Delaware
|
58-1550825
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
Number)
|
Part
I. Financial Information
|
Page
No.
|
|||
3
|
||||
4
|
||||
5
|
||||
6
-
13
|
||||
14
- 22
|
||||
22
|
||||
22
|
||||
Part
II. Other Information
|
||||
23
|
||||
23
|
||||
23
|
||||
24
|
||||
24
|
||||
24
|
||||
24
|
||||
25
|
||||
FOR
THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
|
||||||||||||
(In
thousands except per share data)
|
||||||||||||
(Unaudited)
|
Three
months ended March 31,
|
|||||||
|
2006
|
2005
|
|||||
Revenues
|
$
|
136,024
|
$
|
92,330
|
|||
Cost
of services rendered and goods sold
|
65,751
|
50,411
|
|||||
Selling,
general and administrative expenses
|
21,083
|
18,406
|
|||||
Depreciation
and amortization
|
10,705
|
9,280
|
|||||
Gain
on disposition of assets, net
|
(1,032
|
)
|
(626
|
)
|
|||
Operating
profit
|
39,517
|
14,859
|
|||||
Interest
income, net
|
153
|
92
|
|||||
Other
income, net
|
261
|
1,270
|
|||||
Income
before income taxes
|
39,931
|
16,221
|
|||||
Income
tax provision
|
15,031
|
6,294
|
|||||
Net
income
|
$
|
24,900
|
$
|
9,927
|
|||
Earnings
per share
|
|||||||
Basic
|
$
|
0.39
|
$
|
0.15
|
|||
Diluted
|
$
|
0.38
|
$
|
0.15
|
|||
Dividends
per share
|
$
|
0.050
|
$
|
0.027
|
|||
Average
shares outstanding
|
|||||||
Basic
|
63,354
|
63,920
|
|||||
Diluted
|
65,831
|
66,049
|
|||||
The
accompanying notes are an integral part of these consolidated
financial
statements.
|
FOR
THE THREE MONTHS ENDED MARCH 31, 2006 and 2005
|
|||||||
(In
thousands)
|
|||||||
(Unaudited)
|
|||||||
Three
months ended March 31,
|
|||||||
|
2006
|
2005
|
|||||
OPERATING
ACTIVITIES
|
|||||||
Net
income
|
$
|
24,900
|
$
|
9,927
|
|||
Noncash
charges (credits) to earnings:
|
|||||||
Depreciation,
amortization and other non-cash charges
|
11,405
|
9,621
|
|||||
Gain
on sale of property and equipment
|
(1,032
|
)
|
(626
|
)
|
|||
Deferred
income tax provision
|
115
|
446
|
|||||
Changes
in current assets and liabilities:
|
|||||||
Accounts
receivable
|
(8,737
|
)
|
(4,012
|
)
|
|||
Income
taxes receivable
|
-
|
(286
|
)
|
||||
Inventories
|
(1,788
|
)
|
(969
|
)
|
|||
Prepaid
expenses and other current assets
|
289
|
357
|
|||||
Accounts
payable
|
629
|
415
|
|||||
Income
taxes payable
|
1,602
|
(113
|
)
|
||||
Accrued
payroll and related expenses
|
(2,031
|
)
|
(3,197
|
)
|
|||
Accrued
insurance expenses (current portion)
|
(89
|
)
|
(31
|
)
|
|||
Accrued
state, local and other expenses
|
(804
|
)
|
(602
|
)
|
|||
Other
accrued expenses
|
(41
|
)
|
(436
|
)
|
|||
Changes
in working capital
|
(10,970
|
)
|
(8,874
|
)
|
|||
Changes
in other assets and liabilities:
|
|||||||
Long-term
pension liabilities
|
(1,816
|
)
|
(852
|
)
|
|||
Long-term
accrued insurance expenses
|
311
|
(157
|
)
|
||||
Other
non-current assets
|
(628
|
)
|
(382
|
)
|
|||
Other
non-current liabilities
|
-
|
17
|
|||||
Net
cash provided by operating activities
|
22,285
|
9,120
|
|||||
INVESTING
ACTIVITIES
|
|||||||
Capital
expenditures
|
(25,970
|
)
|
(13,318
|
)
|
|||
Proceeds
from sale of property and equipment
|
1,357
|
947
|
|||||
Net
cash used for investing activities
|
(24,613
|
)
|
(12,371
|
)
|
|||
FINANCING
ACTIVITIES
|
|||||||
Payment
of dividends
|
(3,170
|
)
|
(1,704
|
)
|
|||
Payments
on debt
|
-
|
(2,800
|
)
|
||||
Excess
tax benefit for share based payments
|
640
|
-
|
|||||
Cash
paid for common stock purchased and retired
|
(1,110
|
)
|
(73
|
)
|
|||
Proceeds
received upon exercise of stock options
|
545
|
464
|
|||||
Net
cash used for financing activities
|
(3,095
|
)
|
(4,113
|
)
|
|||
Net
decrease in cash and cash equivalents
|
(5,423
|
)
|
(7,364
|
)
|
|||
Cash
and cash equivalents at beginning of period
|
12,809
|
29,636
|
|||||
Cash
and cash equivalents at end of period
|
$
|
7,386
|
$
|
22,272
|
|||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
1.
