Exhibit 99.1
RPC, Inc. Reports 2003 Third Quarter Results
ATLANTA--(BUSINESS WIRE)--Oct. 29, 2003--
-- Revenues for the Third Quarter Increased 29.7 Percent over
Prior Year
-- Diluted EPS for the Third Quarter Increased to Earnings of
$0.09 from a Loss of $0.04 in the Prior Year
RPC Incorporated (NYSE: RES) announced its unaudited results for
the third quarter and nine months ended September 30, 2003. For the
quarter ended September 30, 2003, revenues increased 29.7 percent to
$69,244,000 compared to $53,370,000 last year. Net income was
$2,577,000, or $0.09 diluted earnings per share, compared to a net
loss of $1,040,000 or $0.04 diluted loss per share last year.
Cost of services rendered and goods sold was $43,482,000 during
the third quarter of 2003, a 19.5 percent increase over the prior
year. These increases were due to increases in direct employment costs
and certain operational expenses, both of which vary with activity
levels, coupled with increased self-insured casualty claims costs. As
a percentage of revenues, these costs decreased to 62.8 percent
compared to 68.2 percent in 2002 because of improved pricing and
higher equipment and personnel utilization. Selling, general and
administrative expenses increased by 21.2 percent in the third quarter
of 2003 to $13,438,000 compared to $11,083,000 in the prior year. This
increase was due to higher personnel and incentive compensation
expense consistent with increased activity levels and profitability,
and increased pension expense relating to RPC's pension plan
obligation. Depreciation and amortization increased during the quarter
by 5.4 percent to $8,387,000 due to the effect of capital expenditures
made during the first nine months of 2003.
Income before income taxes was $4,156,000 in the third quarter of
2003, compared to a loss before income taxes of $1,677,000 in the
prior year. This improvement resulted from the increases in revenues,
partially offset by the increases in operating expenses and
depreciation and amortization.
For the nine months ended September 30, 2003, revenues increased
30.4 percent to $200,808,000 compared to $153,957,000 last year. Net
income was $7,587,000, or $0.26 diluted earnings per share compared to
a net loss of $4,160,000, or $0.15 diluted per share last year.
"RPC's third quarter results reflect the continuation of higher
activity levels than we experienced one year ago," stated Richard A.
Hubbell, RPC's President and Chief Executive Officer. "Our overall
domestic activity has increased because of higher customer drilling
activity. The average domestic rig count during the third quarter was
1,088, 27.6 percent higher than the same period in 2002. Our revenues
grew at a slightly higher rate than the rig count, principally because
of the effect of our Bronco Oilfield Services acquisition, which was
closed in the second quarter of 2003. Also, the average natural gas
price was $4.82 this quarter, 49.7 percent higher than the third
quarter of last year, which had a positive impact on our results,
because we believe that our activity levels are affected more by
natural gas prices than by the price of oil. Our revenue increases
compared to the prior year were driven by higher overall activity and
pricing levels in most of our service lines. While we are pleased with
these year-over-year improvements, we should also note that our
revenues are slightly lower this quarter compared to the second
quarter of 2003 due to lower activity levels in many of our service
lines. We are also continuing to experience weakness in the Gulf of
Mexico market, where activity levels have not increased to the extent
that they have in the U.S. land markets.
Hubbell continued, "We continued to make selective capital
expenditures during the quarter to position ourselves to take
advantage of relatively stable industry conditions. As always,
however, we continued to focus on a strong balance sheet and I am
pleased to state that our cash and cash equivalents balance increased
by more than $10 million during the quarter. We continue to explore
domestic and international opportunities that can provide acceptable
expected returns on investment and diversify our operations into other
markets and services."
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, surface production equipment, 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 29.0 percent for the
quarter compared to the prior year, driven by higher overall pricing
and activity levels. Support Services revenues rose by 40.5 percent
during the quarter compared to the prior year. This relatively higher
increase was due to significantly higher activity levels in the rental
tools service line and higher utilization and pricing of our work
platform vessels due to a long term project which ended during the
quarter.
