UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 1-8726
RPC, INC.
(exact name of registrant as specified in its charter)
DELAWARE 58-1550825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2170 PIEDMONT ROAD, NE, ATLANTA, GEORGIA 30324
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code -- (404) 321-2140
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No
--- ---
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
As of October 15, 2004, RPC, Inc. had 28,767,537 shares of common stock
outstanding.
RPC, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE
NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets -
As of September 30, 2004 and December 31, 2003 3
Consolidated statements of operations -
For the three months and nine months ended September 30, 2004 and 2003 4
Consolidated statements of cash flows -
For the nine months ended September 30, 2004 and 2003 5
Notes to consolidated financial statements 6 - 11
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 23
Item 4. Controls and Procedures 23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 25
Item 2. Unregistered sales of equity securities and use of proceeds 25
Item 3. Defaults upon Senior Securities 26
Item 4. Submission of Matters to a Vote of Security Holders 26
Item 5. Other Information 26
Item 6. Exhibits 27
SIGNATURES 28
2
RPC, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
(In thousands)
(Unaudited)
SEPTEMBER 30, December 31,
2004 2003
- ----------------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 16,101 $ 22,302
Accounts receivable, net 73,403 53,719
Inventories 10,161 10,057
Deferred income taxes 5,905 6,394
Income taxes receivable 4,047 4,149
Prepaid expenses and other current assets 1,370 3,614
- ----------------------------------------------------------------------------------------------------
Total current assets 110,987 100,235
Property, plant and equipment, net 117,039 109,163
Intangibles, net 15,932 15,488
Other assets 2,415 1,864
- ----------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 246,373 $ 226,750
====================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 21,846 $ 19,603
Accrued payroll and related expenses 9,447 8,526
Accrued insurance expenses 4,041 2,852
Accrued state, local and other taxes 1,721 1,549
Current portion of long-term debt 2,700 1,110
Other accrued expenses 708 3,369
- ----------------------------------------------------------------------------------------------------
Total current liabilities 40,463 37,009
Accrued insurance expenses 6,458 5,856
Long-term debt 2,100 4,800
Pension liabilities 10,013 12,972
Deferred income taxes 13,638 13,296
Other long-term liabilities 2,610 1,711
- ----------------------------------------------------------------------------------------------------
Total liabilities 75,282 75,644
- ----------------------------------------------------------------------------------------------------
Common stock 2,876 2,862
Capital in excess of par value 28,348 26,796
Retained earnings 149,778 128,824
Deferred compensation (3,643) (1,076)
Accumulated other comprehensive loss (6,268) (6,300)
- ----------------------------------------------------------------------------------------------------
Total stockholders' equity 171,091 151,106
- ----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 246,373 $ 226,750
====================================================================================================
The accompanying notes are an integral part of these consolidated financial statements.
3
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(In thousands except per share data)
(Unaudited)
Three months ended September 30, Nine months ended September 30,
-------------------------------------- ------------------------------------
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------- ------------------------------------
REVENUES $ 88,721 $ 69,244 $ 254,149 $ 200,808
Cost of services rendered and goods sold 50,233 43,482 146,529 125,798
Selling, general and administrative expenses 16,921 13,438 48,213 38,599
Depreciation and amortization 8,596 8,387 25,736 24,784
- ------------------------------------------------------------------------------------------- ------------------------------------
Operating profit 12,971 3,937 33,671 11,627
Interest expense, net 17 45 75 137
Other income, net 1,555 264 2,324 747
- ------------------------------------------------------------------------------------------- ------------------------------------
Income before income taxes 14,509 4,156 35,920 12,237
Income tax provision 4,272 1,579 12,408 4,650
- ------------------------------------------------------------------------------------------- ------------------------------------
NET INCOME $ 10,237 $ 2,577 $ 23,512 $ 7,587
=========================================================================================== ====================================
EARNINGS PER SHARE
Basic $ 0.36 $ 0.09 $ 0.83 $ 0.27
================ ================ ================ ================
Diluted $ 0.35 $ 0.09 $ 0.82 $ 0.26
================ ================ ================ ================
DIVIDENDS PER SHARE $ 0.030 $ 0.025 $ 0.090 $ 0.075
================ ================ ================ ================
AVERAGE SHARES OUTSTANDING
Basic 28,321 28,446 28,296 28,380
================ ================ ================ ================
Diluted 28,914 28,877 28,792 28,794
================ ================ ================ ================
The accompanying notes are an integral part of these consolidated financial statements.
4
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 and 2003
(In thousands)
(Unaudited)
Nine months ended September 30,
---------------------------------------
2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
NET INCOME $ 23,512 $ 7,587
Noncash charges (credits) to earnings:
Depreciation, amortization and other non-cash charges 26,074 24,857
(Gain) loss on sale of property and equipment (2,195) 297
Deferred income tax provision (benefit) 812 (168)
(Increase) decrease in assets:
Accounts receivable (19,684) (8,419)
Income taxes receivable 267 5,824
Inventories (104) 64
Prepaid expenses and other current assets 2,276 1,625
Other non-current assets (532) 173
Increase (decrease) in liabilities:
Accounts payable 2,243 3,326
Accrued payroll and related expenses 921 257
Pension liabilities (2,959) 1,457
Accrued insurance expenses 1,791 1,724
Accrued state, local and other expenses 172 (159)
Other accrued expenses 174 (986)
Other non-current liabilities 899 1,021
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 33,667 38,480
- ------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Capital expenditures (36,594) (20,711)
Purchase of businesses (3,310) (6,211)
Proceeds from sale of property and equipment 5,244 1,328
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (34,660) (25,594)
- ------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Payment of dividends (2,558) (2,155)
Payments on debt (1,110) (552)
Cash paid for common stock purchased and retired (1,963) (836)
Proceeds received upon exercise of stock options 423 96
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (5,208) (3,447)
- ------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (6,201) 9,439
Cash and cash equivalents at beginning of period 22,302 11,533
- ------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 16,101 $ 20,972
==============================================================================================================================
The accompanying notes are an integral part of these consolidated financial statements.
