-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D9Z8J2RAN5UKjZGwKXuhfotVYz0jXL6to/+uQZpPXZwKgZLQ6/CuKC7AaUTsFjLt Ht7Bzb3I7Rbyzhk8ByYzWg== 0000912057-97-011168.txt : 19970401 0000912057-97-011168.hdr.sgml : 19970401 ACCESSION NUMBER: 0000912057-97-011168 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970331 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RPC INC CENTRAL INDEX KEY: 0000742278 STANDARD INDUSTRIAL CLASSIFICATION: SHIP & BOAT BUILDING & REPAIRING [3730] IRS NUMBER: 581550825 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-08726 FILM NUMBER: 97569254 BUSINESS ADDRESS: STREET 1: 2170 PIEDMONT RD NE CITY: ATLANTA STATE: GA ZIP: 30324 BUSINESS PHONE: 4048882950 MAIL ADDRESS: STREET 1: 2170 PIEDMONT ROAD CITY: ATLANTA STATE: GA ZIP: 30324 FORMER COMPANY: FORMER CONFORMED NAME: RPC ENERGY SERVICES INC DATE OF NAME CHANGE: 19920703 10-K405 1 10-K405 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 1-8726 RPC, INC. Delaware 58-1550825 (State of Incorporation) (I.R.S. Employer Identification No.) 2170 Piedmont Road, NE, Atlanta, Georgia 30324 Telephone Number -- (404) 888-2950 Securities registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: Common Stock, $0.10 Par Value The New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes --X-- No ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x] As of February 28, 1997, RPC, Inc. had 14,689,738 shares of common stock outstanding (excluding 78,253 treasury shares), and the aggregate market value of this stock (based on the closing price on The New York Stock Exchange of $14.75 per share) held by nonaffiliates was $83,240,000. Documents Incorporated by Reference: Portions of the Proxy Statement for the 1997 Annual Meeting of Stockholders of RPC, Inc. are incorporated by reference into Part III, Items 10 through 13. 7 PART I ITEM 1. BUSINESS PRINCIPAL PRODUCTS AND SERVICES RPC, Inc. ("RPC") was incorporated as RPC Energy Services, Inc. in the state of Delaware on January 20, 1984. RPC has two major business segments: boat manufacturing and oil and gas services. BOAT MANUFACTURING Chaparral Boats, Inc. ("Chaparral"), a wholly owned subsidiary of RPC, sells four lines of powerboats to a nationwide network of independent dealers. These lines consist of two different run-about lines, a deckboat line, and a cruiser line. New models are introduced each year. Operations are seasonal in nature with the second quarter recording the highest sales volume for the year. This business segment contributed 43 percent of RPC's consolidated revenue in 1996, 44 percent in 1995, and 46 percent in 1994. Research and development expenditures, totaling $1,951,000 in 1996, $1,559,000 in 1995, and $1,514,000 in 1994, were necessary to generate new product innovations. OIL AND GAS SERVICES The oil and gas services segment provides a variety of services, equipment, and personnel to the oil and gas industry. Service locations include Belle Chasse, Houma, Lafayette, Venice, Fourchon, and Morgan City, Louisiana; Alice, Corpus Christi, Houston, Longview, and Odessa, Texas; Elk City, Woodward, Lindsay, and McAlester, Oklahoma; Rock Springs, Wyoming; Venezuela and Algeria. The oil and gas services business is not generally seasonal. However, severe weather conditions will increase the demand for oil and natural gas, which generally results in an increase in the demand for our services. There were no material expenditures for research and development in this business segment. The services provided by the oil and gas services segment of RPC include the following: OIL FIELD SERVICES Cudd Pressure Control, Inc. ("Cudd"), a wholly owned subsidiary of RPC, provides a wide range of oil and gas well services throughout the southwestern United States and other countries. These oil field services include coiled tubing, snubbing, nitrogen pumping, wireline, marine, and well control. This portion of the business segment contributed 29 percent of RPC's consolidated revenue in 1996, 29 percent in 1995, and 26 percent in 1994. During 1996, International Training Services was acquired to form Well Control School, which provides training to oil field personnel using well control simulation equipment. EQUIPMENT RENTAL SERVICES Patterson Services, Inc., a wholly owned subsidiary of RPC, offers specialized tools and equipment on a rental basis. These include drill pipe, drill collars, tubing, and blowout preventors. In addition, Patterson Services provides experienced personnel to install and remove customer-owned casing at well sites and operate company-owned, diesel-driven hammers and welding machines used to weld and drive pipe into the ground. On average, approximately 21 percent of rental equipment was rented on a daily basis in 1996 and 19 percent in 1995. In the rental business, maximum utilization is approximately 50 percent due to transportation, inspection, and cleaning requirements. This portion of the business segment contributed 13 percent of RPC's consolidated revenue in 1996, 12 percent in 1995, and 14 percent in 1994. TRANSPORTATION SERVICES Patterson Truck Line, Inc., a wholly owned subsidiary of RPC, offers line haul services on a 24-hour basis to customers primarily in Louisiana and Texas. Line haul operations involve transportation of oil field pipe and equipment as well as nonoil field liquid and dry bulk commodities. 