ATLANTA, Oct. 23, 2019 /PRNewswire/ -- RPC, Inc.
(NYSE: RES) today announced its unaudited results for the third
quarter ended September 30, 2019. 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 September 30,
2019, revenues were $293.2
million, a decrease of 33.4 percent, compared with
$440.0 million in the third quarter
of 2018. Revenues decreased due to lower activity levels and
slightly lower pricing within most of RPC's service lines.
Operating loss for the third quarter of 2019 was $92.6 million compared to operating profit of
$54.6 million in the same period of
the prior year. Adjusted operating loss for the third quarter of
2019 was $21.0 million.2
Net loss for the third quarter of 2019 was $69.2 million, or $0.33 loss per share, compared to net income of
$50.0 million, or $0.23 diluted earnings per share, in the third
quarter of 2018. Adjusted net loss for the third quarter of 2019
was $18.0 million, or $0.08 adjusted loss per share.1
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the third quarter was negative $48.9 million, compared to EBITDA of $97.8 million in the same period of the prior
year.3 Adjusted earnings before interest, taxes,
depreciation and amortization (adjusted EBITDA) for the third
quarter was $22.8
million.3
For the nine months ended September 30,
2019, revenues decreased to $986.4
million compared to $1.34
billion in the same period last year. Net loss for the
nine-month period was $63.7 million,
or $0.30 loss per share, compared to
net income of $162.0 million, or
$0.75 diluted earnings per share in
the same period last year. Adjusted net loss for the nine-month
period was $12.5 million, or
$0.06 adjusted loss per
share.1
Cost of revenues during the third quarter of 2019 was
$225.2 million, or 76.8 percent of
revenues, compared to $300.9 million,
or 68.4 percent of revenues, during the third quarter of 2018. Cost
of revenues decreased, consistent with lower activity levels, due
to lower materials and supplies expenses, employment costs, and
other expenses that vary with activity levels. Cost of revenues as
a percentage of revenues increased due to lower activity levels,
increasingly competitive pricing for our services, and labor cost
inefficiencies.
Selling, general and administrative expenses were $42.6 million in the third quarter of 2019
compared with $41.8 million in the
third quarter of 2018. As a percentage of revenues, these expenses
increased to 14.5 percent in the third quarter of 2019 compared
with 9.5 percent in the third quarter of 2018. Depreciation and
amortization increased to $44.7
million in the third quarter of 2019 compared with
$43.0 million in the third quarter of
the prior year.
Discussion of Sequential Quarterly Financial Results
RPC's revenues for the quarter ended September 30, 2019 decreased by $65.3 million, or 18.2 percent, compared with the
second quarter of 2019 due primarily to lower activity levels in
pressure pumping. Cost of revenues during the third quarter of 2019
decreased by $39.9 million, or 15.0
percent, due primarily to decreases in materials and supplies
expenses and other expenses which vary with activity levels. As a
percentage of revenues, cost of revenues increased from 73.9
percent in the second quarter of 2019 to 76.8 percent in the third
quarter of 2019, due primarily to labor inefficiencies and
increasingly competitive pricing for our services. RPC's adjusted
operating loss for the third quarter of 2019 was $21.0 million, compared with operating income of
$8.4 million in the second quarter of
2019. Adjusted EBITDA for the third quarter of 2019 was
$22.8 million compared to EBITDA of
$51.2 million in the prior
quarter.
Management Commentary
"The average U.S. domestic rig count during the third quarter of
2019 was 920, a 12.5 percent decrease compared to the same period
in 2018, and a 7.0 percent decrease compared to the second quarter
of 2019," stated Richard A. Hubbell,
RPC's President and Chief Executive Officer. "The average price of
oil during the third quarter was $56.39 per barrel, a 19.1 percent decrease
compared to the same period in 2018 and a 5.8 percent decrease
compared to the second quarter of 2019. The average price of
natural gas during the third quarter was $2.38 per Mcf, an 18.8 percent decrease compared
to the same period in 2018, and a 7.4 percent decrease compared to
the second quarter of 2019. Our significant sequential revenue
declines were driven by pronounced weakness in pressure pumping and
coiled tubing. Although many service companies are idling fleets,
the pressure pumping industry continues to be oversupplied.
