Exhibit 99
RPC, Inc. Reports 2003 Second Quarter Results
ATLANTA--(BUSINESS WIRE)--July 23, 2003--RPC Incorporated (NYSE:
RES):
-- Revenues for the Second Quarter Increased 42.2 Percent over
Prior Year
-- Diluted EPS for the Second Quarter Increased to Earnings of
$0.16 from a Loss of $0.07 in the Prior Year
RPC Incorporated (NYSE: RES) announced its unaudited results for
the second quarter and six months ended June 30, 2003. For the quarter
ended June 30, 2003, revenues increased 42.2 percent to $70,864,000
compared to $49,821,000 last year. Net income was $4,705,000, or $0.16
diluted earnings per share, compared to a net loss of $1,953,000 or
$0.07 diluted loss per share last year.
Cost of services rendered and goods sold were $42,390,000 during
the second quarter of 2003, a 21.5 percent increase over the prior
year. As a percentage of revenues, these costs decreased to 59.8
percent compared to 70.0 percent in 2002 because of improved pricing
in several service lines, as well as higher levels of personnel and
equipment utilization. Selling, general and administrative expenses
increased by 23.4 percent in the second quarter of 2003 to $13,208,000
compared to $10,704,000 in the prior year. This increase was due to
higher personnel and incentive compensation expense consistent with
increased activity and profitability, and increased pension expense
relating to RPC's pension plan obligation. Depreciation and
amortization increased by 7.6 percent to $8,401,000 due to the effect
of capital expenditures made during the first six months of 2003.
Income before income taxes was $7,589,000 in the second quarter of
2003, compared to a loss before income taxes of $3,151,000 in the
prior year. This improvement resulted from the increases in revenues
and non-operating income, partially offset by the increases in
operating expenses and depreciation and amortization.
For the six months ended June 30, 2003, revenues increased 30.8
percent to $131,564,000 compared to $100,587,000 last year. Net income
was $5,010,000, or $0.17 diluted earnings per share compared to a net
loss of $3,120,000, or $0.11 diluted per share last year.
"RPC's second quarter results continued the upturn that began in
the first quarter of 2003," stated Richard A. Hubbell, RPC's President
and Chief Executive Officer. "The average domestic rig count during
the second quarter was 1,028, 27.2 percent higher than the same period
in 2002. We are pleased that RPC's quarterly revenue growth exceeded
the domestic rig count growth rate. However, the U.S. land rig count,
which we believe is a better indicator of our customers' activity
levels, grew by 31.5 percent, from 695 last year to 914 this year.
Also, the average natural gas price was $5.59 this quarter, 70 percent
higher than the second quarter of last year, and we believe that our
activity levels are affected more by natural gas prices than by the
price of oil.
Hubbell continued, "Our revenue increases were driven primarily by
higher activity levels in most of our service lines, but also by
slightly increased pricing in several of our service lines. Although
these developments are encouraging, the pricing in our largest service
lines remains low by historical measures during periods of favorable
industry conditions. We continue to look for strong expansion
opportunities, as evidenced by the acquisition of Bronco Oilfield
Services, which we completed early in the second quarter. However, we
are still dedicated to maintaining a strong balance sheet and
conservative capital structure due to the volatility of the oilfield
services industry."
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 drilling rig count and related customer
activity. Technical Services revenues rose 49.7 percent for the
quarter compared to the 27.2 percent increase in the rig count.
Support Services revenues rose by 27.6 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. The relatively larger increase in Technical Services
revenues was due to higher overall pricing in this segment, in
contrast to Support Services, a segment in which activity increased
but pricing in the rental tools service line has been impacted by
relatively lower increases in customer activity in the Gulf of Mexico
area.
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2003 2002 2003 2002
(in thousands)
Revenues:
Technical services $58,073 $38,796 $105,891 $78,732
Support services 10,670 8,359 20,368 16,860
Other 2,121 2,666 5,305 4,995
-------- --------- --------- ---------
Total revenues $70,864 $49,821 $131,564 $100,587
-------- --------- --------- ---------
Operating income
(loss):
Technical services $ 8,440 $(1,321) $11,185 $ (495)
Support services 750 (813) 697 (3,137)
Other (543) (415) (781) (879)
-------- --------- --------- ---------
Segment operating
profit (loss) $ 8,647 $(2,549) $11,101 $ (4,511)
-------- --------- --------- ---------
Corporate expenses (1,782) (1,039) (3,411) (2,307)
Other income, net 801 466 483 1,830
Interest expense, net (77) (29) (92) (45)
-------- --------- --------- ---------
Income (loss) before
income taxes $ 7,589 $(3,151) $8,081 $ (5,033)
======== ========= ========= =========
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 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, 2002.
