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~~2022

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,~~21, 2022, RPC, Inc. had ~~215,725,436~~216,631,140 shares of common stock outstanding.

Table of Contents

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~~2022 and December 31, ~~2020~~2021	3

	Consolidated Statements of Operations – For the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	4

	Consolidated Statements of Comprehensive Income (Loss) – For the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	5

	Consolidated Statements of Stockholders’ Equity – For the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	6

	Consolidated Statements of Cash Flows – For the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	7

	Notes to Consolidated Financial Statements	8 – 1918

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2019 – 27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27

Item 4.	Controls and Procedures	2827

Part II. Other Information

Item 1.	Legal Proceedings	2928

Item 1A.	Risk Factors	2928

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2928

Item 3.	Defaults upon Senior Securities	2928

Item 4.	Mine Safety Disclosures	2928

Item 5.	Other Information	2928

Item 6.	Exhibits	29

Signatures		30

Table of Contents

~~RPC, INC. AND SUBSIDIARIES~~

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, ~~2021~~2022 AND DECEMBER 31, ~~2020~~2021

(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

0

0
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


	September 30,		December 31,
	2022		2021
ASSETS		(Unaudited)		(Note 1)
Cash and cash equivalents	$	35,885	$	82,433
Accounts receivable, net of allowance for credit losses of $6,555 in 2022 and $5,717 in 2021		470,000		258,635
Inventories		93,346		78,983
Income taxes receivable		45,466		58,504
Prepaid expenses		6,866		9,773
Assets held for sale		692		692
Other current assets		2,867		2,990
Total current assets		655,122		492,010
Property, plant and equipment, less accumulated depreciation of $790,032 in 2022 and $763,304 in 2021		312,596		254,408
Operating lease right-of-use assets		21,768		24,572
Finance lease right-of-use assets		—		20,327
Goodwill		32,150		32,150
Other assets		33,947		40,898
Total assets	$	1,055,583	$	864,365
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Accounts payable	$	146,569	$	74,404
Accrued payroll and related expenses		26,046		15,350
Accrued insurance expenses		4,427		10,129
Accrued state, local and other taxes		6,214		1,905
Income taxes payable		517		656
Pension liabilities		6,429		—
Current portion of operating lease liabilities		6,299		6,387
Current portion of finance lease liabilities		—		20,194
Other accrued expenses		1,743		1,824
Total current liabilities		198,244		130,849
Long-term accrued insurance expenses		8,008		11,770
Long-term pension and retirement plans liabilities		22,128		35,376
Deferred income taxes		31,223		17,749
Long-term operating lease liabilities		16,832		19,719
Other long-term liabilities		5,738		7,111
Total liabilities		282,173		222,574
Commitments and contingencies (Note 9)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.10 par value, 1,000,000 shares authorized, none issued		—		—
Common stock, $0.10 par value, 349,000,000 shares authorized, 216,631,140 and 215,628,716 shares issued and outstanding in 2022 and 2021, respectively		21,663		21,563
Capital in excess of par value		—		—
Retained earnings		771,779		640,936
Accumulated other comprehensive loss		(20,032)		(20,708)
Total stockholders’ equity		773,410		641,791
Total liabilities and stockholders’ equity	$	1,055,583	$	864,365

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

Table of Contents

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 AND ~~2020~~2021

(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

0

0

0

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)


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues	$	459,601	$	225,310	$	1,119,732	$	596,677
COSTS AND EXPENSES:
Cost of revenues		309,790		170,621		779,544		462,633
Selling, general and administrative expenses		38,243		31,446		110,362		91,444
Depreciation and amortization		20,941		18,106		60,501		53,775
Gain on disposition of assets, net		(1,543)		(2,837)		(6,295)		(7,408)
Operating income (loss)		92,170		7,974		175,620		(3,767)
Interest expense		(143)		(1,280)		(543)		(1,763)
Interest income		329		15		472		47
Other (expense) income, net		(67)		448		516		1,571
Income (loss) before income taxes		92,289		7,157		176,065		(3,912)
Income tax provision		22,949		1,891		44,707		1,210
Net income (loss)	$	69,340	$	5,266	$	131,358	$	(5,122)
Earnings (loss) per share
Basic	$	0.32	$	0.02	$	0.61	$	(0.02)
Diluted	$	0.32	$	0.02	$	0.61	$	(0.02)
Dividends paid per share	$	0.02	$	—	$	0.02	$	—

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

Table of Contents

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 AND ~~2020~~2021

(In thousands)

(Unaudited)


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Net income (loss)	$	5,266	$	(16,437)	$	(5,122)	$	(201,953)	$	69,340	$	5,266	$	131,358	$	(5,122)
Other comprehensive income (loss):
Other comprehensive income:
Pension adjustment and reclassification adjustment, net of taxes		152		186		458		1,104		195		152		585		458
Foreign currency translation		(239)		(25)		(34)		(423)		(90)		(239)		91		(34)
Comprehensive income (loss)	$	5,179	$	(16,276)	$	(4,698)	$	(201,272)	$	69,445	$	5,179	$	132,034	$	(4,698)

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

Table of Contents

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 AND ~~2020~~2021

(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, 2022
								Accumulated
				Capital in				Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss		Total
Balance, December 31, 2021	215,629	$	21,563	$	—	$	640,936	$	(20,708)	$	641,791
Stock issued for stock incentive plans, net	1,037		104		1,393		—		—		1,497
Stock purchased and retired	(190)		(19)		(1,393)		502		—		(910)
Net income	—		—		—		15,079		—		15,079
Pension adjustment, net of taxes	—		—		—		—		195		195
Foreign currency translation	—		—		—		—		116		116
Balance, March 31, 2022	216,476	$	21,648	$	—	$	656,517	$	(20,397)	$	657,768
Stock issued for stock incentive plans, net	186		18		1,677		—		—		1,695
Stock purchased and retired	—		—		(1,677)		1,677		—		—
Net income	—		—		—		46,939		—		46,939
Pension adjustment, net of taxes	—		—		—		—		195		195
Foreign currency translation	—		—		—		—		65		65
Balance, June 30, 2022	216,662	$	21,666	$	—	$	705,133	$	(20,137)	$	706,662
Stock issued for stock incentive plans, net	(31)		(3)		1,575		—		—		1,572
Stock purchased and retired	—		—		(1,575)		1,573		—		(2)
Net income	—		—		—		69,340		—		69,340
Pension adjustment, net of taxes	—		—		—		—		195		195
Foreign currency translation	—		—		—		—		(90)		(90)
Dividends declared	—		—		—		(4,267)
Balance, September 30, 2022	216,631	$	21,663	$	—	$	771,779	$	(20,032)	$	773,410

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


	Nine months ended September 30, 2021
								Accumulated
				Capital in				Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss		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

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

Table of Contents

RPC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 AND ~~2020~~2021

(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


	Nine months ended September 30,
	2022		2021
OPERATING ACTIVITIES
Net income (loss)	$	131,358	$	(5,122)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and other non-cash charges		61,352		53,754
Stock-based compensation expense		4,764		4,481
Gain on disposition of assets, net		(6,295)		(7,408)
Deferred income tax provision (benefit)		13,284		(4,385)
(Increase) decrease in assets:
Accounts receivable		(211,375)		(71,702)
Income taxes receivable		13,038		31,922
Inventories		(14,708)		3,044
Prepaid expenses		2,907		4,754
Other current assets		(83)		140
Other non-current assets		6,393		(982)
Increase (decrease) in liabilities:
Accounts payable		42,700		17,562
Income taxes payable		(139)		(426)
Accrued payroll and related expenses		10,759		(1,282)
Accrued insurance expenses		(5,702)		1,066
Accrued state, local and other taxes		4,309		1,815
Other accrued expenses		(2,804)		(2,575)
Pension and retirement plans liabilities		(6,044)		(1,526)
Long-term accrued insurance expenses		(3,762)		1,830
Other long-term liabilities		976		1,456
Net cash provided by operating activities		40,928		26,416
INVESTING ACTIVITIES
Capital expenditures		(90,227)		(44,925)
Proceeds from sale of assets		11,572		15,811
Net cash used for investing activities		(78,655)		(29,114)

FINANCING ACTIVITIES
Payment of dividends		(4,267)		—
Cash paid for common stock purchased and retired		(912)		(567)
Cash paid for finance lease		(3,642)		(396)
Net cash used for financing activities		(8,821)		(963)

Net decrease in cash and cash equivalents		(46,548)		(3,661)
Cash and cash equivalents at beginning of period		82,433		84,496
Cash and cash equivalents at end of period	$	35,885	$	80,835

Supplemental cash flows disclosure:
Income taxes payment (refund), net	$	18,615	$	(25,435)
Interest paid	$	127	$	124
Supplemental disclosure of noncash investing activities:
Capital expenditures included in accounts payable	$	13,912	$	6,077

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

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~~2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021.~~2022.

The balance sheet at December 31, ~~2020~~2021 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.~~2021.

A group that includes a member of the Company’s ~~Chairman~~Board of ~~the Board,~~Directors, 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~~provide 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~~London Interbank Offered Rate (LIBOR) or other reference rate that is expected to be discontinued due to reference rate reform. ~~This~~ In the second quarter of 2022, the Company adopted these provisions as part of the Amendment No. 6 to its Credit Agreement (see note 11) wherein LIBOR was replaced with the Term Secured Overnight Financing Rate (SOFR). Adoption of these provisions did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted:

●

ASU ~~is effective as of March 12, 2020 through December 31, 2022~~No. 2021-08: Business Combinations (Topic 805):Accounting for Contract Assets and ~~may be applied~~Contract Liabilities from Contracts with Customers: The amendments in this ASU address diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination, by adopting guidance requiring an acquirer to recognize and measure contract ~~modifications~~assets and ~~hedging relationships from~~contract liabilities acquired in a business combination in accordance with Topic 606. At the ~~beginning of~~acquisition date, an ~~interim period~~acquirer would recognize and measure the acquired contract assets and contract liabilities in the same manner that ~~includes or is subsequent to March 12, 2020.~~they were recognized and measured in the acquiree's financial statements before the acquisition. The Company ~~will~~plans to adopt these provisions ~~when LIBOR is discontinued,~~prospectively to business combinations occurring after January 1, 2023 and does not expect adoption to have a material impact on its consolidated financial statements.

Table of Contents

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~~accompanying Consolidated Statements of ~~operations~~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 7.6.

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 is generally ~~occurs~~expected 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.

