-----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, RvQC/vscOVW4gjF3GMNR4PEshm65f9sqX75TzS58htg9+6coabn83861uHBvTwV2 3A24HKWy2SavPyXfksWMBQ== 0000912057-96-004640.txt : 19960319 0000912057-96-004640.hdr.sgml : 19960319 ACCESSION NUMBER: 0000912057-96-004640 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960318 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RPC INC CENTRAL INDEX KEY: 0000742278 STANDARD INDUSTRIAL CLASSIFICATION: SHIP & BOAT BUILDING & REPAIRING [3730] IRS NUMBER: 581550825 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-08726 FILM NUMBER: 96535720 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 10-K405 1 FORM 10-K405 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K /x/ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 /x/ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 1-8726 RPC, INC. DELAWARE 58-1550825 (State of Incorporation) (I.R.S. Employer Identification No.) 2170 Piedmont Road, N.E., Atlanta, Georgia 30324 Telephone Number--(404) 888-2950 Securities registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: COMMON STOCK, $0.10 PAR VALUE THE NEW YORK STOCK EXCHANGE 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 --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x] As of February 29, 1996, RPC, Inc. had 14,544,508 shares of common stock outstanding (excluding 65,546 treasury shares), and the aggregate market value of this stock (based on the closing price on The New York Stock Exchange of $9.50 per share) held by nonaffiliates was $51,671,000. Documents Incorporated by Reference: Portions of the Proxy Statement for the 1996 Annual Meeting of Stockholders of RPC, Inc. are incorporated by reference into Part III, Items 10 through 13. PART I ITEM 1. BUSINESS PRINCIPAL PRODUCTS AND SERVICES RPC, Inc. ("RPC") was incorporated in the state of Delaware on January 20, 1984. RPC has two major business segments: boat manufacturing and oil and gas services. At the 1995 Annual Meeting of Stockholders, stockholders approved an amendment to the Articles of Incorporation changing the company's name from RPC Energy Services, Inc. to RPC, Inc. This change was made because the words "Energy Services" no longer accurately describe the business conducted by RPC. BOAT MANUFACTURING Chaparral Boats, Inc. ("Chaparral"), a wholly owned subsidiary of RPC, sells 4 lines of powerboats to a nationwide network of independent dealers. These lines consist of 2 different runabout lines, a deckboat line, and a cruiser line. New models are introduced at the end of each summer. Operations are seasonal in nature with the second quarter recording the highest sales volume for the year. This business segment contributed 44 percent of RPC's consolidated revenue in 1995, 46 percent in 1994, and 38 percent in 1993. Research and development activities, totaling $1,559,000 in 1995, $1,514,000 in 1994, and $1,152,000 in 1993, were necessary to generate new product innovations. OIL AND GAS SERVICES The oil and gas services segment provides a variety of services, equipment, and personnel to the oil and gas industry. Service locations include Belle Chasse, Houma, Lafayette, Venice, Lake Charles, Fourchon, and Morgan City, Louisiana; Alice, Corpus Christi, Houston, Longview, and Odessa, Texas; Elk City, Woodward, Lindsay, and McAlester, Oklahoma; Farmington, New Mexico; and Rock Springs, Wyoming. The oil and gas services business is not generally seasonal. However, severe weather conditions will increase the demand for oil and natural gas, which generally results in an increase in the demand for our services. There were no material expenditures for research and development in this business segment. The services provided by the oil and gas services segment of RPC include the following: OIL FIELD SERVICES Cudd Pressure Control, Inc., a wholly owned subsidiary of RPC, provides a wide range of well services throughout the southwestern United States and other countries. These oil field services include coiled tubing, snubbing, nitrogen pumping, wireline, marine, and well control. This portion of the business segment contributed 29 percent of RPC's consolidated revenue in 1995, 26 percent in 1994, and 29 percent in 1993. EQUIPMENT RENTAL SERVICES Patterson Services, Inc., a wholly owned subsidiary of RPC, offers specialized tools and equipment on a rental basis. These include drill pipe, drill collars, tubing, and blowout preventors. In addition, Patterson Services provides experienced personnel both to install and remove customer-owned casing at well sites and to operate company-owned diesel-driven hammers and welding machines used to weld and drive pipe into the ground. On average, approximately 19 percent of rental equipment was rented on a daily basis in 1995 and 20 percent in 1994. In the rental business, maximum capacity is approximately 50 percent due to transportation, inspection, and cleaning requirements. The decreased level of activity in the oil and gas industry as a whole has caused utilization rates to remain below the 50 percent level. This portion of the business segment contributed 12 percent of RPC's consolidated revenue in 1995, 14 percent in 1994, and 17 percent in 1993. TRANSPORTATION SERVICES Patterson Truck Line, Inc., a wholly owned subsidiary of RPC, offers line haul services on a 24-hour basis to customers primarily in Louisiana and Texas. Line haul operations involve transportation of oil field pipe and equipment as well as nonoil field liquid and dry bulk commodities. STORAGE AND INSPECTION SERVICES Patterson Tubular Services, Inc. ("PTS"), a wholly owned subsidiary of RPC, performs tubular inspection and stores and inventories pipe using an on-line computerized inventory system. Waterfront dock facilities enable PTS to service a wide variety of offshore and inland vessels. In January 1996, PTS opened a state-of-the-art internal pipe coating facility in Channelview, Texas. The plant uses CERAM-KOTE 54-Registered Trademark-, a high-performance ceramic-epoxy coating system, which gives pipe more abrasion and corrosion protection than was previously available in the oil field. Neither business segment is significantly affected by the availability of raw materials or the existence of licenses, patents, and trademarks. CUSTOMERS RPC's business is not dependent on any one customer, but on a variety of customers in both major industry segments. No one customer accounts for more than 10 percent of consolidated revenue. The oil and gas services segment provides services to drilling contractors, oil field supply stores and service companies, major oil and gas producers, and independent exploration companies. Sales are generated by RPC's sales force and from customer referrals. RPC has no written contracts of a material nature with any of its oil and gas services segment customers. Also, there is no material sales backlog due to the short-term nature of the rental and services industry. The boat manufacturing segment produces 4 lines of boats with distribution to a nationwide network of independent dealers. Sales to these dealers are generated by a 5-person sales force. A 5-year boat structure warranty is provided for boats, beginning in the 1992 model year. These warranty terms, though, have no material impact on working capital. Although production is scheduled from orders placed by dealers, these are not firm