RPC, Inc. (NYSE:RES) Q4 2023 Earnings Conference Call January 25, 2024 9:00 AM ET

Company Participants

Mike Schmit - Chief Financial Officer

Ben Palmer - President and CEO

Conference Call Participants

Stephen Gengaro - Stifel

Derek Podhaizer - Barclays

Operator

Good morning and thank you for joining us for RPC Incorporated’s Fourth Quarter 2023 Conference Call. Today’s call will be hosted by Ben Palmer, President and CEO; and Mike Schmit, Chief Financial Officer. At this time, all participants are in a listen-only mode. Following the presentations, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference call is being recorded.

I’ll now turn the call over to Mr. Schmit.

Mike Schmit

Thank you, and good morning. Before we begin, I want to remind you that 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. Please refer to our press release issued today, along with our 2022 10-K and other public filings that outline those risks, all of which can be found on RPC’s website at www.rpc.net.

In today’s earnings release and conference call, we’ll be referring to several non-GAAP measures of operating performance and liquidity. We believe these non-GAAP measures allow us to compare performance consistently over various periods. Our press release issued today and our website contain reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

I’ll now turn the call over to our President and CEO, Ben Palmer.

Ben Palmer

Thank you, Mike and thank you for joining our call this morning. We closed out the year with strong sequential fourth quarter revenues and EBITDA increases, as expected, following a soft third quarter. And for the year, we delivered adjusted EBITDA of $374 million and free cash flow of $214 million. We also completed the acquisition of Spinnaker to strengthen and diversify our business and we are still able to end the year debt-free. We have a solid balance sheet that can support both investments in our business and consistent returns of capital to shareholders.

To elaborate further on the fourth quarter, we started off strong, have felt the impact of falling oil prices later in the quarter. During our third quarter call, we noted that with all above [80] [ph], we and our customers should have a favorable environment for activity and utilization. At that time, we had indications from our customers that there would be a limited holiday slowdown. Obviously, we fell below 80 in early November and dipped below 70 in early December, has declined calls completion postponements, and more holiday downtime than originally anticipated.