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RPC, Inc. Reports 2003 Second Quarter Results
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ATLANTA--(BUSINESS WIRE)--July 23, 2003--RPC Incorporated (NYSE: RES):
- Revenues for the Second Quarter Increased 42.2 Percent over Prior Year
- Diluted EPS for the Second Quarter Increased to Earnings of $0.16 from a Loss of $0.07 in the Prior Year
RPC Incorporated (NYSE: RES) announced its unaudited results for the second quarter and six months ended June 30, 2003. For the quarter ended June 30, 2003, revenues increased 42.2 percent to $70,864,000 compared to $49,821,000 last year. Net income was $4,705,000, or $0.16 diluted earnings per share, compared to a net loss of $1,953,000 or $0.07 diluted loss per share last year.
Cost of services rendered and goods sold were $42,390,000 during the second quarter of 2003, a 21.5 percent increase over the prior year. As a percentage of revenues, these costs decreased to 59.8 percent compared to 70.0 percent in 2002 because of improved pricing in several service lines, as well as higher levels of personnel and equipment utilization. Selling, general and administrative expenses increased by 23.4 percent in the second quarter of 2003 to $13,208,000 compared to $10,704,000 in the prior year. This increase was due to higher personnel and incentive compensation expense consistent with increased activity and profitability, and increased pension expense relating to RPC's pension plan obligation. Depreciation and amortization increased by 7.6 percent to $8,401,000 due to the effect of capital expenditures made during the first six months of 2003.
Income before income taxes was $7,589,000 in the second quarter of 2003, compared to a loss before income taxes of $3,151,000 in the prior year. This improvement resulted from the increases in revenues and non-operating income, partially offset by the increases in operating expenses and depreciation and amortization.
For the six months ended June 30, 2003, revenues increased 30.8 percent to $131,564,000 compared to $100,587,000 last year. Net income was $5,010,000, or $0.17 diluted earnings per share compared to a net loss of $3,120,000, or $0.11 diluted per share last year.
"RPC's second quarter results continued the upturn that began in the first quarter of 2003," stated Richard A. Hubbell, RPC's President and Chief Executive Officer. "The average domestic rig count during the second quarter was 1,028, 27.2 percent higher than the same period in 2002. We are pleased that RPC's quarterly revenue growth exceeded the domestic rig count growth rate. However, the U.S. land rig count, which we believe is a better indicator of our customers' activity levels, grew by 31.5 percent, from 695 last year to 914 this year. Also, the average natural gas price was $5.59 this quarter, 70 percent higher than the second quarter of last year, and we believe that our activity levels are affected more by natural gas prices than by the price of oil.
Hubbell continued, "Our revenue increases were driven primarily by higher activity levels in most of our service lines, but also by slightly increased pricing in several of our service lines. Although these developments are encouraging, the pricing in our largest service lines remains low by historical measures during periods of favorable industry conditions. We continue to look for strong expansion opportunities, as evidenced by the acquisition of Bronco Oilfield Services, which we completed early in the second quarter. However, we are still dedicated to maintaining a strong balance sheet and conservative capital structure due to the volatility of the oilfield services industry."
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 drilling rig count and related customer activity. Technical Services revenues rose 49.7 percent for the quarter compared to the 27.2 percent increase in the rig count. Support Services revenues rose by 27.6 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. The relatively larger increase in Technical Services revenues was due to higher overall pricing in this segment, in contrast to Support Services, a segment in which activity increased but pricing in the rental tools service line has been impacted by relatively lower increases in customer activity in the Gulf of Mexico area.
** See attachment for entire release and tables ** |
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