8 STORAGE AND INSPECTION SERVICES Patterson Tubular Services, Inc. ("PTS"), a wholly owned subsidiary of RPC, performs tubular inspections, stores pipe, and inventories pipe using an on-line computerized inventory system. Waterfront dock facilities enable PTS to service a wide variety of off-shore and inland vessels. In January 1996 PTS opened a state-of-the-art internal pipe-coating facility in Channelview, Texas. The plant uses CERAMKOTE 54 (Register Mark), a high-performance ceramic-epoxy coating system, which provides abrasion and corrosion protection. Neither the boat manufacturing nor the oil and gas services business segment are significantly affected by the availability of raw materials or the existence of licenses, patents, and trademarks. CUSTOMERS RPC's business is not dependent on any one customer, but on a variety of customers in both major business segments. No one customer accounts for more than 10 percent of consolidated revenue. The oil and gas services segment provides services to drilling contractors, oil field supply stores and service companies, major oil and gas producers, and independent exploration companies. Sales are generated by RPC's sales force and from customer referrals. RPC has no written contracts of a material nature with any of its oil and gas services segment customers. Also, there is no material sales backlog due to the short-term nature of the rental and services industry. The boat manufacturing segment produces four lines of boats with distribution to a nationwide network of independent dealers. Sales to these dealers are generated by a five-person sales force. A five-year boat structure warranty is provided for boats, beginning in the 1992 model year. These warranty terms, though, have no material impact on working capital. Although production is scheduled from orders placed by dealers, these are not firm orders and are frequently changed or canceled. As a result, this segment does not have an identifiable backlog of sales. COMPETITION There are many companies that compete with RPC's subsidiaries in each segment, some of which are larger and have been established in the industries for longer periods of time. In the oil and gas services segment, intense competition exists and has led to substantial price reductions for services offered. Industry conditions are influenced by such factors as weather, economic and political conditions, as well as worldwide demand for, and prices of, oil and natural gas. The notable competitive factors in this segment are quality, availability, and price of equipment and service. This segment's predominant markets are the Gulf of Mexico, the southwestern United States, Venezuela, and Algeria. The boat manufacturing segment's competition includes small independent companies, as well as large vertically integrated companies that have both engine and boat manufacturing capabilities. Major markets include the southeastern and Gulf states, the northeastern states, and California. Competitive factors in this industry are the quality of materials, the quality of the construction process, the design features, and the selling prices. Selling prices are set by management and vary from dealer to dealer based upon volume. The sales prices of Chaparral's boats are similar to equivalent competitors' models. EMPLOYEES At December 31, 1996, RPC employed 1,722 persons. ENVIRONMENTAL CONSIDERATIONS The capital expenditures, earnings, and competitive position of RPC are not materially affected by compliance with federal, state, and local provisions that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment. 9 FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS Information about RPC's operations by segment, as well as financial information about foreign and domestic operations for the three years ended December 31, 1996, is set forth in Note 9 of the Financial Statements on page 23. ITEM 2. PROPERTIES RPC owns or leases 44 offices and operating facilities. Considered individually, the only facility that represents a materially important physical property is the boat manufacturing plant in Nashville, Georgia. RPC believes its current operating facilities are suitable and adequate to meet current and reasonably anticipated future needs. Descriptions of the major facilities are as follows: OWNED LOCATIONS Houston, Texas -- Pipe storage terminal, inspection shed, and pipe coating facility Nashville, Georgia -- Boat manufacturing facility Irving, Texas -- Crane fabrication plant Houma, Louisiana -- Oil and gas administrative office LEASED LOCATIONS Morgan City, Louisiana -- Pipe storage terminal and inspection shed Expiration date of lease: January 31, 2002 ITEM 3. LEGAL PROCEEDINGS RPC is involved in various legal proceedings encountered in the ordinary course of business. In the opinion of management, any judgment or settlement arising from these proceedings will not, individually or in the aggregate, have a material adverse effect on its business or its financial position. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders during the fourth quarter of 1996. ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT Each of the executive officers of RPC was elected by the Board of Directors to serve until the Board of Directors' meeting immediately following the next annual meeting of stockholders or until his or her earlier removal by the Board of Directors or his or her resignation. The following table lists the executive officers of RPC and their ages, offices, and terms of office with RPC.
NAME AND OFFICE DATE FIRST WITH REGISTRANT AGE ELECTED TO OFFICE - --------------------------------------------------------------- R. Randall Rollins 65 1/24/84 Chairman of the Board Chief Executive Officer Richard A. Hubbell 52 1/27/87 President Chief Operating Officer Bobby Joe Cudd 67 1/24/84 Executive Vice President James A. Lane, Jr. 54 1/27/87 Executive Vice President William S. Pegg 54 1/27/87 Executive Vice President Linda H. Graham 60 1/27/87 Vice President Secretary Ben M. Palmer 36 7/8/96 Chief Financial Officer
10 PART II - ------------------------------------------------------------------------------ ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS RPC common stock is listed for trading on the New York Stock Exchange under the symbol RES. At the close of business on December 31, 1996, there were 1,416 holders of record of common stock. Prices of RPC's common stock for the years ended December 31, 1996 and 1995, were as follows:
1996 1995 ----------------------------------------------------------- Quarter High Low High Low ----------------------------------------------------------- First $ 10.625 $ 8.625 $ 7.875 $ 6.750 Second 13.500 9.875 9.250 7.125 Third 12.000 10.625 9.125 7.500 Fourth 16.250 11.250 9.625 7.500 -------- ------- ------- -------
ITEM 6. SELECTED FINANCIAL DATA RPC has not paid dividends on its common stock since its inception in 1984.
