RPC Inc – ‘10-K405’ for 12/31/97

As of:  Friday, 3/27/98   ·   For:  12/31/97   ·   Accession #:  1047469-98-11892   ·   File #:  1-08726

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [x] Reg. S-K Item 405                21    118K 
 2: EX-21       Subsidiaries of the Registrant                         1      5K 
 3: EX-23       Consent of Experts or Counsel                          1      5K 
 4: EX-24       Power of Attorney                                      8     12K 
 5: EX-27       Financial Data Schedule                                2      6K 

10-K405   —   Annual Report — [x] Reg. S-K Item 405
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 FORM 10-K

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

 For the fiscal year ended December 31, 1997

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

Commission File No. 1-8726

 RPC, INC.

Delaware                                  58-1550825            
(State of Incorporation)             (I.R.S. Employer Identification No.)       

2170 Piedmont Road, NE, Atlanta, Georgia 30324
 Telephone Number-(404) 321-2140

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class:           Name of each exchange on which registered:
Common Stock, $0.10 Par Value            The 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 x No                                     

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]                                                                  

As of March 2, 1998, RPC, Inc. had 29,644,990 shares of common stock outstanding
(excluding 169,392 treasury shares), and the aggregate market value of this     
stock (based on the closing price on The New York Stock Exchange of $11.3125 per
share) held by nonaffiliates was $115,273,289.                                  

Documents Incorporated by Reference:

Portions of the Proxy Statement for the 1998 Annual Meeting of Stockholders of  
RPC, Inc. are incorporated by reference into Part III, Items 10 through 13.     

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Part I                                                                          

Item 1. Business                                                                

Principal Products and Services                                                 

RPC, Inc. ("RPC") was incorporated as RPC Energy Services,    
Inc. in the state of Delaware on January 20, 1984. RPC has two                  
major business segments: boat manufacturing and oil and gas                     
services.                                                                       

Boat Manufacturing                                                              

        Chaparral Boats, Inc. ("Chaparral"), a wholly owned subsidiary of RPC,
sells four lines of powerboats to a nationwide network of independent dealers.  
These lines consist of two different runabout lines, a deckboat line, and a     
cruiser line. New models are introduced each year. Operations are seasonal in   
nature with the second quarter recording the highest sales volume for the year. 
This business segment contributed 39 percent of RPC's consolidated revenue in   
1997, 43 percent in 1996, and 44 percent in 1995. Research and development      
expenditures, totaling $2,122,000 in 1997, $1,951,000 in 1996, and $1,559,000 in
1995, were necessary to generate new product innovations.                       

Oil and Gas Services                                                            

  The oil and gas services segment provides a variety of services,
equipment, and personnel to the oil and gas industry. Service locations include 
Belle Chasse, Houma, Lafayette, Venice, Fourchon, and Morgan City, Louisiana;   
Alice, Corpus Christi, Houston, Longview, and Odessa, Texas; Elk City, Woodward,
Lindsay, and McAlester, Oklahoma; Rock Springs, Wyoming; Venezuela and Algeria. 
The oil and gas services business is not generally seasonal. However, severe    
weather conditions will increase the demand for oil and natural gas, which      
generally results in an increase in the demand for our services. During 1997,   
1996, and 1995 there were no material expenditures for research and development 
in this business segment.                                                       

  The services provided by the oil and gas services segment of RPC
include the following:                                                          

Oil Field Services                                                              

         Cudd Pressure Control, Inc. ("Cudd"), a wholly owned subsidiary of RPC,
provides a wide range of oil and gas well services throughout the southwestern  
United States and other countries. These oil field services include coiled      
tubing, snubbing, nitrogen pumping, wireline, marine, and well control. This    
portion of the business segment contributed 32 percent of RPC's consolidated    
revenue in 1997, 29 percent in 1996, and 29 percent in 1995. During 1997, Cudd  
began operations of two new divisions: Energy Personnel International and       
Thru-Tubing Solutions. Energy Personnel International specializes in well site  
consulting. Thru-Tubing Solutions supplies tools and personnel for downhole work
related to the coiled tubing service line.                                      

Equipment Rental Services                                                       

    Patterson Services, Inc., a wholly owned subsidiary of RPC, offers
specialized tools and equipment on a rental basis. These include drill pipe,    
drill collars, tubing, blowout preventors, and torque-turning equipment. In     
addition, Patterson Services provides experienced personnel to install and      
remove customer-owned casing at well sites and operate company-owned,           
diesel-driven hammers and welding machines used to weld and drive pipe into the 
ground. On average, approximately 26 percent of rental equipment was rented on a
daily basis in 1997 and 21 percent in 1996. In the rental business, maximum     
utilization is approximately 50 percent due to transportation, inspection, and  
cleaning requirements. This portion of the business segment contributed 15      
percent of RPC's consolidated revenue in 1997, 13 percent in 1996, and 12       
percent in 1995.                                                                

Storage and Inspection Services                                                 

        Patterson Tubular Services, Inc. ("PTS"), a wholly owned subsidiary of
RPC, performs tubular inspections, stores pipe, and inventories pipe using an   
on-line computerized inventory system. Waterfront dock facilities enable PTS to 
service a wide variety of offshore and inland vessels.                          

In January 1996 PTS opened a state-of-the-art internal pipe-  
coating facility in Channelview, Texas. The plant uses CERAM-KOTE               
54(r), a high-performance ceramic-epoxy coating system, which                   
provides abrasion and corrosion protection.                                     

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Transportation Services                                                         

      Patterson Truck Line, Inc., a wholly owned subsidiary of RPC, offers
line haul services on a 24-hour basis to customers primarily in Louisiana and   
Texas. Line haul operations involve transportation of oil field pipe and        
equipment as well as nonoil field liquid and dry bulk commodities.              

