Last10K.com

Rpc Inc (RES) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

Rpc Inc

CIK: 742278 Ticker: RES

Exhibit 99

 

 

 

RPC, Inc. Reports Third Quarter 2021 Financial Results

 

ATLANTA, October 27, 2021 - RPC, Inc. (NYSE: RES) today announced its unaudited results for the third quarter ended September 30, 2021. RPC provides a broad range of specialized oilfield services and equipment primarily to independent and major oilfield companies engaged in the exploration, production and development of oil and gas properties throughout the United States and in selected international markets.

 

For the quarter ended September 30, 2021, RPC generated revenues of $225.3 million, an increase of 93.3 percent compared to $116.6 million in the third quarter of 2020 due primarily to higher activity levels in all service lines as well as pricing improvements. Operating profit for the third quarter of 2021 was $8.0 million compared to an operating loss of $31.8 million in the third quarter of the prior year. Net income for the third quarter of 2021 was $5.3 million, or $0.02 diluted earnings per share, compared to a net loss of $16.4 million, or $0.08 loss per share in the third quarter of the prior year. The adjusted net loss in the third quarter of 2020 was $20.0 million, or $0.09 adjusted loss per share. 1 Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2021 was $26.5 million, compared to EBITDA of negative $12.3 million in the same period of the prior year.2

 

Cost of revenues during the third quarter of 2021 was $170.6 million, or 75.7 percent of revenues, compared to $100.9 million, or 86.5 percent of revenues during the third quarter of 2020. Cost of revenues increased primarily due to increases in expenses consistent with higher activity levels, such as materials and supplies expenses, employment costs and fuel costs. Cost of revenues as a percentage of revenues decreased primarily due to the leverage of higher revenues over direct employment costs.

 

Selling, general and administrative expenses were $31.4 million in the third quarter of 2021 compared to $32.4 million in the third quarter of 2020. Selling, general and administrative expenses decreased from 27.8 percent of revenues in the third quarter of 2020 to 14.0 percent of revenues in the third quarter of 2021 due to leverage of higher revenues over costs that are relatively fixed during the short term. Depreciation and amortization was $18.1 million in the third quarter of 2021 compared to $18.7 million in the third quarter of the prior year. Interest expense of $1.3 million during the third quarter of 2021 is primarily comprised of interest related to the resolution of a long-term contractual dispute with a vendor.

 

For the nine months ended September 30, 2021, revenues increased 32.7 percent to $596.7 million compared to $449.7 million for the same period last year. Net loss for the nine months ended September 30, 2021 was $5.1 million, or $0.02 loss per share, compared to a net loss of $201.9 million, or $0.95 loss per share in the same period last year. The adjusted net loss for the nine months ended September 30, 2020 was $51.2 million, or $0.24 adjusted loss per share. 1

 

1 Adjusted net loss and adjusted loss per share are financial measures which do not conform to GAAP. Additional disclosure regarding these non-GAAP financial measures and their reconciliation to net loss and loss per share, the nearest GAAP financial measures, are disclosed in Appendix A to this press release.

 


The following information was filed by Rpc Inc (RES) on Wednesday, October 27, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2021

Commission File No. 1-8726

RPC, INC.

(Exact name of registrant as specified in its charter)

Delaware

    

58-1550825

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

2801 Buford Highway, Suite 300, Atlanta, Georgia 30329

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code -- (404) 321-2140

Securities Registered under Section 12(b) of the Act:

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common stock, par value $0.10

RES

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

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). Yes No

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.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 No

As of October 22, 2021, RPC, Inc. had 215,725,436 shares of common stock outstanding.

RPC, INC. AND SUBSIDIARIES

Table of Contents

    

Page No.

Part I. Financial Information

Item 1.

Financial Statements (Unaudited)

Consolidated Balance Sheets –As of September 30, 2021 and December 31, 2020

3

Consolidated Statements of Operations – For the three and nine months ended September 30, 2021 and 2020

4

Consolidated Statements of Comprehensive Income (Loss) – For the three and nine months ended September 30, 2021 and 2020

5

Consolidated Statements of Stockholders’ Equity – For the three and nine months ended September 30, 2021 and 2020

6

Consolidated Statements of Cash Flows – For the nine months ended September 30, 2021 and 2020

7

Notes to Consolidated Financial Statements

8 – 19

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20 – 27

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

27

Item 4.

Controls and Procedures

28

Part II. Other Information

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

Item 3.