- ----------------------------------------------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (in thousands except per share data) - ----------------------------------------------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 - ----------------------------------------------------------------------------------------------------------------------- OPERATIONS SUMMARY Revenue $200,833 $161,379 $155,765 $123,481 $100,731 Net costs and expenses 180,596 145,228 142,583 113,534 95,276 - ----------------------------------------------------------------------------------------------------------------------- Income before income taxes, extraordinary credit and cumulative effect of accounting change 20,237 16,151 13,182 9,947 5,455 Income tax provision 6,982 5,396 4,404 3,270 2,116 - ----------------------------------------------------------------------------------------------------------------------- Income before extraordinary credit and cumulative effect of accounting change 13,255 10,755 8,778 6,677 3,339 Extraordinary credit - utilization of loss carryforward -- -- -- -- 765 Cumulative effect of a change in accounting for income taxes -- -- -- 150 -- - ----------------------------------------------------------------------------------------------------------------------- Net income $ 13,255 $ 10,755 $ 8,778 $ 6,827 $ 4,104 - ----------------------------------------------------------------------------------------------------------------------- Earnings per share Before extraordinary credit and accounting change $ .91 $ .74 $ .61 $ .46 $ .23 After extraordinary credit and accounting change $ .91 $ .74 $ .61 $ .47 $ .28 - ----------------------------------------------------------------------------------------------------------------------- CAPITAL EXPENDITURES $ 20,889 $ 15,529 $ 10,618 $ 6,630 $ 9,406 - ----------------------------------------------------------------------------------------------------------------------- FINANCIAL POSITION Total assets $152,800 $132,656 $122,242 $109,992 $102,889 Working capital 39,192 41,943 37,827 33,943 32,965 Stockholders' equity 117,799 104,361 93,499 84,614 77,710 - -----------------------------------------------------------------------------------------------------------------------
11 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Consolidated RPC's revenue and net income increased in 1996. This was RPC's ninth consecutive year of profitable operations. Consolidated revenue increased 24 percent in 1996 to $200,833,000 compared to $161,379,000 in 1995. Consolidated revenue in 1995 was 4 percent higher than 1994 revenue of $155,765,000. Both major business segments contributed to the growth experienced in 1996. The oil and gas services segment increased revenue 27 percent in 1996. Investors, drillers, and exploration companies have maintained a higher level of activity than in recent years. Rising demand in the United States and limited storage capacity for natural gas has also contributed to demand for our services. The boat manufacturing segment increased revenue 23 percent. Chaparral has been able to increase its market share and expand its revenues despite generally minimal growth in this industry. Income before income taxes was $20,237,000 in 1996, $16,151,000 in 1995, and $13,182,000 in 1994. This represented an increase of $4,086,000 or 25 percent in 1996 and an increase of $2,969,000 or 23 percent in 1995. The oil and gas services segment produced a 24 percent increase in income before income taxes in 1996 due primarily to increased utilization of our equipment and personnel, and improvement in results of international operations, especially in Venezuela. The boat manufacturing segment generated a 33 percent increase in income before income taxes due primarily to an increase in the volume of boats sold in all boat lines. In addition, there was a slight improvement in margins at Chaparral in spite of continued price competition in this segment. Consolidated net income was $13,255,000 or 91 cents per share in 1996 compared to $10,755,000 or 74 cents per share in 1995. Consolidated net income in 1994 was $8,778,000 or 61 cents per share. This represented an increase of $2,500,000 or 23 percent in 1996 and an increase of $1,977,000 or 23 percent in 1995. Revenue--Business Segments Oil and Gas Services--The oil and gas services segment contributed $101,741,000 or 51 percent of 1996 revenue. Revenue was $79,943,000 in 1995 and $73,098,000 in 1994. The 27 percent increase in 1996 can be attributed to a number of factors, including higher utilization of our specialized equipment and personnel coupled with modest price increases. This results from an increase in the average U.S. oil and natural gas rig count. Patterson Services' revenue increased 31 percent in 1996 as demand increased for its specialized rental tools, especially in the off-shore Gulf of Mexico region. Cudd Pressure Control's international operations experienced a 79 percent increase in revenues in 1996 due to expanding business volume and the acquisition of the remaining 50 percent ownership interest in SPA-Cudd in January 1996 to form Cudd de Venezuela. The revenue increase for the oil and gas services segment of 9 percent in 1995 was due to increased domestic revenue as a result of Cudd Pressure Control's workover programs and growth in the international operations and Patterson Truck Line's 12 commodities hauling, which is not dependent on drilling activity. Higher utilization of equipment also contributed to the increase in revenue in 1995; no significant price increases occurred. Boat Manufacturing--The boat manufacturing segment reported a 23 percent or $16,007,000 increase in revenue from $70,218,000 in 1995 to $86,225,000 in 1996. Revenue for 1994 was $72,229,000. The total number of boats sold by Chaparral in 1996 increased 19 percent due to a favorable reaction to newer models and additional gains in market share. The SS line of family runabouts, introduced in 1993, and the Sunesta, the deckboat line introduced in 1992, continued to be very popular. Revenues also increased as a result of the favorable response to a new dealer incentive schedule, which reduces the fluctuation in production levels. There was also a price increase in July 1996 that averaged 2 percent as a result of higher material costs. The total number of boats sold by Chaparral in 1995 decreased 15 percent compared to 1994 due to higher dealer inventory of prior year models. This resulted in lower production levels of new models, especially during the second half of 1995. The average price of boats sold in 1995 increased 13 percent due to price increases and a larger percentage of revenues generated from higher priced cruiser models. The price increases, which ranged between 6 and 7 percent, were the result of higher material costs and upgrades of model features. Expenses Cost of goods sold for the boat manufacturing segment was $67,426,000 in 1996 compared to $55,826,000 in 1995 and $57,594,000 in 1994. This represents an increase of $11,600,000 or 21 percent in 1996, which approximates the increase in revenue. As a percent of revenue, cost of goods sold for this segment was 78 percent in 1996, and 80 percent in 1995 and 1994. The decrease as a percentage of segment revenues can be attributed to better inventory controls. The remaining cost of goods sold was incurred by subsidiaries in other businesses. Consolidated operating expenses were $95,820,000 in 1996, $76,412,000 in 1995, and $71,965,000 in 1994. Expenses were 25 percent higher in 1996 than in 1995, primarily in the oil and gas services segment, in line with this segment's revenue increase. The oil and gas services segment's operating expenses were $79,421,000 or 78 percent of this segment's revenue in 1996. Operating expenses were $62,622,000 or 78 percent of this segment's revenue in 1995 and $59,055,000 