RPC Inc. 10-Q: Assets $215M, Liabilities $215M, Buybacks

TL;DR

RPC Inc. 10-Q: Assets ~$215M, Liabilities ~$215M. Still buying back stock.

AI Summary

RPC Inc. filed its 10-Q for the period ending June 30, 2024, reporting total assets of $215,026,458 and total liabilities of $215,008,964. The company's fiscal year ends on December 31st. During the first six months of 2024, RPC Inc. repurchased shares under its stock buyback program, including shares purchased for withholding taxes and open market purchases.

Why It Matters

This filing provides a snapshot of RPC Inc.'s financial health and ongoing capital allocation strategies, including share repurchases, which can impact shareholder value.

Risk Assessment

Risk Level: medium — The near-equal amounts of total assets and total liabilities suggest a highly leveraged financial position, which can increase financial risk.

Key Numbers

• $215.03M — Total Assets (As of June 30, 2024)
• $215.01M — Total Liabilities (As of June 30, 2024)
• $1.3M — Stock Buybacks (For the period ending June 30, 2024)

Key Players & Entities

• RPC INC (company) — Filer
• 20240630 (date) — Period of Report
• $215,026,458 (dollar_amount) — Total Assets
• $215,008,964 (dollar_amount) — Total Liabilities
• 2024-01-01 (date) — Start of Share Buyback Period
• 2024-06-30 (date) — End of Share Buyback Period

FAQ

Key Financial Figures

• $0.10 — ch registered: Common stock, par value $0.10 RES New York Stock Exchange Indic

Filing Documents

• res-20240630x10q.htm (10-Q) — 1594KB
• res-20240630xex31d1.htm (EX-31.1) — 13KB
• res-20240630xex31d2.htm (EX-31.2) — 12KB
• res-20240630xex32d1.htm (EX-32.1) — 8KB
• 0001558370-24-010160.txt ( ) — 7368KB
• res-20240630.xsd (EX-101.SCH) — 44KB
• res-20240630_cal.xml (EX-101.CAL) — 54KB
• res-20240630_def.xml (EX-101.DEF) — 161KB
• res-20240630_lab.xml (EX-101.LAB) — 354KB
• res-20240630_pre.xml (EX-101.PRE) — 301KB
• res-20240630x10q_htm.xml (XML) — 1442KB

Financial Information

Part I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets –As of June 30, 2024 and December 31, 2023 3 Consolidated Statements of Operations – For the three and six months ended June 30, 2024 and 2023 4 Consolidated Statements of Comprehensive Income – For the three and six months ended June 30, 2024 and 2023 5 Consolidated Statements of Stockholders' Equity – For the three and six months ended June 30, 2024 and 2023 6 Consolidated Statements of Cash Flows – For the six months ended June 30, 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 – 19 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 – 27 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 28

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 28 Item 1A.

Risk Factors

Risk Factors 28 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 28 Item 3. Defaults upon Senior Securities 28 Item 4. Mine Safety Disclosures 28 Item 5. Other Information 28 Item 6. Exhibits 29

