[10-Q] RPC, Inc. Quarterly Earnings Report
Q2 FY25 revenue rose 12.1% YoY to $999.5 million, with 7.3% organic growth. Gross profit climbed 11.6% to $537.7 million but gross margin slipped 20 bps to 53.8%. Operating income grew 8.7% to $198.3 million and net income 9.3% to $141.5 million, lifting diluted EPS to $0.29 (+7.4%). For the first half, revenue advanced 11.1% to $1.82 billion, net income 10.3% to $246.7 million and free cash flow 20.1% to $308.2 million. Q2 operating cash flow of $175.1 million covered $226.4 million in acquisitions and $79.5 million of dividends.
The $207 million Saela purchase and 12 tuck-in deals added 4.8 pp of Q2 growth and pushed goodwill to $1.34 billion. Rollins issued $500 million of 5.25% senior notes, repaid its revolver, and ended the quarter with $485.3 million long-term debt and $123.0 million cash; leverage remains well below its 3.5× covenant. Management targets 7-8% organic and 3-4% inorganic growth for 2025 but highlights margin pressure from higher fleet and insurance costs (-60 bps operating margin) and an environmental investigation in California. The quarterly dividend was raised 10% to $0.165 per share.
Q2 FY25 i ricavi sono aumentati del 12,1% su base annua, raggiungendo 999,5 milioni di dollari, con una crescita organica del 7,3%. Il profitto lordo è salito dell'11,6% a 537,7 milioni di dollari, mentre il margine lordo è leggermente calato di 20 punti base, attestandosi al 53,8%. L'utile operativo è cresciuto dell'8,7% a 198,3 milioni di dollari e l'utile netto del 9,3% a 141,5 milioni, portando l'utile diluito per azione a 0,29 dollari (+7,4%). Nel primo semestre, i ricavi sono aumentati dell'11,1% a 1,82 miliardi di dollari, l'utile netto del 10,3% a 246,7 milioni e il flusso di cassa libero del 20,1% a 308,2 milioni. Il flusso di cassa operativo del secondo trimestre, pari a 175,1 milioni, ha coperto acquisizioni per 226,4 milioni e dividendi per 79,5 milioni.
L'acquisizione di Saela da 207 milioni di dollari e 12 operazioni di integrazione hanno contribuito per 4,8 punti percentuali alla crescita del secondo trimestre, portando l'avviamento a 1,34 miliardi di dollari. Rollins ha emesso 500 milioni di dollari di obbligazioni senior al 5,25%, ha rimborsato la linea di credito revolving e ha chiuso il trimestre con un debito a lungo termine di 485,3 milioni e 123,0 milioni in cassa; la leva finanziaria resta ben al di sotto del covenant di 3,5×. La direzione prevede una crescita organica del 7-8% e inorganica del 3-4% per il 2025, evidenziando però pressioni sui margini dovute a costi maggiori per la flotta e le assicurazioni (-60 punti base sul margine operativo) e a un'indagine ambientale in California. Il dividendo trimestrale è stato aumentato del 10% a 0,165 dollari per azione.
Q2 FY25 los ingresos aumentaron un 12,1% interanual hasta 999,5 millones de dólares, con un crecimiento orgánico del 7,3%. El beneficio bruto subió un 11,6% hasta 537,7 millones, pero el margen bruto bajó 20 puntos básicos hasta el 53,8%. El ingreso operativo creció un 8,7% hasta 198,3 millones y el ingreso neto un 9,3% hasta 141,5 millones, elevando el BPA diluido a 0,29 dólares (+7,4%). En el primer semestre, los ingresos aumentaron un 11,1% hasta 1.820 millones, el ingreso neto un 10,3% hasta 246,7 millones y el flujo de caja libre un 20,1% hasta 308,2 millones. El flujo de caja operativo del Q2 de 175,1 millones cubrió adquisiciones por 226,4 millones y dividendos por 79,5 millones.
La compra de Saela por 207 millones y 12 adquisiciones adicionales aportaron 4,8 puntos porcentuales al crecimiento del Q2 y elevaron el fondo de comercio a 1.340 millones. Rollins emitió 500 millones en notas senior al 5,25%, pagó su línea revolvente y cerró el trimestre con una deuda a largo plazo de 485,3 millones y 123,0 millones en efectivo; el apalancamiento sigue muy por debajo del covenant de 3,5×. La dirección apunta a un crecimiento orgánico del 7-8% y uno inorgánico del 3-4% para 2025, aunque advierte presión en los márgenes por mayores costos de flota y seguros (-60 pb en margen operativo) y una investigación ambiental en California. El dividendo trimestral se incrementó un 10% a 0,165 dólares por acción.
FY25 2분기 매출은 전년 동기 대비 12.1% 증가한 9억 9,950만 달러를 기록했으며, 유기적 성장률은 7.3%였습니다. 총이익은 11.6% 증가한 5억 3,770만 달러였으나, 총이익률은 20bp 하락한 53.8%를 기록했습니다. 영업이익은 8.7% 증가한 1억 9,830만 달러, 순이익은 9.3% 증가한 1억 4,150만 달러로, 희석 주당순이익(EPS)은 0.29달러(+7.4%)로 상승했습니다. 상반기 매출은 11.1% 증가한 18억 2,000만 달러, 순이익은 10.3% 증가한 2억 4,670만 달러, 잉여현금흐름은 20.1% 증가한 3억 820만 달러를 기록했습니다. 2분기 영업현금흐름 1억 7,510만 달러는 2억 2,640만 달러의 인수와 7,950만 달러의 배당금을 충당했습니다.
2억 700만 달러 규모의 Saela 인수와 12건의 추가 인수합병 거래가 2분기 성장률에 4.8%포인트를 기여했으며, 영업권은 13억 4,000만 달러로 증가했습니다. 롤린스는 5.25% 이자율의 5억 달러 선순위 채권을 발행하고, 리볼빙 대출을 상환했으며, 분기 말 장기부채는 4억 8,530만 달러, 현금은 1억 2,300만 달러를 보유했습니다. 레버리지는 3.5배의 계약 조건보다 훨씬 낮은 수준을 유지하고 있습니다. 경영진은 2025년 유기적 성장률 7-8%, 비유기적 성장률 3-4%를 목표로 하고 있으나, 차량 운용비와 보험료 상승(-60bp 영업이익률) 및 캘리포니아 환경 조사로 인한 마진 압박을 강조했습니다. 분기 배당금은 주당 0.165달러로 10% 인상되었습니다.
T2 FY25 le chiffre d'affaires a augmenté de 12,1 % en glissement annuel pour atteindre 999,5 millions de dollars, avec une croissance organique de 7,3 %. La marge brute a progressé de 11,6 % pour atteindre 537,7 millions de dollars, mais la marge brute a reculé de 20 points de base à 53,8 %. Le résultat d'exploitation a augmenté de 8,7 % pour atteindre 198,3 millions de dollars et le résultat net de 9,3 % à 141,5 millions, portant le BPA dilué à 0,29 $ (+7,4 %). Sur le premier semestre, le chiffre d'affaires a progressé de 11,1 % pour atteindre 1,82 milliard de dollars, le résultat net de 10,3 % à 246,7 millions et le flux de trésorerie disponible de 20,1 % à 308,2 millions. Le flux de trésorerie d'exploitation du T2, à 175,1 millions, a couvert 226,4 millions d'acquisitions et 79,5 millions de dividendes.
L'acquisition de Saela pour 207 millions de dollars et 12 opérations complémentaires ont ajouté 4,8 points de pourcentage à la croissance du T2 et porté le goodwill à 1,34 milliard. Rollins a émis 500 millions de dollars d'obligations senior à 5,25 %, remboursé sa ligne de crédit renouvelable et terminé le trimestre avec une dette à long terme de 485,3 millions et 123,0 millions en liquidités ; l'endettement reste bien en dessous du covenant de 3,5×. La direction vise une croissance organique de 7-8 % et inorganique de 3-4 % pour 2025, mais souligne une pression sur les marges due à l'augmentation des coûts de flotte et d'assurance (-60 points de base sur la marge opérationnelle) ainsi qu'à une enquête environnementale en Californie. Le dividende trimestriel a été augmenté de 10 % à 0,165 $ par action.
Q2 FY25 stieg der Umsatz im Jahresvergleich um 12,1 % auf 999,5 Millionen US-Dollar, mit einem organischen Wachstum von 7,3 %. Der Bruttogewinn kletterte um 11,6 % auf 537,7 Millionen US-Dollar, jedoch sank die Bruttomarge um 20 Basispunkte auf 53,8 %. Das Betriebsergebnis wuchs um 8,7 % auf 198,3 Millionen US-Dollar und der Nettogewinn um 9,3 % auf 141,5 Millionen US-Dollar, was das verwässerte Ergebnis je Aktie auf 0,29 US-Dollar (+7,4 %) anhob. Für das erste Halbjahr stiegen die Umsätze um 11,1 % auf 1,82 Milliarden US-Dollar, der Nettogewinn um 10,3 % auf 246,7 Millionen und der freie Cashflow um 20,1 % auf 308,2 Millionen. Der operative Cashflow im Q2 von 175,1 Millionen deckte Akquisitionen in Höhe von 226,4 Millionen und Dividenden von 79,5 Millionen ab.
Der Kauf von Saela für 207 Millionen US-Dollar und 12 Zukäufe trugen 4,8 Prozentpunkte zum Wachstum im Q2 bei und erhöhten den Firmenwert auf 1,34 Milliarden US-Dollar. Rollins gab 500 Millionen US-Dollar an 5,25 % Senior Notes aus, tilgte seine revolvierende Kreditlinie und schloss das Quartal mit 485,3 Millionen langfristigen Schulden und 123,0 Millionen Barbestand ab; die Verschuldungsquote liegt weiterhin deutlich unter dem Covenant von 3,5×. Das Management peilt für 2025 ein organisches Wachstum von 7-8 % und ein anorganisches von 3-4 % an, weist jedoch auf Margendruck durch höhere Flotten- und Versicherungskosten (-60 Basispunkte operative Marge) sowie eine Umweltuntersuchung in Kalifornien hin. Die Quartalsdividende wurde um 10 % auf 0,165 US-Dollar je Aktie erhöht.
- Double-digit revenue growth (12.1% YoY) with 7.3% organic contribution shows strong underlying demand.
- Operating cash flow +20.7% to $175 million, driving free cash flow conversion above 120%.
- Accretive M&A: $207 million Saela deal and 12 tuck-ins add 4.8 pp to Q2 growth.
- Strengthened liquidity: $500 million 5.25% notes issued; revolver fully undrawn post-repayment.
- Dividend increased 10% to $0.165 per share, reflecting confidence in future cash generation.
- Margin compression: operating margin down 60 bps and gross margin down 20 bps from higher fleet and insurance costs.
- Rising leverage: long-term debt up 23% to $485 million; commercial paper balance $60 million.
- Environmental investigation in California could trigger compliance costs or fines.
- Goodwill concentration at $1.34 billion (42% of assets) raises future impairment risk.
- Macro headwinds (inflation, labor, supply chain) cited as uncertainties to achieving 2025 targets.
Insights
TL;DR – Solid top-line and cash flow, mild margin squeeze; outlook intact.
Rollins produced its sixth consecutive quarter of double-digit revenue growth, underpinned by robust termite and commercial demand and a meaningful M&A lift. Despite 20–60 bps margin give-back tied to fleet inflation and legacy insurance claims, EBITDA rose 10% and free cash flow conversion exceeded 120%, underscoring strong cash economics. The $500 million 5.25% note issue extends duration at a manageable coupon and resets revolver capacity, keeping net leverage around 1.5× EBITDA—comfortable versus the 3.5× covenant. Saela integration appears smooth, contributing $18.9 million revenue and $2.7 million earnings in its first quarter. Near-term watch points are cost inflation, the California waste probe and potential goodwill concentration (42% of assets), yet guidance of ~11% total growth looks achievable.
TL;DR – Balance sheet still conservative after new notes; liquidity strong.
The February 2035 senior notes refinance short-term revolver borrowings, extending weighted-average maturity to 9.2 years. Interest coverage remains robust at 17×, and no borrowings are outstanding on the $1 billion revolver. Commercial paper of just $60 million is backstopped by ample cash and untapped credit. Key covenant (Net Debt/EBITDA ≤3.5×) sits at roughly 1.5×, providing >$800 million headroom for further acquisitions. Risk factors include potential legal costs from the environmental inquiry and rising contingent consideration (now $40 million). Overall credit quality is stable with a slight negative bias should margin compression persist.