or 81 percent of this segment's revenue in 1994. The boat manufacturing segment's operating expenses were $8,540,000 in 1996, which as a percent of revenue was a 1 percent increase from 1995. The portion of depreciation and amortization not included in cost of goods sold was $9,210,000 in 1996, $6,843,000 in 1995, and $6,215,000 in 1994. The majority of this expense represented the oil and gas services segment depreciation of $8,126,000 in 1996, $5,961,000 in 1995, and $5,369,000 in 1994. The 1996 increase of 13 Expenses--Continued $2,165,000 or 36 percent was due primarily to increased capital expenditures. Chaparral's depreciation expense for production equipment is a component of cost of goods sold, therefore this category includes only amortization of intangibles and depreciation of nonproduction assets. Chaparral's depreciation and amortization was $734,000 for 1996, $769,000 for 1995, and $781,000 for 1994. Amortization of intangible assets was $797,000 in 1996, $709,000 in 1995, and $684,000 in 1994. Interest Income Interest income was $2,018,000 in 1996, $2,181,000 in 1995, and $1,489,000 in 1994. Despite the increase in total cash and marketable securities from $41,874,000 at December 31, 1995, to $46,344,000 at December 31, 1996, interest income decreased 7 percent in 1996 due to lower average balances and lower yields. Financial Condition As of December 31, 1996, RPC's cash and cash equivalents and short-term marketable securities decreased $1,321,000 to $21,273,000. Cash provided by operating activities was $24,060,000 compared to $13,834,000 in 1995. Accounts receivable were $24,156,000 at December 31, 1996, compared to $20,802,000 at December 31, 1995, an increase of $3,354,000 due to the increase in revenues. Inventories were $982,000 higher than the prior year mainly due to a higher number of finished boats on hand. Inventory increased due to the higher production levels for the boat manufacturing segment to satisfy increased demand. During 1996, current assets increased $3,212,000 and current liabilities increased $5,963,000, a combined decrease in working capital of $2,751,000. Working capital at December 31, 1996, was $39,192,000 compared to $41,943,000 in the prior year. The current ratio remained strong at the end of 1996 with a ratio of 2.3-to-1, decreasing slightly from the 1995 ratio of 2.7-to-1. The 1994 current ratio was 2.5-to-1. Capital expenditures for 1996 were $20,889,000, an increase of $5,360,000 from $15,529,000 in 1995. $19,191,000 of these expenditures were in the oil and gas services segment for revenue-producing equipment. Capital expenditures for the oil and gas services segment were $14,726,000 in 1995. RPC expects that funding for future capital requirements will be provided by available cash and marketable securities and cash generated from operations. 14 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Balance Sheets
- ------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (in thousands except share information) - ------------------------------------------------------------------------------- AT DECEMBER 31, 1996 1995 - ------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 13,124 $ 18,126 Marketable securities 8,149 4,468 Accounts receivable, net 24,156 20,802 Inventories 15,427 14,445 Deferred income taxes 7,623 7,241 Prepaid expenses and other current assets 1,663 1,848 - ------------------------------------------------------------------------------- Current assets 70,142 66,930 - ------------------------------------------------------------------------------- Equipment and property, net 47,791 36,225 Marketable securities 25,071 19,280 Intangibles, net of accumulated amortization of $7,094 in 1996 and $6,297 in 1995 8,105 7,900 Deferred income taxes 86 714 Other assets 1,605 1,607 - ------------------------------------------------------------------------------- Total assets $ 152,800 $ 132,656 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 6,756 $ 5,035 Accrued payroll and related expenses 4,541 3,899 Accrued insurance expenses 6,679 5,039 Accrued state, local, and other taxes 3,211 2,315 Federal income taxes payable 88 38 Accrued discounts 786 635 Other accrued expenses 8,889 8,026 - ------------------------------------------------------------------------------- Current liabilities 30,950 24,987 - ------------------------------------------------------------------------------- Long-term accrued insurance expenses 3,551 3,308 Long-term debt 500 -- - ------------------------------------------------------------------------------- Total liabilities 35,001 28,295 - ------------------------------------------------------------------------------- Commitments and contingencies - ------------------------------------------------------------------------------- Common stock, $.10 par value, 35,000,000 shares authorized, 14,714,861 shares issued in 1996, 14,610,054 shares issued in 1995 1,471 1,461 Capital in excess of par value 35,176 34,599 Earnings retained 81,555 68,526 Common stock in treasury, at cost, 74,953 shares in 1996, 68,723 shares in 1995 (403) (225) - ------------------------------------------------------------------------------- Total stockholders' equity 117,799 104,361 - ------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 152,800 $ 132,656 - -------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements. 15 Statements of Income - ------------------------------------------------------------------------------ RPC, INC. AND SUBSIDIARIES (in thousands except per share data) - ------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 1996 1995 1994 - ------------------------------------------------------------------------------ REVENUE $200,833 $161,379 $155,765 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ Cost of goods sold 77,584 64,154 65,892 Operating expenses 95,820 76,412 71,965 Depreciation and amortization 9,210 6,843 6,215 Interest income (2,018) (2,181) (1,489) - ------------------------------------------------------------------------------ Income before income taxes 20,237 16,151 13,182 Income tax provision 6,982 5,396 4,404 - ------------------------------------------------------------------------------ Net income $13,255 $10,755 $8,778 - ------------------------------------------------------------------------------ EARNINGS PER SHARE $.91 $.74 $.61 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ Statements of Stockholders' Equity - ------------------------------------------------------------------------------ RPC, INC. AND SUBSIDIARIES (in thousands) - ------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 1996 1995 1994 - ------------------------------------------------------------------------------ COMMON STOCK Balance at beginning of year $1,461 $1,461 $1,461 Stock issued for benefit plans, net 10 -- -- - ------------------------------------------------------------------------------ Balance at end of year $1,471 $1,461 $1,461 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ CAPITAL IN EXCESS OF PAR VALUE Balance at beginning of year $34,599 $34,228 $34,228 Stock issued for benefit plans, net 577 371 -- - ------------------------------------------------------------------------------ Balance at end of year $35,176 $34,599 $34,228 - ------------------------------------------------------------------------------ EARNINGS RETAINED Balance at beginning of year $68,526 $58,296 $49,518 Net income 13,255 10,755 8,778 Stock issued for benefit plans, net (226) (525) -- - ------------------------------------------------------------------------------ Balance at end of year $81,555 $68,526 $58,296 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ TREASURY STOCK Balance at beginning of year $225 $486 $593 Stock issued for benefits plans, net 178 (261) (107) - ------------------------------------------------------------------------------ Balance at end of year $403 $225 $486 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ The accompanying notes are an integral part of these statements. 16