Neither the boat manufacturing nor the oil and gas services business segment are
significantly affected by the availability of raw materials or the existence of 
licenses, patents, and trademarks.                                              

Customers                                                                       

       RPC's business is not dependent on any one customer, but on a variety
of customers in both major business segments. No one customer accounts for more 
than 10 percent of consolidated revenue.                                        

  The boat manufacturing segment produces four lines of boats with
distribution to a nationwide network of independent dealers. Sales to these     
dealers are generated by a five-person sales force. Although production is      
scheduled from orders placed by dealers, these are not firm orders and are      
frequently changed or canceled. As a result, this segment does not have an      
identifiable backlog of sales.                                                  

The oil and gas services segment provides services to drilling
contractors, oil field supply stores and service companies, major oil and gas   
producers, and independent exploration companies. Sales are generated by RPC's  
sales force and from customer referrals. RPC has no written contracts of a      
material nature with any of its oil and gas services segment customers. Also,   
there is no material sales backlog due to the short-term nature of the rental   
and services industry.                                                          

Competition                                                                     

       There are many companies that compete with RPC's subsidiaries in each
segment, some of which are larger and have been established in the industries   
for longer periods of time.                                                     

         The boat manufacturing segment's competition includes small independent
companies, as well as large vertically integrated companies that have both      
engine and boat manufacturing capabilities. Major markets include the           
southeastern and Gulf states, the northeastern states, and California.          
Competitive factors in this industry are the quality of materials, the quality  
of the construction process, the design features, and the selling prices.       
Selling prices are set by management and vary from dealer to dealer based upon  
volume. The sales prices of Chaparral's boats are similar to equivalent         
competitors' models.                                                            

         In the oil and gas services segment, intense competition exists and has
led to substantial price reductions for services offered. Industry conditions   
are influenced by such factors as weather, economic and political conditions, as
well as worldwide demand for, and prices of, oil and natural gas. The notable   
competitive factors in this segment are quality, availability, and price of     
equipment and service. This segment's predominant markets are the Gulf of       
Mexico, the southwestern United States, Venezuela, and Algeria.                 

Employees                                                                       

At December 31, 1997, RPC employed 1,811 persons.             

Environmental Considerations                                                    

         The capital expenditures, earnings, and competitive position of RPC are
not materially affected by compliance with federal, state, and local provisions 
that have been enacted or adopted regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment.        

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Financial Information About Industry Segments                                   

     Information about RPC's operations by segment, as well as financial
information about foreign and domestic operations for the three years ended     
December 31, 1997, is set forth in Note 9 of the Financial Statements on page   
23.                                                                             

Item 2. Properties                                                              

    RPC owns or leases 60 offices and operating facilities. Considered
individually, the only facility that represents a materially important physical 
property is the boat manufacturing plant in Nashville, Georgia. RPC believes its
current operating facilities are suitable and adequate to meet current and      
reasonably anticipated future needs. Descriptions of the major facilities are as
follows:                                                                        

Owned Locations                                                                 

Houston, Texas-Pipe storage terminal, inspection                                
shed, and pipe coating facility                               

Nashville, Georgia-Boat manufacturing facility                                  

Irving, Texas-Crane fabrication plant                                           

Houma, Louisiana-Oil and gas administrative office                              

Leased Locations                                                                

Morgan City, Louisiana-Pipe storage terminal                                    
and inspection shed                                           

Expiration date of lease: January 31, 2002                                      

Item 3. Legal Proceedings                                                       

 RPC is involved in various legal proceedings encountered in the
ordinary course of business. In the opinion of management, any judgment or      
settlement arising from these proceedings will not, individually or in the      
aggregate, have a material adverse effect on its business or its financial      
position.                                                                       

Item 4. Submission of Matters to a Vote of Security Holders                     

      There were no matters submitted to a vote of security holders during
the fourth quarter of 1997.                                                     

Item 4A. Executive Officers of the Registrant                                   

   Each of the executive officers of RPC was elected by the Board of
Directors to serve until the Board of Directors' meeting immediately following  
the next annual meeting of stockholders or until his or her earlier removal by  
the Board of Directors or his or her resignation. The following table lists the 
executive officers of RPC and their ages, offices, and terms of office with RPC.

                                                                [Download Table]


Name and Office                                             Date First    
with Registrant                     Age                  Elected to Office
                                                                          

R. Randall Rollins                  66                                    
Chairman of the Board                                         1/24/84     
Chief Executive Officer                                                   

Richard A. Hubbell                  53                                    
President                                                     1/27/87     
Chief Operating Officer                                                   

Bobby Joe Cudd                      68                                    
Executive Vice President                                      1/24/84     

James A. Lane, Jr.                  55                                    
Executive Vice President                                      1/27/87     

William S. Pegg                     55                                    
Executive Vice President                                      1/27/87     

Linda H. Graham                     61                                    
Vice President                                                1/27/87     
Secretary                                                                 

Ben M. Palmer                       37                                    
Chief Financial Officer                                       7/8/96      
Treasurer                                                                 

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Part II                                                                         

Item 5. Market For Registrant's Common Equity and Related                       
Stockholder Matters                                                             

       RPC common stock is listed for trading on the New York Stock Exchange
under the symbol RES. All prices have been adjusted to reflect the two-for-one  
stock split, effective December 11, 1997. At the close of business on December  
31, 1997, there were 1,346 holders of record of common stock. The high and low  
prices of RPC's common stock for each quarter in the years ended December 31,   
1997 and 1996, were as follows:                                                 

                                                                [Download Table]

------------------------------------------------------------------------------------
                                          1997                       1996           
------------------------------------------------------------------------------------
Quarter                            High          Low           High          Low    
------------------------------------------------------------------------------------
                                                                                    
First                         $     7.688    $     7.188    $    5.313    $    4.322
Second                              7.407          6.188         6.750         4.938
Third                              16.219          7.344         6.000         5.313
Fourth                             15.313         11.125         8.125         5.625
------------------------------------------------------------------------------------

        During 1997, RPC declared and paid a cash dividend of $0.025 cents per
common share payable September 10, 1997, and December 10, 1997. Prior to 1997,  
no dividends were declared or paid.                                             

Item 6. Selected Financial Data                                                 

                                                        [Enlarge/Download Table]

----------------------------------------------------------------------------------------------------------
RPC, INC. AND SUBSIDIARIES  (in thousands except per share data)                                          
----------------------------------------------------------------------------------------------------------
                                                        1997      1996        1995      1994       1993   
----------------------------------------------------------------------------------------------------------
                                                                                                          
OPERATIONS SUMMARY                                                                                        
Revenue                                               $245,799   $200,833   $161,379   $155,765   $123,481
Net costs and expenses                                 211,836    180,596    145,228    142,583    113,534
----------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative                                                                 
  effect of accounting change                           33,963     20,237     16,151     13,182      9,947
Income tax provision                                    11,718      6,982      5,396      4,404      3,270
----------------------------------------------------------------------------------------------------------
Income before cumulative effect                                                                           
  of accounting change                                  22,245     13,255     10,755      8,778      6,677
Cumulative effect of a change in                                                                          
  accounting for income taxes                             --         --         --         --          150
----------------------------------------------------------------------------------------------------------
Net income                                            $ 22,245   $ 13,255   $ 10,755   $  8,778   $  6,827
----------------------------------------------------------------------------------------------------------
Per share:                                                                                                
  Earnings before accounting change                                                                       
    Basic                                                  .76        .46        .37        .31        .23
    Diluted                                                .75        .46        .37        .31        .23
  Earnings after accounting change                                                                        
    Basic                                                  .76        .46        .37        .31        .24
    Diluted                                                .75        .46        .37        .31        .24
Cash dividends declared                                    .05       --         --         --         --  
----------------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURES                                  $ 20,479   $ 20,889   $ 15,529   $ 10,618   $  6,630
----------------------------------------------------------------------------------------------------------
FINANCIAL POSITION                                                                                        
Total assets                                          $182,518   $152,800   $132,656   $122,242   $109,992
Working capital                                         50,395     39,192     41,943     37,827     33,943
Stockholders' equity                                   139,376    117,799    104,361     93,499     84,614
----------------------------------------------------------------------------------------------------------

