Delaware | 58-1550825 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Part I. Financial Information
|
Page No.
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
Consolidated Balance Sheets –As of June 30, 2014 and December 31, 2013
|
3
|
|
Consolidated Statements of Operations – For the three months and six months ended June 30, 2014 and 2013
|
4
|
|
Consolidated Statements of Comprehensive Income – For the three months and six months ended June 30, 2014 and 2013
|
5
|
|
Consolidated Statement of Stockholders’ Equity – For the three months and six months ended June 30, 2014
|
6
|
|
Consolidated Statements of Cash Flows – For the six months ended June 30, 2014 and 2013
|
7
|
|
Notes to Consolidated Financial Statements
|
8 – 16
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
17 – 25
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
25
|
Item 4.
|
Controls and Procedures
|
25
|
Part II. Other Information
|
||
Item 1.
|
Legal Proceedings
|
26
|
Item 1A.
|
Risk Factors
|
26
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
26
|
Item 3.
|
Defaults upon Senior Securities
|
26
|
Item 4.
|
Mine Safety Disclosures
|
26
|
Item 5.
|
Other Information
|
26
|
Item 6.
|
Exhibits
|
27
|
Signatures
|
28
|
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
ASSETS
|
(Note 1)
|
|||||||
Cash and cash equivalents
|
$ | 22,164 | $ | 8,700 | ||||
Accounts receivable, net
|
565,940 | 437,132 | ||||||
Inventories
|
138,836 | 126,604 | ||||||
Deferred income taxes
|
11,624 | 14,185 | ||||||
Income taxes receivable
|
16,874 | 5,720 | ||||||
Prepaid expenses
|
6,002 | 9,143 | ||||||
Other current assets
|
6,787 | 3,441 | ||||||
Total current assets
|
768,227 | 604,925 | ||||||
Property,
plant and equipment, less accumulated depreciation of $1,156 in 2014 and $1,069 in 2013
|
708,598 | 726,307 | ||||||
Goodwill
|
32,150 | 31,861 | ||||||
Other assets
|
21,886 | 20,767 | ||||||
Total assets
|
$ | 1,530,861 | $ | 1,383,860 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Accounts payable
|
$ | 150,894 | $ | 119,170 | ||||
Accrued payroll and related expenses
|
37,686 | 36,638 | ||||||
Accrued insurance expenses
|
6,624 | 6,072 | ||||||
Accrued state, local and other taxes
|
8,411 | 5,002 | ||||||
Income taxes payable
|
535 | - | ||||||
Other accrued expenses
|
1,310 | 1,170 | ||||||
Total current liabilities
|
205,460 | 168,052 | ||||||
Long-term accrued insurance expenses
|
11,412 | 10,225 | ||||||
Notes payable to banks
|
131,400 | 53,300 | ||||||
Long-term pension liabilities
|
22,867 | 21,966 | ||||||
Deferred income taxes
|
127,459 | 153,176 | ||||||
Other long-term liabilities
|
10,618 | 8,439 | ||||||
Total liabilities
|
509,216 | 415,158 | ||||||
Common stock
|
21,883 | 21,899 | ||||||
Capital in excess of par value
|
- | - | ||||||
Retained earnings
|
1,009,711 | 956,918 | ||||||
Accumulated other comprehensive loss
|
(9,949 | ) | (10,115 | ) | ||||
Total stockholders’ equity
|
1,021,645 | 968,702 | ||||||
Total liabilities and stockholders’ equity
|
$ | 1,530,861 | $ | 1,383,860 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
|
3 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Revenues
|
$ | 582,831 | $ | 457,566 | $ | 1,084,523 | $ | 883,387 | ||||||||
Cost of revenues (exclusive of items shown below)
|
374,275 | 287,578 | 704,290 | 555,805 | ||||||||||||
Selling, general and administrative expenses
|
47,603 | 47,611 | 96,311 | 92,525 | ||||||||||||
Depreciation and amortization
|
56,517 | 52,767 | 112,022 | 105,588 | ||||||||||||
Loss on disposition of assets, net
|
1,405 | 1,757 | 3,637 | 4,397 | ||||||||||||
Operating profit
|
103,031 | 67,853 | 168,263 | 125,072 | ||||||||||||
Interest expense
|
(49 | ) | (942 | ) | (386 | ) | (1,282 | ) | ||||||||
Interest income
|
6 | 60 | 10 | 65 | ||||||||||||
Other income (expense), net
|
831 | (191 | ) | 911 | 364 | |||||||||||
Income before income taxes
|
103,819 | 66,780 | 168,798 | 124,219 | ||||||||||||
Income tax provision
|
40,536 | 26,364 | 66,127 | 48,727 | ||||||||||||
Net income
|
$ | 63,283 | $ | 40,416 | $ | 102,671 | $ | 75,492 | ||||||||
Earnings per share
|
||||||||||||||||
Basic
|
$ | 0.29 | $ | 0.19 | $ | 0.48 | $ | 0.35 | ||||||||
Diluted
|
$ | 0.29 | $ | 0.19 | $ | 0.47 | $ | 0.35 | ||||||||
Dividends per share
|
$ | 0.105 | $ | 0.10 | $ | 0.21 | $ | 0.20 | ||||||||
Weighted average shares outstanding
|
||||||||||||||||
Basic
|
215,224 | 215,883 | 215,199 | 216,039 | ||||||||||||
Diluted
|
216,238 | 216,695 | 216,280 | 217,190 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