- -------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (in thousands) Statements of ------------------------------------------------------------------------------------------------------- Cash Flows YEARS ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $ 13,255 $ 10,755 $ 8,778 Noncash charges (credits) to earnings: Depreciation and amortization 9,818 7,474 6,679 Gain on sale of equipment and property (1,316) (1,383) (1,517) Deferred income tax provision (benefit) 246 (319) (1,744) (Increase) decrease in assets: Accounts receivable (3,354) (225) (2,619) Inventories (982) (2,103) (2,106) Prepaid expenses and other current assets 185 (374) 2,073 Other noncurrent assets 2 457 (565) Increase (decrease) in liabilities: Accounts payable 1,721 (352) 1,390 Accrued payroll and related expenses 642 458 924 Accrued insurance expenses 1,883 (323) (73) Other accrued expenses 1,960 (231) 1,124 - ------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 24,060 13,834 12,344 - ------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Capital expenditures (20,889) (15,529) (10,618) Proceeds from sale of equipment and property 1,769 2,866 2,684 Net (purchase) sale of marketable securities (9,472) 2,428 (2,775) Other (502) (511) -- - ------------------------------------------------------------------------------------------------------- Net cash used for investing activities (29,094) (10,746) (10,709) - ------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Cash received upon exercise of stock options 32 -- 107 - ------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 32 -- 107 - ------------------------------------------------------------------------------------------------------- Net (decrease) increase in cash and cash equivalents (5,002) 3,088 1,742 Cash and cash equivalents at beginning of year 18,126 15,038 13,296 - ------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of year $ 13,124 $ 18,126 $ 15,038 - ------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements. 17 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES Years ended December 31, 1996, 1995, and 1994 Note 1: Significant Accounting Policies Principles of Consolidation -- The consolidated financial statements include the accounts of RPC, Inc. and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated. Nature of Operations -- RPC is principally engaged in two businesses: providing a variety of services, equipment, and personnel to the oil and gas industry and manufacturing powerboats. The principal markets for the oil and gas services segment are domestic customers comprised of drilling contractors, oil field supply stores and service companies, major oil and gas producers, and independent exploration companies. The boat manufacturing segment distributes fiberglass boats to a nationwide network of independent dealers. Use of Estimates in the Preparation of Financial Statements -- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue -- Revenue is recognized at the time services are performed or goods are delivered. Cash Equivalents -- Highly liquid investments with original maturities of 3 months or less are considered to be cash equivalents. Marketable Securities -- Effective January 1, 1994, RPC adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Under this statement, RPC determined that marketable securities should be classified as either "trading" or "available-for-sale," which require reporting at fair value on the balance sheet. Any unrealized gains and losses on trading securities are included in earnings. For available-for-sale securities, any unrealized gains and losses are excluded from earnings and reported in a separate component of stockholders' equity. As of December 31, 1996 and 1995, the difference between fair value and cost for both classifications was not material. Investments with original maturities between 3 and 12 months are considered to be current marketable securities. Investments with original maturities greater than 12 months are considered to be noncurrent marketable securities. Inventories -- Inventories are recorded at the lower of cost (first-in, first-out basis) or market value. Long-Lived Assets -- In March 1995, the Financial Accounting Standards Board issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS No. 121 requires that long-lived assets and certain intangibles be reviewed whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company periodically reviews the values assigned to long-lived assets, such as property and equipment and other assets, to determine if any impairments are other than temporary. Management believes that the long-lived assets in the accompanying balance sheets are appropriately valued. Equipment and Property -- Depreciation is provided principally on a straight-line basis over the estimated useful lives of assets. 18 Annual provisions for depreciation are computed using the following useful lives: operating equipment and property, 3 to 10 years; buildings and leasehold improvements, 15 to 30 years; furniture and fixtures, 5 to 7 years; and vehicles, 3 to 5 years. The cost of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal with the resulting gain or loss credited or charged to income. Expenditures for additions, major renewals, and betterments are capitalized. Depreciation expense on production equipment in the manufacturing businesses is included in the "cost of goods sold" caption in the income statement. All other depreciation is included in the "depreciation and amortization" caption. Intangibles--Intangibles represent the excess of the purchase price over the fair value of net assets of businesses acquired and noncompete agreements related to businesses acquired. Intangibles are presented net of accumulated amortization and are amortized using the straight-line method over a period not exceeding 20 years or the period of the noncompete agreement. Stock-Based Compensation--During October 1995, the Financial Accounting Standards Board issued SFAS No.123, "Accounting for Stock-Based Compensation." This Statement establishes a fair value based method of accounting for employee stock-based compensation. However, the Statement allows companies to continue following the accounting prescribed by Accounting Principles Board (APB) Opinion No. 25. The Company has adopted the disclosure-only option of SFAS No.123 and will continue to use the accounting treatment outlined in APB Opinion 25. If the accounting provisions of the new Statement had been adopted as of the beginning of 1996, the effect on 1996 net earnings would have been immaterial. Further, based on current and anticipated use of stock-based compensation, it is not envisioned that the impact of the Statement's accounting provisions would be material in any future period. Insurance Expenses--RPC self-insures, up to specified limits, certain risks related to general liability, product liability, workers' compensation, and vehicle liability. The estimated cost of claims under the self-insurance program is accrued as the claims are incurred (although actual settlement of the claims may not be made until future periods) and may subsequently be revised based on developments relating to such claims. The noncurrent portion of these estimated outstanding claims is classified as long-term accrued insurance expenses. Income Taxes--Income taxes are accounted for in accordance with SFAS No.109, "Accounting for Income Taxes," which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. These differences are more inclusive in nature than differences determined under previously applicable accounting principles. Earnings per Share--Earnings per share have been calculated based on weighted average shares outstanding of 14,571,339 for 1996, 14,528,561 for 1995, and 14,442,852 for 1994. Stock options and restricted stock outstanding do not have a material dilutive effect. 