5
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The accompanying unaudited condensed consolidated financial statements
include the accounts of RPC, Inc. and its wholly-owned subsidiaries
("RPC" or the "Company") and have been prepared in accordance with
accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three and nine months period ended September
30, 2004 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2004.
The balance sheet at December 31, 2003 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 2003.
2. EARNINGS PER SHARE
Basic and diluted earnings per share are computed by dividing net income
by the weighted average number of shares outstanding during the
respective periods. A reconciliation of the weighted average shares
outstanding is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
(In thousands) SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2004 2003 2004 2003
---- ---- ---- ----
Basic 28,321 28,446 28,296 28,380
Dilutive effect of stock options and
restricted shares 593 431 496 414
----------------------------------------------------------------
Diluted 28,914 28,877 28,792 28,794
================================================================
6
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. RECENT ACCOUNTING PRONOUNCEMENTS
In January 2003, the Financial Accounting Standards Board ("FASB")
issued FASB Interpretation (FIN) No. 46, "Consolidation of Variable
Interest Entities." The Interpretation requires that a variable interest
entity, as defined, be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's
residual returns or both. The Company does not have any agreements in
place that are subject to the Interpretation's provisions. As a result,
the Company's adoption of the Interpretation did not have an impact on
the financial position, results of operations or liquidity of the
Company.
In March 2004, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 03-1, "The Meaning of Other-Than-Temporary
Impairment and its Application to Certain Investments." EITF 03-1
applies to investments accounted for under SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," and SFAS No. 124,
"Accounting for Certain Investments Held by Not-for-Profit
Organizations." EITF 03-1 provides a basic three-step model to evaluate
whether the impairment is other than temporary. This model for
evaluating impairment must be applied to all current and prospective
investments beginning in the second quarter of 2004. Qualitative and
quantitative disclosures are effective for the fiscal year ending
December 31, 2004. The adoption of EITF 03-1 did not have a material
impact on the financial position, results of operations or liquidity of
the Company.
4. COMPREHENSIVE INCOME
The components of comprehensive income are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
(In thousands) SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2004 2003 2004 2003
---- ---- ---- ----
Net income as reported $ 10,237 $ 2,577 $ 23,512 $ 7,587
Change in unrealized gain on
marketable securities, net of
taxes 38 (12) 31 (37)
--------------------------------------------------------------
Comprehensive income $ 10,275 $ 2,565 $ 23,543 $ 7,550
==============================================================
7
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. STOCK-BASED COMPENSATION
RPC accounts for its stock incentive plan using the intrinsic value
method prescribed by Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees." The Company has computed for
pro forma disclosure purposes the value of all options granted during
the nine months ended September 30, 2004 and 2003 using the
Black-Scholes option pricing model as prescribed by SFAS No. 123
"Accounting for Stock-Based Compensation. If RPC had accounted for the
stock incentive plans in accordance with SFAS No.123, RPC's reported net
income and net income per share would have been as follows:
Three months ended Nine months ended
September 30, September 30,
--------------------------------------------------------------------------------------------------------------------
2004 2003 2004 2003
---- ---- ---- ----
(IN THOUSANDS)
NET INCOME - AS REPORTED $ 10,237 $ 2,577 $ 23,512 $ 7,587
ADD: STOCK-BASED EMPLOYEE
COMPENSATION COST,
INCLUDED IN REPORTED NET
INCOME, NET OF RELATED TAX
EFFECT 113 38 239 113
DEDUCT: STOCK-BASED EMPLOYEE
COMPENSATION COST,
COMPUTED USING THE BLACK
SCHOLES OPTION PRICING
MODEL, FOR ALL AWARDS, NET
OF RELATED TAX EFFECT 42 (240) (467) (719)
--------------------------------------------------------------------------------------------------------------------
PRO FORMA NET INCOME $ 10,392 $ 2,375 $ 23,284 $ 6,981
====================================================================================================================
EARNINGS PER SHARE, AS REPORTED
BASIC $ 0.36 $ 0.09 $ 0.83 $ 0.27
DILUTED 0.35 0.09 0.82 0.26
PRO FORMA EARNINGS PER SHARE
BASIC $ 0.37 $ 0.08 $ 0.82 $ 0.25
DILUTED 0.36 0.08 0.81 0.24
8
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The stock-based employee compensation for the three months ended
September 30, 2004 reflects a cumulative reduction in expense for grants
outstanding resulting from a change in the estimated forfeiture rate.
