ATLANTA - RPC, Inc. (NYSE: RES) announced its unaudited results for the fourth quarter and year ended December 31, 2022. 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 December 31, 2022, RPC generated revenues of $482.0 million, an increase of 4.9 percent compared to $459.6 million in the third quarter of 2022. The improvement in revenues was driven by improved pricing in most of our service lines and higher equipment utilization supported by a full quarter of operation for our most recently reactivated pressure pumping fleet. Operating profit for the fourth quarter of 2022 was $112.3 million compared to operating profit of $92.2 million in the third quarter of 2022. Net income for the fourth quarter of 2022 was $87.0 million, or $0.40 diluted earnings per share, compared to net income of $69.3 million, or $0.32 diluted earnings per share, in the third quarter of 2022. Earnings before interest, taxes, depreciation, and amortization (EBITDA)1 for the fourth quarter of 2022 was $135.5 million, compared to $113.0 million in the third quarter of 2022, an increase of 19.8 percent.
Cost of revenues during the fourth quarter of 2022 was $308.6 million, or 64.0 percent of revenues, compared to $309.8 million, or 67.4 percent of revenues in the third quarter of 2022. Cost of revenues as a percentage of revenues decreased during the quarter due to improved job mix and continued strong pricing for our services.
Selling, general and administrative expenses were $38.2 million in both the fourth and third quarters of 2022. Depreciation and amortization was $22.5 million in the fourth quarter of 2022 compared to $20.9 million in the third quarter of 2022.
During the fourth quarter of 2022 RPC also recorded a $2.9 million pension settlement charge. Adjusted net income during the fourth quarter was $89.2 million and adjusted diluted earnings per share was $0.41.2 We expect to finalize the termination of the pension plan in the first quarter of 2023.
For the twelve months ended December 31, 2022, revenues increased 85.2 percent to $1.6 billion compared to $864.9 million for 2021. Net income for the twelve-month period was $218.4 million, or $1.01 diluted earnings per share, compared to $7.2 million, or $0.03 diluted earnings per share, for 2021.
RPC's revenues for the quarter ended December 31, 2022 increased by $213.8 million, or 79.7 percent, compared to the fourth 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 fourth quarter of 2022 increased by $107.9 million compared to the fourth quarter of 2021. As a percentage of revenues, cost of revenues decreased to 64.0 percent in the fourth quarter of 2022 from 74.8 percent in the fourth quarter of 2021 because of improved pricing for our services and leverage of direct employment costs.
Selling, general and administrative expenses increased by $6.1 million in the fourth quarter of 2022 compared to the fourth quarter of the prior year. RPC's operating profit in the fourth quarter of 2022 was $112.3 million, compared to an operating profit of $20.1 million in the fourth quarter of 2021. Net income for the fourth quarter of 2022 was $87.0 million compared to net income of $12.3 million in the fourth quarter of 2021. EBITDA2 for the fourth quarter of 2022 was $135.5 million compared to $39.4 million in the fourth quarter of 2021.
Rig Count and Commodity Price Statistics
The average U.S. domestic rig count during the fourth quarter of 2022 was 776, a 2.0 percent increase compared to the third quarter of 2022 and a 38.3 percent increase compared to the same period in 2021. The average price of oil during the fourth quarter of 2022 was $82.67 per barrel, an 11.0 percent decrease compared to the third quarter of 2022, but a 26.8 percent increase compared to the same period in 2021. The average price of natural gas during the fourth quarter of 2022 was $5.55 per Mcf, an increase of 17.3 percent compared to the third quarter of 2022, and a one percent increase compared to the same period in 2021.
Management Commentary
'RPC's fourth quarter financial results reflect a continued strong oilfield operating environment, which led to a sequential revenue increase during a quarter that is traditionally impacted by holidays, inclement weather and customer budgets. Our customers were eager to continue their operations throughout the quarter. Most of our service lines realized higher revenues during the fourth quarter due to strong activity and pricing improvements,' stated Ben M. Palmer, RPC's President and Chief Executive Officer. 'As we begin the first quarter of 2023, we expect continued robust drilling and completion activities based on indications from most customers.
'I am pleased to report that our cash balance increased by $90.5 million during the fourth quarter to $126.4 million. Our cash balance improved significantly despite increasing activity and capital expenditures of $49.3 million during the quarter. Our strong capital position at the end of 2022 and expectations for 2023 will allow us to continue to invest in our businesses and return capital to our shareholders. Yesterday RPC's Board of Directors doubled our quarterly dividend to $0.04 per share from $0.02 per share in the prior quarter,' 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, 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 fourth quarter 2022 revenues increased 5.1 percent compared to the prior quarter and by 80.1 percent compared to the same period of the prior year. Technical Services generated an operating profit of $110.5 million in the fourth quarter of 2022 compared to an operating profit of $89.5 million in the prior quarter, and an operating profit of $20.5 million in the fourth quarter of the prior year. The sequential and year-over-year improvements in Technical Services operating results were driven by higher customer activity levels and improved pricing and a larger active fleet of revenue-producing equipment.
Support Services revenues were unchanged during the fourth quarter of 2022 compared to the prior quarter but increased 73.1 percent compared to the same period of the prior year. The revenue increase compared to the fourth quarter of 2021 was due to higher activity levels and improved pricing within rental tools. Support Services generated an operating profit of $6.7 million in the fourth quarter of 2022 compared to an operating profit of $5.3 million in the prior quarter, and an operating loss of $373 thousand in the same period of the prior year.
RPC, Inc. will hold a conference call today, January 25, 2023 at 9:00 a.m. ET to discuss the results for the quarter. Interested parties may listen in by accessing a live webcast in the investor relations section of RPC, Inc.'s website at rpc.net. The live conference call can also be accessed by calling (888) 440-5966 or (646) 960-0125 for international callers and use conference ID number 9842359. 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 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 regarding (i) our belief that most customers plan to continue robust drilling and completion activities during the first quarter of 2023 plans to continue to invest in our business and return capital to our shareholders. 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 for the year ended December 31, 2021.
Contact:
Michael L. Schmit
Chief Financial Officer
T: (404) 321-2140
E: irdept@rpc.net
Jim Landers
Vice President Corporate Services
T: (404) 321-2162
E: JLanders@rpc.net
RPC, INC. 