Q2 FY25 i ricavi sono aumentati del 12,1% su base annua, raggiungendo 999,5 milioni di dollari, con una crescita organica del 7,3%. Il profitto lordo è salito dell'11,6% a 537,7 milioni di dollari, mentre il margine lordo è leggermente calato di 20 punti base, attestandosi al 53,8%. L'utile operativo è cresciuto dell'8,7% a 198,3 milioni di dollari e l'utile netto del 9,3% a 141,5 milioni, portando l'utile diluito per azione a 0,29 dollari (+7,4%). Nel primo semestre, i ricavi sono aumentati dell'11,1% a 1,82 miliardi di dollari, l'utile netto del 10,3% a 246,7 milioni e il flusso di cassa libero del 20,1% a 308,2 milioni. Il flusso di cassa operativo del secondo trimestre, pari a 175,1 milioni, ha coperto acquisizioni per 226,4 milioni e dividendi per 79,5 milioni.
L'acquisizione di Saela da 207 milioni di dollari e 12 operazioni di integrazione hanno contribuito per 4,8 punti percentuali alla crescita del secondo trimestre, portando l'avviamento a 1,34 miliardi di dollari. Rollins ha emesso 500 milioni di dollari di obbligazioni senior al 5,25%, ha rimborsato la linea di credito revolving e ha chiuso il trimestre con un debito a lungo termine di 485,3 milioni e 123,0 milioni in cassa; la leva finanziaria resta ben al di sotto del covenant di 3,5×. La direzione prevede una crescita organica del 7-8% e inorganica del 3-4% per il 2025, evidenziando però pressioni sui margini dovute a costi maggiori per la flotta e le assicurazioni (-60 punti base sul margine operativo) e a un'indagine ambientale in California. Il dividendo trimestrale è stato aumentato del 10% a 0,165 dollari per azione.
Q2 FY25 los ingresos aumentaron un 12,1% interanual hasta 999,5 millones de dólares, con un crecimiento orgánico del 7,3%. El beneficio bruto subió un 11,6% hasta 537,7 millones, pero el margen bruto bajó 20 puntos básicos hasta el 53,8%. El ingreso operativo creció un 8,7% hasta 198,3 millones y el ingreso neto un 9,3% hasta 141,5 millones, elevando el BPA diluido a 0,29 dólares (+7,4%). En el primer semestre, los ingresos aumentaron un 11,1% hasta 1.820 millones, el ingreso neto un 10,3% hasta 246,7 millones y el flujo de caja libre un 20,1% hasta 308,2 millones. El flujo de caja operativo del Q2 de 175,1 millones cubrió adquisiciones por 226,4 millones y dividendos por 79,5 millones.
La compra de Saela por 207 millones y 12 adquisiciones adicionales aportaron 4,8 puntos porcentuales al crecimiento del Q2 y elevaron el fondo de comercio a 1.340 millones. Rollins emitió 500 millones en notas senior al 5,25%, pagó su línea revolvente y cerró el trimestre con una deuda a largo plazo de 485,3 millones y 123,0 millones en efectivo; el apalancamiento sigue muy por debajo del covenant de 3,5×. La dirección apunta a un crecimiento orgánico del 7-8% y uno inorgánico del 3-4% para 2025, aunque advierte presión en los márgenes por mayores costos de flota y seguros (-60 pb en margen operativo) y una investigación ambiental en California. El dividendo trimestral se incrementó un 10% a 0,165 dólares por acción.
FY25 2분기 매출은 전년 동기 대비 12.1% 증가한 9억 9,950만 달러를 기록했으며, 유기적 성장률은 7.3%였습니다. 총이익은 11.6% 증가한 5억 3,770만 달러였으나, 총이익률은 20bp 하락한 53.8%를 기록했습니다. 영업이익은 8.7% 증가한 1억 9,830만 달러, 순이익은 9.3% 증가한 1억 4,150만 달러로, 희석 주당순이익(EPS)은 0.29달러(+7.4%)로 상승했습니다. 상반기 매출은 11.1% 증가한 18억 2,000만 달러, 순이익은 10.3% 증가한 2억 4,670만 달러, 잉여현금흐름은 20.1% 증가한 3억 820만 달러를 기록했습니다. 2분기 영업현금흐름 1억 7,510만 달러는 2억 2,640만 달러의 인수와 7,950만 달러의 배당금을 충당했습니다.
2억 700만 달러 규모의 Saela 인수와 12건의 추가 인수합병 거래가 2분기 성장률에 4.8%포인트를 기여했으며, 영업권은 13억 4,000만 달러로 증가했습니다. 롤린스는 5.25% 이자율의 5억 달러 선순위 채권을 발행하고, 리볼빙 대출을 상환했으며, 분기 말 장기부채는 4억 8,530만 달러, 현금은 1억 2,300만 달러를 보유했습니다. 레버리지는 3.5배의 계약 조건보다 훨씬 낮은 수준을 유지하고 있습니다. 경영진은 2025년 유기적 성장률 7-8%, 비유기적 성장률 3-4%를 목표로 하고 있으나, 차량 운용비와 보험료 상승(-60bp 영업이익률) 및 캘리포니아 환경 조사로 인한 마진 압박을 강조했습니다. 분기 배당금은 주당 0.165달러로 10% 인상되었습니다.
T2 FY25 le chiffre d'affaires a augmenté de 12,1 % en glissement annuel pour atteindre 999,5 millions de dollars, avec une croissance organique de 7,3 %. La marge brute a progressé de 11,6 % pour atteindre 537,7 millions de dollars, mais la marge brute a reculé de 20 points de base à 53,8 %. Le résultat d'exploitation a augmenté de 8,7 % pour atteindre 198,3 millions de dollars et le résultat net de 9,3 % à 141,5 millions, portant le BPA dilué à 0,29 $ (+7,4 %). Sur le premier semestre, le chiffre d'affaires a progressé de 11,1 % pour atteindre 1,82 milliard de dollars, le résultat net de 10,3 % à 246,7 millions et le flux de trésorerie disponible de 20,1 % à 308,2 millions. Le flux de trésorerie d'exploitation du T2, à 175,1 millions, a couvert 226,4 millions d'acquisitions et 79,5 millions de dividendes.
L'acquisition de Saela pour 207 millions de dollars et 12 opérations complémentaires ont ajouté 4,8 points de pourcentage à la croissance du T2 et porté le goodwill à 1,34 milliard. Rollins a émis 500 millions de dollars d'obligations senior à 5,25 %, remboursé sa ligne de crédit renouvelable et terminé le trimestre avec une dette à long terme de 485,3 millions et 123,0 millions en liquidités ; l'endettement reste bien en dessous du covenant de 3,5×. La direction vise une croissance organique de 7-8 % et inorganique de 3-4 % pour 2025, mais souligne une pression sur les marges due à l'augmentation des coûts de flotte et d'assurance (-60 points de base sur la marge opérationnelle) ainsi qu'à une enquête environnementale en Californie. Le dividende trimestriel a été augmenté de 10 % à 0,165 $ par action.
Q2 FY25 stieg der Umsatz im Jahresvergleich um 12,1 % auf 999,5 Millionen US-Dollar, mit einem organischen Wachstum von 7,3 %. Der Bruttogewinn kletterte um 11,6 % auf 537,7 Millionen US-Dollar, jedoch sank die Bruttomarge um 20 Basispunkte auf 53,8 %. Das Betriebsergebnis wuchs um 8,7 % auf 198,3 Millionen US-Dollar und der Nettogewinn um 9,3 % auf 141,5 Millionen US-Dollar, was das verwässerte Ergebnis je Aktie auf 0,29 US-Dollar (+7,4 %) anhob. Für das erste Halbjahr stiegen die Umsätze um 11,1 % auf 1,82 Milliarden US-Dollar, der Nettogewinn um 10,3 % auf 246,7 Millionen und der freie Cashflow um 20,1 % auf 308,2 Millionen. Der operative Cashflow im Q2 von 175,1 Millionen deckte Akquisitionen in Höhe von 226,4 Millionen und Dividenden von 79,5 Millionen ab.
Der Kauf von Saela für 207 Millionen US-Dollar und 12 Zukäufe trugen 4,8 Prozentpunkte zum Wachstum im Q2 bei und erhöhten den Firmenwert auf 1,34 Milliarden US-Dollar. Rollins gab 500 Millionen US-Dollar an 5,25 % Senior Notes aus, tilgte seine revolvierende Kreditlinie und schloss das Quartal mit 485,3 Millionen langfristigen Schulden und 123,0 Millionen Barbestand ab; die Verschuldungsquote liegt weiterhin deutlich unter dem Covenant von 3,5×. Das Management peilt für 2025 ein organisches Wachstum von 7-8 % und ein anorganisches von 3-4 % an, weist jedoch auf Margendruck durch höhere Flotten- und Versicherungskosten (-60 Basispunkte operative Marge) sowie eine Umweltuntersuchung in Kalifornien hin. Die Quartalsdividende wurde um 10 % auf 0,165 US-Dollar je Aktie erhöht.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
or
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File No.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
(Address of principal executive offices) | (Zip code) |
(
(Registrant’s telephone number, including area code)
Securities Registered under Section 12(b) of the Act:
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Title of each class: |
| Trading Symbol(s) |
| Name of each exchange on which registered: |
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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.
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | ☐ | ☒ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of July 18, 2025, RPC, Inc. had
Table of Contents
RPC, INC. AND SUBSIDIARIES
Table of Contents
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Part I. Financial Information | | | |
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Item 1. | Financial Statements (Unaudited) | | |
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| Consolidated Balance Sheets – As of June 30, 2025, and December 31, 2024 | | 3 |
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| Consolidated Statements of Operations – For the three and six months ended June 30, 2025, and 2024 | | 4 |
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| Consolidated Statements of Comprehensive Income – For the three and six months ended June 30, 2025, and 2024 | | 5 |
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| Consolidated Statements of Stockholders’ Equity – For the three and six months ended June 30, 2025, and 2024 | | 6 |
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| Consolidated Statements of Cash Flows – For the six months ended June 30, 2025, and 2024 | | 7 |
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| Notes to Consolidated Financial Statements | | 8 – 22 |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 23 – 33 |
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Item 3. | Quantitative and Qualitative Disclosures about Market Risk | | 33 |
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Item 4. | Controls and Procedures | | 33 |
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Part II. Other Information | | | |
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Item 1. | Legal Proceedings | | 35 |
| | | |
Item 1A. | Risk Factors | | 35 |
| | | |
Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | | 35 |
| | | |
Item 3. | Defaults upon Senior Securities | | 35 |
| | | |
Item 4. | Mine Safety Disclosures | | 35 |
| | | |
Item 5. | Other Information | | 35 |
| | | |
Item 6. | Exhibits | | 37 |
| | | |
Signatures | | 38 | |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2025, AND DECEMBER 31, 2024
(In thousands, except share and par value data)
| | | | | | |
| | June 30, | | December 31, | ||
|
| 2025 |
| 2024 | ||
ASSETS | | | (Unaudited) | | | Note 1 |
Cash and cash equivalents | | $ | | | $ | |
Accounts receivable, net of allowance for credit losses of $ | | | | | | |
Inventories | |
| | |
| |
Income taxes receivable | |
| | |
| |
Prepaid expenses | |
| | |
| |
Retirement plan assets | | | | | | — |
Other current assets | |
| | |
| |
Total current assets | |
| | |
| |
Property, plant and equipment, less accumulated depreciation of $ | | | | | | |
Operating lease right-of-use assets | | | | | | |
Finance lease right-of-use assets | | | | | | |
Goodwill | |
| | |
| |
Other intangibles, net | | | | | | |
Retirement plan assets | | | — | | | |
Other assets | |
| | |
| |
Total assets | | $ | | | $ | |
| | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
|
| |
|
|
LIABILITIES | |
|
| |
|
|
Accounts payable | | $ | | | $ | |
Accrued payroll and related expenses | |
| | |
| |
Accrued insurance expenses | |
| | |
| |
Accrued state, local and other taxes | |
| | |
| |
Income taxes payable | |
| | |
| |
Unearned revenue | | | — | | | |
Current portion of operating lease liabilities | | | | | | |
Current portion of finance lease liabilities and finance obligations | | | | | | |
Retirement plan liabilities | | | | | | — |
Current portion of notes payable | | | | | | — |
Accrued expenses and other liabilities | |
| | |
| |
Total current liabilities | |
| | |
| |
Accrued insurance expenses | |
| | |
| |
Retirement plan liabilities | |
| — | |
| |
Note payable | | | | | | — |
Operating lease liabilities | |
| | |
| |
Finance lease liabilities | | | | | | |
Other long-term liabilities | | | | | | |
Deferred income taxes | |
| | |
| |
Total liabilities | |
| | |
| |
Commitments and contingencies (Note 12) | |
| | |
| |
| | | | | | |
STOCKHOLDERS’ EQUITY | |
|
| |
|
|
Preferred stock, $ | |
| — | |
| — |
Common stock, $ | |
| | |
| |
Capital in excess of par value | |
| | |
| |
Retained earnings | |
| | |
| |
Accumulated other comprehensive loss | |
| ( | |
| ( |
Total stockholders’ equity | |
| | |
| |
Total liabilities and stockholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
3
Table of Contents
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024
(In thousands except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Revenues | | $ | | | $ | | | $ | | | $ | |
COSTS AND EXPENSES: | |
| | |
| | |
|
| |
|
|
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
| | |
| | |
| | |
| | |
Selling, general and administrative expenses |
| | |
| | |
| | |
| | |
Acquisition related employment costs | | | | | | — | | | | | | — |
Depreciation and amortization |
| | |
| | |
| | |
| | |
Gain on disposition of assets, net |
| | ( |
| | ( |
| | ( |
| | ( |
Operating income |
| | |
| | |
| | |
| | |
Interest expense |
| | ( |
| | ( |
| | ( |
| | ( |
Interest income |
| | |
| | |
| | |
| | |
Other income, net |
| | |
| | |
| | |
| | |
Income before income taxes |
| | |
| | |
| | |
| | |
Income tax provision |
| | |
| | |
| | |
| | |
Net income | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Earnings per share | |
|
| |
| | |
|
| |
|
|
Basic | | $ | | | $ | | | $ | | | $ | |
Diluted | | $ | | | $ | | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
4
