ATLANTA, April 26,
2023 /PRNewswire/ -- RPC, Inc. (NYSE: RES) today
announced its unaudited results for the first quarter ended
March 31, 2023. RPC provides a broad
range of specialized oilfield services and equipment primarily to
independent and major oilfield companies engaged in the
exploration, production, and development of oil and gas properties
throughout the United States and
in selected international markets.
For the quarter ended March 31,
2023, RPC generated revenues of $476.7 million, a slight decrease compared to
$482.0 million in the fourth quarter
of 2022. Revenues were impacted by weather disruptions and a change
in the job mix in pressure pumping, RPC's largest service line.
Operating profit for the first quarter of 2023 was $90.7 million compared to $112.3 million in the fourth quarter of 2022. Net
income for the first quarter of 2023 was $71.5 million, or $0.33 diluted earnings per share, compared to net
income of $87.0 million, or
$0.40 diluted earnings per share, in
the fourth quarter of 2022.
In connection with the final termination of our pension plan,
RPC recorded a non-cash pension settlement charge of $17.4 million in the first quarter of 2023 and a
$2.9 million charge in the fourth
quarter of 2022. Adjusted operating profit1 for the
first quarter of 2023 was $108.0
million compared to $115.2
million in the fourth quarter of 2022. Adjusted net
income2 for the first quarter of 2023 was $84.9 million, or $0.39 adjusted diluted earnings per
share2, compared to adjusted net income of $89.2 million, or $0.41 adjusted diluted earnings per
share2, in the fourth quarter of 2022. Adjusted Earnings
before interest, taxes, depreciation, and amortization
(EBITDA)3 for the first quarter of 2023 was $132.9 million, a slight decrease compared to
$138.4 million in the fourth quarter
of 2022.
Cost of revenues during the first quarter of 2023 was
$305.3 million compared to
$308.6 million in the fourth quarter
of 2022. Cost of revenues as a percentage of revenues was 64.0
percent during both the first quarter of 2023 and the fourth
quarter of 2022. Selling, general and administrative expenses were
$42.2 million in the first quarter of
2023 compared to $38.2 million in the
fourth quarter of 2022. The increase was driven largely by
typically higher first quarter payroll taxes and 401(k) employer
match. Depreciation and amortization was $24.1 million in the first quarter of 2023
compared to $22.5 million in the
fourth quarter of 2022.
RPC's revenues for the quarter ended March 31, 2023 increased by $192.0 million, or 67.5 percent, compared to the
first quarter of the prior year due to improved pricing, higher
customer activity levels and a larger active fleet of
revenue-producing equipment. Cost of revenues during the first
quarter of 2023 increased by $96.4
million compared to the first quarter of 2022. As a
percentage of revenues, cost of revenues decreased to 64.0 percent
in the first quarter of 2023 from 73.4 percent in the first quarter
of 2022 because of improved pricing for our services and leverage
of direct employment costs.
Selling, general and administrative expenses increased by
$6.0 million in the first quarter of
2023 compared to the first quarter of the prior year. RPC's
operating profit in the first quarter of 2023 was $90.7 million, compared to $23.0 million in the first quarter of 2022. Net
income for the first quarter of 2023 was $71.5 million compared to $15.1 million in the first quarter of 2022.
Adjusted EBITDA3 for the first quarter of 2023 was
$132.9 million compared to
$43.0 million in the first quarter of
2022.
Rig Count and Commodity Price Statistics
The average U.S. domestic rig count during the first quarter of
2023 was 760, a 2.1 percent decrease compared to the fourth quarter
of 2022, but a 19.5 percent increase compared to the same period in
2022. The average price of oil during the first quarter of 2023 was
$75.97 per barrel, an 8.1 percent
decrease compared to the fourth quarter of 2022, and a 19.1 percent
decrease compared to the same period in 2022. The average price of
natural gas during the first quarter of 2023 was $2.66 per Mcf, a decrease of 52.1 percent
compared to the fourth quarter of 2022, and a 43.2 percent decrease
compared to the same period in the prior year.
