-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SjaMU07udSJVbKv/xC5xtbtIKKjyOfQA9P16GRXsJhwwdbY1PW1w3iuzxWOjpUZ5 Zoxs5a5/kVS8aAEvMcfLpg== 0000891092-06-000444.txt : 20060222 0000891092-06-000444.hdr.sgml : 20060222 20060222154455 ACCESSION NUMBER: 0000891092-06-000444 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060222 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060222 DATE AS OF CHANGE: 20060222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RPC INC CENTRAL INDEX KEY: 0000742278 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 581550825 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08726 FILM NUMBER: 06636228 BUSINESS ADDRESS: STREET 1: 2170 PIEDMONT RD NE CITY: ATLANTA STATE: GA ZIP: 30324 BUSINESS PHONE: 4048882950 MAIL ADDRESS: STREET 1: 2170 PIEDMONT ROAD CITY: ATLANTA STATE: GA ZIP: 30324 FORMER COMPANY: FORMER CONFORMED NAME: RPC ENERGY SERVICES INC DATE OF NAME CHANGE: 19920703 8-K/A 1 e23455_8ka.txt FORM 8-K/A - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K/A ---------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 15, 2006 RPC, INC. (Exact name of registrant as specified in its charter) ---------- Delaware 1-8726 58-1550825 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 2170 Piedmont Road, NE, Atlanta, Georgia 30324 (Address of principal executive office) (zip code) Registrant's telephone number, including area code: (404) 321-2140 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - -------------------------------------------------------------------------------- Item 2.02 Results of Operations and Financial Condition. On February 15, 2006, RPC, Inc. issued a press release entitled "RPC, Inc. Reports 2005 Fourth Quarter and Annual Results," that announced the financial results for the fourth quarter ended December 31, 2005. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. Exhibit 99 - Press Release dated February 15, 2006 -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, RPC, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RPC, Inc. Date: February 22, 2006 /s/ BEN M. PALMER --------------------------- Ben M. Palmer Vice President, Chief Financial Officer and Treasurer -3- EX-99.1 2 e23455ex99_1.txt PRESS RELEASE Exhibit 99.1 [LOGO]RPC FOR IMMEDIATE RELEASE RPC, Inc. Reports 2005 Fourth Quarter and Annual Results -------------------------------------------------------- o Revenues for the Fourth Quarter were $117.6 million, an increase of 37.3 Percent over Prior Year o Including a $0.05 per share Income Tax Credit, Diluted EPS for the Fourth Quarter Increased to $0.33 ATLANTA, February 15, 2006 -- RPC, Incorporated (NYSE: RES) announced its unaudited results for the fourth quarter and twelve months ended December 31, 2005. RPC provides a broad range of specialized oilfield services and equipment primarily to independent and major oilfield companies engaged in the exploration, production and development of oil and gas properties throughout the United States and in selected international markets. For the quarter ended December 31, 2005, revenues increased 37.3 percent to $117,567,000 compared to $85,643,000 last year. Operating profit for the quarter was $27,350,000 compared to $15,474,000 in the prior year. Operating profit in the fourth quarter of 2004 included a net gain on disposition of assets of $3,307,000, or $0.03 per diluted share. Net income was $21,540,000, or $0.33 diluted earnings per share, compared to $11,261,000 or $0.17 diluted earnings per share last year. Net income for the fourth quarter of 2005 included an income tax credit of $0.05 per diluted share. For the twelve months ended December 31, 2005, revenues increased 25.9 percent to $427,643,000, compared to $339,792,000 last year. Operating profit for the twelve months ending December 31, 2005 was $97,713,000 compared to $51,340,000 last year. The gain on disposition of assets, net was $12,169,000, compared to $5,551,000 last year. This increase was due primarily to a net gain on disposition of assets of $10,718,000, or $0.10 per diluted share, relating to the sale during the third quarter of 2005 of the operating assets of RPC's hammer, casing, laydown and casing torque-turn services. The gain on disposition of assets in 2004 was due primarily to the gain on the sale of RPC's domestic liftboat fleet, which occurred during the fourth quarter of that year. Net income was $66,484,000 or $1.01 diluted earnings per share, an increase from $34,773,000, or $0.53 diluted earnings per share last year. Cost of services rendered and goods sold during the fourth quarter of 2005 was $59,911,000, or 51.0 percent of revenues, compared to $47,130,000, or 55.0 percent of revenues, in the prior year. The increase in these costs was due to the variable nature of many of these expenses, including materials and supplies, employment costs, and maintenance and repair expenses. As a percentage of revenues, however, these costs decreased because