6. BUSINESS SEGMENT INFORMATION
RPC has two reportable segments: Technical Services and Support
Services. Technical Services includes RPC's oil and gas 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 business segment consists primarily of pressure
pumping, snubbing, coiled tubing, nitrogen, wire line, well control,
downhole tools, surface production equipment, casing installation
services and fishing tool operations. The principal markets for this
business segment include the United States, including the Gulf of
Mexico, mid-continent, southwest and Rocky Mountain regions, and
selected international locations. Customers include major multi-national
and independent oil and gas producers, and selected nationally owned oil
companies. Support Services includes RPC's oilfield service lines that
primarily provide equipment for customer use or services to assist
customer operations. The equipment and services include rental of drill
pipe and related tools, pipe handling, inspection and storage services,
work platform vessels, and oilfield training services. The demand for
these services tends to be influenced primarily by customer
drilling-related activity levels. The principal markets for this segment
include the United States, Gulf of Mexico and mid-continent regions.
Customers include domestic operations of major multi-national and
independent oil and gas producers.
9
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Certain information with respect to RPC's business segments is set forth
in the following table:
Three months ended September 30, Nine months ended September 30,
------------------------------------------ ------------------------------------------
2004 2003 2004 2003
------------------------------------------ ------------------------------------------
(IN THOUSANDS)
REVENUES:
Technical Services $ 73,404 $ 53,603 $ 209,523 $ 159,494
Support Services 15,302 13,125 40,848 33,493
Other 15 2,516 3,778 7,821
- ----------------------------------- ------------------- ------------------- ------------------- -------------------
Total revenues $ 88,721 $ 69,244 $ 254,149 $ 200,808
OPERATING PROFIT (LOSS):
Technical Services $ 13,024 $ 3,969 $ 35,706 $ 15,154
Support Services 2,378 2,376 4,629 3,073
Other (382) (419) (803) (1,200)
Corporate (2,049) (1,989) (5,861) (5,400)
- ----------------------------------- ------------------- ------------------- ------------------- -------------------
Total operating profit $ 12,971 $ 3,937 $ 33,671 $ 11,627
Interest expense, net 17 45 75 137
Other income, net 1,555 264 2,324 747
- ----------------------------------- ------------------- ------------------- ------------------- -------------------
Income before income taxes $ 14,509 $ 4,156 $ 35,920 $ 12,237
=================================== =================== =================== ==================== ===================
At the end of April 2004, RPC sold one of the company's non-oilfield
businesses, which was previously reported in the Other segment. This
sale generated approximately $4 million in cash. The impact of the sale
of this business unit on consolidated operating and other income was
immaterial.
7. INVENTORIES
Inventories consist of the following:
SEPTEMBER 30, December 31,
2004 2003
----------------------------------------------------------------------------------------------
(IN THOUSANDS)
Raw materials and supplies $ 10,161 $ 8,251
Work in process - 317
Finished goods - 1,489
----------------------------------------------------------------------------------------------
Total inventories $ 10,161 $ 10,057
==============================================================================================
10
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. EMPLOYEE BENEFIT PLAN
The following represents the net periodic defined benefit cost and
related components of the Company's pension plan.
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
----------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
Service cost $ - $ - $ - $ -
Interest cost 437 484 1,311 1,453
Expected return on plan assets (361) (341) (1,083) (1,022)
Amortization of unrecognized net
(gains) and losses 231 257 692 770
----------------------------------------------------------------------------------------------------------------
Net periodic benefit cost $ 307 $ 400 $ 920 $ 1,201
================================================================================================================
As of September 30, 2004, the Company has contributed approximately
$4,200,000 to the pension plan. The Company does not currently expect to
make any additional contributions to the defined benefit plan in 2004.
9. INCOME TAXES
The Company determines its periodic income tax expense based upon the
current period income and the estimated annual effective tax rate for
the Company. The rate is revised, if necessary, as of the end of each
successive interim period during the fiscal year to the Company's best
current estimate of its annual effective tax rate.
The Company has filed amended federal and state tax returns for the
years 1999, 2000 and 2001 to claim higher deductions for certain
expenses and additional foreign tax credits representing potential tax
benefits totaling up to approximately $3.5 million. These returns are
currently being reviewed by the Internal Revenue Service before going to
Joint Committee. There is significant uncertainty surrounding the amount
and timing of the tax benefits that will be ultimately realized. The
Company believes it has supportable positions for claiming these
deductions and credits, but the amounts are subject to Joint Committee
approval. Accordingly, the Company has not reflected these potential tax
benefits in its financial statements. No tax benefits will be recognized
in the financial statements until these gain contingencies are resolved
through the eventual disposition with the respective tax authorities.
11
RPC, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OVERVIEW
RPC provides a broad range of specialized oilfield services primarily to
independent and major oilfield companies engaged in 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
selected international locations. RPC's business is affected by geopolitical
factors such as political instability in the petroleum-producing regions of the
world, overall economic conditions and weather in the United States, the prices
of oil and natural gas, and our customers' drilling and production activities.
The Company's revenues are earned by providing equipment and services to
customers who operate oil and gas properties and invest capital to drill new
wells and enhance production or perform maintenance on existing wells. RPC's
management is presently focused on opportunities to increase its revenues and
earnings through expansion in the Middle East and selected domestic markets and
to increase the prices it charges for its services. The Company's management
also continues to monitor factors that impact the level of current and expected
customer activities, such as the price of oil and natural gas, among other
factors.
CRITICAL ACCOUNTING POLICIES
The discussion on Critical Accounting Polices is incorporated herein by
reference from the Company's annual report on Form 10-K for the fiscal year
ended December 31, 2003. There have been no significant changes in the critical
accounting policies since year-end.