Defaults upon Senior Securities

29

Item 4.

Mine Safety Disclosures

29

Item 5.

Other Information

29

Item 6.

Exhibits

29

Signatures

30

2

RPC, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020

(In thousands)

(Unaudited)

September 30, 

December 31, 

    

2021

    

2020

ASSETS

(Note 1)

  

  

Cash and cash equivalents

$

80,835

$

84,496

Accounts receivable, net of allowance for doubtful accounts of $7,342 in 2021 and $5,181 in 2020

238,192

161,771

Inventories

 

79,881

 

82,918

Income taxes receivable

 

51,021

 

82,943

Prepaid expenses

 

4,371

 

9,124

Assets held for sale

692

4,032

Other current assets

 

2,863

 

3,075

Total current assets

 

457,855

 

428,359

Property, plant and equipment, less accumulated depreciation of $792,763 in 2021 and $790,712 in 2020

253,095

264,411

Operating lease right-of-use assets

21,408

27,270

Finance lease right-of-use assets

21,415

Goodwill

 

32,150

 

32,150

Other assets

 

40,717

 

38,315

Total assets

$

826,640

$

790,505

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Accounts payable

$

60,862

$

41,080

Accrued payroll and related expenses

 

17,146

 

18,428

Accrued insurance expenses

 

6,555

 

5,489

Accrued state, local and other taxes

 

4,603

 

2,788

Income taxes payable

 

689

 

1,115

Current portion of operating lease liabilities

7,197

9,192

Current portion of finance lease liabilities

21,382

Other accrued expenses

 

2,287

 

1,473

Total current liabilities

 

120,721

 

79,565

Long-term accrued insurance expenses

 

13,652

 

11,822

Long-term pension liabilities

 

30,945

 

33,080

Deferred income taxes

 

9,099

 

13,332

Long-term operating lease liabilities

16,066

21,090

Other long-term liabilities

 

5,374

 

49

Total liabilities

 

195,857

 

158,938

Common stock

21,564

21,495

Capital in excess of par value

 

 

Retained earnings

 

626,501

 

627,778

Accumulated other comprehensive loss

 

(17,282)

 

(17,706)

Total stockholders’ equity

 

630,783

 

631,567

Total liabilities and stockholders’ equity

$

826,640

$

790,505

The accompanying notes are an integral part of these consolidated financial statements.

3

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands except per share data)

(Unaudited)

Three months ended

Nine months ended

September 30, 

September 30,

    

2021

    

2020

    

2021

    

2020

Revenues

$

225,310

$

116,588

$

596,677

$

449,665

Cost of revenues (exclusive of items shown below)

 

170,621

 

100,872

 

462,633

 

362,853

Selling, general and administrative expenses

 

31,446

 

32,376

 

91,444

 

97,681

Impairment and other charges

207,175

Depreciation and amortization

 

18,106

 

18,655

 

53,775

 

77,521

Gain on disposition of assets, net

 

(2,837)

 

(3,563)

 

(7,408)

 

(7,576)

Operating income (loss)

 

7,974

 

(31,752)

 

(3,767)

 

(287,989)

Interest expense

 

(1,280)

 

(73)

 

(1,763)

 

(257)

Interest income

 

15

 

29

 

47

 

431

Other income (expense), net

 

448

 

769

 

1,571

 

(1,020)

Income (loss) before income taxes

 

7,157

 

(31,027)

 

(3,912)

 

(288,835)

Income tax provision (benefit)

 

1,891

 

(14,590)

 

1,210

 

(86,882)

Net income (loss)

$

5,266

$

(16,437)

$

(5,122)

$

(201,953)

Earnings(loss) per share

 

  

 

 

  

 

  

Basic

$

0.02

$

(0.08)

$

(0.02)

$

(0.95)

Diluted

$

0.02

$

(0.08)

$

(0.02)

$

(0.95)

The accompanying notes are an integral part of these consolidated financial statements.

4

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands)

(Unaudited)

Three months ended

Nine months ended

September 30, 

September 30,

    

2021

    

2020

    

2021

    

2020

Net income (loss)

$

5,266

$

(16,437)

$

(5,122)

$

(201,953)

Other comprehensive income (loss):

  

  

  

  

Pension adjustment and reclassification adjustment, net of taxes

 

152

 

186

 

458

 

1,104

Foreign currency translation

 

(239)

 

(25)

 

(34)

 

(423)

Comprehensive income (loss)

$

5,179

$

(16,276)

$

(4,698)

$

(201,272)

The accompanying notes are an integral part of these consolidated financial statements.