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RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024
(In thousands)
(Unaudited)
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Net income | | $ | | | $ | | | $ | | | $ | |
Other comprehensive income (loss): | |
| | |
| | |
| | |
| |
Foreign currency translation |
| | |
| | ( |
| | |
| | ( |
Comprehensive income | | $ | | | $ | | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
5
Table of Contents
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | Six months ended June 30, 2025 | |||||||||||||||
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Capital in | | | | | Other | | | | ||
| | Common Stock | | Excess of | | Retained | | Comprehensive | | | | ||||||
|
| Shares |
| Amount |
| Par Value |
| Earnings |
| Loss |
| Total | |||||
Balance, December 31, 2024 |
| | | $ | | | $ | — | | $ | | | $ | ( | | $ | |
Stock issued for stock incentive plans, net |
| | |
| | |
| | |
| — | |
| — | |
| |
Stock purchased and retired |
| ( | |
| ( | |
| ( | |
| ( | |
| — | |
| ( |
Net income |
| — | |
| — | |
| — | |
| | |
| — | |
| |
Cash dividends ($ |
| — | |
| — | |
| — | |
| ( | |
| — | |
| ( |
Foreign currency translation |
| — | |
| — | |
| — | |
| — | |
| | |
| |
Balance, March 31, 2025 | | | | | | | | — | | | | | | ( | | | |
Stock issued for stock incentive plans, net | | | | | | | | | | | — | | | — | | | |
Stock purchased and retired | | — | | | — | | | ( | | | | | | — | | | — |
Net income | | — | | | — | | | — | | | | | | — | | | |
Cash dividends ($ | | — | | | — | | | — | | | ( | | | — | | | ( |
Acquisition related employment costs | | — | | | — | | | — | | | | | | — | | | |
Foreign currency translation | | — | | | — | | | — | | | — | | | | | | |
Balance, June 30, 2025 | | | | $ | | | $ | — | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | |
| | Six months ended June 30, 2024 | |||||||||||||||
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Capital in | | | | | Other | | | | ||
| | Common Stock | | Excess of | | Retained | | Comprehensive | | | | ||||||
|
| Shares |
| Amount |
| Par Value |
| Earnings |
| Loss |
| Total | |||||
Balance, December 31, 2023 |
| | | $ | | | $ | — | | $ | | | $ | ( | | $ | |
Stock issued for stock incentive plans, net |
| | |
| | |
| | |
| — | |
| — | |
| |
Stock purchased and retired |
| ( | |
| ( | |
| ( | |
| ( | |
| — | |
| ( |
Net income |
| — | |
| — | |
| — | |
| | |
| — | |
| |
Cash dividends ($ | | — | |
| — | |
| — | |
| ( | |
| — | | | ( |
Foreign currency translation |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balance, March 31, 2024 | | | | | | | | — | | | | | | ( | | | |
Stock issued for stock incentive plans, net | | | | | | | | | | | — | | | — | | | |
Stock purchased and retired | | — | | | — | | | ( | | | | | | — | | | — |
Net income | | — | | | — | | | — | | | | | | — | | | |
Cash dividends ($ | | — | | | — | | | — | | | ( | | | — | | | ( |
Foreign currency translation | | — | | | — | | | — | | | — | | | ( | | | ( |
Balance, June 30, 2024 |
| | | $ | | | $ | — | | $ | | | $ | ( | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
6
Table of Contents
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2025, AND 2024
(In thousands)
(Unaudited)
| | | | | | |
| | Six months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
OPERATING ACTIVITIES | | |
| | |
|
Net income | | $ | | | $ | |
Adjustments to reconcile net income to net cash provided by operating activities: |
| | |
| | |
Depreciation and amortization |
| | |
| | |
Stock-based compensation expense |
| | |
| | |
Gain on disposition of assets, net |
| | ( |
| | ( |
Gain due to benefit plan financing arrangement |
| | — | | | ( |
Deferred income tax (benefit) provision |
| | ( |
| | |
Acquisition related employment costs |
| | |
| | — |
Other non-cash adjustments | | | ( | | | |
Decrease (increase) in assets: |
| | |
| | |
Accounts receivable |
| | |
| | |
Income taxes receivable |
| | |
| | |
Inventories |
| | ( |
| | ( |
Prepaid expenses |
| | |
| | |
Other current assets |
| | ( |
| | |
Retirement plan assets | | | ( | | | — |
Other non-current assets |
| | ( |
| | ( |
(Decrease) increase in liabilities: |
| | |
| | |
Accounts payable |
| | ( |
| | |
Income taxes payable |
| | |
| | |
Unearned revenue | | | ( | | | ( |
Accrued payroll and related expenses |
| | |
| | ( |
Accrued insurance expenses |
| | |
| | |
Accrued state, local and other taxes |
| | |
| | |
Other accrued expenses | | | | | | ( |
Retirement plan liabilities |
| | ( |
| | |
Long-term accrued insurance expenses |
| | |
| | |
Other long-term liabilities |
| | |
| | ( |
Net cash provided by operating activities |
| | |
| | |
| | | | | | |
INVESTING ACTIVITIES |
| |
|
| |
|
Capital expenditures |
| | ( |
| | ( |
Proceeds from sale of assets |
| | |
| | |
Purchase of business, net of cash and debt assumed |
| | ( |
| | — |
Proceeds from benefit plan financing arrangement |
| | — |
| | |
Re-investment in benefit plan financing arrangement |
| | — |
| | ( |
Net cash used for investing activities |
| | ( |
| | ( |
| | | | | | |
FINANCING ACTIVITIES |
| |
|
| |
|
Payment of dividends |
| | ( |
| | ( |
Repayment of debt assumed at acquisition |
| | ( |
| | — |
Cash paid for common stock purchased and retired |
| | ( |
| | ( |
Cash paid for finance lease and finance obligations | | | ( | | | ( |
Net cash used for financing activities |
| | ( |
| | ( |
| | | | | | |
Net (decrease) increase in cash and cash equivalents |
| | ( |
| | |
Cash and cash equivalents at beginning of period |
| | |
| | |
Cash and cash equivalents at end of period | | $ | | | $ | |
| | | | | | |
Supplemental cash flows disclosure: | | | | | | |
Income tax payments (refunds), net | | $ | | | $ | ( |
Interest paid | | $ | | | $ | |
Supplemental disclosure of noncash investing activities: | | | | | | |
Capital expenditures included in accounts payable | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
7
Table of Contents
RPC, INC. AND SUBSIDIARIES
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, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025.
The balance sheet at December 31, 2024, 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, 2024.
A group that includes Amy R. Kreisler and Timothy C. Rollins, each of whom is a director of the Company, certain of their family members, and certain companies under their and/or their family members’ control, controls in excess of fifty percent of the Company’s voting power.
Certain prior year amounts have been reclassified to conform to the presentation in the current year.
2. RECENT ACCOUNTING STANDARDS
Recently Issued Accounting Standards Update (ASU) Not Yet Adopted:
ASU 2024-03: Income Statement (Topic 220): Disaggregation of Income Statement Expenses: The amendments in this ASU require public companies to disclose, in interim and year-end reporting periods, additional information about certain expenses in the financial statements. These disclosures are effective beginning with 2027 annual reports, and interim reports beginning with the second quarter of 2028. Early adoption is permitted on either a prospective or retrospective basis. The Company is currently assessing the potential impact of adoption of these provisions on the consolidated financial statements.
3. ACQUISITION
On April 1, 2025 (the “Closing Date”), RPC, through its wholly owned subsidiary, Thru Tubing Solutions, Inc., completed its previously announced acquisition of Pintail Alternative Energy, L.L.C (“Pintail”). Pursuant to the terms of the Membership Interest Purchase Agreement dated as of April 1, 2025 (the “Merger Agreement”), by and among RPC and Pintail, on the Closing Date, Pintail merged with and into RPC (the “Merger”), and Pintail continued as a wholly owned subsidiary of RPC. Pintail, headquartered in Midland, Texas, is a leading provider of oilfield wireline perforating services in the Permian Basin. Pintail operates more than
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, on the Closing Date,
8
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Overnight Financing Rate (“SOFR”), for the applicable interest period, plus
The Stock Consideration and
An additional net of tax amount totaling $
Non-cash expenses related to the Contingent Consideration and the Redistribution Payments are reflected as Acquisition related employment costs in the Consolidated Statement of Operations. For the three months ended June 30, 2025, this amount totaled $
The Company incurred transaction expenses of approximately $
The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”), primarily using Level 3 inputs. The preliminary purchase price allocation was based upon valuation information that was available to determine the preliminary fair value of certain assets and liabilities, including goodwill. The preliminary purchase price allocation is subject to change, as additional information about the fair value of the individual assets and liabilities becomes available and adjustments to net working capital are finalized. The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.
The purchase price under US GAAP was $
The Company assumed finance leases related to trucks and operating leases for both vehicles and certain real estate. There were no favorable or unfavorable market terms for the leases.
The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, which is being amortized over
9
Table of Contents
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The preliminary allocation of purchase price recorded for Pintail under US GAAP was as follows:
| | | | |
|
| Amount |
| |
Cash and cash equivalents | | $ | | |
Accounts receivable | |
| | |
Inventories | |
| | |
Prepaid expenses | |
| | |
Property, plant and equipment, net | |
| | |
Operating lease right-of-use assets | |
| | |
Finance lease right-of-use assets | |
| | |
Other intangibles, net | |
| | |
Other assets | |
| | |
Total assets | | | | |
| | | | |
Accounts payable | | | ( | |
Accrued payroll and related expenses | |
| ( | |
Accrued state, local and other taxes | |
| ( | |
Current portion of notes payable | | | ( | |
Current portion of operating lease liabilities | |
| ( | |
Accrued expenses and other liabilities | | | ( | |
Long-term finance lease liabilities | |
| ( | |
Total liabilities | |
| ( | |
Net assets acquired | | | | |
Preliminary purchase price allocation | | | | |
Goodwill recorded | | $ | | |
The purchase price allocation above excludes the contingent portion of total consideration consisting of $
The following table summarizes the amounts allocated to identifiable intangible assets acquired:
| | | | | |
| | Preliminary Fair Value | | | Estimated Useful Life |
(in thousands) | | | | | |
Customer relationships | $ | | | | |
Trade names and trademarks | | | | | |
Intangible assets acquired | $ | | | | |
The fair value of customer relationships was estimated using the multi-period excess earnings method. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the customer relationships intangible assets, net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets.
The fair value of trade names was valued using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned.
Pintail recognizes revenue in an amount equal to consideration received for transferred goods or services to customers. In addition, Pintail has elected the right to invoice practical expedient for recognizing revenue related to its performance obligations.
Pintail’s revenues were $
10
Table of Contents
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
purchase accounting adjustments. Pintail’s operating results are included in the Consolidated Statements of Operations for the period from Apil 1, 2025 to June 30, 2025.
The following unaudited pro forma financial information presents the Company’s results of operations for the three and six months ended June 30, 2025, and 2024, as if the acquisition of Pintail had occurred on January 1, 2024. The unaudited pro forma information includes adjustments for intangible assets acquired, step-ups in the fair value of Property, plant and equipment, removal of non-recurring transaction costs directly associated with the Merger, and interest expense on the Seller Note, as well as the Acquisition related employment costs of $
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
(in thousands) | | | | | | | | | | | | |
Revenues | | $ | | | $ | | | $ | | | $ | |
Net income | | | | | | | | | | | | |
4. REVENUES
Accounting Policy:
RPC’s contract revenues are generated principally from providing oilfield services. These services are based on mutually agreed upon pricing with the customer prior to the services being delivered and, given the nature of the services, do not include the right of return. Pricing for these services is a function of rates based on the nature of the specific job, with consideration for the extent of equipment, labor, and consumables needed for the job. RPC typically satisfies its performance obligations over time as the services are performed. RPC records revenues based on the transaction price agreed upon with its customers.