orders and are frequently changed or canceled. As a result, there is not an amount in this segment identified as backlog. COMPETITION There are many companies that compete with RPC's subsidiaries in each segment, some of which are larger and have been established in the industries for longer periods of time. In the oil and gas services segment, the relatively low level of drilling activities has resulted in intense competition and has historically led to substantial price reductions for services offered. Industry conditions will continue to be influenced by such factors as weather, economic and political conditions, as well as worldwide demand for, and prices of, oil and natural gas. The notable competitive factors in this segment are quality, availability, and price of equipment and service. This segment's predominant markets are the Gulf of Mexico, the southwestern United States, and Algeria. Boat manufacturing competition comes from small independent companies as well as large vertically integrated public companies that have both engine and boat manufacturing subsidiaries. Major markets include the southeastern and Gulf states, the northeastern states, and California. The sources of competition in this industry are the quality of materials, the quality of the construction process, the design features, and the selling prices. Selling prices are set by management and vary from dealer to dealer based upon volume. The sales prices of Chaparral's boats are similar to equivalent competitors' models. EMPLOYEES At December 31, 1995, RPC employed 1,367 persons. ENVIRONMENTAL CONSIDERATIONS The capital expenditures, earnings, and competitive position of RPC are not materially affected by compliance with federal, state, and local provisions which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment. FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS Information about RPC's operations by segment, as well as financial information about foreign and domestic operations for the 3 years ended December 31, 1995, is set forth in Note 8 on page 19. ITEM 2. PROPERTIES RPC owns or leases 43 offices and operating facilities. Considered individually, the only facility that represents a materially important physical property is the boat manufacturing plant in Nashville, Georgia. RPC believes its current operating facilities are suitable and adequate to meet current and reasonably anticipated future needs. Descriptions of the major facilities are as follows: OWNED LOCATIONS Houston, Texas--Pipe storage terminal, and inspection shed, and pipe coating facility Nashville, Georgia--Boat manufacturing facility Irving, Texas--Crane fabrication plant Houma, Louisiana--Administrative office LEASED LOCATIONS Morgan City, Louisiana--Pipe storage terminal and inspection shed Expiration date of lease: January 31, 2002 ITEM 3. LEGAL PROCEEDINGS RPC is involved in various legal proceedings encountered in the ordinary course of business. In the opinion of management, any judgment or settlement arising from these proceedings will not, individually or in the aggregate, have a material adverse effect on its business or its financial position. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders during the fourth quarter of 1995. ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT Each of the executive officers of RPC was elected by the Board of Directors to serve until the Board of Directors' meeting immediately following the next annual meeting of stockholders or until his or her earlier removal by the Board of Directors or his or her resignation. The following table lists the executive officers of RPC and their ages, offices, and terms of office with RPC. NAME AND OFFICE DATE FIRST WITH REGISTRANT AGE ELECTED TO OFFICE R. Randall Rollins 64 Chairman of the Board 1/24/84 Chief Executive Officer Richard A. Hubbell 51 President 1/27/87 Chief Operating Officer Bobby Joe Cudd 66 Executive Vice President 1/24/84 James A. Lane, Jr. 53 Executive Vice President 1/27/87 William S. Pegg 53 Executive Vice President 1/27/87 Linda H. Graham 59 Vice President 1/27/87 Secretary Debra G. Herron 37 Chief Financial Officer 1/24/90 Treasurer 1/27/87 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS RPC common stock is listed for trading on the New York Stock Exchange under the symbol RES. At the close of business on December 31, 1995, there were 1,530 holders of record of common stock. Prices of RPC's common stock for the years ended December 31, 1995 and 1994, were as follows:
- ----------------------------------------------------------------- 1995 1994 - ----------------------------------------------------------------- - ----------------------------------------------------------------- Quarter High Low High Low - ----------------------------------------------------------------- First $ 7.875 $ 6.750 $ 9.000 $ 7.875 Second 9.250 7.125 8.500 7.875 Third 9.125 7.500 8.250 7.125 Fourth 9.625 7.500 8.500 6.250 - ----------------------------------------------------------------- - -----------------------------------------------------------------
ITEM 6. SELECTED FINANCIAL DATA RPC has not paid dividends on its common stock in the two most recent years. - -------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (IN THOUSANDS EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------- OPERATIONS SUMMARY Revenue $ 161,379 $ 155,765 $ 123,481 $ 100,731 $ 97,339 Net costs and expenses 145,228 142,583 113,534 95,276 89,040 - ------------------------------------------------------------------------------------------------------------------------- Income before income taxes, extraordinary credit, and cumulative effect of accounting change 16,151 13,182 9,947 5,455 8,299 Income tax provision 5,396 4,404 3,270 2,116 2,979 - ------------------------------------------------------------------------------------------------------------------------- Income before extraordinary credit and cumulative effect of accounting change $ 10,755 $ 8,778 $ 6,677 $ 3,339 $ 5,320 Extraordinary credit - utilization of loss carryforward -- -- -- 765 2,822 Cumulative effect of a change in accounting for income taxes -- -- 150 -- -- - ------------------------------------------------------------------------------------------------------------------------- Net income $ 10,755 $ 8,778 $ 6,827 $ 4,104 $ 8,142 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- Earnings per share: Before extraordinary credit and accounting change $ .74 $ .61 $ .46 $ .23 $ .37 After extraordinary credit and accounting change $ .74 $ .61 $ .47 $ .28 $ .57 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- CAPITAL EXPENDITURES $ 15,529 $ 10,618 $ 6,630 $ 9,406 $ 5,123 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- FINANCIAL POSITION Total assets $ 132,656 $ 122,242 $ 109,992 $ 102,889 $ 97,350 Working capital 41,943 37,827 33,943 32,965 38,991 Stockholders' equity 104,361 93,499 84,614 77,710 73,602 - ------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS CONSOLIDATED RPC's revenue and net income both increased in 1995. This was RPC's eighth consecutive year of profitable operations. The oil and gas services segment experienced a 31 percent increase in operating profit in 1995, in spite of unfavorable trends in the price of natural gas and the average U.S. rig count. This was due primarily to a strong performance by the service lines