RES
$5.81
RPC
$.45
8.40%
Earnings Details
1st Quarter March 2021
Wednesday, April 28, 2021 6:45:00 AM
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Summary

RPC (RES) Recent Earnings

RPC (RES) reported a 1st Quarter March 2021 loss of $0.05 per share on revenue of $182.6 million. The consensus estimate was a loss of $0.03 per share on revenue of $157.6 million. Revenue fell 25.1% compared to the same quarter a year ago.

RPC Inc provides oilfield services and equipment primarily to oil and gas companies engaged in the exploration, production and development of oil and gas properties throughout the United States.

Results
Reported Earnings
($0.05)
Earnings Whisper
-
Consensus Estimate
($0.03)
Reported Revenue
$182.6 Mil
Revenue Estimate
$157.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

RPC, Inc. Reports First Quarter 2021 Financial Results

ATLANTA, April 28, 2021 /PRNewswire/ -- RPC, Inc. (NYSE: RES) today announced its unaudited results for the first quarter ended March 31, 2021. 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.

RPCBlueLogo

For the quarter ended March 31, 2021, RPC generated revenues of $182.6 million, a decrease of 25.1 percent compared to $243.8 million in the first quarter of 2020. Operating loss for the first quarter of 2021 was $10.5 million compared to an operating loss of $218.7 million and an adjusted operating loss of $13.2 million in the first quarter of the prior year.1 Net loss for the first quarter of 2021 was $9.7 million, or $0.05 loss per share, compared to a net loss of $160.4 million, or $0.76 loss per share in first quarter of the prior year.  In the first quarter of 2020 the adjusted net loss was $9.0 million, or $0.04 adjusted loss per share.2 Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2021 was $7.8 million, compared to negative EBITDA of $179.7 million and an adjusted EBITDA of $25.8 million in the same period of the prior year.

Cost of revenues during the first quarter of 2021 was $146.2 million, or 80.1 percent of revenues, compared to $181.9 million, or 74.6 percent of revenues during the first quarter of 2020. Cost of revenues declined primarily due to decreases in expenses consistent with lower activity levels and RPC's ongoing cost reduction initiatives. Cost of revenues as a percentage of revenues increased primarily due to labor and other cost inefficiencies resulting from lower activity levels, as well as increased diesel fuel costs, in the first quarter as compared to the prior year.

Selling, general and administrative expenses were $30.6 million in the first quarter of 2021 compared to $36.5 million in the first quarter of 2020. These expenses decreased due to lower employment costs, primarily the result of cost reduction initiatives during previous quarters. Selling, general and administrative expenses increased from 15.0 percent of revenues in the first quarter of 2020 to 16.8 percent of revenues in the first quarter of 2021. Depreciation and amortization was $17.8 million in the first quarter of 2021 compared to $39.3 million in the first quarter of the prior year. Depreciation and amortization declined primarily because of RPC's asset impairment charges recorded in prior quarters.

Discussion of Sequential Quarterly Financial Results

RPC's revenues for the quarter ended March 31, 2021 increased by $34.0 million compared to the prior quarter, or 22.9 percent, due to activity increases in most service lines. Cost of revenues during the first quarter of 2021 increased by $28.3 million, or 24.0 percent, due to expenses which increase with higher activity levels such as materials and supplies and employment costs. As a percentage of revenues, cost of revenues increased slightly from 79.3 percent in the fourth quarter of 2020 to 80.1 percent in the first quarter of 2021 due to increases in maintenance and repair expenses and fuel costs. Selling, general and administrative expenses increased by $4.6 million in the first quarter of 2021 compared to the prior quarter, primarily due to a beneficial forfeiture rate adjustment to stock compensation recorded in the prior quarter. RPC's operating loss in the first quarter of 2021 was $10.5 million, compared to an operating loss of $21.6 million and an adjusted operating loss of $11.3 million for the fourth quarter of 2020.1 EBITDA for the first quarter of 2021 was $7.8 million compared to negative EBITDA of $2.5 million and adjusted EBITDA of $7.8 million in the fourth quarter of 2020.3