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Item 7. Management's Discussion and Analysis of Financial                       
Condition and Results of Operations                             

Results of Operations                                                           

Consolidated                                                                    

      RPC's revenue and net income increased in 1997. This was RPC's tenth
consecutive year of profitable operations. Consolidated revenue increased 22    
percent in 1997 to $245,799,000 compared to $200,833,000 in 1996. Consolidated  
revenue in 1996 was 24 percent higher than 1995 revenue of $161,379,000. Both   
major business segments contributed to the growth experienced in 1997. The boat 
manufacturing segment increased revenue 10 percent. Chaparral has been able to  
increase its market share and expand its revenues despite minimal growth in this
industry. The oil and gas services segment increased revenue 35 percent in 1997.
A rising world energy demand and a favorable economic climate in the United     
States have had a favorable effect on the oil and gas industry.                 

    Income before income taxes was $33,963,000 in 1997, $20,237,000 in
1996, and $16,151,000 in 1995. This represented an increase of $13,726,000 or 68
percent in 1997 and an increase of $4,086,000 or 25 percent in 1996. The boat   
manufacturing segment generated a 30 percent increase in income before income   
taxes due primarily to an increase in the volume of boats sold in all boat      
lines. In addition, there was a slight improvement in margins at Chaparral in   
spite of continued price competition in this segment. The oil and gas services  
segment produced a 93 percent increase in income before income taxes in 1997 due
primarily to increased utilization of our equipment and personnel, coupled with 
effective cost controls and improvement in results of international operations, 
especially in Venezuela.                                                        

       Consolidated net income was $22,245,000 or $0.75 diluted earnings per
share in 1997 compared to $13,255,000 or $0.46 diluted earnings per share in    
1996. This compares to $0.76 basic earnings per share in 1997 versus $0.46 basic
earnings per share in 1996. Consolidated net income in 1995 was $10,755,000 or  
$0.37 diluted and basic earnings per share. This represented an increase of     
$8,990,000 or 68 percent in 1997 and an increase of $2,500,000 or 23 percent in 
1996.                                                                           

Revenue-Business Segments                                                       

Boat Manufacturing-The boat manufacturing segment reported a 10 percent or      
$8,804,000 increase in revenue from $86,225,000 in 1996 to $95,029,000 in 1997. 
Revenue for 1995 was $70,218,000. A five year boat structure warranty is        
provided for boats, beginning in the 1992 model year. These warranty terms,     
though, have no material effect on working capital.                             

         The total number of boats sold by Chaparral in 1997 increased 5 percent
due to a favorable reaction to newer models and additional gains in market      
share. The SS line of family runabouts, introduced in 1993, and the Sunesta, the
deckboat line introduced in 1992, continued to be very popular. Revenues also   
continued to increase as a result of the favorable response to the dealer       
incentive schedule, which reduces the fluctuation in production levels, and     
increased production of higher priced models to meet dealer demands. There were 

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price increases in July 1997 and December 1997 that averaged 2 percent and 3    
percent, respectively, as a result of higher material costs.                    

  The total number of boats sold by Chaparral in 1996 increased 19
percent compared to 1995. The increase was due to increased sales from new model
changes coupled with a favorable response to the new dealer incentive schedule. 
Oil and Gas Services-The oil and gas services segment contributed $137,599,000  
or 56 percent of 1997 revenue. Revenue was $101,741,000 in 1996 and $79,943,000 
in 1995. The 35 percent increase in 1997 can be attributed to a number of       
factors, including higher utilization of our specialized equipment and personnel
coupled with modest price increases. This resulted from increased spending on   
exploration and production by the major and independent oil companies. Patterson
Services' revenue increased 52 percent in 1997 as demand increased for its      
specialized rental tools, especially in the offshore Gulf of Mexico region. Cudd
Pressure Control's international operations experienced a 32 percent increase in
revenues in 1997 due to expanding business volume and select international      
opportunities related to blowouts, well control, and other special project work.

         The revenue increase for the oil and gas services segment of 27 percent
in 1996 was due to increased equipment utilization for Patterson Services       
coupled with increases in Cudd Pressure Control's international revenues from   
the acquisition of the remaining 50 percent ownership interest in SPA-Cudd in   
January 1996 to form Cudd de Venezuela.                                         

Expenses                                                                        

       Cost of goods sold for the boat manufacturing segment was $72,899,000
in 1997 compared to $67,426,000 in 1996 and $55,826,000 in 1995. This represents
an increase of $5,473,000 or 8 percent in 1997, which approximates the increase 
in revenue. As a percent of revenue, cost of goods sold for this segment was 77 
percent in 1997 and 78 percent in 1996 and 80 percent in 1995. The decrease as a
percentage of segment revenues can be attributed to better inventory controls.  
The remaining cost of goods sold was incurred by subsidiaries in other          
businesses.                                                                     

        Consolidated operating expenses were $117,777,000 in 1997, $95,820,000
in 1996, and $76,412,000 in 1995. Expenses were 23 percent higher in 1997 than  
in 1996, primarily in the oil and gas services segment, in line with this       
segment's revenue increase.                                                     

        The boat manufacturing segment's operating expenses were $9,595,000 in
1997, which as a percent of revenue was comparable to 1996. The oil and gas     
services segment's operating expenses were $99,981,000 or 73 percent of this    
segment's revenue in 1997. Operating expenses were $79,421,000 or 78 percent of 
this segment's revenue in 1996 and $62,622,000 or 78 percent of this segment's  
revenue in 1995.                                                                

      The portion of depreciation and amortization not included in cost of
goods sold was $12,877,000 in 1997, $9,210,000 in 1996, and $6,843,000 in 1995. 
The majority of this expense represented the oil and gas services segment       
depreciation of $11,521,000 in 1997, $8,126,000 in 1996, and $5,961,000         

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in 1995. The 1997 increase of $3,667,000 or 40 percent was due primarily to     
increased capital expenditures. Chaparral's depreciation expense for production 
equipment is a component of cost of goods sold, therefore this category includes
only amortization of intangibles and depreciation of nonproduction assets.      
Chaparral's depreciation and amortization was $780,000 for 1997, $734,000 for   
1996, and $769,000 for 1995. Amortization of intangible assets was $865,000 in  
1997, $797,000 in 1996, and $709,000 in 1995.                                   