|
GENERAL
|
2.
|
EARNINGS
PER SHARE
|
Three
months ended
March
31
|
|||||||
(In
thousands except per share data amounts)
|
2006
|
2005
|
|||||
Net
income available for stockholders (numerator for basic and diluted
earnings
per
share):
|
$
|
24,900
|
$
|
9,927
|
|||
Shares
(denominator):
|
|||||||
Weighted-average
shares outstanding (denominator for basic earnings per
share)
|
63,354
|
63,920
|
|||||
Effect
of dilutive securities:
|
|||||||
Employee
stock options and restricted stock
|
2,477
|
2,129
|
|||||
Adjusted
weighted average shares (denominator for diluted earnings per
share)
|
65,831
|
66,049
|
|||||
Earnings
per share:
|
|||||||
Basic
|
$
|
0.39
|
$
|
0.15
|
|||
Diluted
|
$
|
0.38
|
$
|
0.15
|
3.
|
RECENT
ACCOUNTING PRONOUNCEMENTS
|
4.
|
COMPREHENSIVE
INCOME
|
Three
months ended
|
|||||||
|
March
31,
|
||||||
(In
thousands)
|
2006
|
2005
|
|||||
Net
income as reported
|
$
|
24,900
|
$
|
9,927
|
|||
Change
in unrealized gain on securities, net of taxes
|
(108
|
)
|
112
|
||||
Comprehensive
income
|
$
|
24,792
|
$
|
10,039
|
Three
months ended
|
|||||||
(In
thousands)
|
March
31, 2006
|
||||||
Earnings
before income taxes
|
$
|
268
|
|||||
Net
earnings
|
$
|
265
|
Three
months ended
|
||||||
(In
thousands except per share data amounts)
|
March
31, 2005
|
|||||
Net
income - as reported
|
$
|
9,927
|
||||
Add:
Stock-based employee compensation cost, previously included in reported
net income,
net
of related tax effect
|
343
|
|||||
Deduct:
Stock-based employee compensation cost, computed using the Black-Scholes
option
pricing
model, for all awards, net of related tax effect
|
(512
|
)
|
||||
Pro
forma net income
|
$
|
9,758
|
||||
Earnings
per share, as reported
|
||||||
Basic
|
$
|
0.15
|
||||
Diluted
|
$
|
0.15
|
||||
Pro
forma earnings per share
|
||||||
Basic
|
$
|
0.15
|
||||
Diluted
|
$
|
0.15
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life
|
Aggregate
Intrinsic Value
|
||||||||||
Outstanding
at January 1, 2006
|
2,329,110
|
$
|
4.64
|
5.4
years
|
|||||||||
Granted
|
-
|
-
|
N/A
|
||||||||||
Exercised
|
(226,417
|
)
|
3.89
|
N/A
|
|||||||||
Forfeited
|
(9,000
|
)
|
5.02
|
N/A
|
|||||||||
Expired
|
-
|
-
|
N/A
|
||||||||||
Outstanding
at March 31, 2006
|
2,093,693
|
4.72
|
5.2
years
|
$
|
37,958,672
|
||||||||
Exercisable
at March 31, 2006
|
1,411,944
|
$
|
4.73
|
4.7
years
|
$
|
25,584,425
|
Shares
|
Weighted
Average
Grant-Date
Fair
Value
|
||||||
Non-vested
shares at January 1, 2006
|
1,235,991
|
$
|
6.65
|
||||
Granted
|
166,900
|
33.48
|
|||||
Vested
|
(79,200
|
)
|
2.96
|
||||
Forfeited
|
(5,700
|
)
|
11.90
|
||||
Non-vested
shares at March 31, 2006
|
1,317,991
|
$
|
10.25
|
Three
months ended March 31,
|
|||||||
2006
|
2005
|
||||||
(in
thousands)
|
|||||||
Revenues:
|
|||||||
Technical
Services
|
$
|
114,761
|
$
|
77,958
|
|||
Support
Services
|
21,263
|
14,355
|
|||||
Other
|
-
|
17
|
|||||
Total
revenues
|
$
|
136,024
|
$
|
92,330
|
|||
Operating
profit (loss):
|
|||||||
Technical
Services
|
$
|
36,239
|
$
|
14,788
|
|||
Support
Services