"In our second quarter commentary, we stated there were
indications customer activities would decline during the third
quarter. Because these declines did occur and are expected to
continue in the near term, we are adjusting our operating strategy
to compete in this difficult market. During the third quarter we
began closing several pressure pumping-related facilities, retiring
older pressure pumping equipment, and reducing the number of
staffed fleets and operational and administrative employee
headcount. In connection with the preparation of our third quarter
financial statements, we recorded impairment and other charges of
$71.7 million of which $69.7 million was in our Technical Services
segment and $2.0 million in
Corporate expenses, of which $5.9
million will have a cash impact.
"The locations we are closing have inadequate utilization of
equipment and crews. The older pressure pumping equipment is being
retired because it no longer effectively meets the industry's
current market requirements, needs more maintenance, and is not
expected to generate adequate returns in the future. As a result of
these steps, RPC will be better positioned to compete in a
difficult market environment.
"Capital expenditures during the third quarter of 2019 were
$77.0 million. We finished the third
quarter with $49.5 million in cash, a
slight increase compared with the end of the second quarter and
continue to remain debt free. In spite of a very challenging
operating environment and our impairment charge, our balance sheet
remains strong," concluded Hubbell.
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, coiled tubing, hydraulic workover
services, nitrogen, surface pressure control equipment, well
control 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 handling, inspection and storage
services, and oilfield training services.
Technical Services revenues decreased by 34.8 percent for the
quarter compared to the same period of the prior year due to lower
pricing and activity levels within most of the service lines which
comprise this segment. On a sequential basis, Technical Services
revenues decreased by 18.8 percent during the third quarter of 2019
compared to the prior quarter due primarily to lower activity
levels within pressure pumping. Support Services revenues were
unchanged during the quarter compared to the same period of the
prior year. On a sequential basis, Support Services revenues
decreased by 8.4 percent during the third quarter of 2019 compared
to the prior quarter. Technical Services incurred an operating loss
during the third quarter of 2019 compared with an operating profit
during the second quarter due primarily to lower customer activity
within pressure pumping. Support Services' operating profit
declined $2.4 million in the third
quarter of 2019 compared to the prior quarter due to lower revenues
within rental tools, the largest service line in this segment.
(in
thousands)
|
|
Three Months
Ended
|
|
|
Nine Months Ended
September 30,
|
|
|
September
30,
|
|
June 30,
|
|
September
30,
|
|
|
|
|
|
|
|
2019
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Technical Services
|
$
|
274,483
|
$
|
338,034
|
$
|
421,270
|
|
$
|
926,596
|
$
|
1,290,185
|
Support
Services
|
|
18,757
|
|
20,482
|
|
18,723
|
|
|
59,816
|
|
54,069
|
Total
revenues
|
$
|
293,240
|
$
|
358,516
|
$
|
439,993
|
|
$
|
986,412
|
$
|
1,344,254
|
Operating (loss)
profit:
|
|
|
|
|
|
|
|
|
|
|
|
Technical Services
|
$
|
(18,174)
|
$
|
6,850
|
$
|
56,209
|
|
$
|
(15,782)
|
$
|
196,838
|
Support
Services
|
|
1,632
|
|
4,018
|
|
1,788
|
|
|
8,787
|
|
2,075
|
Corporate expenses
|
|
(2,720)
|
|
(3,614)
|
|
(3,730)
|
|
|
(10,678)
|
|
(11,992)
|
Impairment and other charges *
|
|
(71,650)
|
|
-
|
|
-
|
|
|
(71,650)
|
|
-
|
(Loss)
gain on disposition of assets, net
|
|
(1,727)
|
|
1,133
|
|
286
|
|
|
2,910
|
|
3,459
|
Total operating
(loss) profit
|
$
|
(92,639)
|
$
|
8,387
|
$
|
54,553
|
|
$
|
(86,413)
|
$
|
190,380
|
Interest
expense
|
|
(8)
|
|
(164)
|
|
(150)
|
|
|
(261)
|
|
(368)
|
Interest
income
|
|
182
|
|
594
|
|
783
|
|
|
1,576
|
|
1,643
|
Other (expense)
income, net
|
|
(937)
|
|
(53)
|
|
287
|
|
|
(545)
|
|
9,786
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income
before income taxes
|
$
|
(93,402)
|
$
|
8,764
|
$
|
55,473
|
|
$
|
(85,643)
|
$
|
201,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents $69,640 related to
Technical Services and $2,010 related to Corporate
expenses.
|
|
|
|
|
|
RPC, Inc. will hold a conference call today, October 23, 2019 at 9:00
a.m. ET to discuss the results for the third quarter.