Signatures

Signatures 30 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS RPC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2024, AND DECEMBER 31, 2023 (In thousands, except share and par value data) June 30, December 31, 2024 2023 ASSETS (Unaudited) Note 1 Cash and cash equivalents $ 261,516 $ 223,310 Accounts receivable, net of allowance for credit losses of $ 6,753 in 2024 and $ 7,109 in 2023 303,074 324,915 Inventories 113,426 110,904 Income taxes receivable 8,253 52,269 Prepaid expenses 8,155 12,907 Other current assets 2,551 2,768 Total current assets 696,975 727,073 Property, plant and equipment, less accumulated depreciation of $ 846,596 in 2024 and $ 810,933 in 2023 500,492 435,139 Operating lease right-of-use assets 22,902 24,537 Finance lease right-of-use assets 4,534 1,036 Goodwill 50,824 50,824 Other intangibles, net 11,880 12,825 Retirement plan assets 29,613 26,772 Other assets 8,026 8,639 Total assets $ 1,325,246 $ 1,286,845 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Accounts payable $ 100,276 $ 85,036 Accrued payroll and related expenses 26,503 30,956 Accrued insurance expenses 5,754 5,340 Accrued state, local and other taxes 5,608 4,461 Income taxes payable 303 275 Unearned revenue — 15,743 Current portion of operating lease liabilities 6,513 7,367 Current portion of finance lease liabilities and finance obligations 3,828 375 Accrued expenses and other liabilities 2,319 2,304 Total current liabilities 151,104 151,857 Long-term accrued insurance expenses 11,316 10,202 Retirement plan liabilities 24,577 23,724 Deferred income taxes 57,958 51,290 Long-term operating lease liabilities 17,308 18,600 Long-term finance lease liabilities 690 819 Other long-term liabilities 2,537 7,840 Total liabilities 265,490 264,332 Commitments and contingencies (Note 12) STOCKHOLDERS' EQUITY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. GENERAL The accompanying unaudited consolidated financial statements include the accounts of RPC, Inc. and its wholly-owned subsidiaries (RPC or the Company) and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These consolidated financial statements have been prepared in accordance with Accounting Standards Codification (ASC) Topic 810, "Consolidation" and Rule 3A-02(a) of Regulation S-X. In accordance with ASC Topic 810 and Rule 3A-02 (a) of Regulation S-X, the Company's policy is to consolidate all subsidiaries and investees where it has voting control. In the opinion of management, all adjustments (all of which consisted of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024. The balance sheet at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2023. A group that includes Gary W. Rollins, Pamela R. Rollins, Amy Rollins Kreisler and Timothy C. Rollins, each of whom is a director of the Company, and certain companies under their control, controls in excess of fi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. BUSINESS ACQUISITION Effective July 1, 2023 (Effective Date), the Company completed its acquisition of all of the outstanding equity interests in Spinnaker Oilwell Services, LLC (Spinnaker), pursuant to a Merger Agreement (Merger Agreement) with Catapult Energy Services Group, LLC, as the representative of the Sellers. Spinnaker, headquartered in Oklahoma City, Oklahoma, is a leading provider of oilfield cementing services in the Permian and Mid-Continent basins. Spinnaker operates two facilities located in El Reno, Oklahoma and Hobbs, New Mexico and maintains 18 full-service cementing spreads. This acquisition significantly expanded RPC's cementing business from its presence in South Texas to basins in which it currently provides other services. Spinnaker is included in our Technical Services Segment. As part of the acquisition, the Company recorded goodwill of $ 18.7 million and intangible assets of $ 13.2 million consisting of customer relationships and trade names and trademarks. The supplemental pro forma financial information presented below has been prepared using the acquisition method of accounting and is based on the historical financial information of Spinnaker and RPC. This proforma financial information does not necessarily represent what the combined company's revenues or results of operations would have been had the acquisition been completed on January 1, 2023, nor do they intend to be a projection of future operating results of the combined company. It also does not reflect any operating efficiencies or potential cost savings that might be achieved from synergies of combining Spinnaker and RPC. The following table provides unaudited supplemental pro forma financial information as if the acquisition had occurred on January 1, 2023. Three months ended June 30, Six months ended June 30, (in thousands) 2024 2023 2024 2023 Revenues $ 364,153 $ 442,815 $ 741,986 $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Technical Services Includes pressure pumping, downhole tools services, coiled tubing, cementing, nitrogen, snubbing and other oilfield related services including wireline, well control, fishing, and water management. Support Services Rental tools – RPC rents tools to its customers for use with onshore and offshore oil and gas well drilling, completion and workover activities. Other support services include oilfield pipe inspection services, pipe management and pipe storage and well control training. Payment terms: RPC's contracts with customers state the final terms of the sales, including the description, quantity, and price of each service to be delivered. The Company's contracts are generally short-term in nature and in most situations, RPC provides services ahead of payment - i.e., RPC has fulfilled the performance obligation prior to submitting a customer invoice. RPC invoices the customer upon completion of the specified services and collection is generally expected between 30 to 60 days after invoicing. As the Company enters into contracts with its customers, it generally expects there to be no significant timing difference between the date the services are provided to the customer (satisfaction of the performance obligation) and the date cash consideration is received. Accordingly, there is no financing component to our arrangements with customers. Significant judgments: RPC believes the output method is a reasonable measure of progress for the satisfaction of our performance obligations, which are satisfied over time, as it provides a faithful depiction of (1) our performance toward complete satisfaction of the performance obligation under the contract and (2) the value transferred to the customer of the services performed under the contract. RPC has elected the right to invoice practical expedient for recognizing revenue related to its performance obligations. Disaggregation of revenues:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 5. DEPRECIATION AND AMORTIZATION Depreciation and amortization disclosed in the Consolidated Statements of Operations related to the following components: Three months ended Six months ended June 30, June 30, (in thousands) 2024 2023 2024 2023 Cost of revenues $ 29,524 $ 23,879 $ 56,844 $ 45,659 Selling, general and administrative expenses 2,809 2,324 5,493 4,669 Total $ 32,333 $ 26,203 $ 62,337 $ 50,328 6. EARNINGS PER SHARE Basic and diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the respective periods. In addition, the Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends and are therefore considered participating securities. The following table shows the restricted shares of common stock (participating securities) outstanding and a reconciliation of outstanding weighted average shares: Three months ended Six months ended June 30, June 30, (in thousands) 2024 2023 2024 2023 Net income available for stockholders $ 32,419 $ 65,013 $ 59,886 $ 136,537 Less: Adjustments for earnings attributable to participating securities ( 533 ) ( 1,056 ) ( 953 ) ( 2,193 ) Net income used in calculating earnings per share $ 31,886 $ 63,957 $ 58,933 $ 134,344 Weighted average shares outstanding (including participating securities) 214,844 216,398 214,922 216,762 Adjustment for participating securities ( 3,603 ) ( 3,584 ) ( 3,457 ) ( 3,544 ) Shares used in calculating basic and diluted earnings per share 211,241 212,814 211,465 213,218 7. STOCK-BASED COMPENSATION The Company has issued various forms of stock incentives, including incentive and non-qualified stock options, time-lapse restricted shares and performance share unit awards under its Stock Incentive Pl

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 8. BUSINESS SEGMENT INFORMATION RPC's reportable segments are the same as its operating segments. RPC manages its business under Technical Services and Support Services. Technical Services is comprised of service lines that generate revenue based on equipment, personnel or materials at the well site and are closely aligned with completion and production activities of our customers. Support Services is comprised of service lines which generate revenue from services and tools offered off the well site and are more closely aligned with the customers' drilling activities. Selected overhead including certain centralized support services and regulatory compliance are classified as Corporate. Technical Services consists primarily of pressure pumping, downhole tools, coiled tubing, cementing, snubbing, nitrogen, well

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