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 76 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

$
0

$
0

$
0

$
0
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 onin the ~~consolidated balance sheets~~accompanying Consolidated Balance Sheets are shown below:


	September 30,		December 31,		September 30,		December 31,
(in thousands)	2021		2020		2022		2021
Unbilled trade receivables	$	52,710	$	29,574	$	140,908	$	50,370

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)

$
0

$
0

$
0

$
204,765
Severance Costs

0

0

0

1,882
Other (2)

0

0

0

528
Total

$
0

$
0

$
0

$
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~~.

~~Table of Contents~~

~~RPC, INC. AND SUBSIDIARIES~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

5.4. 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~~shows the restricted shares of common stock (participating securities) outstanding and a reconciliation of outstanding weighted average shares:


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30				September 30				September 30				September 30
(In thousands)	2021		2020		2021		2020
(in thousands)									2022		2021		2022		2021
Net income (loss) available for stockholders:	$	5,266	$	(16,437)	$	(5,122)	$	(201,953)	$	69,340	$	5,266	$	131,358	$	(5,122)
Less: Adjustments for earnings attributable to participating securities		(41)		0		—		0		(1,041)		(65)		(1,910)		—
Net income (loss) used in calculating earnings per share	$	5,225	$	(16,437)	$	(5,122)	$	(201,953)	$	68,299	$	5,201	$	129,448	$	(5,122)

Weighted average shares outstanding (including participating securities)		215,677		215,083		215,648		215,088		216,647		215,677		216,485		215,648
Adjustment for participating securities		(2,649)		(2,539)		(2,665)		(2,697)		(3,288)		(2,649)		(3,163)		(2,665)
Shares used in calculating basic and diluted earnings per share		213,028		212,544		212,983		212,391		213,359		213,028		213,322		212,983

6.5. 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,~~2022, there were ~~3,180,060~~2,033,715 shares available for grant.

~~During the third quarter~~10

Table 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.~~Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
(in thousands)	2021		2020		2021		2020		2022		2021		2022		2021
Pre-tax expense	$	1,471	$	5,207	$	4,481	$	9,321	$	1,572	$	1,471	$	4,764	$	4,481
After tax expense	$	1,103	$	3,419	$	3,360	$	6,525	$	1,145	$	1,103	$	3,554	$	3,360

Restricted Stock

The following is a summary of the changes in non-vested restricted shares for the nine months ended September 30, ~~2021:~~2022:


		Weighted Average			Weighted Average
	Shares	Grant-Date Fair Value		Shares	Grant-Date Fair Value
Non-vested shares at December 31, 2020	2,235,179	$	6.81
Non-vested shares at January 1, 2022				2,619,691	$	7.89
Granted	1,010,700		3.87	1,254,276		6.72
Vested	(434,208)		14.96	(507,918)		11.87
Forfeited	(177,980)		7.72	(93,931)		6.31
Non-vested shares at September 30, 2021	2,633,691	$	7.89
Non-vested shares at September 30, 2022				3,272,118	$	6.87

The total fair value of shares vested was ~~$1,757,000~~$2.8 million during the nine months ended September 30, ~~2021~~2022 and ~~$3,452,000~~$1.8 million during the nine months ended September 30, ~~2020.~~2021. 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 $655,000 for the nine months ended September 30, 2022 and 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.~~

~~Table of Contents~~

~~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.~~2021.

7.6. 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 certain 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

$
163,614
Downhole Tools

61,979

34,331

177,209

148,994
Coiled Tubing

26,733

12,407

61,900

37,619
Nitrogen

8,996

8,281

28,195

23,834
Snubbing

3,748

1,974

10,685

5,371
All other

14,064

9,152

39,212

38,079
Total Technical Services

$
211,842

$
109,278

$
560,602

$
417,511
Support Services:








Rental Tools

$
8,545

$
3,752

$
23,126

$
19,227
All other

4,923

3,558

12,949

12,927
Total Support Services

$
13,468

$
7,310

$
36,075

$
32,154
Total revenues

$
225,310

$
116,588

$
596,677

$
449,665

1211

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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)	2022		2021		2022		2021
Technical Services:
Pressure Pumping	$	257,933	$	96,322	$	572,472	$	243,401
Downhole Tools		102,831		61,979		273,828		177,209
Coiled Tubing		37,407		26,733		100,572		61,900
Nitrogen		10,335		8,996		28,727		28,195
Snubbing		7,100		3,748		20,337		10,685
All other		20,169		14,064		62,291		39,212
Total Technical Services	$	435,775	$	211,842	$	1,058,227	$	560,602

Support Services:
Rental Tools	$	17,880	$	8,545	$	45,257	$	23,126
All other		5,946		4,923		16,248		12,949
Total Support Services	$	23,826	$	13,468	$	61,505	$	36,075

Total revenues	$	459,601	$	225,310	$	1,119,732	$	596,677

The following summarizes revenues for the United States and separately for all international locations combined for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. 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 percent of RPC’s consolidated assets, and therefore are not presented.


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
(in thousands)	2021		2020		2021		2020		2022		2021		2022		2021
United States revenues	$	217,711	$	110,823	$	572,170	$	421,323	$	450,359	$	217,711	$	1,094,528	$	572,170
International revenues		7,599		5,765		24,507		28,342		9,242		7,599		25,204		24,507
Total revenues	$	225,310	$	116,588	$	596,677	$	449,665	$	459,601	$	225,310	$	1,119,732	$	596,677

The accounting policies of the reportable segments are the same as those referenced in Note 1 to these consolidated financial statements. RPC evaluates the performance of its segments based on revenues, operating profits and return on invested capital. Gains or losses on disposition of assets are reviewed by the CODM on a consolidated basis, and accordingly the Company does not report gains or losses at the segment level. Inter-segment 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.

~~Summarized financial information with respect RPC’s reportable segments for the three and nine months ended September 30, 2021 and 2020 are shown in the following table:~~

Three months ended

Nine months ended

September 30,

September 30,
(in thousands)

2021

2020

2021

2020
Revenues:








Technical Services

$
211,842

$
109,278

$
560,602

$
417,511
Support Services

13,468

7,310

36,075

32,154
Total revenues

$
225,310

$
116,588

$
596,677

$
449,665
Operating income (loss):

Technical Services

$
8,272

$
(24,941)

$
3,938

$
(71,248)
Support Services

(55)

(3,840)

(5,353)

(4,139)
Corporate Expenses

(3,080)

(6,534)

(9,760)

(13,003)
Impairment and Other Charges ⁽¹⁾

0

0

0

(207,175)
Gain on disposition of assets, net

2,837

3,563

7,408

7,576
Total 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)

⁽¹⁾	~~Represents $541 related to Corporate and the remainder to Technical Services.~~

As of and for the nine months ended

Technical

Support

September 30, 2021

Services

Services

Corporate

Total
(in thousands)








Depreciation and amortization

$
46,341

$
7,232

$
202

$
53,775
Capital expenditures

38,794

5,436

695

44,925
Identifiable assets

$
556,385

$
74,135

$
196,120

$
826,640

As of and for the nine months ended

Technical

Support

September 30, 2020

Services

Services

Corporate

Total
(in thousands)

Depreciation and amortization

$
77,224

$
5,088

$
209

$
77,521
Capital expenditures

43,437

8,338

538

52,313
Identifiable assets

$
475,168

$
64,463

$
261,246

$
800,877

1312

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8.Summarized financial information with respect RPC’s reportable segments for the three and nine months ended September 30, 2022 and 2021 are shown in the following table:


	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2022		2021		2022		2021
Revenues:
Technical Services	$	435,775	$	211,842	$	1,058,227	$	560,602
Support Services		23,826		13,468		61,505		36,075
Total revenues	$	459,601	$	225,310	$	1,119,732	$	596,677
Operating income (loss):
Technical Services	$	89,455	$	8,272	$	171,093	$	3,938
Support Services		5,278		(55)		11,392		(5,353)
Corporate expenses		(4,106)		(3,080)		(13,160)		(9,760)
Gain on disposition of assets, net		1,543		2,837		6,295		7,408
Total operating income (loss)	$	92,170	$	7,974	$	175,620	$	(3,767)
Interest expense		(143)		(1,280)		(543)		(1,763)
Interest income		329		15		472		47
Other (expense) income, net		(67)		448		516		1,571
Income (loss) before income taxes	$	92,289	$	7,157	$	176,065	$	(3,912)

As of and for the nine months ended

Technical

Support

September 30, 2022

Services

Corporate

Total

(in thousands)

Depreciation and amortization

53,002

7,346

153

60,501

Capital expenditures

79,828

9,558

841

90,227

Identifiable assets

836,310

79,546

139,727

1,055,583


As of and for the nine months ended	Technical		Support
September 30, 2021	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	46,341	$	7,232	$	202	$	53,775
Capital expenditures		38,794		5,436		695		44,925
Identifiable assets		556,385		74,135		196,120		826,640

7. 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 credit loss allowance 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. ~~Estimates used to determine the allowance for current expected credit losses are based on an assessment~~

Table of ~~anticipated payment and all other historical, current and future information that is reasonably available.~~Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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:


Nine months ended September 30,	2021		2020		2022		2021
(in thousands)
Beginning balance	$	4,815	$	5,181	$	6,765	$	4,815
Provision (benefit) for current expected credit losses		3,848		(448)
Provision for current expected credit losses						1,484		3,848
Write-offs		(1,330)		(315)		(1,708)		(1,330)
Recoveries collected (net of expenses)		9		(8)		14		9
Ending balance	$	7,342	$	4,410	$	6,555	$	7,342

9.8. 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 first-in, first-out method or the weighted average cost method.


	September 30,		December 31,
	2021		2020		September 30,		December 31,
(in thousands)					2022		2021
Raw materials and supplies	$	78,298	$	81,278	$	92,028	$	77,709
Finished goods		1,583		1,640		1,318		1,274
Ending balance	$	79,881	$	82,918	$	93,346	$	78,983

~~10.~~9. 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 statute that could result in unfavorable outcomes. In accordance with ASC 450-20, Loss Contingencies, any probable and reasonable estimate of assessment costs have been included in accrued state, local and other taxes.

The Company has received a state tax notification of audit results related to sales and use tax ~~on July 12, 2021. The Company~~ and with its outside legal counsel ~~continue to evaluate~~has evaluated the perceived merits of ~~the~~this tax assessment. The Company believes the likelihood of a material loss related to this contingency is remote and cannot be reasonably estimated at this time. Therefore, no loss has been recorded 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.