of improved pricing and higher equipment and personnel utilization. In addition, insurance expense was lower during the fourth quarter of 2005 than in the prior year. Selling, general and administrative expenses increased by 12.6 percent in the fourth quarter of 2005 to $19,884,000 from $17,658,000 in the prior year, due to higher salary and wage expenses and bad debt expense consistent with higher activity levels. These costs decreased as a percentage of revenues to 16.9 percent in 2005 compared to 20.6 percent last year because of our success in leveraging these costs over higher revenues. Depreciation and amortization were $10,379,000 during the quarter, 18.8 percent higher than last year, due to increased capital expenditures made during 2005. Net income for the quarter compared to the prior year increased due to higher revenues, higher gain on disposition of assets, and a lower effective tax rate, partially offset by the higher costs of services rendered and good sold and higher selling, general and administrative expenses. The effective tax rate during the quarter was 23.9 percent compared to 34.8 percent in the prior year. The decrease in the effective tax rate was primarily due to receipt of tax refunds related Page 2 4th Quarter and Annual 2005 Press Release to successful resolution of certain tax matters during the fourth quarter of 2005, which had a positive impact of $0.05 diluted earnings per share. "RPC's fourth quarter results reflect continued high activity levels, an increase in pricing, and growth in our capacity," stated Richard A. Hubbell, RPC's President and Chief Executive Officer. "The average domestic rig count during the fourth quarter was 1,478, 18 percent higher than the same period in 2004. Our domestic revenues grew at a higher rate than the rig count because of a price increase during the third quarter and continued investment in operating capacity. In addition, our international business grew in the fourth quarter of 2005 compared to the prior year, principally due to increases in West Africa, South America, and the Middle East. Hubbell continued, "We have invested over $17 million in capital expenditures during the quarter, compared to approximately $13 million in the fourth quarter of last year. We have increased our capital expenditures in order to take advantage of the favorable operating environment. The majority of these capital expenditures have been used to grow our largest service lines. This was an exceptional year for RPC, marked by a strong domestic market and a continued focus on areas in which we have already had proven success. "RPC experienced a strong year in 2005, especially in the fourth quarter. In a continued favorable environment, we plan to continue to focus on our largest service lines in 2006, increasing our capacity in the domestic market while continuing to expand our opportunities in the international markets. Assuming that the environment for our services continues to remain strong, we plan to increase the level of our capital expenditures for new equipment in 2006. The industry environment continues to look promising, but we will remain aware of the volatility in this industry and be prepared to take necessary action in response to changing conditions." Summary of Segment Operating Performance RPC's business segments are Technical Services and Support Services. Technical Services includes RPC's oilfield service lines that utilize people and equipment to perform value-added completion, production and maintenance services directly to a customer's well. These services are generally directed toward improving the flow of oil and natural gas from producing formations or to address well control issues. The Technical Services include pressure pumping, snubbing, coiled tubing, nitrogen, wireline, well control, downhole tools, surface production equipment, and fishing tool operations. Support Services includes RPC's oilfield service lines that provide equipment for customer use or services to assist customer operations. The equipment and services offered include rental of drill pipe and related tools, pipe handling, inspection and storage services and oilfield training services. Both Technical Services and Support Services experienced stronger results during the fourth quarter of 2005 due to the increased drilling rig count and related customer activity. Technical Services revenues rose 44.0 percent for the quarter compared to the prior year, driven by pricing increases, additional capacity, and higher activity levels in all of its service lines. This increase was partially offset by the elimination of revenues from the sale during the third quarter of 2005 of the operating assets of the hammer, casing, laydown and casing torque-turn services, which were included in this segment. Support Services revenues rose by 8.2 percent during the quarter compared to the prior year. This increase was driven by increased capacity in the