<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 SEPTEMBER 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 September 30, 1996, RPC, Inc. had 14,574,690 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 SEPTEMBER 30, 1996, AND DECEMBER 31, 1995
(In thousands except share information)
SEPTEMBER 30, December 31,
1996 1995
(UNAUDITED) (Audited)
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ASSETS
Cash and cash equivalents $13,457 $18,126
Marketable securities 4,865 4,468
Accounts receivable, net of allowance for doubtful
accounts of $5,743 and $4,205, respectively 26,155 20,802
Inventories, at lower of cost or market 15,065 14,445
Deferred income taxes 6,953 7,241
Prepaid expenses and other current assets 1,077 1,848
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Current assets 67,572 66,930
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Equipment and property, net 45,683 36,225
Marketable securities 25,071 19,280
Goodwill, net 8,301 7,900
Deferred income taxes 269 714
Other assets 1,404 1,607
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TOTAL ASSETS $148,300 $132,656
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $6,977 $5,035
Accrued payroll and related expenses 4,369 3,899
Accrued insurance expenses 5,563 5,039
Accrued state, local and other taxes 3,422 2,315
Federal income taxes payable 71 38
Accrued discounts 635 635
Other accrued expenses 8,879 8,026
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Current liabilities 29,916 24,987
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Long-term accrued insurance expenses 4,000 3,308
Long-term debt 499 0
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Total liabilities 34,415 28,295
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Commitments and contingencies
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Common stock 1,464 1,461
Capital in excess of par value 34,743 34,599
Earnings retained 77,881 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 113,885 104,361
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $148,300 $132,656
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996, AND 1995
(In thousands except share and per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
1996 1995 1996 1995
- ------------------------------------------------------ ----------------------
REVENUE $44,942 $35,756 $146,863 $122,552
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Cost of goods sold 16,037 12,162 59,124 50,108
Operating expenses 22,674 19,039 68,062 57,660
Depreciation and amortization 2,338 1,739 6,620 5,054
Interest income (479) (551) (1,331) (1,620)
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Income before income taxes 4,372 3,367 14,388 11,350
Income tax provision 1,559 1,105 4,964 3,915
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NET INCOME $2,813 $2,262 $9,424 $7,435
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EARNINGS PER SHARE $0.19 $0.15 $0.65 $0.51
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Average shares outstanding 14,569,786 14,541,331 14,560,662 14,524,258
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996, and 1995
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $16,789 $12,818
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (16,236) (10,447)
Proceeds from sale of equipment and property 1,434 983
Net sale (purchase) of marketable securities (6,188) 485
Other (500) (511)
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Net cash (used for) investing activities (21,490) (9,490)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options 32 90
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Net cash provided by financing activities 32 90
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Net increase (decrease) in cash and cash equivalents (4,669) 3,418
Cash and cash equivalents at beginning of period 18,126 15,038
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Cash and cash equivalents at end of period $13,457 $18,456
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</TABLE>
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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 Company, 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 Company'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 Company as of September 30, 1996, the results of
operations for the quarter and nine months then ended and the cash flows
for the nine 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 nine months ended
September 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 SEPTEMBER 30, 1996, COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
Revenue for the third quarter ended September 30, 1996, was $44,942,000 compared
with $35,756,000 for the quarter ended September 30, 1995, and $52,204,000 for
the previous quarter ended June 30, 1996. Revenue for the quarter ended
September 30, 1996, increased $9,186,000 or 26% from the same period one year
ago and decreased $7,262,000 or 14% from the quarter ended June 30, 1996. The
oil and gas services segment revenue of $25,057,000 increased 23% from last
year's third quarter primarily due to a 38% increase in the price of natural gas
and rising U.S. demand and reduced storage capacity. 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. The average U.S. rig
count has increased 8% from September 30, 1995. The oil and gas services segment
revenue increased 6% from the quarter ended June 30, 1996. The boat
manufacturing segment revenue for the quarter ended September 30, 1996, of
$16,961,000 increased 33% from last year's third quarter of $12,805,000 as the
result of growth in the boating industry overall, in addition to an increase in
Chaparral's market share. In particular, the Sunesta, Chaparral's deck boat
line, has continued to surpass sales expectations. The boat manufacturing
segment revenue decreased 34% from the quarter ended June 30, 1996, as a result
of normal seasonal decline.
Net income for the quarter ended September 30, 1996, was $2,813,000 or 19 cents
per share versus net income of $2,262,000 or 15 cents per share for the quarter
ended September 30, 1995, and net income of $3,161,000 or 22 cents per share for
the quarter ended June 30, 1996. The increase in earnings from the same period
one year ago was due to the revenue increase and improved profit margins for
both the oil and gas services and the boat manufacturing segments.
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RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
NINE MONTHS ENDED SEPTEMBER 30, 1996, COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995
Revenue for the nine months ended September 30, 1996, increased 20% to
$146,863,000 compared to $122,552,000 for the nine months ended September 30,
1995. An increase of 21% occurred in the oil and gas services segment and an
18% increase occurred in the boat manufacturing segment. The last nine months
have seen an upturn in the oil and gas industry as a whole. In particular,
natural gas prices have stabilized to the extent that investors, drillers, and
exploration companies have maintained a higher level of activity than in
previous years. Rising U.S. demand and reduced storage capacity has allowed
natural gas prices and the average U.S. rig count to increase. Growth in the
overall boating industry combined with an increase in Chaparral's market share
caused the revenue increase in the boat manufacturing segment for the first nine
months of 1996.
Net income for the nine months ended September 30, 1996, was $9,424,000 or 65
cents per share compared to net income of $7,435,000 or 51 cents per share for
the nine months ended September 30, 1995. The 27% increase was due to the
revenue increases and improved margins for both the oil and gas services and the
boat manufacturing segments.
FINANCIAL CONDITION
The Company's current ratio remained strong as of September 30, 1996, with
current assets of $67,572,000 exceeding current liabilities of $29,916,000 by a
ratio of 2.3-to-1. This compares to a current ratio of 2.7-to-1 at December 31,
1995.
Capital expenditures during the first nine months of 1996 totaling $16,236,000
included approximately $15,196,000 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 September 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: November 6, 1996 Richard A. Hubbell
President and Chief Operating Officer
/s/ Ben M. Palmer
-----------------
Date: November 6, 1996 Ben M. Palmer
Asst. Treasurer and Chief Financial Officer
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 13,457
<SECURITIES> 4,865
<RECEIVABLES> 31,898
<ALLOWANCES> 5,743
<INVENTORY> 15,065
<CURRENT-ASSETS> 67,572
<PP&E> 45,683
<DEPRECIATION> 0
<TOTAL-ASSETS> 148,300
<CURRENT-LIABILITIES> 29,916
<BONDS> 499
0
0
<COMMON> 1,464
<OTHER-SE> 112,421
<TOTAL-LIABILITY-AND-EQUITY> 148,300
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<TOTAL-REVENUES> 146,863
<CGS> 59,124
<TOTAL-COSTS> 127,186
<OTHER-EXPENSES> 6,620
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<INCOME-PRETAX> 14,388
<INCOME-TAX> 4,964
<INCOME-CONTINUING> 9,424
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,424
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
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