4 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Net income
|
$ | 63,283 | $ | 40,416 | $ | 102,671 | $ | 75,492 | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Pension adjustment and reclassification adjustment, net of taxes
|
84 | 124 | 168 | 248 | ||||||||||||
Foreign currency translation
|
467 | (383 | ) | (4 | ) | (627 | ) | |||||||||
Unrealized gain (loss) on securities, net of taxes
|
38 | 30 | 2 | (31 | ) | |||||||||||
Comprehensive income
|
$ | 63,872 | $ | 40,187 | $ | 102,837 | $ | 75,082 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
5 |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
||||||||||||||||||||||
Common Stock
|
||||||||||||||||||||||||
Shares
|
Amount
|
Total
|
||||||||||||||||||||||
Balance, December 31, 2013
|
218,986 | $ | 21,899 | $ | — | $ | 956,918 | ($10,115 | ) | $ | 968,702 | |||||||||||||
Stock issued for stock incentive plans, net
|
600 | 60 | 4,657 | — | — | 4,717 | ||||||||||||||||||
Stock purchased and retired
|
(753 | ) | (76 | ) | (9,073 | ) | (3,995 | ) | — | (13,144 | ) | |||||||||||||
Net income
|
— | — | — | 102,671 | — | 102,671 | ||||||||||||||||||
Pension adjustment, net of taxes
|
— | — | — | — | 168 | 168 | ||||||||||||||||||
Foreign currency translation
|
— | — | — | — | (4 | ) | (4 | ) | ||||||||||||||||
Unrealized loss on securities, net of taxes
|
— | — | — | — | 2 | 2 | ||||||||||||||||||
Dividends declared
|
— | — | — | (45,883 | ) | — | (45,883 | ) | ||||||||||||||||
Excess tax benefits for share-based payments
|
— | — | 4,416 | — | — | 4,416 | ||||||||||||||||||
Balance, June 30, 2014
|
218,833 | $ | 21,883 | $ | — | $ | 1,009,711 | ($9,949 | ) | $ | 1,021,645 | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
6 |
Six months ended June 30,
|
||||||||
2014
|
2013
|
|||||||
OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 102,671 | $ | 75,492 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation, amortization and other non-cash charges
|
113,308 | 107,056 | ||||||
Stock-based compensation expense
|
4,717 | 4,251 | ||||||
Loss on disposition of assets, net
|
3,637 | 4,397 | ||||||
Deferred income tax benefit
|
(23,255 | ) | (15,635 | ) | ||||
Excess tax benefits for share-based payments
|
(4,416 | ) | (3,197 | ) | ||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(128,862 | ) | 6,416 | |||||
Income taxes receivable
|
(6,738 | ) | 7,431 | |||||
Inventories
|
(12,261 | ) | 6,276 | |||||
Prepaid expenses
|
3,049 | 2,706 | ||||||
Other current assets
|
(3,342 | ) | (964 | ) | ||||
Other non-current assets
|
(467 | ) | 26 | |||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
33,231 | 7,090 | ||||||
Income taxes payable
|
535 | 3,683 | ||||||
Accrued payroll and related expenses
|
1,048 | (3,253 | ) | |||||
Accrued insurance expenses
|
552 | 169 | ||||||
Accrued state, local and other taxes
|
3,409 | 606 | ||||||
Other accrued expenses
|
139 | (1,586 | ) | |||||
Pension liabilities
|
1,167 | 915 | ||||||
Long-term accrued insurance expenses
|
1,187 | 605 | ||||||
Other long-term liabilities
|
2,179 | (1,836 | ) | |||||
Net cash provided by operating activities
|
91,488 | 200,648 | ||||||
INVESTING ACTIVITIES
|
||||||||
Capital expenditures
|
(112,804 | ) | (108,490 | ) | ||||
Proceeds from sale of assets
|
11,958 | 5,158 | ||||||
Net cash used for investing activities
|
(100,846 | ) | (103,332 | ) | ||||
FINANCING ACTIVITIES
|
||||||||
Payment of dividends
|
(45,883 | ) | (44,030 | ) | ||||
Borrowings from notes payable to banks
|
537,400 | 350,500 | ||||||
Repayments of notes payable to banks
|
(459,300 | ) | (390,300 | ) | ||||
Debt issue costs for notes payable to banks
|
(667 | ) | — | |||||
Excess tax benefits for share-based payments
|
4,416 | 3,197 | ||||||
Cash paid for common stock purchased and retired
|
(13,144 | ) | (20,587 | ) | ||||
Net cash provided by (used for) financing activities
|
22,822 | (101,220 | ) | |||||
Net increase (decrease) in cash and cash equivalents
|
13,464 | (3,904 | ) | |||||
Cash and cash equivalents at beginning of period
|
8,700 | 14,163 | ||||||
Cash and cash equivalents at end of period
|
$ | 22,164 | $ | 10,259 | ||||
Supplemental cash flows disclosure:
|
||||||||
Interest paid, net of amounts capitalized
|
$ | 443 | $ | 406 | ||||
Income taxes paid, net
|
$ | 93,108 | $ | 53,298 | ||||
Supplemental disclosure of noncash investing activities:
|
||||||||
Capital expenditures included in accounts payable
|
$ | 18,205 | $ | 15,793 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
|
7 |
1.