Management Commentary
"RPC's first quarter 2023 financial results reflect a stable
oilfield operating environment as the strong activity of late 2022
continued," stated Ben M. Palmer,
RPC's President and Chief Executive Officer. "We are encouraged by
recent OPEC announcements which led to higher oil prices and a
strengthening of our industry's fundamentals."
"Our profitable operations and prudent working capital
management have resulted in a debt-free company with a cash balance
of $177.9 million. RPC's strong
balance sheet allows the company to continue investing in our
business and returning capital to our shareholders. RPC has
recently resumed its open market share buybacks, and this morning
we announced our Board approved an increased share repurchase
authorization and a $0.04 per share
cash dividend.
"On the equipment front, we recently received new tier 4
dual-fuel pressure pumps and are deploying them as replacements for
older pressure pumping equipment being sent out for scheduled
refurbishment," concluded Palmer.
Summary of Segment Operating Performance
RPC manages two operating segments – Technical Services and
Support Services.
Technical Services includes RPC's oilfield service lines that
utilize people and equipment to perform value-added completion,
production and maintenance services directly to a customer's well.
These services are generally directed toward improving the flow of
oil and natural gas from producing formations or to address well
control issues. The Technical Services segment includes pressure
pumping, downhole tools and services, coiled tubing, nitrogen,
hydraulic workover services, surface pressure control equipment,
well control, and fishing tool operations.
Support Services includes RPC's oilfield service lines that
provide equipment for customer use or services to assist customer
operations. The equipment and services offered include rental of
tubulars and related tools, pipe inspection and storage services,
and oilfield training services.
Technical Services first quarter 2023 revenues decreased
slightly compared to the prior quarter but increased by 69.7
percent compared to the same period of the prior year. Technical
Services generated an operating profit of $103.5 million in the first quarter of 2023
compared to $110.5 million in the
prior quarter and an operating profit of $21.8 million in the first quarter of the prior
year. The year-over-year improvements in Technical Services
operating results were driven by higher customer activity levels,
improved pricing, and a larger active fleet of revenue-producing
equipment.
Support Services revenues increased by 3.3 percent during the
first quarter of 2023 compared to the prior quarter and by 35.0
percent compared to the same period of the prior year. The revenue
increase was due to higher activity levels and improved pricing
within rental tools. Support Services generated an operating profit
of $6.6 million in the first quarter
of 2023 and $6.7 million in the
fourth quarter of 2022. First quarter 2023 Support Services
operating profit increased by $3.9
million compared to the first quarter of the prior year due
to higher activity levels, improved pricing, and leverage of higher
revenues over costs that are fixed during the short term.
(in
thousands)
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December 31,
|
|
March 31,
|
|
|
2023
|
|
2022
|
|
2022
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Technical
Services
|
$
|
451,991
|
$
|
458,135
|
$
|
266,349
|
Support
Services
|
|
24,677
|
|
23,895
|
|
18,275
|
Total
revenues
|
$
|
476,668
|
$
|
482,030
|
$
|
284,624
|
Operating
profit:
|
|
|
|
|
|
|
Technical
Services
|
$
|
103,533
|
$
|
110,529
|
$
|
21,811
|
Support
Services
|
|
6,644
|
|
6,703
|
|
2,780
|
Corporate
expenses
|
|
(5,081)
|
|
(4,500)
|
|
(4,510)
|
Pension
settlement charges
|
|
(17,375)
|
|
(2,921)
|
|
-
|
Gain on
disposition of assets, net
|
|
2,936
|
|
2,509
|
|
2,954
|
Total operating
profit
|
$
|
90,657
|
$
|
112,320
|
$
|
23,035
|
Interest
expense
|
|
(72)
|
|
(71)
|
|
(178)
|
Interest
income
|
|
1,855
|
|
699
|
|
15
|
Other income,
net
|
|
761
|
|
619
|
|
504
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
93,201
|
$
|
113,567
|
$
|
23,376
|
|
|
|
|
|
|
|
RPC, Inc. will hold a conference call today, April 26, 2023 at 9:00
a.m. ET to discuss the results for the quarter. Interested
parties may listen in by accessing a live webcast in the investor
relations section of RPC, Inc.'s website at rpc.net. The live
conference call can also be accessed by calling (888) 440-5966, or
(646) 960-0125 for international callers, and using conference ID
number 9842359. For those not able to attend the live
conference call, a replay will be available in the investor
relations section of RPC, Inc.'s website beginning approximately
two hours after the call and for a period of 90 days.