Sales tax charged to customers is presented on a net basis within the accompanying Consolidated Statements of Operations and therefore excluded from revenues.
Nature of services:
RPC provides a broad range of specialized oilfield services to independent and major oil and gas companies engaged in the exploration, production and development of oil and gas properties throughout the United States and in selected international markets. RPC manages its business as either (1) services offered on the well site with equipment and personnel (Technical Services) or (2) services and tools offered off the well site (Support Services). For more detailed information about operating segments, see note titled Business Segment and Entity Wide Disclosures.
Our contracts with customers are generally short-term in nature and generally consist of a single performance obligation – the provision of oilfield services. RPC contracts with its customers to provide the following services by reportable segment:
Technical Services
| ● | Includes pressure pumping, downhole tools, wireline, coiled tubing, cementing, snubbing, nitrogen, well control and fishing. |
11
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 pipe handling and pipe inspection and storage services, 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
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:
See note titled Business Segment and Entity Wide Disclosures for disaggregation of revenue by operating segment and services offered in each of them and by geographic regions.
Contract balances:
Contract assets representing the Company’s rights to consideration for work completed but not billed are included in accounts receivable, net in the accompanying Consolidated Balance Sheets and are shown below:
| | | | | | | |
| | June 30, | | December 31, | | ||
|
| 2025 |
| 2024 |
| ||
(in thousands) | | | | | | | |
Unbilled trade receivables | | $ | | | $ | | |
Substantially all of the unbilled trade receivables disclosed were, or are expected to be, invoiced during the following quarter.
Unearned revenue
Contract liabilities represent payments received in advance of satisfying the Company’s performance obligation and are recognized over time as the service is performed. All of the $
5. 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 Plans to officers, selected employees and non-employee directors.
12
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of June 30, 2025, there were
6. 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, | ||||||||
|
| | 2025 | | | 2024 |
| | 2025 | | | 2024 |
(in thousands) | | | | | | | | | | | | |
Cost of revenues | | $ | | | $ | | | $ | | | $ | |
Selling, general and administrative expenses | | | | | | | | | | | | |
Total | | $ | | | $ | | | $ | | | $ | |
7. INCOME TAXES
The Company generally determines its periodic income tax expense or benefit based upon the current period income or loss and the annual estimated tax rate for the Company adjusted for discrete items including changes to prior period estimates. In certain instances, the Company uses the discrete method when it believes the actual year-to-date effective rate provides a more reliable estimate of its income tax rate for the period. The estimated tax rate is revised, if necessary, at the end of each successive interim period to the Company’s current annual estimated tax rate.
For the three months ended June 30, 2025, the effective rate reflects a provision of
On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains several changes to corporate taxation including modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated depreciation on fixed asset additions. As the legislation was signed into law after the close of our second quarter, our operating results for the six months ended June 30, 2025, does not include any adjustments related to it. The Company is in the process of evaluating the OBBBA and has not estimated its financial impact at this time.
8. 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
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
(in thousands) | | | | | | | | | | | | |
Net income available for stockholders | | $ | | | $ | | | $ | | | $ | |
Less: Adjustments for earnings attributable to participating securities | | | ( | | | ( | | | ( | | | ( |
Net income used in calculating earnings per share | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Weighted average shares outstanding (including participating securities) | |
| | |
| | |
| | |
| |
Adjustment for participating securities | |
| ( | |
| ( | |
| ( | |
| ( |
Shares used in calculating basic and diluted earnings per share | |
| | |
| | |
| | |
| |
9. CURRENT EXPECTED CREDIT LOSSES
The Company utilizes an expected credit loss model for valuing its accounts receivable, a financial asset measured at amortized cost. The Company is exposed to credit losses primarily from providing oilfield services. The Company’s expected allowance for credit losses for accounts receivable is based on historical collection experience, current and future economic and market conditions and a review of the current status of customers’ account receivable balances. Due to the short-term nature of such receivables, the estimated amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers’ financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible and recoveries of amounts previously written off are recorded when collected.
The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected:
| | | | | | |
| | | | | ||
| | Six months ended | ||||
| | June 30, | ||||
|
| 2025 | | 2024 | ||
(in thousands) | | | | | | |
Beginning balance | | $ | | | $ | |
Provision for current expected credit losses | | | | |
| |
Write-offs | | | ( | |
| ( |
Recoveries collected (net of expenses) | | | | |
| |
Ending balance | | $ | | | $ | |
10. INVENTORIES
Inventories consist of (i) raw materials and supplies that are consumed providing services to the Company’s customers, (ii) spare parts for equipment used in providing these services and (iii) components and attachments for manufactured equipment used in providing services. In the table below, spare parts and components are included as part of raw materials and supplies; tools that are assembled using components are reported as finished goods. Inventories are recorded at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method or the weighted average cost method.
| | | | | | |
| | June 30, | | December 31, | ||
(in thousands) | | 2025 | | 2024 | ||
Raw materials and supplies | | $ | | | $ | |
Finished goods | | | | |
| |
Total Inventory | | $ | | | $ | |
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
11. OTHER INTANGIBLES, NET
Intangible assets are amortized over their legal or estimated useful life. The following table provides a summary of the gross carrying value and accumulated amortization by each major intangible class as of June 30, 2025, and December 31, 2024:
| | | | | | | | | | | | | | |
| | | | | June 30, 2025 | | | December 31, 2024 | ||||||
| | Estimated Useful Life (in years) | | | Gross | | | Accumulated Amortization | | | Gross | | | Accumulated Amortization |
(in thousands) | | | | | | | | | | | | | | |
Finite-lived Intangibles: | | | | | | | | | | | | | | |
Customer relationships | | | $ | | | $ | ( | | $ | | | $ | ( | |
Trade names and trademarks | | | | | | | ( | | | | | | ( | |
Software licenses | | | | | | | ( | | | | | | ( | |
| | | | $ | | | $ | ( | | $ | | | $ | ( |
During the second quarter of 2025, the Company acquired intangible assets; see Note 3 for additional details related to the intangible assets acquired.
Amortization expense for each of the periods presented follows:
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
|
| | 2025 | | | 2024 |
| | 2025 | | | 2024 |
(in thousands) | | | | | | | | | | | | |
Amortization of finite-lived intangible assets | | $ | | | $ | | | $ | | | $ | |
Estimated future amortization expense based on balances as of June 30, 2025, were as follows: $
12. COMMITMENTS AND CONTINGENCIES
Sales and Use Taxes - The Company has ongoing sales and use tax audits in various jurisdictions and may be subjected to varying interpretations of statutes that could result in unfavorable outcomes. In accordance with ASC 450-20, Loss Contingencies, any probable and reasonable estimates of assessment costs have been included in Accrued state, local and other taxes in the accompanying Consolidated Balance Sheet.
The Company has outstanding state tax notifications of audit results related to sales and use tax and with its outside legal counsel has evaluated the perceived merits of this tax assessment. The Company believes the likelihood of a material loss related to these contingencies is remote and the amount of liability cannot be reasonably estimated at this time. Therefore, no loss has been recorded and the Company currently does not believe the resolution of these claims will have a material impact on its consolidated financial position, results of operations or cash flows.
Litigation - RPC is a party to various routine legal proceedings primarily involving commercial claims, employee liability and workers’ compensation claims and claims for personal injury. RPC insures against these risks to the extent deemed prudent by its management, but no assurance can be given that the nature and amount of such insurance will, in every case, fully indemnify RPC against liabilities arising out of pending and future legal proceedings related to its business activities.
13. RETIREMENT PLANS
In the fourth quarter of 2024, the Board of Directors approved the termination of the Supplemental Retirement Plan (SERP). Pursuant to the Internal Revenue Service rules, participant balances are required to be distributed between 12 and 24 months after termination. The Company currently expects to distribute the participant balances within the next
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
currently held in the Rabbi Trust. As of June 30, 2025, the Retirement plan assets and Retirement plan liabilities related to the SERP are reported as part of current assets and current liabilities in the accompanying Consolidated Balance Sheet.
The Company permitted, through December 31, 2024, selected highly compensated employees to defer a portion of their compensation to the SERP. The Company maintains certain securities primarily in mutual funds and company-owned life insurance policies as a funding source to satisfy the obligations of the SERP that have been classified as trading and are stated at fair value totaling $
The SERP liabilities include participant deferrals, net of distributions, and are stated at fair value of approximately $
14. NOTES PAYABLE
The Company has a revolving Credit Agreement with Bank of America and
Under the Credit Agreement, when RPC’s trailing four quarter EBITDA (as calculated under the Credit Agreement) is equal to or greater than $
Revolving loans under the amended revolving credit facility bear interest at one of the following two rates at the Company’s election:
| ● | Term SOFR; plus, a margin ranging from |
| ● | the Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus |
In addition, the Company pays an annual fee ranging from
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of June 30, 2025, RPC had
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
(in thousands) | | 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Interest incurred | | $ | | | $ | | | $ | | | $ | |
Interest paid | | | | | | | | | | | | |
15. FAIR VALUE DISCLOSURES
The various inputs used to measure assets at fair value establish a hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three broad levels as follows:
The Company determines the fair value of equity securities that have a readily determinable fair value through quoted market prices. The total fair value is the final closing price, as defined by the exchange in which the asset is actively traded, on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs.
Trading securities are comprised of the SERP assets, as described in the note titled Retirement Plans, and are recorded primarily at their net cash surrender values, calculated using their net asset values, which approximates fair value, as provided by the issuing insurance or investment company. Significant observable inputs, in addition to quoted market prices, were used to value the equity securities. The Company’s policy is to recognize transfers between levels at the beginning of quarterly reporting periods. For the quarter ended June 30, 2025, there were no significant transfers in or out of levels 1, 2 or 3.
Under the Company’s revolving credit facility, there was
The carrying amounts of other financial instruments reported in the balance sheet for current assets and current liabilities approximate their fair values because of the short maturity of these instruments. The Company currently does not use the fair value option to measure any of its existing financial instruments and has not determined whether it will elect this option for financial instruments acquired in the future.
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
16. ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated other comprehensive loss consists of the following:
| | | |
| | | Foreign |
| | | Currency |
|
| | Translation |
(in thousands) | | | |
Balance at December 31, 2024 | | $ | ( |
Change during the period: | |
| |
Before-tax amount | |
| |
Balance at June 30, 2025 | | $ | ( |
| | | |
| | | Foreign |
| | | Currency |
|
| | Translation |
(in thousands) | | | |
Balance at December 31, 2023 | | $ | ( |
Change during the period: | |
| |
Before-tax amount | |
| ( |
Balance at June 30, 2024 | | $ | ( |
17. CASH PAID FOR COMMON STOCK PURCHASED AND RETIRED
The Company has a stock buyback program to repurchase up to
Shares purchased for withholding taxes represent taxes due upon vesting of time-lapse restricted shares granted to employees.
Total share repurchases for each of the periods presented are detailed below:
| | | | | | | | | | | | | | | | | | |
| | | | | ||||||||||||||
| | Six months ended June 30, 2025 | | Six months ended June 30, 2024 | ||||||||||||||
|
| No. of Shares | | | Avg. Price | | | Total Cost |
| No. of Shares | | | Avg. Price | | Total Cost | |||
(in thousands except per share data) | | | | | | | | | | | | | | | | | | |
Shares purchased for withholding taxes | | | | | $ | | $ | | | | | | $ | | $ | | ||
Open market purchases | | | — | | | — | | | — | | | | | | | | | |
Total | | | | | $ | | $ | | | | | | $ | | $ | | ||
Excise tax payable on share repurchases totaling $
18. BUSINESS SEGMENT AND ENTITY WIDE DISCLOSURES
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 control, wireline, fishing and water management. The services offered under Technical Services are high capital and
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
personnel intensive businesses. The Company considers all of these services to be closely integrated oil and gas well servicing businesses and makes resource allocation and performance assessment decisions based on this operating segment as a whole across these various services.
Support Services consist primarily of drill pipe and related tools, pipe handling, pipe inspection and storage services, and oilfield training services. The demand for these services tends to be influenced primarily by customer drilling-related activity levels.
The Company’s Chief Operating Decision Maker (CODM) assesses performance and makes resource allocation decisions regarding, among others, staffing, growth and maintenance capital expenditures and key initiatives based on the operating segments outlined above.
The accounting policies of the reportable segments are the same as those referenced in Note 1 to the consolidated financial statements. Gains or losses on disposition of assets are reviewed on a consolidated basis, and accordingly the Company does not report gains or losses at the segment level. Intersegment revenues are generally recorded in segment operating results at prices that management believes approximate prices for arm’s length transactions and are not material to operating results.
RPC's CODM is its Chief Executive Officer. For each of the reportable segments, the CODM uses operating income to allocate resources (equipment, financial, and human resources).