5

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands)

(Unaudited)

Nine months ended September 30, 2021

Accumulated

Capital in 

Other

Common Stock

Excess of

Retained

Comprehensive

    

Shares

    

Amount

    

Par Value

    

Earnings

    

(Loss) Income

    

Total

Balance, December 31, 2020

 

214,951

$

21,495

$

$

627,778

$

(17,706)

$

631,567

Stock issued for stock incentive plans, net

 

924

 

93

 

1,446

 

 

 

1,539

Stock purchased and retired

 

(140)

 

(14)

 

(1,446)

 

903

 

 

(557)

Net loss

 

 

 

 

(9,662)

 

 

(9,662)

Pension adjustment, net of taxes

 

 

 

 

 

153

 

153

Foreign currency translation

 

 

 

 

 

136

 

136

Balance, March 31, 2021

215,735

$

21,574

$

$

619,019

$

(17,417)

$

623,176

Stock issued for stock incentive plans, net

(9)

(1)

1,472

1,471

Stock purchased and retired

(1)

(1,472)

1,463

(9)

Net loss

(726)

(726)

Pension adjustment, net of taxes

153

153

Foreign currency translation

69

69

Balance, June 30, 2021

215,725

$

21,573

$

$

619,756

$

(17,195)

$

624,134

Stock issued for stock incentive plans, net

(82)

(9)

1,480

1,471

Stock purchased and retired

(1,480)

1,479

(1)

Net Income

5,266

5,266

Pension adjustment, net of taxes

152

152

Foreign currency translation

(239)

(239)

Balance, September 30, 2021

 

215,643

$

21,564

$

$

626,501

$

(17,282)

$

630,783

Nine months ended September 30, 2020

Accumulated

Capital in 

Other

Common Stock

Excess of

Retained

Comprehensive

    

Shares

    

Amount

    

Par Value

    

Earnings

    

(Loss) Income

    

Total

Balance, December 31, 2019

 

214,423

$

21,443

$

$

832,113

$

(23,223)

$

830,333

Stock issued for stock incentive plans, net

 

1,014

 

100

 

1,997

 

 

 

2,097

Stock purchased and retired

 

(177)

 

(17)

 

(1,997)

 

1,222

 

 

(792)

Net loss

 

 

 

(160,423)

 

 

(160,423)

Pension adjustment, net of taxes

 

 

 

 

 

732

 

732

Foreign currency translation

 

 

 

 

 

(712)

 

(712)

Balance, March 31, 2020

215,260

$

21,526

$

$

672,912

$

(23,203)

$

671,235

Stock issued for stock incentive plans, net

(135)

(4)

2,021

2,017

Stock purchased and retired

(2)

(10)

(2,021)

2,025

(6)

Net loss

(25,093)

(25,093)

Pension adjustment, net of taxes

186

186

Foreign currency translation

314

314

Balance, June 30, 2020

 

215,123

$

21,512

$

$

649,844

$

(22,703)

$

648,653

Stock issued for stock incentive plans, net

(54)

(5)

5,212

5,207

Stock purchased and retired

(2)

(5,212)

5,183

(29)

Net loss

(16,437)

(16,437)

Pension adjustment, net of taxes

186

186

Foreign currency translation

(25)

(25)

Balance, September 30, 2020

215,067

$

21,507

$

$

638,590

$

(22,542)

$

637,555

The accompanying notes are an integral part of these consolidated financial statements.

6

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands)

(Unaudited)

Nine months ended September 30, 

    

2021

    

2020

OPERATING ACTIVITIES

  

  

Net loss

$

(5,122)

$

(201,953)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

  

 

  

Depreciation, amortization and other non-cash charges

 

53,754

 

77,582

Stock-based compensation expense

 

4,481

 

9,321

Gain on disposition of assets, net

 

(7,408)

 

(7,576)

Deferred income tax benefit

 

(4,385)

 

(35,901)

Impairment and other non-cash charges

 

 

205,299

(Increase) decrease in assets:

 

  

 

  

Accounts receivable

 

(71,702)

 

119,272

Income taxes receivable

 

31,922

 

(40,163)

Inventories

 

3,044

 

16,234

Prepaid expenses

 

4,754

 

6,309

Other current assets

 

140

 

(70)

Other non-current assets

 

(982)

 

(1,393)

Increase (decrease) in liabilities:

 

  

 

  