GENERAL
The Company's operations are influenced by U.S. domestic oil and natural gas
well drilling, which relates to new wells, and production activity, which
relates to existing wells. Factors within the drilling and production industry
that impact the Company's business include the geographic location of wells, the
conditions under which they are drilled, and the production enhancement services
which they require. The Technical Services segment provides completion,
production, and maintenance services to a customer's well. The demand for these
services is more influenced by production activities than drilling activities;
however, production activity typically increases at the same time drilling
activity increases. The Support Services segment primarily provides equipment
for customer operations, and the demand for these services tends to depend more
on drilling activities than production activities. Drilling activity is
influenced by the price of oil and natural gas. We believe that our activity
levels are affected more by natural gas prices than oil prices, due to the
nature of our services and our current geographic concentration in the domestic
U.S. market. The prices of oil and natural gas are influenced by a wide variety
of factors
12
RPC, INC. AND SUBSIDIARIES
and can be very volatile. This volatility can cause a great deal of fluctuation
in the Company's revenues, profitability, and cash flow.
Although the Company has historically generated revenues internationally, the
majority of revenues generated during the nine months ended September 30, 2004
were from the U.S. domestic oilfields. Domestic drilling activity, as measured
by the weekly active rig count, reached its most recent cyclical peak in July
2001 with 1,293 active oil and gas rigs in operation. Activity began to decline
in the third and fourth quarter of 2001 due to decreased demand and high natural
gas storage levels. This depressed rig count continued in early 2002 and reached
a weekly low of 738 during the third quarter of 2002. The average weekly rig
count for the nine months ended September 30, 2004 was 1,170, which was 16.7
percent higher than the average weekly rig count during the nine months ended
September 30, 2003. The Company believes that the rig count has stabilized for
the near term, but is susceptible to further fluctuation based on the strength
and timing of the economic recovery, near term weather conditions in the United
States, the actions of the OPEC cartel, the supply of oil and natural gas in the
United States, and the prospect of continued tensions in the oil-producing
countries of the Middle East.
13
RPC, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ------------------------------
2004 2003 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REVENUES [IN THOUSANDS] $ 88,721 $ 69,244 $ 254,149 $ 200,808
REVENUES BY BUSINESS SEGMENT [IN THOUSANDS]:
TECHNICAL $ 73,404 $ 53,603 $ 209,523 $ 159,494
SUPPORT 15,302 13,125 40,848 33,493
OTHER 15 2,516 3,778 7,821
CONSOLIDATED OPERATING PROFIT [IN THOUSANDS] $ 12,971 $ 3,937 $ 33,671 $ 11,627
OPERATING PROFIT (LOSS) BY BUSINESS SEGMENT [IN THOUSANDS]:
TECHNICAL $ 13,024 $ 3,969 $ 35,706 $ 15,154
SUPPORT 2,378 2,376 4,629 3,073
OTHER (382) (419) (803) (1,200)
CORPORATE $ (2,049) $ (1,989) $ (5,861) $ (5,400)
PERCENTAGE COST OF SERVICES RENDERED & GOODS SOLD TO
REVENUES 56.6% 62.8% 57.7% 62.6%
PERCENTAGE SELLING, GENERAL & ADMINISTRATIVE EXPENSES TO
REVENUES 19.1% 19.4% 19.0% 19.2%
PERCENTAGE DEPRECIATION AND AMORTIZATION EXPENSE TO
REVENUES 9.7% 12.1% 10.1% 12.3%
AVERAGE U.S. DOMESTIC RIG COUNT 1,228 1,088 1,170 1,003
AVERAGE NATURAL GAS PRICE (PER THOUSAND CUBIC FEET (MCF)) $ 5.45 $ 4.82 $ 5.73 $ 5.51
AVERAGE OIL PRICE (PER BARREL) $ 43.66 $ 30.43 $ 39.03 $ 31.20
- -----------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2003
REVENUES for the three months ended September 30, 2004 increased $19,477,000 or
28.1 percent compared to the three months ended September 30, 2003. The
Technical Services segment revenues increased 36.9 percent from last year's
third quarter revenues. Revenues in this segment increased compared to prior
year due to higher overall customer activity levels and higher pricing levels in
most of our service lines. The Support Services segment revenues for the quarter
ended September 30, 2004 increased 16.6 percent from last year's third quarter
revenues. This increase was due to significantly higher utilization and slightly
higher pricing in rental tools, which is the largest service line within this
segment, offset by lower utilization and pricing of marine liftboats.
Domestic revenues increased during the quarter due to higher customer drilling
and production activity. The average domestic rig count during the third quarter
was 12.9
14
RPC, INC. AND SUBSIDIARIES
percent higher than the same period in 2003. Our consolidated revenues
grew at a higher rate than the overall domestic rig count, principally because
of the effect of strong activity in our West African operations, and our new
operations in Kuwait and a new fishing tool service line, which began in the
first quarter of 2004. These increases were partially offset by continued
weakness in the Gulf of Mexico market and the sale of one of our non-oilfield
businesses, which occurred at the end of April 2004. During the third quarter,
there was a series of strong hurricanes in the Gulf of Mexico, which severely
curtailed oilfield drilling and production activity in that market. We estimate
that our third quarter 2004 revenues were negatively impacted by these
hurricanes in the range of three to five percent, and our bottom line earnings
per share were negatively impacted in the range of five to 10 percent. However,
we believe that the eventual recovery of activity in the Gulf of Mexico will
provide temporary opportunities for us as our customers repair and enhance
production in wells damaged by the storms. At the end of the quarter, the Gulf
of Mexico rig count was 119 or 4.8 percent lower than at the same time during
the prior year. In addition, the average price of natural gas increased by 13.1
percent during the period as compared to the prior year. We believe that our
activity levels are affected more by natural gas prices than by the price of
oil. International revenues increased significantly during the three months
ended September 30, 2004 as compared to the prior year due to our new operations
in Kuwait which commenced in the first quarter of 2004; however, international
revenues remain a small percentage of total revenues.