Significant segment expense by reportable segment for the three and six months ended June 30, 2025 and 2024 are shown in the following tables:
| | | | | | | | | | | | | | | | | | | |
|
| | Three months ended | | | | Six months ended | ||||||||||||
| | | June 30, | | | June 30, | |||||||||||||
| | | Technical | | Support | | | | Technical | | Support | | | ||||||
|
| | Services |
| Services |
| Total |
| Services |
| Services |
| Total | ||||||
(in thousands) | | | | | | | | | | | | | | | | | | | |
2025 | | | | | | | | | | | | |
| | |
| | |
|
Revenues | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Employment costs (1) | | | | | | | | | | | | | | | | | | | |
Materials and supplies | | | | | | | | | | | | | | | | | | | |
Maintenance & repairs | | | | | | | | | | | | | | | | | | | |
Fleet and transportation | | | | | | | | | | | | | | | | | | | |
Other cost of revenues (2) | | | | | | | | | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation and amortization) |
| $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Employment costs (1) | | | | | | | | | | | | | | | | | | | |
Enterprise shared services (3) | | | | | | | | | | | | | | | | | | | |
Other selling, general and administrative expenses (4) | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Segment depreciation and amortization | | | | | | | | | | | | | | | | | | | |
Segment operating income | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
Unallocated corporate expenses (5) | | | | | | | | | | | | | | | | | | | |
Acquisition related employment costs | | | | | | | | | | | | | | | | | | | |
(Gain) on sale of assets | | | | | | | | | ( | | | | | | | | | | ( |
Operating income | | | | | | | | $ | | | | | | | | | | $ | |
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | |
|
| | Three months ended | | | | Six months ended | ||||||||||||
| | | June 30, | | | June 30, | |||||||||||||
| | | Technical | | Support | | | | Technical | | Support | | | ||||||
|
| | Services |
| Services |
| Total |
| Services |
| Services |
| Total | ||||||
(in thousands) | | | | | | | | | | | | | | | | | | | |
2024 | | | | | | | | | | | | | | | | | | | |
Revenues | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Employment costs (1) | | | | | | | | | | | | | | | | | | | |
Materials and supplies | | | | | | | | | | | | | | | | | | | |
Maintenance & repairs | | | | | | | | | | | | | | | | | | | |
Fleet and transportation | | | | | | | | | | | | | | | | | | | |
Other cost of revenues (2) | | | | | | | | | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation and amortization) |
| $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Employment costs (1) |
| | | | | | | | | | | | | | | | | | |
Enterprise shared services (3) | | | | | | | | | | | | | | | | | | | |
Other selling, general and administrative expenses (4) | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Segment depreciation and amortization | | | | | | | | | | | | | | | | | | | |
Segment operating income | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | |
Unallocated corporate expenses (5) | | | | | | | | | | | | | | | | | | | |
(Gain) on sale of assets | | | | | | | | | ( | | | | | | | | | | ( |
Operating income | | | | | | | | $ | | | | | | | | | | $ | |
| (1) | Employment costs include employee payroll, share-based compensation, bonuses and amounts related to benefits for each of the income statement items. Additional employment costs are included within the shared services amount. |
| (2) | Includes expenses related to rent, travel, insurance and other costs. |
| (3) | Includes costs incurred at the enterprise level that are allocated to each reportable segment based on payroll cost, headcount and revenues. |
| (4) | Includes professional fees, utilities, travel & entertainment and other costs. |
| (5) | Unallocated corporate expenses are included in selling general and administrative expenses at the consolidated level. |
The table below shows the reconciliation of segment totals to the consolidated level for the three and six months ended June 30, 2025 and 2024:
| | | | | | | | | | | | | | | | |
| | Three months ended June 30, | | |||||||||||||
| | Technical | | Support | | Segment | | Unallocated | | Consolidated | | |||||
|
| Services |
| Services |
| Total |
| Total |
| Total | | |||||
(in thousands) | | | | | | | | | | | | | | | | |
2025 | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | $ | | | $ | | | $ | | | $ | | | $ | | |
Depreciation and amortization | | | | | | | | | | | | | | | | |
Capital expenditures (1) | | | | | | | | | | | | | | | | |
Total assets, end of period (2) | | $ | | | $ | | | $ | | | $ | | | $ | | |
2024 | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | $ | | | $ | | | $ | | | $ | | | $ | | |
Depreciation and amortization | | | | | | | | | | | | | | | | |
Capital expenditures (1) | | | | | | | | | | | | | | | | |
Total assets, end of period (2) | | $ | | | $ | | | $ | | | $ | | | $ | | |
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| | | | | | | | | | | | | | | |
| | Six months ended June 30, | |||||||||||||
| | Technical | | Support | | Segment | | Unallocated | | Consolidated | |||||
|
| Services |
| Services |
| Total |
| Total |
| Total | |||||
(in thousands) | | | | | | | | | | | | | | | |
2025 | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | $ | | | $ | | | $ | | | $ | | | $ | |
Depreciation and amortization | | | | | | | | | | | | | | | |
Capital expenditures (1) | | | | | | | | | | | | | | | |
2024 | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | $ | | | $ | | | $ | | | $ | | | $ | |
Depreciation and amortization | | | | | | | | | | | | | | | |
Capital expenditures (1) | | | | | | | | | | | | | | | |
| (1) | Unallocated total primarily related to corporate and enterprise services capital expenditures. |
| (2) | Unallocated total primarily consists of cash and cash equivalents of $ |
The following summarizes revenues for the United States and separately for all international locations combined for the three and six months ended June 30, 2025, and 2024. The revenues are presented based on the location of the use of the equipment or services. Assets related to international operations are less than 10% of RPC’s consolidated assets, and therefore are not presented.
| | | | | | | | | | | | |
|
| Three months ended |
| Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
(in thousands) | | | | | | | | | | | | |
United States revenues | | $ | | | $ | | | $ | | | $ | |
International revenues |
| | |
| | | | | |
| | |
Total revenues | | $ | | | $ | | | $ | | | $ | |
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RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Segment Revenues:
RPC’s operating segment revenues by major service lines are shown in the following table:
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
(in thousands) | | | | | | | | | | | | |
Technical Services: | | |
| | |
| | |
| | |
|
Pressure Pumping | | $ | | | $ | | | $ | | | $ | |
Downhole Tools |
| | |
| | | | | |
| | |
Coiled Tubing |
| | |
| | | | | |
| | |
Wireline | | | |
| | | | | | | | |
Cementing | | | | | | | | | | | | |
Nitrogen |
| | |
| | | | | |
| | |
Snubbing |
| | |
| | | | | |
| | |
All other |
| | |
| | | | | |
| | |
Total Technical Services | | | | | | | | | | | | |
| | | | | | | | | | | | |
Support Services: | |
|
| |
|
| |
|
| |
|
|
Rental Tools | | | | | | | | | | | | |
All other | | | | | | | |
| | |
| |
Total Support Services | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total revenues | | $ | | | $ | | | $ | | | $ | |
19. SUBSEQUENT EVENT
Dividends
On
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RPC, INC. AND SUBSIDIARIES
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Overview
The following discussion should be read in conjunction with the Consolidated Financial Statements included elsewhere in this document. See also Forward-Looking Statements on page 32.
RPC, Inc. (RPC or the Company) provides a broad range of specialized oilfield services primarily to independent and major Oilfield companies engaged in exploration, production and development of oil and gas properties throughout the United States, including the Gulf of America, mid-continent, southwest, Rocky Mountain and Appalachian regions, and in selected international locations. The Company’s revenues and profits are generated by providing equipment and services to customers who operate oil and gas properties and invest capital to drill new wells and enhance production or perform maintenance on existing wells. We continuously monitor factors that impact current and expected customer activity levels, such as the prices of oil and natural gas, changes in pricing for our services and equipment, and utilization of our equipment and personnel. Our financial results are affected by geopolitical factors such as political instability in the petroleum-producing regions of the world, the actions of the OPEC oil cartel, overall economic conditions and weather in the United States, the prices of oil and natural gas, other shifting trends in our industry, and our customers’ drilling and production activities.
The discussion of our key business and financial strategies set forth under the Overview section in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2024, is incorporated herein by reference.
During the second quarter of 2025, total revenues of $420.8 million increased by $56.7 million or 15.6% compared to the same period in the prior year.
Operating profit was $15.5 million for the three months ended June 30, 2025, compared to $35.5 million during the same period of 2024.
Net income for the three months ended June 30, 2025, was $10.1 million or $0.05 diluted earnings per share compared to net income of $32.4 million, or $0.15 diluted earnings per share in the same period of 2024.
Net cash provided by operating activities decreased to $92.9 million for the six months ended June 30, 2025, compared to $184.5 million for the same period of 2024.
On April 1, 2025 (the “Closing Date”), RPC, through its wholly owned subsidiary, Thru Tubing Solutions, Inc., completed its acquisition of Pintail Alternative Energy, L.L.C (“Pintail”). Headquartered in Midland, Texas, Pintail is a leading provider of oilfield wireline perforating services in the Permian Basin and operates more than 30 active fleets, and its conventional and electric wireline units are among the newest in the industry. The acquisition will build on RPC’s diversified oilfield services platform with geographic concentration in the most active oil producing region in the U.S. land market. Pintail is included in our Technical Services Segment.
On the Closing Date, 100% of Pintail’s equity was automatically canceled and converted into the right to receive (i) $170 million in cash, without interest, (ii) $25 million of RPC common stock, which was paid by the issuance of 4,545,454 shares of restricted common stock of RPC to one of the previous owners, and (iii) $50 million in the form of a secured note payable to Houston LP (the “Seller Note”). Interest on the Seller Note accrues at a variable rate equal to the Simple Secured Overnight Financing Rate, for the applicable interest period, plus 2.0% per annum, or where applicable, at a specified default rate. Beginning with second quarter of 2025, the Company has begun interest payments on the Seller Note.
As of June 30, 2025, there were no outstanding borrowings under our credit facility. How We Evaluate Our Operations
We use Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, all non-GAAP measures, to evaluate and analyze the operating performance of our businesses.
We believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow are important indicators of performance. Adjusted EBITDA is defined as EBITDA, adjusted for unusual (income)/expenses. Adjusted EBITDA margin reflects Adjusted EBITDA as a percentage of revenues. Management believes that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin enable investors to compare the operating performance of our core business consistently over various time periods without regard to changes in our capital structure. Management believes that Free cash flow, which measures our ability to generate needed cash from
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business operations, is an important financial measure for evaluating RPC’s financial condition. Our definition of Free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, since the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income/(loss), operating income/(loss), and related margins, or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Similarly, Free cash flow should be considered in addition to, rather than as a substitute for GAAP presentation of net cash provided by operating activities, as a measure of our financial condition.
See Non-GAAP Financial Measures below for a reconciliation of EBITDA and Adjusted EBITDA to net income, and Adjusted EBITDA margin to net income margin, the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of Free Cash Flow to Operating Cash Flow, the most directly comparable financial measure calculated and presented in accordance with GAAP.
Results of Operations
| | | | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
(in thousands, except for percentages) | | | | | | | | | | | | |
Revenues by business segment: | | | | | | | | | | | | |
Technical | | $ | 396,754 | | $ | 341,484 | | $ | 708,598 | | $ | 697,878 |
Support | | | 24,055 | | | 22,669 | | | 45,088 | | | 44,108 |
Total revenue | | | 420,809 | | | 364,153 | | | 753,686 | | | 741,986 |
| | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | | | 317,746 | | | 262,284 | | | 561,641 | | | 538,893 |
Selling, general and administrative expenses | | | 40,825 | | | 37,406 | | | 83,324 | | | 77,491 |
Acquisition related employment costs | | | 6,554 | | | — | | | 6,554 | | | — |
Depreciation and amortization | | | 42,347 | | | 32,333 | | | 77,970 | | | 62,337 |
Gain on disposition of assets | | | (2,199) | | | (3,338) | | | (3,725) | | | (4,552) |
Other income, net | | | (1,152) | | | (732) | | | (2,037) | | | (1,499) |
Interest expense | | | 1,007 | | | 99 | | | 1,138 | | | 333 |
Interest income | | | (1,618) | | | (3,343) | | | (5,013) | | | (6,308) |
Income tax provision | | | 7,151 | | | 7,025 | | | 11,656 | | | 15,405 |
Net income | | $ | 10,148 | | $ | 32,419 | | $ | 22,178 | | $ | 59,886 |
| | | | | | | | | | | | |
Net income margin | | | 2.4% | | | 8.9% | | | 2.9% | | | 8.1% |
Net cash provided by operating activities | | $ | 53,078 | | $ | 127,928 | | $ | 92,943 | | $ | 184,487 |
| | | | | | | | | | | | |
Non-GAAP Financial Measures | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 65,589 | | $ | 68,533 | | $ | 114,483 | | $ | 131,653 |
Adjusted EBITDA margin | | | 15.6% | | | 18.8% | | | 15.2% | | | 17.7% |
Free cash flow | | $ | 10,025 | | $ | 52,907 | | $ | 17,620 | | $ | 56,688 |
THREE MONTHS ENDED JUNE 30, 2025 COMPARED TO THREE MONTHS ENDED JUNE 30, 2024
Revenues. Revenues of $420.8 million for the three months ended June 30, 2025, increased 15.6% compared to the three months ended June 30, 2024. The increase in revenues was primarily due to revenues from recently acquired Pintail of $98.9 million, partially offset by lower pressure pumping activity levels compared to the prior year. Pressure pumping results for the second quarter of 2025 were negatively impacted by pricing pressure, weather, third-party non-productive time and customer startup delays. Pressure pumping market remains highly competitive. Management believes the industry continues to be over-supplied and efficiency gains are consistently adding pump hour capacity to the industry. These challenges, as well as a declining rig count, have impacted activity, asset utilization, and pricing. International revenues represented 2.0% of total revenues in the second quarter of 2025 compared to 2.9% in the same period of the prior year. We believe that international revenues will continue to be less than 10% of RPC’s consolidated revenues in the foreseeable future.
