ATLANTA - RPC, Inc. (NYSE: RES) today announced its unaudited results for the fourth quarter and year ended December 31, 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 December 31, 2019, revenues were $236.0 million, a decrease of 37.4 percent, compared with $376.8 million in the fourth quarter of 2018. Revenues decreased due to lower activity levels and pricing, a more pronounced fourth quarter seasonal decline than in the prior year, and a smaller fleet of pressure pumping equipment. Operating loss for the fourth quarter of 2019 was $27.9 million compared to operating profit of $19.7 million in the same period of the prior year. Adjusted operating loss for the fourth quarter of 2019 was $17.3 million.2 Net loss for the fourth quarter of 2019 was $23.4 million, or $0.11 loss per share, compared to net income of $13.4 million, or $0.06 diluted earnings per share, in the fourth quarter of 2018. Adjusted net loss for the fourth quarter of 2019 was $13.9 million, or $0.07 adjusted loss per share.1 Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2019 was $12.6 million, compared to EBITDA of $61.7 million in the same period of the prior year.3 Adjusted EBITDA for the fourth quarter of 2019 was $23.2 million.3
For the 12 months ended December 31, 2019, revenues decreased to $1.22 billion compared to $1.72 billion in the prior year. Net loss for the 12 months ended December 31, 2019 was $87.1 million, or $0.41 loss per share, compared to net income of $175.4 million, or $0.82 diluted earnings per share in the prior year. Adjusted net loss for the 12 months ended December 31, 2019 was $26.5 million, or $0.12 adjusted loss per share.1
Cost of revenues during the fourth quarter of 2019 was $176.9 million, or 75.0 percent of revenues, compared to $274.4 million, or 72.8 percent of revenues, during the fourth quarter of 2018. Cost of revenues decreased primarily due to lower materials and supplies expenses and other expenses associated with lower activity levels. In addition, cost of revenues declined due to lower employment costs as a result of our downsizing. Cost of revenues as a percentage of revenues increased primarily due to lower activity levels and more competitive pricing for our services.
Selling, general and administrative expenses were $36.8 million in the fourth quarter of 2019 compared with $40.0 million in the fourth quarter of 2018, primarily due to lower employment costs. Depreciation and amortization decreased to $40.3 million in the fourth quarter of 2019 compared with $42.6 million in the fourth quarter of the prior year.
Discussion of Sequential Quarterly Financial Results
RPC's revenues for the quarter ended December 31, 2019 decreased by $57.2 million, or 19.5 percent, compared with the third quarter of 2019 due to seasonally lower activity levels and a smaller active fleet of pressure pumping equipment. Cost of revenues during the fourth quarter of 2019 decreased by $48.3 million, or 21.5 percent, due to lower activity levels and our cost reduction actions. As a percentage of revenues, cost of revenues decreased from 76.8 percent in the third quarter of 2019 to 75.0 percent in the fourth quarter of 2019, due primarily to a favorable job mix within RPC's pressure pumping service line. RPC's adjusted operating loss for the fourth quarter of 2019 was $17.3 million, compared with an adjusted operating loss of $21.0 million in the third quarter of 2019. 2 Adjusted EBITDA for the fourth quarter of 2019 was $23.2 million compared to adjusted EBITDA of $22.8 million in the prior quarter. 3
Management Commentary
'The average U.S. domestic rig count during the fourth quarter of 2019 was 820, a 23.6 percent decrease compared to the same period in 2018, and a 10.9 percent decrease compared to the third quarter of 2019,' stated Richard A. Hubbell, RPC's President and Chief Executive Officer. 'The average price of oil during the fourth quarter was $56.74 per barrel, a 4.4 percent decrease compared to the same period in 2018, but a 0.6 percent increase compared to the third quarter of 2019. The average price of natural gas during the fourth quarter was $2.41 per Mcf, a 36.2 percent decrease compared to the same period in 2018, but a 1.3 percent increase compared to the third quarter of 2019.
'During the fourth quarter we continued to execute our downsizing plans we first disclosed in October, including closing facilities, scrapping equipment and reducing headcount. In connection with the preparation of our fourth quarter financial statements, we recorded additional impairment and other charges of $10.6 million in our Technical Services segment related primarily to severance and underutilized assets. We believe these are appropriate measures for RPC given the numerous secular changes in the oil and gas industry. As 2020 begins, we are focused on improving our results by improving utilization and well site execution, as well as effectively managing our costs.
'Our capital expenditures during the fourth quarter of 2019 were $41.4 million, and capital expenditures for the 12 months ended December 31, 2019 were $250.6 million, slightly less than previously forecasted. We finished the fourth quarter with $50.0 million in cash and continue to remain debt free,' concluded Hubbell.
Contact:
Ben M. Palmer
Tel: (404) 321-2140
Email: irdept@rpc.net
RPC, INC. 