Interested parties may listen in by accessing a live webcast in the
investor relations section of RPC, Inc.'s website at www.rpc.net.
The live conference call can also be accessed by calling (800)
353-6461 or (334) 323-0501 for international callers, and use
conference ID number 9015162. For those not able to attend
the live conference call, a replay will be available in the
investor relations section of RPC, Inc.'s website beginning
approximately two hours after the call and for a period of 90
days.
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, including the Gulf of
Mexico, mid-continent, southwest, Appalachian and Rocky
Mountain regions, and in selected international markets. RPC's
investor website can be found at www.rpc.net.
Certain statements and information included in this press
release constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including
all statements that look forward in time or express management's
beliefs, expectations or hopes. These statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of RPC to be materially
different from any future results, performance or achievements
expressed or implied in such forward-looking statements, including
statements that the decline in customer activities during the third
quarter of 2019 are expected to continue; that our older pressure
pumping equipment which is being retired will not generate adequate
returns; and that RPC's steps will better position RPC to compete.
Such risks include changes in general global business and economic
conditions, including volatility of oil and natural gas prices;
credit risks associated with collections of our accounts receivable
from customers experiencing challenging business conditions;
drilling activity and rig count; risks of reduced availability or
increased costs of both labor and raw materials used in providing
our services; the impact on our operations if we are unable to
comply with regulatory and environmental laws; turmoil in the
financial markets and the potential difficulty to fund our capital
needs; the potentially high cost of capital required to fund our
capital needs; the impact of the level of unconventional
exploration and production activities may cease or change in nature
so as to reduce demand for our services; the actions of the OPEC
cartel; the ultimate impact of current and potential political
unrest and armed conflict in the oil production regions of the
world, which could impact drilling activity; adverse weather
conditions in oil and gas producing regions, including the
Gulf of Mexico; competition in the
oil and gas industry; an inability to implement price increases;
risks of international operations; and our reliance upon large
customers. Additional discussion of factors that could cause the
actual results to differ materially from management's projections,
forecasts, estimates and expectations is contained in RPC's Form
10-K filed with the Securities and Exchange Commission for the year
ended December 31, 2018.
For information about RPC, Inc., please contact:
Ben M.
Palmer
|
Jim
Landers
|
Chief Financial
Officer
|
Vice President,
Corporate Finance
|
(404)
321-2140
|
(404)
321-2162
|
irdept@rpc.net
|
jlanders@rpc.net
|
1 Adjusted net loss, adjusted net income, adjusted
loss per share, and adjusted earnings per share are financial
measures which do not conform to GAAP. Additional disclosure
regarding these non-GAAP financial measures and their
reconciliation to net loss, net income, net loss per share, and net
income per share, the nearest GAAP financial measures, are
disclosed in Appendix A to this press release.
2 Adjusted operating loss is a financial measure which
does not conform to GAAP. Additional disclosure regarding this
non-GAAP financial measure and its reconciliation to operating loss
and operating profit, the nearest GAAP financial measures, are
disclosed in Appendix B to this press release.
3 Adjusted EBITDA and EBITDA are financial measures
which do not conform to GAAP. Additional disclosure regarding these
non-GAAP financial measures and their reconciliation to net loss
and net income, the nearest GAAP financial measures, are disclosed
in Appendix C to this press release.