|
GENERAL
|
2.
|
REVENUES
|
3.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
●
|
Accounting Standards Update 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in this ASU require that when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity, the parent should release the cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Sale of an investment in a foreign entity includes both: (1) events that result in the loss of a controlling financial interest in a foreign entity; and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date. The Company adopted these provisions in the first quarter of 2014 and adoption did not have a material impact on the Company’s consolidated financial statements.
|
8 |
●
|
Accounting Standards Update 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in this ASU requires an unrecognized tax benefit, or a portion of thereof, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry-forward, a similar tax loss, or a tax credit carry-forward. The only exception would be if the deferred taxes related to these items are not available to settle any additional income taxes that would result from the disallowance of a tax position either by statute or at the entity’s choosing. In such cases, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The Company adopted these provisions in the first quarter of 2014 and adoption did not have a material impact on the Company’s consolidated financial statements.
|
●
|
Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply a five step process – (i) identifying the contract(s) with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the entity satisfies a performance obligation. The Company plans to adopt these provisions in the first quarter of 2017 and is currently evaluating the impact of these provisions on its financial statements. Early adoption is not permitted.
|
●
|
Accounting Standards Update 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU require that only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective in the first quarter of 2015 with early adoption permitted. The Company plans to adopt these provisions in the first quarter of 2015 and does not expect the adoption to have a material impact on the Company’s consolidated financial statements.
|
4.
|
EARNINGS PER SHARE
|
9 |
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
(In thousands except per share data )
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Net income available for stockholders:
|
$ | 63,283 | $ | 40,416 | $ | 102,671 | $ | 75,492 | ||||||||
Less: Dividends paid
|
(22,898 | ) | (22,015 | ) | (45,883 | ) | (44,030 | ) | ||||||||
Undistributed earnings
|
$ | 40,385 | $ | 18,401 | $ | 56,788 | $ | 31,462 | ||||||||
Basic shares outstanding:
|
||||||||||||||||
Common stock
|
211,611 | 211,707 | 211,522 | 211,790 | ||||||||||||
Restricted shares of common stock
|
3,613 | 4,176 | 3,677 | 4,249 | ||||||||||||
215,224 | 215,883 | 215,199 | 216,039 | |||||||||||||
Diluted shares outstanding:
|
||||||||||||||||
Common stock
|
211,611 | 211,707 | 211,522 | 211,790 | ||||||||||||
Dilutive effect of stock based awards
|
1,014 | 812 | 1,081 | 1,151 | ||||||||||||
212,625 | 212,519 | 212,603 | 212,941 | |||||||||||||
Restricted shares of common stock
|
3,613 | 4,176 | 3,677 | 4,249 | ||||||||||||
216,238 | 216,695 | 216,280 | 217,190 |
5.