RPC provides a broad range of specialized oilfield services and
equipment primarily to independent and major oilfield companies
engaged in the exploration, production and development of oil and
gas properties throughout the United
States, including the Gulf of
Mexico, mid-continent, southwest, Appalachian and Rocky
Mountain regions, and in selected international markets. RPC's
investor website can be found at rpc.net.
Certain statements and information included in this press
release constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including
all statements that look forward in time or express management's
beliefs, expectations or hopes. These statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of RPC to be materially
different from any future results, performance or achievements
expressed or implied in such forward-looking statements, including
statements regarding (i) the uncertainty in our near term outlook
caused by low natural gas prices and fluctuating oil prices have
introduced into our near-term outlook, (ii) our belief that low
natural gas prices may reduce natural gas-directed drilling and
completion activities during the near term, and (iii) our
encouragement by recent OPEC announcements which we believe led to
higher oil prices and a strengthening of our industry's
fundamentals. Additional discussion of factors that could cause the
actual results to differ materially from management's projections,
forecasts, estimates, and expectations is contained in RPC's Form
10-K for the year ended December 31,
2022.
For information about RPC, Inc., please contact:
Michael L. Schmit, Chief
Financial Officer
(404) 321-2140
irdept@rpc.net
Jim Landers, Vice President
Corporate Services
(404) 321-2162
JLanders@rpc.net
RPC INCORPORATED AND
SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (In
thousands except per share data)
|
|
|
|
|
|
|
Three Months Ended
|
Periods ended,
(Unaudited)
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
March 31,
2022
|
REVENUES
|
|
$
|
476,668
|
|
$
|
482,030
|
|
$
|
284,624
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
305,250
|
|
|
308,571
|
|
|
208,837
|
Selling, general and
administrative expenses
|
|
42,197
|
|
|
38,211
|
|
|
36,240
|
Pension settlement
charges
|
|
|
17,375
|
|
|
2,921
|
|
|
-
|
Depreciation and
amortization
|
|
|
24,125
|
|
|
22,516
|
|
|
19,466
|
Gain on disposition of
assets, net
|
|
|
(2,936)
|
|
|
(2,509)
|
|
|
(2,954)
|
Operating
profit
|
|
|
90,657
|
|
|
112,320
|
|
|
23,035
|
Interest
expense
|
|
|
(72)
|
|
|
(71)
|
|
|
(178)
|
Interest
income
|
|
|
1,855
|
|
|
699
|
|
|
15
|
Other income,
net
|
|
|
761
|
|
|
619
|
|
|
504
|
Income before income
taxes
|
|
|
93,201
|
|
|
113,567
|
|
|
23,376
|
Income tax
provision
|
|
|
21,677
|
|
|
26,562
|
|
|
8,297
|
NET
INCOME
|
|
$
|
71,524
|
|
$
|
87,005
|
|
$
|
15,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.33
|
|
$
|
0.40
|
|
$
|
0.07
|
Diluted
|
|
$
|
0.33
|
|
$
|
0.40
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
|
|
|
|
|
|
Basic
|
|
|
217,152
|
|
|
216,618
|
|
|
216,242
|
Diluted
|
|
|
217,152
|
|
|
216,618
|
|
|
216,242
|
|
|
|
|
|
|
|
|
|
|
RPC INCORPORATED AND
SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
177,904
|
|
$
|
126,424
|
Accounts receivable,
net
|
|
400,359
|
|
|
416,568
|
Inventories
|
|
98,073
|
|
|
97,107
|
Income taxes
receivable
|
|
24,346
|
|
|
42,403
|
Prepaid
expenses
|
|
16,028
|
|
|
17,753
|
Other current
assets
|
|
2,914
|
|
|
3,086
|
Total current
assets
|
|
719,624
|
|
|
703,341
|
Property, plant and
equipment, net
|
|
375,461
|
|
|
333,093
|
Operating lease
right-of-use assets
|
|
28,801
|
|
|
28,864
|