Interest Income                                                                 

 Interest income was $2,376,000 in 1997, $2,018,000 in 1996, and
$2,181,000 in 1995. The increase in total cash and marketable securities from   
$46,344,000 at December 31, 1996, to $58,184,000 at December 31, 1997, resulted 
in an increase in interest income of 18 percent in 1997 due to higher average   
balances offset by moderately lower yields.                                     

Financial Condition                                                             

         As of December 31, 1997, RPC's cash and cash equivalents and short-term
marketable securities increased $7,412,000 to $28,685,000. Cash provided by     
operating activities was $30,196,000 compared to $24,060,000 in 1996. Accounts  
receivable were $32,153,000 at December 31, 1997, compared to $24,156,000 at    
December 31, 1996, an increase of $7,997,000 due to the increase in revenues.   
Inventories were $598,000 higher than the prior year mainly due to a higher     
number of finished boats on hand. Inventory increased due to the higher         
production levels for the boat manufacturing segment to satisfy increased       
demand.                                                                         

During 1997, current assets increased $17,737,000 and current 
liabilities increased $6,534,000, a combined increase in working capital of     
$11,203,000. Working capital at December 31, 1997, was $50,395,000 compared to  
$39,192,000 in the prior year. The current ratio remained strong at the end of  
1997 with a ratio of 2.3-to-1, which is unchanged from the end of 1996. The 1995
current ratio was 2.7-to-1.                                                     

        Capital expenditures for 1997 were $20,479,000, a decrease of $410,000
from $20,889,000 in 1996. $19,668,000 of these expenditures were in the oil and 
gas services segment for revenue-producing equipment. Capital expenditures for  
the oil and gas services segment were $19,191,000 in 1996.                      

        RPC expects that funding for capital requirements over the next twelve
months will be provided by available cash and marketable securities and cash    
generated from operations.                                                      

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Item 8. Financial Statements and Supplementary Data                             

Balance Sheets                                                                  

                                                                [Download Table]

-------------------------------------------------------------------------- 
RPC, INC. AND SUBSIDIARIES  (in thousands except stock information)        
-------------------------------------------------------------------------- 
At December 31,                                        1997         1996   
-------------------------------------------------------------------------- 
                                                                           
ASSETS                                                                     
Cash and cash equivalents                           $  17,409    $  13,124 
Marketable securities                                  11,276        8,149 
Accounts receivable, net                               32,153       24,156 
Inventories                                            16,025       15,427 
Deferred income taxes                                   8,626        7,623 
Prepaid expenses and other current assets               2,390        1,663 
-------------------------------------------------------------------------- 
Current assets                                         87,879       70,142 
-------------------------------------------------------------------------- 
Equipment and property, net                            55,673       47,791 
Marketable securities                                  29,499       25,071 
Intangibles, net of accumulated amortization                               
    of $7,959 in 1997 and $7,094 in 1996                8,289        8,105 
Deferred income taxes                                    --             86 
Other assets                                            1,178        1,605 
-------------------------------------------------------------------------- 
Total assets                                        $ 182,518    $ 152,800 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
LIABILITIES AND STOCKHOLDERS' EQUITY                                       

Accounts payable                                    $   7,437    $   6,756 
Accrued payroll and related expenses                    5,826        4,541 
Accrued insurance expenses                              7,422        6,679 
Accrued state, local and other taxes                    4,211        3,211 
Federal income taxes payable                            1,061           88 
Accrued discounts                                         826          786 
Current portion of long-term debt                         857         --   
Other accrued expenses                                  9,844        8,889 
-------------------------------------------------------------------------- 
Current liabilities                                    37,484       30,950 
-------------------------------------------------------------------------- 
Deferred income taxes                                     309         --   
Long-term accrued insurance expenses                    4,034        3,551 
Long-term debt                                          1,315          500 
-------------------------------------------------------------------------- 
Total liabilities                                      43,142       35,001 
-------------------------------------------------------------------------- 
Commitments and contingencies                                              
-------------------------------------------------------------------------- 
Common stock, $.10 par value, 35,000,000 shares                            
    authorized, 29,780,382 shares issued in 1997,                          
    14,714,861 shares issued in 1996                    2,978        1,471 
Capital in excess of par value                         35,211       35,176 
Earnings retained                                     101,805       81,555 
Common stock in treasury, at cost, 169,392                                 
    shares in 1997,  74,953 shares in 1996               (618)        (403)
-------------------------------------------------------------------------- 
Total stockholders' equity                            139,376      117,799 
-------------------------------------------------------------------------- 
Total liabilities and stockholders' equity          $ 182,518    $ 152,800 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 

The accompanying notes are an integral part of these statements.                

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Statements of Income                                                            

                                                                [Download Table]


------------------------------------------------------------------------------- 
RPC, INC. AND SUBSIDIARIES       (in thousands except per share data)           
------------------------------------------------------------------------------- 
Years ended December 31,                        1997         1996         1995  
------------------------------------------------------------------------------- 
                                                                                
Revenue                                     $ 245,799    $ 200,833    $ 161,379 
------------------------------------------------------------------------------- 
Cost of goods sold                             83,558       77,584       64,154 
Operating expenses                            117,777       95,820       76,412 
Depreciation and amortization                  12,877        9,210        6,843 
Interest income                                (2,376)      (2,018)      (2,181)
------------------------------------------------------------------------------- 
Income before income taxes                     33,963       20,237       16,151 
Income tax provision                           11,718        6,982        5,396 
------------------------------------------------------------------------------- 
Net income                                  $  22,245    $  13,255    $  10,755 
------------------------------------------------------------------------------- 
EARNINGS PER SHARE                                                              
     Basic                                  $     .76          .46          .37 
------------------------------------------------------------------------------- 
     Diluted                                $     .75          .46          .37 
------------------------------------------------------------------------------- 

Statements of Stockholders' Equity                                              

                                                                [Download Table]

------------------------------------------------------------------------------- 
RPC, INC. AND SUBSIDIARIES     (in thousands)                                   
------------------------------------------------------------------------------- 
Years ended December 31,                        1997         1996         1995  
------------------------------------------------------------------------------- 
                                                                                