10. PENSION AND RETIREMENT PLANS LIABILITIES

The following represents the net periodic benefit cost and related components of the Company’s multiple employer Retirement Income Plan, a trusteed defined benefit pension plan:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Interest cost	$	243	$	247	$	729	$	741
Expected return on plan assets		—		(378)		-		(1,132)
Amortization of net losses		253		202		758		606
Net periodic benefit cost	$	496	$	71	$	1,487	$	215

During the fourth quarter of 2021, the Company ~~recorded an estimated liability of $4.5 million~~initiated actions to ~~reflect~~terminate the ~~resolution of a long-term contractual dispute with a vendor~~defined benefit pension plan, which is ~~disclosed~~expected to be completed in early 2023 and therefore the funded status of the plan is being reported as part of ~~accrued insurance expense on~~Pension liabilities in the ~~consolidated balance sheet; $3.3~~accompanying Consolidated Balance Sheets. The Company currently expects to make a final cash contribution of approximately $8.0 million to $9.0 million in connection with the plan termination. As of the ~~total amount has been included~~plan termination date, the Company will recognize a pre-tax, non-cash settlement charge representing the unamortized net loss in ~~cost of revenues and~~ the ~~remainder in interest expense.~~plan which was approximately

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~11. EMPLOYEE BENEFIT PLAN~~

$22.7 million as of September 30, 2022. The ~~following represents~~final amount is subject to change based on the actual return on plan assets and the periodic actuarial updates of the net ~~periodic benefit cost~~losses in the plan. For the year ending December 31, 2022, the Company is utilizing an expected return on plan assets of zero percent based on the current short-term rates and ~~related components~~investment horizon as a result of the ~~Company’s multiple employers Retirement Income Plan:~~expected plan termination.

Three months ended September 30,

Nine months ended September 30,
(in thousands)

2021

2020

2021

2020
Interest cost

$
247

$
411

$
741

$
1,234
Expected return on plan assets

(378)

(395)

(1,132)

(1,186)
Amortization of net losses

202

246

606

739
Net periodic benefit cost

$
71

$
262

$
215

$
787

The Company did not make a cash contribution to this plan during the nine months ended September 30, ~~2021~~2022 or September 30, ~~2020.~~2021.

In October 2020, the Company amended the Retirement Income Plan to add a limited lump-sum payment window for vested terminated participants who had terminated employment before July 1, 2020 and for active employees who reached age ~~59 ½~~ by December 1, 2020, with a vested balance. The participants could elect to receive their vested balance immediately as a lump-sum or by initiating a monthly annuity payment. The lump-sum payment window offering ended during the fourth quarter of 2020 and plan assets were used to fund participant elections. The resulting non-cash settlement charges represent the accelerated recognition of actuarial losses reflected in Accumulated Other Comprehensive Income (Loss) (AOCI). A settlement loss of $4.7 million associated with the acceptance of these lump-sum payments was included as part of impairment and other charges during the fourth quarter of 2020.

The Company permits selected highly compensated employees to defer a portion of their compensation into the non-qualified Supplemental Retirement Plan (“SERP”). The Company maintains certain securities primarily in mutual funds and company-owned life insurance (“COLI”) policies as a funding source to satisfy the obligation of the SERP that have been classified as trading, and are stated at fair value totaling ~~$31.6~~$26.6 million as of September 30, ~~2021~~2022 and ~~$32.0~~$31.7 million as of December 31, ~~2020.~~2021. Trading ~~gains~~losses related to the SERP assets totaled approximately $1.1 million during the three months ended September 30, 2022, compared to trading gains of approximately $407 thousand during the three months ended September 30, ~~2021, compared to trading gains of approximately $1.1 million during the three months ended September 30, 2020.~~2021. Trading ~~gains~~losses related to the SERP assets totaled approximately $5.2 million during the nine months ended September 30, 2022, compared to trading gains of approximately $2.5 million during the nine months ended September 30, ~~2021, compared to trading gains of approximately $178 thousand during the nine months ended September 30, 2020.~~2021. The SERP assets are reported in non-current ~~other~~Other assets onin the ~~consolidated balance sheets~~accompanying Consolidated Balance Sheets and changes in the fair value of these assets are reported in the ~~consolidated statements~~accompanying Consolidated Statements of ~~operations~~Operations as compensation cost in ~~selling,~~Selling, general and administrative expenses.

The SERP liabilities includes participant deferrals net of distributions and are stated at fair value of approximately ~~$29.3~~$22.1 million as of September 30, ~~2021~~2022 and $29.7 million as of December 31, ~~2020.~~2021. The SERP liabilities are reported onin the ~~consolidated balance sheets~~accompanying Consolidated Balance Sheets in ~~long-term~~Long-term pension and retirement plans liabilities and any change in the fair value is recorded as compensation cost within ~~selling,~~Selling, general and administrative expenses in the ~~consolidated statements~~accompanying Consolidated Statements of ~~operations.~~Operations. Changes in the fair value of the SERP liabilities represented unrealized losses of approximately $1.0 million during the three months ended September 30, 2022, compared to unrealized gains of approximately $502 thousand during the three months ended September 30, ~~2021, compared to unrealized gains of approximately $1.2 million during the three months ended September 30, 2020.~~2021. Changes in the fair value of the SERP liabilities represented unrealized losses of approximately $4.9 million during the nine months ended September 30, 2022, compared to unrealized gains of approximately $2.8 million during the nine months ended September 30, ~~2021, compared to unrealized gains of approximately $486 thousand during the nine months ended September 30, 2020.~~2021.

~~12.~~11. NOTES PAYABLE TO BANKS

The Company has a revolving Credit Agreement with Bank of America and 4four other lenders which provides for a line of credit of up to ~~$100~~$100.0 million, including a ~~$35~~$35.0 million letter of credit subfacility, and a ~~$35~~$35.0 million swingline subfacility. 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 percent owned domestic subsidiaries whose assets equal substantially all of the consolidated assets of the Company and its subsidiaries. ~~Certain~~

During the second quarter of 2022, the ~~Company’s minor subsidiaries are not guarantors.~~ Company entered into Amendment No. 6 to its Credit Agreement (the “Amendment”). This Amendment (1) extends the termination date for revolving loans from July 26, 2023 to June 22, 2027, (2) replaces LIBOR with the Term SOFR as an interest rate option in connection with revolving loan borrowings and reduces the applicable rate margins by approximately 25.0 basis points at each pricing level, (3) introduces a 1.00% per annum floor for Base Rate borrowings, and (4) permits the issuance of letters of credit in currencies other than U.S. dollars.

The Credit ~~Agreement’s maturity date~~Agreement has three financial covenants when RPC’s trailing four quarter EBITDA (as calculated under the Credit Agreement) is ~~July 26, 2023.~~equal to or greater than $50.0 million: (i) the consolidated leverage ratio cannot exceed 2.50:1.00 and (ii) the debt service coverage ratio must be equal to or greater than 2.00:1.00; otherwise, the minimum tangible net worth must be greater than or equal to $400.0 million.

As of September 30, 2022, the Company was in compliance with all covenants.

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During the third quarter of 2020, the Company entered into Amendment No. 5 to Credit Agreement (the “Amendment”). This Amendment (1) reduced the maximum amount available for borrowing under the credit facility from $125 million to $100 million, (2) decreased the minimum tangible net worth covenant level from not less than $600 million to not less than $400 million, and (3) increased the margin spreads and commitment fees payable by RPC by 37.5 and 5 basis points, respectively, at each pricing level of the applicable rate without any changes to the leverage ratios used to calculate such spreads.

The Credit Agreement includes the following covenants: (i) when RPC’s trailing four quarter EBITDA (as calculated under the Credit Agreement) is equal to or greater than $50 million, a maximum consolidated leverage ratio of 2.50:1.00 and a minimum debt service coverage ratio of 2.00:1.00, and (ii) when RPC’s trailing four quarter EBITDA is less than $50 million, a minimum tangible net worth of no less than $400 million.

~~As of September 30, 2021, the Company was in compliance with these covenants.~~

Revolving loans under the amended revolving credit facility bear interest at one of the following two rates at the Company’s election:

●

~~the Eurodollar Rate, which is the rate per annum equal to the London Interbank Offering Rate (“LIBOR”);~~Term SOFR; plus, a margin ranging from ~~1.5%~~1.25% to ~~2.5%~~2.25%, based on a quarterly consolidated leverage ratio ~~calculation;~~calculation, and an additional SOFR Adjustment ranging from 10 to 30 basis points depending upon maturity length; or

●

the Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) Bank of America’s publicly announced, “prime rate,” ~~and~~ (c) the ~~Eurodollar Rate~~Term SOFR plus 1.00%, or (d) 1.00%; in each case plus a margin that ranges from ~~0.5%~~0.25% to ~~1.5%~~1.25% based on a quarterly consolidated leverage ratio calculation.

In addition, the Company pays an annual fee ranging from 0.20% to 0.30%, based on a quarterly consolidated leverage ratio calculation, on the unused portion of the credit facility.

The Company has incurred total loan origination fees and other debt related costs associated with this revolving credit facility in the aggregate of approximately ~~$3.4~~$3.7 million. These costs are being amortized to interest expense over the remaining term of the loan, and the remaining unamortized balance of ~~$0.2 million~~$348 thousand at September 30, ~~2021~~2022 is classified as part of non-current ~~other~~Other assets.

As of September 30, ~~2021,~~2022, RPC had 0no outstanding borrowings under the revolving credit facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaled ~~$17.7~~$16.3 million; therefore, a total of ~~$82.3~~$83.7 million of the facility was available. Interest incurred, which includes facility fees on the unused portion of the revolving credit facility and the amortization of loan ~~cost,~~costs, and interest paid on the credit facility were as follows for the periods indicated:


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
(in thousands)	2021		2020		2021		2020		2022		2021		2022		2021
Interest incurred	$	86	$	20	$	192	$	173	$	60	$	86	$	188	$	192
Interest paid		42		40		124		120		4		42		127		124

~~13.~~12. 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, as of the end of each successive interim period during the fiscal year to the Company’s current annual estimated tax rate.

For the three months ended September 30, ~~2021,~~2022, the effective rate reflects a provision of ~~26.4~~24.9 percent compared to a ~~benefit~~provision of ~~47.0~~26.4 percent for the comparable period in the prior year. For the nine months ended September 30, ~~2021,~~2022, the effective rate reflects a provision of ~~30.9~~25.4 percent compared to a ~~benefit~~provision of ~~30.1~~30.9 percent for the comparable period in the prior year. ~~The~~For the quarter ended September 30, 2022 the decrease in effective tax rate is ~~mainly~~primarily related to ~~the unfavorable~~an increase in pretax income coupled with favorable changes in permanent ~~adjustments together with detrimental~~differences and discrete ~~adjustments related to restricted stock vesting and approximately $0.6 million related to the employee retention credit.~~items.

