<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
/ / Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File No. 1-8726
RPC, INC.
DELAWARE 58-1550825
(State of Incorporation) (I.R.S. Employer
Identification Number)
2170 Piedmont Road, NE, Atlanta, Georgia 30324
Telephone Number -- (404) 888-2950
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
As of June 30, 1996, RPC, Inc. had 14,567,413 shares of common stock outstanding
(excluding 61,841 treasury shares).
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RPC, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1996 AND DECEMBER 31, 1995
(In thousands except stock information)
June 30, December 31,
1996 1995
(Unaudited) (Audited)
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ASSETS
Cash and cash equivalents $18,853 $18,126
Marketable securities 2,841 4,468
Accounts receivable, net of allowance for doubtful
accounts of $5,283 and $4,205, respectively 26,976 20,802
Inventories, at lower of cost or market 15,196 14,445
Deferred income taxes 6,604 7,241
Prepaid expenses and other current assets 1,094 1,848
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Current assets 71,564 66,930
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Equipment and property, net 42,557 36,225
Marketable securities 18,144 19,280
Goodwill, net 8,494 7,900
Deferred income taxes 428 714
Other assets 1,385 1,607
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Total assets $142,572 $132,656
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $5,340 $5,035
Accrued payroll and related expenses 4,359 3,899
Accrued insurance expenses 4,794 5,039
Accrued state, local and other taxes 2,991 2,315
Federal income taxes payable 86 38
Accrued discounts 1,407 635
Other accrued expenses 8,051 8,026
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Current liabilities 27,028 24,987
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Long-term accrued insurance expenses 3,978 3,308
Long-term debt 536 0
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Total liabilities 31,542 28,295
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Commitments and contingencies
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Common stock 1,463 1,461
Capital in excess of par value 34,746 34,599
Earnings retained 75,024 68,526
Common stock in treasury, at cost, 61,841 shares
and 68,723 shares, respectively (203) (225)
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Total stockholders' equity 111,030 104,361
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Total liabilities and stockholders' equity $142,572 $132,656
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------------- -------------------------
1996 1995 1996 1995
- ------------------------------------------------------------------ -------------------------
<S> <C> <C> <C> <C>
Revenue $52,204 $44,576 $101,921 $86,796
- -----------------------------------------------------------------------------------------------
Costofgoodssold 22,257 20,669 43,087 37,946
Operatingexpenses 23,320 18,735 45,388 38,621
Depreciation and amortization 2,250 1,698 4,282 3,315
Interest income (414) (547) (852) (1,069)
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Income before income taxes 4,791 4,021 10,016 7,983
Income tax provision 1,630 1,415 3,405 2,810
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NET INCOME $3,161 $2,606 $6,611 $5,173
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EARNINGS PER SHARE $0.22 $0.18 $0.46 $0.36
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Average shares outstanding 14,567,413 14,541,331 14,556,050 14,515,580
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</TABLE>
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 and 1995
(In thousands)
(Unaudited)
Six months ended June 30,
-------------------------
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES $8,130 $11,866
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (10,722) (6,397)
Proceeds from sale of equipment and property 1,009 680
Net sale (purchase) of marketable securities 2,763 (6,863)
Other (457) (481)
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Net cash (used for) investing activities (7,407) (13,061)
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CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued for benefit plans 4 74
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Net cash provided by financing activities 4 74
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Net increase (decrease) in cash and cash equivalents 727 (1,121)
Cash and cash equivalents at beginning of period 18,126 15,038
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Cash and cash equivalents at end of period $18,853 $13,917
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations. These consolidated financial statements should be read in
conjunction with the financial statements and related notes contained in
the Registrant's annual report on Form 10-K for the fiscal year ended
December 31, 1995.
In the opinion of management, the consolidated financial statements
included herein contain all adjustments necessary to present fairly the
financial position of the Registrant as of June 30, 1996, the results of
operations for the quarter and six months then ended and the changes in
cash flows for the six months then ended.
2. Earnings per share are computed by dividing net income by the weighted
average number of shares outstanding during the respective periods.
3. The results of operations for the quarter and the six months ended June 30,
1996 are not necessarily indicative of the results to be expected for the
full year.
