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RPC, Inc. Reports Second Quarter 2023 Financial Results
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PR Newswire
ATLANTA, July 26, 2023
ATLANTA, July 26, 2023 /PRNewswire/ -- RPC, Inc. (NYSE: RES) today announced its unaudited results for the second quarter and six months ended June 30, 2023. 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.
For the quarter ended June 30, 2023, RPC generated revenues of $415.9 million, a decrease compared to $476.7 million in the first quarter. Revenues declined due to job delays and cancellations by several pressure pumping customers as well as weaker activity levels in most of the natural gas-directed basins in which RPC operates. Operating profit for the second quarter of 2023 was $82.4 million compared to $90.7 million in the first quarter. Net income for the second quarter of 2023 was $65.0 million, or $0.30 diluted earnings per share, compared to net income of $71.5 million, or $0.33 diluted earnings per share, in the first quarter.
Adjusted operating profit1 for the second quarter of 2023 was $83.3 million compared to $108.0 million in the first quarter of 2023. Adjusted net income2 for the second quarter of 2023 was $65.7 million, or $0.30 adjusted diluted earnings per share2, compared to adjusted net income of $84.9 million, or $0.39 adjusted diluted earnings per share, in the first quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA)3 for the second quarter of 2023 was $110.1 million, a decrease compared to $132.9 million in the first quarter. In connection with the final termination of our pension plan, RPC recorded a non-cash pension settlement charge of $911 thousand in the second quarter of 2023 compared to a $17.4 million charge in the prior quarter.
Cost of revenues during the second quarter of 2023 was $265.8 million compared to $305.3 million in the first quarter. Cost of revenues as a percentage of revenues was 63.9 percent in the second quarter of 2023, essentially the same as 64.0 percent of revenues in the first quarter. Selling, general and administrative expenses were $43.6 million in the second quarter of 2023 compared to $42.2 million in the first quarter of 2023. Depreciation and amortization was $26.2 million in the second quarter of 2023 compared to $24.1 million in the first quarter of 2023.
RPC's revenues for the quarter ended June 30, 2023 increased by $40.4 million, or 10.7 percent, compared to the second quarter of the prior year due to improved pricing, higher customer activity levels and a larger active fleet of revenue-producing equipment. Cost of revenues during the second quarter of 2023 increased by $4.9 million compared to the second quarter of 2022. As a percentage of revenues, cost of revenues decreased to 63.9 percent in the second quarter of 2023 from 69.5 percent in the second quarter of 2022 because of improved pricing for our services and increases in customer supplied materials, as well as reduced maintenance expense due to an improvement in the average age of our equipment.
Selling, general and administrative expenses increased by $7.7 million in the second quarter of 2023 compared to the second quarter of the prior year primarily due to costs related to the settlement of a vendor dispute and the July 1, 2023 acquisition of Spinnaker Oilwell Service, LLC ("Spinnaker"). RPC's operating profit in the second quarter of 2023 was $82.4 million, compared to $60.4 million in the second quarter of 2022. Net income for the second quarter of 2023 was $65.0 million compared to $46.9 million in the second quarter of 2022. Adjusted EBITDA3 for the second quarter of 2023 was $110.1 million compared to $80.6 million in the second quarter of 2022.
For the six months ended June 30, 2023, revenues increased 35.2 percent to $892.5 million compared to $660.1 million for the same period last year. Net income for the six-month period was $136.5 million, or $0.63 diluted earnings per share, compared to net income of $62.0 million, or $0.29 diluted earnings per share, in the same period last year.
Rig Count and Commodity Price Statistics
The average U.S. domestic rig count during the second quarter of 2023 was 719, a 5.4 percent decrease compared to the first quarter of 2023, and unchanged compared to the same period in 2022. The average price of oil during the second quarter of 2023 was $73.54 per barrel, a 3.2 percent decrease compared to the first quarter of 2023, and a 32.5 percent decrease compared to the same period in 2022. The average price of natural gas during the second quarter of 2023 was $2.16 per Mcf, a decrease of 18.8 percent compared to the first quarter of 2023, and a 71.2 percent decrease compared to the same period in the prior year.
Management Commentary
"RPC's second quarter 2023 financial results reflect a slight decline in drilling and completion activity, particularly in natural gas-directed basins. This weakness impacted our pressure pumping revenues and profits, as several large customers either reduced their well completion activity or delayed completion work," stated Ben M. Palmer, RPC's President and Chief Executive Officer. "While we believe that this slowdown is temporary, we are taking prudent cost-cutting measures to better align our cost structure to activity levels.
"As we announced several weeks ago, RPC acquired Spinnaker Oilwell Services, a leading provider of oilfield cementing services in the Permian and mid-Continent basins. This acquisition will significantly expand our cementing business beyond its current location in South Texas to two other basins in which we provide our other services. As we begin the integration of Spinnaker into our operations, we continue to be impressed with the quality of Spinnaker's management, employees and operations," concluded Palmer.
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, nitrogen, hydraulic workover services, surface pressure control equipment, well control, cementing 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 inspection and storage services, and oilfield training services.
Technical Services second quarter 2023 revenues decreased by 13.7 percent compared to the prior quarter but increased by 9.5 percent compared to the same period of the prior year. Technical Services generated an operating profit of $77.0 million in the second quarter of 2023 compared to $103.5 million in the prior quarter and an operating profit of $59.8 million in the second quarter of the prior year. The year-over-year improvements in Technical Services operating results were driven by higher customer activity levels, improved pricing, and a larger active fleet of revenue-producing equipment.
Support Services revenues increased by 4.7 percent during the second quarter of 2023 compared to the prior quarter and by 33.2 percent compared to the same period of the prior year. The revenue increase was due to higher activity levels and improved pricing within rental tools. Support Services generated an operating profit of $7.9 million in the second quarter of 2023 and $6.6 million in the first quarter. Second quarter 2023 Support Services operating profit increased by $4.6 million compared to the second quarter of the prior year due to higher activity levels, improved pricing, and leverage of higher revenues over costs that are fixed during the short term.
| (in thousands) | | Three Months Ended | | | Six Months Ended June 30, | ||||||
| | | June 30, | | March 31, | | June 30, | | | | | |
| | | 2023 | | 2023 | | 2022 | | | 2023 | | 2022 |
| | | | | | | | | | | | |
| Revenues: | | | | | | | | | | | |
| Technical Services | $ | 390,018 | $ | 451,991 | $ | 356,103 | | $ | 842,009 | $ | 622,452 |
| Support Services | | 25,840 | | 24,677 | | 19,404 | | | 50,517 | | 37,679 |
| Total revenues | $ | 415,858 | $ | 476,668 | $ | 375,507 | | $ | 892,526 | $ | 660,131 |
| Operating profit: | | | | | | | | | | | |
| Technical Services | $ | 77,017 | $ | 103,533 | $ | 59,827 | | $ | 180,550 | $ | 81,638 |
| Support Services | | 7,920 | | 6,644 | | 3,334 | | | 14,564 | | 6,114 |
| Corporate expenses | | (4,672) | | (5,081) | | (4,544) | | | (9,753) | | (9,054) |
| Pension settlement charges | | (911) | | (17,375) | | - | | | (18,286) | | - |
| Gain on disposition of assets, net | | 3,015 | | 2,936 | | 1,798 | | | 5,951 | | 4,752 |
| Total operating profit | $ | 82,369 Werbung Mehr Nachrichten zur RPC Aktie kostenlos abonnieren
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