Mccoy Global Inc. · TSX:MCB
Mccoy Global — Investor Presentation (March 2012)
37 slides from Mccoy Global's investor presentation, March 2012
Slide 1: Innovative Paths to Global Growth
INNOVATIVE PATHS TO GLOBAL GROWTH Corporate Presentation March 2012
Slide 2: Forward Looking Information
Forward Looking Information This presentation contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect“, "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should",
Slide 3: What is McCoy?
WHAT IS McCOY? ⁄ McCoy is a trusted provider of innovative energy products and services to the global market ⁄ Clients include service companies, onshore and offshore drillers and rig manufacturers ⁄ McCoy generates revenue globally through direct sales and distributors McCoy Corporation
Slide 4: Market Summary
Market Summary As at March 22, 2012 unless noted Ticker symbol TSX : MCB Share price $4.12 Shares outstanding ~26.5 million Options ~1.7 million (as at February 29, 2012) Market capitalization ~$109 million Daily Trading Volume 100,510 shares (as at Feb. 23, 2012) 4 McCoy Corporation
Slide 5: Corporate Overview
Corporate Overview 5 McCoy Corporation
Slide 6: Global Opportunity
GLOBAL OPPORTUNITY McCoy Corporation
Slide 7: Growing Global Reach
Growing Global Reach Growing sales footprint McCoy locations ⁄ McCoy delivered products/sales ⁄ Alberta to 44 countries in 2011. ⁄ British Columbia ⁄ Texas ⁄ Louisiana 7 McCoy Corporation
Slide 8: A Presence in the Global Energy Hub
A Presence in the Global Energy Hub ⁄ In 2011, McCoy purchased an office and distribution warehouse in Houston, Texas ⁄ Strategically located in the world's energy hub and is the headquarters for McCoy’s Drilling & Completions division McCoy now has a presence in Houston, TX 8 McCoy Corporation
Slide 9: Global Marketing Strategy
Global Marketing Strategy ⁄ Geographically based sales managers in growing markets, close to our customers MENA (Middle East North Africa) RICS (Russia India Caspian Sub-Sahara) FE (Far East) ⁄ Optimize domestic coverage outside of Texas and Louisiana ⁄ Exceptional and responsive service to cu
Slide 10: International Sales Growth
International Sales Growth ⁄ McCoy expanded its U.S. and other international sales from 15% of total sales in 2006 to 53% in 2010 2006 Sales 2010 Sales 2014 Goal 10% US 26% 5% 20% Other US Canada International 47% 35% US 85% Canada Canada 27% 45% Other Other International International 10 McCoy Corp
Slide 11: Global Clients
Global Clients 11 McCoy Corporation
Slide 12: International Stability
International Stability 2,000 Rig Counts (Daily Average) 1,500 Global Rig Counts Canada US 1,000 International 500 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 McCoy’s focus on the global market reduces volatility Source: Baker Hughes 12 McCoy Corporation
Slide 13: Innovation
INNOVATION ⁄ McCoy’s investment in new product development has increased from 1% to 4% of revenue ⁄ New product development will add approximately $150 million in new revenue over the next 5 years McCoy Corporation
Slide 14: Innovative Product Line
Innovative Product Line Global market: existing products under development high priority products $3 to $6 billion to develop or acquire annually • Hydraulic Power Tongs • Iron Roughneck • Make/ Break Tools • Electric Bucking Unit Tubular Running • Torque Turn Monitoring • Casing Running Tool Equipm
Slide 15: “we” Concept
“we” Concept ⁄ “we” is defined as a joint partnership between McCoy and our customers ⁄ A sample of McCoy’s new “we” branded products: ⁄ weTORQ ⁄ weRUN ⁄ weCATT ⁄ weBUCK 15 McCoy Corporation
Slide 16: New Product: Iron Roughneck
New Product: Iron Roughneck weTORQ85 Market ready: 2012 Make up and break out tubulars Predicted that all land rigs in North America will be fitted with Iron Roughneck tools within 5 years 16 McCoy Corporation
Slide 17: New Product: Torque Sub
New Product: Torque Sub weCATT Market ready: 2012 Monitors makeup from a top drive and records torque, turns and hook load Data can be transmitted wirelessly to WinCatt or other torque monitoring systems 17 McCoy Corporation
Slide 18: New Product: Electric Bucking Unit
New Product: Electric Bucking Unit weBUCK weSTART Market ready: 2012 weSTART product is a coupling starter/doper commonly used in pipe threading facilities; Will begin development once the weBUCK12 is released for prototype manufacturing Larger size weBUCK/weSTART units are planned as future project
Slide 19: New Product: Casing Running Tool (CRT)