RPC INCORPORATED
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands except per share
data)
|
|
|
|
|
|
|
|
|
|
Periods ended,
(Unaudited)
|
|
|
Three Months Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
2019
|
|
|
June 30,
2019
|
|
|
September 30,
2018
|
|
|
2019
|
|
|
2018
|
REVENUES
|
|
$
|
293,240
|
|
$
|
358,516
|
|
$
|
439,994
|
|
$
|
986,412
|
|
$
|
1,344,254
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
225,230
|
|
|
265,088
|
|
|
300,947
|
|
|
742,713
|
|
|
908,631
|
Selling, general and
administrative expenses
|
|
42,571
|
|
|
43,293
|
|
|
41,787
|
|
|
131,285
|
|
|
128,135
|
Impairment and other
charges
|
|
|
71,650
|
|
|
-
|
|
|
-
|
|
|
71,650
|
|
|
-
|
Depreciation and
amortization
|
|
|
44,701
|
|
|
42,881
|
|
|
42,993
|
|
|
130,087
|
|
|
120,567
|
Loss (gain) on
disposition of assets, net
|
|
|
1,727
|
|
|
(1,133)
|
|
|
(286)
|
|
|
(2,910)
|
|
|
(3,459)
|
Operating (loss)
profit
|
|
|
(92,639)
|
|
|
8,387
|
|
|
54,553
|
|
|
(86,413)
|
|
|
190,380
|
Interest
expense
|
|
|
(8)
|
|
|
(164)
|
|
|
(150)
|
|
|
(261)
|
|
|
(368)
|
Interest
income
|
|
|
182
|
|
|
594
|
|
|
783
|
|
|
1,576
|
|
|
1,643
|
Other (expense)
income, net
|
|
|
(937)
|
|
|
(53)
|
|
|
287
|
|
|
(545)
|
|
|
9,786
|
(Loss) Income before
income taxes
|
|
|
(93,402)
|
|
|
8,764
|
|
|
55,473
|
|
|
(85,643)
|
|
|
201,441
|
Income tax (benefit)
provision
|
|
|
(24,221)
|
|
|
2,593
|
|
|
5,506
|
|
|
(21,894)
|
|
|
39,401
|
NET (LOSS)
INCOME
|
|
$
|
(69,181)
|
|
$
|
6,171
|
|
$
|
49,967
|
|
$
|
(63,749)
|
|
$
|
162,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.33)
|
|
$
|
0.03
|
|
$
|
0.23
|
|
$
|
(0.30)
|
|
$
|
0.75
|
Diluted
|
|
$
|
(0.33)
|
|
$
|
0.03
|
|
$
|
0.23
|
|
$
|
(0.30)
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
212,025
|
|
|
214,908
|
|
|
214,807
|
|
|
212,285
|
|
|
215,362
|
Diluted
|
|
|
212,025
|
|
|
214,908
|
|
|
214,807
|
|
|
212,285
|
|
|
215,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPC INCORPORATED
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
At September 30,
(Unaudited)
|
|
(In
thousands)
|
|
|
2019
|
|
|
2018
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
49,523
|
|
$
|
128,373
|
Accounts receivable,
net
|
|
288,563
|
|
|
382,755
|
Inventories
|
|
107,028
|
|
|
128,957
|
Income taxes
receivable
|
|
20,771
|
|
|
11,578
|
Prepaid
expenses
|
|
6,531
|
|
|
6,344
|
Assets held for
sale
|
|
5,385
|
|
|
-
|
Other current
assets
|
|
3,310
|
|
|
5,583
|
Total current
assets
|
|
481,111
|
|
|
663,590
|
Property, plant and
equipment, net
|
|
528,925
|
|
|
515,805
|
Operating lease
right-of-use assets
|
|
35,556
|
|
|
-
|
Goodwill
|
|
32,150
|
|
|
32,150
|
Other
assets
|
|
32,121
|
|
|
34,117
|
Total
assets
|
$
|
1,109,863
|
|
$
|
1,245,662
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts
payable
|
$
|
82,813
|
|
$
|
127,161
|
Accrued payroll and
related expenses
|
|
24,022
|
|
|
32,140
|
Accrued insurance
expenses
|
|
6,489
|
|
|
5,903
|
Accrued state, local
and other taxes
|
|
7,368
|
|
|
7,110
|
Income taxes
payable
|
|
849
|
|
|
4,999
|
Current portion of
operating lease liabilities
|
|
11,066
|
|
|
-
|
Other accrued
expenses
|
|
3,613
|
|
|
272
|
Total current
liabilities
|
|
136,220
|
|
|
177,585
|
Long-term accrued
insurance expenses
|
|
13,543
|
|
|
11,435
|
Long-term pension
liabilities
|
|
33,575
|
|
|
30,294
|
Long-term operating
lease liabilities
|
|
30,165
|
|
|
-
|
Other long-term
liabilities
|
|
2,505
|
|
|
3,834
|
Deferred income
taxes
|
|
38,680
|
|
|
45,913
|
Total
liabilities
|
|
254,688
|
|
|
269,061
|
Common
stock
|
|
21,450
|
|
|
21,480
|
Capital in excess of
