Exhibit 99
[LOGO] RPC, INC.
An Oil & Gas Services Company
FOR IMMEDIATE RELEASE
RPC, INC. REPORTS RECORD 2005 THIRD QUARTER REVENUES, PROFITS AND STOCK SPLIT
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o Revenues for the Third Quarter Increased 30.5 Percent over Prior
Year
o Excluding a $0.15 per share Gain from Sale of Assets, Diluted EPS
for the Third Quarter Increased 58.3 Percent to $0.38, Compared to
$0.24 in the Prior Year
o Including a $0.15 per share Gain from Sale of Assets, Diluted EPS
for the Third Quarter Increased 120.8 Percent to $0.53, Compared to
$0.24 in the Prior Year
o Three-for-two stock split payable December 12, 2005
ATLANTA, October 26, 2005 -- RPC, Inc. (NYSE: RES) announced its unaudited
results for the third quarter ended September 30, 2005. 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 September 30, 2005, revenues increased 30.5 percent to
$115,801,000 compared to $88,721,000 last year. Operating profit for the quarter
was $25,514,000, compared to $12,971,000 in the prior year, an increase of 96.7
percent. Net income for the quarter was $23,107,000, or $0.53 diluted earnings
per share ($0.35 adjusted for the three-for-two split effective December 12,
2005), compared to $10,237,000, or $0.24 diluted earnings per share last year
($0.16 adjusted for the three-for-two split). Net income for the third quarter
included an after tax gain of $0.15 diluted earnings per share ($0.10 adjusted
for the three-for-two split) on the sale of all of the operating assets of RPC's
hammer, casing, laydown and casing torque-turn services.
Cost of services rendered and goods sold increased 22.3 percent to $61,424,000,
or 53.0 percent of revenues, during the third quarter of 2005, compared to
$50,233,000, or 56.6 percent of revenues, in the prior year. The increase in
these costs was due to the variable nature of many of these expenses, including
personnel, maintenance and repairs, and materials and supplies, as well as
increases in fuel costs. As a percentage of revenues, however, these costs
decreased because of higher equipment and personnel utilization, improved
pricing, and the leverage of fixed costs over higher revenues. Selling, general
and administrative expenses increased by 12.3 percent in the third quarter of
2005 to $19,000,000 from $16,921,000 in the prior year, primarily due to
increased employment costs. These costs decreased as a percentage of revenues to
16.4 percent in 2005 compared to 19.1 percent last year, due to leverage of
these costs over higher revenues. Depreciation and amortization were $9,863,000
during the quarter, 14.7 percent higher than last year, due to capital
expenditures made during recent quarters.
For the nine months ended September 30, 2005, revenues increased 22.0 percent to
$310,076,000 compared to $254,149,000 last year. Net income increased 91.2
percent to $44,944,000, or $1.03 diluted earnings per share ($0.69 adjusted for
the three-for-two split) compared to net income of $23,512,000, or $0.54 diluted
earnings per share last year ($0.36 adjusted for the three-for-two split).
RPC also announced that its Board of Directors has approved a three-for-two
split of the Company's outstanding common stock. The split will be effected by
issuing one additional share of common stock for every two shares of common
stock held. The additional share of common stock will be distributed on December
12, 2005 to holders of record at the close of
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3rd Quarter 2005 Press Release
business on November 11, 2005. No fractional shares will be issued. Fractional
share amounts resulting from the split will be paid to shareholders in cash.
"RPC's third quarter results reflect the continuation of the strongest activity
levels in many years and the results of our continued investment in our
business," stated Richard A. Hubbell, RPC's President and Chief Executive
Officer. "Our overall domestic revenues increased due to higher activity levels,
increased capacity in our largest service lines, and increased pricing for our
services. Most notably, we realized some pricing increases due to new price
books that were issued and began to take effect during the quarter. The average
domestic rig count during the third quarter was 1,432, 17 percent higher than
the same period in 2004. Our revenues grew at a higher rate than the rig count
because of the factors mentioned above, partially offset by declines in
international revenues, the elimination of revenues from our marine liftboat
division, which was sold in the fourth quarter of 2004, and the elimination of
revenues from our hammer, casing, laydown and casing torque-turn service lines,
which we sold during the third quarter of 2005.