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RPC, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Revenue for the first quarter ended June 30, 1996 was $52,204,000 compared with
$44,576,000 for the quarter ended June 30, 1995 and $49,717,000 for the previous
quarter ended March 31, 1996. Revenue for the quarter ended June 30, 1996
increased $7,628,000 or 17% from the same period one year ago and increased
$2,487,000 or 5% from the quarter ended March 31, 1996. The oil and gas
services segment revenue of $23,700,000 increased 26% from last year's second
quarter primarily due to a 41% increase in the price of natural gas in the
second quarter of 1996 compared to the second quarter of 1995. This price
increase caused a significant increase in natural gas activity, particularly in
the Gulf of Mexico, the area where most of our business is centered. A rising
world energy demand and a favorable economic climate in the United States have
had a favorable impact on the industry. The oil and gas services segment
revenue increased 4% from the quarter ended March 31, 1996. The boat
manufacturing segment revenue for the quarter ended June 30, 1996 of $25,519,000
increased 9% from last year's second quarter of $23,418,000 as the result of a
strong trend in the boating industry combined with an increase in Chaparral's
market share. The majority of the increase was due to a higher sales mix of
deckboats and cruisers. The boat manufacturing segment revenue increased 10%
from the quarter ended March 31, 1996 as a result of a normal seasonal upturn.
Net income for the quarter ended June 30, 1996 was $3,161,000 or 22 cents per
share versus net income of $2,606,000 or 18 cents per share for the quarter
ended June 30, 1995 and net income of $3,450,000 or 24 cents per share for the
quarter ended March 31, 1996. The increase in earnings from the same period one
year ago was due to the revenue increase for both the oil and gas services and
the boat manufacturing segments as well as improved margins for the boat
manufacturing segment.
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RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Revenue for the six months ended June 30, 1996 increased 17% to $101,921,000
compared to $86,796,000 for the six months ended June 30, 1995. An increase of
20% occurred in the oil and gas services segment and a 14% increase occurred in
the boat manufacturing segment. In the oil and gas services segment, the
revenue improvement was due to the significant increase in the price of natural
gas. An unusually severe winter in the United States and a rising world energy
demand had a favorable impact on the industry. A strong trend in the boating
industry combined with an increase in Chaparral's market share caused the
increase in the boat manufacturing segment for the first six months of 1996.
Chaparral had a higher sales mix of the larger boat lines this year which
include deckboats and cruisers.
Net income for the six months ended June 30, 1996 was $6,611,000 or 46 cents per
share compared to net income of $5,173,000 or 36 cents per share for the six
months ended June 30, 1996. The 28% increase was due to the revenue increases
for both the oil and gas services and the boat manufacturing segments as well as
improved margins for both segments.
FINANCIAL CONDITION
The Registrant's current ratio remained strong as of June 30, 1996 with current
assets of $71,564,000 exceeding current liabilities of $27,028,000 by a ratio of
2.6-to-1. This compares to a current ratio of 2.7-to-1 at December 31, 1995.
Capital expenditures during the first six months of $10,722,000 included
approximately $9,829,000 spent on revenue equipment and vehicles in the oil and
gas services segment. The remainder was spent on various purchases for the other
business segments. Funding for future capital requirements will be provided
from operations.
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RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed or required to be filed during the
quarter ended June 30, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RPC, INC.
/s/ Richard A. Hubbell
--------------------------------------
Date: August 9, 1996 Richard A. Hubbell
President and Chief Operating Officer
/s/ Ben M. Palmer
--------------------------------------
Date: August 9, 1996 Ben M. Palmer
Treasurer and Chief Financial Officer
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 18,853
<SECURITIES> 2,841
<RECEIVABLES> 32,259
<ALLOWANCES> 5,283
<INVENTORY> 15,196
<CURRENT-ASSETS> 71,564
<PP&E> 42,557
<DEPRECIATION> 0
<TOTAL-ASSETS> 142,572
<CURRENT-LIABILITIES> 27,028
<BONDS> 536
0
0
<COMMON> 1,463
<OTHER-SE> 109,567
<TOTAL-LIABILITY-AND-EQUITY> 142,572
<SALES> 0
<TOTAL-REVENUES> 101,921
<CGS> 43,087
<TOTAL-COSTS> 88,475
<OTHER-EXPENSES> 4,282
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<INCOME-PRETAX> 10,016
<INCOME-TAX> 3,405
<INCOME-CONTINUING> 6,611
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 6,611
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