 COMMON STOCK                                                                   
Balance at beginning of year                $   1,471    $   1,461    $   1,461 
Two-for-one stock split                         1,487         --           --   
Stock issued for benefit plans, net                20           10         --   
------------------------------------------------------------------------------- 
Balance at end of year                          2,978        1,471        1,461 
------------------------------------------------------------------------------- 
CAPITAL IN EXCESS OF PAR VALUE                                                  
Balance at beginning of year                $  35,176    $  34,599    $  34,228 
Two-for-one stock split                        (1,487)        --           --   
Stock issued for benefit plans, net             1,522          577    $     371 
------------------------------------------------------------------------------- 
Balance at end of year                      $  35,211    $  35,176    $  34,599 
------------------------------------------------------------------------------- 
EARNINGS RETAINED                                                               
Balance at beginning of year                $  81,555    $  68,526    $  58,296 
Net income                                     22,245       13,255       10,755 
Cash dividends declared                        (1,475)        --           --   
Stock issued for benefit plans, net              (520)        (226)        (525)
------------------------------------------------------------------------------- 
Balance at end of year                      $ 101,805    $  81,555    $  68,526 
------------------------------------------------------------------------------- 
TREASURY STOCK                                                                  
Balance at beginning of year                $     403    $     225    $     486 
Stock issued for benefit plans, net               215          178         (261)
------------------------------------------------------------------------------- 
Balance at end of year                      $     618    $     403    $     225 
------------------------------------------------------------------------------- 

The accompanying notes are an integral part of these statements.                

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Statements of Cash Flows                                                        

                                                        [Enlarge/Download Table]

--------------------------------------------------------------------------------------- 
RPC, INC. AND SUBSIDIARIES                                                              
--------------------------------------------------------------------------------------- 
Years ended December 31,                                  1997       1996        1995   
--------------------------------------------------------------------------------------- 
                                                                                        
OPERATING ACTIVITIES                                                                    
Net income                                             $ 22,245    $ 13,255    $ 10,755 
Noncash charges (credits) to earnings:                                                  
        Depreciation and amortization                    13,510       9,818       7,474 
        Gain on sale of equipment and property           (2,216)     (1,316)     (1,383)
        Deferred income tax (benefit) provision            (608)        246        (319)
(Increase) decrease in assets:                                                          
        Accounts receivable                              (7,997)     (3,354)       (225)
        Inventories                                        (598)       (982)     (2,103)
        Prepaid expenses and other current assets          (727)        185        (374)
        Other noncurrent assets                             427           2         457 
Increase (decrease) in liabilities:                                                     
        Accounts payable                                    681       1,721        (352)
        Accrued payroll and related expenses              1,285         642         458 
        Insurance expenses                                1,226       1,883        (323)
        Other accrued expenses                            2,968       1,960        (231)
--------------------------------------------------------------------------------------- 
Net cash provided by operating activities                30,196      24,060      13,834 
--------------------------------------------------------------------------------------- 
INVESTING ACTIVITIES                                                                    
Capital expenditures                                    (20,479)    (20,889)    (15,529)
Proceeds from sale of equipment and property              2,510       1,769       2,866 
Net (purchase) sale of marketable securities             (7,555)     (9,472)      2,428 
Other                                                       623        (502)       (511)
--------------------------------------------------------------------------------------- 
Net cash used for investing activities                  (24,901)    (29,094)    (10,746)
--------------------------------------------------------------------------------------- 
FINANCING ACTIVITIES                                                                    
Cash dividends paid                                      (1,475)          -           - 
Cash received upon exercise of stock options                465          32        --   
--------------------------------------------------------------------------------------- 
Net cash (used for) provided by financing activities     (1,010)         32        --   
--------------------------------------------------------------------------------------- 
Net increase (decrease) in cash and cash equivalents      4,285      (5,002)      3,088 
Cash and cash equivalents at beginning of year           13,124      18,126      15,038 
--------------------------------------------------------------------------------------- 
Cash and cash equivalents at end of year               $ 17,409    $ 13,124    $ 18,126 
--------------------------------------------------------------------------------------- 

The accompanying notes are an integral part of these statements.                

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NOTES TO FINANCIAL STATEMENTS                                                   

RPC, INC. AND SUBSIDIARIES                                                      
Years ended December 31, 1997, 1996, and 1995                                   

Note 1: Significant Accounting Policies                                         

Principles of Consolidation-The consolidated financial statements include the   
accounts of RPC, Inc. and its wholly owned subsidiaries. All material           
intercompany accounts and transactions have been eliminated.                    

Nature of Operations-RPC is principally engaged in two businesses: manufacturing
powerboats and providing a variety of services, equipment, and personnel to the 
oil and gas industry. The boat manufacturing segment manufactures and           
distributes fiberglass boats to a nationwide network of independent dealers. The
principal markets for the oil and gas services segment are domestic customers   
comprised of drilling contractors, oil field supply stores and service          
companies, major oil and gas producers, and independent exploration companies.  

Use of Estimates in the Preparation of Financial Statements-The preparation of  
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported  
amounts of assets and liabilities and disclosure of contingent assets and       
liabilities at the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period. Actual results could differ  
from those estimates.                                                           

Revenue-Revenue is recognized at the time services are performed or goods are   
delivered.                                                                      

Cash Equivalents-Highly liquid investments with original maturities of 3 months 
or less are considered to be cash equivalents.                                  

Marketable Securities-RPC adopted Statement of Financial Accounting Standards   
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"     
(SFAS No. 115). Under this statement, RPC determined that marketable securities 
should be classified as either "trading" or "available-for-sale," which require 
reporting at fair value on the balance sheet. Any unrealized gains and losses on
trading securities are included in earnings. For available-for-sale securities, 
any unrealized gains and losses are excluded from earnings and, if significant, 
reported in a separate component of stockholders' equity. As of December 31,    
1997 and 1996, the difference between fair value and cost for both              
classifications was not material.                                               

  Investments with original maturities between 3 and 12 months are
considered to be current marketable securities. Investments with original       
maturities greater than 12 months are considered to be noncurrent marketable    
securities.                                                                     

Inventories-Inventories are recorded at the lower of cost (first-in, first-out  
basis) or market value.                                                         

Long-Lived Assets-In March 1995, the Financial Accounting Standards Board issued
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived 
Assets to be Disposed of " (SFAS No. 121). SFAS No. 121 requires that long-lived
assets and certain intangibles be reviewed whenever events or changes in        
circumstances indicate that the carrying amount of an asset may not be          
recoverable. The Company periodically reviews the values assigned to long-lived 
assets, such as property and equipment and other assets, to determine if any    
impairments are other than temporary. Management believes that the long-lived   
assets in the accompanying balance sheets are appropriately valued.             