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During the second quarter of 2025, the average price of oil was 20.8% lower and the average price of natural gas was 54.6% higher, both as compared to the same period in the prior year. The average domestic rig count (Source: Baker Hughes, Inc.) for the three months ended June 30, 2025, was 5.3% lower than in the same period in 2024.
The Technical Services segment revenues for the second quarter of 2025 increased by 16.2% compared to the same period of the prior year due primarily to the addition of Pintail, partially offset by a decrease in pressure pumping revenues. Technical Services reported operating income was $21.1 million during the second quarter of 2025 compared to operating income of $30.2 million in the second quarter of 2024. The decrease in Technical Services operating income was primarily due to lower pricing in pressure pumping. Support Services segment revenues for the second quarter of 2025 increased by 6.1% compared to the same period in the prior year, primarily due to higher activity levels within rental tools. Support Services reported operating income of $4.6 million for the second quarter of 2025 compared to operating income of $4.4 million for the second quarter of 2024. Second quarter 2025 Support Services operating profit increased by $260 thousand compared to the second quarter of the prior year due to higher activity levels.
Cost of revenues. Cost of revenues increased 21.1% to $317.7 million for the three months ended June 30, 2025, compared to $262.3 million for the three months ended June 30, 2024 primarily due to costs from recently acquired Pintail, partially offset by lower pressure pumping activities and change in job mix. In accordance with Staff Accounting Bulletin (SAB) Topic 11.B, cost of revenues presented on the Consolidated Statements of Operations excludes depreciation and amortization totaling $36.6 million for the second quarter of 2025 compared to $29.5 million for the second quarter of 2024.
Selling, general and administrative expenses. Selling, general and administrative expenses increased to $40.8 million for the three months ended June 30, 2025, compared to $37.4 million for the three months ended June 30, 2024, primarily due to acquisition costs, coupled with expenses from recently acquired Pintail.
Acquisition related employment costs. Acquisition related employment costs of $6.6 million represent non-cash accounting adjustments related to the Pintail acquisition consideration that is contingent upon continued employment. We expect to recognize these costs equally over 12 quarters and approximate $78.6 million in the aggregate.
Depreciation and amortization. Depreciation and amortization increased 31.0% to $42.3 million for the three months ended June 30, 2025, compared to $32.3 million for the three months ended June 30, 2024. Depreciation and amortization increased due to additional fixed assets and intangibles related to the Pintail acquisition, coupled with capital expenditures in the past year.
Gain on disposition of assets, net. Gain on disposition of assets, net was $2.2 million for the three months ended June 30, 2025, compared to $3.3 million for the three months ended June 30, 2024. The gain on disposition of assets, net is generally comprised of gains and losses related to various property and equipment dispositions or sales to customers of lost or damaged rental equipment.
Other income, net. Other income, net was $1.2 million for the three months ended June 30, 2025, compared to $732 thousand for the same period in the prior year.
Interest expense and interest income. Interest expense increased to $1.0 million for the three months ended June 30, 2025, compared to $99 thousand for the three months ended June 30, 2024 primarily due to interest on the Seller Note issued in conjunction with the Pintail acquisition. Interest expense includes interest on the Seller Note, facility fees on the unused portion of the credit facility and the amortization of loan costs. Interest income decreased to $1.6 million compared to $3.3 million in the prior year due to a lower average cash balance, primarily due to the acquisition of Pintail on April 1, 2025.
Income tax provision. Income tax provision was $7.2 million during the three months ended June 30, 2025 compared to $7.0 million tax provision for the same period in the prior year. The effective tax rate was 41.3% for the three months ended June 30, 2025 compared to a 17.8% effective tax rate for the same period in the prior year. The increase in effective tax rate is primarily due to Acquisition related employment costs which both contributed to a lower pre-tax income and included a non-deductible component.
Net income, net income margin and diluted earnings per share. Net income was $10.1 million during the three months ended June 30, 2025, or $0.05 diluted earnings per share, compared to net income of $32.4 million during the three months ended June 30, 2024, or $0.15 diluted earnings per share. Net income margin was 2.4% for the three months ended June 30, 2025, compared to 8.9% for the same period in the prior year.
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Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA was $65.6 million, and Adjusted EBITDA margin was 15.6% for the three months ended June 30, 2025 compared to $68.5 million and 18.8%, respectively, for the same period in the prior year.
Cash provided by operating activities and Free cash flow. Cash provided by operating activities was $53.1 million for the three months ended June 30, 2025, compared to $127.9 million for the three months ended June 30, 2024. The decrease in cash provided by operating activities is due primarily to unfavorable changes in working capital, primarily due to a $52.8 million federal refund received in the second quarter of 2024, coupled with lower net income. Free cash flow decreased to $10.0 million for the three months ended June 30, 2025, from $52.9 million for the three months ended June 30, 2024, primarily due to a decrease in cash provided by operating activities, partially offset by lower capital expenditures.
SIX MONTHS ENDED JUNE 30, 2025, COMPARED TO SIX MONTHS ENDED JUNE 30, 2024
Revenues. Revenues of $753.7 million for the six months ended June 30, 2025, increased 1.6% compared to the six months ended June 30, 2024. The slight increase in revenues was primarily due to results from recently acquired Pintail, partially offset by lower pressure pumping activity levels compared to the prior year. Pressure pumping market remains highly competitive. Management believes the industry continues to be over-supplied and efficiency gains are consistently adding pump hour capacity to the industry. These challenges, as well as a declining rig count, have impacted activity, asset utilization, and pricing. International revenues represented 2.2% of total revenues in the first six months of 2025 compared to 2.8% in the same period of the prior year. We believe that international revenues will continue to be less than 10% of RPC’s consolidated revenues in the foreseeable future.
During the first six months of 2025, the average price of oil was 14.2% lower and the average price of natural gas was 73.9% higher, both as compared to the same period in the prior year. The average domestic rig count (Source: Baker Hughes, Inc.) for the six months ended June 30, 2025, was 5.4% lower than in the same period in 2024.
The Technical Services segment revenues for the six months ended June 30, 2025 increased by 1.5% compared to the same period of the prior year due primarily to results from recently acquired Pintail, partially offset by a decrease in Pressure Pumping revenues. Technical Services reported operating income of $35.1 million during the six months ended June 30, 2025 compared to operating income of $62.2 million in the same period of the prior year. The decrease in Technical Services operating income was primarily due to lower pricing in pressure pumping and several other service lines. Support Services segment revenues for the six months ended June 30, 2025 increased by 2.2% compared to the same period in the prior year, primarily due to higher activity levels within rental tools. Support Services reported operating income of $7.3 million for the six months ended June 30, 2025 compared to operating income of $8.0 million for the same period in the prior year. Support Services operating profit for the six months ended June 30, 2025 decreased by $678 thousand compared to the six months ended June 30, 2024.
Cost of revenues. Cost of revenues increased 4.2% to $561.6 million for the six months ended June 30, 2025, compared to $538.9 million for the six months ended June 30, 2024 primarily due to costs from recently acquired Pintail. Excluding results from Pintail, cost of revenues decreased in line with revenues primarily due to a decrease in expenses consistent with lower activity levels, such as materials and supplies, fleet and transportation and maintenance and repairs expenses. In accordance with Staff Accounting Bulletin (SAB) Topic 11.B, cost of revenues presented on the Consolidated Statements of Operations excludes depreciation and amortization totaling $69.0 million for the six months ended June30, 2025 compared to $56.8 million for the same period in the prior year.
Selling, general and administrative expenses. Selling, general and administrative expenses increased to $83.3 million for the six months ended June 30, 2025, compared to $77.5 million for the six months ended June 30, 2024, primarily due to acquisition costs and expenses from recently acquired Pintail, coupled with ERP system implementation costs.
Acquisition related employment costs. Acquisition related employment costs of $6.6 million represent non-cash accounting adjustments related to the Pintail acquisition consideration that is contingent upon continued employment. We expect to recognize these costs equally over 12 quarters and approximate $78.6 million in the aggregate.
Depreciation and amortization. Depreciation and amortization increased 25.1% to $78.0 million for the six months ended June 30, 2025, compared to $62.3 million for the six months ended June 30, 2024. Depreciation and amortization increased due to additional fixed assets and intangibles related to the Pintail acquisition, coupled with capital expenditures in the past year.
Gain on disposition of assets, net. Gain on disposition of assets, net was $3.7 million for the six months ended June 30, 2025, compared to $4.6 million for the six months ended June 30, 2024. The gain on disposition of assets, net is generally comprised of gains and losses related to various property and equipment dispositions or sales to customers of lost or damaged rental equipment.
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Other income, net. Other income, net was $2.0 million for the six months ended June 30, 2025, compared to $1.5 million for the same period in the prior year.
Interest expense and interest income. Interest expense increased to $1.1 million for the six months ended June 30, 2025, compared to $333 thousand for the six months ended June 30, 2024 primarily due to interest on the Seller Note issued in conjunction with the Pintail acquisition. Interest expense includes interest on the Seller Note, facility fees on the unused portion of the credit facility and the amortization of loan costs. Interest income decreased to $5.0 million compared to $6.3 million in the prior year primarily due to a lower average cash balance, primarily due to the acquisition of Pintail on April 1, 2025.
Income tax provision. Income tax provision was $11.7 million during the six months ended June 30, 2025 compared to $15.4 million tax provision for the same period in the prior year. The effective tax rate was 34.5% for the six months ended June 30, 2025 compared to a 20.5% effective tax rate for the same period in the prior year. The increase in effective tax rate is primarily due to Acquisition related employment costs which both contributed to a lower pre-tax income and included a non-deductible component.
Net income, net income margin and diluted earnings per share. Net income was $22.2 million during the six months ended June 30, 2025, or $0.10 diluted earnings per share, compared to net income of $59.9 million during the six months ended June 30, 2024, or $0.28 diluted earnings per share. Net income margin was 2.9% for the six months ended June 30, 2025, compared to 8.1% for the same period in the prior year.
Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA was $114.5 million, and Adjusted EBITDA margin was 15.2% for the six months ended June 30, 2025, compared to $131.7 million and 17.7% for the same period in the prior year.
Cash provided by operating activities and Free cash flow. Cash provided by operating activities was $92.9 million for the six months ended June 30, 2025, compared to $184.5 million for the six months ended June 30, 2024. The decrease in cash provided by operating activities is due primarily to unfavorable changes in working capital, primarily due to a $52.8 million federal refund received during the first six months of 2024, coupled with lower net income. Free cash flow decreased to $17.6 million for the six months ended June 30, 2025, from $56.7 million for the six months ended June 30, 2024, primarily due to a decrease in cash provided by operating activities, partially offset by lower capital expenditures.
Non-GAAP Financial Measures
Reconciliation of GAAP and non-GAAP Financial Measures
Disclosed herein are non-GAAP financial measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and Free cash flow. These measures should not be considered in isolation or as a substitute for performance or liquidity measures prepared in accordance with GAAP.