COST OF SERVICES RENDERED AND GOODS SOLD for the three months ended September
30, 2004 was $50,233,000 compared to $43,482,000 for the three months ended
September 30, 2003, an increase of $6,751,000 or 15.5 percent. This increase was
due to higher activity levels, which resulted in increased direct employment
costs and increases in variable operational expenses such as maintenance and
repairs, materials and supplies, sub-rental expense and fuel. Cost of services
rendered and goods sold, as a percent of revenues, decreased from the third
quarter of 2003 compared to the third quarter of 2004 as a result of increased
revenues and the related improved operating leverage due to overall higher
utilization of personnel and operating equipment.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES for the three months ended
September 30, 2004 were $16,921,000 compared to $13,438,000 for the three months
ended September 30, 2003, an increase of $3,483,000 or 25.9 percent. These
expenses increased primarily due to an increase in bad debt expense and higher
employment costs mainly as a result of an increase in number of employees and
higher incentive compensation expenses consistent with improved operating
results. Selling, general and administrative expenses as a percent of revenues
decreased slightly from the third quarter of 2003 compared to the third quarter
of 2004.
DEPRECIATION AND AMORTIZATION were $8,596,000 for the three months ended
September 30, 2004, an increase of $209,000 or 2.5 percent compared to
$8,387,000 for the quarter ended September 30, 2003. This increase in
depreciation and amortization resulted from
15
RPC, INC. AND SUBSIDIARIES
various capital expenditures during the previous twelve months within Support
Services and Technical Services.
OPERATING PROFIT for the three months ended September 30, 2004 increased
$9,034,000 or 229.5 percent compared to the three months ended September 30,
2003. This improvement was the result of increased revenues because of higher
customer activity levels, partially offset by the increases in costs of services
rendered and goods sold, selling, general and administrative expenses, and
depreciation and amortization, as discussed above.
OTHER INCOME, NET for the three months ended September 30, 2004 was $1,555,000,
an increase of $1,291,000 compared to $264,000 for the three months ended
September 30, 2003. For the three months ended September 30, 2004 and 2003,
other income, net primarily reflects net gains and losses related to the sale of
property and operating equipment.
INTEREST EXPENSE, NET was $17,000 for the three months ended September 30, 2004
compared to $45,000 for the quarter ended September 30, 2003. The decrease in
interest expense, net resulted primarily from the reduction in outstanding debt
through annual principal payments made in the first and second quarters of 2004,
and small increases in interest income in the current quarter compared to the
prior year. RPC generates interest income from investment of its available cash
primarily in highly liquid investments with original maturities of three months
or less.
INCOME TAX PROVISION was $4,272,000 during the three months ended September 30,
2004, compared to $1,579,000 in 2003. This increase was due to the increase in
operating profit during the period. During the third quarter of 2004, the
effective tax rate was 29.4 percent for the quarter compared to 38.0 percent in
the prior year. The decrease in the effective tax rate was due to higher
anticipated foreign tax credit utilization this year and other adjustments
recorded in the third quarter of 2004. The effective tax rate estimate change
and adjustments increased third quarter net income by $1,241,000 or $0.04
diluted earnings per share.
The Company has filed amended federal and state tax returns for the years 1999,
2000 and 2001 to claim higher deductions for certain expenses and additional
foreign tax credits representing potential tax benefits totaling up to
approximately $3.5 million. These returns are currently being reviewed by the
Internal Revenue Service before going to Joint Committee. There is significant
uncertainty surrounding the amount and timing of the tax benefits that will be
ultimately realized. The Company believes it has supportable positions for
claiming these deductions and credits, but the amounts are subject to Joint
Committee approval. Accordingly, the Company has not reflected these potential
tax benefits in its financial statements. No tax benefits will be recognized in
the financial statements until these gain contingencies are resolved through the
eventual disposition with the respective tax authorities.
16
RPC, INC. AND SUBSIDIARIES
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2003
REVENUES for the nine months ended September 30, 2004 increased $53,341,000 or
26.6 percent compared to the nine months ended September 30, 2003. The Technical
Services segment revenues for the nine months ended September 30, 2004 increased
31.4 percent from the same period of the prior year due primarily to higher
overall customer activity levels, higher pricing levels in most of our service
lines and a shift in the mix of pressure pumping work towards higher revenue
generating jobs. The Support Services segment revenues for the nine months ended
September 30, 2004 increased 22.0 percent from the same period of the prior year
as a result of higher equipment utilization and slightly higher pricing in
rental tools, which is the largest service line within this segment, partially
offset by lower utilization and pricing of marine liftboats.