~~Table of Contents~~

~~RPC, INC. AND SUBSIDIARIES~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~14.~~13. 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 ~~nine~~three broad levels as follows:

1.Level 1 – Quoted market prices in active markets for identical assets or liabilities.

2.Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

3.Level 3 – Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use.

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the valuation of financial instruments measured at fair value on a recurring basis in the balance sheets as of September 30, ~~2021~~2022 and December 31, ~~2020:~~2021:

Fair Value Measurements at September 30, 2021 with:

Fair Value Measurements at September 30, 2022 with:

Quoted prices in

Significant

Quoted prices in

Significant

active markets

other

Significant

active markets

other

Significant

for identical

observable

unobservable

for identical

observable

unobservable

(in thousands)

Total

assets

inputs

Total

assets

inputs

(Level 1)

(Level 2)

(Level 3)

(Level 1)

(Level 2)

(Level 3)

Assets:

Equity securities

180

—

224

—

Investments measured at net asset value

31,591

26,551

Fair Value Measurements at December 31, 2020 with:

Fair Value Measurements at December 31, 2021 with:

Quoted prices in

Significant

Quoted prices in

Significant

active markets

other

Significant

active markets

other

Significant

for identical

observable

unobservable

for identical

observable

unobservable

(in thousands)

Total

assets

inputs

Total

assets

inputs

(Level 1)

(Level 2)

(Level 3)

(Level 1)

(Level 2)

(Level 3)

Assets:

Equity securities

132

—

197

—

Investments measured at net asset value

32,039

31,738

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. Marketable securities comprised of the SERP assets, 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 ~~trading~~equity securities. The Company’s policy is to recognize transfers between levels at the beginning of quarterly reporting periods. For the quarter ended September 30, ~~2021,~~2022, there were no significant transfers in or out of levels 1, 2 or 3.

Under the Company’s revolving credit facility, there was no balance outstanding at September 30, ~~2021~~2022 and December 31, ~~2020.~~2021. Borrowings under our revolving credit facility are typically based on the quote from the lender (level 2 inputs), which approximates fair value, and bear variable interest rates as described in Note 11. The Company is subject to interest rate risk, to the extent there are outstanding borrowings on the variable component of the interest rate.

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.

~~Table of Contents~~

~~RPC, INC. AND SUBSIDIARIES~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

The Company’s real estate classified as Assets held for sale in the accompanying Consolidated Balance Sheets has been stated at fair value less costs. The fair value measurement was based on observable market data that includes estimated values per square foot involving comparable properties in similar locations.

The non-recurring fair value measurement ~~of both these asset categories are~~is reflected in the table below:

Fair Value Measurements at September 30, 2021 with:

Fair Value Measurements at September 30, 2022 with:

Quoted prices in

Significant

Quoted prices in

Significant

active markets

other

Significant

active markets

other

Significant

for identical

observable

unobservable

for identical

observable

unobservable

(in thousands)

Total

assets

inputs

Total

assets

inputs

(Level 1)

(Level 2)

(Level 3)

(Level 1)

(Level 2)

(Level 3)

Assets:

Assets held for sale

692

—

692

—

692

—

692

—

��

Fair Value Measurements at December 31, 2020 with:




Quoted prices in

Significant


active markets

other

Significant

for identical

observable

unobservable
(in thousands)

Total

assets

inputs

inputs

(Level 1)

(Level 2)

(Level 3)
Assets:









Assets held for sale

$
4,032

$
—

$
4,032

$
—

Table of Contents

RPC, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements at December 31, 2021

Quoted prices in

Significant

active markets

other

Significant

for identical

observable

unobservable

(in thousands)

Total

assets

inputs

(Level 1)

(Level 2)

(Level 3)

Assets:

Assets held for sale

692

—

692

—

~~15.~~14. ACCUMULATED OTHER COMPREHENSIVE ~~(LOSS) INCOME~~LOSS

Accumulated other comprehensive (loss) income consists of the following (in thousands):


			Foreign						Foreign
	Pension		Currency				Pension		Currency
	Adjustment		Translation		Total		Adjustment		Translation		Total
Balance at December 31, 2020	$	(15,181)	$	(2,525)	$	(17,706)
Balance at December 31, 2021							$	(18,071)	$	(2,637)	$	(20,708)
Change during the period:
Before-tax amount		—		(34)		(34)		—		91		91
Reclassification adjustment, net of taxes:
Amortization of net loss ⁽¹⁾		458		—		458		585		—		585
Total activity for the period		458		(34)		424		585		91		676
Balance at September 30, 2021	$	(14,723)	$	(2,559)	$	(17,282)
Balance at September 30, 2022							$	(17,486)	$	(2,546)	$	(20,032)

(1)	Reported as part of ~~selling,~~Selling, general and administrative expenses.


			Foreign						Foreign
	Pension		Currency				Pension		Currency
	Adjustment		Translation		Total		Adjustment		Translation		Total
Balance at December 31, 2019	$	(20,908)	$	(2,315)	$	(23,223)
Balance at December 31, 2020							$	(15,181)	$	(2,525)	$	(17,706)
Change during the period:
Before-tax amount		—		(423)		(423)		—		(34)		(34)
Reclassification adjustment, net of taxes:
Amortization of net loss ⁽¹⁾		1,104		—		1,104		458		—		458
Total activity for the period		1,104		(423)		681		458		(34)		424
Balance at September 30, 2020	$	(19,804)	$	(2,738)	$	(22,542)
Balance at September 30, 2021							$	(14,723)	$	(2,559)	$	(17,282)

(1)	Reported as part of ~~selling,~~Selling, general and administrative expenses.

15. SUBSEQUENT EVENT

On October 25, 2022, the Board of Directors declared a regular quarterly cash dividend of $0.02 per share payable December 9, 2022 to common stockholders of record at the close of business on November 10, 2022.

Table of Contents

RPC, INC. AND SUBSIDIARIES

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~16. LEASES~~:

During the third quarter of 2021, the Company entered into two Agreements (Agreement 1 and Agreement 2) for certain operating equipment rentals with an industrial manufacturer. Per the terms of Agreement 1, the equipment is being rented for one year and RPC is required to purchase the assets at the end of the lease term for the guaranteed purchase price less the monthly amounts paid during the year. As a result, the Company classified this arrangement as a finance lease and recorded the lease liability using its one year incremental borrowing rate. At the initiation of the lease, the Company recorded finance lease right-of-use assets and short –term ~~finance~~ ~~lease liabilities of $21.7 million.~~

Per the terms of Agreement 2, certain operating equipment is being rented for one year with variable lease payments based on usage. The Company evaluated the terms of the terms of the contract and concluded that the arrangement contains a lease since it has the rights to obtain substantially all of the economic benefits and to direct the use of the operating equipment. In addition the Company has made an accounting policy election to account for this as a short-term lease and therefore not recognize a related right-of-use asset or lease liability.

~~Lease Costs (in thousands):~~

~~Finance lease costs are comprised of amortization of leased assets of $363 and interest on lease liabilities of $29.~~

~~Operating lease costs related to the lease described above total approximately $152.~~

~~Undiscounted cash flows (in thousands):~~

As of September 30, 2021, projected future lease payments on the finance lease total $21,675 scheduled to be paid as follows: $1,275 in 2021 and $20,400 in 2022, with amounts representing interest of $293 over the term of the lease.

~~Other information:~~


~~Weighted average remaining lease term – finance lease (months)~~	11	~~months~~
~~Weighted average discount rate – finance lease~~	~~1.682~~	%

~~Table of Contents~~

~~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 ~~27.~~26.

RPC, Inc. (“RPC”) 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 Mexico, 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, 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, ~~2020~~2021 is incorporated herein by reference. In ~~2021,~~2022, the Company’s strategy of utilizing equipment in unconventional basins has continued. During the nine months ended September 30, ~~2021,~~2022, capital expenditures totaled ~~$44.9~~$90.2 million, ~~excluding equipment acquired under finance leases in the third quarter,~~ primarily for capitalized maintenance and upgrades of our existing ~~equipment, including upgrades of selected pressure pumping equipment for dual-fuel capability.~~

The oil and gas industry experienced an unprecedented disruption during 2020 due to the substantial decline in global demand for oil caused by the combined impact of the OPEC disputes, and the COVID-19 pandemic that has continued during the third quarter of 2021. The pandemic has significantly impacted the economic conditions in the United States, as federal, state and local governments have reacted to the public health crisis, creating significant uncertainties in the United States, as well as the global economy. RPC continued our regular operations during the period since we function as an essential infrastructure business in the energy sector under guidance issued by the Department of Homeland Security. In response to the pandemic, RPC instituted strict procedures to assess employee health and safety while in its facilities or on operational locations.equipment.

During the third quarter of ~~2021,~~2022, revenues of ~~$225.3~~$459.6 million increased by ~~$108.7~~$234.3 million or ~~93.3~~104.0 percent compared to the same period in the prior year. The increase in revenues is due to ~~activity increases in all of our service lines as well as slight~~improved pricing, improvement in several of our larger service lines. The economic slowdown that occurred due to the COVID-19 pandemic began at the end of the first quarter of 2020, therefore the third quarter of 2020 reflects the significant decline in businesshigher customer activity levels ~~explaining the significant increase in revenues during the third quarter~~and a larger active fleet of ~~2021 when compared to the prior year.~~revenue-producing equipment. International revenues for the third quarter of ~~2021~~2022 increased ~~32.0~~21.6 percent to ~~$7.6~~$9.2 million compared to the same period in the prior year. We continue to pursue international growth opportunities, but the nature of this work is unpredictable and we believe that international revenues will continue to be less than ten percent of RPC’s consolidated revenues in the future.

Cost of revenues increased ~~during the third quarter of 2021 in comparison to the same period of the prior year~~ primarily due to increases in expenses consistent with higher activity levels, such as materials and supplies expenses, maintenance and repairs expenses, employment costs and fuel costs. In addition, these costs increased due to higher market prices for materials and supplies, fuel and other raw materials. Cost of revenues as a percentage of revenues decreased ~~primarily~~ due to ~~the~~improved pricing for our services and leverage of ~~higher revenues over direct~~ employment costs. During the third quarter of 2021 RPC recorded a $3.3 million expense related to the resolution of a long-term contractual dispute with a vendor, partially offset by a CARES tax credit of approximately $2.3 million.

Selling, general and administrative expenses ~~were~~increased to $38.2 million in the third quarter of 2022 from $31.4 million in the third quarter of 2021 ~~compared to $32.4 million in the third quarter of 2020. The expenses for the third quarter of 2020 reflect $3.3 million of accelerated vesting of restricted stock~~primarily due to ~~the death of on officer. The expenses for the third quarter of 2021 reflect higher bad debt expense and some expense growth consistent with higher activity levels.~~increases in variable employment compensation costs. 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 to 8.3 percent of revenues in the third quarter of 2022 due to leverage of ~~higher revenues our cost~~costs that are relatively fixed during the short ~~term.~~term over higher revenues.