Goodwill
|
|
32,150
|
|
|
32,150
|
Other assets
|
|
31,794
|
|
|
31,565
|
Total
assets
|
$
|
1,187,830
|
|
$
|
1,129,013
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts
payable
|
$
|
114,357
|
|
$
|
115,213
|
Accrued payroll and
related expenses
|
|
19,968
|
|
|
33,161
|
Accrued insurance
expenses
|
|
4,097
|
|
|
3,232
|
Accrued state, local
and other taxes
|
|
5,987
|
|
|
4,296
|
Income taxes
payable
|
|
513
|
|
|
499
|
Pension
liabilities
|
|
1,150
|
|
|
9,610
|
Current portion of
operating lease liabilities
|
|
10,578
|
|
|
10,728
|
Other accrued
expenses
|
|
1,864
|
|
|
1,864
|
Total current
liabilities
|
|
158,514
|
|
|
178,603
|
Long-term accrued
insurance expenses
|
|
9,167
|
|
|
7,149
|
Long-term retirement
plan liabilities
|
|
22,559
|
|
|
23,106
|
Long-term operating
lease liabilities
|
|
19,638
|
|
|
19,517
|
Other long-term
liabilities
|
|
5,267
|
|
|
5,430
|
Deferred income
taxes
|
|
44,990
|
|
|
37,473
|
Total
liabilities
|
|
260,135
|
|
|
271,278
|
Common
stock
|
|
21,637
|
|
|
21,661
|
Capital in excess of
par value
|
|
-
|
|
|
-
|
Retained
earnings
|
|
909,335
|
|
|
856,013
|
Accumulated other
comprehensive loss
|
|
(3,277)
|
|
|
(19,939)
|
Total
stockholders' equity
|
|
927,695
|
|
|
857,735
|
Total
liabilities and stockholders' equity
|
$
|
1,187,830
|
|
$
|
1,129,013
|
|
|
|
|
|
|
Appendix A
RPC has used the non-GAAP financial measures of earnings before
interest, taxes, depreciation, and amortization (EBITDA) and
adjusted earnings before interest, taxes, depreciation, and
amortization (adjusted EBITDA) in today's earnings release and
anticipates using EBITDA and adjusted EBITDA in today's earnings
conference call. EBITDA and adjusted EBITDA should not be
considered in isolation or as a substitute for net income or other
performance measures prepared in accordance with GAAP.
RPC uses EBITDA and adjusted EBITDA as a measure of operating
performance because it allows us to compare performance
consistently over various periods without regard to changes in our
capital structure. We are also required to use EBITDA to report
compliance with financial covenants under our revolving credit
facility.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of net income, the most directly
comparable GAAP measure, to EBITDA and adjusted EBITDA. This
reconciliation also appears on RPC's investor website, which can be
found on the Internet at rpc.net.
The Reconciliation of Net Income to EBITDA and Adjusted EBITDA
is shown below:
Periods ended,
(Unaudited)
|
|
|
Three Months
Ended
|
(In
thousands)
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
March 31,
2022
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
Net Income
|
|
$
|
71,524
|
|
$
|
87,005
|
|
$
|
15,079
|
Add:
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
21,677
|
|
|
26,562
|
|
|
8,297
|
Interest expense
|
|
|
72
|
|
|
71
|
|
|
178
|
Depreciation and
amortization
|
|
|
24,125
|
|
|
22,516
|
|
|
19,466
|
Less:
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
1,855
|
|
|
699
|
|
|
15
|
EBITDA
|
|
$
|
115,543
|
|
$
|
135,455
|
|
$
|
43,005
|
Add:
|
|
|
|
|
|
|
|
|
|
Pension settlement
charges
|
|
|
17,375
|
|
|
2,921
|
|
|
-
|
Adjusted
EBITDA
|
|
$
|
132,918
|
|
$
|
138,376
|
|
$
|
43,005
|
Appendix B
RPC, Inc. has used the non-GAAP financial measures of adjusted
net income and adjusted diluted earnings per share in today's
earnings release and anticipates using these non-GAAP financial
measures in today's earnings conference call. These measures
should not be considered in isolation or as a substitute for net
income, income per share, or other performance measures prepared in
accordance with GAAP.