|
STOCK-BASED COMPENSATION
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30
|
June 30
|
|||||||||||||||
(in thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Pre-tax expense
|
$ | 2,397 | $ | 2,146 | $ | 4,717 | $ | 4,251 | ||||||||
After tax expense
|
$ | 1,522 | $ | 1,363 | $ | 2,995 | $ | 2,699 |
10 |
Shares
|
Weighted Average
Grant-Date Fair Value |
|||||||
Non-vested shares at December 31, 2013
|
4,114,800 | $ | 9.67 | |||||
Granted
|
657,375 | 18.84 | ||||||
Vested
|
(1,106,250 | ) | 7.19 | |||||
Forfeited
|
(56,775 | ) | 10.11 | |||||
Non-vested shares at June 30, 2014
|
3,609,150 | $ | 12.05 |
11 |
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
(in thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Revenues:
|
||||||||||||||||
Technical Services
|
$ | 544,392 | $ | 424,030 | $ | 1,011,362 | $ | 818,041 | ||||||||
Support Services
|
38,439 | 33,536 | 73,161 | 65,346 | ||||||||||||
Total revenues
|
$ | 582,831 | $ | 457,566 | $ | 1,084,523 | $ | 883,387 | ||||||||
Operating profit:
|
||||||||||||||||
Technical Services
|
$ | 99,717 | $ | 66,123 | $ | 164,613 | $ | 124,624 | ||||||||
Support Services
|
8,998 | 7,081 | 16,455 | 13,339 | ||||||||||||
Corporate
|
(4,279 | ) | (3,594 | ) | (9,168 | ) | (8,494 | ) | ||||||||
Loss on disposition of assets, net
|
(1,405 | ) | (1,757 | ) | (3,637 | ) | (4,397 | ) | ||||||||
Total operating profit
|
$ | 103,031 | $ | 67,853 | $ | 168,263 | $ | 125,072 | ||||||||
Interest expense
|
(49 | ) | (942 | ) | (386 | ) | (1,282 | ) | ||||||||
Interest income
|
6 | 60 | 10 | 65 | ||||||||||||
Other income (expense), net
|
831 | (191 | ) | 911 | 364 | |||||||||||
Income before income taxes
|
$ | 103,819 | $ | 66,780 | $ | 168,798 | $ | 124,219 |
Six months ended June 30, 2014
|
Technical Services
|
Support Services
|
Corporate
|
Total
|
||||||||||||
(in thousands)
|
||||||||||||||||
Identifiable assets at June 30, 2014
|
$ | 1,284,577 | $ | 161,572 | $ | 84,712 | $ | 1,530,861 | ||||||||
Capital expenditures
|
92,820 | 19,417 | 567 | 112,804 | ||||||||||||
Depreciation and amortization
|
$ | 95,839 | $ | 15,863 | $ | 320 | $ | 112,022 |
Six months ended June 30, 2013
|
Technical Services
|
Support Services
|
Corporate
|
Total
|
||||||||||||
(in thousands)
|
||||||||||||||||
Identifiable assets at June 30, 2013
|
$ | 1,079,607 | $ | 195,406 | $ | 53,969 | $ | 1,328,982 | ||||||||
Capital expenditures
|
86,217 | 21,626 | 647 | 108,490 | ||||||||||||
Depreciation and amortization
|
$ | 89,442 | $ | 15,803 | $ | 343 | $ | 105,588 |
12 |
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
(in thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Service cost
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Interest cost
|
487 | 436 | 973 | 870 | ||||||||||||
Expected return on plan assets
|
(560 | ) | (511 | ) | (1,120 | ) | (1,022 | ) | ||||||||
Amortization of net losses
|
133 | 196 | 266 | 391 | ||||||||||||
Net periodic benefit cost
|
$ | 60 | $ | 121 | $ | 119 | $ | 239 |
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
(in thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Gains (losses), net
|
$ | 453 | $ | 46 | $ | 637 | $ | 568 |
13 |
●
|
the Base Rate, which is the highest of Bank of America’s “prime rate” for the day of the borrowing, a fluctuating rate per annum equal to the Federal Funds Rate plus 0.50%, and a rate per annum equal to the one (1) month LIBOR rate plus 1.00%; in each case plus a margin that ranges from 0.125% to 1.125% based on a quarterly debt covenant calculation; or
|
●
|
with respect to any Eurodollar borrowings, Adjusted LIBOR (which equals LIBOR as increased to account for the maximum reserve percentages established by the U.S. Federal Reserve) plus a margin ranging from 1.125% to 2.125%, based upon a quarterly debt covenant calculation.
|
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
(in thousands except interest rate data)
|
||||||||||||||||
Interest incurred
|
$ | 472 | $ | 324 | $ | 886 | $ | 677 | ||||||||
Capitalized interest
|
$ | 115 | $ | 247 | $ | 212 | $ | 489 | ||||||||
Weighted average interest rate
|
2.67 | % | 3.12 | % | 2.97 | % | 3.05 | % |
14 |
1.
|
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
|
2.
|
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
3.
|
Level 3 – Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use.