The average U.S. domestic rig count during the first quarter of 2021 was 396, a 49.6 percent decrease compared to the same period in 2020, but a 27.3 percent increase compared to the fourth quarter of 2020. The average price of oil during the first quarter of 2021 was $58.13 per barrel, a 23.1 percent increase compared to the same period in 2020, and a 36.4 percent increase compared to the fourth quarter of 2020. The average price of natural gas during the first quarter of 2021 was $3.59 per Mcf, an 87.0 percent increase compared to the same period in 2020, and a 43.6 percent increase compared to the fourth quarter of 2020.

Management Commentary

"First quarter revenues increased compared to the prior quarter in all of our major service lines as oil prices increased and customers initiated their annual drilling and completion plans," stated Richard A. Hubbell, RPC's President and Chief Executive Officer. "Equipment and crew utilization increased as we continued to improve efficiencies and streamlined operations. Job mix in several service lines contributed to our sequential revenue growth as well. These activity improvements were partially offset by the extreme winter weather in February in many of our markets, particularly the Permian Basin. This event hurt profitability because of weather-related expenses and inefficiencies arising from a two-week long operational disruption.

"As we begin the second quarter, we believe near-term industry activity will be similar to the first quarter, adjusted for the weather impact. Although drilling and completion activities have improved, supported by higher oil prices and customer spending, the oilfield services industry is still faced with overcapacity. We believe pricing for our services will continue to be intensely competitive, and financial returns do not presently support significant growth capital expenditures. Our first quarter capital expenditures of $11.8 million reflect this conservative outlook, and we are pleased that our cash balance at the end of the quarter was $85.4 million, slightly higher than year-end 2020," concluded Hubbell.

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, hydraulic workover services, nitrogen, 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 handling, inspection and storage services, and oilfield training services.

Technical Services quarterly revenues decreased by 24.2 percent compared to the same period of the prior year due to significantly lower activity and pricing. On a sequential basis, Technical Services revenues increased by 24.2 percent compared to the prior quarter due to increased activity levels in most of the segment's service lines. Support Services revenues decreased by 38.0 percent during the first quarter compared to the same period of the prior year. On a sequential basis, Support Services revenues increased by 3.2 percent compared to the prior quarter. Technical Services narrowed its operating loss during the first quarter of 2021 compared to the fourth quarter of 2020 due to higher activity levels.  

(in thousands)


Three Months Ended



March 31,


December 31,


March 31,



2021


2020


2020








Revenues:







   Technical Services

$

172,641

$

138,978

$

227,700

   Support Services


9,969


9,659


16,077

Total revenues

$

182,610

$

148,637

$

243,777

Operating (loss) profit:







   Technical Services

$

(5,762)

$

(11,277)

$

(12,207)

   Support Services


(2,896)


(2,575)


1,547

   Corporate expenses


(3,323)


577


(3,330)

    Impairment and other charges *


-


(10,318)


(205,536)

   Gain on disposition of assets, net


1,460


1,947


819

Total operating loss

$

(10,521)

$

(21,646)

$

(218,707)

Interest expense


(380)


(116)


(113)

Interest income


18


65


334

Other income (expense), net


507


1,101


(308)








Loss before income taxes

$

(10,376)

$

(20,596)

$

(218,794)















* December 2020 represents $5,658 of impairment charges related to Technical Services and $4,660 related

  to pension settlement loss.  March 2020 relates exclusively to Technical Services.



