<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, 1997
/ / 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) 321-2140
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, 1997, RPC, Inc. had 14,703,438 shares of common
stock outstanding (excluding 78,253 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, 1997, AND DECEMBER 31, 1996
(In thousands except share information)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Cash and cash equivalents............................................................. $ 11,432 $ 13,124
Marketable securities................................................................. 6,728 8,149
Accounts receivable, net of allowance for doubtful accounts of $6,864 and $7,058,
respectively........................................................................ 33,741 24,156
Inventories, at lower of cost or market............................................... 14,494 15,427
Deferred income taxes................................................................. 7,440 7,623
Prepaid expenses and other current assets............................................. 1,337 1,663
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Current assets........................................................................ 75,172 70,142
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Equipment and property, net........................................................... 53,773 47,791
Marketable securities................................................................. 30,776 25,071
Goodwill, net......................................................................... 8,733 8,105
Deferred income taxes................................................................. -- 86
Other assets.......................................................................... 1,168 1,605
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Total assets.......................................................................... $ 169,622 $ 152,800
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable...................................................................... $ 7,632 $ 6,756
Accrued payroll and related expenses.................................................. 4,583 4,541
Accrued insurance expenses............................................................ 6,435 6,679
Accrued state, local and other taxes.................................................. 3,633 3,211
Federal income taxes payable.......................................................... 176 88
Accrued discounts..................................................................... 1,333 786
Current portion of long-term debt..................................................... 1,159 --
Other accrued expenses................................................................ 10,451 8,889
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Current liabilities................................................................... 35,402 30,950
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Long-term accrued insurance expenses.................................................. 4,601 3,551
Long-term debt........................................................................ 1,402 500
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Total liabilities..................................................................... 41,405 35,001
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Commitments and contingencies
Common stock.......................................................................... 1,478 1,471
Capital in excess of par value........................................................ 35,560 35,176
Earnings retained..................................................................... 91,632 81,555
Common stock in treasury, at cost, 78,253 shares and 74,953 shares, respectively...... (453) (403)
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Total stockholders' equity............................................................ 128,217 117,799
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Total liabilities and stockholders' equity............................................ $ 169,622 $ 152,800
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</TABLE>
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1997, AND 1996
(In thousands except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- --------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue.................................................. $ 67,032 $ 52,204 $ 125,235 $ 101,921
------------ ------------ ------------ ------------
Cost of goods sold....................................... 24,969 22,257 47,383 43,087
Operating expenses....................................... 30,499 23,320 57,445 45,388
Depreciation and amortization............................ 3,118 2,250 5,896 4,282
Interest income.......................................... (582) (414) (1,090) (852)
------------ ------------ ------------ ------------
Income before income taxes............................... 9,028 4,791 15,601 10,016
Income tax provision..................................... 3,116 1,630 5,382 3,405
------------ ------------ ------------ ------------
Net income............................................... $ 5,912 $ 3,161 $ 10,219 $ 6,611
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings per share....................................... $ 0.41 $ 0.22 $ 0.70 $ 0.46
------------ ------------ ------------ ------------
Average shares outstanding............................... 14,574,149 14,567,413 14,577,160 14,556,050
------------ ------------ ------------ ------------
</TABLE>
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997, and 1996
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
<S> <C> <C>
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES.................................................... $ 11,772 $ 8,130
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures.................................................................... (11,816) (10,722)
Proceeds from sale of equipment and property............................................ 1,391 1,009
Net (purchase) sale of marketable securities............................................ (4,284) 2,763
Other................................................................................... 1,093 (457)
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Net cash (used for) investing activities................................................ (13,616) (7,407)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options................................................. 152 4
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Net cash provided by financing activities............................................... 152 4
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Net (decrease) increase in cash and cash equivalents.................................... (1,692) 727
Cash and cash equivalents at beginning of period........................................ 13,124 18,126
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Cash and cash equivalents at end of period.............................................. $ 11,432 $ 18,853
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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 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, 1996.