|
Fair value measurements at June 30, 2014 with:
|
||||||||||||
(in thousands)
|
Quoted prices in
active markets for identical assets |
Significant other
observable inputs |
Significant
unobservable inputs |
|||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||
Assets:
|
||||||||||||
Trading securities
|
$ | - | $ | 14,600 | $ | - | ||||||
Available for sale securities
|
449 | - | - |
Fair value measurements at December 31, 2013 with:
|
||||||||||||
(in thousands)
|
Quoted prices in
active markets for identical assets |
Significant other
observable inputs |
Significant
unobservable inputs |
|||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||
Assets:
|
||||||||||||
Trading securities
|
$ | - | $ | 13,963 | $ | - | ||||||
Available for sale securities
|
445 | - | - |
15 |
Pension
Adjustment
|
Unrealized
Gain (Loss) On
Securities
|
Foreign Currency Translation
|
Total
|
|||||||||||||
Balance at December 31, 2013
|
$ | (9,760 | ) | $ | 10 | $ | (365 | ) | $ | (10,115 | ) | |||||
Change during the period:
|
||||||||||||||||
Before-tax amount
|
- | 3 | (4 | ) | (1 | ) | ||||||||||
Tax benefit (expense)
|
- | (1 | ) | - | (1 | ) | ||||||||||
Reclassification adjustment, net of taxes:
|
||||||||||||||||
Amortization of net loss (1)
|
168 | - | - | 168 | ||||||||||||
Total activity for the period
|
168 | 2 | (4 | ) | 166 | |||||||||||
Balance at June 30, 2014
|
$ | (9,592 | ) | $ | 12 | $ | (369 | ) | $ | (9,949 | ) |
(1)
|
Reported as part of selling, general and administrative expenses.
|
Pension
Adjustment
|
Unrealized
Gain (Loss) On
Securities
|
Foreign Currency Translation
|
Total
|
|||||||||||||
Balance at December 31, 2012
|
$ | (14,688 | ) | $ | 29 | $ | 413 | $ | (14,246 | ) | ||||||
Change during the quarter:
|
||||||||||||||||
Before-tax amount
|
- | (49 | ) | (627 | ) | (676 | ) | |||||||||
Tax benefit (expense)
|
- | 18 | - | 18 | ||||||||||||
Reclassification adjustment, net of taxes:
|
||||||||||||||||
Amortization of net loss (1)
|
248 | - | - | 248 | ||||||||||||
Total activity for the quarter
|
248 | (31 | ) | (627 | ) | (410 | ) | |||||||||
Balance at June 30, 2013
|
$ | (14,440 | ) | $ | (2 | ) | $ | (214 | ) | $ | (14,656 | ) |
(1)
|
Reported as part of selling, general and administrative expenses.
|
16 |
17 |
18 |
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Consolidated revenues [in thousands]
|
$ | 582,831 | $ | 457,566 | $ | 1,084,523 | $ | 883,387 | ||||||||
Revenues by business segment [in thousands]:
|
||||||||||||||||
Technical
|
$ | 544,392 | $ | 424,030 | $ | 1,011,362 | $ | 818,041 | ||||||||
Support
|
38,439 | 33,536 | 73,161 | 65,346 | ||||||||||||
Consolidated operating profit [in thousands]
|
$ | 103,031 | $ | 67,853 | $ | 168,263 | $ | 125,072 | ||||||||
Operating profit by business segment [in thousands]:
|
||||||||||||||||
Technical
|
$ | 99,717 | $ | 66,123 | $ | 164,613 | $ | 124,624 | ||||||||
Support
|
8,998 | 7,081 | 16,455 | 13,339 | ||||||||||||
Corporate
|
(4,279 | ) | (3,594 | ) | (9,168 | ) | (8,494 | ) | ||||||||
Loss on disposition of assets, net
|
(1,405 | ) | (1,757 | ) | (3,637 | ) | (4,397 | ) | ||||||||
Percentage cost of revenues to revenues
|
64.2 | % | 62.8 | % | 64.9 | % | 62.9 | % | ||||||||
Percentage selling, general & administrative expenses to revenues
|
8.2 | % | 10.4 | % | 8.9 | % | 10.5 | % | ||||||||
Percentage depreciation and amortization expense to revenues
|
9.7 | % | 11.5 | % | 10.3 | % | 12.0 | % | ||||||||
Average U.S. domestic rig count
|
1,852 | 1,761 | 1,816 | 1,760 | ||||||||||||
Average natural gas price (per thousand cubic feet (mcf))
|
$ | 4.55 | $ | 3.97 | $ | 4.71 | $ | 3.74 | ||||||||
Average oil price (per barrel)
|
$ | 103.24 | $ | 94.07 | $ | 100.97 | $ | 94.24 |
19 |
20 |
21 |
Six months ended June 30
|
||||||||
(In thousands)
|
2014
|
2013
|
||||||
Net cash provided by operating activities
|
$ | 91,488 | $ | 200,648 | ||||
Net cash used for investing activities
|
(100,846 | ) | (103,332 | ) | ||||
Net cash provided by (used for) financing activities
|
22,822 | (101,220 | ) |
22 |
23 |
24 |
25 |
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
26 |
Exhibit
Number |
Description
|
|
3.1(a)
|
Restated certificate of incorporation of RPC, Inc. (incorporated herein by reference to Exhibit 3.1 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1999).