RPC, Inc. will hold a conference call today, April 28, 2021 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 (833) 579-0910 or (778) 560-2620 for international callers, and use conference ID number 3471295.  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 our expectations that activity levels during the near term will remain consistent with the first quarter of 2021; our belief that pricing for our services will continue to be intensely competitive; our belief that financial returns do not presently support significant growth capital expenditures. Such risks include changes in general global business and economic conditions, including fluctuations in prices of oil and natural gas; the impact of the COVID-19 pandemic on our operations; credit risks associated with collections of our accounts receivable from customers experiencing challenging business conditions; drilling activity and rig count; risks of reduced availability or increased costs of both labor and raw materials used in providing our services; the impact on our operations due to changes in regulatory and environmental laws; turmoil in the financial markets and the potential difficulty to fund our capital needs; the actions of OPEC+, which could impact drilling activity; adverse weather conditions in oil and gas producing regions; competition in the oil and gas industry; an inability to implement price increases; risks of international operations; and reliance upon large customers. 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, 2020.

For information about RPC, Inc., please contact:


Ben M. Palmer

Jim Landers

Chief Financial Officer 

Vice President Corporate Services

(404) 321-2140 

(404) 321-2162

irdept@rpc.net 

jlanders@rpc.net


 

Adjusted operating loss is a financial measure which does not conform to GAAP. Additional disclosure regarding this non-GAAP financial measure and its reconciliation to operating loss, the nearest GAAP financial measure, is disclosed in Appendix A to this press release.

2 Adjusted net loss and adjusted loss per share are financial measures which do not conform to GAAP. Additional disclosure regarding these non-GAAP financial measures and their reconciliation to net loss and loss per share, the nearest GAAP financial measures, are disclosed in Appendix B to this press release.

3 Adjusted 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 loss, the nearest GAAP financial measure, is disclosed in Appendix C to this press release.

 

RPC INCORPORATED AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands except per share data)




Periods ended, (Unaudited)


    Three Months Ended




March 31,  
2021



December 31,   
2020



March 31,  
2020

REVENUES


$

182,610


$

148,637


$

243,777

COSTS AND EXPENSES:










Cost of revenues



146,223



117,886



181,944

Selling, general and administrative expenses


30,595



26,017



36,530

Impairment and other charges



-



10,318



205,536

Depreciation and amortization



17,773



18,009



39,293

Gain on disposition of assets, net


(1,460)



(1,947)



(819)

Operating loss



(10,521)



(21,646)



(218,707)

Interest expense



(380)



(116)



(113)

Interest income



18



65



334

Other income (expense), net



507



1,101



(308)

Loss before income taxes



(10,376)



(20,596)



(218,794)

Income tax benefit



(714)



(10,357)



(58,371)

NET LOSS


$

(9,662)


$

(10,239)


$

(160,423)





















LOSS PER SHARE 










   Basic


$

(0.05)


$

(0.05)


$

(0.76)

   Diluted


$

(0.05)


$

(0.05)


$

(0.76)











WEIGHTED AVERAGE SHARES OUTSTANDING 








     Basic 



212,959



212,708



212,311

     Diluted 



212,959



212,708



212,311

 

RPC INCORPORATED AND SUBSIDIARIES












CONSOLIDATED BALANCE  SHEETS






At March 31, (Unaudited)


(In thousands)



2021



2020

ASSETS






Cash and cash equivalents

$

85,421


$

82,646

Accounts receivable, net


186,891



247,965

Inventories


80,165



97,267

Income taxes receivable


82,612



35,000

Prepaid expenses 


8,027



8,701

Assets held for sale


4,032



5,385

Other current assets


2,493



2,860

  Total current assets


449,641



479,824

Property, plant and equipment, net


257,309



295,262

Operating lease right-of-use assets


25,400



33,250

Goodwill 


32,150



32,150

Other assets


35,573



28,646

  Total assets

$

800,073


$

869,132







LIABILITIES AND STOCKHOLDERS' EQUITY






Accounts payable

$

60,649


$

70,601

Accrued payroll and related expenses


23,074



19,791

Accrued insurance expenses


4,443



7,092

Accrued state, local and other taxes


4,539



3,774

Income taxes payable


1,302



1,791

Current portion of operating lease liabilities


8,594



10,215

Other accrued expenses


946



4,914

  Total current liabilities


103,547



118,178

Long-term accrued insurance expenses


10,543



14,865

Long-term pension liabilities


31,088



33,208

Long-term operating lease liabilities


19,088



27,529

Other long-term liabilities


-



49

Deferred income taxes


12,631



4,068

  Total liabilities


176,897



197,897

Common stock 


21,574



21,526

Capital in excess of par value


-



-

Retained earnings


619,019



672,912

Accumulated other comprehensive loss


(17,417)