in this segment that are less dependent on drilling activity. Improvement in international operations also had a significant impact on results. The boat manufacturing segment recorded only a 3 percent increase in operating profit due to an overall slowdown in the boating industry offset by an increase in sales of the larger models in all boat lines, most notably in the SS line of family runabouts. There was a slight increase in margins and market share in spite of continued price competition in this segment. Consolidated revenue increased 4 percent in 1995 to $161,379,000 compared to $155,765,000 in 1994. Revenue in 1994 was 26 percent higher than 1993 revenue of $123,481,000. Income before income taxes and accounting change was $16,151,000 in 1995, $13,182,000 in 1994, and $9,947,000 in 1993. This represented an increase of $2,969,000 or 23 percent in 1995 and an increase of $3,235,000 or 33 percent in 1994. Consolidated net income was $10,755,000 or 74 cents per share in 1995 compared to $8,778,000 or 61 cents per share in 1994. The net income in 1993 was $6,827,000 or 47 cents per share. This represented an increase of $1,977,000 or 23 percent in 1995 and an increase of $1,951,000 or 29 percent in 1994. OPERATING SEGMENTS--REVENUE The oil and gas services segment contributed $79,943,000 or 50 percent of total 1995 revenue. Revenue was $73,098,000 in 1994 and $67,099,000 in 1993. The 9 percent increase in 1995 can be attributed to a number of factors. Even though the average U.S. rig count (including both oil and natural gas wells)decreased, domestic revenue increased due to Cudd Pressure Control's workover programs and Patterson Truck Line's commodities hauling, which are not dependent on drilling activity. Also, international operations continued to grow. Most of the revenue increase in this segment was from higher volume; no significant price increases occurred. The revenue increase of 9 percent in 1994 was due to the rise of natural gas prices that began in early 1993 and peaked in the first quarter of 1994. This resulted in increased production and drilling in the Gulf of Mexico, the most significant market for the oil and gas services segment. Also, Patterson Truck Line increased its line haul fleet to meet the demand of its customers. Most of the revenue increase was from higher volume; no significant price increases occurred. The boat manufacturing segment reported a 3 percent or $2,011,000 decrease in revenue from $72,229,000 in 1994 to $70,218,000 in 1995. Revenue for 1993 was $47,372,000. The total number of boats sold by Chaparral in 1995 decreased 15 percent due to high dealer inventory of prior year models. This resulted in lower production levels of the new models, especially during the second half of 1995. However, the SS line of family runabouts, introduced in 1993, and the Sunesta, the deckboat line introduced in 1992, continued to be very popular. The average price of boats sold in 1995 increased 13 percent due to price increases and an increase in sales of larger models. These price increases, which ranged between 6 and 7 percent, were the result of higher material costs and upgrades of model features. The 52 percent revenue increase for Chaparral in 1994 resulted from the 50 percent increase in the number of boats sold. This was due to an improvement in the boating industry combined with a strong, favorable reaction to several of the newer models, most notably the SS line of family runabouts. There was a price increase in July 1994 that averaged between 2 and 3 percent as a result of higher material costs. EXPENSES Cost of goods sold for the boat manufacturing segment was $55,826,000 in 1995 compared with $57,594,000 in 1994 and $38,032,000 in 1993. This represents a decrease of $1,768,000 or 3 percent in 1995, which is the same as the decrease in revenue. As a percent of revenue, cost of goods sold for this segment was 80 percent in 1995, 1994, and 1993. The remaining cost of goods sold was incurred by other subsidiaries. Consolidated operating expenses were $76,412,000 in 1995, $71,965,000 in 1994, and $65,408,000 in 1993. Expenses were 6 percent higher in 1995 than in 1994 because operating expenses were incurred primarily in the oil and gas services segment, where revenue increased 9 percent. The oil and gas services segment's operating expenses were $62,622,000 or 78 percent of this segment's revenue in 1995. Operating expenses were $59,055,000 or 81 percent of this segment's revenue in 1994 and $55,099,000 or 82 percent of this segment's revenue in 1993. Operating expenses as a percent of revenue decreased 3 percentage points between 1994 and 1995. The boat manufacturing segment's operating expenses were $6,527,000 which as a percent of revenue was a 1 percentage point decrease from 1994. The portion of depreciation and amortization not included in cost of goods sold was $6,843,000 in 1995, $6,215,000 in 1994, and $5,778,000 in 1993. The majority of this expense represents oil and gas services segment depreciation of $5,961,000 in 1995, $5,369,000 in 1994, and $4,913,000 in 1993. The 1995 increase of $592,000 or 11 percent is due to operating equipment purchases by Cudd Pressure Control. Chaparral's depreciation expense for production equipment is a component of cost of goods sold, so this category includes only amortization of goodwill and depreciation of nonproduction assets. Chaparral's depreciation and amortization was $769,000 for 1995, $781,000 for 1994, and $806,000 for 1993. Amortization of goodwill was $709,000 in 1995 and $684,000 in 1994 and 1993. Interest income was $2,181,000 in 1995, $1,489,000 in 1994, and $1,462,000 in 1993. Even though total cash and marketable securities only increased from $41,214,000 at December 31, 1994, to $41,874,000 at December 31, 1995, interest income increased $692,000 or 46 percent in 1995 due to higher investment returns this year. FINANCIAL CONDITION At the end of 1995, RPC's cash and cash equivalents and short-term marketable securities increased $671,000 to $22,594,000. Cash provided by operating activities was $13,727,000 compared to $12,344,000 in 1994. Accounts receivable were $20,802,000 at December 31, 1995, compared to $20,577,000 at December 31, 1994, an increase of $225,000. Inventories were $2,103,000 higher than the prior year mainly due to raw materials purchases made in December in the boat manufacturing segment before 1996 vendor price increases occurred. During 1995, current assets increased $3,803,000 while current liabilities decreased $313,000, a combined increase in working capital of $4,116,000. Working capital at December 31, 1995, was $41,943,000 compared to $37,827,000 in the prior year. The current ratio remained strong at the end of 1995 with a ratio of 2.7-to-1, increasing slightly from the 1994 ratio of 2.5-to-1. The 1993 current ratio was 2.6-to-1. Capital expenditures for 1995 were $15,529,000, an increase of $4,911,000 from $10,618,000 in 1994. $14,726,000 of these expenditures were in the oil and gas services segment for revenue-producing equipment. Capital expenditures in 1994 were $8,645,000 for the oil and gas services segment. Part of the increase between 1994 and 1995 was due to the construction cost of the pipe coating facility in Houston. RPC expects that funding for future capital requirements will be provided by cash flows from operations.