|
|
3.1(b)
|
Certificate of amendment of the certificate of incorporation of RPC, Inc. (incorporated by reference to Exhibit 3.1(b) to Registrant’s Quarterly Report on Form 10-Q filed on May 8, 2006).
|
|
3.1(c)
|
Certificate of amendment of the certificate of incorporation of RPC, Inc. (incorporated by reference to Exhibit 3.1(c) to the Registrant’s Quarterly Report on Form 10-Q filed on August 2, 2011).
|
|
3.2
|
Amended and Restated Bylaws of RPC, Inc. (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on October 25, 2007).
|
|
4
|
Form of Stock Certificate (incorporated herein by reference to Exhibit 4 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
|
|
10.1
|
Stock Incentive Plan (incorporated by reference to Appendix A to the Registrant’s definitive Proxy Statement filed on March 17, 2014).
|
|
31.1
|
Section 302 certification for Chief Executive Officer.
|
|
31.2
|
Section 302 certification for Chief Financial Officer.
|
|
32.1
|
Section 906 certifications for Chief Executive Officer and Chief Financial Officer.
|
|
95.1
|
Mine Safety Disclosures
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
27 |
RPC, INC.
|
|||
Date: July 31, 2014 | /s/ Richard A. Hubbell | ||
Richard A. Hubbell | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: July 31, 2014 | /s/ Ben M. Palmer | ||
Ben M. Palmer | |||
Vice President and Chief Financial Officer | |||
(Principal Financial and Accounting Officer) | |||
28 |
|
1.
|
I have reviewed this quarterly report on Form 10-Q of RPC, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Richard A. Hubbell | ||
Date: July 31, 2014 | Richard A. Hubbell | |
President and Chief Executive Officer | ||
(Principal Executive Officer) |
|
1.
|
I have reviewed this quarterly report on Form 10-Q of RPC, Inc;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Ben M. Palmer | ||
Date: July 31, 2014 | Ben M. Palmer | |
Vice President, Chief Financial Officer, and Treasurer | ||
(Principal Financial and Accounting Officer) |
Date: July 31, 2014 | /s/ Richard A. Hubbell | |
Richard A. Hubbell | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: July 31, 2014 | /s/ Ben M. Palmer | |
Ben M. Palmer | ||
Vice President, Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
EMPLOYEE BENEFIT PLAN (Detail Textuals) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2014
Multiple Employers Retirement Income Plan
|
Jun. 30, 2013
Multiple Employers Retirement Income Plan
|
Jun. 30, 2014
Non-qualified Supplemental Retirement Plan ("SERP")
|
Dec. 31, 2013
Non-qualified Supplemental Retirement Plan ("SERP")
|
|
Multiemployer Plans [Line Item] | ||||
Contribution by employer for retirement income plan | $ 765 | $ 800 | ||
SERP assets | $ 14,600 | $ 13,963 |
SUBSEQUENT EVENT (Detail Textuals) (Subsequent Event, Dividend declared, USD $)
|
1 Months Ended |
---|---|
Jul. 22, 2014
|
|
Subsequent Event | Dividend declared
|
|
Subsequent Event [Line Items] | |