Hubbell continued, "Hurricanes Katrina and Rita severely curtailed oilfield
drilling and production activity in the Gulf of Mexico. Because of our presence
in this region, our operations were affected by lost working days and temporary
disruptions in the availability of materials and supplies. We estimate that the
financial impact of these storms during the third quarter was a one percent
reduction in revenues and two to three percent reduction in net income. While we
are optimistic that the efforts to rebuild the region's damaged oil and gas
infrastructure will lead to an increase in demand for our services, it is too
soon to determine either the magnitude or the timing of such demand. We invested
more than $21 million in new equipment and maintenance of existing equipment
during the quarter. As in the past, however, we continue to maintain a
conservative, liquid balance sheet.
Hubbell continued, "Our Board approved a three-for-two stock split at its
regular quarterly meeting. This is the third split in RPC's history and the
second in 2005. The decision is a response to our strong earnings and stock
price performance. We believe that this will reward our current shareholders and
increase the investment appeal of our common stock."
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, well control, downhole tools, surface
production equipment, 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, 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 increased 34.9 percent for the quarter compared to the prior
year, driven by increased pricing, higher activity levels, and increased
capacity. Support Services revenues increased by only 9.5 percent during the
quarter compared to the prior year, because the prior year results included
revenues from our marine liftboats, which were sold during the fourth quarter of
2004. This increase was due to increased capacity and higher pricing in the
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3rd Quarter 2005 Press Release
rental tools service line, which comprises the
majority of the revenues in this segment. There were no revenues in the other
segment during the quarter due to the sale of the non-oilfield business unit
that comprised this segment, which occurred during the second quarter of 2004.
Three Months Ended Nine Months Ended
September 30 Ended September 30
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2005 2004 2005 2004
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(in thousands)
Revenues:
Technical services $ 99,046 $ 73,404 $ 262,963 $ 209,523
Support services 16,755 15,302 47,096 40,848
Other 0 15 17 3,778
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Total revenues $ 115,801 $ 88,721 $ 310,076 $ 254,149
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Operating profit (loss):
Technical services $ 24,911 $ 13,024 $57,029 $ 35,706
Support services 3,255 2,378 8,737 4,629
Other (2) (382) (300) (803)
Corporate expenses (2,650) (2,049) (7,315) (5,861)
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Total operating profit $ 25,514 $ 12,971 $ 58,151 $ 33,671
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Other income, net 11,120 1,555 13,994 2,324
Interest income (expense), net 131 (17) 301 (75)
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Income before income taxes $ 36,765 $ 14,509 $ 72,446 $ 35,920
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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 the impact of Hurricanes Katrina and Rita, the impact of
efforts to rebuild the Gulf of Mexico region's oil and gas infrastructure on the
demand for RPC's services, RPC's ability to maintain a conservative, liquid
balance sheet and 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, the Company's ability to implement price increases,
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, 2004, and Form 10-Q for the quarter ended June 30, 2005 and its
other SEC filings.
