EDMONTON, AB, May 15, 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 March 31, 2026.
First Quarter Highlights:
-- Revenue decreased 52% to $9.4 million, compared to $19.3 million in Q1
2025. smartProduct revenue5 of $3.8 million accounted for 41% of total
revenue (three months ended March 31, 2025 -- 59%), a decrease of $7.6
million from the comparative period. The declines were primarily due to
geopolitical instability in the Middle East and the effective suspension
of shipping through the Strait of Hormuz, which delayed customer
shipments and deferred revenue recognition.
-- Net loss of $3.2 million, compared to net earnings of $0.9 million in the
first quarter of 2025, driven by substantially lower revenue, reduced
absorption of fixed operating costs, severance, and retirement--related
charges incurred during the quarter.
-- Adjusted EBITDA1 loss of $1.3 million, or (14%) of revenue, compared to
adjusted EBITDA earnings of $3.5 million, or 18% of revenue, in Q1 2025,
reflecting materially lower shipment volumes and reduced operating
leverage.
-- Order intake of $6.5 million, net of cancellations, representing a 72%
decline year--over--year and a 73% sequential decline. Reported order
intake was negatively impacted by the cancellation of $6.5 million of
previously booked backlog from a single Middle Eastern customer.
Excluding this cancellation, order intake would have otherwise totaled
approximately $13.0 million.
-- Advanced the Technology Roadmap, including the commencement of field
trials for the smart Tail Stabbing Arm (smartTSA(TM)) and continued
development of smarTR$(TM)$ system accessories, while maintaining
disciplined investment in strategic product development.
-- Maintained financial flexibility, ending the quarter with net cash4 of
$2.5 million and subsequently securing a new US$10.0 million asset--based
revolving credit facility, enhancing liquidity and reducing financing
risk amid near--term market uncertainty.
"First quarter results reflected the impact of elevated uncertainty in the Middle East, including logistics disruptions that delayed customer deliveries, deferred revenue, and resulted in a backlog cancellation from a single customer in the Middle East reassessing their near--term capital commitments," said Bing Deng, President and CEO. "While these conditions weighed on near-term revenue and margins, our customer engagement across the region remains active and our long-term outlook is increasingly constructive. The fundamental drivers of demand for our products, including well construction activity, operator urgency to restore and diversify production, and ongoing technology adoption, remain intact. We are well-positioned to support our customers through the recovery and the sustained activity cycle we expect to follow."
"Despite these near--term disruptions, progress against our Technology Roadmap continued during the quarter," added Mr. Deng. "We advanced field trials for key smartProduct system elements, continued to enhance our integrated software platform, and maintained close engagement with customers. While the timing of order activity and tender awards remains variable, underlying demand for technologies that improve safety, reduce labor requirements, and enhance operational consistency remains intact."
"Importantly, I want to recognize the dedication and resilience of our employees," Mr. Deng continued. "Our teams have remained engaged and highly collaborative in a challenging operating environment. Their ability to adapt quickly and continue delivering with discipline and efficiency has been critical. This commitment to doing more with less while maintaining our standards of safety and execution reflects the strength of our culture and positions us well for the opportunities ahead."
"In response to reduced shipment activity and limited near--term visibility, management undertook decisive actions during the quarter to realign our cost structure and preserve liquidity," said Lindsay McGill, Vice President and Chief Financial Officer. "These actions, which were implemented primarily in March, included reductions in force, reduced discretionary spending, and the deferral of non--essential capital expenditures. As these actions were implemented primarily late in the quarter, the full impact was not reflected in first quarter results. The benefits are expected to be realized in subsequent periods, supporting a return of gross profit, general and administrative, and sales and marketing expenses as a percentage of revenue to levels more consistent with historical performance."