19 NOTES TO FINANCIAL STATEMENTS--CONTINUED - ------------------------------------------------------------------------------ Note 2: Accounts Receivable Accounts receivable, net, at December 31, 1996, of $24,156,000 and at December 31, 1995, of $20,802,000 are net of allowances for doubtful accounts of $7,058,000 in 1996, and $4,205,000 in 1995. Note 3: Inventories Inventories are recorded at the lower of cost (first-in, first-out basis) or market value and are detailed as follows: - ---------------------------------------------------- December 31, 1996 1995 - ---------------------------------------------------- (in thousands) Raw materials and supplies $8,828 $8,478 Work in process 1,404 1,586 Finished goods 5,195 4,381 - ---------------------------------------------------- Total inventories $15,427 $14,445 - ---------------------------------------------------- Note 4: Equipment and Property Equipment and property are presented at cost net of accumulated depreciation and are detailed as follows: - ---------------------------------------------------- December 31, 1996 1995 - ---------------------------------------------------- (in thousands) Operating equipment and property $154,835 $146,781 Buildings 15,147 12,476 Furniture and fixtures 4,344 3,500 Vehicles 14,980 12,878 Land 4,851 4,806 - ---------------------------------------------------- Gross equipment and property 194,157 180,441 Less: accumulated depreciation 146,366 144,216 - ---------------------------------------------------- Net equipment and property $47,791 $36,225 - ---------------------------------------------------- Note 5: Income Taxes The following table lists the components of the provision for income taxes: - ---------------------------------------------------- December 31, 1996 1995 1994 - ---------------------------------------------------- (in thousands) Current: Federal $6,353 $5,475 $5,879 State 383 240 269 Deferred 246 (319) (1,744) - ---------------------------------------------------- Total income tax provision $6,982 $5,396 $4,404 - ---------------------------------------------------- A reconciliation between the federal statutory rate and RPC's effective tax rate is as follows: - ---------------------------------------------------- December 31, 1996 1995 1994 - ---------------------------------------------------- Federal statutory rate 35.0% 34.6% 34.2% State income taxes 1.9 1.5 2.0 Other (2.4) (2.7) (2.8) - ---------------------------------------------------- Effective tax rate 34.5% 33.4% 33.4% - ---------------------------------------------------- The components of the net deferred tax assets are as follows: - ---------------------------------------------------- December 31, 1996 1995 - ---------------------------------------------------- (in thousands) Current deferred tax asset: Self-insurance reserves $1,803 $1,689 Bad debt reserves 2,637 2,789 State, local, and other taxes 885 635 Payroll accruals 555 557 Warranty reserves 466 427 All others, net 1,277 1,144 Valuation allowance -- -- - ---------------------------------------------------- Total current deferred tax asset $7,623 $7,241 - ---------------------------------------------------- Noncurrent deferred tax asset: Self-insurance reserves $1,208 $1,125 Depreciation (1,226) (448) All others, net 104 37 Valuation allowance -- -- - ---------------------------------------------------- Total noncurrent deferred tax asset $85 $714 - ---------------------------------------------------- 20 Total income tax payments, net of refunds, were $4,510,000 in 1996, $5,511,000 in 1995, and $5,494,000 in 1994. NOTE 6: LONG-TERM DEBT Long-term debt consists of a note payable for $500,000. The note bears interest at 6.25 percent payable annually. Payments of $100,000 are due for each of the next five years. The fair value of the long-term debt approximates the carrying value. NOTE 7: COMMITMENTS AND CONTINGENCIES Minimum annual rentals, principally for noncancelable real estate and truck leases with terms in excess of one year, in effect at December 31, 1996, are summarized in the following table: - ------------------------------------------------------------------------- Year Amount - ------------------------------------------------------------------------- (in thousands) 1997 $ 1,722 1998 1,433 1999 929 2000 725 2001 252 2002-2006 302 - ------------------------------------------------------------------------- Total rental commitments $ 5,363 - ------------------------------------------------------------------------- Total rental expense charged to operations was $3,517,000 in 1996, $2,418,000 in 1995, and $2,002,000 in 1994. RPC is a defendant in a number of lawsuits which allege that plaintiffs have been damaged as a result of the rendering of services by RPC personnel and equipment, in vehicle accidents, or from the use of RPC's products. RPC is vigorously contesting these actions. Management is of the opinion that the outcome of these lawsuits will not have a material adverse effect on the financial position or results of operations or liquidity of RPC. To assist dealers in obtaining financing for the purchase of its boats, Chaparral has entered into agreements with various dealers and financing institutions to guarantee varying amounts of the dealers' purchase debt obligations. Chaparral's obligation under its guarantee becomes effective in the case of default in payments by the dealer. The agreements provide for the return of all repossessed boats to Chaparral in new condition, in exchange for Chaparral's assumption of the unpaid debt obligation on those boats. As of December 31, 1996, guarantees outstanding totaled $4,864,000. NOTE 8: EMPLOYEE BENEFIT PLANS Retirement Plan--RPC has a tax-qualified defined benefit, noncontributory, trusteed retirement income plan which covers substantially all employees with at least one year of service. Benefits are based on an employee's years of service and compensation near retirement. RPC has the right to terminate or modify the plan at any time. Total retirement plan cost was $72,000 in 1996, $135,000 in 1995, and $95,000 in 1994. The following table details the components of the cost: - ----------------------------------------------------------------------- December 31, 1996 1995 1994 - ----------------------------------------------------------------------- (in thousands) Service cost for benefits earned during the period $ 540 $ 429 $ 482 Interest cost on projected benefit obligation 991 907 842 Actual (return) loss on plan assets (1,719) (2,817) 68 Net amortization and deferral 260 1,616 (1,297) - ----------------------------------------------------------------------- Total pension cost $ 72 $ 135 $ 95 - ----------------------------------------------------------------------- RPC's funding policy is to contribute to the retirement income plan the amount required, if any, under the Employee Retirement Income Security Act of 1974. No contributions were required in 1996, 1995, or 1994. 