For information contact:
Ben M. Palmer
Chief Financial Officer
404.321.2140
irdept@rpc.net
Jim Landers
Corporate Finance
404.321.2162
jlanders@rpc.net
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3rd Quarter 2005 Press Release
RPC INCORPORATED AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data)
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Periods ended September 30, (Unaudited) Third Quarter Nine Months
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% BETTER % BETTER
2005 2004 (WORSE) 2005 2004 (WORSE)
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REVENUES $115,801 $ 88,721 30.5% $310,076 $254,149 22.0%
COSTS AND EXPENSES:
Cost of services rendered and goods
sold 61,424 50,233 (22.3) 167,581 146,529 (14.4)
Selling, general and administrative
expenses 19,000 16,921 (12.3) 55,594 48,213 (15.3)
Depreciation and amortization 9,863 8,596 (14.7) 28,750 25,736 (11.7)
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Operating profit 25,514 12,971 96.7 58,151 33,671 72.7
Interest income (expense), net 131 (17) NM 301 (75) NM
Other income, net 11,120 1,555 NM 13,994 2,324 NM
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Income before income taxes 36,765 14,509 153.4 72,446 35,920 101.7
Income tax provision 13,658 4,272 (219.7) 27,502 12,408 (121.6)
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NET INCOME $ 23,107 $ 10,237 125.7% $ 44,944 $ 23,512 91.2%
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EARNINGS PER SHARE
Basic $ 0.55 $ 0.24 129.2% $ 1.06 $ 0.55 92.7%
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Diluted $ 0.53 $ 0.24 120.8% $ 1.03 $ 0.54 90.7%
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AVERAGE SHARES OUTSTANDING
Basic 42,029 42,482 42,291 42,443
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Diluted 43,554 43,371 43,726 43,188
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ADJUSTED FOR THE THREE-FOR-TWO STOCK
SPLIT EFFECTIVE DECEMBER 12, 2005
EARNINGS PER SHARE
Basic $ 0.37 $ 0.16 131.3% $ 0.71 $ 0.37 91.9%
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Diluted $ 0.35 $ 0.16 118.8% $ 0.69 $ 0.36 91.7%
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AVERAGE SHARES OUTSTANDING
Basic 63,043 63,723 63,437 63,665
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Diluted 65,331 65,057 65,589 64,782
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3rd Quarter 2005 Press Release
RPC INCORPORATED AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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At September 30, (Unaudited) (In thousands)
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2005 2004
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ASSETS
Cash and cash equivalents $ 21,560 $ 16,101
Accounts receivable, net 98,833 73,403
Inventories 12,186 10,161
Deferred income taxes 4,818 5,905
Income taxes receivable -- 4,047
Prepaid expenses and other current assets 1,936 1,370
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Total current assets 139,333 110,987
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Property, plant and equipment, net 135,290 117,039
Goodwill and other intangibles, net 24,151 15,932
Other assets 3,219 2,415
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Total assets $ 301,993 $ 246,373
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 34,163 $ 21,846
Accrued payroll and related expenses 10,706 9,447
Accrued insurance expenses 4,018 4,041
Accrued state, local and other taxes 2,665 1,721
Income taxes payable 7,216 --
Current portion of long-term debt -- 2,700
Other accrued expenses 2,512 708
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Total current liabilities 61,280 40,463
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Accrued insurance expenses 6,774 6,458
Long-term debt -- 2,100
Pension liabilities 11,515 10,013
Deferred income taxes 7,923 13,638
Other long-term liabilities 1,381 2,610
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Total liabilities 88,873 75,282
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Common stock 4,290 4,314
Capital in excess of par value 21,126 26,910
Retained earnings 200,051 149,778
Deferred compensation (5,722) (3,643)
Accumulated other comprehensive loss (6,625) (6,268)
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Total stockholders' equity 213,120 171,091
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Total liabilities and st$ckholders' equity $ 301,993 $ 246,373
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Certain prior year balances have been reclassified to conform with current year
presentation.
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3rd Quarter 2005 Press Release
RPC INCORPORATED AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Nine months ended September 30, (Unaudited) (In thousands)
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2005 2004
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Operating Activities:
Net income $ 44,944 $ 23,512
Depreciation, amortization and other non-cash charges 29,706 26,074
Other net changes in operating activities (19,354) (15,919)
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Net cash provided by operating activities 55,296 33,667
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Investing Activities:
Capital expenditures (55,439) (36,594)
Other investing activities 11,449 1,934
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Net cash used for investing activities (43,990) (34,660)
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Financing Activities:
Payment of dividends (5,082) (2,558)
Payments on debt (4,800) (1,110)
Cash paid for common stock purchased and retired (10,268) (1,963)
Proceeds from exercise of stock options 768 423
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Net cash used for financing activities (19,382) (5,208)
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Net decrease in cash and cash equivalents (8,076) (6,201)
Cash and cash equivalents at beginning of period 29,636 22,302
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Cash and cash equivalents at end of period $ 21,560 $ 16,101
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