Income before income taxes was ~~$7.2~~$92.3 million for the three months ended September 30, ~~2021~~2022 compared to ~~$31.0~~$7.2 million ~~loss before income taxes in~~during the same period of ~~2020.~~2021. Diluted earnings per share ~~was $0.02~~were $0.32 for the three months ended September 30, ~~2021~~2022 compared to ~~a loss~~$0.02 per share ~~of $0.08~~ in the same period of ~~2020.~~2021. Cash provided by operating activities ~~decreased~~increased to $40.9 million for the nine months ended September 30, 2022 compared to $26.4 million in the same period of 2021 primarily due to a significant increase in earnings, partially offset by unfavorable changes in working capital from higher business activity levels experienced in the first nine months of 2022.

We currently expect capital expenditures to be approximately $150.0 million during 2022 and to be directed primarily towards capitalized maintenance of our existing equipment and selected growth opportunities. In addition, finance lease payments of approximately of $24.3 million have or will be made during 2022 for a pressure pumping fleet we began operating in 2021, inclusive of an approximately $20.0 million final payment to be made in the fourth quarter of 2022.

2019

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~~the nine months ended September 30, 2021 compared to $131.4 million in the same period of 2020 primarily due to an unfavorable change in working capital in 2021.~~

We expect capital expenditures, excluding lease financed equipment, in 2021 will be approximately $65 million, and will be directed mostly towards capitalized maintenance of our existing equipment and selected growth opportunities.

Outlook

Drilling activity in the U.S. domestic oilfields, as measured by the rotary drilling rig count, reached a cyclical peak of 1,083 during the fourth quarter of 2018. Beginning in the fourth quarter of 2018, the drilling rig count began to decline and by the third quarter of 2020, the U.S. domestic drilling rig count fell 77 percent reaching the lowest level recorded up to that time. The principal catalyst for this steep rig count decline was the decrease in the price of oil in the world markets resulting from the decline in global oil demand associated with the COVID-19 pandemic which began in the third quarter of 2020.

RPC monitors rig count efficiencies and well completion trends because the majority of our services are directed toward well completions. Improvements in drilling rig efficiencies have increased the number of potential well completions for a given drilling rig count; therefore, the statistics regarding well completions are more meaningful indicators of the outlook for RPC’s activity levels and revenues. Annual well completions during 2018 increased by approximately 25 percent compared to 2017, and by approximately five percent in 2019 compared to 2018. Well completions in 2020 decreased by approximately 49 percent compared to ~~2019. For~~2019 due to the ~~nine months ended September 30, 2021,~~impact of COVID-19. However, well completions in 2021 increased by approximately 2933 percent compared to 2020. Well completions for the first nine months of 2022 increased 24.5 percent compared to the same period in the prior year.

Drilling activity in the U.S. domestic oilfields, as measured by the rotary drilling rig count, reached a cyclical peak of 1,083 during the fourth quarter of 2018. Between the fourth quarter of 2018 and the third quarter of 2020, the drilling rig count fell by 77 percent. During the third quarter of 2020, the U.S. domestic drilling rig count reached the lowest level recorded up to that time. The principal catalyst for this steep rig count decline was the decrease in the price of oil in the world markets resulting from the decline in global oil demand associated with the COVID-19 pandemic which began in the first quarter of 2020. Rig count for the first nine months of 2022 increased 56.7 percent compared to the same period in the prior year.

The current and projected prices of oil, natural gas and natural gas liquids are important catalysts for U.S. domestic drilling activity. Following the trough of the most recent oilfield downturn in the ~~third~~second quarter of 2020, the ~~average~~ price of oil has risen by more than 72250 percent in the third quarter of ~~2021~~2022 compared to the average price of oil in the ~~third~~second quarter of 2020. The ~~average~~ price of natural gas has ~~also~~ risen by ~~more than 119~~over 300 percent during the same time ~~period, due to steady demand for natural gas.~~period. Following a low price of $0.23 per gallon in the first quarter of 2020, the price of benchmark natural gas liquids has risen to ~~$1.17~~$1.08 per gallon in the third quarter of ~~2021.~~2022. In addition, oil and gas prices experienced increases beginning in February 2022 due to concerns about potential world-wide supply constraints resulting from the Russian invasion of Ukraine. The price increases in these commodities during the past ~~three quarters~~year are ~~encouraging,~~favorable for our business, and RPC believes that they have encouraged our customers to increase drilling and completion activities.

The Russian invasion of Ukraine during the first quarter of 2022 prompted Western European countries to curtail or eliminate their purchases of natural gas from Russia. As a result, the demand for liquified natural gas from the United States increased significantly, which increased the price for natural gas in the United States to its highest level since 2008 and has encouraged additional investment in liquified natural gas production facilities in the United States. These higher prices and additional investments in natural gas infrastructure should encourage RPC’s customers to increase their natural gas-directed exploration and production activities.

The majority of the U.S. domestic rig count remains directed towards oil. ~~Early in~~In the ~~fourth~~third quarter of ~~2021,~~2022, approximately 8279 percent of the U.S. domestic rig count was directed towards oil, ~~an increase~~unchanged compared ~~with approximately 73 percent during~~to the same period in the prior year. We believe that oil-directed drilling will remain the majority of domestic drilling, and that natural gas-directed drilling will remain a low percentage of U.S. domestic drilling in the near term. However, we believe that natural gas-directed drilling has increased and will continue to increase in natural gas-directed basins in the United States due to the current and projected high prices of natural gas. This trend should be favorable for the demand for RPC’s services in these basins.

We continue to monitor the market for our services and the competitive environment, including the current trends and expectations with regard to environmental concerns and related impact on our equipment fleets. The growing efficiency with which oilfield completion crews are providing services is a catalyst for the oversupplied nature of the oilfield services market. ~~Early in the fourth quarter of 2021, we~~We believe that most of the feasible efficiency gains have been realized, and a number of our smaller competitors have ceased operations. These factors, combined with the increase in drilling and completion activities and the improvement in commodity prices, leads us to believe that the competitive market for our services has improved during the first nine months of 2022 and we expect demand will continue to improve during the near term.

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During the third quarter of ~~2021,~~2022, RPC ~~entered into an agreement~~continued to make payments under a finance lease arrangement for a new Tier IV4 dual-fuel pressure pumping fleet, which immediately went to work at the beginning of the fourth ~~quarter. In 2019, RPC expanded its fleet~~quarter of ~~revenue-producing equipment, while also retiring older equipment which could no longer function effectively in service-intensive operating environments.~~2021. We ~~continue to~~have selectively ~~upgrade~~upgraded our existing equipment to operate using multiple fuel sources and to take advantage of advances in technology and data collection. We will continue to monitor current and expected customer activity levels and projected financial returns as we consider activating additional idle equipment during the near term. ~~Our consistent~~RPC’s response to ~~the near-term potential of lower~~our industry’s current higher activity levels and ~~competitive~~improved service pricing ~~has been~~is primarily to ~~undertake moderate~~maintain and upgrade our current fleet ~~expansions which~~capacity of revenue-producing equipment. We will remain highly disciplined about adding new revenue-producing equipment capacity and will only when we believe ~~will allow us~~the projected financial returns of such capital expenditures meet our financial return criteria.The Company is allocating capital in the coming quarter to maintain the capacity of its pressure pumping fleet to offset anticipated future fleet retirements. Consistent with this strategy, RPC is currently refurbishing an existing pressure pumping fleet that will be placed in service in early 2023, and we have ordered a ~~strong balance sheet, while also positioning RPC for long-term growth and strong financial returns.~~

~~Table~~pressure pumping fleet that is projected to be delivered in the first half of ~~Contents~~2023.

~~RPC, INC. AND SUBSIDIARIES~~

Results of Operations


	Three months ended						Nine months ended
	September 30,						September 30,						Three months ended						Nine months ended
	2021			2020				2021			2020		September 30,						September 30,
													2022			2021			2022			2021
Consolidated revenues [in thousands]	$	225,310		$	116,588		$	596,677		$	449,665		$	459,601		$	225,310		$	1,119,732		$	596,677
Revenues by business segment [in thousands]:
Technical	$	211,842		$	109,278		$	560,602		$	417,511		$	435,775		$	211,842		$	1,058,227		$	560,602
Support		13,468			7,310			36,075			32,154			23,826			13,468			61,505			36,075

Consolidated operating income (loss) [in thousands]	$	7,974		$	(31,752)		$	(3,767)		$	(287,989)		$	92,170		$	7,974		$	175,620		$	(3,767)
Operating income (loss) by business segment [in thousands]:
Technical	$	8,272		$	(24,941)		$	3,938		$	(71,248)		$	89,455		$	8,272		$	171,093		$	3,938
Support		(55)			(3,840)			(5,353)			(4,139)			5,278			(55)			11,392			(5,353)
Corporate		(3,080)			(6,534)			(9,760)			(13,003)			(4,106)			(3,080)			(13,160)			(9,760)
Impairment and other charges (1)		—			—			—			(207.175)
Gain on disposition of assets, net		2,837			3,563			7,408			7,576			1,543			2,837			6,295			7,408

Percentage cost of revenues to revenues		75.7	%		86.5	%		77.5	%		80.7	%		67.4	%		75.7	%		69.6	%		77.5	%
Percentage selling, general & administrative expenses to revenues		14.0	%		27.8	%		15.3	%		21.7	%		8.3	%		14.0	%		9.9	%		15.3	%
Percentage depreciation and amortization expense to revenues		8.0	%		16.0	%		9.0	%		17.2	%		4.6	%		8.0	%		5.4	%		9.0	%
Average U.S. domestic rig count		500			254			425			477			761			500			705			425
Average natural gas price (per thousand cubic feet (mcf))	$	4.39		$	2.00		$	3.29		$	1.88		$	8.0		$	4.4		$	6.7		$	3.3
Average oil price (per barrel)	$	70.5		$	40.83		$	62.4		$	38.46		$	92.8		$	70.5		$	99.0		$	62.4

⁽¹⁾	~~Includes $541 related to Corporate and the remainder to Technical Services.~~

THREE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, ~~2020~~2021

Revenues. Revenues of ~~$225.3~~$459.6 million for the three months ended September 30, ~~2021~~2022 increased ~~93.3~~104.0 percent compared to the three months ended September 30, ~~2020.~~2021. Domestic revenues of ~~$217.7~~$450.4 million increased ~~96.0~~22.1 percent for the three months ended September 30, ~~2021~~2022 compared to the same period in the prior year. The increase in revenues was primarily due to improved pricing, higher customer activity levels ~~compared to the third quarter~~and a larger active fleet of ~~the prior year which was negatively impacted by COVID-19 shutdowns.~~pressure pumping equipment. International revenues of ~~$7.6~~$9.2 million increased ~~32.0~~21.6 percent for the three months ended September 30, ~~2021~~2022 compared to the same period in the prior year.

