Exhibit 99
RPC, Inc. Reports 2004 Second Quarter Results
- Revenues for the Second Quarter Increased 20.5 Percent over Prior Year
- Diluted EPS for the Second Quarter Increased 62.5 Percent to $0.26 from
$0.16 in the Prior Year
ATLANTA, July 28 /PRNewswire-FirstCall/ -- RPC Incorporated (NYSE: RES)
announced its unaudited results for the second quarter ended June 30, 2004.
For the quarter ended June 30, 2004, revenues increased 20.5 percent to
$85,426,000 compared to $70,864,000 last year. Net income was $7,474,000, or
$0.26 diluted earnings per share, compared to $4,705,000 or $0.16 diluted
earnings per share last year. Operating profit for the quarter was
$11,467,000 compared to $6,865,000 in the prior year.
Cost of services rendered and goods sold was $49,189,000, or 57.6 percent
of revenues, during the second quarter of 2004, compared to $42,390,000, or
59.8 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, primarily in the pressure pumping service line, and fuel costs.
In addition, casualty insurance claim costs were higher in the second quarter
of 2004 than in the prior year. As a percentage of revenues, however, these
costs decreased because of improved pricing and higher equipment and personnel
utilization. Selling, general and administrative expenses increased by
22.4 percent in the second quarter of 2004 to $16,166,000 from $13,208,000 in
the prior year. This increase was due to an increase in personnel, an
increase in bad debt expense, and an increase in incentive compensation
consistent with profitability increases. These costs were 18.9 percent of
revenues in 2004 and 18.6 percent last year. Depreciation and amortization
were $8,604,000 during the quarter, 2.4 percent higher than last year.
For the six months ended June 30, 2004, revenues increased 25.7 percent to
$165,428,000 compared to $131,564,000 last year. Net income was $13,275,000,
or $0.46 diluted earnings per share compared to net income of $5,010,000, or
$0.17 diluted earnings per share last year.
"RPC's second quarter results reflect the continuation of strong activity
levels," stated Richard A. Hubbell, RPC's President and Chief Executive
Officer. "Our overall domestic revenues increased due to higher customer
activity, some pricing increases, and a shift in the mix of pressure pumping
work towards higher-revenue jobs. Our revenues also increased during the
quarter due to the continuation of our operations in Kuwait, although this
revenue was lower than in the first quarter, and includes revenue from our
fishing tool service line which we started in the first quarter of 2004. The
average domestic rig count during the second quarter was 1,163, 13 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 and the sale of one of our non-
oilfield businesses which occurred at the end of April. At the end of the
second quarter, the Gulf of Mexico rig count was approximately 11 percent
lower than in 2003, which indicates that this geographic market continues to
be weak relative to the rest of the domestic oilfield.
Hubbell continued, "We are making capital expenditures to position
ourselves to take advantage of favorable industry conditions, including making
more than $16 million in capital expenditures during the second quarter. We
continued to maintain a strong balance sheet, and finished the period with
approximately $12 million in cash and cash equivalents. The proceeds from the
sale of our non-oilfield business unit yielded approximately $4 million, which
we intend to re-invest in oilfield assets which we believe will produce better
returns."
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, casing installation services, and fishing tool operations.
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 21.6 percent for the quarter compared to the
prior year, driven by higher activity levels, some pricing increases, and a
favorable job mix shift in pressure pumping. Support Services revenues rose
by 29.8 percent during the quarter compared to the prior year. This
relatively higher increase was due to significantly higher utilization and
slightly higher pricing in rental tools, which is the largest service line
within Support Services. Other revenues declined 55.4 percent due to the sale
of the non-oilfield business unit that comprises the majority of the revenue
in this segment, which occurred during the quarter. The impact of the sale of
this business unit on operating and other income was immaterial.