rental tool division, which is the largest service line within Support Services. The growth in this segment compared to the prior year was lower than in Technical Services and lower than the Page 3 4th Quarter and Annual 2005 Press Release increase in the rig count, however, due to this segment's exposure to the Gulf of Mexico, where activity has been weak since the hurricanes in the third quarter of 2005. For the 12 months ending December 31, 2005, Technical Services' operating profit included a $10,718,000 pre-tax gain on disposition of assets from the sale of the operating assets of the hammer, casing, laydown and casing torque-turn services. For the 12 months ended December 31, 2004, Support Services' operating profit included a $3,307,000 pre-tax gain on disposition of assets of the domestic liftboat fleet. Three Months Twelve Months Ended December 31 Ended December 31 ---------------------------------------------- 2005 2004 2005 2004 ---------------------------------------------- (in thousands) REVENUES Technical Services $100,176 $69,547 $363,139 $279,070 Support services 17,391 16,069 64,487 56,917 Other 0 27 17 3,805 - ------------------------------ -------- ------- -------- -------- Total revenues 117,567 85,643 427,643 339,792 - ------------------------------ -------- ------- -------- -------- Operating profit (loss) Technical Services $ 27,019 $11,321 $ 84,048 $ 47,027 Support services 3,253 3,658 11,990 8,287 Other 27 (172) (273) (975) Corporate expenses (2,906) (2,689) (10,221) (8,550) (Loss) gain on disposition of assets, net (43) 3,356 12,169 5,551 - ------------------------------ -------- ------- -------- -------- Total operating profit $ 27,350 $15,474 $ 97,713 $ 51,340 - ------------------------------ -------- ------- -------- -------- Interest income (expense), net 649 7 950 (68) Other income, net 295 1,802 2,077 1,931 - ------------------------------ -------- ------- -------- -------- Income before income taxes $ 28,294 $17,283 $100,740 $ 53,203 ============================== ======== ======= ======== ======== 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 expected activity and performance in the future, such as the planned level of capital expenditures for new equipment in 2006, and efforts to expand international operations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of RPC to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Such risks include the possibility of declines in the price of oil and natural gas, which tend to result in a decrease in drilling activity and therefore a decline in the demand for our services, the actions of the OPEC cartel, the ultimate impact of current and potential political unrest and armed conflict in the oil-producing regions of the world, which could impact drilling activity, adverse weather conditions in oil or gas producing regions, including the Gulf of Mexico, competition in the oil and gas industry, and risks of international operations. Additional discussion of factors that could cause the actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in RPC's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2004, its Form 10-Q for the quarter ending September 30, 2005, and its other SEC filings. For information about RPC, Inc., please contact: Page 4 4th Quarter and Annual 2005 Press Release BEN M. PALMER Chief Financial Officer 404.321.2140 irdept@rpc.net JIM LANDERS Corporate Finance 404.321.2162 jlanders@rpc.net Page 5 4th Quarter and Annual 2005 Press Release
RPC INCORPORATED AND SUBSIDIARIES - ------------------------------------------------------------------------------- ------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) - ------------------------------------------------------------------------------- ------------------------------- Periods ended December 31, (Unaudited) Fourth Quarter Twelve Months - ------------------------------------------------------------------------------- ------------------------------- % BETTER % BETTER 2005 2004 (WORSE) 2005 2004 (WORSE) - ------------------------------------------------------------------------------- ------------------------------- REVENUES $ 117,567 $ 85,643 37.3% $ 427,643 $ 339,792 25.9% COSTS AND EXPENSES: Cost of services rendered and goods sold 59,911 47,130 (27.1) 227,492 193,659 (17.5) Selling, general and administrative expenses 19,884 17,658 (12.6) 75,478 65,871 (14.6) Depreciation and amortization 10,379 8,737 (18.8) 39,129 34,473 (13.5) (Loss) gain on disposition of assets, net (43) 3,356 N/M 12,169 5,551 N/M - ------------------------------------------------------------------------------- ------------------------------- Operating profit 27,350 15,474 76.7 97,713 51,340 90.3 Interest income (expense), net 649 7 N/M 950 (68) NM Other income, net 295 1,802 (83.6) 2,077 1,931 7.6 - ------------------------------------------------------------------------------- ------------------------------- Income before income taxes 28,294 17,283 