted for 61% of total revenue (three months ended June 30, 2025 – $13.9 million or 58% of total revenue) and continues to represent the majority of the Corporation's revenue.
• Net earnings decreased 92% to $0.1 million compared to the second quarter of 2025 of $1.4 million primarily due to lower shipment volumes, delayed customer activity and reduced absorption of operating costs.
• Adjusted EBITDA¹ of $1.9 million, or 11% of revenue, compared with $4.8 million, or 20% of revenue, in Q2 2025. The percentage of revenue decline from the comparative period was primarily attributable to lower shipment volumes, reduced absorption of fixed costs, as well as strategic pricing initiatives on certain tongs and mechanical CRT orders in targeted regions to convert inventory into cash and expand the Corporation's installed base, supporting future recurring revenue opportunities.
• Advanced the Technology Roadmap through continued field operation of the fully integrated smarTR™ system, advancement of smart Tailing Stabbing Arm (smartTSA™) field trials, and ongoing development of smarTR™ accessories and software enhancements to support broader commercial adoption, improved automation, and targeted labour reductions.
• Meaningfully improved liquidity during the quarter, generating $7.4 million of operating cash flow, ending the period with no debt and $8.3 million of net cash providing balance sheet flexibility to navigate the current market environment while continuing to advance strategic priorities.

"Second quarter results reflected the impact of extended geopolitical instability in the Middle East, including logistics constraints, delayed customer shipments and deferred capital purchase decisions," said Bing Deng, President & CEO. "At the same time, we strengthened our balance sheet, improved liquidity and continued to execute against our technology roadmap. While near-term market visibility remains limited, we remain focused on disciplined execution, advancing commercialization of our technology portfolio and positioning the business to capitalize on future growth opportunities."

"Despite lower revenue and earnings compared with the prior year period, McCoy meaningfully strengthened its financial position during the quarter," said Lindsay McGill, Vice President & CFO. "We generated $7.4 million of operating cash flow, ended the quarter with no debt, and $8.3 million of net cash. This liquidity provides important flexibility as we navigate near-term market uncertainty, manage delivery timing in affected regions and continue investing selectively in product development, customer support and strategic market opportunities. Our focus remains on disciplined capital allocation, working capital management and preserving balance sheet strength while positioning the business for improved activity levels as customer purchasing and logistics conditions normalize."

McCoy also announced that Lindsay McGill, Vice President & Chief Financial Officer, intends to commence a planned maternity leave of absence in the fourth quarter of 2026. To ensure continuity during Ms. McGill's temporary leave, the Corporation expects to appoint an interim Chief Financial Officer who is anticipated to join McCoy in the fourth quarter of 2026. Ms. McGill remains committed to the Corporation and will work closely with the interim CFO and management team to support an orderly transition of responsibilities before the commencement of her leave.

Second Quarter Financial Highlights:

• Total revenue of $17.2 million, compared with $24.1 million in Q2 2025;
• Net earnings of $0.1 million, compared to $1.4 million in Q2 2025;
• Adjusted EBITDA¹ of $1.9 million, or 11% of revenue, compared with $4.8 million, or 20% of revenue, in Q2 2025;
• Booked backlog² of $18.4 million at June 30, 2026, compared to $24.6 million in Q2 2025;
• Book-to-bill ratio³ was 0.70 for the three months ended June 30, 2026, compared with 0.93 in Q2 2025.

Financial Summary

Revenue for the three and six months ended June 30, 2026 decreased 28% and 39%, 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 contributed to delays in contract awards and customer capital purchase decisions, as well as delayed shipments and reduced revenue recognition. Despite the overall decline in revenue, smartProduct sales continued to represent the majority of the Corporation's revenue, accounting for 61% and 54% of total revenue for the three and six months ended June 30, 2026, respectively (58% and 58% for the three and six months ended June 30, 2025).

Gross profit as a percentage of revenue for the three and six months ended June 30, 2026 was 20% and 15%, respectively, compared to 36% and 35% for the corresponding periods in 2025. The decrease in gross profit percentage primarily reflects substantially lower revenue levels during the current period, which materially reduced the Corporation's ability to absorb fixed costs. In the current period, gross margin was also impacted by strategic pricing initiatives on  certain tong and mechanical CRT orders to convert inventory into cash and expand the Corporation's installed base, supporting future recurring revenue opportunities. The Corporation continued to realize the benefits of cost-reduction initiatives implemented in March 2026, including workforce reductions; however, these savings were insufficient to fully offset the impact of lower shipment volumes and reduced fixed cost absorption during the period.

For the three and six months ended June 30, 2026, general and administrative expenses (G&A) totaled $1.7 million and $3.1 million, respectively, a decrease from the comparative periods primarily attributable to lower stock-based compensation expense due to the remeasurement of cash-settled awards; bad debt recoveries recognized in the three and six month periods ended June 30, 2026 compared to bad debt expense in 2025; and lower salaries and benefits expense, reflecting lower short-term incentive costs and reduced headcount following the workforce reductions implemented in March 2026.