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
(in thousands)
Revenues:
Technical services $70,633 $58,073 $136,119 $105,891
Support services 13,846 10,670 25,546 20,368
Other 947 2,121 3,763 5,305
Total revenues $85,426 $70,864 $165,428 $131,564
Operating profit
(loss):
Technical services $11,532 $8,440 $22,682 $11,185
Support services 2,112 750 2,251 697
Other (210) (543) (421) (781)
Corporate (1,967) (1,782) (3,812) (3,411)
Total operating profit $11,467 $6,865 $20,700 $7,690
Other income, net 620 801 769 483
Interest expense, net 33 77 58 92
Income before income
taxes $12,054 $7,589 $21,411 $8,081
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 INCORPORATED AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (In thousands except per share data)
Periods ended June 30, (Unaudited) Second Quarter
% BETTER
2004 2003 (WORSE)
REVENUES $85,426 $70,864 20.5 %
COSTS AND EXPENSES:
Cost of services rendered
and goods sold 49,189 42,390 (16.0)
Selling, general and
administrative expenses 16,166 13,208 (22.4)
Depreciation and amortization 8,604 8,401 (2.4)
Operating profit 11,467 6,865 67.0
Interest expense, net 33 77 57.1
Other income, net 620 801 (22.6)
Income before income taxes 12,054 7,589 58.8
Income tax provision 4,580 2,884 (58.8)
NET INCOME $7,474 $4,705 58.8 %
EARNINGS PER SHARE
Basic $0.26 $0.17 52.9 %
Diluted $0.26 $0.16 62.5 %
AVERAGE SHARES OUTSTANDING
Basic 28,300 28,439
Diluted 28,812 28,851
RPC INCORPORATED AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (In thousands except per share data)
Periods ended June 30, (Unaudited) Six Months
% BETTER
2004 2003 (WORSE)
REVENUES $165,428 $131,564 25.7 %
COSTS AND EXPENSES:
Cost of services rendered
and goods sold 96,296 82,316 (17.0)
Selling, general and
administrative expenses 31,292 25,161 (24.4)
Depreciation and amortization 17,140 16,397 (4.5)
Operating profit 20,700 7,690 169.2
Interest expense, net 58 92 37.0
Other income, net 769 483 59.2
Income before income taxes 21,411 8,081 165.0
Income tax provision 8,136 3,071 (165.0)
NET INCOME $13,275 $5,010 165.0 %
EARNINGS PER SHARE
Basic $0.47 $0.18 161.1 %
Diluted $0.46 $0.17 170.6 %
AVERAGE SHARES OUTSTANDING
Basic 28,283 28,348
Diluted 28,736 28,754
RPC INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
At June 30, (Unaudited) (In thousands)
2004 2003
ASSETS
Cash and cash equivalents $12,495 $10,182
Accounts receivable, net 69,037 52,388
Inventories 9,133 9,629
Deferred income taxes 4,982 6,548
Income taxes receivable 4,902 1,176
Prepaid expenses and
other current assets 2,677 2,774
Total current assets 103,226 82,697
Property, plant and equipment, net 114,683 110,802
Intangibles, net 15,942 12,657
Other assets 2,577 1,627
Total assets $236,428 $207,783
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $21,746 $14,151
Accrued payroll and related expenses 8,524 6,440
Accrued insurance expenses 3,869 4,507
Accrued state, local and other taxes 2,289 2,075
Income taxes payable - 909
Current portion of long-term debt 700 1,133
Other accrued expenses 493 526
Total current liabilities 37,621 29,741
Accrued insurance expenses 6,123 4,137
Long-term debt 4,100 4,800
Pension liabilities 9,614 7,891
Deferred income taxes 15,439 8,873
Other long-term liabilities 1,820 1,551
Total liabilities 74,717 56,993
Common stock 2,876 2,881
Capital in excess of par value 28,572 28,581
Retained earnings 140,390 124,380
Deferred compensation (3,820) (1,197)
Accumulated other comprehensive loss (6,307) (3,855)
Total stockholders' equity 161,711 150,790
Total liabilities and
stockholders' equity $236,428 $207,783
Certain prior year balances have been reclassified to conform with the
current year presentation
RPC INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, (Unaudited)
(In thousands)
2004 2003
Operating Activities:
Net income $13,275 $5,010
Depreciation, amortization
and other non-cash charges 17,301 16,450
Other net changes in
operating activities (10,948) (794)
Net cash provided by
operating activities 19,628 20,666
Investing Activities:
Capital expenditures (25,151) (14,584)
Other investing activities 108 (5,508)
Net cash used for
investing activities (25,043) (20,092)
Financing Activities:
Payment of dividends (1,708) (1,435)
Cash paid for common stock
purchased and retired (1,922) (14)
Other financing activities (762) (476)
Net cash used for
financing activities (4,392) (1,925)
Net decrease in cash and
cash equivalents (9,807) (1,351)
Cash and cash equivalents
at beginning of period 22,302 11,533
Cash and cash equivalents
at end of period $12,495 $10,182
For information contact:
BEN M. PALMER JIM LANDERS
Chief Financial Officer Corporate Finance
404.321.2140 404.321.2162
irdept@rpc.net
SOURCE RPC, Inc.
-0- 07/28/2004
/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