Accounts payable

 

17,562

 

(4,628)

Income taxes payable

 

(426)

 

1,433

Accrued payroll and related expenses

 

(1,282)

 

(1,706)

Accrued insurance expenses

 

1,066

 

(585)

Accrued state, local and other taxes

 

1,815

 

3,180

Other accrued expenses

 

(2,575)

 

(5,181)

Pension liabilities

 

(1,526)

 

(6,163)

Long-term accrued insurance expenses

 

1,830

 

137

Other long-term liabilities

 

1,456

 

(2,084)

Net cash provided by operating activities

 

26,416

 

131,364

INVESTING ACTIVITIES

 

  

 

  

Capital expenditures

 

(44,925)

 

(52,313)

Proceeds from sale of assets

 

15,811

 

17,372

Net cash used for investing activities

 

(29,114)

 

(34,941)

FINANCING ACTIVITIES

 

  

 

  

Cash paid for common stock purchased and retired

 

(567)

 

(827)

Cash paid for finance lease

(396)

Net cash used for financing activities

 

(963)

 

(827)

Net (decrease) increase in cash and cash equivalents

 

(3,661)

 

95,596

Cash and cash equivalents at beginning of period

 

84,496

 

50,023

Cash and cash equivalents at end of period

$

80,835

$

145,619

Supplemental cash flows disclosure:

Income taxes refund, net

$

(25,435)

$

(10,137)

Supplemental disclosure of noncash investing activities:

Capital expenditures included in accounts payable

$

6,077

$

4,992

The accompanying notes are an integral part of these consolidated financial statements.

7

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 the Financial Accounting Standards Board (FASB) 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 nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021.

The balance sheet at December 31, 2020 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, 2020.

A group that includes the Company’s Chairman of the Board, Gary W. Rollins, controls in excess of fifty percent of the Company’s voting power.

2.    RECENT ACCOUNTING STANDARDS

The FASB issued the following applicable Accounting Standards Updates (ASU):

Recently Adopted Accounting Standards:

Accounting Standards Update (ASU) No. 2019-12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing the exceptions to the incremental approach for intra-period tax allocation in certain situations, requirement to recognize a deferred tax liability for a change in the status of a foreign investment, and the general methodology for computing income taxes in an interim period when year-to date loss exceeds the anticipated loss for the year. The amendments also simplify the accounting for income taxes with regard to franchise tax, evaluation of step up in the tax basis goodwill in certain business combinations, allocating current and deferred tax expense to legal entities that are not subject to tax and enacted change in tax laws or rates. The Company adopted these provisions in the first quarter of 2021 and the adoption did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted:

ASU No. 2020-04 — Reference Rate Reform (Topic 848): The amendments in this ASU, provides optional guidance for a limited time to ease the impact of the reference rate reform on financial reporting. The amendments, which are elective, provide expedients to contract modifications, affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or other reference rate that is expected to be discontinued due to reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company will adopt these provisions when LIBOR is discontinued, and does not expect adoption to have a material impact on its consolidated financial statements.

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RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3.    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 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 7.

RPC contracts with its customers to provide the following services by reportable segment:

Technical Services

Includes pressure pumping, downhole tools services, coiled tubing, nitrogen, snubbing and other oilfield related services including wireline, well control, fishing and pump down services.

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 oilfield pipe inspection services, pipe management and pipe storage; well control training and consulting.

Our contracts with customers are generally very short-term in nature and generally consist of a single performance obligation – the provision of oilfield services.

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 generally occurs between 30 to 60 days after invoicing. As the Company enters into contracts with its customers, it generally expects there to be no significant timing difference between the date the services are provided to the customer (satisfaction of the performance obligation) and the date cash consideration is received. Accordingly, there is no financing component to our arrangements with customers.

9

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 7 for disaggregation of revenue by operating segment and services offered in each of them and by geographic regions.

Timing of revenue recognition for each of the periods presented is shown below:

Three months ended

Nine months ended

September 30, 

September 30, 

(in thousands)

    

2021

    

2020

    

2021

    

2020

Oilfield services transferred at a point in time

$

$

$

$

Oilfield services transferred over time

 

225,310

 

116,588

596,677

 

449,665

Total revenues

$

225,310

$

116,588

$

596,677

$

449,665

Contract balances:

Contract assets representing the Company’s rights to consideration for work completed but not billed are included in accounts receivable, net on the consolidated balance sheets are shown below:

September 30, 

December 31, 

(in thousands)

    

2021

    

2020

Unbilled trade receivables

$

52,710

$

29,574

Substantially all of the unbilled trade receivables disclosed were or are expected to be invoiced during the following quarter.