RPC INCORPORATED AND SUBSIDIARIES
- ---------------------------------------------------------------------
STATEMENTS OF OPERATIONS (In thousands except per share data)
- ---------------------------------------------------------------------
Six months Second Quarter Six Months
ended June 30,
(Unaudited)
- ---------------------------------------------------------------------
% BETTER % BETTER
2003 2002 (WORSE) 2003 2002 (WORSE)
- ----------------------------------------------------------------------
REVENUES $70,864 $49,821 42.2 % $131,564 $100,587 30.8 %
COSTS AND
EXPENSES:
Cost of
services
rendered and
goods sold 42,390 34,899 (21.5) 82,316 68,845 (19.6)
Selling,
general and
administrative
expenses 13,208 10,704 (23.4) 25,161 23,030 (9.3)
Depreciation
and
amortization 8,401 7,806 (7.6) 16,397 15,530 (5.6)
- ----------------------------------------- ---------------------------
Operating
profit (loss) 6,865 (3,588) NM 7,690 (6,818) NM
Interest
expense, net (77) (29) (165.5) (92) (45) (104.4)
Other income,
net 801 466 71.9 483 1,830 (73.6)
- ----------------------------------------- ---------------------------
Income (loss)
before income
taxes 7,589 (3,151) NM 8,081 (5,033) NM
Income tax
provision
(benefit) 2,884 (1,198) NM 3,071 (1,913) NM
- ----------------------------------------- ---------------------------
NET INCOME
(LOSS) $ 4,705 $(1,953) NM % $ 5,010 $ (3,120) NM %
========================================= ===========================
EARNINGS (LOSS)
PER SHARE
Basic $ 0.17 $ (0.07) NM % $ 0.18 $ (0.11) NM %
========================== ============================
Diluted $ 0.16 $ (0.07) NM % $ 0.17 $ (0.11) NM %
========================== ============================
AVERAGE SHARES
OUTSTANDING
Basic 28,439 28,265 28,348 28,265
================ ==================
Diluted 28,851 28,265 28,754 28,265
================ ==================
NM = Not Meaningful
RPC INCORPORATED AND SUBSIDIARIES
- ----------------------------------------------------------------------
BALANCE SHEETS
- ----------------------------------------------------------------------
At June 30, (Unaudited) (In thousands)
- ----------------------------------------------------------------------
2003 2002
- ----------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 10,182 $ 7,364
Accounts receivable, net 52,388 42,609
Inventories 9,629 8,683
Deferred income taxes 6,548 5,505
Taxes receivable 267 7,682
Prepaid expenses and other current
assets 2,774 2,184
- ----------------------------------------------------------------------
Total current assets 81,788 74,027
- ----------------------------------------------------------------------
Property, plant and equipment, net 110,802 109,652
Intangibles, net 12,657 9,399
Other assets 1,627 1,457
- ----------------------------------------------------------------------
Total assets $ 206,874 $ 194,535
======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 14,151 $ 11,788
Accrued payroll and related
expenses 6,440 5,731
Accrued insurance expenses 4,507 5,473
Accrued state, local and other
taxes 2,075 1,818
Short-term debt 1,133 1,068
Other accrued expenses 526 1,615
- ----------------------------------------------------------------------
Total current liabilities 28,832 27,493
- ----------------------------------------------------------------------
Long-term accrued insurance
expenses 4,137 3,974
Long-term debt 4,800 2,442
Pension liabilities 7,891 2,778
Deferred income taxes 10,424 6,096
- ----------------------------------------------------------------------
Total liabilities 56,084 42,783
- ----------------------------------------------------------------------
Common stock 2,881 2,867
Capital in excess of par value 28,581 26,961
Deferred compensation (1,197) (1,592)
Earnings retained 124,380 124,377
Accumulated other comprehensive
loss (3,855) (861)
- ----------------------------------------------------------------------
Total stockholders' equity 150,790 151,752
- ----------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 206,874 $ 194,535
======================================================================
RPC INCORPORATED AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
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Six months ended June 30, (unaudited)
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2003 2002
--------------------------------------------------------------------
Operating Activities:
Net income (loss) $ 5,010 $ (3,120)
Depreciation and amortization 16,450 15,578
Other non-cash (credits) charges
to earnings (86) 2,197
Changes in working capital (708) (4,850)
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Net cash provided by operating
activities 20,666 9,805
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Investing Activities:
Capital expenditures (14,584) (10,613)
Other investing activities (5,508) 7
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Net cash used for investing
activities (20,092) (10,606)
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Financing Activities:
Dividend distributions (1,435) (1,435)
Cash paid for common stock purchased
and retired (14) (484)
Other financing activities (476) (651)
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Net cash used for financing
activities (1,925) (2,570)
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Net decrease in cash and cash
equivalents (1,351) (3,371)
Cash and cash equivalents at
beginning of period 11,533 10,735
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Cash and cash equivalents at end of
period $ 10,182 $ 7,364
====================================================================
CONTACT: RPC Incorporated, Atlanta
Ben M. Palmer, 404/321-2140
or
Jim Landers, 404/321-2162
irdept@rpc.net