|
5,191
|
2,171
|
|||||
Other
|
-
|
(165
|
)
|
||||
Corporate
|
(2,945
|
)
|
(2,561
|
)
|
|||
Gain
on disposition of assets, net
|
1,032
|
626
|
|||||
Total
operating profit
|
$
|
39,517
|
$
|
14,859
|
|||
Interest
income, net
|
153
|
92
|
|||||
Other
income, net
|
261
|
1,270
|
|||||
Income
before income taxes
|
$
|
39,931
|
$
|
16,221
|
Three
months ended
|
|||||||
March
31,
|
|||||||
(in
thousands
)
|
2006
|
2005
|
|||||
Service
cost
|
$
|
-
|
$
|
-
|
|||
Interest
cost
|
426
|
436
|
|||||
Expected
return on plan assets
|
(472
|
)
|
(428
|
)
|
|||
Amortization
of unrecognized net losses
|
250
|
263
|
|||||
Net
periodic benefit cost
|
$
|
204
|
$
|
271
|
|
||||||||||
Three
months ended
March
31,
|
||||||||||
2006
|
2005
|
|||||||||
Consolidated
revenues [in thousands]
|
$
|
136,024
|
$
|
92,330
|
||||||
Revenues
by business segment [in thousands]:
|
||||||||||
Technical
|
$
|
114,761
|
$
|
77,958
|
||||||
Support
|
21,263
|
14,355
|
||||||||
Other
|
-
|
17
|
||||||||
Consolidated
operating profit [in thousands]
|
$
|
39,517
|
$
|
14,859
|
||||||
Operating
profit (loss) by business segment [in thousands]:
|
||||||||||
Technical
|
$
|
36,239
|
$
|
14,788
|
||||||
Support
|
5,191
|
2,171
|
||||||||
Other
|
-
|
(165
|
)
|
|||||||
Corporate
|
$
|
(2,945
|
)
|
$
|
(2,561
|
)
|
||||
Gain
on disposition of assets, net
|
$
|
1,032
|
$
|
626
|
||||||
Percentage
cost of services rendered & goods sold to
revenues
|
48
|
%
|
55
|
%
|
||||||
Percentage
selling, general & administrative expenses to revenues
|
15
|
%
|
20
|
%
|
||||||
Percentage
depreciation and amortization expense to revenues
|
8
|
%
|
10
|
%
|
||||||
Average
U.S. domestic rig count
|
1,521
|
1,283
|
||||||||
Average
natural gas price (per thousand cubic feet (mcf))
|
$
|
7.64
|
$
|
6.55
|
||||||
Average
oil price (per barrel)
|
$
|
63.92
|
$
|
50.43
|
||||||
|
||||||||||
|
|
|||||||||
Three
months ended
March
31,
|
||||||||||
( In thousands) |
2006
|
2005
|
||||||||
Net
cash provided by operating activities
|
$
|
22,285
|
$
|
9,120
|
||||||
Net
cash used for investing activities
|
24,613
|
12,371
|
||||||||
Net
cash used for financing activities
|
3,095
|
4,113
|
Period |
Total
Number of
Shares (or Units) Purchased |
Average
Price
Paid Per Share (or Unit) |
Total
number of
Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (3) |
Maximum
Number
(or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
|||||||||
Month
#1
January 1, 2006 to January 31, 2006 |
34,176
|
(1) |
$
|
32.72
|
-
|
2,711,310 | |||||||
|
|
|
|
||||||||||
Month
#2
February 1, 2006 to February 28, 2006 |
9,101
|
(1)
|
27.60
|
-
|
2,711,310 | ||||||||
|
|
|
|
|
|||||||||
Month
#3
March 1, 2006 to March 31, 2006 |
3,605
|
(2) |
21.51
|
-
|
2,711,310 | ||||||||
|
|
|
|
|
|||||||||
Totals
|
46,882
|
$
|
30.87
|
-
|
|
2,711,310
|
Exhibit
Number
|
Description
|
|
3.1(a)
|
Restated
certificate of incorporation of RPC, Inc. (incorporated herein by
reference to Exhibit 3.1 to the Annual Report on Form 10-K for the
fiscal
year ended December 31, 1999).