4.    IMPAIRMENT AND OTHER CHARGES

The Company recorded the following pre-tax charges during the three and nine months ended September 30, 2021 and 2020 which are reflected in “Impairment and other charges” in the consolidated statements of operations:

Three months ended

Nine months ended

September 30, 

September 30, 

(in thousands)

    

2021

    

2020

    

2021

    

2020

Long Lived Asset Impairments (1)

$

$

$

$

204,765

Severance Costs

 

 

 

 

1,882

Other (2)

 

 

 

 

528

Total

$

$

$

$

207,175

(1).     Relates solely to the Technical Services segment and primarily includes pressure pumping and coiled tubing assets.

(2).     Includes interest costs related to leased assets that were impaired in the third and fourth quarter of 2019 and additional costs related to abandoned assets.

See Note 7 for details of impairment and other charges by segment.

10

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RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5.    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 sets forth the restricted shares of common stock (participating securities) outstanding and a reconciliation of outstanding weighted average shares:

Three months ended

Nine months ended

September 30

September 30

(In thousands)

    

2021

    

2020

    

2021

    

2020

Net income (loss) available for stockholders:

$

5,266

$

(16,437)

$

(5,122)

$

(201,953)

Less: Adjustments for earnings attributable to participating securities

(41)

Net income (loss) used in calculating earnings per share

$

5,225

$

(16,437)

$

(5,122)

$

(201,953)

Weighted average shares outstanding (including participating securities)

 

215,677

 

215,083

 

215,648

 

215,088

Adjustment for participating securities

 

(2,649)

 

(2,539)

 

(2,665)

 

(2,697)

Shares used in calculating basic and diluted earnings per share

 

213,028

 

212,544

 

212,983

 

212,391

6.    STOCK-BASED COMPENSATION

In April 2014, the Company reserved 8,000,000 shares of common stock under the 2014 Stock Incentive Plan with a term of 10 years expiring in April 2024. This plan provides for the issuance of various forms of stock incentives, including, among others incentive and non-qualified stock options and restricted shares. As of September 30, 2021, there were 3,180,060 shares available for grant.

During the third quarter of 2020, the Company recorded $3.3 million of accelerated amortization of restricted stock related to the passing of R. Randall Rollins, RPC’s chairman.

Stock-based employee compensation expense was as follows for the periods indicated:

Three months ended

Nine months ended

September 30, 

September 30,

(in thousands)

    

2021

2020

    

2021

2020

Pre-tax expense

$

1,471

$

5,207

$

4,481

$

9,321

After tax expense

$

1,103

$

3,419

$

3,360

$

6,525

Restricted Stock

The following is a summary of the changes in non-vested restricted shares for the nine months ended September 30, 2021:

Weighted Average 

    

Shares

    

Grant-Date Fair Value

Non-vested shares at December 31, 2020

2,235,179

$

6.81

Granted

 

1,010,700

 

3.87

Vested

 

(434,208)

 

14.96

Forfeited

 

(177,980)

 

7.72

Non-vested shares at September 30, 2021

 

2,633,691

$

7.89

The total fair value of shares vested was $1,757,000 during the nine months ended September 30, 2021 and $3,452,000 during the nine months ended September 30, 2020. Excess tax benefits or deficits realized from tax compensation deductions in excess of, or lower than compensation expense are recorded as either a beneficial or detrimental discrete income tax adjustment. This was a detrimental adjustment of $1,164,000 for the nine months ended September 30, 2021 and a detrimental adjustment of $2,241,000 for the nine months ended September 30, 2020.

11

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RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2021, total unrecognized compensation cost related to non-vested restricted shares was $40,322,000 which is expected to be recognized over a weighted-average period of 4.1 years.

7.    BUSINESS SEGMENT INFORMATION

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 the 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 centralized support services and regulatory compliance are classified as Corporate.

Technical Services consists primarily of pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline and fishing. The services offered under Technical Services are high capital and 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 and consulting 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.

Segment Revenues:

RPC’s operating segment revenues by major service lines are shown in the following table:

Three months ended

Nine months ended

September 30, 

September 30, 

(in thousands)

    

2021

    

2020

    

2021

    

2020

Technical Services:

  

  

  

  

Pressure Pumping

$

96,322

$

43,133

$

243,401

$