BALANCE --------------------------------------------------------------------- SHEETS RPC, INC. AND SUBSIDIARIES (IN THOUSANDS EXCEPT STOCK INFORMATION) --------------------------------------------------------------------- At December 31, 1995 1994 --------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 18,126 $ 15,038 Marketable securities 4,468 6,885 Accounts receivable, net 20,802 20,577 Inventories 14,445 12,342 Deferred income taxes 7,241 6,811 Prepaid expenses and other current assets 1,848 1,474 --------------------------------------------------------------------- Current assets 66,930 63,127 --------------------------------------------------------------------- Equipment and property, net 36,225 28,837 Marketable securities 19,280 19,291 Goodwill, net of accumulated amortization of $6,297 in 1995 and $5,588 in 1994 7,900 8,098 Deferred income taxes 714 825 Other assets 1,607 2,064 --------------------------------------------------------------------- Total assets $ 132,656 $ 122,242 --------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 5,035 $ 5,387 Accrued payroll and related expenses 3,899 3,441 Accrued insurance expenses 5,039 5,227 Accrued state, local, and other taxes 2,315 2,567 Federal income taxes payable 38 198 Accrued discounts 635 824 Other accrued expenses 8,026 7,656 --------------------------------------------------------------------- Current liabilities 24,987 25,300 --------------------------------------------------------------------- Long-term accrued insurance expenses 3,308 3,443 --------------------------------------------------------------------- Total liabilities 28,295 28,743 --------------------------------------------------------------------- Commitments and contingencies --------------------------------------------------------------------- Common stock, $.10 par value, 35,000,000 shares authorized, 14,610,054 shares issued 1,461 1,461 Capital in excess of par value 34,599 34,228 Earnings retained 68,526 58,296 Common stock in treasury, at cost, 68,723 shares in 1995, 147,723 shares in 1994 (225) (486) --------------------------------------------------------------------- Total stockholders' equity 104,361 93,499 --------------------------------------------------------------------- Total liabilities and stockholders' equity $ 132,656 $ 122,242 ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
- ---------------------------------------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (IN THOUSANDS EXCEPT PER SHARE DATA) STATEMENTS OF - ---------------------------------------------------------------------------------------------------------------- INCOME Years ended December 31, 1995 1994 1993 - ---------------------------------------------------------------------------------------------------------------- REVENUE $ 161,379 $ 155,765 $ 123,481 - ---------------------------------------------------------------------------------------------------------------- Cost of goods sold 64,154 65,892 43,810 Operating expenses 76,412 71,965 65,408 Depreciation and amortization 6,843 6,215 5,778 Interest income (2,181) (1,489) (1,462) - ---------------------------------------------------------------------------------------------------------------- Income before income taxes and cumulative effect of accounting change 16,151 13,182 9,947 Income tax provision 5,396 4,404 3,270 - ---------------------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change 10,755 8,778 6,677 Cumulative effect of a change in accounting for income taxes -- -- 150 - ---------------------------------------------------------------------------------------------------------------- Net income $ 10,755 $ 8,778 $ 6,827 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE Before accounting change $ .74 $ .61 $ .46 - ---------------------------------------------------------------------------------------------------------------- After accounting change $ .74 $ .61 $ .47 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (IN THOUSANDS) STATEMENTS OF - ---------------------------------------------------------------------------------------------------------------- STOCKHOLDERS' Years ended December 31, 1995 1994 1993 EQUITY - ---------------------------------------------------------------------------------------------------------------- COMMON STOCK Balance at beginning and end of year $ 1,461 $ 1,461 $ 1,461 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- CAPITAL IN EXCESS OF PAR VALUE Balance at beginning of year $ 34,228 $ 34,228 $ 34,228 Stock issued for benefit plans 371 -- -- - ---------------------------------------------------------------------------------------------------------------- Balance at end of year $ 34,599 $ 34,228 $ 34,228 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- EARNINGS RETAINED Balance at beginning of year $ 58,296 $ 49,518 $ 42,691 Net income 10,755 8,778 6,827 Stock issued for benefit plans, net (525) -- -- - ---------------------------------------------------------------------------------------------------------------- Balance at end of year $ 68,526 $ 58,296 $ 49,518 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- TREASURY STOCK Balance at beginning of year $ 486 $ 593 $ 670 Stock issued for benefit plans (261) (107) (77) - ---------------------------------------------------------------------------------------------------------------- Balance at end of year $ 225 $ 486 $ 593 - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
STATEMENTS OF RPC, INC. AND SUBSIDIARIES (IN THOUSANDS) CASH FLOWS ------------------------------------------------------------------------------------------------- Years ended December 31, 1995 1994 1993 ------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $ 10,755 $ 8,778 $ 6,827 Noncash charges (credits) to earnings Depreciation and amortization 7,474 6,679 6,164 (Gain) on sale of equipment and property (1,383) (1,517) (1,297) (Increase) decrease in deferred income taxes (319) (1,744) (71) (Increases) decreases in assets: Accounts receivable (225) (2,619) (2,021) Inventories (2,103) (2,106) (391) Prepaid expenses and other current assets (374) 2,073 (1,731) Other noncurrent assets 457 (565) 928 Increases (decreases) in liabilities: Accounts payable (352) 1,390 (521) Accrued payroll and related expenses 458 924 228 Insurance expenses (323) (73) 716 Other accrued expenses (231) 1,124 (224) ------------------------------------------------------------------------------------------------- Net cash provided by operating activities 13,834 12,344 8,607 ------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Capital expenditures (15,529) (10,618) (6,630) Proceeds from sale of equipment and property 2,866 2,684 1,804 Net sale (purchase) of marketable securities 2,428 (2,775) (2,843) Other (511) -- -- ------------------------------------------------------------------------------------------------- Net cash (used for) investing activities (10,746) (10,709) (7,669) ------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Cash received upon exercise of stock options -- 107 77 ------------------------------------------------------------------------------------------------- Net cash provided by financing activities -- 107 77 ------------------------------------------------------------------------------------------------- Net increase in cash and cash equivalents 3,088 1,742 1,015 Cash and cash equivalents at beginning of year 15,038 13,296 12,281 ------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of year $ 18,126 $ 15,038 $ 13,296 ------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. NOTES TO FINANCIAL STATEMENTS RPC, INC. AND SUBSIDIARIES Years ended December 31, 1995, 1994, and 1993 NOTE 1: SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the accounts of RPC, Inc. and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated. NATURE OF OPERATIONS--RPC is principally engaged in two businesses: providing a variety of services, equipment, and personnel to the oil and gas industry and the manufacture of powerboats. The principal markets for the oil and gas services segment are domestic customers comprised of drilling contractors, oil field supply stores and service companies, major oil and gas producers, and independent exploration companies. The boat manufacturing segment distributes boats to a nationwide network of independent dealers. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. REVENUE--Revenue is recognized at the time services are performed or goods are delivered. CASH EQUIVALENTS--Highly liquid investments with original maturities of 3 months or less are considered to be cash equivalents. MARKETABLE SECURITIES--Effective January 1, 1994, RPC adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Under this statement, RPC determined that marketable securities should be classified as either "trading" or "available-for-sale," which require reporting at fair value on the balance sheet. Any unrealized gains and losses on trading securities are included in earnings. For available-for-sale securities, any unrealized gains and losses are excluded from earnings and reported in a separate component of stockholders' equity. As of December 31, 1995, the difference between fair value and cost for both classifications was not material. Investments with original maturities between 3 and 12 months are considered to be current marketable securities. Investments with original maturities greater than 12 months are considered to be noncurrent marketable securities. INVENTORIES--Inventories are recorded at the lower of cost (first-in, first-out basis) or market value. EQUIPMENT AND PROPERTY--Depreciation is provided principally on a straight-line basis over the estimated useful lives of assets. Annual provisions for depreciation are computed using the following useful lives: operating equipment and property, 5 to 10 years; buildings and leasehold improvements, 15 to 30 years; furniture and fixtures, 5 to 7 years; and vehicles, 3 to 5 years. The cost of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal with the resulting gain or loss credited or charged to income. Expenditures for additions, major renewals, and betterments are capitalized. Depreciation expense on production equipment in the manufacturing businesses is included in the "cost of goods sold" caption in the income statement. All other depreciation is included in the "depreciation and amortization" caption. GOODWILL--Goodwill represents the excess of the purchase price over the fair value of net assets of a business acquired. Goodwill is presented net of accumulated amortization and is amortized using the straight-line method over a period not exceeding 20 years. INSURANCE EXPENSES-RPC self-insures, up to specified limits, certain risks related to general liability, product liability, workers' compensation, and vehicle liability. The estimated cost of claims under the self-insurance program is accrued as the claims are incurred (although actual settlement of the claims may not be made until future periods) and may subsequently be revised based on developments relating to such claims. The noncurrent portion of these estimated outstanding claims is classified as long-term accrued insurance expenses. INCOME TAXES-Income taxes are accounted for in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." See Note 5. EARNINGS PER SHARE-Earnings per share have been calculated based on weighted average shares outstanding of 14,528,561 for 1995, 14,442,852 for 1994, and 14,416,932 for 1993. Stock options outstanding do not have a material dilutive effect. NOTE 2: ACCOUNTS RECEIVABLE Accounts receivable, net, at December 31, 1995 of $20,802,000 and at December 31, 1994 of $20,577,000 are net allowances for doubtful accounts of $4,205,000 in 1995 and $6,300,000 in 1994. NOTE 3: INVENTORIES Inventories are recorded at the lower of cost (first-in, first-out basis) or market value and are detailed as follows:
- ------------------------------------------------------------------- December 31, 1995 1994 - ------------------------------------------------------------------- (in thousands) Raw materials and supplies $ 8,478 $ 7,071 Work in process 1,586 845 Finished goods 4,381 4,426 - ------------------------------------------------------------------- Total inventories $ 14,445 $ 12,342 - ------------------------------------------------------------------- - -------------------------------------------------------------------
NOTE 4: EQUIPMENT AND PROPERTY Equipment and property are presented at cost net of accumulated depreciation and are detailed as follows:
- ------------------------------------------------------------------- December 31, 1995 1994 - ------------------------------------------------------------------- (in thousands) Operating equipment and property $ 146,781 $ 141,501 Buildings 12,476 12,005 Furniture and fixtures 3,500 3,471 Vehicles 12,878 10,964 Land 4,806 4,806 - ------------------------------------------------------------------- Gross equipment and property 180,441 172,747 Less: accumulated depreciation 144,216 143,910 - ------------------------------------------------------------------- Net equipment and property $ 36,225 $ 28,837 - ------------------------------------------------------------------- - -------------------------------------------------------------------
NOTE 5: INCOME TAXES The following table lists the components of the provision for income taxes:
- ----------------------------------------------------------------------------- December 31, 1995 1994 1993 - ----------------------------------------------------------------------------- (in thousands) Current: Federal $ 5,475 $ 5,879 $ 3,031 State 240 269 161 Deferred (319) (1,744) 78 - ----------------------------------------------------------------------------- Total income tax provision $ 5,396 $ 4,404 $ 3,270 - ----------------------------------------------------------------------------- - -----------------------------------------------------------------------------
In 1993, RPC adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. These differences are more inclusive in nature than differences determined under previously applicable accounting principles. The cumulative effect of the change in the method of accounting for income taxes attributable to years prior to 1993 was an increase in net income of $150,000. A reconciliation between the federal statutory rate and RPC's effective tax rate is as follows:
- ----------------------------------------------------------------------------- December 31, 1995 1994 1993 - ----------------------------------------------------------------------------- Federal statutory rate 34.6 % 34.2 % 34.0 % State income taxes 1.5 2.0 1.6 Other (2.7) (2.8) (2.7) - ----------------------------------------------------------------------------- Effective tax rate 33.4 % 33.4 % 32.9 % - ----------------------------------------------------------------------------- - -----------------------------------------------------------------------------
The components of the net deferred tax assets are as follows:
- -------------------------------------------------------------- December 31, 1995 1994 - -------------------------------------------------------------- (in thousands) Current deferred tax asset: Self-insurance reserves $ 1,689 $ 1,790 Bad debt reserves 2,789 2,152 State, local, and other taxes 635 723 Payroll accruals 557 536 Warranty reserves 427 425 All others 1,144 1,185 Valuation allowance -- -- - -------------------------------------------------------------- Total current deferred tax asset $ 7,241 $ 6,811 - -------------------------------------------------------------- - -------------------------------------------------------------- Noncurrent deferred tax asset: Self-insurance reserves $ 1,125 $ 1,171 Depreciation (448) (371) All others 37 25 Valuation allowance -- -- - -------------------------------------------------------------- Total noncurrent deferred tax asset $ 714 $ 825 - -------------------------------------------------------------- - --------------------------------------------------------------
Total income tax payments were $5,511,000 in 1995, $5,494,000 in 1994, and $3,857,000 in 1993. NOTE 6: COMMITMENTS AND CONTINGENCIES Minimum annual rentals, principally for noncancelable real estate and truck leases with terms in excess of one year, in effect at December 31, 1995, are summarized in the accompanying table.
- ------------------------------------------------------------------ Year Amount - ------------------------------------------------------------------ (in thousands) 1996 $ 710 1997 596 1998 501 1999 329 2000 186 2001-2005 67 - ------------------------------------------------------------------ Total rental commitments $ 2,389 - ------------------------------------------------------------------ - ------------------------------------------------------------------
Total rental expense charged to operations was $2,418,000 in 1995, $2,002,000 in 1994, and $1,664,000 in 1993. RPC is a defendant in a number of lawsuits which allege that plaintiffs have been damaged as a result of the rendering of services by RPC personnel and equipment, in vehicle accidents, or from the use of RPC's products. RPC is vigorously contesting these actions. Management is of the opinion that the outcome of these lawsuits will not have a material adverse effect on the financial position or results of operations or liquidity of RPC. To assist dealers in obtaining financing for the purchase of its boats, Chaparral has entered into agreements with various dealers and financing institutions to guarantee varying amounts of the dealers' purchase debt obligations. Chaparral's obligation under its guarantee becomes effective in the case of default in payments by the dealer. The agreements provide for the return of all repossessed boats to Chaparral in new condition, in exchange for Chaparral's assumption of the unpaid debt obligation on those boats. As of December 31, 1995, guarantees outstanding totaled $3,398,000. NOTE 7: EMPLOYEE BENEFIT PLANS RPC has a tax-qualified defined benefit, noncontributory, trusteed retirement income plan which covers substantially all employees with at least one year of service. Benefits are based on an employee's years of service and compensation near retirement. RPC has the right to terminate or modify the plan at any time. Total retirement plan cost was $135,000 in 1995 and $95,000 in 1994. Plan income was $52,000 in 1993. The following table details the components:
- ----------------------------------------------------------------------------- December 31, 1995 1994 1993 - ----------------------------------------------------------------------------- (in thousands) Services cost for benefits earned during the period $ 429 $ 482 $ 422 Interest cost on projected benefit obligation 907 842 763 Actual (return) loss on plan assets (2,817) 68 (977) Net amortization and deferral 1,616 (1,297) (260) - ----------------------------------------------------------------------------- Total pension cost (income) $ 135 $ 95 $ (52) - ----------------------------------------------------------------------------- - -----------------------------------------------------------------------------
RPC's funding policy is to contribute to the plan the amount required, if any, under the Employee Retirement Income Security Act of 1974. No contributions were required in 1995, 1994, or 1993. The funded status of the pension plan was as follows:
- -------------------------------------------------------------- December 31, 1995 1994 - -------------------------------------------------------------- (in thousands) Actuarial present value of: Vested benefits $ 10,416 $ 8,561 Nonvested benefits 431 427 - -------------------------------------------------------------- Accumulated benefit obligation 10,847 8,988 Effect of projected future compensation increases 1,875 1,401 - -------------------------------------------------------------- Projected benefit obligation 12,722 10,389 Plan assets at fair value 13,543 11,187 - -------------------------------------------------------------- Plan assets in excess of projected benefit obligation 821 798 Unrecognized net losses 898 1,249 Unrecognized net transition assets (1,252) (1,445) - -------------------------------------------------------------- Prepaid pension cost $ 467 $ 602 - -------------------------------------------------------------- - --------------------------------------------------------------
In 1995, the projected benefit obligation was calculated using a discount rate of 7.5 percent, and in 1994 a rate of 8.5 percent was used. In 1995, a 5.0 percent annual rate of increase in future compensation levels was used compared to a 1994 rate of 5.5 percent. Plan assets are invested in a diversified portfolio that consists of equity and debt securities, including U.S. government obligations. The expected long-term rate of return on plan assets is 9.5 percent. RPC sponsors a deferred compensation 401(k) plan that is available to substantially all full-time employees with more than 6 months of service. This plan allows employees to make tax-deferred contributions of up to 15 percent of their annual compensation, not exceeding the permissible deduction imposed by the Internal Revenue Code. RPC matches 40 percent of each employee's contributions up to 3 percent of the employee's compensation. Employees vest in the RPC contributions after five years of service. The charges to expense for RPC's contributions were $238,000 in 1995, $193,900 in 1994, and $181,000 in 1993. RPC has an Employee Incentive Stock Option Plan (the "1984 Plan") under which 500,000 shares of common stock were reserved for issuance upon the exercise of options granted under this plan. The 1984 Plan expired in October 1994. There were options outstanding to purchase 259,588 shares as of December 31, 1995, 265,588 shares as of December 31, 1994, and 295,388 as of December 31, 1993. The weighted average exercise price at December 31, 1995, was $4.70. All of these options are currently exercisable. Options for 129,488 shares expire on January 27, 1997, 84,100 shares expire on January 24,1999, and 46,000 shares expire on January 23, 2000. During 1995, no options to purchase shares were exercised and options to purchase 6,000 shares were canceled. On January 25, 1994, RPC adopted a new 10-year Employee Stock Incentive Plan (the "1994 Plan") under which 500,000 shares of common stock are subject to grants under various stock incentive programs. There were no grants under this plan in 1995. There were stock options outstanding to purchase 75,900 shares as of December 31, 1995, and 78,900 shares as of December 31, 1994. There were 15,180 shares exercisable as of December 31, 1995, at a price of $8.00. During 1995, no options to purchase shares were exercised and options to purchase 3,000 shares were canceled. There were 115,000 grant units awarded under 2 restricted stock programs of the 1994 Plan during 1994, but no additional units were granted during 1995. As of December 31, 1995, all 115,000 units were outstanding, but none were vested. NOTE 8: BUSINESS SEGMENT INFORMATION Certain information with respect to RPC's business segments is set forth in the accompanying table.
