Exhibit 99
RPC, Inc. Reports 2004 First Quarter Results
-- Revenues for the First Quarter Increased 31.8 Percent over Prior Year
-- Diluted EPS for the First Quarter Increased to $0.20 from $0.01 in
the Prior Year
ATLANTA, April 28 /PRNewswire-FirstCall/ -- RPC, Incorporated (NYSE: RES)
announced its unaudited results for the first quarter ended March 31, 2004.
For the quarter ended March 31, 2004, revenues increased 31.8 percent to
$80,002,000 compared to $60,700,000 last year. Net income was $5,801,000, or
$0.20 diluted earnings per share, compared to $305,000 or $0.01 diluted
earnings per share last year. Operating profit for the quarter was
$9,233,000, compared to $825,000 in the prior year. Earnings before interest,
taxes, depreciation and amortization were $17,937,000, compared to $8,529,000
in the first quarter of 2003, an increase of 110.3 percent.
Cost of services rendered and goods sold was $47,107,000, or 58.9 percent
of revenues, during the first quarter of 2004, compared to $39,926,000, or
65.8 percent of revenues, in the prior year. This increase was due to the
variable nature of many of these expenses, including compensation, materials
and supplies expenses and fuel costs, all of which vary with activity levels.
As a percentage of revenues, however, these costs decreased because of
improved pricing and higher equipment and personnel utilization. In addition,
casualty insurance expenses were lower during the first quarter of 2004 than
in the prior year due to improved claims experience. Selling, general and
administrative expenses increased by 26.5 percent in the first quarter of 2004
to $15,126,000 from $11,953,000 in the prior year. These costs were
19.7 percent of revenues in 2003 and 18.9 percent this year, reflecting the
fixed nature of many of these costs, although incentive compensation increased
from the prior year due to increased profitability. Depreciation and
amortization was $8,536,000 during the quarter, 6.8 percent higher than last
year, due to increased capital expenditures made during 2003 and 2004.
"RPC's first quarter results reflect the continuation of higher activity
levels than we experienced at this time last year," stated Richard A. Hubbell,
RPC's President and Chief Executive Officer. "Our overall domestic revenues
increased due to higher customer activity and some pricing increases, the
beginning of our new operations in Kuwait and the impact of the Bronco
Oilfield Services acquisition completed at the beginning of the second quarter
of 2003. The average domestic rig count during the first quarter was 1,119,
25 percent higher than the same period in 2003. Our revenues grew at a higher
rate than the rig count because of the factors mentioned above, slightly
offset by continued weakness in the Gulf of Mexico. At the end of the first
quarter, the Gulf of Mexico rig count was 10 percent lower than in 2003.
Hubbell continued, "We continued to make selective capital expenditures
during the quarter to position ourselves to take advantage of favorable
industry conditions. As always, however, we continued to focus on a strong
balance sheet. We made more than $8 million in capital expenditures during
the first quarter and finished the period with approximately $13 million in
cash. This is lower than at the end of 2003 due to the increased working
capital requirements caused by higher revenues, our capital expenditures, and
a $4.2 million pension contribution for 2004. This is the first quarter that
reflects the results of our recent snubbing contract in Kuwait, which we hope
to maintain at current levels for the next several quarters. The
international market represents a potential growth opportunity for RPC, and we
will continue to explore opportunities that we believe can provide acceptable
expected returns on investment and diversify our operations into other
surrounding markets and services."
Summary of Segment Operating Performance
RPC's business segments are Technical Services and Support Services.
Technical Services includes RPC's oilfield service lines that utilize
people and equipment to perform value-added completion, production and
maintenance services directly to a customer's well. These services are
generally directed toward improving the flow of oil and natural gas from
producing formations or to address well control issues. The Technical
Services include snubbing, coiled tubing, pressure pumping, nitrogen, well
control, downhole tools, wireline, fluid pumping, surface production
equipment, and casing installation services.
