Exhibit 20
RPC, Inc. Reports 2003 First Quarter Results
ATLANTA--(BUSINESS WIRE)--April 23, 2003--RPC Incorporated (NYSE:
RES):
-- Revenues Increased 19.6% over Prior Year
-- First Profitable Quarter Since Third Quarter 2001
RPC Incorporated (NYSE: RES) announced its unaudited results for
the first quarter ended March 31, 2003.
For the quarter ended March 31, 2003, revenues increased 19.6
percent to $60,700,000 compared to $50,766,000 last year. Net income
was $305,000, or $0.01 diluted earnings per share, compared to a net
loss of $1,167,000 or $0.04 loss per diluted share last year.
Cost of services rendered and goods sold were $39,926,000 during
the first quarter of 2003, a 17.6 percent increase over the prior
year. As a percentage of revenues, these costs decreased slightly to
65.8 percent compared to 66.9 percent in 2002 because of improved
leverage in the first quarter of 2003 resulting from the higher levels
of personnel and equipment utilization. Selling, general and
administrative expenses declined by three percent in the first quarter
of 2003 to $11,953,000 compared to $12,325,000 in the prior year.
Depreciation and amortization expense increased by 3.5 percent or
$272,000 due to the effect of capital expenditures made during 2002.
Income before income taxes was $492,000 in the first quarter of
2003, compared to a loss before income taxes of $1,882,000 in the
prior year. This improvement resulted from the increases in revenues,
partially offset by the increases in operating expenses, depreciation
and amortization, and the effect of the change in non-operating other
income and expenses.
"RPC's first quarter results reflect a mild upturn in the domestic
oil and gas rig count and our customers' activity levels," stated
Richard A. Hubbell, RPC's President and Chief Operating Officer. "The
average rig count during the first quarter was 893, almost 10 percent
higher than the same period in 2002. The rig count for the last week
in the first quarter was up 26 percent year over year, showing the
increased activity towards the end of the quarter. We are pleased that
RPC grew its quarterly revenues by more than 19 percent year over year
- - a growth rate that is higher than the growth in the quarterly rig
count. The oil price at the end of the first quarter was almost nine
percent less than at the beginning of the quarter, but still about
eight percent higher than the average oil price in the fourth quarter
of 2002. The price of natural gas has been extremely volatile this
quarter, briefly spiking to more than $11 per thousand cubic feet
(Mcf) although it ended at approximately five dollars per Mcf. These
price increases and volatility may lead to an increase in drilling
activity.
Hubbell continued, "Our revenue increases were driven primarily by
higher activity levels, as the pricing environment for our services
remains very competitive. We remain cautious about our operating
environment because of the global political turmoil and resulting
impact on the markets in which we operate. As a result, we have
remained selective regarding new capital expenditures and the entrance
into potential new markets."
Shortly after the end of the first quarter, RPC acquired the
assets of Bronco Oilfield Services, Inc., a Corpus Christi,
Texas-based company, specializing in surface pressure control services
and equipment for a combination of cash, RPC common stock and
seller-financed debt. The Company, with over 3,000 rental tool items,
recently added fluid pumping and production testing services to its
services mix. Bronco's operations represent a geographic expansion of
the services currently provided by Sooner Testing, Inc., located in
Elk City, OK, which RPC acquired in February 2001.
Recently, RPC opened a new operational headquarters in Houston,
Texas. This facility consists of office space and a storage area for
our well control equipment and it consolidates RPC employees from
seven offices around Houston. We believe that this building will help
to improve our customer relationship capabilities across our diverse
service lines and also save the Company occupancy costs.
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, wire line,
fluid pumping, 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 rig count and customer activity.
Technical Services revenues rose 19.7 percent for the quarter compared
to the 9.7 percent increase in the rig count. Support Services
revenues rose by 14.1 percent during the quarter compared to the prior
year. The increase in revenues in both segments was principally due to
increased utilization of equipment and personnel.
Three months
ended March 31,
--------------------
2003 2002
--------------------
(in thousands)
Revenues:
Technical
services $ 47,818 $ 39,937
Support services 9,698 8,500
Other 3,184 2,329
--------------------
Total revenues $ 60,700 $ 50,766
====================
Operating income
(loss):
Technical
services $ 2,745 $ 1,348
Support services (53) (2,841)
Other (238) (470)
--------------------
Total operating
income (loss) $ 2,454 $ (1,963)
--------------------
Corporate
expenses 1,629 1,267
Other expense
(income) 318 (1,364)
Interest expense,
net 15 16
--------------------
Income (loss)
before income
taxes $ 492 $ (1,882)
====================
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 oil and gas services operating
subsidiaries include Cudd Pressure Control, Inc. and Patterson
Services, Inc. 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 ability to emerge from
the current industry decline and its ability to capture more business
than in the last up cycle. 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 possibility of war in the
middle east, 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, 2002.