For the three and six months ended June 30, 2026, sales and marketing expenses were $0.9 million and $1.4 million, respectively. The decrease from the comparable periods was primarily attributable to lower salaries and benefits expense due to lower short-term incentive expense and reduced headcount following workforce reductions implemented in March 2026. These decreases were partially offset by higher marketing expenditures during the current period. As a percentage of revenue, Sales & Marketing increased 1% from the comparative periods.

With total product development and support expenditures of $1.7 million and $3.4 million during the three and six months ended June 30, 2026, respectively, the Corporation further advanced its 'Technology Roadmap' through the design and development of additional smart product enhancements and complementary product accessories for McCoy's smartProduct portfolio. The Corporation continued field trials of its smart Tailing and Stabbing Arm (smartTSA™), an automated casing alignment solution designed to precisely guide tubulars during stabbing and make up operations, along with 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. Product development and support expenses decreased for the three and six months ended June 30, 2026 compared to the corresponding periods in 2025, primarily due to a higher proportion of labour costs being capitalized as development expenditures, lower intellectual property-related costs, and reduced salaries and benefits expense resulting from cost-reduction initiatives implemented in March 2026.

Net earnings for the three months ended June 30, 2026, was $0.1 million or $nil per basic share, compared with net earnings of $1.4 million or $0.05 per basic share in the second quarter of 2025. Adjusted EBITDA¹ for the three months ended June 30, 2026, was $1.9 million compared with $4.8 million for the second quarter of 2025.

As at June 30, 2026, the Corporation had $8.3 million in net cash⁴.

Selected Quarterly Information

Summary of Quarterly Results

Outlook and Forward-Looking Information

Geopolitical instability in the Middle East continued through the second quarter of 2026 and has persisted longer than initially anticipated. The extended duration and uncertainty of the conflict have reduced visibility over the operating environment, and the Corporation expects logistics disruptions, project deferrals and lower order activity to continue through 2026 before shipping corridors, insurance availability and customer purchasing behaviour begin to normalize. The Corporation has near-term visibility over third-quarter revenue based on its existing backlog. However, approximately 30% of backlog at June 30, 2026 is destined for the Middle East region, where continued logistics and security constraints may further affect delivery timing and revenue recognition.

In spite of this near term uncertainty, 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. Over the next 12 months, several TRS contract awards remain under consideration which, in aggregate, represent a potential opportunity involving more than 100 rigs being allocated to TRS customers. Although the timing of awards remains uncertain, customers have remained engaged in NOC negotiations, which management views as a positive indication of continued underlying demand and progress towards a tender award announcement. The Corporation's smartCRT™ is one of only two non‑proprietary tools that presently meets the technical qualification requirements under one of the larger regional tender frameworks, positioning McCoy favourably should awards proceed. Looking beyond 2026, the Corporation anticipates a further NOC TRS tender cycle in 2027 in a separate geography, representing an additional potential cumulative opportunity in excess of 200 rigs. Accordingly, McCoy's focus remains 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.

Against this backdrop of extended geopolitical instability in Middle Eastern geographies, management believes underlying customer demand remains intact and, in certain respects, may be strengthening as regional production capacity constraints increase the need to restore and expand drilling activity over time. Recent developments, including the United Arab Emirates' announced exit from OPEC and OPEC+, reinforce expectations that activity levels across the Corporation's core Middle Eastern markets may recover to levels above pre-conflict expectations, due to significant production capacity losses.

In the North American land market, drilling activity remains subdued. 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 adoption to follow a deliberate and iterative path, with continuous refinements informed by field experience and customer feedback. Importantly, pace of adoption is further driven by customer economics: the smarTR™ system replaces fully depreciated, labor-intensive conventional equipment, and the return profile is therefore closely tied to realized labor savings and operating efficiencies at the wellsite.

The Corporation implemented workforce reductions and other cost-reduction initiatives in March 2026 to better align its cost structure with reduced activity levels. These actions reduced operating expenses in the second quarter of 2026 and are intended to preserve operational flexibility while maintaining investment in critical strategic priorities, including product development, controlled system deployment, customer support and global technical capabilities. Capital expenditures for the remainder of 2026 are expected to be focused on:

• up to US$1.1 million of investment in the development of 'Technology Roadmap' offerings; and
• up to US$0.6 million of strategic investment in rental equipment, largely transferred from inventory, where meaningful returns are expected, and to a lesser extent, maintenance production equipment.

McCoy's longstanding international customer relationships and geographically diversified operations position the Corporation to pursue opportunities in markets where activity levels improve. While these opportunities may help mitigate prolonged regional disruption, management expects the timing of order activity and revenue conversion to remain dependent on customer capital spending decisions, logistics availability and broader market conditions. The Corporation also meaningfully improved liquidity during the quarter, generating $7.4 million of operating cash flow, ending the period with no debt and $8.3 million of net cash providing balance sheet flexibility to navigate the current market environment while continuing to advance strategic priorities.

Although near‑term revenue and order timing remain uncertain, management remains confident in the Corporation's long‑term strategy and technology roadmap. The current environment underscores the value proposition of McCoy's solutions, and management believes that once market conditions stabilize, the combination of constrained supply, elevated drilling requirements, and heightened safety and efficiency mandates is expected to drive renewed demand for the Corporation's smartProduct offerings.

