Exibit 99
[LOGO] RPC
An Oil & Gas Services Company
FOR IMMEDIATE RELEASE
RPC, Inc. Reports 2004 Fourth Quarter and Annual Results
o Revenues for the Fourth Quarter Increased 22.8 Percent over Prior Year
o Diluted EPS for the Fourth Quarter Increased to $0.32, Excluding a $0.07
per share Gain from Sale of Assets , Compared to $0.11 in the Prior Year
o Three-for-two stock split and 100 percent dividend increase announced
January 25, 2005
ATLANTA, February 16, 2005 -- RPC, Incorporated (NYSE: RES) announced its
unaudited results for the fourth quarter and twelve months ended December 31,
2004. 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 and in selected international markets.
For the quarter ended December 31, 2004, revenues increased 22.8 percent to
$85,643,000 compared to $69,719,000 last year. Operating profit for the quarter
was $12,118,000 compared to $4,772,000 in the prior year. Net income was
$11,261,000, or $0.39 diluted earnings per share ($0.26 adjusted for
three-for-two split announced January 25, 2005), compared to $3,306,000 or $0.11
diluted earnings per share last year ($0.08 adjusted for the
three-for-two-split). Diluted earnings per share during the quarter included a
gain from sale of assets of $0.07 ($0.05 adjusted for the three-for-two split),
resulting from the sale of RPC's domestic liftboat fleet during the quarter.
For the twelve months ended December 31, 2004, revenues increased 25.6 percent
to $339,792,000, compared to $270,527,000 last year. Operating profit for the
twelve months ending December 31, 2004 was $45,789,000 compared to an operating
profit of $16,399,000 last year. Net income was $34,773,000, or $1.20 diluted
earnings per share ($0.80 adjusted for the three-for-two split), an increase
from $10,893,000, or $0.38 diluted earnings per share last year ($0.25 adjusted
for the three-for-two split).
Cost of services rendered and goods sold was $47,130,000, or 55.0 percent of
revenues, during the fourth quarter of 2004, compared to $42,968,000, or 61.6
percent of revenues, in the prior year. The increase in these costs was due to
the variable nature of many of these expenses, including incentive compensation
and equipment maintenance, and increased fuel costs. 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 29.2 percent in the fourth quarter of 2004 to $17,658,000
from $13,669,000 in the prior year. This increase was due to higher salary and
wage expenses and public company compliance costs, and increased incentive
compensation consistent with improved profitability. These costs increased as a
percentage of revenues to 20.6 percent in 2004 compared to 19.6 percent last
year because of higher business activity levels, improved profitability, and
increased compliance requirements. Depreciation and amortization were $8,737,000
during the quarter, 5.1 percent higher than last year.
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4th Quarter and Annual 2004 Press Release
Other income, net increased to $5,158,000 during the quarter, compared to
$577,000 in the prior year, the majority of which related to the gain on sale of
RPC's domestic liftboat fleet.
Net income increased due to higher revenues and other income, a lower effective
tax rate, partially offset by the higher costs of services rendered, and
selling, general and administrative expenses. The effective tax rate during the
quarter was 34.8 percent compared to 38.0 percent in the prior year. The
decrease in the effective tax rate was due to higher estimated full year foreign
tax credit utilization, and an adjustment to the liability for foreign taxes.
"RPC's fourth quarter results reflect continued high activity levels, an
increase in pricing, and growth in our capacity," stated Richard A. Hubbell,
RPC's President and Chief Executive Officer. "The average domestic rig count
during the fourth quarter was 1,248, 13 percent higher than the same period in
2003. Our domestic revenues grew at a higher rate than the rig count because of
our continuing investment in our operating capacity and a shift in our focus
from the weaker Gulf of Mexico region, to the relatively stronger mid continent
region. Although we performed well, bad weather in the fourth quarter impacted
our results, particularly in several of our pressure pumping markets in Texas
and Oklahoma. Our international revenues declined compared to the prior year.
However, we continued our activities in various international markets, such as
West Africa, China and the Middle East. We invested over $13,000,000 in capital
expenditures during the quarter to improve our existing fleet of equipment and
purchase new equipment."
Hubbell continued, "This was an exceptional year for RPC, marked by a strong
domestic market, success in the international arena, and a renewed focus on
areas in which we have already been successful. As we announced on January 25,
the Board of Directors has approved a three-for-two stock split of RPC's common
stock, which is the first split since 1997. This decision is a response to our
strong earnings and stock price performance. The Board also increased the
dividend by 100 percent. Both of these actions will reward our current
stockholders and, we believe, increase the liquidity and investment appeal of
our common stock.