Support Services includes RPC's oilfield service lines that provide
equipment for customer use or services to assist customer operations. The
equipment and services offered include drill pipe and related tools, pipe
handling, inspection and storage services, work platform vessels, and oilfield
training services.
Both Technical Services and Support Services experienced stronger results
due to the increased drilling rig count and related customer activity.
Technical Services revenues rose 36.9 percent for the quarter compared to the
prior year, driven by higher activity levels and some pricing increases, and
the impact of the Bronco Oilfield Services acquisition. Support Services
revenues rose by 20.6 percent during the quarter compared to the prior year.
This relatively lower increase was due to declines in the activities of our
work platform vessels, which were involved in a long-term project during the
first quarter of last year. Corporate expenses increased compared to the
prior year due to increased salaries and other expenses related to public
company compliance requirements, and depreciation related to increased
investment in information technology assets.
Three Months Ended March 31,
2004 2003
(in thousands)
Revenues:
Technical services $65,486 $47,818
Support services 11,700 9,698
Other 2,816 3,184
Total revenues $80,002 $60,700
Operating profit (loss):
Technical services $11,150 $2,717
Support services 139 (25)
Other (211) (238)
Corporate expenses (1,845) (1,629)
Total operating profit (loss) $9,233 $825
Other income (expense), net 149 (318)
Interest expense, net 25 15
Income before income taxes $9,357 $492
RPC provides a broad range of specialized oilfield services and equipment
primarily to independent and major oilfield companies engaged in the
exploration, production and development of oil and gas properties throughout
the United States, including the Gulf of Mexico, mid-continent, southwest and
Rocky Mountain regions, and in selected international markets. RPC's investor
website can be found at www.rpc.net.
Certain statements and information included in this press release
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
include statements regarding RPC's future performance. These statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of RPC to be materially
different from any future results, performance or achievements expressed or
implied in such forward-looking statements. Such risks include the possibility
of declines in the price of oil and natural gas, which tend to result in a
decrease in drilling activity and therefore a decline in the demand for our
services, the actions of the OPEC cartel, the ultimate impact of current and
potential political unrest and armed conflict in the oil-producing regions of
the world, which could impact drilling activity, adverse weather conditions in
oil or gas producing regions, competition in the oil and gas industry, and
risks of international operations. Additional discussion of factors that could
cause the actual results to differ materially from management's projections,
forecasts, estimates and expectations is contained in RPC's Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
2003.
RPC has used the non-GAAP financial measure of earnings before interest,
taxes, depreciation and amortization (EBITDA) in today's earnings release, and
anticipates using EBITDA in today's earnings conference call. RPC uses this
measure because it believes that EBITDA provides useful information to
investors as it represents a measure of pre-tax cash flow available to the
company before debt service requirements, if any. A non-GAAP financial
measure is a numerical measure of financial performance, financial position,
or cash flows that either 1) excludes amounts, or is subject to adjustments
that have the effect of excluding amounts, that are included in the most
directly comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash flows, or
2) includes amounts, or is subject to adjustments that have the effect of
including amounts, that are excluded from the most directly comparable measure
so calculated and presented. The attached schedule shows a reconciliation
between EBITDA and Net Income, the most comparable GAAP measure. This
reconciliation also appears on RPC's investor website.
