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RPC, Inc. Reports 2001 Fourth Quarter and Year End Results |
ATLANTA, Jan. 18 /PRNewswire-FirstCall/ -- RPC Incorporated (NYSE: RES) announced its unaudited results for the quarter and twelve months ended December 31, 2001. For the fourth quarter, revenues decreased 2.9 percent to $55,703,000 compared to $57,352,000 last year. The Company generated a net loss of $1,036,000 or $0.04 loss per diluted share, compared to net income of $6,033,000 or $0.28 diluted earnings per share from continuing operations last year. Gross profit for the fourth quarter was $19,423,000, a 17.8 percent decrease over the same period in 2000. The Company generated an operating loss for the fourth quarter of $1,566,000, compared to an operating profit of $9,291,000 in the fourth quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were $5,870,000 or $0.20 per diluted share for the quarter, compared to $13,759,000 or $0.49 per diluted share in the prior year.
For the twelve months ended December 31, 2001, revenues increased 43.8 percent to $264,942,000 compared to $184,215,000 last year. Net income from continuing operations increased 58.1 percent to $25,496,000 or $0.89 diluted earnings per share compared to $16,127,000 or $0.57 diluted earnings per share last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $66,724,000 for the period or $2.33 per diluted share.
RPC, Inc. President Richard A. Hubbell commented, "During the fourth quarter of 2001, RPC, along with the rest of the energy services sector, faced significant business challenges. Revenues declined 26 percent compared to the third quarter of 2001 as our customers responded to lower natural gas and oil prices by reducing their exploration and production activity levels. This resulted in dramatic reductions in the utilization of our people and equipment. The average price of natural gas in December 2001 had declined 80 percent from its peak in December 2000 because of oversupply concerns and lower demand due to continued world-wide economic weakness and warm winter temperatures. In fact, the US rig count has declined 31 percent from its July 2001 peak of 1,293 to 887 at year-end 2001. The decline in the rig count during the fourth quarter represents the second steepest quarterly decline since 1992. This clearly illustrates the extreme volatility in the oil and gas services industry."
Hubbell continued, "Our companies were not able to react fully with cost reduction measures to this rapid revenue decline during the fourth quarter. We have begun implementing our contingency plans and are monitoring customer and business activity levels early in the first quarter of 2002, in order to assess appropriate additional cost savings measures and to monitor our capital expenditure programs. Despite the significant revenue decline in the fourth quarter the company was able to generate healthy cash flows and continues to maintain a very strong capital position. In addition, we believe, as in past industry declines, RPC will emerge as an even stronger company than before. We are well positioned with our diversified service lines to create additional growth through leveraging the capabilities of our strong companies and our experienced personnel."
The following information presents business segment information for RPC's oil and gas service lines summarized by technical services and support services.
Technical 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, and generated 77 percent of revenues in 2001. These services are generally directed towards improving the flow of oil and natural gas from producing formations or to address well control issues. The Technical Services include snubbing, coiled tubing, pressure pumping, nitrogen, well control, downhole tools, wire line, fluid pumping, hot tapping, gate valve drilling and casing installation services.
Through 2001, RPC demonstrated its ability to generate diversified revenue streams and to bring new services to market quickly. In line with its previously stated strategy, RPC continued to demonstrate its commitment to actively seeking continued growth through strategic acquisitions. Early in the year, RPC acquired Sooner Testing, a fluid pumping, production testing and equipment rental company. More recently, RPC acquired the assets of Mathews Energy Services, the largest oil and gas services acquisition since the formation of RPC in 1984, and RPC's first use of stock as consideration in an acquisition. Mathews Energy Services and Sooner Testing are well-recognized providers of well stimulation services including fracturing and acidizing for both oil and gas wells and operate within Texas and Oklahoma.
Support Services
Support Services includes RPC's oilfield service lines that provide equipment for customer use or services to assist customer operations, and generated 19 percent of revenues in 2001. The equipment and services offered include drill pipe and related tools, pipe handling, inspection and storage services, work platform vessels, and oilfield training services.
RPC continues to seek growth opportunities in this segment, including the introduction of the Well Control School's System 21(TM). System 21(TM) is the only interactive CD-ROM computer based oilfield industry training and certification system approved by the Mineral Management Service (MMS), a division of the U.S. Department of the Interior, for both Well Control and Production Safety Systems. The true potential for this product will start to develop in 2002.
** See attachment for entire release and tables ** |
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