- ----------------------------------------------------------------------------- December 31, 1995 1994 1993 - ----------------------------------------------------------------------------- (in thousands) REVENUE: Oil and gas services $ 79,943 $ 73,098 $ 67,099 Boat manufacturing 70,218 72,229 47,372 Other 11,218 10,438 9,010 - ----------------------------------------------------------------------------- Total revenue $ 161,379 $ 155,765 $ 123,481 - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- OPERATING INCOME(LOSS): Oil and gas services $ 11,360 $ 8,678 $ 7,087 Boat manufacturing 7,096 6,866 3,726 Other (1,971) (1,428) (575) - ----------------------------------------------------------------------------- Total operating income $ 16,485 $ 14,116 $ 10,238 - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- IDENTIFIABLE ASSETS: Oil and gas services $ 51,145 $ 44,224 $ 40,531 Boat manufacturing 23,019 23,601 22,138 Other, including corporate assets 58,492 54,417 47,323 - ----------------------------------------------------------------------------- Total identifiable assets $ 132,656 $ 122,242 $ 109,992 - ----------------------------------------------------------------------------- - -----------------------------------------------------------------------------
In 1995, RPC had revenue of $7,159,000 and an operating profit of $1,680,000 from international operations in the oil and gas services segment. In 1994, oil and gas services revenue from international operations was $4,161,000 and the operating profit was $176,000. In 1993, oil and gas services revenue from international operations was $4,365,000 and the operating loss was $1,542,000. There were $4,709,000 in identifiable assets attributable to these operations in 1995, $6,353,000 in 1994, and $6,893,000 in 1993. There were no international operations in the boat manufacturing segment. NOTE 9: UNAUDITED QUARTERLY DATA
- ----------------------------------------------------------------------------- Quarter First Second Third Fourth - ----------------------------------------------------------------------------- (in thousands except per share data) 1995 Revenue $ 42,220 $ 44,576 $ 35,756 $ 38,827 Net income $2,567 2,606 2,262 3,320 Earnings per share .18 .18 .15 .23 1994 Revenue $ 37,333 $39,871 $ 38,561 $ 40,000 Net income 2,148 2,142 1,754 2,734 Earnings per share .15 .15 .12 .19 - ----------------------------------------------------------------------------- - -----------------------------------------------------------------------------
PART III ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE This item is not applicable to RPC because there has been no change in or disagreements with independent auditors. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning directors and executive officers is included in the RPC Proxy for its 1996 Annual Meeting of Stockholders, in the sections entitled "Election of Directors" and "Section 16 Compliance." This information is incorporated herein by reference. Information about executive officers is contained on page 8. ITEM 11. EXECUTIVE COMPENSATION Information concerning executive compensation is included in the RPC Proxy for its 1996 Annual Meeting of Stockholders, in the section entitled "Executive Compensation." This information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information concerning security ownership is included in the RPC Proxy for its 1996 Annual Meeting of Stockholders, in the sections entitled "Capital Stock" and "Election of Directors." This information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information concerning certain relationships and related transactions is included in the RPC Proxy for its 1996 Annual Meeting of Stockholders, in the section entitled "Certain Relationships and Related Transactions." This information is incorporated herein by reference. Part IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K The following documents are filed as part of this report.
