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RPC, Inc. Reports 2002 Fourth Quarter Results
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ATLANTA--(BUSINESS WIRE)--Jan. 28, 2003--RPC Incorporated (NYSE: RES) announced its unaudited results for the fourth quarter and twelve months ended December 31, 2002.
For the quarter ended December 31, 2002, revenues decreased 8.6 percent to $55,073,000 compared to $60,245,000 last year. Net loss from continuing operations was $1,100,000, or $0.04 diluted loss per share, compared to a net loss from continuing operations of $1,036,000 or $0.04 loss per diluted share last year. The operating loss for the fourth quarter was $1,432,000, compared to an operating loss of $1,566,000 last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were $6,352,000 or $0.22 per diluted share for the quarter, compared to $5,870,000 or $0.21 per diluted share in the prior year.
For the twelve months ended December 31, 2002, revenues decreased 26.8 percent to $209,030,000 compared to $285,706,000 last year. Net loss from continuing operations was $5,260,000, or a net loss of $0.19 per diluted share compared to net income from continuing operations of $25,496,000 or $0.89 diluted earnings per share last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were $23,262,000 or $0.82 per diluted share, compared to $66,724,000 for the prior year or $2.33 per diluted share.
Certain prior period items treated as pass through costs and expenses billable to customers have been reclassified to reflect as revenues and costs of services rendered for all periods presented. This change in presentation has no impact on the previously reported operating income (loss) or net income (loss).
"RPC's fourth quarter results reflect the continued impact of low customer activity levels as evidenced by the year over year decline in the domestic oil and gas rig count," stated Richard A. Hubbell, RPC's President and Chief Operating Officer. "The average rig count during the fourth quarter was 846, 16 percent lower than the same period in 2001. Fourth quarter of 2001 was the beginning of the current downturn, during which the industry experienced the second sharpest drop in rig count since 1991. Fourth quarter 2002 rig count was down seven rigs from the third quarter and just 15 percent higher than the low of 2002, 738, which occurred in early April. The average oil price fell two percent from the third quarter, and the average price for natural gas actually rose 31 percent from the third quarter. These prices remain historically strong, but have failed to lead to an increase in drilling activity, which is inconsistent with the historically high correlation between commodity prices and rig counts.
"Mirroring the weaker industry activity levels, our revenues are down year over year because of less utilization combined with much lower pricing in most of our service lines. In addition, revenues were negatively impacted by the absence of our business operations in Algeria and Venezuela, which had been shut down by the end of the first quarter of 2002. Beginning in the fourth quarter of 2001 and continuing throughout 2002, we cut our expenses and restrained our capital spending levels to maintain a conservative, debt-free balance sheet. Our capital expenditures were approximately 50 percent lower during 2002 than 2001. For the full year, our revenues are down 26.8 percent and our SG&A expenses are down 14.6 percent. RPC was once again cash-flow positive for the quarter and the full year."
Hubbell continued, "We are patiently waiting for the upswing in the market to arrive, and when the time arrives we will be financially and operationally ready. During the past couple of quarters, we have noticed an indication activity might be slowly recovering, but pricing has remained low and this has continued to put pressure on our revenues and profits. We have yet to see the performance of our full asset base during an upturn, but we believe when the upturn commences, we will be able to capture more business than during the last up cycle."
Summary of Segment Operating Performance
RPC's business segments are Technical Services and Support Services.
Technical Services includes RPC's oilfield service lines that utilize people and equipment to perform value-added completion, production and maintenance services directly to a customer's well. These services are generally directed toward improving the flow of oil and natural gas from producing formations or to address well control issues. The Technical Services include snubbing, coiled tubing, pressure pumping, nitrogen, well control, downhole tools, wire line, fluid pumping, and casing installation services.
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 drill pipe and related tools, pipe handling, inspection and storage services, work platform vessels, and oilfield training services.
Both Technical Services and Support Services were impacted by weaker customer demand. Technical Services revenues fell seven percent for the quarter compared to the 16 percent decline in the rig count. Our Support Services tend to be impacted more by dramatic changes in rig counts, as indicated by the 10 percent decline in revenues for the quarter, compared to the prior year.
** See attachment for entire release and tables ** |
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