Three Months Ended Nine Months Ended
Sept 30, Sept 30,
----------------------------------------
2003 2002 2003 2002
-------- -------- ---------- ----------
(in thousands)
Revenues:
Technical services $ 53,603 $41,542 $ 159,494 $ 120,274
Support services 13,125 9,339 33,493 26,199
Other 2,516 2,489 7,821 7,484
- ----------------------------- -------- ------- --------- ---------
Total revenues $ 69,244 $53,370 $ 200,808 $ 153,957
- ----------------------------- -------- ------- --------- ---------
Operating profit (loss):
Technical services $ 3,969 $ (365) $ 15,154 $ (860)
Support services 2,376 (116) 3,073 (3,253)
Other (419) (445) (1,200) (1,324)
Corporate expenses (1,989) (1,132) (5,400) (3,439)
-------- ------- --------- ---------
Total operating profit (loss) $ 3,937 $(2,058) $ 11,627 $ (8,876)
- ----------------------------- -------- ------- --------- ---------
Other income, net 264 398 747 2,228
Interest expense, net (45) (17) (137) (62)
-------- ------- --------- ---------
Income (loss) before income
taxes $ 4,156 $(1,677) $ 12,237 $ (6,710)
- ----------------------------- -------- ------- --------- ---------
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)
- ----------------------------------------------------------------------
Periods ended September 30, (Unaudited) Third Quarter
- ----------------------------------------------------------------------
% BETTER
2003 2002 (WORSE)
- -------------------------------------- -------------------------------
REVENUES $ 69,244 $ 53,370 29.7 %
COSTS AND EXPENSES:
Cost of services rendered and goods
sold 43,482 36,391 (19.5)
Selling, general and administrative
expenses 13,438 11,083 (21.2)
Depreciation and amortization 8,387 7,954 (5.4)
- -------------------------------------- ------------------------------
Operating profit (loss) 3,937 (2,058) NM
Interest expense, net (45) (17) (164.7)
Other income, net 264 398 (33.7)
- -------------------------------------- ------------------------------
Income (loss) before income taxes 4,156 (1,677) NM
Income tax provision (benefit) 1,579 (637) NM
- -------------------------------------- ------------------------------
NET INCOME (LOSS) $ 2,577 $ (1,040) NM %
====================================== ==============================
EARNINGS (LOSS) PER SHARE
Basic $ 0.09 $ (0.04) NM %
==============================
Diluted $ 0.09 $ (0.04) NM %
==============================
AVERAGE SHARES OUTSTANDING
Basic 28,446 28,259
====================
Diluted 28,877 28,259
====================
NM= Not Meaningful
RPC INCORPORATED AND SUBSIDIARIES
- -------------------------------------- ------------------------------
STATEMENTS OF OPERATIONS (In thousands except per share data)
- ---------------------------------------------------------------------
Periods ended September 30, (Unaudited) Nine Months
- ---------------------------------------------------------------------
% BETTER
2003 2002 (WORSE)
- -------------------------------------- -------------------------------
REVENUES $ 200,808 $153,957 30.4 %
COSTS AND EXPENSES:
Cost of services rendered and goods
sold 125,798 105,236 19.5)
Selling, general and administrative
expenses 38,599 34,113 (13.2)
Depreciation and amortization 24,784 23,484 (5.5)
- -------------------------------------- ------------------------------
Operating profit (loss) 11,627 (8,876) NM
Interest expense, net (137) (62) (121.0)
Other income, net 747 2,228 (66.5)
- -------------------------------------- ------------------------------
Income (loss) before income taxes 12,237 (6,710) NM
Income tax provision (benefit) 4,650 (2,550) NM
- -------------------------------------- ------------------------------
NET INCOME (LOSS) $ 7,587 $ (4,160) NM %
====================================== ==============================
EARNINGS (LOSS) PER SHARE
Basic $ 0.27 $ (0.15) NM %
===============================
Diluted $ 0.26 $ (0.15) NM %
===============================
AVERAGE SHARES OUTSTANDING
Basic 28,380 28,263
====================
Diluted 28,794 28,263
====================
NM= Not Meaningful