About McCoy Global Inc.

McCoy Global is transforming well construction using automation and machine learning to maximize wellbore integrity and collect precise connection data critical to the global energy industry. The Corporation has offices in Canada, the United States of America, and the United Arab Emirates and operates internationally in more than 50 countries through a combination of direct sales and key distributors.

Throughout McCoy's 102-year history, it has proudly called Edmonton, Alberta, Canada its corporate headquarters. The Corporation's shares are listed on the Toronto Stock Exchange and trade under the symbol "MCB".

¹ EBITDA is a non-GAAP measure defined as net earnings (loss), before depreciation of property, plant and equipment; amortization of intangible assets; income tax expense (recovery); and finance charges, net. Adjusted EBITDA is a non-GAAP measure defined as net earnings (loss), before: depreciation of property, plant and equipment; amortization of intangible assets; income tax expense (recovery); finance charges, net; provisions for excess and obsolete inventory; other (gains) losses, net; restructuring charges; share-based compensation; and impairment losses. The Corporation reports on EBITDA and adjusted EBITDA because they are key measures used by management to evaluate performance. The Corporation believes adjusted EBITDA assists investors in assessing McCoy Global's current operating performance on a consistent basis without regard to non-cash, unusual (i.e. infrequent and not considered part of ongoing operations), or non-recurring items that can vary significantly depending on accounting methods or non-operating factors. Adjusted EBITDA is not considered an alternative to net earnings (loss) in measuring McCoy Global's performance. Adjusted EBITDA does not have a standardized meaning and is therefore not likely to be comparable to similar measures used by other issuers.

² McCoy Global defines backlog as orders that have a high certainty of being delivered and is measured on the basis of a firm customer commitment, such as the receipt of a purchase order. Customers may default on or cancel such commitments but may be secured by a deposit and/or require reimbursement by the customer upon default or cancellation. Backlog reflects likely future revenues; however, cancellations or reductions may occur and there can be no assurance that backlog amounts will ultimately be realized as revenue, or that the Corporation will earn a profit on backlog once fulfilled. Expected delivery dates for orders recorded in backlog historically spanned from one to six months. Under current market conditions, many customers have shifted their purchasing towards just-in-time buying.

³ The book-to-bill ratio is a measure of the amount of net sales orders received to revenues recognized and billed in a set period of time. The ratio is an indicator of customer demand and sales order processing times. The book-to-bill ratio is not a GAAP measure and therefore the definition and calculation of the ratio will vary among other issuers reporting the book-to-bill ratio. McCoy Global calculates the book-to-bill ratio as net sales orders taken in the reporting period divided by the revenues reported for the same reporting period.

⁴ Net cash is a non-GAAP measure defined as cash and cash equivalents, plus: restricted cash, less: borrowings.

⁵ smartProduct revenue is a non-GAAP measure and includes sales, rental and services revenues from those products and technologies developed under the Corporation's technology roadmap initiative. The metric includes revenues from flush mount spiders (FMS), casing running tools (CRTs), smartTONGs and related software and accessories. The Corporation believes smartProduct revenue is a key metric that can assist investors in assessing how McCoy Global has executed on its technology roadmap strategy.

Forward-Looking Information

This News Release contains forward looking statements and forward-looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward looking information is often, but not always, identified by the use of words such as "could", "should", "can", "anticipate", "expect", "objective", "ongoing", "believe", "will", "may", "projected", "plan", "sustain", "continues", "strategy", "potential", "projects", "grow", "take advantage", "estimate", "well positioned" or similar words suggesting future outcomes. This New Release contains forward looking statements respecting the business opportunities for the Corporation that are based on the views of management of the Corporation and current and anticipated market conditions; and the perceived benefits of the growth strategy and operating strategy of the Corporation are based upon the financial and operating attributes of the Corporation as at the date hereof, as well as the anticipated operating and financial results. Forward-looking statements regarding the Corporation are based on certain key expectations and assumptions of the Corporation concerning anticipated financial performance, business prospects, strategies, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the ability to obtain financing on acceptable terms, which are subject to change based on market conditions and potential timing delays. Although management of the Corporation consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in the forward looking statements, including inability to meet current and future obligations; inability to complete or effectively integrate strategic acquisitions; inability to implement the Corporation's business strategy effectively; access to capital markets; fluctuations in oil and gas prices; fluctuations in capital expenditures of the Corporation's target market; competition for, among other things, labour, capital, materials and customers; interest and currency exchange rates; technological developments; global political and economic conditions; global natural disasters or disease; and inability to attract and retain key personnel. Readers are cautioned that the foregoing list is not exhaustive. The reader is further cautioned that the preparation of financial statements in accordance with IFRS requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. These judgments and estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes. The information contained in this News Release identifies additional factors that could affect the operating results and performance of the Corporation. We urge you to carefully consider those factors. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this News Release are made as of the date of this New Release and the Corporation does not undertake and is not obligated to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

SOURCE McCoy Global Inc.