Cash dividend payable (in dollars per share) | $ 0.105 |
Dividends payable date | Sep. 10, 2014 |
Dividends payable record date | Aug. 08, 2014 |
$LJ\ _=UD8M<6?--=$A$`.5]J$->NJGKP_+*,HIES(_%GTWE4GG[$:?K[%A>"M&^
MURL##!RKKW[$:[&%[_O]?OW9$X]?MN+C0Y#O(?TJ0?B=ZE5)J_(^$F'0*492
M$8MWYJ2G].,,6EBF[D!EFJKDMS&\R9VU5AK'*K9+?7?F3*V`3-G$FEG4)LQ_
M(B3P60B-JE7,&R2C?TX&'-0Z`\BDME,E?M:.'X"K.:%@Q7U@[H(@&1.IF!?=
M-%5L=XY4(/W:R^`ZE=**'[@V5L$)5VA<69)M^4AFA,R,VF8>"26>-4.7#W1T
M_=?V]1Y9$AH2K#\PT(8;>8,-23/+MMV0!@Y]9`O/I?#>+EN`?Q='K_7;.L3R
M*.SVV8)X`)+EX:X-<.":!&.9Z_>)Y0.*T*<%H;X5.&[CQX>H!DW"G-)!4>M21`Z%+(+7,]IQ@=CL89%DY@C\\7,_4D(FT"G'IR`
M+>`LX=CP^=$DV*@;$,C,^FE-9H0%+IQ%^AUW;XC/C291YE!(##9:_S5,#S&:
MFD35@^5X;&G-0L*FCF_/7#_TFOLQ9)I$&=`2SL-9-3S D<8%2Z67XJQ@,,<@P"#:>@!#+_=#^`R>Z3R=R2$M20-ARAJ]
M7J1(;GXN*5C"8*Y%D,$G]4"&7N!0<(:4IW-%1IH8&2FB9"QA,M &IE1LN-"WAJY9QFJ16GZ[C;_]Z (:5W(TIWS=TL7TR5('9CR"R@K^YZ?`]>
MAW`YEA-MU3;76^::"@R2QH0#C`+$#N)\#[&_F>6"GG<4F#]AH!L`NTBU`.G*
M30+W!E*'ZJQ;V>ZJZPQ1Z&3*B@1))C2="TB),#1$SZJ%MONC(+Z0'K>EH-OL
M%ID0N&G,:@3+BXJRVF6:/Z:S""_7O1]Z%Q]Z_5#G[#2Z%&+-01V?IJ?D*O=1
M"*=0*C#-P!-T!T5$O5S*8I'./F8`6?!&M/NRI:OIRH:N/B`J@9'SW40R>E"7
MRB/E.M@9-1]5623&$(@'BK5L*!J9'G(^01T5_@&\?>BV^AX:$E4!\P5FV5\C
M5?#>;?8)IP/Q1C"F,]046)OE:8<\M,WNX'L``V?#4@P./-0\G1<>%_T/<_BB
M,SE_X`0(.IA[)O4@&8O91`$5YX6:K3PU#EH'TD)!IT%RZ*.$)7-LA.8C6?`!
M6,#9]4/R-AH 8&_C[5T%K+NKIPE_'0`(GR);V+3AJ3-+3A+(E.3(':!52+U&WV7#U/J
M>GB^W?Z'.#M^#7LTF8,;NZ- YO;APC^M"5)`YICIFA*
MS_[8>O5>,QUL'VP`VP/G="2WMXA)*/=/SL5`4Q/,Q8>M_I9YU^U>@;&0)[!<
M!P:C3R8&70Q*N57IAE-$G#6_0].JA!P^0H"V:EX%(BU,[.>"]U$6*Y6(=5-L
MU_/\/M?,H#TO)9'\975/,83>H)+2Z)=^@R;X6NG6W58;1T#0(2)6G@,`J%OC
M/]K80K\U&1B+V^!1W0%*VQV]#G89P($3)-%TJIOFW22K[*$^I*^,V@'=>1E,
M%U>H'A7F\0$]W&@.B5"&225V<3[LH\4%W1:Y#@:6!$)S' 4"VEUK%/0%'#NJX5!6::JFDJ=1%,S`,:=:_H;
M%.N^4,:?50VQX-6K1!@3+TC_@%"WU[V^0"=,WZ"3']?.NM>]T.7<$R$(/SV2
M=FCRU<@V.P-? Y$0?EXY..H'PW$8[,UNY^$\
MN6S!U]-1Z3P@@38K1H\.E!P8YAV2!1PN05G&DD"XYV.!/.28>SE(#06:PUJ^
M;.(T7ODOD'_>,UO-I*XS,#.3R,X0MP/B@[_!)(1DFXPNFI2#3).S=)!7\]AJ
M)%5K)">6C2X8!B"9CQN0@]8N2`X)Q.G< FB/9K0_8:3'
MZ1P;[6C5XUJ+^N[@.#([]U:TQE"EB>?30[N%4^R'+"YC>L1("M^8S_UDO$1;
M<;RY-W.7RBEK2[B,D83+SPI7V.&6TX7G-.R2I25:Q4BBU6=%:^QHWBR8+-V'
MYZVVF8VT%;4%97;Q'[25?L?*_#::^MHG-1^KK7B^4VUMM)755K26U"@[;:43
MM?+A"X@AZ\B=BQC)G8LUHL=F//`EMK2WFKK/R%+6$>F,D4CG*%V(E6K.L[G3
ME$L^+L(5(Q&N4;C1B-LM=90)5/'Z[H]D5FVDF9G]1YO/]$U/&!QZ-*./H8\O
M8&SHC:QU7(^L]=_(V*`=^VVMU6SI/J8)]2G13CPG-]+(B!:SE5ED0+2$'?4F
MVFSI;MFEK"/1,G:2-6K.5B>C%>+8+ BR'(N^-
M$@.!LB)8L%$,9*T--4-GS+]\`4.09(4L"W_B>[!E"U0B7+@-)SEJ!(VF%L
M%UHT;1OOA88AVCX6\,UD,%(\!\"9$+I;F,'1?X77?P```/__`P!02P,$%``&
M``@````A`&>J9,G:`@``10@``!D```!X;"]W;W)KU$DMFMO!I&-B!F-1`,=V>MJQ'GX4!2SB*:#*8U)#J\-!ER
MLT'.*+F?EV\.]B5ALG[&C11^^=:F]]>=%A
/ZF@7%&'*!=+F,NU"*X$5N+75Z?KIA6-'1V=,Z;3JT0R1&A.94OT[N>\7&0ZG1G55$Q337TN:N?^7
^73"SB!5PIB8GL6!OE"7^8GOT:B&CF64%LL0:HOMEZ:E+GXPSYK4YC326U],H(YJ1%V.E
MN:IF@QA6\&O63M2>U):0#U6#(
CJ`O_Z^7`SP\A8VI6T51TO\`LW^';Y^=-BK_2S:3BW"!@Z4^#&
MVCXGQ+"&2VHBU?,.;BJE);6PU34QO>:T]$&R)6D<9T12T>'`D.OW<*BJ$HS?