Domestic revenues increased during the period due to higher customer drilling
and production activity. The average domestic rig count during the nine months
ended September 30, 2004 was 16.7 percent higher than the same period in 2003.
Our consolidated revenues grew at a higher rate than the overall domestic rig
count, principally because of the effect of stronger activity in our West
African operations, and our new operations in Kuwait which began generating
operating revenues in the first quarter of 2004, our Bronco Oilfield Services
acquisition, which was closed in the second quarter of 2003, and our new fishing
tool service line, which began generating revenues in the first quarter of 2004.
These increases were partially offset by continued weakness in the Gulf of
Mexico market, exacerbated by the recent hurricanes in the area, and the sale of
one of our non-oilfield businesses, which occurred during the second quarter of
2004. International revenues increased significantly during the nine months
ended September 30, 2004 as compared to the prior year due to our new operations
in Kuwait which commenced in the first quarter of 2004; however, international
revenues remain a small percentage of total revenues.
COST OF SERVICES RENDERED AND GOODS SOLD for the nine months ended September 30,
2004 was $146,529,000 compared to $125,798,000 for the nine months ended
September 30, 2003, an increase of $20,731,000 or 16.5 percent. This increase
was due to higher activity levels, which resulted in increased direct employment
costs, and because of variable operational expenses such as materials and
supplies, sub-rental and fuel. Cost of services rendered and goods sold, as a
percent of revenues, decreased from the nine months ended September 30, 2003
compared to same period of 2004 as a result of improved operating leverage due
to overall higher utilization of personnel and operating equipment.
17
RPC, INC. AND SUBSIDIARIES
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES for the nine months ended September
30, 2004 were $48,213,000 compared to $38,599,000 for the nine months ended
September 30, 2003, an increase of $9,614,000 or 24.9 percent. These expenses
increased primarily due to an increase in bad debt expense and higher employment
costs mainly as a result of an increase in number of employees and higher
incentive compensation expenses consistent with improved operating results.
Selling, general and administrative expenses as a percent of revenues decreased
slightly in the nine months ended September 30, 2004 compared to the same period
in 2003.
DEPRECIATION AND AMORTIZATION were $25,736,000 for the nine months ended
September 30, 2004, an increase of $952,000 or 3.8 percent compared to
$24,784,000 for the nine months ended September 30, 2003. This increase in
depreciation and amortization resulted from various capital expenditures during
the previous twelve months within Support Services and Technical Services, and
from the effect of the acquisition completed during the second quarter of 2003.
OPERATING PROFIT for the nine months ended September 30, 2004 increased
$22,044,000 compared to the nine months ended September 30, 2003. This
improvement was the result of increased revenues because of higher customer
activity levels, partially offset by the increases in costs of services rendered
and goods sold, selling, general and administrative expenses, and depreciation
and amortization, as discussed above.
OTHER INCOME, NET for the nine months ended September 30, 2004 was $2,324,000,
an increase of $1,577,000 compared to $747,000 for the nine months ended
September 30, 2003. For the nine months ended September 30, 2004 and 2003, other
income, net primarily reflects net gains related to the sale of property and
operating equipment.
INTEREST EXPENSE, NET was $75,000 for the nine months ended September 30, 2004
compared to $137,000 for the nine months ended September 30, 2003. The decrease
in interest expense, net resulted primarily from the reduction in outstanding
debt through annual principal payments made in the first and second quarters of
2004, and small increases in interest income in the current period compared to
the comparable period in the prior year. RPC generates interest income from
investment of its available cash primarily in highly liquid investments with
original maturities of three months or less.
INCOME TAX PROVISION was $12,408,000 during the nine months ended September 30,
2004, compared to $4,650,000 in 2003. This increase was due to the increase in
operating profit during the period. During the third quarter of 2004, the
company reduced the effective tax rate to 34.5 percent for the nine months ended
September 30, 2004 compared to 38.0 percent in the prior year and the first six
months of the current year. The decrease in the effective tax rate was due to
anticipated higher foreign tax credit utilization this year and other
adjustments recorded during the third quarter of 2004.
18
RPC, INC. AND SUBSIDIARIES
The effective tax rate estimate change and adjustments increased net income for
the nine months ended September 30, 2004 by $1,242,000 or $0.04 diluted earnings
per share.
The Company has filed amended federal and state tax returns for the years 1999,
2000 and 2001 to claim higher deductions for certain expenses and additional
foreign tax credits representing potential tax benefits totaling up to
approximately $3.5 million. These returns are currently being reviewed by the
Internal Revenue Service before going to Joint Committee. There is significant
uncertainty surrounding the amount and timing of the tax benefits that will be
ultimately realized. The Company believes it has supportable positions for
claiming these deductions and credits, but the amounts are subject to Joint
Committee approval. Accordingly, the Company has not reflected these potential
tax benefits in its financial statements. No tax benefits will be recognized in
the financial statements until these gain contingencies are resolved through the
eventual disposition with the respective tax authorities.
19
RPC, INC. AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) NINE MONTHS ENDED
SEPTEMBER 30,
----------------------------------------------------
2004 2003
------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 33,667 $ 38,480
Net cash used for investing activities (34,660) (25,594)
Net cash used for financing activities (5,208) (3,447)
------------------------------------------------------------------------------------------------------------
The Company's decisions about the amount of cash to be used for investing and
financing purposes are influenced by its capital position and the expected
amount of cash to be provided by operations.
