RPC(RES) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) This section presents RPC, Inc.'s unaudited consolidated financial statements for Q2 2022 and FY2021, covering key financial statements and detailed accounting notes Consolidated Balance Sheets Consolidated balance sheets show RPC's financial position as of June 30, 2022, with increased total assets and equity, driven by higher receivables and retained earnings | Metric | June 30, 2022 (Unaudited) (in millions) | December 31, 2021 (Note 1) (in millions) | | :-------------------------------- | :-------------------------------------- | :--------------------------------------- | | Total Assets | $965.079 | $864.365 | | Total Liabilities | $258.417 | $222.574 | | Total Stockholders' Equity | $706.662 | $641.791 | | Accounts receivable, net | $357.582 | $258.635 | | Retained earnings | $705.133 | $640.936 | Consolidated Statements of Operations Consolidated statements of operations show a turnaround from net loss in 2021 to net income in 2022, driven by increased revenues and improved operating efficiency | Metric | Three months ended June 30, 2022 (in millions, except per share) | Three months ended June 30, 2021 (in thousands, except per share) | Six months ended June 30, 2022 (in millions, except per share) | Six months ended June 30, 2021 (in millions, except per share) | | :-------------------------------- | :----------------------------------------------- | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Revenues | $375.507 | $188.757 | $660.131 | $371.367 | | Operating income (loss) | $60.415 | $(1.220) | $83.450 | $(11.741) | | Net income (loss) | $46.939 | $(726) | $62.018 | $(10.388) | | Basic Earnings (loss) per share | $0.22 | $0.00 | $0.29 | $(0.05) | | Diluted Earnings (loss) per share | $0.22 | $0.00 | $0.29 | $(0.05) | Consolidated Statements of Comprehensive Income (Loss) Consolidated statements of comprehensive income (loss) show a positive shift from losses in 2021 to income in 2022, driven by improved net income and minor pension/FX adjustments | Metric | Three months ended June 30, 2022 (in millions/thousands) | Three months ended June 30, 2021 (in thousands) | Six months ended June 30, 2022 (in millions/thousands) | Six months ended June 30, 2021 (in millions/thousands) | | :-------------------------------- | :----------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income (loss) | $46.939 | $(726) | $62.018 | $(10.388) | | Pension adjustment, net of taxes | $195 | $153 | $390 | $306 | | Foreign currency translation | $65 | $69 | $181 | $205 | | Comprehensive income (loss) | $47.199 | $(504) | $62.589 | $(9.877) | Consolidated Statements of Stockholders' Equity Consolidated statements of stockholders' equity show increased total equity for H1 2022, driven by net income and stock issued for incentive plans, partially offset by repurchases | Metric | December 31, 2021 (in millions, except shares) | June 30, 2022 (in millions, except shares) | | :-------------------------------- | :--------------------------------------------- | :----------------------------------------- | | Total Stockholders' Equity | $641.791 | $706.662 | | Shares Outstanding | 215.629 | 216.662 | | Net Income (Six months) | - | $62.018 | | Stock issued for stock incentive plans, net (Six months) | - | $3.192 | | Stock purchased and retired (Six months) | - | $(0.910) | Consolidated Statements of Cash Flows Consolidated statements of cash flows show decreased operating cash flow for H1 2022 due to working capital changes, with increased cash used in investing activities for capital expenditures | Metric | Six months ended June 30, 2022 (in millions) | Six months ended June 30, 2021 (in millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $42.853 | $54.866 | | Net cash used for investing activities | $(43.430) | $(17.781) | | Net cash used for financing activities | $(3.623) | $(0.566) | | Net (decrease) increase in cash and cash equivalents | $(4.200) | $36.519 | | Cash and cash equivalents at end of period | $78.233 | $121.015 | Notes to Consolidated Financial Statements These notes provide detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, standards, revenue, EPS, stock compensation, segments, credit losses, inventories, commitments, pensions, credit facilities, income taxes, fair value, and comprehensive income 1. GENERAL This note outlines the basis of presentation for the unaudited interim consolidated financial statements, confirming adherence to GAAP and SEC regulations, and states that all necessary adjustments have been included. It also notes that a group including a Board member controls over 50% of the Company's voting power - GAAP and SEC Form 10-Q instructions guide the preparation of unaudited consolidated financial statements[17] - A group including a Board member controls over 50% of the Company's voting power[20] 2. RECENT ACCOUNTING STANDARDS This note details recently adopted and issued accounting standards. The company adopted ASU No. 2020-04 (Reference Rate Reform) in Q2 2022, replacing LIBOR with Term SOFR, with no material impact. It plans to adopt ASU No. 2021-08 (Business Combinations) prospectively from January 1, 2023, also not expecting a material impact - RPC adopted ASU No. 2020-04 (Reference Rate Reform) in Q2 2022, replacing LIBOR with Term SOFR, with no material financial impact[21] - The Company plans to adopt ASU No. 2021-08 (Business Combinations) from January 1, 2023, with no expected material impact[22] 3. REVENUES This note describes RPC's revenue recognition policies, primarily from oilfield services, which are recognized over time using the output method. Services are categorized into Technical Services (well-site) and Support Services (off-well-site). Contract terms are generally short-term, with invoicing upon completion and expected collection within 30-60 days. Unbilled trade receivables increased significantly to $92.8 million as of June 30, 2022 - RPC generates contract revenues primarily from specialized oilfield services, recognized over time using the output method[24][30] - Services are categorized into Technical Services (e.g., pressure pumping) and Support Services (e.g., rental tools)[26][27][29] | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | | :-------------------- | :-------------------------- | :-------------------------- | | Unbilled trade receivables | $92.756 | $50.370 | 4. EARNINGS PER SHARE This note details the calculation of basic and diluted earnings per share, accounting for participating securities (restricted shares with dividend rights). Net income used in EPS calculation for the six months ended June 30, 2022, was $61.1 million, resulting in $0.29 per share - Basic and diluted EPS are calculated by dividing net income by weighted average shares outstanding, adjusted for participating securities[33] | Metric | Three months ended June 30, 2022 (in millions/shares) | Three months ended June 30, 2021 (in thousands/shares) | Six months ended June 30, 2022 (in millions/shares) | Six months ended June 30, 2021 (in millions/shares) | | :-------------------------------- | :---------------------------------------------------- | :------------------------------------------------