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, 1997, the results of
operations for the quarter and the six months ended June 30, 1997 and 1996,
and the cash flows for the six months ended June 30, 1997 and 1996.
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 ended June 30, 1997 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, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Revenue for the first quarter ended June 30, 1997 was $67,032,000 compared with
$52,204,000 for the quarter ended June 30, 1996 and $58,203,000 for the previous
quarter ended March 31, 1997. Revenue for the quarter ended June 30, 1997
increased $14,828,000 or 28% from the same period one year ago and increased
$8,829,000 or 15% from the quarter ended March 31, 1997. The oil and gas
services segment revenue of $34,898,000 increased 47% from last year's second
quarter primarily due to a higher level of oil and gas exploration and
production activities by the major and independent oil companies, and expansion
of international operations. The oil and gas services segment revenue increased
16% from the quarter ended March 31, 1997. The powerboat manufacturing segment
revenue for the quarter ended June 30, 1997 of $28,846,000 increased 13% from
last year's second quarter of $25,519,000 as the result, we believe, of an
increase in Chaparral's market share. The powerboat manufacturing segment
revenue increased 16% from the quarter ended March 31, 1997 as a result of a
normal seasonal upturn.
Net income for the quarter ended June 30, 1997 was $5,912,000 or 41 cents per
share compared to net income of $3,161,000 or 22 cents per share for the quarter
ended June 30, 1996 and net income of $4,307,000 or 29 cents per share for the
quarter ended March 31, 1997. The increase in earnings from the same period one
year ago was due to the revenue increase for both business segments as well as
improved margins for the oil and gas services segment.
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RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Revenue for the six months ended June 30, 1997 increased 23% or $23,314,000
to $125,235,000 compared with $101,921,000 for the six months ended June 30,
1996. An increase of 40% occurred in the oil and gas services segment and an
increase of 10% occurred in the powerboat manufacturing segment The oil and
gas services segment revenue increased despite recent declines in oil prices.
A higher level of oil and gas exploration and production activities by the
major and independent oil companies and expansion of international operations
contributed to the increase. The powerboat manufacturing revenue increased
despite an overall decline in sales in the powerboat market. We believe this
increase is the result of increased market share.
Net income for the six months ended June 30, 1997 was $10,219,000 or 70 cents
per share compared to net income of $6,611,000 or 46 cents per share for the six
months ended June 30, 1996. The increase in earnings from the same period one
year ago was due to the revenue increase for both business segments as well as
improved margins for the oil and gas services segment.
FINANCIAL CONDITION
The Registrant's current ratio remained strong as of June 30, 1997 with current
assets of $75,172,000 exceeding current liabilities of $35,402,000 by a ratio of
2.1-to-1. This compares to a current ratio of 2.4-to-1 at March 31, 1997.
Capital expenditures during the first six months of $11,816,000 were primarily
for revenue-producing equipment 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, 1997.
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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 11, 1997 Richard A. Hubbell
President and Chief Operating Officer
/s/ Ben M. Palmer
-------------------------
Date: August 11, 1997 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 11,432
<SECURITIES> 6,728
<RECEIVABLES> 40,605
<ALLOWANCES> 6,864
<INVENTORY> 14,494
<CURRENT-ASSETS> 75,172
<PP&E> 201,331
<DEPRECIATION> 147,558
<TOTAL-ASSETS> 169,622
<CURRENT-LIABILITIES> 35,402
<BONDS> 1,402
0
0
<COMMON> 1,478
<OTHER-SE> 126,739
<TOTAL-LIABILITY-AND-EQUITY> 169,622
<SALES> 0
<TOTAL-REVENUES> 125,235
<CGS> 47,383
<TOTAL-COSTS> 104,828
<OTHER-EXPENSES> 5,896
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,601
<INCOME-TAX> 5,382
<INCOME-CONTINUING> 10,219
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,219
<EPS-PRIMARY> 0.70
<EPS-DILUTED> 0.70
</TABLE>