"However, we are always mindful of the volatility of this industry and will
continue throughout 2005 to focus on internal processes and controls,
maintaining a conservative balance sheet, and investing in capital expenditures,
with the goal of assuring the optimization of resources within our markets.
Specifically, we will also continue to focus on the areas where we have been
strong over the past year, these areas primarily include our mid-continent
expansion, international business development and our top performing service
lines."
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 pressure pumping,
snubbing, coiled tubing, nitrogen, wireline, well control, downhole tools,
surface production equipment, casing installation services, and fishing tool
operations.
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4th Quarter and Annual 2004 Press Release
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 rental of drill pipe and related tools, pipe handling,
inspection and storage services 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 22.4 percent for the quarter compared to the prior year,
driven by pricing increases, additional capacity, and higher activity levels in
a majority of its service lines. Support Services revenues rose by 54.3 percent
during the quarter compared to the prior year. This increase was driven by
increased utilization in the rental tool division, which is the largest service
line within Support Services; this increase was partially offset by lower
utilization and pricing within our marine liftboats division and the elimination
of activity within this division subsequent to the sale of the domestic fleet.
During the fourth quarter, we received an offer and sold the domestic marine
liftboats. We intend to invest the proceeds in more productive assets. Other
revenues were immaterial this quarter due to the sale of the non-oilfield
business unit that comprised the majority of the revenues in this segment, which
occurred during the second quarter of 2004.
Three Months Twelve Months
Ended December 31, Ended December 31,
------------------------------------------------
2004 2003 2004 2003
------------------------------------------------
(in thousands)
Revenues:
Technical services $ 69,547 $ 56,827 $ 279,070 $ 216,321
Support services 16,069 10,416 56,917 43,909
Other 27 2,476 3,805 10,297
- ------------------------------------------ --------- --------- --------- ---------
Total revenues $ 85,643 $ 69,719 $ 339,792 $ 270,527
- ------------------------------------------ --------- --------- --------- ---------
Operating profit (loss):
Technical services $ 11,321 $ 7,279 $ 47,027 $ 22,433
Support services 3,658 (432) 8,287 2,641
Other (172) (155) (975) (1,355)
Corporate expenses (2,689) (1,920) (8,550) (7,320)
- ------------------------------------------ --------- --------- --------- ---------
Total operating profit $ 12,118 $ 4,772 $ 45,789 $ 16,399
- ------------------------------------------ --------- --------- --------- ---------
Other income, net 5,158 577 7,482 1,324
Interest (income) expense, net (7) 16 68 153
- ------------------------------------------ --------- --------- --------- ---------
Income before income taxes $ 17,283 $ 5,333 $ 53,203 $ 17,570
- ------------------------------------------ --------- --------- --------- ---------
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 expected activity and performance in the future.
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, including the Gulf of Mexico, competition in
the oil and gas industry,
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4th Quarter and Annual 2004 Press Release
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.
For information about RPC, Inc., please contact:
BEN M. PALMER
Chief Financial Officer
404.321.2140
irdept@rpc.net
JIM LANDERS
Corporate Finance
404.321.2162
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4th Quarter and Annual 2004 Press Release
RPC INCORPORATED AND SUBSIDIARIES
- ------------------------------------------------------------------------------ ----------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data)
- ------------------------------------------------------------------------------ ----------------------------------
Periods ended December 31, (Unaudited) Fourth Quarter Twelve Months
- ------------------------------------------------------------------------------ ----------------------------------
% BETTER % BETTER
2004 2003 (WORSE) 2004 2003 (WORSE)
- ------------------------------------------------------------------------------ ----------------------------------
REVENUES $ 85,643 $ 69,719 22.8% $339,792 270,527 25.6 %
COSTS AND EXPENSES:
Cost of services rendered and goods sold 47,130 42,968 (9.7) 193,659 168,766 (14.8)
Selling, general and administrative expenses 17,658 13,669 (29.2) 65,871 52,268 (26.0)
Depreciation and amortization 8,737 8,310 (5.1) 34,473 33,094 (4.2)
- ------------------------------------------------------------------------------ ----------------------------------
Operating profit 12,118 4,772 153.9 45,789 16,399 179.2
Interest (income) expense, net (7) 16 NM 68 153 55.6
Other income, net 5,158 577 NM 7,482 1,324 N/M
- ------------------------------------------------------------------------------ ----------------------------------
Income before income taxes 17,283 5,333 NM 53,203 17,570 N/M
Income tax provision 6,022 2,027 (197.1) 18,430 6,677 (176.0)