63.7 100,740 53,203 89.4 Income tax provision 6754 6,022 (12.2) 34256 18,430 (85.9) - ------------------------------------------------------------------------------- ------------------------------- NET INCOME $ 21,540 $ 11,261 91.3% $ 66,484 $ 34,773 91.2% =============================================================================== =============================== EARNINGS PER SHARE Basic $ 0.34 $ 0.18 88.9% $ 1.05 $ 0.55 90.9% =============================== =============================== Diluted $ 0.33 $ 0.17 94.1% $ 1.01 $ 0.53 90.6% =============================== =============================== AVERAGE SHARES OUTSTANDING Basic 63,162 63,790 63,368 63,696 ==================== ==================== Diluted 65,658 65,769 65,673 65,144 ==================== ====================
Page 6 4th Quarter and Annual 2005 Press Release RPC INCORPORATED AND SUBSIDIARIES - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- At December 31, (Unaudited) (In thousands) - -------------------------------------------------------------------------------- 2,005 2,004 - -------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 12,809 $ 29,636 Accounts receivable, net 107,428 75,793 Inventories 13,298 10,587 Deferred income taxes 5,304 6,144 Prepaid expenses and other current assets 4,004 3,638 - -------------------------------------------------------------------------------- Total current assets 142,843 125,798 - -------------------------------------------------------------------------------- Property, plant and equipment, net 141,218 114,222 Goodwill and other intangibles, net 24,114 20,183 Other assets 3,610 2,739 - -------------------------------------------------------------------------------- Total assets $ 311,785 $ 262,942 ================================================================================ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 30,437 $ 23,389 Accrued payroll and related expenses 11,903 10,842 Accrued insurance expenses 3,695 3,875 Accrued state, local and other taxes 2,585 2,183 Income taxes payable 791 113 Current portion of long-term debt -- 2,700 Other accrued expenses 544 5,187 - -------------------------------------------------------------------------------- Total current liabilities 49,955 48,289 - -------------------------------------------------------------------------------- Accrued insurance expenses 6,168 6,451 Long-term debt -- 2,100 Pension liabilities 13,614 11,379 Deferred income taxes 8,758 11,945 Other long-term liabilities 789 1,355 - -------------------------------------------------------------------------------- Total liabilities 79,284 81,519 - -------------------------------------------------------------------------------- Common stock 6,445 6,482 Capital in excess of par value 19,235 25,165 Retained earnings 219,907 160,189 Deferred compensation (5,391) (3,527) Accumulated other comprehensive loss (7,695) (6,886) - -------------------------------------------------------------------------------- Total stockholders' equity 232,501 181,423 - -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 311,785 $ 262,942 ================================================================================ Page 7 4th Quarter and Annual 2005 Press Release RPC INCORPORATED AND SUBSIDIARIES - -------------------------------------------------------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------- Twelve months ended December 31, (Unaudited) (In thousands) - -------------------------------------------------------------------------------- 2005 2,004 - -------------------------------------------------------------------------------- Operating Activities: Net income $ 66,484 $ 34,773 Depreciation, amortization and other non-cash charges 40,390 35,054 Other net changes in operating activities (40,512) (19,453) - -------------------------------------------------------------------------------- Net cash provided by operating activities 66,362 50,374 - -------------------------------------------------------------------------------- Investing Activities: Capital expenditures (72,808) (49,869) Other investing activities 10,393 12,654 - -------------------------------------------------------------------------------- Net cash used for investing activities (62,415) (37,215) Financing Activities: Payment of dividends (6,766) (3,408) Payments on debt (4,800) (1,110) Cash paid for common stock purchased and retired (10,268) (1,728) - -------------------------------------------------------------------------------- Proceeds from exercise of stock options 1,060 421 - -------------------------------------------------------------------------------- Net cash used for financing activities (20,774) (5,825) Net (decrease) increase in cash and cash equivalents (16,827) 7,334 Cash and cash equivalents at beginning of period 29,636 22,302 - -------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 12,809 $ 29,636 ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----