par value
|
|
-
|
|
|
-
|
Retained
earnings
|
|
854,170
|
|
|
971,382
|
Accumulated other
comprehensive loss
|
|
(20,445)
|
|
|
(16,261)
|
Total
stockholders' equity
|
|
855,175
|
|
|
976,601
|
Total
liabilities and stockholders' equity
|
$
|
1,109,863
|
|
$
|
1,245,662
|
Appendix A
RPC, Inc. has used the non-GAAP financial measures of adjusted
net loss, adjusted net income, adjusted loss per share, and
adjusted earnings per share in today's earnings release, and
anticipates using these non-GAAP financial measures in today's
earnings conference call. These measures should not be
considered in isolation or as a substitute for net income, earnings
per share, or other performance measures prepared in accordance
with GAAP.
Management believes that presenting the financial measures of
adjusted net loss, adjusted net income, adjusted loss per share,
and adjusted earnings per share enable us to compare our operating
performance consistently over various time periods without regard
to non-recurring items.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of this non-GAAP measure with its
most comparable GAAP measures. This reconciliation also
appears on RPC, Inc.'s investor website, which can be found on the
Internet at www.rpc.net.
The Reconciliation of Net (Loss) Income to Adjusted Net (Loss)
Income and the Reconciliation of Net (Loss) Income Per Share to
Adjusted Net (Loss) Income Per Share is shown below:
Periods ended,
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(In
thousands)
|
|
|
September
30,
2019
|
|
|
June 30,
2019
|
|
|
September
30,
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net (Loss) Income to Adjusted Net (Loss) Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
|
$
|
(69,181)
|
|
$
|
6,171
|
|
$
|
49,967
|
|
$
|
(63,749)
|
|
$
|
162,040
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discrete tax
adjustment
|
|
|
(6,744)
|
|
|
-
|
|
|
-
|
|
|
(6,744)
|
|
|
-
|
Impairment and other
charges, net of tax
|
|
57,947
|
|
|
-
|
|
|
-
|
|
|
57,947
|
|
|
-
|
Total Impact of Discrete tax adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Impairment and other charges
|
|
51,203
|
|
|
-
|
|
|
-
|
|
|
51,203
|
|
|
-
|
Adjusted Net (Loss)
Income
|
|
$
|
(17,978)
|
|
$
|
6,171
|
|
$
|
49,967
|
|
$
|
(12,546)
|
|
$
|
162,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net (Loss) Income Per Share to Adjusted Net (Loss) Income Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income Per
Share
|
|
$
|
(0.33)
|
|
$
|
0.03
|
|
$
|
0.23
|
|
$
|
(0.30)
|
|
$
|
0.75
|
Total Impact of Discrete tax adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Impairment and other charges
|
$
|
0.24
|
|
$
|
-
|
|
$
|
-
|
|
$
|
0.24
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net (Loss) Income Per Share(a)
|
$
|
(0.08)
|
|
$
|
0.03
|
|
$
|
0.23
|
|
$
|
(0.06)
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
212,025
|
|
|
214,908
|
|
|
214,807
|
|
|
212,285
|
|
|
215,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Net
(Loss) Income per Share Excluding the Impact of Discrete tax
adjustment and Impairment and other charges in the Three Months
Ended September 30, 2019 does not sum because of
rounding.
|
Appendix B
RPC, Inc. has used the non-GAAP financial measure of adjusted
operating loss and adjusted operating profit in today's earnings
release, and anticipates using this non-GAAP financial measure in
today's earnings conference call. This measure should not be
considered in isolation or as a substitute for net income, earnings
per share, or other performance measures prepared in accordance
with GAAP.