During the third quarter of ~~2021,~~2022, the average price of oil was 31.6 percent higher and the average price of natural gas was ~~119.5 percent higher and the average price of oil was 72.7~~82.9 percent higher, both as compared to the same period in the prior year. Oil and gas prices are higher due to continued strong demand as well as supply constraints worldwide due to the Russian invasion of Ukraine during the first quarter of 2022. The average domestic rig count during the third quarter of ~~2021~~2022 was ~~96.9~~52.2 percent higher than the same period in ~~2020.~~2021.

The Technical Services segment revenues for the third quarter of ~~2021~~2022 increased by ~~93.9~~105.7 percent compared to the same period of the prior year due to ~~significantly~~ higher customer activity levels, improved pricing and ~~slightly improved pricing.~~a larger fleet of pressure pumping equipment in service. Technical Services reported operating income of ~~$8.3~~$89.5 million during the third quarter of ~~2021~~2022 compared to an operating ~~loss~~income of ~~$24.9~~$8.3 million in the third quarter of ~~2020 due to higher activity levels.~~2021. The Support Services segment revenues for the third quarter of ~~2021~~2022 increased by ~~84.2~~76.9 percent compared to the same period in the prior ~~year. This increase was~~year, primarily due ~~principally~~ to higher activity levels ~~for~~and improved pricing within rental tools. Support

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Services reported operating income of $5.3 million for the third quarter of 2022 compared to an operating loss of $55 thousand for the third quarter of ~~2021 compared to an operating loss of $3.8 million for the third quarter of 2020 due to higher pricing on rental tools.~~2021.

Cost of revenues. Cost of revenues increased ~~69.1~~81.6 percent to $309.8 million for the three months ended September 30, 2022 compared to $170.6 million for the three months ended September 30, ~~2021 compared to $100.9 million for the three months ended September 30, 2020.~~2021. Cost of revenues increased primarily due to increases in expenses consistent with higher activity levels, such as materials and supplies expenses, maintenance and repairs expenses, employment costs and fuel costs. In addition, these costs increased due to higher market prices for materials and supplies, fuel and other raw materials. Cost of revenues, as a percentage of revenues, decreased ~~primarily due to the leverage of higher revenues over direct employment costs. During~~from 75.7 percent in the third quarter of 2021 ~~RPC recorded~~to 67.4 percent in the third quarter of 2022 primarily due to improved pricing for our services and leverage of employment costs.

Selling, general and administrative expenses. Selling, general and administrative expenses increased to $38.2 million for the three months ended September 30, 2022 compared to $31.4 million for the three months ended September 30, 2021, primarily due to increases in variable incentive compensation costs consistent with improved operating results. Selling, general and administrative expenses, as a ~~$3.3~~percentage of revenues, decreased from 14.0 percent in the third quarter of 2021 to 8.3 percent in the third quarter of 2022 due to leverage of costs that are relatively fixed during the short term over higher revenues.

Depreciation and amortization. Depreciation and amortization increased 15.7 percent to $20.9 million for the three months ended September 30, 2022, compared to $18.1 million for the three months ended September 30, 2021. Depreciation and amortization increased due to capital expenditures in the past year.

Gain on disposition of assets, net. Gain on disposition of assets, net was $1.5 million for the three months ended September 30, 2022 compared to a gain on disposition of assets, net of $2.8 million for the three months ended September 30, 2021. 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 (expense) income, net. Other expense, net was $67 thousand for the three months ended September 30, 2022 compared to other income, net of $448 thousand for the same period in the prior year.

Interest expense. Interest expense was $143 thousand for the three months ended September 30, 2022 compared to $1.3 million for the three months ended September 30, 2021. The decrease in interest expense is primarily due to interest expense related to the ~~resolution~~settlement of a ~~long-term contractual~~legal dispute with a ~~vendor, partially offset~~supplier in the third quarter of 2021. Interest expense also includes facility fees on the unused portion of the credit facility and the amortization of loan costs.

Income tax provision. Income tax provision was $22.9 million during the three months ended September 30, 2022 compared to $1.9 million tax provision for the same period in 2021. The effective tax rate was 24.9 percent for the three months ended September 30, 2022 compared to a 26.4 percent effective benefit rate for the three months ended September 30, 2021. The increase in income tax provision is mainly related to an increase in pretax income for the quarter ended September 30, 2022. In addition, this is what created a decrease in the effective tax rate by diluting the impact the unfavorable permanent and discrete adjustments had on the rate.

NINE MONTHS ENDED SEPTEMBER 30, 2022 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2021

Revenues. Revenues of $1.1 billion for the nine months ended September 30, 2022 increased 87.7 percent compared to the nine months ended September 30, 2021. Domestic revenues of $1.1 billion increased 87.7 percent for the nine months ended September 30, 2022 compared to the same period in the prior year. The increase in revenues was due to higher customer activity levels, pricing improvements and a ~~CARES tax credit~~larger fleet of ~~approximately $2.3 million.~~pressure pumping equipment in service. International revenues of $25.2 million increased 2.8 percent for the nine months ended September 30, 2022 compared to the same period in the prior year.

During the first nine months of 2022, the average price of oil was 52.1 percent higher and the average price of natural gas was 84.3 percent higher, both as compared to the same period in the prior year. Oil and gas prices are higher due to continued strong demand as well as supply constraints worldwide due to the Russian invasion of Ukraine during the first quarter of 2022. The average domestic rig count during the first nine months of 2022 was 56.7 percent higher than the same period in 2021.

The Technical Services segment revenues for the first nine months of 2022 increased by 88.8 percent compared to the same period of the prior year due to higher activity levels and improved pricing. Technical Services reported operating income of $171.1 million during the first nine months of 2022 compared to operating income of $3.9 million during the first nine months of 2021. The Support Services segment revenues for the first nine months of 2022 increased by 70.5 percent compared to the same period in the

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prior year, primarily due to higher activity levels for rental tools. Support Services reported operating income of $5.3 million for the first nine months of 2022 compared to an operating loss of $5.4 million for the first nine months of 2021.

Cost of revenues. Cost of revenues increased 68.5 percent to $779.5 million for the nine months ended September 30, 2022 compared to $462.6 million for the nine months ended September 30, 2021. Cost of revenues increased primarily due to increases in expenses consistent with higher activity levels, such as materials and supplies expenses, maintenance and repairs expenses, employment costs and fuel costs. In addition, these costs increased due to higher market prices for materials and supplies, fuel and other raw materials. Cost of revenues as a percentage of revenues decreased from 77.5 percent in the nine months ended September 30, 2021 to 69.6 percent in the nine months ended September 30, 2022 due to the leverage of direct employment costs over higher revenues and a favorable job mix within pressure pumping.

Selling, general and administrative expenses. Selling, general and administrative expenses ~~decreased~~increased to ~~$31.4~~$110.4 million for the ~~three~~nine months ended September 30, 2022 compared to $91.4 million for the nine months ended September 30, 2021, ~~compared to $32.4 million for the three months ended September 30, 2020. The expenses for the third quarter of 2020 reflect $3.3 million of accelerated vesting of restricted stock~~primarily due to ~~the death of on officer. The expenses for the third quarter of 2021, reflect higher bad debt expense and some expenses quarter~~increases in employment related costs including variable incentive compensation costs consistent with ~~higher activity levels.~~improved operating results. Selling, general and administrative expenses, as a percentage of revenues, decreased from ~~27.8~~15.3 percent ~~of revenues~~ in the ~~third quarter of 2020~~nine months ended September 30, 2021 to ~~14.0~~9.9 percent ~~of revenues~~ in the ~~third quarter of 2021~~nine months ended September 30, 2022 due to leverage of ~~higher revenues our cost~~costs that are relatively fixed during the short ~~term.~~term over higher revenues.

Depreciation and amortization. Depreciation and amortization ~~decreased 2.9~~increased 12.5 percent to ~~$18.1~~$65.5 million for the ~~three~~nine months ended September 30, ~~2021,~~2022, compared to ~~$18.7~~$53.8 million for the ~~three~~nine months ended September 30, ~~2020.~~2021. Depreciation and amortization ~~decreased~~increased due to ~~lower~~ capital expenditures in ~~recent years, coupled with assets becoming fully depreciated for book purposes during~~ the ~~previous quarters.~~past year.

Gain on disposition of assets, net. Gain on disposition of assets, net was ~~$2.8~~$6.3 million for the ~~three~~nine months ended September 30, ~~2021~~2022 compared to a gain on disposition of assets, net of ~~$3.6~~$7.4 million for the ~~three~~nine months ended September 30, ~~2020.~~2021. 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 ~~$448~~$516 thousand for the ~~three~~nine months ended September 30, ~~2021~~2022 compared to other income, net of ~~$769 thousand~~$1.6 million for the same period in the prior year.

Interest expense. Interest expense was ~~$1.3 million~~$543 thousand for the ~~three~~nine months ended September 30, ~~2021~~2022 compared to ~~$73 thousand~~$1.8 million for the ~~three~~nine months ended September 30, ~~2020.~~2021. Interest expense ~~increased compared to~~for the ~~prior year~~first nine months of 2021 was unusually high, primarily due to interest expense related to the settlement of a legal dispute with a supplier coupled with interest charged in connection with resolution of a ~~long-term contractual dispute with a vendor.~~state well servicing audit. Interest expense ~~also~~ includes facility fees on the unused portion of the credit facility and the amortization of loan costs.

Income tax ~~provision (benefit).~~provision. Income tax provision was ~~$1.9~~$44.7 million during the three months ended September 30, 2021 compared to $14.6 million tax benefit for the same period in 2020. The effective tax rate was 26.4 percent for the three months ended September 30, 2021 compared to a 47.0 percent effective benefit rate for the three months ended September 30, 2020. The effective rate for the third quarter of 2021, reflects a provision due to a net detrimental impact of around $0.6 million related to the employee retention credit.