Cash provided by operating activities for the nine months ended September 30,
2004 decreased $4,813,000 or 12.5 percent compared to the nine months ended
September 30, 2003. Although net income increased $15,925,000, cash provided
from operating activities decreased primarily due to a $4.2 million contribution
to the pension plan made during the first quarter of 2004 and receipt of income
tax refunds in 2003 that did not recur in 2004. Also contributing to the
decrease in cash provided was an increase in working capital requirements during
2004 consistent with the Company's higher overall activity levels and recent
revenue increases. Working capital increases during the period compared to the
prior year were caused principally by increases in accounts receivable and
income taxes receivable offset partially by increases in accounts payable,
accrued state taxes and accrued insurance.
Cash used in investing activities for the nine months ended September 30, 2004
increased by $9,066,000, compared to the nine months ended September 30, 2003,
primarily as a result of an increase in capital expenditures partially offset by
an increase in proceeds from sale of property and equipment and decrease in cash
used in purchases of businesses.
Cash used in financing activities for the nine months ended September 30, 2004
increased by $1,761,000, compared to the nine months ended September 30, 2003,
primarily as a result of a 20 percent increase in dividends paid per share,
higher debt service requirements, and an increase in stock repurchases.
The prices for oil and natural gas remain historically strong, but until
recently, have failed to drive any increase in drilling activity. Prices of oil
and natural gas have also been volatile in the last several quarters, due to
uncertainties over the conflict in the Middle East and fluctuating natural gas
storage levels. Although the weekly domestic rig count has recently increased,
the Company still believes that the operating environment for our services is
uncertain in the near term. As a result of this uncertainty, RPC is monitoring
customer exploration and production activity levels very closely, and is only
making capital
20
RPC, INC. AND SUBSIDIARIES
expenditures to support known customer requirements or to maintain our existing
fleet of operating equipment. The Company currently expects that capital
expenditures during 2004 will be approximately $55 to $60 million, of which
approximately $37 million, primarily in the Technical Services segment, has been
spent during the nine months ended September 30, 2004.
The Company's Retirement Income Plan, a trusteed defined benefit pension plan,
provides monthly benefits upon retirement at age 65 to eligible employees. In
the first quarter of 2002, the Company's Board of Directors approved a
resolution to cease all future retirement benefit accruals under the Retirement
Income Plan effective September 30, 2002. However, the adverse conditions in the
equity markets, along with the low interest rate environment, have had an
unfavorable impact on the funded status of the Company's defined benefit pension
plan. During the first quarter of 2004, the Company contributed approximately
$4,200,000 to the pension plan. The Company does not currently expect to make
any additional contributions to the defined benefit plan in 2004.
We believe the liquidity provided by our existing cash and cash equivalents, our
overall strong capitalization, which includes access to a $25 million credit
facility with a financial institution, of which $11.7 million was available as
of September 30, 2004, and cash expected to be generated from operations, will
provide sufficient capital to meet our requirements for at least the next twelve
months. The portion of the credit facility that is not currently available
supports letters of credit relating to self-insurance programs or contract bids.
We believe our liquidity will allow us to grow our asset base and revenues as
business conditions and customer activity levels increase.
OFF BALANCE SHEET ARRANGEMENTS
The Company does not have any material off balance sheet arrangements.
SEASONALITY
Oil and natural gas prices affect demand throughout the oil and natural gas
industry, including the demand for the Company's products and services. The
Company's business depends in large part on the conditions of the oil and gas
industry, and specifically on the capital expenditures of its customers related
to the exploration and production of oil and natural gas. When these
expenditures fluctuate, customers' demand for the Company's services fluctuates
as well. These fluctuations depend on the current and projected prices of oil
and natural gas and resulting drilling activity, and are not seasonal to any
material degree.
INFLATION
21
RPC, INC. AND SUBSIDIARIES
RPC purchases its equipment and materials from suppliers who provide competitive
prices. Due to the recent increases in activity in the domestic oilfield, the
Company has experienced some upward wage pressures in the labor markets from
which it hires employees. If inflation in the general economy increases, the
Company's costs for equipment, materials and labor could increase as well.
During the nine months ended September 30, 2004, the price of steel, for both
the commodity and for products manufactured with steel, rose dramatically due to
increased worldwide demand. This affected the Company's operations through
delays in scheduled deliveries of new equipment and price quotations that were
only valid for a limited period of time. Steel prices remained high as of
September 30, 2004. If steel prices remain high, delays in scheduled deliveries
of new equipment will continue, and it is likely that the cost of the Company's
new equipment will increase. These increases would result in higher capital
expenditures and depreciation expense. RPC may not be able to recover such
increased costs through price increases to its customers, thereby reducing the
Company's future profits. The Company operates in highly competitive areas of
the oilfield services industry. The products and services of each of the
Company's principal industry segments are sold in highly competitive markets,
and its revenues and earnings may be affected by the following factors: changes
in competitive prices, fluctuations in the level of activity and major markets,
general economic conditions, and governmental regulation.
FORWARD-LOOKING STATEMENTS
Certain statements made in this report that are not historical facts are
"forward-looking statements" under Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include, without limitation, statements that
relate to our business strategy, plans and objectives, market risk exposure,
adequacy of capital resources and funds, opportunity for growth, anticipated
pension funding payments and capital expenditures, and our beliefs and
expectations regarding future demand for our products and services and other
events and conditions that may influence the oilfield services market and our
performance in the future.