RPC INCORPORATED AND SUBSIDIARIES
- -------------------------------------------------
CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
At September 30, (Unaudited) (In thousands)
- ------------------------------------------------- -------------------
2003 2002
- ------------------------------------------------- -------------------
ASSETS
Cash and cash equivalents $ 20,972 $ 8,956
Accounts receivable, net 48,587 38,571
Inventories 9,538 8,590
Deferred income taxes 8,313 2,215
Taxes receivable 2,993 9,959
Prepaid expenses and other current assets 1,777 1,112
- ----------------------------------------------------------------------
Total current assets 92,180 69,403
- ------------------------------------------------- -------------------
Property, plant and equipment, net 108,008 107,235
Intangibles, net 12,663 9,620
Other assets 1,775 1,440
- ------------------------------------------------- -------------------
Total assets $214,626 $187,698
================================================= ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 15,606 $ 11,375
Accrued payroll and related expenses 7,898 5,317
Accrued insurance expenses 3,008 4,124
Accrued state, local and other taxes 1,500 2,234
Short-term debt 1,110 604
Other accrued expenses 511 1,646
- ------------------------------------------------- -------------------
Total current liabilities 29,633 25,300
- ------------------------------------------------- -------------------
Long-term accrued insurance expenses 6,414 3,971
Long-term debt 4,800 2,410
Pension liabilities 8,388 1,806
Deferred income taxes 13,475 4,105
- ------------------------------------------------- -------------------
Total liabilities 62,710 37,592
- ------------------------------------------------- -------------------
Common stock 2,873 2,865
Capital in excess of par value 27,810 26,896
Earnings retained 126,237 122,621
Deferred compensation (1,137) (1,415)
Accumulated other comprehensive loss (3,867) (861)
- ----------------------------------------------------------------------
Total stockholders' equity 151,916 150,106
- ------------------------------------------------- -------------------
Total liabilities and stockholders' equity $214,626 $187,698
================================================= ===================
RPC INCORPORATED AND SUBSIDIARIES
- ------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------
Nine months ended September 30, (unaudited)
- ------------------------------------------------
(In Thousands)
2003 2002
- ------------------------------------------------ --------------------
Operating Activities:
Net income (loss) $ 7,587 $ (4,160)
Depreciation and amortization 24,857 23,558
Other non-cash charges to earnings 1,150 2,871
Changes in working capital 4,886 (4,096)
- ------------------------------------------------ --------- ----------
Net cash provided by operating
activities 38,480 18,173
- ------------------------------------------------ --------- ----------
Investing Activities:
Capital expenditures (20,711) (16,264)
Other investing activities (4,883) 270
- ------------------------------------------------ --------- ----------
Net cash used for investing activities (25,594) (15,994)
- ------------------------------------------------ --------- ----------
Financing Activities:
Dividend distributions (2,155) (2,152)
Cash paid for common stock purchased and
retired (836) (680)
Other financing activities (456) (1,126)
- ------------------------------------------------ --------- ----------
Net cash used for financing activities (3,447) (3,958)
- ------------------------------------------------ --------- ----------
Net increase (decrease) in cash and
cash equivalents 9,439 (1,779)
Cash and cash equivalents at beginning of
period 11,533 10,735
- ------------------------------------------------ --------- ----------
Cash and cash equivalents at end of period $ 20,972 $ 8,956
================================================ ========= ==========
CONTACT: RPC, Inc., Atlanta
Ben M. Palmer, 404/321-2140
or
Jim Landers, 404/321-2162
irdept@Rpc.Net