RPC INCORPORATED AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (In thousands except per share data)
Periods ended March 31, (Unaudited) First Quarter
% BETTER
2004 2003 (WORSE)
REVENUES $80,002 $60,700 31.8 %
COSTS AND EXPENSES:
Cost of services rendered and goods
sold 47,107 39,926 (18.0)
Selling, general and administrative
expenses 15,126 11,953 (26.5)
Depreciation and amortization 8,536 7,996 (6.8)
Operating profit 9,233 825 NM
Interest expense, net 25 15 (66.7)
Other (expense) income, net 149 (318) NM
Income before income taxes 9,357 492 NM
Income tax provision 3,556 187 NM
NET INCOME $5,801 $305 NM %
EARNINGS PER SHARE
Basic $0.21 $0.01 N/M %
Diluted $0.20 $0.01 N/M %
AVERAGE SHARES OUTSTANDING
Basic 28,267 28,257
Diluted 28,714 28,657
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION (EBITDA)
Periods ended March 31, (Unaudited) First Quarter
NET INCOME $5,801 $305 N/M %
Income tax provision 3,556 187 N/M
Total depreciation and amortization (a) 8,555 8,022 6.6
Interest expense, net 25 15 (66.7)
EBITDA $17,937 $8,529 110.3 %
(a) Depreciation and amortization was derived from the statements of
cash flows. This amount differs from depreciation and amortization
presented on the statements of operations due to depreciation related
to the manufacturing of goods which is included in cost of services
rendered and goods sold.
RPC INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
At March 31, (Unaudited) (In thousands)
2004 2003
ASSETS
Cash and cash equivalents $13,229 $3,696
Accounts receivable, net 66,338 45,315
Inventories 10,838 8,746
Deferred income taxes 5,250 6,136
Income taxes receivable 2,074 8,889
Prepaid expenses and other current assets 3,363 3,387
Total current assets 101,092 76,169
Property, plant and equipment, net 108,916 104,881
Intangibles, net 15,905 10,184
Other assets 1,870 1,717
Total assets $227,783 $192,951
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $22,038 $12,465
Accrued payroll and related expenses 6,227 4,257
Accrued insurance expenses 3,130 3,916
Accrued state, local and other taxes 950 1,451
Current portion of long-term debt 700 488
Other accrued expenses 3,793 1,470
Total current liabilities 36,838 24,047
Accrued insurance expenses 5,798 4,415
Long-term debt 4,800 2,000
Pension liabilities 9,220 7,411
Deferred income taxes 13,415 8,581
Other long-term liabilities 1,598 1,832
Total liabilities 71,669 48,286
Common stock 2,863 2,862
Capital in excess of par value 26,833 26,566
Retained earnings 133,766 120,394
Deferred compensation (1,015) (1,258)
Accumulated other comprehensive loss (6,333) (3,899)
Total stockholders' equity 156,114 144,665
Total liabilities and stockholders'
equity $227,783 $192,951
Certain prior year balances have been reclassified to conform with
the current year presentation.
RPC INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, (unaudited)
(In Thousands)
2004 2003
Operating Activities:
Net income $5,801 $305
Depreciation and
amortization 8,555 8,022
Other non-cash charges
to earnings 1,218 17
Other net changes in
operating activities (15,244) (6,328)
Net cash provided by
operating
activities 330 2,016
Investing Activities:
Capital expenditures (8,625) (8,253)
Other investing activities 453 (415)
Net cash used for
investing activities (8,172) (8,668)
Financing Activities:
Dividends (859) (715)
Cash paid for common stock
purchased and retired (6) (7)
Other financing activities (366) (463)
Net cash used for
financing activities (1,231) (1,185)
Net decrease in cash and
cash equivalents (9,073) (7,837)
Cash and cash equivalents
at beginning of period 22,302 11,533
Cash and cash equivalents
at end of period $13,229 $3,696
For information contact:
BEN M. PALMER
Chief Financial Officer
404.321.2140
JIM LANDERS
Corporate Finance
404.321.2162
irdept@rpc.net
SOURCE RPC, Inc.
-0- 04/28/2004
/CONTACT: Ben M. Palmer, Chief Financial Officer, +1-404-321-2140, or Jim
Landers, Corporate Finance, +1-404-321-2162, or irdept@rpc.net, both of RPC,
Inc./
/Web site: http://www.rpc.net/
(RES)
CO: RPC, Inc.
ST: Georgia
IN: OIL
SU: ERN