RPC INCORPORATED AND SUBSIDIARIES
- ----------------------------------------------------------------------
STATEMENTS OF OPERATIONS (In thousands except per share data)
- ----------------------------------------------------------------------
Three months ended March 31, (Unaudited) First Quarter
- ----------------------------------------------------------------------
% BETTER
2003 2002 (WORSE)
- ----------------------------------------------------------------------
REVENUES $ 60,700 $50,766 19.6
COSTS AND EXPENSES:
Cost of services rendered and goods sold 39,926 33,947 (17.6)
Selling, general and administrative
expenses 11,953 12,325 3.0
Depreciation and amortization 7,996 7,724 (3.5)
- ----------------------------------------------------------------------
Operating profit (loss) 825 (3,230) NM
Interest expense, net 15 16 6.3
Other expense (income), net 318 (1,364) NM
- ----------------------------------------------------------------------
Income (loss) before income taxes 492 (1,882) NM
Income tax provision (benefit) 187 (715) NM
- ----------------------------------------------------------------------
NET INCOME (LOSS) $ 305 $(1,167) NM
======================================================================
EARNINGS (LOSS) PER SHARE
Basic $ 0.01 $ (0.04) NM
Diluted 0.01 (0.04) NM
AVERAGE SHARES OUTSTANDING
Basic 28,257 28,264
Diluted 28,657 28,264
NM = Not Meaningful
RPC INCORPORATED AND SUBSIDIARIES
- ----------------------------------------------------------------------
BALANCE SHEETS
- ----------------------------------------------------------------------
At March 31, (Unaudited) (In thousands)
- ----------------------------------------------------------------------
2003 2002
- ----------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 3,696 $ 8,202
Accounts receivable, net 45,315 42,039
Inventories 8,746 8,357
Deferred income taxes 6,136 5,963
Income taxes receivable 8,889 4,343
Prepaid expenses and other current assets 3,387 4,469
- ----------------------------------------------------------------------
Current assets 76,169 73,373
- ----------------------------------------------------------------------
Property, plant and equipment, net 104,881 112,273
Intangibles, net 10,184 9,409
Other assets 1,717 1,466
- ----------------------------------------------------------------------
Total assets $ 192,951 $196,521
======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 12,465 $ 10,033
Accrued payroll and related expenses 4,257 6,205
Accrued insurance expenses 3,916 5,796
Accrued state, local and other taxes 1,451 1,671
Short-term debt 488 1,083
Other accrued expenses 3,302 4,632
- ----------------------------------------------------------------------
Current liabilities 25,879 29,420
- ----------------------------------------------------------------------
Long-term accrued insurance expenses 4,415 3,900
Long-term debt 2,000 2,492
Long-term pension liabilities 7,411 2,513
Deferred income taxes 8,581 3,506
- ----------------------------------------------------------------------
Total liabilities 48,286 41,831
- ----------------------------------------------------------------------
Common stock 2,862 2,871
Capital in excess of par value 26,566 27,314
Earnings retained 119,136 125,366
Accumulated other comprehensive loss (3,899) (861)
- ----------------------------------------------------------------------
Total stockholders' equity 144,665 154,690
- ----------------------------------------------------------------------
Total liabilities and stockholders' equity $ 192,951 $196,521
======================================================================
RPC INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three months ended March 31, (unaudited)
2003 2002
- ----------------------------------------------------------------------
Operating Activities:
Net income (loss) $ 305 $ (1,167)
Depreciation and amortization 8,022 7,748
Other non-cash charges to earnings 17 1,108
Changes in working capital (6,328) (4,759)
---------------------------------------------------------------------
Net cash provided by operating
activities 2,016 2,930
---------------------------------------------------------------------
Investing Activities:
Capital expenditures (8,253) (5,419)
Other investing activities (415) 1,386
---------------------------------------------------------------------
Net cash used for investing activities (8,668) (4,033)
---------------------------------------------------------------------
Financing Activities:
Dividend distributions (715) (718)
Cash paid for common stock purchased and
retired (7) (84)
Other financing activities (463) (628)
---------------------------------------------------------------------
Net cash used for financing activities (1,185) (1,430)
---------------------------------------------------------------------
Net decrease in cash and cash equivalents (7,837) (2,533)
Cash and cash equivalents at beginning of
period 11,533 10,735
---------------------------------------------------------------------
Cash and cash equivalents at end of period $ 3,696 $ 8,202
=====================================================================
CONTACT: RPC Incorporated, Atlanta
Ben M. Palmer, 404/321-2140
Jim Landers, 404/321-2162
irdept@rpc.net