New Product: Casing Running Tool (CRT) weRUN350 weRUN500 Market Ready: 2013 Connected to the Top Drive main shaft, hoists and lowers casing, rotates in and makes up the casing connection Improves likelihood of getting casing down to bottom in difficult wells due to the ability to simultaneously rota
Slide 20: Tubular Running Equipment
Tubular Running Equipment Workover tong Casing tong Bucking unit 20 McCoy Corporation
Slide 21: Dies & Inserts
Dies & Inserts 21 McCoy Corporation
Slide 22: Rig Parts
Rig Parts ⁄ Life-cycle revenue stream ⁄ Growth area with high margins 22 McCoy Corporation
Slide 23: Mobile Solutions
MOBILE SOLUTIONS McCoy Corporation
Slide 24: Mobile Solutions: Custom Heavy-Duty Trailers
⁄ Engaged in the manufacture and sale of custom heavy-duty trailers largely used in the oil and gas industry for pressure pumping, rig transportation and heavy haul ⁄ Focused on the Western Canadian Sedimentary Basin (“WCSB”), the United States and export to China, Australia and the Middle East 24 M
Slide 25: 28% of North American Custom Chassis Market
/ McCoy holds an estimated 28% of the North American custom chassis market / A 50,000 horsepower increase in pressure pumping capacity typically results in an order for 25 custom chassis 25 McCoy Corporation
Slide 26: Horizontal Frac Wells and Horsepower
# Horizontal Frac Wells (US) Horsepower 2008 ~8,000 ~7,000,000 2011 ~16,000 ~14,000,000 2012 ~19,000 ~18,000,000 (projection) Pressure pumping was the largest oilfield market by revenue in 2011 and is projected to grow and remain undersupplied in 2012 Source: Spears & Associates research 26
Slide 27: Manufacturing Plants
⁄ Owned manufacturing plant in British Columbia, Canada ⁄ 3 U.S. sub-contracting plants: 2 in Texas; 1 in Arkansas ⁄ Efficient way to add capacity during market peaks Penticton Plant U.S. sub- Peerless U.S. sub- Limited contractor contractor U.S. sub- contractor 27 McCoy Corporation
Slide 28: Financial Performance
FINANCIAL PERFORMANCE McCoy Corporation
Slide 29: Three Months Ending December 31
Three Months Ending December 31 $ million, except noted 2011 2010 Change Total revenue 44.3 31.4 +41% Net earnings 3.8 1.9 +100% EBITDAS 5.6 4.4 +27% EBITDAS percent of revenue 13% 14% Cash on hand at period end 29.4 16.2 +81% Net cash (net debt) at period end 23.2 9.8 +137% Prepared using accountin
Slide 30: Twelve Months Ending December 31
Twelve Months Ending December 31 $ million, except noted 2011 2010 Change Total revenue 153.8 100.8 +53% Net earnings 11.9 5.4 +120% Net earnings per share 0.45 0.20 +125% EBITDAS 21.6 13.6 +59% EBITDAS per share 0.81 0.51 +59% EBITDAS percent of revenue 14% 13% +8% Cash flow from continuing operati
Slide 31: Segmented Results
Segmented Results Twelve months ended Twelve months ended December 31, 2011 December 31, 2010 Mobile Mobile Solutions Solutions External Sales 32% 45% EP&S EP&S 55% 68% Mobile Earnings from Solutions Mobile continuing 21% Solutions operations before 35% corporate charges, EP&S EP&S interest, other a
Slide 32: Investing in McCoy
INVESTING IN MCCOY ⁄ Significant growth and earnings potential ⁄ Excellent management team with a proven track record ⁄ Growing global market presence ⁄ Innovative technologies with barriers to entry ⁄ Strong balance sheet McCoy Corporation
Slide 33: Contact and Head Office
Jim Rakievich, President & Chief Executive Officer Milica Stolic, Chief Financial Officer & Corporate Secretary Jim Nowotny, Senior Vice President, Drilling & Completions Head Office: Edmonton, Alberta, Canada (780) 453-8451 [email protected] www.mccoyglobal.com TSX:MCB McCoy Corporation
Slide 34: Additional Information
ADDITIONAL INFORMATION ⁄ Management Team ⁄ Board of Directors ⁄ Analyst Coverage
Slide 35: Management Team
Management Team Corporate Jim Rakievich, ICD.D President and Chief Executive Officer Milica Stolic, CMA Chief Financial Officer & Corporate Secretary Tom Watts VP, Human Resources Energy Products & Services Jim Nowotny Senior VP, Drilling & Completions Ron Roling VP, Sales & Marketing, Drilling and
Slide 36: Board of Directors
Board of Directors Chairperson Kerry Brown, CA President and CEO of CMW Management Inc. Frank Burdzy, MBA President and CEO of Champion Petfoods Terry Chalupa President and CEO of Abalone Construction Terry Freeman, FCA, ICD.D Managing Director of Northern Plains Capital Ltd. John Howard, CA Managin
Slide 37: Analyst Coverage
Analyst Coverage Paradigm Capital John Bereznicki, CFA Calgary, Alberta Ben Cherniavsky & Raymond James Steve Hansen Vancouver, British Columbia Cormark Securities Sarah Hughes, CFA Toronto, Ontario 37 McCoy Corporation