A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
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Set forth below are reconciliations of these non-GAAP measures with their most directly comparable GAAP measures.
| | | | | | | | | | | | |
(Unaudited) | | Three months ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | | June 30, | | June 30, | ||||
(In thousands) |
| 2025 | 0 | 2024 | | 2025 |
| 2024 | ||||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA |
| |
| | |
| | |
|
| |
|
Net income | | $ | 10,148 | | $ | 32,419 | | $ | 22,178 | | $ | 59,886 |
Adjustments: | | | | | | | | | | | | |
Add: Income tax provision | |
| 7,151 | |
| 7,025 | |
| 11,656 | |
| 15,405 |
Add: Interest expense | |
| 1,007 | |
| 99 | |
| 1,138 | |
| 333 |
Add: Depreciation and amortization | |
| 42,347 | |
| 32,333 | |
| 77,970 | |
| 62,337 |
Less: Interest income | |
| 1,618 | |
| 3,343 | |
| 5,013 | |
| 6,308 |
EBITDA | | $ | 59,035 | | $ | 68,533 | | $ | 107,929 | | $ | 131,653 |
| |
|
| |
|
| |
|
| |
|
|
Add: Acquisition related employment costs | |
| 6,554 | |
| — | |
| 6,554 | |
| — |
Adjusted EBITDA | | $ | 65,589 | | $ | 68,533 | | $ | 114,483 | | $ | 131,653 |
| | | | | | | | | | | | |
Revenues | | $ | 420,809 | | $ | 364,153 | | $ | 753,686 | | $ | 741,986 |
| | | | | | | | | | | | |
Net income margin | | | 2.4% | | | 8.9% | | | 2.9% | | | 8.1% |
| | | | | | | | | | | | |
Adjusted EBITDA margin | | | 15.6% | | | 18.8% | | | 15.2% | | | 17.7% |
(1) Net income margin is calculated as net income divided by revenues. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenues.
| | | | | | | | | | | | |
(Unaudited) | | Three months ended June 30, | | Six months ended June 30, | ||||||||
(In thousands) |
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Reconciliation of Operating Cash Flow to Free Cash Flow |
| |
|
| |
|
| |
|
| |
|
Net cash provided by operating activities | | $ | 53,078 | | $ | 127,928 | | $ | 92,943 | | $ | 184,487 |
Capital expenditures | | | (43,053) | | | (75,021) | | | (75,323) | | | (127,799) |
Free cash flow | | $ | 10,025 | | $ | 52,907 | | $ | 17,620 | | $ | 56,688 |
Liquidity and Capital Resources
Cash Flows
The Company’s cash and cash equivalents decreased $163.9 thousand to $162.1 million as of June 30, 2025, compared to cash and cash equivalents of $326.0 million as of December 31, 2024.
The following table sets forth the historical cash flows for the six months ended June 30, 2025 and 2024:
| | | | | | |
| | Six months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
(In thousands) | | | | | | |
Net cash provided by operating activities | | $ | 92,943 | | $ | 184,487 |
Net cash used for investing activities | | | (231,483) | | | (118,916) |
Net cash used for financing activities | | | (25,322) | | | (27,365) |
Cash provided by operating activities for the six months ended June 30, 2025, decreased by $91.5 million compared to the six months ended June 30, 2024, primarily due to unfavorable changes in working capital, primarily due to a $52.8 million tax refund received in the prior year, coupled with a decrease in net income. Change in working capital was a use of cash of $14.8 million during the six months ended June 30, 2025, compared to a $56.5 million source of cash in the same period last year. The most significant working capital related cash flows during the six months ended June 30, 2025, were a cash use of $45.4 million due to a decrease in unearned revenue due to the satisfaction of performance obligations that were associated with a customer cash prepayment we received in the fourth quarter of 2024, a $39.7 million cash source from a decrease in accounts receivable and a $21.4 million use of
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cash from a decrease in accounts payable, both due to lower business activity levels compared to the prior year coupled with the timing of receipts. The changes in the other components were mainly due to the timing of payments and receipts.
Cash used for investing activities for the six months ended June 30, 2025, increased by $112.6 million compared to the six months ended June 30, 2024, primarily due to cash used to fund the acquisition of Pintail, partially offset by a decrease in capital expenditures primarily related to the timing of new equipment deliveries and consistent with lower business activity levels. Capital expenditures were $75.3 million for the six months ended June 30, 2025, compared to $127.8 million for the six months ended June 30, 2024. In the prior year period, the Company was purchasing components of a new Tier 4 dual fuel pressure pumping fleet.
Cash used for financing activities for the six months ended June 30, 2025, decreased by $2.1 million compared to the six months ended June 30, 2024, primarily due to a decrease in repurchases of the Company’s common shares in the open market, partially offset by the repayment of debt assumed at acquisition.
Financial Condition and Liquidity
The Company’s financial condition remains strong. We believe the liquidity provided by our existing cash and cash equivalents and our overall strong capitalization will provide sufficient liquidity to meet our requirements for at least the next twelve months. The Company’s decisions about the amount of cash to be used for investing and financing activities are influenced by our capital position, and the expected amount of cash to be provided by operations. RPC does not expect to utilize our revolving credit facility to meet these liquidity requirements in the near term.
The majority of our cash and cash equivalents are held at multiple financial institutions, each of which holds funds in excess of amounts insured by the Federal Deposit Insurance Corporation (FDIC). These financial institutions are among the largest in the United States and we believe are a safe place to hold our deposits.
The Company currently has a $100.0 million revolving credit facility that matures in June 2027. The facility contains customary terms and conditions, including restrictions on indebtedness, dividend payments, business combinations and other related items. The revolving credit facility includes a full and unconditional guarantee by the Company's 100% owned domestic subsidiaries whose assets equal substantially all of the consolidated assets of the Company and its subsidiaries. Certain of the Company’s minor subsidiaries are not guarantors. The Credit Agreement’s maturity date is June 22, 2027, and the interest rate is based on Term Secured Overnight Financing Rate (Term SOFR). In addition, the terms of the agreement have a 1.00% per annum floor for Base Rate borrowings and permits the issuance of letters of credit in currencies other than U.S. dollars. As of June 30, 2025, RPC had no outstanding borrowings under the revolving credit facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaled $15.8 million; therefore, a total of $84.2 million of the facility was available. The Company is currently in compliance with the credit facility financial covenants. For additional information with respect to RPC’s facility, see the note titled Notes Payable of the Consolidated Financial Statements.
In addition, the Company filed a shelf registration statement on Form S-3 on April 23, 2025, which was declared effective on May 5, 2025. The shelf registration includes a base prospectus and allows us to offer any combination of securities described in the prospectus, which include common stock, preferred stock, warrants, rights, depositary shares, purchase contracts and units containing two or more of the foregoing, in one or more offerings in an aggregate amount of up to $300 million. The Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions and our future capital needs. The terms of any future offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.
On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains several changes to corporate taxation including modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated depreciation on fixed asset additions. The Company is in the process of evaluating the OBBBA and has not estimated its financial impact at this time.
Cash Requirements
The Company currently expects capital expenditures, inclusive of recently acquired Pintail, to be between $165 million and $215 million in 2025, mostly related to maintenance. This is inclusive of opportunistic asset purchases and technology spend associated with our ERP implementation. As of June 30, 2025, $75.3 million has been spent. The Company is allocating capital to maintain its pressure pumping fleet and continues to evaluate future investments and options to further upgrade our equipment across the business.
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The Company has ongoing sales and use tax audits in various jurisdictions subject to varying interpretations of statutes. The Company has recorded the exposure from these audits to the extent issues are resolved or are probable and reasonably estimable. These audits involve issues that could result in unfavorable outcomes that cannot be currently estimated. See note of the Consolidated Financial Statements titled Commitments and Contingencies for additional information.
The Company has a stock buyback program to repurchase up to 49,578,125 shares in the open market. As of June 30, 2025, 12,768,870 shares remained available to be repurchased. During the three months ended June 30, 2025, and the three months ended June 30, 2024, there were no shares repurchased by the Company in the open market. The Company may repurchase outstanding common shares periodically based on market conditions and our capital allocation strategies considering restrictions under our credit facility. The stock buyback program does not have a predetermined expiration date. For additional information with respect to RPC’s stock buyback program, see note of the Consolidated Financial Statements titled Cash Paid for Common Stock Purchased and Retired.
In the fourth quarter of 2024, the Board of Directors approved the termination of the SERP. Pursuant to the Internal Revenue Service rules, participant balances are required to be distributed between 12 and 24 months after termination. The Company currently plans to distribute the balances within the next 12 months by liquidating assets currently held in the Rabbi Trust. Both the assets and liabilities related to the SERP are now reflected as part of current assets and current liabilities.
During 2024, the Company entered into a multi-year systems transformation program to upgrade our ERP and supply chain systems. We are currently in the early phases and expensed the majority of non-recurring costs incurred in 2024 and the first quarter of 2025. During the second quarter of 2025 the company began capitalizing some costs associated with ERP implementation. We plan to continue the ERP implementation through a phased approach with costs being incurred over the next few years.
During the second quarter of 2025, the Company began making interest payments on the Seller Note and will continue making such payments in accordance with the terms of the Seller Note. In addition, per the terms of the Seller Note, the first principal payment of $20 million is payable within the next 12 months. The remainder of $30 million in principal is payable over two years after the first repayment, per the terms of the agreement.
On July 22, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.04 per share payable September 10, 2025, to common stockholders of record at the close of business on August 11, 2025. The Company expects to continue to pay cash dividends to common stockholders, subject to industry conditions and RPC’s earnings, financial condition, and other relevant factors.
INFLATION
The Company purchases its equipment and materials from suppliers who provide competitive prices and employ skilled workers from competitive labor markets. If inflation in the general economy increases, the Company’s costs for equipment, materials and labor could increase as well. In addition, increases in activity in the domestic oilfield can cause upward wage pressures in the labor markets from which it hires employees, especially if employment in the general economy increases. Also, activity increases can cause supply disruptions and higher costs of certain materials and key equipment components used to provide services to the Company’s customers. In recent years, the price of labor and raw materials increased while labor shortages caused by the departure of skilled labor from the domestic oilfield industry in prior years. These cost increases have moderated but remain high by historical standards. Though the ultimate impact is uncertain, the Company does currently expect tariffs on goods imported into the US to result in materially higher costs of equipment.
OUTLOOK
The current and projected prices of oil, natural gas and natural gas liquids are important catalysts for U.S. domestic drilling activity and can be impacted by economic and policy developments as well as geopolitical disruptions. RPC believes that oil prices currently remain at levels sufficient to motivate our customers to maintain drilling and completion activities, however the recent decline of oil prices and potential further volatility could result in the Company’s customers opting to delay completion activity. Long-term, projected higher demand for oil and natural gas should drive increased activity in most of the basins in which RPC operates.
We continue to monitor the supply and demand for our services and the competitive environment, including trends such as increasing customer preferences for lower emission and more efficient equipment. Increased efficiencies in recent years of oilfield completion services and equipment, particularly in pressure pumping, has inherently contributed to oversupply in the Oilfield Services (OFS) market. We believe that competition will remain intense.
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OFF BALANCE SHEET ARRANGEMENTS
The Company does not have any material off balance sheet arrangements.
RELATED PARTY TRANSACTIONS
Marine Products Corporation (Marine Products)
In conjunction with RPC’s spin-off of its powerboat manufacturing business, RPC and Marine Products entered into various agreements that define the companies’ relationship. Per the terms of their Transition Support Services agreement, which may be terminated by either party, RPC provides certain administrative services, including financial reporting and income tax administration, acquisition assistance, etc., to Marine Products. Charges from the Company (or from corporations that are subsidiaries of the Company) for such services were $552 thousand for the six months ended June 30, 2025, and $590 thousand for the comparable period in 2024. All of the Company’s directors are also directors of Marine Products, and the executive officers are employees of both the Company and Marine Products.
Other
The Company periodically purchases, in the ordinary course of business, products or services from suppliers that are owned by officers or significant stockholders of or affiliated with certain directors of RPC. The total amounts paid to these affiliated parties were $32 thousand for the six months ended June 30, 2025, and $881 thousand for the six months ended June 30, 2024.
A group that includes Amy R. Kreisler and Timothy C. Rollins, each of whom is a director of the Company, certain of their family members, and certain companies under their and/or their family members’ control, controls in excess of fifty percent of the Company’s voting power.
RPC and Marine Products own 50% each of a limited liability company called 255 RC, LLC that was created for the joint purchase and ownership of a corporate aircraft. RPC recorded certain net operating costs comprised of rent and an allocable share of fixed costs of $96 thousand for the six months ended June 30, 2025 compared to $100 thousand for the comparable period in 2024.
Pursuant to the registration rights agreement between us and our largest stockholder, LOR, Inc. (LOR) and certain of its affiliates (collectively, the Selling Stockholders) and their permitted transferees, we have we have filed a Form S-3 shelf registration statement on April 23, 2025, which was declared effective on May 5, 2025, that registers the resale of up to 127,235,202 shares of our common stock, and which represents all Company securities held by the Selling Stockholders. In addition, they have the right to require, subject to certain conditions and limitations, certain piggy back registration rights with respect to registrations initiated by us.
CRITICAL ACCOUNTING POLICIES
The discussion of Critical Accounting Policies is incorporated herein by reference from the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2024. There have been no significant changes in the critical accounting policies since year-end.
IMPACT OF RECENT ACCOUNTING STANDARDS
See note to the Consolidated Financial Statements titled Recent Accounting Standards for a description of recent accounting standards, including the expected dates of adoption and estimated effects on results of operations and financial condition.
