McCOY GLOBAL ANNOUNCES FIRST QUARTER 2026 RESULTS

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™) and continued development of smarTR™ 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™) along with additional smartTR™ 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.

Net loss for the three months ended March 31, 2026, was $3.2 million or ($0.12) per basic share, compared with net earnings of $1.0 million or $0.03 per basic share in the first quarter of 2025. Results were adversely affected by substantially lower revenue, reduced absorption of fixed operating costs, and higher other losses associated with severance and retirement related charges. A portion of these costs was offset by the cost-reduction measures announced in March 2026, as well as additional targeted actions aimed at returning Adjusted EBITDA, gross profit, and selling, general & administrative expenses as a percentage of revenue to levels more consistent with historical performance.

Adjusted EBITDA¹ for the three months ended March 31, 2026, was a loss of $1.3 million compared with $3.5 million for the first quarter of 2025. Adjusted EBITDA was negatively impacted by lower shipment volumes and reduced operating leverage. During the quarter, the Corporation executed deliberate cost containment measures to mitigate the impact of lower activity levels and support profitability amid reduced near term visibility.

As at March 31, 2026, the Corporation had $2.5 million in net cash⁴.

Selected Quarterly Information

Summary of Quarterly Results

Outlook and Forward-Looking Information

In early 2026, an abrupt outbreak of conflict in the Middle East occurred, which has persisted beyond the first quarter of 2026. Based on current conditions, the Corporation expects logistics disruptions, project deferrals, and subdued Middle East order activity to persist through at least late third quarter 2026, before shipping corridors, insurance availability, and customer purchasing behavior begin to normalize. While the Corporation has near‑term visibility over second‑quarter revenue supported by its existing backlog, the extended duration of the conflict has reduced visibility beyond the near term and resulted in delayed customer shipments, cancellations of select backlog, and deferrals in the timing of new orders. As at March 31, 2026, approximately 30% of the Corporation's backlog was destined for the Middle East region, and continued logistics and security constraints affecting the region may further impact delivery timing and revenue recognition.

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, subject to timing. 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 the backdrop of extended geopolitical instability in the region, the Corporation now expects the timing of the NOC tender announcements and contract awards to be further delayed, with award schedules remaining uncertain. While near‑term timing risk has increased, underlying customer demand remains intact and, in certain respects, has strengthened. The conflict has contributed to meaningful reductions in regional oil production capacity, and recent developments — including the announcement by the United Arab Emirates regarding its future role within OPEC — reinforce expectations that drilling activity levels  across our core markets are likely to recover to levels that meaningfully exceed pre-conflict expectations, driven by production capacity losses that will take years, not quarters, to restore.

In the North American land market, drilling activity remains subdued. We continue to take a targeted and deliberate approach to commercialization of our smarTR^TM 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.

To navigate the near‑term uncertainty, the Corporation has taken decisive actions to realign its cost structure, building on the initiatives previously announced in March 2026. In addition to those actions, management has implemented further targeted measures designed to ensure that Adjusted EBITDA, gross profit, sales, general and administrative expenses as a percentage of revenue are more closely aligned with historical performance levels under reduced activity scenarios. These actions 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 2026 are expected to be lower than in 2025, which included several growth‑related initiatives. Anticipated capital spending for the remainder of 2026 includes:

• up to US$1.6 million of investment in the development of 'Technology Roadmap' offerings;
  
  
• up to US$1.0 million of strategic investment in rental equipment, largely
  transferred from inventory, where meaningful returns are expected; and
  
  
• up to US$0.2 million of investments in production facility equipment.

Should the Middle East conflict persist, management expects that supply‑driven responses in global drilling activity may partially offset prolonged regional disruption through increased investment in other markets. McCoy's longstanding international customer relationships and geographically diversified operations position the Corporation to benefit from improving activity levels in other markets, partially offsetting prolonged regional disruption.

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 112-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

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