Equipment and Property-Depreciation is provided principally on a straight-line  
basis over the estimated useful lives of assets. Annual provisions for          
depreciation are computed using the following useful lives: operating equipment 
and property, 3 to 10 years; buildings and leasehold improvements, 15 to 30     
years; furniture and fixtures, 5 to 7 years; and vehicles, 3 to 5 years. The    
cost of assets retired or otherwise disposed of and the related accumulated     
depreciation are eliminated from the accounts in the year of disposal with the  
resulting gain or loss credited or charged to income. Expenditures for          
additions, major renewals, and betterments are capitalized. Depreciation        

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expense on production equipment in the manufacturing businesses is included in  
the "cost of goods sold" caption in the income statement. All other depreciation
is included in the "depreciation and amortization" caption.                     

Intangibles-Intangibles represent the excess of the purchase price over the fair
value of net assets of businesses acquired and noncompete agreements related to 
businesses acquired. Intangibles are presented net of accumulated amortization  
and are amortized using the straight-line method over a period not exceeding 20 
years or the period of the noncompete agreement.                                

Common Stock Split-On October 28, 1997, the Board of Directors declared a       
two-for-one stock split of the Company's common stock which was effective by the
distribution on December 10, 1997, of one share of common stock for each share  
held of record at the close of business November 10, 1997. Common stock and paid
in capital at December 31, 1997, have been restated to reflect this split.      

       The number of shares issued at December 31, 1997, after giving effect
to the split was 29,780,382. All share and per share data, including stock      
option information, has been restated to reflect the split.                     

Stock-Based Compensation-During 1995, the Financial Accounting Standards Board  
issued SFAS No. 123 which defines a fair value-based method of accounting for an
employee stock option plan or similar equity instrument. However, it also allows
an entity to continue to measure compensation cost for those plans using the    
method of accounting prescribed by APB 25. Entities electing to remain with the 
accounting in APB 25 must make pro forma disclosures of net income and earnings 
per share, as if the fair value-based method of accounting defined in the       
statement had been applied.                                                     

     The Company has elected to account for its stock-based compensation
plans under APB 25; however, the Company has computed for pro forma disclosure  
purposes the value of all options granted during 1997 and 1996 using the        
Black-Scholes option pricing/model as prescribed by SFAS No. 123 using the      
following weighted average assumptions for grants in 1997 and 1996:             

                                                                [Download Table]
                                      
Risk free interest rate       5.3-6.2%
Expected dividend yield             0%
Expected lives                 7 years
Expected volatility             24-31%

The total fair value of the options granted during the years ended December 31, 
1997 and 1996, were computed as approximately $524,000 and $148,000,            
respectively, which would be amortized over the vesting period of the options.  
If the Company had accounted for these plans in accordance with SFAS No. 123,   
the Company's reported pro forma net income and pro forma net income per share  
for the years ended December 31, 1997 and 1996, would have been as follows:     

                                                                [Download Table]

---------------------------------------------------
         December 31,               1997    1996   
---------------------------------------------------
                                                   
Net Income (in thousands)                          
     As Reported            $   22,245   $   13,255
     Pro forma                  22,163       13,238

Basic EPS                                          
     As Reported            $     0.76   $     0.46
     Pro forma                    0.76         0.46

Diluted EPS                                        
     As Reported            $     0.75   $     0.46
     Pro forma                    0.75         0.45
---------------------------------------------------

Insurance Expenses-RPC self-insures, up to specified limits, certain risks      
related to general liability, product liability, workers' compensation, and     
vehicle liability. The estimated cost of claims under the self-insurance program
is accrued as the claims are incurred (although actual settlement of the claims 
may not be made until future periods) and may subsequently be revised based on  
developments relating to such claims. The noncurrent portion of these estimated 
outstanding claims is classified as long-term accrued insurance expenses.       

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Income Taxes-Income taxes are accounted for in accordance with SFAS No. 109,    
"Accounting for Income Taxes," which requires recognition of deferred tax       
liabilities and assets for the expected future tax consequences of events that  
have been included in the financial statements or tax returns. Under this       
method, deferred tax liabilities and assets are determined based on the         
difference between the financial and tax bases of assets and liabilities using  
enacted tax rates in effect for the year in which the differences are expected  
to reverse. These differences are more inclusive in nature than differences     
determined under previously applicable accounting principles.                   

Earnings per Share-RPC has adopted SFAS No. 128, "Earnings Per Share," in 1997  
which requires a basic earnings per share and diluted earnings per share        
presentation. The two calculations differ as a result of common stock           
equivalents and restricted shares included in diluted earnings per share, but   
excluded in basic earnings per share. A reconciliation of the weighted shares   
outstanding is as follows:                                                      

                                                                [Download Table]

                         1997         1996         1995   
----------------------------------------------------------
                                                          
Basic EPS             29,181,668   28,942,180   28,904,035
Common stock                                              
  equivalents and                                         
  restricted shares      423,195      200,498      153,087
----------------------------------------------------------
Diluted EPS           29,604,863   29,142,678   29,057,122
----------------------------------------------------------

New Accounting Standards-In February 1997, the Financial Accounting Standards   
Board issued Statement of Financial Accounting Standards No. 129, "Disclosure of
Information about Capital Structure " (SFAS No. 129), which establishes         
standards for disclosing information about an entity's capital structure. SFAS  
No. 129 is effective for fiscal years beginning after December 15, 1997. The    
adoption of SFAS No. 129 is not expected to have a material impact.             

     Also, in June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive   
Income" (SFAS No. 130), which establishes standards for displaying comprehensive
income and its components in a full set of general purpose financial statements.
SFAS No. 130 is effective for fiscal years beginning after December 15, 1997.   
The adoption of SFAS No. 130 is not expected to have a material impact.         

Note 2: Accounts Receivable                                                     

       Accounts receivable, net, at December 31, 1997, of $32,153,000 and at
December 31, 1996, of $24,156,000 are net of allowances for doubtful accounts of
$6,967,000 in 1997, and $7,058,000 in 1996.                                     