~~NINE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2020~~

~~Revenues.~~ ~~Revenues of $596.7 million for~~ the nine months ended September 30, ~~2021 increased 32.7 percent~~2022 compared to $1.2 million tax provision for the ~~nine months ended September 30, 2020. Domestic revenues of $572.2 million increased 35.8~~same period in 2021. The effective provision rate was 25.4 percent for the nine months ended September 30, ~~2021~~2022 compared to the same period in the prior year. The increase in revenues was due to higher activity levels compared to the prior year which was negatively impacted during 2020 by COVID-19 shutdowns. International revenues of $24.5 million decreased 13.5a 30.9 percent effective provision rate for the nine months ended September 30, ~~2021 compared to the same period~~2021. The increase in ~~the prior year.~~

During the first nine months of 2021, the average price of natural gas was 81.0 percent higher and the average price of oil was 67.3 percent higher, both as compared to the same period in the prior year. The average domestic rig count during the first nine months of 2021 was 27.8 percent lower than the same period in 2020.

The Technical Services segment revenues for the first nine months of 2021 increased by 34.3 percent compared to the same period of the prior year due to higher activity levels. Technical Services reported operating income ~~of $3.9 million during the first nine months of 2021 compared~~tax provision is mainly related to an ~~operating loss of $71.2 million for the first nine months of 2020. The Support Services segment revenues for the first nine months of 2021 increased by 12.2 percent compared to the same period~~increase in the prior year. This increase was due principally to higher activity levels for rental tools. Support Services reported an operating loss of $5.4 million for the first nine months of 2021 compared to operating loss of $4.1 million for the first nine months of 2020 due to lower pricing.

~~Cost of revenues.~~ ~~Cost of revenues increased 27.5 percent to $462.6 million~~pretax income for the nine months ended September 30, ~~2021~~2022. In addition, this is what created a decrease in the effective tax rate by diluting the impact the unfavorable permanent and discrete adjustments had on the rate.

Liquidity and Capital Resources

Cash Flows

The Company’s cash and cash equivalents decreased $46.5 million to $35.9 million as of September 30, 2022 compared to ~~$362.9~~cash and cash equivalents of $82.4 million as of December 31, 2021. This decrease is primarily due to an increase in working capital needs to support higher business level activities, coupled with capital expenditures in the first nine months of 2022.

The following table sets forth the historical cash flows for the nine months ended September 30, 2020. Cost of revenues increased primarily due to increases in expenses consistent with higher activity levels. Cost of revenues as a percentage of revenues decreased from 80.7 percent in the nine months ended September 30, 2020 to 77.5 percent for the nine months ended September 30, 2021 primarily due to labor2022 and ~~other cost efficiencies resulting from higher activity levels.~~2021:

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~~Selling, general and administrative expenses.~~ Selling, general and administrative expenses were $91.4 million for the nine months ended September 30, 2021 and $97.7 million for the nine months ended September 30, 2020. These expenses decreased primarily due to lower employment costs. Employment costs for 2020 reflect $3.3 million of acclerated vesting of restricted stock due to the death of on officer. Selling, general and administrative expenses decreased from 21.7 percent of revenues in the nine months ended September 30, 2020 compared to 15.3 percent of revenues for the nine months ended September 30, 2021 primarily due to higher revenues over cost that are relatively fixed during the short term.

~~Depreciation and amortization.~~ Depreciation and amortization decreased 30.6 percent to $53.8 million for the nine months ended September 30, 2021, compared to $77.5 million for the nine months ended September 30, 2020. Depreciation and amortization decreased significantly because of the asset impairment charges recorded during the first quarter of 2020.

~~Impairment and other charges.~~ There were no impairment and other charges for the nine months ended September 30, 2021 and $207.2 million for the nine months ended September 30, 2020. These changes represent primarily the total amount by which several of our asset groups’ carrying amounts exceeded their fair value, coupled with severance costs. See Note 4 of the notes to the consolidated financial statements for further discussion of these charges.

~~Gain on disposition of assets, net.~~ Gain on disposition of assets, net was $7.4 million for the nine months ended September 30, 2021 compared to a gain on disposition of assets of $7.6 million for the nine months ended September 30, 2020. 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 (expense), net.~~ ~~Other income, net was $1.6 million for the nine months ended September 30, 2021 compared to other expense, net of $1.0 million for the same period in the prior year.~~

~~Interest expense.~~ Interest expense was $1.8 million for the nine months ended September 30, 2021 compared to $257 thousand for the nine months ended September 30, 2020. Interest expense includes facility fees on the unused portion of the credit facility and the amortization of loan costs. The increase in interest expense during the first nine months of 2021 compared to the same period in the prior year is primarily due to interest expense related to the resolution of a long-term contractual dispute with a vendor coupled with interest charged in connection with resolution of a state well servicing tax audit.

~~Income tax provision (benefit).~~ Income tax provision was $1.2 million during the nine months ended September 30, 2021 compared to $86.9 million tax benefit for the same period in 2020. The effective tax rate was 30.9 percent for the nine months ended September 30, 2021 compared to a 30.1 percent effective benefit rate for the nine months ended September 30, 2020. The effective rate reflects a detrimental discrete adjustment related to restricted stock in addition to a net detrimental impact of around $0.6 million related to the employee retention credit.

~~Liquidity and Capital Resources~~

~~Cash Flows~~

~~The Company’s cash and cash equivalents decreased $3.7 million to $80.8 million as of September 30, 2021 compared to cash and cash equivalents of $84.5 million as of December 31, 2020.~~

~~The following table sets forth the historical cash flows for the nine months ended September 30, 2021 and 2020:~~

Nine months ended September 30,
(In thousands)

2021

2020
Net cash provided by operating activities

$
26,416

$
131,364
Net cash used for investing activities

(29,114)

(34,941)
Net cash used for financing activities

(963)

(827)




	Nine months ended September 30,
(In thousands)	2022		2021
Net cash provided by operating activities	$	40,928	$	26,416
Net cash used for investing activities		(78,655)		(29,114)
Net cash used for financing activities		(8,821)		(963)

Cash provided by operating activities for the nine months ended September 30, ~~2021 was $26.4 million.~~2022 increased by $14.5 million compared to the nine months ended September 30, 2021. Cash provided by operating activities for the nine months ended September 30, 2022 includes a net ~~loss~~income of ~~$5.1~~$131.4 million, ~~coupled with~~less an unfavorable change in accounts receivable of ~~$71.7~~$211.4 million, partially offset by favorable changes in other components of our working capital ~~(taxes receivable, accounts~~(accounts payable, accrued payroll and ~~inventories)~~taxes receivable) totaling $66.5 million. The net unfavorable changes in working capital were the result of ~~$53.5 million, mainly due to an increase in taxes receivable, primarily due to a federal tax refund collected during the period.~~increased business activity levels.

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Cash used for investing activities for the nine months ended September 30, ~~2021 decreased~~2022 increased by ~~$5.8~~$49.5 million compared to the nine months ended September 30, ~~2020,~~2021, primarily ~~because of a reduction~~due to an increase in capital expenditures ~~partially offset by a decrease in proceeds from the sale~~consistent with higher business activity levels and an environment of ~~assets.~~improved pricing for our services.

Cash used for financing activities for the nine months ended September 30, ~~2021~~2022 increased by ~~$136 thousand~~$7.9 million primarily ~~as a result~~due to reinstatement of cash dividends paid to common stockholders in the third quarter of 2022, coupled with cash paid for a finance lease ~~partially offset by lower cost~~initiated in the third quarter of ~~repurchases of the Company’s shares for taxes related to the vesting of restricted shares.~~2021.

Financial Condition and Liquidity

The Company’s financial condition as of September 30, ~~2021~~2022 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 relating to 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 currently expect to utilize our revolving credit facility to meet these liquidity requirements.

The Company currently has a ~~$100~~$100.0 million revolving credit facility that matures in ~~July 2023,~~June 2027 as recently amended. The facility contains customary terms and conditions, including restrictions on indebtedness, dividend payments, business combinations and other related items. ~~During~~In the ~~third~~second quarter of ~~2020,~~2022, the ~~Company~~company further amended the revolving credit facility. Among other matters, the amendment (1) ~~reduced~~extends the ~~maximum amount available~~termination date for ~~borrowing~~revolving loans from ~~$125 million~~July 26, 2023 to ~~$100 million,~~June 22, 2027, (2) ~~decreased~~replaces LIBOR with Term SOFR as an interest rate option in connection with revolving loan borrowings and reduces the ~~minimum tangible net worth covenant level from not less than $600 million to not less than $400 million, and (3) increased the margin spreads and commitment fees payable~~applicable rate margins by ~~37.5 and 5~~approximately 25.0 basis points ~~respectively,~~ at each pricing level, (3) introduces a 1.00% per annum floor for base rate borrowings, (4) permits the issuance of ~~the applicable rate without any changes to the leverage ratios used to calculate such spreads.~~letters of credit in currencies other than U.S. dollars. As of September 30, ~~2021,~~2022, RPC had no outstanding borrowings under the revolving credit facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaled ~~$17.7~~$16.3 million; therefore, a total of ~~$82.3~~$83.7 million of the facility was available. The Company was in compliance with the credit facility financial covenants as of September 30, ~~2021.~~2022. For additional information with respect to RPC’s facility, see Note 1211 of the Notes to Consolidated Financial Statements included in this report.

Cash Requirements

The Company currently expects that capital expenditures ~~excluding lease financed equipment,~~ will be approximately ~~$65~~$150.0 million in 2022 and will be directed ~~mostly~~ towards both capitalized maintenance of our existing equipment and selected growth opportunities. ~~During~~The Company is allocating capital to maintain the ~~third~~capacity of its pressure pumping fleet to offset anticipated future fleet retirements. RPC is currently refurbishing an existing fleet that will be placed in service in early 2023, and has ordered a pressure pumping fleet expected to be delivered and paid for in the first half of 2023. Also, during the current year, RPC has continued to make payments for a pressure pumping equipment acquired under finance lease acquired in 2021. Total finance lease payments in 2022 will total approximately $24.3 million, with approximately $20.0 million outstanding as of September 30, 2022, which is expected to be paid in the fourth quarter of 2021, RPC made the strategic decision to add a Tier IV dual-fuel fleet. This fleet was put into service late in the third quarter and is reflected as a finance lease with a balloon payment at the end of 12 months.2022. The actual amount of ~~2021~~2022 capital expenditures will depend primarily on equipment maintenance requirements, expansion opportunities, and equipment delivery schedules.

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 reasonably estimable. There are issues

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that could result in unfavorable outcomes that cannot be currently estimated. See ~~note~~ Note 109 of the Notes to Consolidated Financial Statements for additional information.