"Importantly, we protected investment in critical technology development and customer support initiatives while strengthening our balance sheet," continued Ms. McGill. "Subsequent to quarter--end, we replaced our prior credit facility with a new US$10.0 million asset--based revolving facility, enhancing liquidity and financial flexibility. While near--term results are expected to remain sensitive to Eastern Hemisphere shipment timing and volume variability, these actions ensure we remain well positioned to support customers, navigate ongoing uncertainty, and execute our long--term strategy."
First Quarter Financial Highlights:
-- Total revenue of $9.4 million, compared with $19.3 million in Q1 2025.
-- Net loss of $3.2 million, compared to earnings of $0.9 million in Q1
2025.
-- Adjusted EBITDA1 loss of $1.3 million, or (14%) of revenue, compared with
$3.5 million, or 18% of revenue, in 2025.
-- Booked backlog2 of $23.3 million at March 31, 2026, compared to $27.5
million as at March 31, 2025.
-- Book-to-bill ratio3 was 0.69 for the three months ended March 31, 2026,
compared with 1.21 in the first quarter of 2025. Reported order intake of
$6.5 million was negatively impacted by the cancellation of $6.5 million
of orders included in previously booked backlog from a single customer
from the Middle East region during the quarter. Excluding this
cancellation, Q1 2026 order intake would have otherwise totaled $13.0
million.
Financial Summary
Revenue of $9.4 million for the three months ended March 31, 2026, decreased 52% from the comparative period. The decrease was primarily due to continued geopolitical instability in the Middle East and the effective suspension of shipping through the Strait of Hormuz, which resulted in delayed customer shipments and reduced revenue recognized during the quarter. As at December 31, 2025 ,over two-thirds of the Corporation's backlog was destined for the Middle East, a substantial portion of which was directly impacted by these disruptions.
Gross profit, as a percentage of revenue for the three months ended March 31, 2026, was 6%, a decrease of 28 percentage points from the comparative period in 2025. The decrease in gross profit primarily reflects substantially lower revenue levels, which materially reduced the Corporation's ability to absorb fixed operating costs across assembly, service, and support functions. While the Corporation took actions to align its cost structure with reduced activity levels, including reductions in force implemented in March 2026, the full impact of these actions was not realized within the quarter. The Corporation's cost reduction initiatives are intended to support a return to more normalized gross profit performance on an annualized basis as shipment activity stabilizes and revenue levels improve; however, near--term gross margin performance is expected to remain sensitive to volume variability.
For the three months ended March 31, 2026, general and administrative expenses (G&A) decreased by $1.9 million to $1.4 million, from the comparative period. The decrease primarily reflected a recovery of share-based compensation expense driven by volatility in the Corporation's share price. To a lesser extent, the decrease reflected recoveries of previously provided for trade receivables. G&A was also impacted by cost reduction initiatives implemented during the quarter, though the full benefit of these actions was not reflected in the three month period. As a percentage of revenue, G&A decreased by 2% from the comparative period.
During the three months ended March 31, 2026, product development and support expenditures totaled $1.7 million, representing an increase of $0.1 million or 7% from the comparative period, as the Corporation commenced field trials of its smart Tail Stabbing Arm (smartTSA(TM)) along with additional smartTR(TM) accessories that represent the final system elements required to achieve targeted labour reductions. Product development and support expense decreased to $1.1 million or 17% from the comparative period, primarily due to a higher proportion of labour costs being capitalized as development expenditures, as well as lower intellectual property related costs relative to the prior year period. Cost reduction initiatives implemented in March 2026 were not fully reflected in the current period results, with further benefits expected to be realized in subsequent periods. The increase in total product development and support expenditures as a percentage of revenue primarily reflects lower revenue levels during the period rather than an increase in absolute spend.
For the three months ended March 31, 2026, sales and marketing expenses decreased $0.1 million, or 19% from the comparative period, primarily due to lower marketing and discretionary promotional spending during the quarter. Cost reduction initiatives implemented in March 2026 are not fully reflected in the current period results, with additional benefits expected to be realized in subsequent periods.
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