Note 3: Inventories                                                             

    Inventories are recorded at the lower of cost (first-in, first-out
basis) or market value and are detailed as follows:                             

                                                                [Download Table]

----------------------------------------------
December 31,                    1997     1996 
----------------------------------------------
                              (in thousands)  
                                              
Raw materials and supplies   $10,392   $ 8,828
Work in process                1,262     1,404
Finished goods                 4,371     5,195
----------------------------------------------
Total inventories            $16,025   $15,427
----------------------------------------------

Note 4: Equipment and Property                                                  

 Equipment and property are presented at cost net of accumulated
depreciation and are detailed as follows:                                       

                                                                [Download Table]

------------------------------------------------------
December 31,                          1997      1996  
------------------------------------------------------
                                     (in thousands)   
                                                      
Operating equipment and property   $164,584   $154,835
Buildings                            15,991     15,147
Furniture and fixtures                4,546      4,344
Vehicles                             17,506     14,980
Land                                  4,941      4,851
------------------------------------------------------
Gross equipment and property        207,568    194,157
Less:  accumulated depreciation     151,895    146,366
------------------------------------------------------
Net equipment and property         $ 55,673   $ 47,791
------------------------------------------------------

Note 5: Income Taxes                                                            

      The following table lists the components of the provision for income
taxes:                                                                          

                                                                [Download Table]

------------------------------------------------------------ 
December 31,                   1997         1996       1995  
------------------------------------------------------------ 
                                      (in thousands)         
                                                             
Current:                                                     
  Federal                    $ 11,838    $  6,353   $  5,475 
  State                           488         383        240 
Deferred                         (608)        246       (319)
------------------------------------------------------------ 
Total income tax provision   $ 11,718    $  6,982   $  5,396 
------------------------------------------------------------ 

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         A reconciliation between the federal statutory rate and RPC's effective
tax rate is as follows:                                                         

                                                                [Download Table]

--------------------------------------------------
December 31,               1997     1996     1995 
--------------------------------------------------
                                                  
Federal statutory rate     35.0%    35.0%    34.6%
State income taxes          1.4      1.9      1.5 
Other                      (1.9)    (2.4)    (2.7)
--------------------------------------------------
Effective tax rate         34.5%    34.5%    33.4%
--------------------------------------------------

The components of the net deferred tax assets (liabilities) are as follows:     

                                                                [Download Table]

----------------------------------------------------------------------
December 31,                                         1997       1996  
----------------------------------------------------------------------
                                                     (in thousands)   
                                                                      
Current deferred tax asset:                                           
   Self-insurance reserves                         $ 2,088    $ 1,803 
   Bad debt reserves                                 2,503      2,637 
   State, local & other taxes                          852        885 
   Payroll accruals                                    703        555 
   Warranty reserves                                   795        466 
   All others                                        1,685      1,277 
   Valuation allowance                                --         --   
----------------------------------------------------------------------
Total current deferred tax asset                   $ 8,626    $ 7,623 
----------------------------------------------------------------------
Noncurrent deferred tax asset (liability):                            
   Self-insurance reserves                         $ 1,452    $ 1,208 
   Depreciation                                     (1,592)    (1,226)
   All others                                         (169)       104 
   Valuation allowance                                --         --   
----------------------------------------------------------------------
Total noncurrent deferred tax asset (liability):   ($  309)   $    86 
----------------------------------------------------------------------

      Total income tax payments, net of refunds, were $11,260,000 in 1997,
$4,510,000 in 1996, and $5,511,000 in 1995.                                     

Note 6: Long-Term Debt                                                          

       The fair value of the long-term debt approximates the carrying value.
All obligations are collateralized by property, plant, and equipment.           

       At December 31, 1997, future minimum lease payments on long-term debt
and capitalized lease obligations were as follows:                              

                                                                [Download Table]

             (in thousands)               
------------------------------------------
                                          
1998                                 $ 857
1999                                   650
2000                                   305
2001                                   230
2002                                   130
------------------------------------------
Total minimum principal payments   $ 2,172
------------------------------------------

     The long-term debt of RPC as of December 31, 1997, and December 31,
1996, is summarized as follows:                                                 

                                                                [Download Table]

(in thousands)                       Range of                   
                        Maturity     Interest                   
Type                    Dates          Rates      1997     1996 
----------------------------------------------------------------
                                                                
Notes Payable          2001-2002    6.25-8.50%   $1,300   $  500
Capital Leases           2000           10.99%      872      -- 
----------------------------------------------------------------
Total Debt                                        2,172      500
Less Current Portion                                857      -- 
----------------------------------------------------------------
Long-Term Debt                                   $1,315   $  500
----------------------------------------------------------------

       The net book value of equipment under capital lease was $1,428,000 at
December 31, 1997.                                                              

Note 7: Commitments and Contingencies                                           

       Minimum annual rentals, principally for noncancelable real estate and
truck leases with terms in excess of one year, in effect at December 31, 1997,  
are summarized in the following table:                                          

                                                                [Download Table]

------------------------------------   
Year                        Amount     
------------------------------------   
                                       
                         (in thousands)
1998                       $1,902      
1999                        1,442      
2000                        1,036      
2001                          591      
2002                          217      
2003-2007                     338      
------------------------------------   
Total rental commitments   $5,526      
------------------------------------   

    Total rental expense charged to operations was $3,610,000 in 1997,
$3,517,000 in 1996, and $2,418,000 in 1995.                                     

         RPC is a defendant in a number of lawsuits which allege that plaintiffs
have been damaged as a result of the rendering of services by RPC personnel and 
equipment, in vehicle accidents, or from the use of RPC's products. RPC is      
vigorously contesting these actions. Management is of the opinion that the      
outcome of these lawsuits will not have a material adverse effect on the        
financial position or results of operations or liquidity of RPC.                

         To assist dealers in obtaining financing for the purchase of its boats,
Chaparral has entered into agreements with various dealers and financing        
institutions to guarantee varying amounts of the dealers' purchase debt         
obligations. Chaparral's obligation under its guarantee becomes effective in the
case of default in payments by the dealer. The agreements provide for the return
of all repossessed boats to Chaparral in new condition, in                      

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exchange for Chaparral's assumption of the unpaid debt obligation on those      
boats. As of December 31, 1997, guarantees outstanding totaled $5,720,000.      

Note 8: Employee Benefit Plans                                                  

Retirement Plan-RPC has a tax-qualified defined benefit, noncontributory,       
trusteed retirement income plan which covers substantially all employees with at
least one year of service. Benefits are based on an employee's years of service 
and compensation near retirement. RPC has the right to terminate or modify the  
plan at any time.                                                               

      Total retirement plan cost was $86,000 in 1997, $72,000 in 1996, and
$135,000 in 1995. The following table details the components of the cost:       

                                                                [Download Table]

------------------------------------------------------------------- 
December 31,                            1997       1996       1995  
------------------------------------------------------------------- 
                                              (in thousands)        
                                                                    
Service cost for benefits earned                                    
  during the period                   $   602    $   540    $   429 
Interest cost on projected benefit                                  
  obligation                            1,053        991        907 
Actual (return) loss on plan assets    (2,243)    (1,719)    (2,817)
Net amortization and deferral             674        260      1,616 
------------------------------------------------------------------- 
Total pension cost                    $    86    $    72    $   135 
------------------------------------------------------------------- 

         RPC's funding policy is to contribute to the retirement income plan the
amount required, if any, under the Employee Retirement Income Security Act of   
1974. No contributions were required in 1997, 1996, or 1995.                    

