McCoy Global Quick Update - $MCB.to
Quick update after Q3 2023
I’ve been on vacation for the last week. It was definitely a busy week to be away, but I committed to putting work aside and focusing on having some fun with family. My flight home is delayed, so I thought I would put out a quick update. I’ll work through my backlog over the next week or so.
Price: $1.54 CAD
MC: 43 million
EV: 30 million
Yield: 2.6%
1 year performance:
MCB reported last week. Results were on par with my expectations and the stock jumped a bit on the day.
Quarter Recap
Revenue increased 36% to $16.9 million
Adjusted EBITDA1 increased 251% to $3.9 million
Returning over $2.7 million to shareholders in the quarter through the completion of the normal course issuer bid (NCIB) announced in August and dividends;
Booked backlog2 of $24.7 million at September 30, 2023, compared to $27.4 million in the third quarter of 2022;
Book-to-bill ratio was 0.91 for the three months ended September 30, 2023, compared with 1.90 in the third quarter of 2022.
Expecting North America land market to be flat, although they are expecting strong order intake for their new FMS Technology
Global CRT (Casing Running Tools) to continue to grow
Received 6 new orders (including 3 new geographies) for their CRT technology
Closing Thoughts
This is the 4th quarter of higher revenue which I believe demonstrates the current profitability of MCB at his level of O&G activity. This does not include any additional sales of their products recently released from the Digital Technology Roadmap.
There are two concerns/risks I have at this point.
1) The inventory levels are running higher than the increase in revenue. I understand the need to build inventory, but would like to see if climb slower than sales from here.
2) Cannell capital selling shares. They continue to sell their large position in this illiquid market. Cannell owns about 17% of MCB, but its only 1% of their stated AUM. This could be a drag for awhile and I would like to see some block trades arranged with some institutions.
I continue to hold my shares in my OFS basket.
Thanks for reading.
Dean
* long MCB.to