- ------------------------------------------------------------------------------ ----------------------------------
NET INCOME $ 11,261 $ 3,306 NM% $ 34,773 $ 10,893 NM%
============================================================================== ==================================
EARNINGS PER SHARE
Basic $ 0.40 $ 0.12 NM% $ 1.23 $ 0.38 N/M%
================================ ===================================
Diluted $ 0.39 $ 0.11 NM% $ 1.20 $ 0.38 N/M%
================================ ===================================
AVERAGE SHARES OUTSTANDING
Basic 28,351 28,340 28,309 28,370
================= ===============
Diluted 29,231 28,775 28,953 28,769
================= ===============
ADJUSTED FOR THE THREE-FOR-TWO STOCK SPLIT EFFECTIVE MARCH 10, 2005
EARNINGS PER SHARE
Basic $ 0.26 $ 0.08 NM% $ 0.82 $ 0.26 N/M%
================================ ===================================
Diluted $ 0.26 $ 0.08 NM% $ 0.80 $ 0.25 N/M%
================================ ===================================
AVERAGE SHARES OUTSTANDING
Basic 42,527 42,510 42,464 42,555
================= ===============
Diluted 43,846 43,163 43,429 43,154
================= ===============
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4th Quarter and Annual 2004 Press Release
RPC INCORPORATED AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
At December 31, (Unaudited) (In thousands)
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2004 2003
- --------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 29,636 $ 22,302
Accounts receivable, net 75,793 53,719
Inventories 10,587 10,057
Deferred income taxes 6,144 6,394
Income taxes receivable -- 4,263
Prepaid expenses and other current assets 3,638 3,614
- --------------------------------------------------------------------------------
Total current assets 125,798 100,349
- --------------------------------------------------------------------------------
Property, plant and equipment, net 114,222 109,163
Intangibles, net 20,183 15,488
Other assets 2,739 1,864
- --------------------------------------------------------------------------------
Total assets $ 262,942 $ 226,864
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 23,389 $ 19,603
Accrued payroll and related expenses 10,842 8,526
Accrued insurance expenses 3,875 2,852
Accrued state, local and other taxes 2,183 1,663
Income taxes payable 113 --
Current portion of long-term debt 2,700 1,110
Other accrued expenses 5,187 3,369
- --------------------------------------------------------------------------------
Total current liabilities 48,289 37,123
- --------------------------------------------------------------------------------
Accrued insurance expenses 6,451 5,856
Long-term debt 2,100 4,800
Pension liabilities 11,379 12,972
Deferred income taxes 11,945 13,296
Other long-term liabilities 1,355 1,711
- --------------------------------------------------------------------------------
Total liabilities 81,519 75,758
- --------------------------------------------------------------------------------
Common stock 2,881 2,862
Capital in excess of par value 28,766 26,796
Retained earnings 160,189 128,824
Deferred compensation (3,527) (1,076)
Accumulated other comprehensive loss (6,886) (6,300)
- --------------------------------------------------------------------------------
Total stockholders' equity 181,423 151,106
- --------------------------------------------------------------------------------
Total liabilities and stock$olders' equity 262,942 $ 226,864
================================================================================
Certain prior year balances have been reclassified to conform with the current
year presentation
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4th Quarter and Annual 2004 Press Release
RPC INCORPORATED AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
Twelve months ended December 31, (Unaudited) (In thousands)
- --------------------------------------------------------------------------------
2004 2003
- --------------------------------------------------------------------------------
Operating Activities:
Net income $ 34,773 $ 10,893
Depreciation, amortization and other non-cash charges 35,054 33,182
Other net changes in operating activities (19,454) 6,556
- --------------------------------------------------------------------------------
Net cash provided by operating activities 50,373 50,631
- --------------------------------------------------------------------------------
Investing Activities:
Capital expenditures (49,869) (30,356)
Other investing activities 12,654 (4,314)
- --------------------------------------------------------------------------------
Net cash used for investing activities (37,215) (34,670)
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Financing Activities:
Payment of dividends (3,408) (2,874)
Cash paid for common stock purchased and retired (2,329) (1,870)
Other financing activities (87) (448)
- --------------------------------------------------------------------------------
Net cash used for financing activities (5,824) (5,192)
- --------------------------------------------------------------------------------
Net increase in cash and cash equivalents 7,334 10,769
Cash and cash equivalents at beginning of period 22,302 11,533
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 29,636 $ 22,302
================================================================================