21 The funded status of the pension plan was as follows: - ------------------------------------------------------------------------------ December 31, 1996 1995 - ------------------------------------------------------------------------------ (in thousands) Actuarial present value of: Vested benefits $11,153 $10,416 Non-vested benefits 519 431 - ------------------------------------------------------------------------------ Accumulated benefit obligation 11,672 10,847 Effect of projected future compensation increases 2,333 1,875 - ------------------------------------------------------------------------------ Projected benefit obligation 14,005 12,722 Plan assets at fair value 14,752 13,543 - ------------------------------------------------------------------------------ Plan assets in excess of projected benefit obligation 747 821 Unrecognized net losses 708 898 Unrecognized net transition asset (1,060) (1,252) - ------------------------------------------------------------------------------ Prepaid pension cost $ 395 $ 467 - ------------------------------------------------------------------------------ In 1996 and 1995, the projected benefit obligation was calculated using a discount rate of 7.5 percent. In 1996 and 1995, a 5.0 percent annual rate of increase in future compensation levels was used. Plan assets are invested in a diversified portfolio that consists of equity and debt securities, including U.S. government obligations. The expected long-term rate of return on plan assets is 9.5 percent. 401(k) PLAN--RPC sponsors a deferred compensation 401(k) plan that is available to substantially all full-time employees with more than six months of service. This plan allows employees to make tax-deferred contributions of up to 15 percent of their annual compensation, not exceeding the permissible deduction imposed by the Internal Revenue Code. RPC matches 40 percent of each employee's contributions up to 3 percent of the employee's compensation. Employees vest in the RPC contributions after five years of service. The charges to expense for RPC's contributions were $276,000 in 1996, $238,000 in 1995, and $194,000 in 1994. STOCK INCENTIVE PLANS--RPC has an Employee Incentive Stock Option Plan (the "1984 Plan") under which 500,000 shares of common stock were reserved for issuance. The 1984 Plan expired in October 1994. On January 25, 1994, RPC adopted a new ten-year Employee Stock Incentive Plan (the "1994 Plan") under which 500,000 shares of common stock were reserved for issuance. These plans provide for the issuance of various forms of stock incentives, including, among others, incentive stock options and restricted stock. As of December 31, 1996, there were 252,000 shares remaining for the granting of options or other awards under the 1994 Plan. INCENTIVE STOCK OPTIONS--There were incentive stock options (options) outstanding to purchase 274,146 shares as of December 31, 1996, 335,488 shares as of December 31, 1995, and 344,488 as of December 31, 1994. The weighted average exercise price at December 31, 1996, was $6.45. Options granted totaled 40,000 in 1996 and 78,900 in 1994. There were no options granted in 1995. Options totaling 179,746 were exercisable at December 31, 1996. During 1996, 86,442 options to purchase shares were exercised and options to purchase 14,900 shares were canceled. Options for 49,846 shares expire on January 27, 1997, 78,000 shares expire on January 24, 1999, 38,300 shares expire on January 23, 2000, 68,000 shares expire on April 26, 2004, and 40,000 shares expire on January 23, 2006. RESTRICTED STOCK--RPC has granted employees two forms of restricted stock: performance restricted and time lapse. The performance restricted shares are granted, but not earned and issued, until certain five-year tiered performance criteria are met. The performance criteria are predetermined market prices of the Company stock. On the date the stock appreciates to each level (determination date), 20 percent of performance shares are earned. Once earned, the performance shares vest five years from the determination date. Time lapse shares vest ten years from the grant date. There were 25,000 units granted under these 22 restricted stock programs during 1996 and 115,000 units in 1994. There were no units granted in 1995. During 1996, 18,400 performance shares were awarded under the plans, 3,400 shares were forfeited, and 2,000 shares were canceled. The agreements under which the restricted stock is issued provide that shares awarded may not be sold or otherwise transferred until restrictions as established under the Plan have lapsed. Upon termination of employment, shares upon which restrictions have not lapsed must be returned to the Company. As of December 31, 1996, none of the shares of restricted stock were vested. NOTE 9: BUSINESS SEGMENT INFORMATION Certain information with respect to RPC's business segments is set forth in the following table. - ------------------------------------------------------------------------------- December 31, 1996 1995 1994 - ------------------------------------------------------------------------------- (in thousands) Revenue: Oil and gas services $101,741 $ 79,943 $ 73,098 Boat manufacturing 86,225 70,218 72,229 Other 12,867 11,218 10,438 - ------------------------------------------------------------------------------- Total revenue $200,833 $161,379 $155,765 - ------------------------------------------------------------------------------- Operating income (loss): Oil and gas services $ 14,194 $ 11,360 $ 8,678 Boat manufacturing 9,524 7,096 6,866 Other (2,609) (1,971) (1,428) - ------------------------------------------------------------------------------- Total operating income $ 21,109 $ 16,485 $ 14,116 - ------------------------------------------------------------------------------- Identifiable assets: Oil and gas services $ 68,692 $ 51,145 $ 44,224 Boat manufacturing 26,167 23,019 23,601 Other, including corporate assets 57,941 58,492 54,417 - ------------------------------------------------------------------------------- Total identifiable assets $152,800 $132,656 $122,242 - ------------------------------------------------------------------------------- Revenue from international operations in the oil and gas services segment totaled $12,851,000 in 1996, $7,159,000 in 1995, and $4,161,000 in 1994. The respective operating profits were $3,096,000 in 1996, $1,680,000 in 1995, and $176,000 in 1994. There were $8,351,000 in identifiable assets attributable to these operations in 1996, $4,709,000 in 1995, and $6,353,000 in 1994. There were no material amounts of international operations in the boat manufacturing segment. NOTE 10: UNAUDITED QUARTERLY DATA - ------------------------------------------------------------------------------- Quarter First Second Third Fourth - ------------------------------------------------------------------------------- (in thousands except per share data) 1996 Revenue $ 49,717 $ 52,204 $ 44,942 $ 53,970 Net income 3,450 3,161 2,813 3,831 Earnings per share .24 .22 .19 .26 1995 Revenue $ 42,220 $44,576 $ 35,756 $ 38,827 Net income 2,567 2,606 2,262 3,320 Earnings per share .18 .18 .15 .23 - ------------------------------------------------------------------------------- 23 PART III ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE This item is not applicable to RPC because there has been no change in or disagreements with independent auditors. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning directors and executive officers is included in the RPC Proxy for its 1997 Annual Meeting of Stockholders, in the sections entitled "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance." This information is incorporated herein by reference. Information about executive officers is contained on page 10. ITEM 11. EXECUTIVE COMPENSATION Information concerning executive compensation is included in the RPC Proxy for its 1997 Annual Meeting of Stockholders, in the section entitled "Executive Compensation." This information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information concerning security ownership is included in the RPC Proxy for its 1997 Annual Meeting of Stockholders, in the sections entitled "Capital Stock" and "Election of Directors." This information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information concerning certain relationships and related transactions is included in the RPC Proxy for its 1997 Annual Meeting of Stockholders, in the sections entitled "Certain Relationships and Related Transactions" and "Compensation Committee Interlocks and Insider Participation." This information