SEASONALITY
Oil and natural gas prices affect demand throughout the oil and natural gas industry, including the demand for the Company’s products and services. The Company’s business depends in large part on the economic conditions of the oil and gas industry, and specifically on the capital expenditures of its customers related to the exploration and production of oil and natural gas. There is a positive correlation between these expenditures and customers’ demand for the Company’s services. As such, when these expenditures fluctuate, customers’ demand for the Company’s services fluctuates as well. These fluctuations depend on the current and projected prices of oil and natural gas and resulting drilling activity and are not seasonal to any material degree.
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FORWARD-LOOKING STATEMENTS
Certain statements made in this report that are not historical facts are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “focus,” “plan,” and similar expressions generally identify forward-looking statements. Such forward-looking statements may include, without limitation, statements that relate to our business strategy, plans and objectives, and our beliefs and expectations regarding future demand for our equipment and services, trends in the industry, and other events and conditions that may influence the oilfield services market and our performance in the future. Forward-looking statements made elsewhere in this report include, without limitation, statements regarding: our belief that the operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025; our belief that Pintail is a leading provider of oilfield wireline perforating services in the Permian Basin; our belief that Pintail’s conventional and electric wireline units are among the newest in the industry; our belief that the acquisition of Pintail will build on RPC’s diversified oilfield services platform with geographic concentration in the most active oil producing region in the U.S. land market; our assessment that the preliminary purchase price allocation in connection with the Pintail acquisition is subject to change as additional information is obtained; our expectation that, in regards to the Pintail acquisition, the Company will finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date; our expectation that the Company anticipates finalizing the post-closing adjustment for an agreed-upon level of Pintail’s working capital by the end of fiscal year 2025; our belief that there were no favorable or unfavorable market terms in the assumed financing and operating leases in connection with the Pintail acquisition; our contention that goodwill is attributable to synergies expected to be achieved from the combined operations of the Company and Pintail and the assembled workforce; our expectation that the acquisition of Pintail builds on our diversified oilfield services platform with geographic concentration in the most active oil producing region in the U.S. land market; our expectation that the Company will distribute the balances of the SERP with the next 12 months by liquidating assets currently held in the Rabbi Trust; our belief that the likelihood of a material loss related to the outstanding state tax assessment is remote and cannot be reasonably estimated at this time, and the Company currently does not believe the resolution of this claim will have a material impact on its consolidated financial position, results of operations or cash flows; statements that repurchases of the Company’s stock may be made from time to time in the open market by block purchases, in privately negotiated transactions or in such other manner as determined by the Company; our ability to continue to monitor factors that impact current and expected customer activity levels, such as the prices of oil and natural gas, changes in pricing for our services and equipment, and utilization of our equipment and personnel; the effect of geopolitical factors such as political instability in the petroleum-producing regions of the world, the actions of the OPEC oil cartel, overall economic conditions and weather in the United States, the prices of oil and natural gas, and our customers’ drilling and production activities on our financial results; our belief that EBITDA, EBITDA margin and free cash flow are important indicators of performance; our belief that EBITDA and EBITDA margin enable investors to compare the operating performance of our core business consistently over various time periods without regard to changes in our capital structure and that free cash flow is an important financial measure for evaluating our financial condition; our belief that pressure pumping remains highly competitive; our belief that the industry continues to be over-supplied and efficiency gains are consistently adding pump hour capacity to the industry, and these challenges as well as a declining rig count, have resulted in activity, asset utilization, and pricing trending lower; our belief that international revenues will continue to be less than ten percent of our consolidated revenues in the foreseeable future; our belief that our financial condition remains strong; our belief that the liquidity provided by our existing cash and cash equivalents and our overall strong capitalization will provide sufficient liquidity to meet our requirements for at least the next twelve months; our expectation that we will not need our revolving credit facility to meet our liquidity requirements; our belief that the financial institutions are a safe place to hold our deposits; our expectation that capital expenditures will be between $165 million and $215 million during 2025 and our expectation that such expenditures will be mostly related to maintenance; our plan to continue to evaluate future investments and options to further upgrade our equipment across the business; our inability to estimate the outcomes of sales and use tax audits in various jurisdictions; our plan to continue the ERP implementation through a phased approach with costs being incurred over the next few years; our expectation to continue to pay cash dividends to common stockholders, subject to industry conditions and our earnings, financial condition, and other relevant factors; our belief that if inflation in the general economy increases, our costs for equipment, materials and labor could increase as well; our belief that increases in activity in the domestic oilfield can cause upward pressures in the labor markets from which it hires employees, especially if employment in the general economy increases; our belief that activity increases can cause supply disruptions and higher costs of certain materials and key equipment components used to provide our services to our customers; our expectation that tariffs on goods imported into the U.S. will increase equipment prices; our belief that current and projected prices of oil, natural gas and natural gas liquids are important catalysts for U.S. domestic drilling activity and can be impacted by economic and policy developments as well as geopolitical disruptions; our belief that oil prices currently remain at levels sufficient to motivate our customers to maintain drilling and completion activities, however, the recent decline of oil prices and potential further volatility could result in our customers opting to delay completion activity; our belief that long-term, projected steady higher demand for oil and natural gas should drive increased activity in most of the basins in which we operate; our belief that competition will remain intense; our plan to continue to monitor the supply and demand for our services and the competitive environment, including trends such as increasing customer preferences for lower emission and more efficient equipment; our expectation that changes in the foreign exchange rate will not have a
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material effect on our consolidated results of operations or financial conditions; our belief that the outcome of litigation will not have a material adverse effect on our financial position or results of operations; and our belief that the material weaknesses in Pintail’s audit for the fiscal year ended December 31, 2024, could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner if not remediated.
Such forward-looking statements are based on certain assumptions and analyses made by our management in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. 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. Risk factors that could cause such future events not to occur as expected include the following: the volatility of oil and natural gas prices; our concentration of customers in the energy industry and periodic downturns; our business depends on capital spending by our customers, many of whom rely on outside financing to fund their operations; dependence on our key personnel; our ability to identify or complete acquisitions; our ability to attract and retain skilled workers; some of our equipment and several types of materials used in providing our services are available from a limited number of suppliers; whether outside financing is available or favorable to us; increasing expectations from customers, investors and other stakeholders regarding our environmental, social and governance practices; our compliance with regulations and environmental laws; the combined impact of the OPEC disputes and the COVID-19 pandemic on our operating results; possible declines in the price of oil and natural gas, which tend to result in a decrease in drilling activity and therefore a decline in the demand for our services; the ultimate impact of current and potential political unrest and armed conflict in the oil producing regions of the world, including the current conflict involving Israel and the Gaza Strip, which could impact drilling activity; adverse weather conditions in oil or gas producing regions, including the Gulf of America; competition in the oil and gas industry, especially in pressure pumping, and adverse impacts from the industry being over-supplied; limits to the Company’s ability to implement price increases; the potential impact of possible future regulations on hydraulic fracturing on our business; risks of international operations; reliance on large customers; our operations rely on digital systems and processes that are subject to cyber-attacks or other threats; and our cash and cash equivalents are held primarily at a single financial institution. Additional discussion of factors that could cause actual results to differ from management’s projections, forecasts, estimates and expectations is contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in this Quarterly Report on Form 10-Q.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to interest rate risk exposure through borrowings on its credit facility and the Pintail Seller Note. As of June 30, 2025, there were no outstanding interest-bearing advances on our credit facility, which provides for interest at a floating rate.
Additionally, the Company is exposed to market risk resulting from changes in foreign exchange rates. However, since the majority of the Company’s transactions occur in U.S. currency, this risk is not expected to have a material effect on its consolidated results of operations or financial condition.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures – The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to its management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, June 30, 2025 (the Evaluation Date), the Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon this evaluation, which excluded the impact of the acquisition of Pintail, discussed below, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the Evaluation Date.
As discussed in the Note titled “Acquisition” of the Notes to Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this Form 10-Q for the quarter ended June 30, 2025, we completed the acquisition of Pintail during the quarter. As part of our post-closing integration activities, we are engaged in the process of assessing the internal controls of Pintail and have begun to integrate policies, processes, people, technology, and operations for the post-acquisition combined company. As permitted for newly acquired businesses by interpretive guidance issued by the staff of the SEC, management has excluded the internal control over financial reporting of Pintail from the evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2025.
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We have reported the operating results of Pintail in our Consolidated Statements of Operations and Statements of Cash Flows from the acquisition date through June 30, 2025. As of June 30, 2025, total assets related to Pintail represented approximately 18% of our total assets, recorded on a preliminary basis as the measurement period for the business combination remained open as of June 30, 2025. Revenues from Pintail represented approximately 24% of our total consolidated revenues for the three months ended June 30, 2025.
Changes in internal control over financial reporting –The Company has successfully completed the mapping of Pintail’s accounts to our existing financial reporting systems. The Company has begun an initial review of key controls and has implemented controls related to all Pintail financial statement line items and consolidation in order to enable the accurate preparation and timely reporting of their results.
Other than the changes to Pintail controls noted above, there were no changes in the Company’s internal control over financial reporting during the second quarter of 2025 which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
RPC is involved in litigation from time to time in the ordinary course of its business. RPC does not believe that the outcome of such litigation will have a material adverse effect on the financial position or results of operations of RPC.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, with the exception of the following:
Risks related to our business
Material weaknesses in the internal control over financial reporting of Pintail Alternative Energy, L.L.C. (“Pintail”), our significant subsidiary acquired on April 1, 2025, were identified by Pintail’s independent registered public accounting firm as part of their financial statement audit for the year ended December 31, 2024. These material weaknesses, if not remediated, could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our disclosure controls, including our internal controls, and to disclose any changes in internal controls identified through such evaluations of those controls.
Material weaknesses in internal control over financial reporting were identified by Pintail’s independent registered public accounting firm as part of their audit of Pintail’s financial statements for fiscal year ended December 31, 2024. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s annual or interim financial statements will not be prevented or detected on a timely basis. To respond to these material weaknesses, we have undertaken immediate steps to implement compensating controls to continue to remediate and improve the internal controls over financial reporting relating to Pintail operations, including improvements regarding segregation of duties and documenting the review process around key controls.
Any failure to maintain adequate internal controls could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. The Company has controls in place to account for the purchase of Pintail. The material weaknesses are limited to Pintail’s internal controls.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. OTHER INFORMATION
During the three months ended June 30, 2025,
Adoption of Amended and Restated Bylaws
On July 22, 2025, the Board of Directors approved and adopted amended and restated bylaws (the “Amended and Restated Bylaws”), which became effective the same day. Among other things, the amendments contained in the Amended and Restated Bylaws effected the following changes:
| ● | To delete provisions providing for the closing of the Company’s stock transfer books. |
| ● | To delete former Article Twenty-Ninth, which contained fee shifting provisions. |
| ● | To further enhance and refine procedural mechanics and disclosure requirements in connection with stockholder nominations of directors and submissions of proposals regarding other business at stockholder meetings (other than proposals to be included in the Company’s proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). |
| ● | To provide additional flexibility with respect to the signatures required on certificates evidencing Company common stock. |
| ● | To provide additional specificity with respect to the setting of record dates. |
The Amended and Restated Bylaws also incorporate various other non-material updates and technical, clarifying and conforming changes. The foregoing description is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, a redlined copy of which is attached hereto as Exhibit 3.2 and is incorporated herein by reference.
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ITEM 6. EXHIBITS
Exhibit |
| Description |
2.1 3.1(a) | Membership Interest Purchase Agreement dated April 1, 2025 (portions of this Exhibit have been omitted) (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8‑K filed on April 7, 2025). Restated certificate of incorporation of RPC, Inc. (incorporated herein by reference to Exhibit 3.1 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1999). | |
3.1(b) | Certificate of amendment of the certificate of incorporation of RPC, Inc. (incorporated by reference to Exhibit 3.1(b) to Registrant’s Quarterly Report on Form 10-Q filed on May 8, 2006). | |
3.1(c) | Certificate of amendment of the certificate of incorporation of RPC, Inc. (incorporated by reference to Exhibit 3.1(c) to the Registrant’s Quarterly Report on Form 10-Q filed on August 2, 2011). | |
3.2 | Amended and Restated Bylaws of RPC, Inc. effective July 22, 2025. | |
4 | Form of Stock Certificate (incorporated herein by reference to Exhibit 4 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998). | |
31.1 | Section 302 certification for Chief Executive Officer. | |
31.2 | Section 302 certification for Chief Financial Officer. | |
32.1 | Section 906 certifications for Chief Executive Officer and Chief Financial Officer. | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) |
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SIGNATURES
Pursuant to the requirements 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. |
| | |
| | /s/ Ben M. Palmer |
Date: July 24, 2025 | | Ben M. Palmer |
| | President and Chief Executive Officer |
| | (Principal Executive Officer) |
| | |
| | /s/ Michael L. Schmit |
Date: July 24, 2025 | | Michael L. Schmit |
| | Vice President, Chief Financial Officer and Corporate Secretary |
| | (Principal Financial and Accounting Officer) |
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