FINANCIAL STATEMENTS PAGE Balance Sheets as of December 31, 1995 12 and 1994 Statements of Income for the 3 years ended 13 December 31, 1995 Statements of Stockholders' Equity for the 3 13 years ended December 31, 1995 Statements of Cash Flows for the 3 years 14 ended December 31, 1995 Notes to Financial Statements 15-19 SCHEDULES Schedule II-Valuation and Qualifying Accounts 21
EXHIBITS EXHIBITS NUMBER DESCRIPTION (3)(i)(a) RPC's Certificate of Incorporation is incorporated herein by reference to Exhibit (3)(a) to the fiscal 1992 Form 10-K. (3)(i)(b) RPC's Certificate of Amendment of the Certificate of Incorporation. (3)(ii) By-laws of RPC are incorporated herein by reference to Exhibit (3)(b) to the fiscal 1993 Form 10-K. (10) RPC's 1994 Employee Stock Incentive Plan is incorporated herein by reference to Exhibit A of the 1994 Proxy Statement. (21) Subsidiaries of RPC. (23) Consent of Arthur Andersen LLP. (24) Powers of Attorney for Directors. (27) Financial Data Schedule. REPORTS ON FORM 8-K No reports on Form 8-K were required to be filed by RPC for the quarter ended December 31, 1995. Any schedules or exhibits not shown above have been omitted because they are not applicable. SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
- ------------------------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (IN THOUSANDS) - ------------------------------------------------------------------------------------------------- For the years ended December 31, 1995, 1994, and 1993 - ------------------------------------------------------------------------------------------------- Balance at Charged to Balance at Beginning Costs and End of Description of Period Expenses Deductions* Period - ------------------------------------------------------------------------------------------------- Year ended December 31, 1995 Allowance for doubtful accounts $6,300 $1,339 $3,434 $4,205 - ------------------------------------------------------------------------------------------------- Year ended December 31, 1994 Allowance for doubtful accounts $2,279 $4,431 $410 $6,300 - ------------------------------------------------------------------------------------------------- Year ended December 31, 1993 Allowance for doubtful accounts $1,684 $1,442 $847 $2,279 - -------------------------------------------------------------------------------------------------
*DEDUCTIONS REPRESENT THE WRITE-OFF OF UNCOLLECTIBLE RECEIVABLES, NET OF RECOVERIES. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Directors and Stockholders of RPC, Inc.: We have audited the accompanying consolidated balance sheets of RPC, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1995 and 1994 and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1995. These financial statements and schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of RPC, Inc. and subsidiaries as of December 31, 1995 and 1994 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. As explained in Note 1 to the financial statements, effective January 1, 1993, the Company changed its method of accounting for income taxes. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14 is presented for the purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements and, in our opinion, fairly states in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ATLANTA, GEORGIA Arthur Andersen LLP MARCH 6, 1996 SIGNATURES Pursuant to the requirements of Section 13 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. By: /s/ R. Randall Rollins ---------------------- R. Randall Rollins Chairman of the Board of Directors (Principal Executive Officer) March 6, 1996 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ R. Randall Rollins /s/ Debra G. Herron ---------------------- ---------------------- R. Randall Rollins Chief Financial Officer and Chairman of the Board of Directors Treasurer (Principal Executive Officer) (Principal Financial and Accounting March 6, 1996 Officer) March 6, 1996 The Directors of RPC, Inc. (listed below) executed a power of attorney appointing Richard A. Hubbell their attorney-in-fact, empowering him to sign this report on their behalf. Bobby Joe Cudd, Director James A. Lane, Jr., Director Wilton Looney, Director Charles R. Patterson, Jr., Director Gary W. Rollins, Director John W. Rollins, Director Henry B. Tippie, Director James B. Williams, Director /s/ Richard A. Hubbell ---------------------- Richard A. Hubbell Director and as Attorney-in-fact March 6, 1996 EX-3.IB 2 EXHIBIT 3(I)(B) EXHIBIT 3(i)(b) CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF RPC, INC. It is hereby certified that: 1. The name of the corporation is RPC Energy Services, Inc. (the "Corporation"). 2. The Certificate in Incorporation of the Corporation (the "Certificate of Incorporation") is hereby amended by striking out the FIRST paragraph, in its entirety, and substituting in lieu thereof, the following new paragraph: "FIRST. The name of this corporation is RPC, Inc." 3. The amendment of the Certificate of Incorporation herein certified was duly adopted in accordance with the provisions of Section 242 of the Delaware general Corporation Law on April 25, 1995 at the Annual Meeting of the Stockholders of the Corporation. Dated this 25th day of April, 1995. Richard A. Hubbell, President ----------------------------------- Richard A. Hubbell, President ATTEST: Linda H. Graham, Secretary - ----------------------------------- Linda H. Graham, Secretary [CORPORATE SEAL] EX-21 3 EXHIBIT 21 EXHIBIT 21 SUBSIDIARIES OF RPC, INC. NAME STATE OF INCORPORATION ---- ---------------------- Cudd Pressure Control, Inc. Delaware Pressure Control, Inc. Delaware South Texas Swabbing, Inc. Texas Coiled Tubing, Inc. Delaware Patterson Services, Inc. Delaware Patterson Truck Line, Inc. Louisiana Patterson Tubular Services, Inc. Texas Chaparral Boats, Inc. Georgia RPC Investment Company Delaware RPC Waste Management Services, Inc. Georgia Anchor Crane & Hoist Service Company, Inc. Georgia RPC Data Link, Inc. Georgia EX-23 4 EXHIBIT 23 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K, into RPC, Inc.'s previously filed Form S-8 Registration Statement (No. 33-5527) and its previously filed Form S-8 Registration Statement (No. 33-75652). Arthur Andersen LLP -------------------------- Atlanta, Georgia March 18, 1996 EX-24 5 EXHIBIT 24 EXHIBIT 24 POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 15th day of February, 1996. Bobby Joe Cudd, Director ------------------------------ Bobby Joe Cudd, Director Witness: Joyce Hamilton - --------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 6th day of February, 1996. James A. Lane, Jr., Director ---------------------------------- James A. Lane, Jr., Director Witness: Vicky Weaver - --------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 6th day of February, 1996. Wilton Looney, Director ---------------------------------- Wilton Looney, Director Witness: Norma Cook - --------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 7th day of March, 1996. Charles R. Patterson, Jr., Director ----------------------------------------- Charles R. Patterson, Jr., Director Witness: Anne Hamilton Abouchar - ------------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 7th day of February, 1996. Gary W. Rollins, Director ------------------------------- Gary W. Rollins, Director Witness: Anne Hamilton Abouchar - ------------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 7th day of February, 1996. John W. Rollins, Director ------------------------------- John W. Rollins, Director Witness: Cindy Alfano - ------------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 7th day of February, 1996. Henry B. Tippie, Director --------------------------------- Henry B. Tippie, Director Witness: Linda M. Potts - ------------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 8th day of February, 1996. John B. Williams, Director --------------------------------- John B. Williams, Director Witness: Mary H. Walden - ------------------------- EX-27 6 EXHIBIT 27
5 1,000 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 18,126 4,468 25,007 4,205 14,445 66,930 36,225 0 132,656 24,987 0 0 0 1,461 102,900 132,656 0 161,379 64,154 140,566 6,843 0 0 16,151 5,396 10,755 0 0 0 10,755 .74 .74
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