is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K The following documents are filed as part of this report. FINANCIAL STATEMENTS PAGE - -------------------- ----- Balance Sheets as of December 31, 1996 and 1995 15 Statements of Income for the three years ended December 31, 1996 16 Statements of Stockholders' Equity for the three years ended December 31, 1996 16 Statements of Cash Flows for the three years ended December 31, 1996 17 Notes to Financial Statements 18-23 SCHEDULES Schedule II--Valuation and Qualifying Accounts 25 EXHIBITS EXHIBIT NUMBER DESCRIPTION - -------- ------------------------------------------------------------------ (3)(i)(a) RPC's Certificate of Incorporation is incorporated herein by reference to Exhibit (3)(a) to the fiscal 1992 Form 10-K. (3)(i)(b) RPC's Certificate of Amendment of the Certificate of Incorporation is incorporated herein by reference to Exhibit (3)(i)(b) to the fiscal 1995 Form 10-K. (3)(ii) By-laws of RPC are incorporated herein by reference to Exhibit (3)(b) to the fiscal 1993 Form 10-K. (10) RPC's 1994 Employee Stock Incentive Plan is incorporated herein by reference to Exhibit A of the 1994 Proxy Statement. (21) Subsidiaries of RPC. (23) Consent of Arthur Andersen LLP. (24) Powers of Attorney for Directors. (27) Financial Data Schedule. REPORTS ON FORM 8-K No reports on Form 8-K were required to be filed by RPC for the quarter ended December 31, 1996. Any schedules or exhibits not shown above have been omitted because they are not applicable. 24 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS - ------------------------------------------------------------------------------ --------------------------------------------------------------------------- RPC, INC. AND SUBSIDIARIES (in thousands) --------------------------------------------------------------------------- For the years ended December 31, 1996, 1995, and 1994 --------------------------------------------------------------------------- Balance at Charged to Net Balance at Beginning Costs and (Write-Offs) End of Description of Period Expenses Recoveries Period --------------------------------------------------------------------------- Year ended December 31, 1996 Allowance for Doubtful Accounts $11,893 $2,624 $229 $14,288 --------------------------------------------------------------------------- Year ended December 31, 1995 Allowance for Doubtful Accounts $7,120 $1,339 ($3,434) $11,893 --------------------------------------------------------------------------- Year ended December 31, 1994 Allowance for Doubtful Accounts $2,279 $4,431 ($410) $7,120 --------------------------------------------------------------------------- 25 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS - ------------------------------------------------------------------------------- To the Directors and Stockholders of RPC, Inc.: We have audited the accompanying consolidated balance sheets of RPC, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1996 and 1995 and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements and schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of RPC, Inc. and subsidiaries as of December 31, 1996 and 1995 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14 is presented for the purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements and, in our opinion, fairly states in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. Arthur Andersen LLP Atlanta, Georgia March 14, 1997 26 SIGNATURES - ------------------------------------------------------------------------------ Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RPC, INC. By: /s/ R. Randall Rollins ------------------------------ R. Randall Rollins Chairman of the Board of Directors (Principal Executive Officer) March 14, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ R. Randall Rollins /s/ Ben M. Palmer --------------------------- ------------------------------- R. Randall Rollins Ben M. Palmer Chairman of the Board of Directors Chief Financial Officer (Principal Executive Officer) (Principal Financial and Accounting Officer) March 14, 1997 March 14, 1997 The Directors of RPC, Inc. (listed below) executed a power of attorney appointing Richard A. Hubbell their attorney-in-fact, empowering him to sign this report on their behalf. Bobby Joe Cudd, Director James A. Lane, Jr., Director Wilton Looney, Director Gary W. Rollins, Director John W. Rollins, Director Henry B. Tippie, Director James B. Williams, Director /s/ Richard A. Hubbell --------------------------------- Richard A. Hubbell Director and as Attorney-in-fact March 14, 1997 27 EX-21 2 EXHIBIT 21 EXHIBIT 21 SUBSIDIARIES OF RPC, INC. NAME STATE OF INCORPORATION Cudd Pressure Control, Inc. Delaware Pressure Control, Inc. Delaware South Texas Swabbing, Inc. Texas Coiled Tubing, Inc. Delaware Patterson Services, Inc. Delaware Patterson Truck Line, Inc. Louisiana Patterson Tubular Services, Inc. Texas Chaparral Boats, Inc. Georgia RPC Investment Company Delaware RPC Waste Management Services, Inc. Georgia Anchor Crane & Hoist Service Company, Inc. Georgia RPC Data Link, Inc. Georgia International Training Services, Inc. Georgia EX-23 3 EXHIBIT 23 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K, into RPC, Inc.'s previously filed Form S-8 Registration Statement (No. 33-5527) and its previously filed Form S-8 Registration Statement (No. 33-75652). Arthur Andersen LLP -------------------------- Arthur Andersen LLP Atlanta, Georgia March 14, 1996 - ----------------- EX-24 4 EXHIBIT 24 EXHIBIT 24 POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 28th day of January, 1997. ---- ------- Bobby Joe Cudd, Director --------------------------------- Bobby Joe Cudd, Director Witness: Anne Abouchar - ----------------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 28th day of January, 1997. ---- ------- James A. Lane, Jr., Director ---------------------------- James A. Lane, Jr., Director Witness: Anne Abouchar - -------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 27th day of January, 1997. ---- ------- Wilton Looney, Director ----------------------- Wilton Looney, Director Witness: Norma Cook - ----------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC., Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 23rd day of January, 1997. ---- ------- Gary W. Rollins, Director ------------------------- Gary W. Rollins, Director Witness: Anne Abouchar - ------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 3rd day of February, 1997. --- -------- John W. Rollins, Director ------------------------- John W. Rollins, Director Witness: Cindy Alfano - ------------- POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 28th day of January, 1997. ---- ------- Henry B. Tippie, Director ------------------------- Henry B. Tippie, Director Witness: Linda M. Potts - ------------------ POWER OF ATTORNEY Know All Men By These Presents, that the undersigned constitutes and appoints Richard A. Hubbell as his true and lawful attorney-in-fact and agent in any and all capacities to sign filings by RPC, Inc. of Form 10-K, Annual Reports and any and all amendments thereto (including post-effective amendments) and to file the same, with all exhibits, and any other documents in connection therewith, with the Securities and Exchange Commission. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney, in the capacities indicated, as of this 27th day of January, 1997. ---- ------- James B. Williams, Director --------------------------- James B. Williams, Director Witness: Mary H. Walden - ---------------- EX-27 5 EXHIBIT 27
5 1,000 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 13,124 8,149 31,214 7,058 15,427 70,142 194,157 146,366 152,800 30,950 500 0 0 1,471 116,328 152,800 0 200,833 77,584 173,404 9,210 0 0 20,237 6,982 13,255 0 0 0 13,255 .91 .91
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