|
|
3.1(b)
|
Certificate
of amendment of the certificate of incorporation of RPC,
Inc.
|
|
3.2
|
Bylaws
of RPC, Inc. (
incorporated
herein by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on
Form 10-Q filed on May 5, 2004
).
|
|
4
|
Form
of Stock Certificate (incorporated herein by reference to Exhibit
4 to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended December
31, 1998).
|
|
10.1
|
Summary
of ‘at will’ compensation arrangements with the Executive Officers
(incorporated herein by reference to Exhibit 10.9 to the Registrant’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2005).
|
|
10.2
|
Amended
and Restated Credit Agreement dated as of March 10, 2006, between
the
Company and SunTrust Bank (incorporated herein by reference to Exhibit
10.12 to the Registrant’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2005).
|
|
31.1
|
Section
302 certification for Chief Executive Officer.
|
|
31.2
|
Section
302 certification for Chief Financial Officer.
|
|
32.1
|
Section
906 certifications for Chief Executive Officer and Chief Financial
Officer.
|
RPC, INC. | ||
|
|
|
Date: May 8, 2006 | By: | /s/ Richard A. Hubbell |
Richard A. Hubbell | ||
President and
Chief
Executive Officer
(Principal Executive
Officer
|
|
|
|
Date: May 8, 2006 | By: | /s/ Ben M. Palmer |
Ben M. Palmer | ||
Vice President
and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
|
1. |
I
have reviewed this quarterly report on Form 10-Q of RPC,
Inc.;
|
2. |
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3. |
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4. |
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a. |
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b. |
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c. |
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d. |
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5. |
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
a. |
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information;
and
|
b. |
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
Date: May 8, 2006 | By: | /s/ Richard A. Hubbell |
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. |
I
have reviewed this quarterly report on Form 10-Q of RPC,
Inc.;
|
2. |
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered
by this
report;
|
3. |
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of
the
registrant as of, and for, the periods presented in this
report;
|
4. |
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act
Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a. |
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision,
to ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report
is being
prepared;
|
b. |
Designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c. |
Evaluated
the effectiveness of the registrant's disclosure controls and
procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the
period
covered by this report based on such evaluation;
and
|
d. |
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably
likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5. |
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
a. |
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which
are
reasonably likely to adversely affect the registrant's ability
to record,
process, summarize and report financial information;
and
|
b. |
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial
reporting.
|
Date: May 8, 2006 | By: | /s/ Ben M. Palmer |
Ben M. Palmer | ||
Vice President, Chief Financial Officer, and Treasurer | ||
(Principal Financial and Accounting Officer) |
Date: May 8, 2006 | By: | /s/ Richard A. Hubbell |
Richard A. Hubbell | ||
President and
Chief
Executive Officer
(Principal Executive
Officer
|
|
|
|
Date: May 8, 2006 | By: | /s/ Ben M. Palmer |
Ben M. Palmer | ||
Vice President,
Chief
Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
|