The words "may," "will," "expect," "believe," "anticipate," "project,"
"estimate," and similar expressions generally identify forward-looking
statements. Such statements are based on certain assumptions and analyses made
by our management in light of its experience and its perception of historical
trends, current conditions, expected future developments and other factors it
believes to be appropriate. We caution you that such statements are only
predictions and not guarantees of future performance and that actual results,
developments and business decisions may differ from those envisioned by the
forward-looking statements. Risk factors that could cause such future events not
to occur as expected include those described in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2003 and the following: the
volatility of oil and natural gas prices, downturn in the economy leading to
decreased oil and gas exploration, inability
22
RPC, INC. AND SUBSIDIARIES
to identify or complete acquisitions, adverse weather conditions, inability to
attract and retain skilled employees, personal injury or property damage claims,
and the changes in the supply and demand for oil and gas.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of September 30, 2004, cash and cash equivalents were primarily invested in
money market accounts which are highly liquid with maturities of three months or
less. As a result, we are not subject to material interest rate risk exposure on
these investments. The Company has been affected by the impact of lower interest
rates on interest income from its short-term investments. This risk is managed
through conservative policies to invest in high-quality obligations. Also, as of
September 30, 2004, RPC had debt with variable interest rates that exposes RPC
to certain market risks. In the prior year, RPC performed an interest rate
sensitivity analysis related to the debt instruments using a duration model over
the near term of the securities and the term of the debt with a 10 percent
change in interest rates. RPC is not subject to material interest rate risk
exposure based on this analysis, and no material changes in market risk
exposures or how those risks are managed is expected.
As of September 30, 2004, RPC had accounts receivable of approximately $73.4
million (net of an allowance for doubtful accounts of approximately $2.8
million). RPC is subject to a concentration of credit risk because most of the
accounts receivable are due from companies in the oil and gas industry.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES - The Company maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in its Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms, and that such information is accumulated and communicated to
its management, including the President and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, September 30, 2004 (the
"Evaluation Date"), the Company carried out an evaluation, under the supervision
and with the participation of its management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of its disclosure controls and procedures. Based upon this evaluation,
the Chief Executive Officer and the Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective at the reasonable
assurance level as of the Evaluation Date.
23
RPC, INC. AND SUBSIDIARIES
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING - There were no changes in
the Company's internal control over financial reporting that occurred during the
Company's most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.
24
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
RPC is involved in litigation from time to time in the ordinary course of its
business. RPC does not believe that the outcome of such litigation will have a
material adverse effect on the financial position or results of operations of
RPC.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
SHARE REPURCHASES
Under a plan authorized by its Board of Directors on March 9, 1998, the Company
has purchased an aggregate of 1,839,000 shares of its common stock on the open
market and can purchase up to 161,000 additional shares. In January 2004, the
Board approved an increase of 1,500,000 shares to the previous stock repurchase
program to a total of 1,651,000 shares available for repurchase as of September
30, 2004. Currently the program does not have a predetermined expiration date.
There were no repurchases of stock on the open market during the nine months
ended September 30, 2004.
The following shares were repurchased during the three months ended September
30, 2004:
-------------------------- ------------------- ------------------------ ------------------ ----------------------
Total number of
Shares (or Maximum Number (or
Units) Purchased Approximate Dollar
as Part of Value) of Shares (or
Total Number of Publicly Units) that May Yet
Shares (or Units) Average Price Paid per Announced Plans Be Purchased Under
Period Purchased Share (or Unit) or Programs the Plans or Programs
-------------------------- ------------------- ------------------------ ------------------ ----------------------
July 1, 2004 -
July 31, 2004 - $ - - -
August 1, 2004 -
August 31, 2004 711 (1) $ 15.49 - -
September 1, 2004 -
September 30, 2004 1,737 (1) $ 17.28 - -
-------------------------- ------------------- --------------------- --------------------- ----------------------
Total 2,448 16.76 - -
========================== =================== ===================== ===================== ======================
(1) Represents shares tendered in connection with the exercise of employee
stock options.
25
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
26
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. Exhibits
EXHIBIT
NUMBER DESCRIPTION
- --------------------------------------------------------------------------------
3.1 Restated certificate of incorporation of RPC, Inc. (incorporated
herein by reference to exhibit 3.1 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1999).
3.2 Bylaws of RPC, Inc. (incorporated herein by reference to Exhibit
3.2 to the Registrant's Quarterly Report on Form 10-Q filed on
May 5, 2004).
4 Form of Stock Certificate (incorporated herein by reference to the
Annual Report on Form 10-K for the fiscal year ended December 31,
1998).
10.1 Form of Stock Option grant agreement.
10.2 Form of Time Lapse Restricted Stock grant agreement.
10.3 Form of Performance Restricted Stock grant agreement.
31.1 Section 302 certification for Chief Executive Officer.
31.2 Section 302 certification for Chief Financial Officer.
32.1 Section 906 certifications for Chief Executive Officer and
Chief Financial Officer.
- --------------------------------------------------------------------------------
27
RPC, INC. AND SUBSIDIARIES
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RPC, INC.
/s/ Richard A. Hubbell
----------------------
Date: November 1, 2004 Richard A. Hubbell
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Ben M. Palmer
-----------------
Date: November 1, 2004 Ben M. Palmer
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
28