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RPC, Inc. Reports 2003 First Quarter Results |
ATLANTA--(BUSINESS WIRE)--April 23, 2003--RPC Incorporated (NYSE: RES):
- Revenues Increased 19.6% over Prior Year
- First Profitable Quarter Since Third Quarter 2001
RPC Incorporated (NYSE: RES) announced its unaudited results for the first quarter ended March 31, 2003.
For the quarter ended March 31, 2003, revenues increased 19.6 percent to $60,700,000 compared to $50,766,000 last year. Net income was $305,000, or $0.01 diluted earnings per share, compared to a net loss of $1,167,000 or $0.04 loss per diluted share last year.
Cost of services rendered and goods sold were $39,926,000 during the first quarter of 2003, a 17.6 percent increase over the prior year. As a percentage of revenues, these costs decreased slightly to 65.8 percent compared to 66.9 percent in 2002 because of improved leverage in the first quarter of 2003 resulting from the higher levels of personnel and equipment utilization. Selling, general and administrative expenses declined by three percent in the first quarter of 2003 to $11,953,000 compared to $12,325,000 in the prior year. Depreciation and amortization expense increased by 3.5 percent or $272,000 due to the effect of capital expenditures made during 2002.
Income before income taxes was $492,000 in the first quarter of 2003, compared to a loss before income taxes of $1,882,000 in the prior year. This improvement resulted from the increases in revenues, partially offset by the increases in operating expenses, depreciation and amortization, and the effect of the change in non-operating other income and expenses.
"RPC's first quarter results reflect a mild upturn in the domestic oil and gas rig count and our customers' activity levels," stated Richard A. Hubbell, RPC's President and Chief Operating Officer. "The average rig count during the first quarter was 893, almost 10 percent higher than the same period in 2002. The rig count for the last week in the first quarter was up 26 percent year over year, showing the increased activity towards the end of the quarter. We are pleased that RPC grew its quarterly revenues by more than 19 percent year over year - a growth rate that is higher than the growth in the quarterly rig count. The oil price at the end of the first quarter was almost nine percent less than at the beginning of the quarter, but still about eight percent higher than the average oil price in the fourth quarter of 2002. The price of natural gas has been extremely volatile this quarter, briefly spiking to more than $11 per thousand cubic feet (Mcf) although it ended at approximately five dollars per Mcf. These price increases and volatility may lead to an increase in drilling activity.
Hubbell continued, "Our revenue increases were driven primarily by higher activity levels, as the pricing environment for our services remains very competitive. We remain cautious about our operating environment because of the global political turmoil and resulting impact on the markets in which we operate. As a result, we have remained selective regarding new capital expenditures and the entrance into potential new markets."
Shortly after the end of the first quarter, RPC acquired the assets of Bronco Oilfield Services, Inc., a Corpus Christi, Texas-based company, specializing in surface pressure control services and equipment for a combination of cash, RPC common stock and seller-financed debt. The Company, with over 3,000 rental tool items, recently added fluid pumping and production testing services to its services mix. Bronco's operations represent a geographic expansion of the services currently provided by Sooner Testing, Inc., located in Elk City, OK, which RPC acquired in February 2001.
Recently, RPC opened a new operational headquarters in Houston, Texas. This facility consists of office space and a storage area for our well control equipment and it consolidates RPC employees from seven offices around Houston. We believe that this building will help to improve our customer relationship capabilities across our diverse service lines and also save the Company occupancy costs.
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 experienced stronger results due to the increased rig count and customer activity. Technical Services revenues rose 19.7 percent for the quarter compared to the 9.7 percent increase in the rig count. Support Services revenues rose by 14.1 percent during the quarter compared to the prior year. The increase in revenues in both segments was principally due to increased utilization of equipment and personnel.
** See attachment for entire release and tables ** |
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