Management believes that presenting the financial measure of
adjusted operating loss and adjusted operating profit enables us to
compare our operating performance consistently over various time
periods without regard to non-recurring items.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of this non-GAAP measure with its
most comparable GAAP measures. This reconciliation also
appears on RPC, Inc.'s investor website, which can be found on the
Internet at www.rpc.net.
The Reconciliation of Operating (Loss) Profit to Adjusted
Operating (Loss) Profit, the nearest performance measure prepared
in accordance with GAAP, is shown below:
Periods ended,
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(In
thousands)
|
|
|
September
30,
2019
|
|
|
June 30,
2019
|
|
|
September
30,
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating (Loss) Profit to Adjusted Operating (Loss)
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
|
$
|
(92,639)
|
|
$
|
8,387
|
|
$
|
54,553
|
|
$
|
(86,413)
|
|
$
|
190,380
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and other
charges
|
|
|
71,650
|
|
|
-
|
|
|
-
|
|
|
71,650
|
|
|
-
|
Adjusted Operating
(Loss) Profit
|
|
$
|
(20,989)
|
|
$
|
8,387
|
|
$
|
54,553
|
|
$
|
(14,763)
|
|
$
|
190,380
|
Appendix C
RPC has used the non-GAAP financial measures of earnings before
interest, taxes, depreciation and amortization (EBITDA) and
adjusted earnings before interest, taxes, depreciation and
amortization (adjusted EBITDA) in today's earnings release, and
anticipates using EBITDA and adjusted EBITDA in today's earnings
conference call. EBITDA and adjusted EBITDA should not be
considered in isolation or as a substitute for operating income,
net income or other performance measures prepared in accordance
with GAAP.
RPC uses EBITDA and adjusted EBITDA as a measure of operating
performance because it allows us to compare performance
consistently over various periods without regard to changes in our
capital structure or non-recurring items. We are also required to
use EBITDA to report compliance with financial covenants under our
revolving credit facility.
A non-GAAP financial measure is a numerical measure of financial
performance, financial position, or cash flows that either 1)
excludes amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet or statement of cash
flows, or 2) includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable measure so calculated and presented. Set
forth below is a reconciliation of EBITDA and adjusted EBITDA with
net loss and net income, the most comparable GAAP measures.
This reconciliation also appears on RPC's investor website, which
can be found on the Internet at www.rpc.net.
The Reconciliation of Net (Loss) Income to EBITDA and Adjusted
EBITDA is shown below:
Periods ended,
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(In
thousands)
|
|
|
September
30,
2019
|
|
|
June 30,
2019
|
|
|
September
30,
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net (Loss) Income to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
|
$
|
(69,181)
|
|
$
|
6,171
|
|
$
|
49,967
|
|
$
|
(63,749)
|
|
$
|
162,040
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
|
|
(24,221)
|
|
|
2,593
|
|
|
5,506
|
|
|
(21,894)
|
|
|
39,401
|
Interest expense
|
|
|
8
|
|
|
164
|
|
|
150
|
|
|
261
|
|
|
368
|
Depreciation and
amortization
|
|
|
44,701
|
|
|
42,881
|
|
|
42,993
|
|
|
130,087
|
|
|
120,567
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
182
|
|
|
594
|
|
|
783
|
|
|
1,576
|
|
|
1,643
|
EBITDA
|
|
$
|
(48,875)
|
|
|
51,215
|
|
|
97,833
|
|
|
43,129
|
|
|
320,733
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and other
charges
|
|
|
71,650
|
|
|
-
|
|
|
-
|
|
|
71,650
|
|
|
-
|
Adjusted
EBITDA
|
|
$
|
22,775
|
|
$
|
51,215
|
|
$
|
97,833
|
|
$
|
114,779
|
|
$
|
320,733
|
View original
content:http://www.prnewswire.com/news-releases/rpc-inc-reports-third-quarter-2019-financial-results-300943561.html
SOURCE RPC, Inc.