~~The Company’s Retirement Income Plan, a multiple employer trusteed~~During the fourth quarter of 2021, the Company initiated actions to terminate the defined benefit pension plan ~~provides monthly benefits upon retirement at age 65~~which is expected to ~~eligible employees. During~~be completed in early 2023. The Company currently expects to make a final cash contribution of approximately $8.0 million to $9.0 million as part of the ~~nine months ended September 30, 2021, the~~termination. The Company did not make a cash contribution to this plan during the ~~plan and does not currently expect to make any additional contributions for the remainder of~~nine months ended September 30, 2022 or September 30, 2021.

As of September 30, ~~2021,~~2022, the Company’s stock buyback program authorizes the aggregate repurchase of up to 41,578,125 shares, including an additional 10,000,000 shares authorized for repurchase by the Board of Directors ~~on February 12,~~in 2018. No shares ~~have been~~were purchased on the open market during the ~~nine~~three months ended September 30, ~~2021,~~2022, and 8,248,184 shares remain available to be repurchased under the current authorization. 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.

On ~~July 22, 2019,~~October 25, 2022, the Board of Directors ~~voted to suspend RPC’s~~declared a regular quarterly cash dividend of $0.02 per share payable December 9, 2022 to common ~~stockholders.~~stockholders of record at the close of business on November 10, 2022. The Company expects to ~~resume~~continue to pay cash dividends to common stockholders, subject to ~~the~~industry conditions and RPC’s earnings, ~~and~~ financial condition, ~~of the Company~~ and other relevant factors. ~~The Company has no timetable for the resumption of dividends.~~

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INFLATION

The Company purchases its equipment and materials from suppliers who provide competitive prices, and employs 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, ~~higher~~ activity increases can cause ~~increases in the~~supply disruptions and higher costs of certain materials and key equipment components used to provide services to the Company’s customers. ~~Labor~~Beginning in 2018, prices for the raw material comprising the Company’s single largest purchase began to decline due to increased sources of supply of the material, particularly in geographic markets located close to the largest U.S. oil and gas basin. In addition, labor costs ~~decreased during~~declined throughout 2020 due to the significant decline in oilfield activity. However, during ~~the fourth quarter of 2020~~2021 and ~~the first nine months of 2021,~~continuing into 2022, the price of labor ~~has begun to rise~~and raw materials have been increasing due to ~~increasing~~improving oilfield activity and labor shortages caused by the departure of skilled labor from the domestic oilfield industry ~~during 2020. Also, the~~in prior years.

During 2022, market prices of some raw materials ~~used in~~and key equipment components have increased significantly and availability has been challenged. We have successfully increased the ~~Company’s operations have begun~~pricing for our equipment and services to ~~increase because many suppliers~~cover much of these ~~materials ceased operations or other supply chain disruptions have occurred. The Company is attempting to pass these price~~cost increases, ~~along to our customers,~~ but due to the competitive nature of the oilfield services business, there is no assurance that ~~these efforts~~we will be ~~successful.~~able to continue to do this successfully in the future.

OFF BALANCE SHEET ARRANGEMENTS

The Company does not have any material off balance sheet arrangements.

RELATED PARTY TRANSACTIONS

Marine Products Corporation

In conjunction with the spin-off of its former power boat manufacturing segment conducted through Chaparral Boats, Inc., RPC and Marine Products Corporation (Marine Products) entered into various agreements that define the companies’ relationship. RPC charged Marine Products for its allocable share of administrative costs incurred for services rendered on behalf of Marine Products Corporation totaling ~~$670,000~~$682 thousand for the nine months ended September 30, ~~2021~~2022 and ~~$646,000~~$670 thousand for the comparable period in ~~2020.~~2021.

Other

The Company periodically purchases, in the ordinary course of business, products or services from suppliers ~~who~~that are owned by officers or significant stockholders of, or affiliated with the directors of RPC. The total amounts paid to these affiliated parties were ~~$751,000~~$1.3 million for the nine months ended September 30, ~~2021~~2022 and ~~$710,000~~$751 thousand for the nine months ended September 30, ~~2020.~~2021.

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RPC receives certain administrative services and rents office space from Rollins, Inc. (a company of which Mr. Gary W. Rollins is ~~also~~ Chairman, and which is controlled by Mr. Rollins and his affiliates). The service agreements between Rollins, Inc. and the Company provide for the provision of services on a cost reimbursement basis and are terminable on ~~nine~~three months’ notice. The services covered by these agreements include office space, selected administrative services for certain employee benefit programs, and other administrative services. Charges to the Company (or to corporations which are subsidiaries of the Company) for such services and rent aggregated ~~$78,000~~$62 thousand for the nine months ended September 30, ~~2021~~2022 and ~~$78,000~~$78 thousand for the nine months ended September 30, ~~2020.~~2021.

RPC and Marine Products own 50 percent 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 ~~$150,000~~$150 thousand for each of the nine months ended September 30, ~~2021~~2022 and ~~2020.~~September 30, 2021.

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, ~~2020.~~2021. There have been no significant changes in the critical accounting policies since year-end.

IMPACT OF RECENT ACCOUNTING STANDARDS

See Note 2 of the Notes to Consolidated Financial Statements for a description of recent accounting standards, including the expected dates of adoption and estimated effects on results of operations and financial condition.

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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.

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. 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 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 natural gas prices, production levels and drilling activities;~~regarding: our ~~expectation~~ability to continue to ~~focus~~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 ~~the development~~our financial results; our strategy of utilizing equipment in unconventional basins; our plans to continue to pursue international growth opportunities; our belief that international revenues will continue to be less than ten percent ~~(10%)~~ of our consolidated revenues in the future; our expectation that capital expenditures will be approximately $150.0 million during 2022 and will be directed primarily towards capitalized maintenance of our existing equipment and selected growth opportunities; our belief that the statistics regarding well completions are more meaningful indicators of the outlook for our activity levels and revenues; our belief that ~~recent~~the current and projected prices of oil, natural gas and natural gas liquids are important catalysts for U.S. domestic drilling activity; our belief that oil and gas price increases during the past year are favorable for our business and our belief that such price increases have encouraged our customers to increase drilling and completion activities; our belief that higher prices for natural gas and additional investments in natural gas infrastructure should encourage our customers to increase their natural gas-directed exploration and production activities; our belief that oil-directed drilling will remain the majority of domestic drilling and that natural gas-directed drilling will remain a low percentage of U.S. domestic drilling in the near-term; our belief that natural gas-directed drilling has increased and will continue to increase in natural gas-directed basins in the United States due to the current and projected high prices of natural gas and that this trend ~~will~~should be favorable for the demand for our services in these basins; our plans to continue to monitor the market for our services and the competitive environment,

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including the current trends and expectations with regard to environmental concerns and related impact on our equipment fleets; our belief that the ~~increased efficiencies of~~growing efficiency with which oilfield completion crews are providing services is a catalyst for the oversupplied nature of the oilfield services market; our belief that most of the feasible efficiency gains have been ~~realized;~~realized and that a number of our smaller competitors have ceased operations; our belief that the competitive market for our services will improve during the near term; our plans to continue to selectively upgrade our existing equipment to operate using multiple fuel sources and to take advantage of advances in technology and data collection; our plans to continue to monitor current and expected customer activity levels and projected financial returns as we consider activating additional idle equipment during the near term; our plans to allocate capital to maintain the capacity of our pressure pumping fleet to offset anticipated fleet requirements; our plans to refurbish an existing fleet that will be activated in 2023 and our expectations regarding the delivery of a pressure pumping fleet in the ~~near-term;~~first half of 2023; our plans to respond to the industry’s current higher activity levels and improved service pricing by maintaining and upgrading our fleet of revenue-producing equipment as well as adding new revenue-producing equipment if the projected financial returns of such capital expenditures meet our financial return criteria; our expectations with respect to capital expenditures; the strength of our financial condition; expectations about contributions to the defined benefit pension plan in ~~2021;~~2022 and thereafter, including our ~~ability~~plans with respect to the termination of such plan in early 2023; our plans with respect to our stock buyback program; 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 ~~cash~~ requirements infor at least the ~~future; the estimated amount and focus of our capital expenditures;~~next twelve months; our belief that we will not need our revolving credit facility to meet our liquidity requirements; our expectations to ~~resume payments of~~continue to pay cash ~~dividends;~~dividends to common stockholders, subject to industry conditions and RPC earnings, financial condition and other relevant factors; estimates made with respect to our critical accounting policies; the effect of new accounting standards; the effect of the changes in foreign exchange rates on our consolidated results of operations or financial condition; and the impact of lawsuits, legal proceedings and claims on our financial position and results of operation.

The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “focus,” “plan,” and similar expressions generally identify forward-looking statements. Such 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 combined impact of the OPEC disputes and the COVID-19 pandemic on our operating results, ~~the~~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 actions of the OPEC cartel, the ultimate impact of current and potential political unrest and armed conflict in the oil producing regions of the world, which could impact drilling activity, adverse weather conditions in oil or gas producing regions, including the Gulf of Mexico, competition in the oil and gas industry, 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, and reliance on large customers. 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, ~~2020~~2021 and in this 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. As of September 30, ~~2021,~~2022, there were no outstanding interest-bearing advances on our credit facility, which bear 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.

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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, September 30, ~~2021~~2022 (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

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Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon this evaluation, 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.

Changes in internal control over financial reporting – Management’s evaluation of changes in internal control did not identify any changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter 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

See the risk factors described in the Company’s annual report on Form 10-K for the year ended December 31, ~~2020.~~2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

The Board of Directors adopted resolutions approving amendments to the Company’s Bylaws effective October 26, 2021, to further clarify the parameters for board meetings and the annual meeting of the stockholders and establish the size of the board of directors. The Amended and Restated Bylaws, as so amended, are filed herewith as an exhibit.None.

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ITEM 6. EXHIBITS

Exhibit Number		Description
3.1(a)		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 October 26, 2021 (incorporated by reference to Exhibit 3.2 of the Registrant’s Quarterly Report on Form 10-Q filed on October 29, 2021)..
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).
10.1		Amendment No. 6 to Credit Agreement between RPC, the Lenders party thereto, the Subsidiary Loan Parties party thereto and Bank of America, N.A., as Administrative Agent. (incorporated by reference to Exhibit 99 to the Registrant’s Current Report on 8-K filed on June 23, 2022).
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)

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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/ ~~Richard A. Hubbell~~Ben M. Palmer
Date: October ~~29, 2021~~28, 2022		~~Richard A. Hubbell~~Ben M. Palmer
		President and Chief Executive Officer
		(Principal Executive Officer)

		/s/ ~~Ben M. Palmer~~Michael L. Schmit
Date: October ~~29, 2021~~28, 2022		~~Ben M. Palmer~~Michael L. Schmit
		Vice President, Chief Financial Officer and Corporate Secretary
		(Principal Financial and Accounting Officer)


	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