(23,203)

  Total stockholders' equity


623,176



671,235

  Total liabilities and stockholders' equity 

$

800,073


$

869,132

Appendix A

RPC, Inc. has used the non-GAAP financial measure of adjusted operating loss 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 loss, or other performance measures prepared in accordance with GAAP. 

Management believes that presenting the financial measure of adjusted operating loss enables us to compare our operating performance consistently over various time periods without regard to non-recurring items.

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 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 Operating Loss to Adjusted Operating Loss, the nearest performance measure prepared in accordance with GAAP, is shown below:


Periods ended, (Unaudited)



Three Months Ended

(In thousands)



March 31,
2021



December 31,   
2020



March 31,   
2020





















Reconciliation of operating loss to adjusted operating loss

















Operating loss  


$

(10,521)


$

(21,646)


$

(218,707)

Add:










     Impairment and other charges



-



10,318



205,536

Adjusted operating loss


$

(10,521)


$

(11,328)


$

(13,171)

Appendix B

RPC, Inc. has used the non-GAAP financial measures of adjusted net loss and adjusted loss 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 loss, loss per share, or other performance measures prepared in accordance with GAAP. 

Management believes that presenting the financial measures of adjusted net loss and adjusted loss per share, enable us to compare our operating performance consistently over various time periods without regard to non-recurring items.

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 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 Loss to Adjusted Net Loss and the Reconciliation of Loss Per Share to Adjusted Loss Per Share is shown below:  


Periods ended, (Unaudited)



Three Months Ended

(In thousands except per share amounts)



March 31,
2021



December 31,   
2020



March 31,   
2020











Reconciliation of net loss to adjusted net loss


















Net loss   


$

(9,662)


$

(10,239)


$

(160,423)

Add:










     Discrete tax adjustments  



-



(4,581)



22,807

     Impairment and other charges, net of tax  


-



7,980



128,642

          Total impact of discrete tax adjustments 









          and Impairment and other charges


-



3,399



151,449

Adjusted net loss 


$

(9,662)


$

(6,840)


$

(8,974)





















Reconciliation of loss per share to adjusted loss per share

















Loss per share


$

(0.05)


$

(0.05)


$

(0.76)

          Total impact of discrete tax adjustments 









          and Impairment and other charges

$

-


$

0.02


$

0.71











         Adjusted loss per share 


$

(0.05)


$

(0.03)


$

(0.04)











Weighted average shares outstanding



212,959



212,708



212,311

Appendix C

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 loss 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 or non-recurring items. 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 loss to EBITDA and adjusted EBITDA, the most comparable GAAP measures.  This reconciliation also appears on RPC's investor website, which can be found on the Internet at rpc.net.

The Reconciliation of Net Loss to EBITDA and Adjusted EBITDA is shown below:











Periods ended, (Unaudited)



Three Months Ended

(In thousands)



March 31,
2021



December 31,   
2020



March 31,   
2020











Reconciliation of net loss to EBITDA and adjusted EBITDA







Net loss   


$

(9,662)


$

(10,239)


$

(160,423)

Add:










     Income tax benefit



(714)



(10,357)



(58,371)

     Interest expense



380



116



113

     Depreciation and amortization



17,773



18,009



39,293

Less:










     Interest income



18



65



334

EBITDA


$

7,759


$

(2,536)


$

(179,722)

Add:










     Impairment and other charges



-



10,318



205,536

Adjusted EBITDA


$

7,759


$

7,782


$

25,814

 

Cision View original content:http://www.prnewswire.com/news-releases/rpc-inc-reports-first-quarter-2021-financial-results-301278458.html

SOURCE RPC, Inc.