Management believes that presenting the financial measures of
adjusted net income and adjusted income per share, enable us to
compare our operating performance consistently over various time
periods.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of these non-GAAP measures with
their most directly comparable GAAP measures. This
reconciliation also appears on RPC, Inc.'s investor website, which
can be found on the Internet at rpc.net.
The Reconciliation of Net Income to Adjusted Net Income and the
Reconciliation of Diluted Earnings Per Share to Adjusted Diluted
Earnings Per Share is shown below:
Periods ended,
(Unaudited)
|
|
|
Three Months
Ended
|
(In
thousands)
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
March 31,
2022
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
71,524
|
|
$
|
87,005
|
|
$
|
15,079
|
Add:
|
|
|
|
|
|
|
|
|
|
Pension settlement charges,
net of tax
|
|
13,327
|
|
|
2,202
|
|
|
-
|
Adjusted Net
Income
|
|
$
|
84,851
|
|
$
|
89,207
|
|
$
|
15,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Diluted Earnings Per Share to Adjusted Diluted Earnings Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
|
$
|
0.33
|
|
$
|
0.40
|
|
$
|
0.07
|
Add:
|
|
|
|
|
|
|
|
|
|
Pension settlement charges,
net of tax
|
$
|
0.06
|
|
$
|
0.01
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share
|
$
|
0.39
|
|
$
|
0.41
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
|
217,152
|
|
|
216,618
|
|
|
216,242
|
Appendix C
RPC, Inc. has used the non-GAAP financial measure of adjusted
operating income in today's earnings release and anticipates using
this non-GAAP financial measure in today's earnings conference
call. This measure should not be considered in isolation or as a
substitute for operating income, or other performance measures
prepared in accordance with GAAP.
Management believes that presenting the financial measure of
adjusted operating income enables us to compare our operating
performance consistently over various time periods.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of this non-GAAP measure with its
most directly comparable GAAP measure. This reconciliation
also appears on RPC, Inc.'s investor website, which can be found on
the Internet at rpc.net.
The Reconciliation of Operating Profit to Adjusted Operating
Profit, the most directly comparable performance measure prepared
in accordance with GAAP, is shown below:
Periods ended,
(Unaudited)
|
|
|
Three Months
Ended
|
(In
thousands)
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
March 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Profit to Adjusted Operating Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
90,657
|
|
$
|
112,320
|
|
$
|
23,035
|
Add:
|
|
|
|
|
|
|
|
|
|
Pension settlement
charges
|
|
|
17,375
|
|
|
2,921
|
|
|
-
|
Adjusted Operating
Profit
|
|
$
|
108,032
|
|
$
|
115,241
|
|
$
|
23,035
|
1Adjusted operating profit is a financial measure
which does not conform to GAAP. Additional disclosure regarding
this non-GAAP financial measure and its reconciliation to operating
income, the nearest GAAP financial measure, is disclosed in
Appendix A to this press release.
2Adjusted net income and adjusted diluted earnings per
share are financial measures which do not conform to GAAP.
Additional disclosure regarding these non-GAAP financial measures
and their reconciliation to net income and income per share, the
nearest GAAP financial measures, are disclosed in Appendix B to
this press release.
3Adjusted EBITDA and EBITDA are financial measures which
do not conform to GAAP. Additional disclosure regarding these
non-GAAP financial measures and their reconciliation to net income,
the nearest GAAP financial measures, are disclosed in Appendix C to
this press release.
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SOURCE RPC, Inc.