RPC(US:RES)2019-10-31 20:56Financial Performance - Revenues for the third quarter of 2019 were $293.2 million, a decrease of $146.8 million or 33.4% compared to the same period in 2018[92]. - Domestic revenues decreased by 33.9% to $275.9 million, while international revenues fell by 23.6% to $17.3 million[112]. - Loss before income taxes was $93.4 million for Q3 2019, compared to income of $55.5 million in Q3 2018[96]. - Revenues for the nine months ended September 30, 2019, were $986.4 million, a decrease of 26.6% compared to the same period in 2018, driven by lower pricing and activity levels[125]. Cost and Expenses - Cost of revenues as a percentage of revenues increased to 76.8% in Q3 2019 from 68.4% in Q3 2018, reflecting lower revenues and competitive pricing[110]. - Selling, general and administrative expenses rose to $42.6 million, or 14.5% of revenues, compared to 9.5% in the same quarter of 2018[94]. - Selling, general and administrative expenses increased to $131.3 million for the nine months ended September 30, 2019, up from $128.1 million in the same period in 2018, representing 13.3% of revenues[129]. - Cost of revenues decreased by 25.2% to $225.2 million in Q3 2019, but as a percentage of revenues, it increased to 14.5% due to lower revenues and competitive pricing[117][118]. Impairment and Charges - The company recorded impairment and other charges of $71.7 million, primarily due to location closures and equipment retirements[95]. - Impairment and other charges amounted to $71.7 million in Q3 2019, primarily related to asset abandonment and severance costs, with no impairment charges recorded in Q3 2018[120]. Market Conditions - Average oil price per barrel was $56.39, down 19.1% from $69.73 in the same period last year[110]. - Average natural gas price was $2.38 per thousand cubic feet, an 18.8% decrease from $2.93 in Q3 2018[110]. - Average price of natural gas decreased by 12.0% and oil by 14.9% during the nine months ended September 30, 2019, compared to the same period in 2018[126]. - The U.S. domestic rig count decreased by approximately 11% compared to the end of 2018, indicating a decline in drilling activity[100]. Capital Expenditures - Capital expenditures for 2019 are expected to be approximately $260 million, focused on new revenue-producing equipment and maintenance[97]. - The company expects capital expenditures of approximately $260 million for 2019, with $209.3 million spent as of September 30, 2019[145]. - The Company expects capital expenditures to be approximately $260 million in 2019, primarily directed towards new revenue-producing equipment and capitalized maintenance[161]. Future Outlook - The Company believes that U.S. oilfield well completion activity will decline during the near term, impacting demand for its services[161]. - The Company anticipates that customers will reduce drilling and completion activity in Q4 2019, leading to negative consequences for pricing and utilization of its services[161]. Cash and Financial Position - Cash and cash equivalents as of September 30, 2019, were $49.5 million, with net cash provided by operating activities decreasing by $152.2 million compared to the prior year[138]. - The Company does not have any material off-balance sheet arrangements, indicating a stable financial position[151]. Corporate Governance - The Company maintains effective disclosure controls and procedures, ensuring timely and accurate reporting of required information[168]. - The Company has not identified any changes in internal control over financial reporting that materially affect its operations during the most recent fiscal quarter[169]. Dividends and Related Party Transactions - The company has suspended dividends to common stockholders as of July 22, 2019, with no timetable for resumption[149]. - Total amounts paid to affiliated parties were $1,068,000 for the nine months ended September 30, 2019, up from $911,000 for the same period in 2018, reflecting a 17.2% increase[154]. - Charges for services and rent from Rollins, Inc. amounted to $86,000 for the nine months ended September 30, 2019, down from $110,000 for the same period in 2018, a decrease of 21.8%[155].