M*[:5O+.!1/.66M!O&M&;$YMD[Z&35#]O^QNF9`\4&]$*^^)),9(L?ZP[I>FF
MA;P/R9BR$[??7-%+P;0RJK(1T)$@]#KG.9D38%HN2@$9.-N1YE6![Y)\/<9D
MN?#^_!9\;\[^D6G4_HL6Y3?1<3`;RN0*L%'JV4$?2W<$P>0J^L$7X+M&):_H
MMK4_U/XK%W5CH=H32,CEE969S0
MPZ/7*XJ%;RI^2Q2Q4-GC(?(1!8A"1!&B&%&":(9HCBA%M$"T1+1"M$:T,9`9
M"U%MN"$6LCBAQZ*J5ZA4H1=AS`5U2CD"J0+(1ZD`48@H0A0C2A#-$,T1I8@6
MB):(5HC6B#8&,L+CWE;R*<0I";3P,%)Y,47D(?(1!8A"1!&B&%&":(9HCBA%
MM$"T1+1"M$:T,9`9B]M*/BZ6?!CIL9!2"GE2RBCYT-G,3"A?2?$!*I"H5[PU
M5:R*(5J,).K3S*H>;6['VD?&2HK5)X9ZTS.TV[IA$:'B3+$6Z+-4(N6&*4LI
MY$E$GN%!^8@"B0PW@/I(2EENL':XL9)BBXFAWG2#..'K:^D_JC")TH-XD.G>
MD:4#57^;2JF>0AXCM1OV$06,RI?81.DB9*1T11+U:79JD\0J:<1*2GE'#K50
M;WI'').O>>=C&V>W/&T;[I&(]NS:8*WSPU1V=+7-&NM21PI?HFY'ENF
]G2T1C=19#!7EPAF%-FPD
ME[5E9/K!7+QCJ_Y)IS<)EIZC';*)+*PB1A(N9G0R7,)6?;@Y51K09/H[$$BT
MC)TD6L[H9+2"K?3%S9<+=VE?LHF$JQA)N)K1R7`-6^EP_M1W[V7+)ETX>VH8
MW?+\J;:$NY]!C^8R2&X0;1'M$(6((D0QH@11BBA#E",J$)6(*D0UH@91:R$[
M730!_^*NKQ2=B:!',W,B\-WGGI[::ZE:K%B^0=2R
M_$CG53N(L.0T2H'SGE?0HR=H`CV:T<
?D`MH6&8*VF
MRV(3@=HQ;)PY'C4@R*W.AZ8&:;8/[DUW0IT9@9>@(>T_1M17IB6@"9E&F"';"+S-
MC-70B/&@=_H:WGPDH'EP*Z(-V58,G)(XH3HKZBZB_FX65.QH0O-<>BD_8(<0
M#>&+UX7K]F4=A="_Z!;D;`0[FP@3=#;2AY'^Q9%!VPTY3;[J'C82'#,%X<\_(4H(7'>HR-:K
AC&X]%S
M6(Y^*3[81V8U1.]*N1T@`'^OX8L2H9*(E$0\10@&P'(=&\"7L#IE>2?@1C$0
MTQ*C\)&9B#-0$J&2B)1$/$4(3L`&]KP3O).<$E(N^LA8;4K8TNX2X$W,%\N^
M60E]W[O9$BF)6'B$0ZZ+30@?=MOGP^>=Y/"EA/>1Z<.7X^_OW@TP5!*1DHBG
M",$%7G^.WFC3NR&'Y>BO[N)NB`Q&/W,D;P*\B[,_\TQ'VDU"X?[2\Z34BGKU
MN^[%@@)9$NNZ3H7`O6<"Y[`