RPC Inc. (NYSE:RES) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 09:00 am ET

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RPC Inc. (NYSE:RES) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and thank you for joining us for the RPC, Inc. Second Quarter 2020 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Finance. [Operator Instructions] I would now like to advise everyone that this call is being recorded. Jim will get us started by reading the forward-looking disclaimer.

Executive
James C. Landers

Thank you, Polly, and good morning to everyone. Before we begin our call today, I want to remind you that in order to talk about our company, we're going to mention a few things that are not historical facts. Some of the statements that will be made on this call could be forward-looking in nature and reflect a number of known and unknown risks. I'd like to refer you to our press release issued today along with our 2019 10-K and other public filings that outline those risks, all of which can be found on RPC's website at rpc.net. In today's earnings release and conference call, we'll be referring to several non-GAAP measures of operating performance. These non-GAAP measures are adjusted net loss, adjusted loss per share, adjusted operating loss, EBITDA and adjusted EBITDA.

We're using these non-GAAP measures today because they allow us to compare performance consistently over various periods without regard to nonrecurring items. In addition, RPC is required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release and our website contain reconciliations of these non-GAAP financial measures to operating loss, net loss and loss per share, which are the nearest GAAP financial measures. Please review these disclosures if you're interested in seeing how they're calculated. If you've not received our press release and as like one, please eat our website again at rpc.net for a copy. I will now turn the call over to our President and CEO, Rick Hubbell.

Executive
Richard A. Hubbell

Thank you, Jim. This morning, we issued our earnings press release for RPC's second quarter of 2020. As we anticipated, the twin impacts of the COVID-19 pandemic and global oil glut have caused a swift, steep decline in oilfield activity over the past few months. The rig count fell to historic lows, and RPC's quarterly revenues fell to their lowest level since 2004. We addressed this rapid disruption by reducing costs and managing working capital, which resulted in more than doubling our cash during the quarter. Our CFO, Ben Palmer, will discuss this and other financial results in more detail, after which I will offer some additional thoughts about the near term.

Executive
Ben M. Palmer

Okay. Thank you, Rick. For the second quarter of 2020, revenues decreased to $89.3 million compared to $358.5 million in the prior year. Revenues decreased due to lower activity levels and pricing compared to the second quarter of the prior year. Adjusted operating loss for the second quarter was $35.9 million compared to an operating income of $8.4 million in the second quarter of the prior year. Adjusted