 The funded status of the retirement income plan was as follows:

                                                                [Download Table]

-------------------------------------------------------- 
December 31,                          1997         1996  
-------------------------------------------------------- 
                                        (in thousands)   
                                                         
Actuarial present value of:                              
  Vested benefits                   $ 13,236    $ 11,153 
  Non-vested benefits                    561         519 
-------------------------------------------------------- 
Accumulated benefit obligation        13,797      11,672 
Effect of projected future                               
  compensation increases               2,375       2,333 
-------------------------------------------------------- 
Projected benefit obligation          16,172      14,005 
Plan assets at fair value             16,493      14,752 
-------------------------------------------------------- 
Plan assets in excess of                                 
  projected benefit obligation           321         747 
Unrecognized net losses                  854         708 
Unrecognized net transition asset       (867)     (1,060)
-------------------------------------------------------- 
Prepaid pension cost                $    308    $    395 
-------------------------------------------------------- 

         In 1997 and 1996, the projected benefit obligation was calculated using
a discount rate of 7.5 percent. In 1997, a 4.5 percent annual rate of increase  
in future compensation levels was used compared to a 5.0 percent annual rate in 
1996. Plan assets are invested in a diversified portfolio that consists of      
equity and debt securities, including U.S. government obligations. The expected 
long-term rate of return on plan assets is 9.5 percent.                         

401(k) Plan-RPC sponsors a deferred compensation 401(k) plan that is available  
to substantially all full-time employees with more than six months of service.  
This plan allows employees to make tax-deferred contributions of up to 15       
percent of their annual compensation, not exceeding the permissible deduction   
imposed by the Internal Revenue Code. RPC matches 40 percent of each employee's 
contributions up to 3 percent of the employee's compensation. Employees vest in 
the RPC contributions after five years of service. The charges to expense for   
RPC's contributions were $315,000 in 1997, $276,000 in 1996, and $238,000 in    
1995.                                                                           

Stock Incentive Plans-RPC has an Employee Incentive Stock Option Plan (the "1984
Plan") under which 1,000,000 shares of common stock were reserved for issuance. 
The 1984 Plan expired in October 1994. On January 25, 1994, RPC adopted a new   
ten-year Employee Stock Incentive Plan (the "1994 Plan") under which 1,000,000  
shares of common stock were reserved for issuance. During 1997, an additional   
1,600,000 shares were reserved for issuance. These plans provide for the        
issuance of various forms of stock incentives, including, among others,         
incentive stock options and restricted stock. As of December 31, 1997, there    
were 1,904,000 shares remaining for the granting of options or other awards     
under the 1994 Plan.                                                            

Incentive Stock Options-Transactions involving the incentive stock option plans 
were as follows:                                                                

                                                                [Download Table]

                                                           Weighted
                                                           Average 
                                           Option Price    Exercise
                                 Shares    (Per Share)      Price  
-------------------------------------------------------------------
                                                                   
Outstanding January 1, 1995      694,976   $1.63-$4.00    $   2.74 
Granted                             --              --      --     
Canceled                         (18,000)     3.00-4.00        3.34
Exercised                           --              --      --     
                                -----------------------------------
Outstanding December 31, 1995    676,976    $1.63-$4.00    $   2.72
Granted                           80,000           4.44        4.44
Canceled                         (29,800)     3.00-4.00        3.40
Exercised                       (172,884)     1.63-4.00        1.76
                                -----------------------------------
Outstanding December 31, 1996    554,292    $1.63-$4.44    $   3.23
Granted                          158,000           7.50        7.50
Canceled                          (5,232)     1.63-7.50        6.12
Exercised                       (264,260)     1.63-4.44        2.58
                                -----------------------------------
Outstanding December 31, 1997    442,800    $3.00-$7.50    $   5.11
-------------------------------------------------------------------

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                                                                [Download Table]

                                       1997          1996         1995   
-------------------------------------------------------------------------
                                                                         
Exerciseable at December 31           151,120       360,692       416,200
Weighted Average Exercise Price                                          
   of exerciseable options          $    3.51     $    2.94     $    2.51
Weighted Average grant date                                              
  fair value of options                                                  
  granted during the year           $    3.40     $    1.85          --  
-------------------------------------------------------------------------

        The weighted average remaining contractual life of options outstanding
at December 31, 1997, was 6.7 years.                                            

     Options for 58,800 shares expire on January 24, 1999, 25,600 shares
expire on January 23, 2000, 126,800 shares expire on April 26, 2004, 77,600     
shares expire on January 23, 2006, and 154,000 shares expire on January 28,     
2007.                                                                           

Restricted Stock-RPC has granted employees two forms of restricted stock:       
performance restricted and time lapse. The performance restricted shares are    
granted, but not earned and issued, until certain five-year tiered performance  
criteria are met. The performance criteria are predetermined market prices of   
the Company stock. On the date the stock appreciates to each level              
(determination date), 20 percent of performance shares are earned. Once earned, 
the performance shares vest five years from the determination date. Time lapse  
shares vest ten years from the grant date. There were 52,000 units granted under
these restricted stock programs during 1997 and 50,000 units during 1996. There 
were no units granted in 1995. During 1997, 66,000 performance shares were      
awarded under the plans. No shares were forfeited or canceled.                  

        The agreements under which the restricted stock is issued provide that
shares awarded may not be sold or otherwise transferred until restrictions as   
established under the Plan have lapsed. Upon termination of employment, shares  
upon which restrictions have not lapsed must be returned to the Company. As of  
December 31, 1997, none of the shares of restricted stock were vested.          

Note 9: Business Segment Information                                            

In June 1997, the Financial Accounting Standards Board        
issued Statement of Financial Accounting Standards No. 131,                     
"Disclosures about Segments of an Enterprise and Related                        
Information" (SFAS No. 131). SFAS No. 131 establishes standards                 
for reporting information about operating segments in annual                    
financial statements and requires reporting selected information                
about operating segments in interim financial reports issued to                 
stockholders. SFAS No. 131 is effective for fiscal years                        
beginning after December 15, 1997. The adoption of SFAS No. 131                 
is not expected to have a material impact.                                      

    Certain information with respect to RPC's business segments is set
forth in the following table:                                                   

                                                                [Download Table]

--------------------------------------------------------------- 
December 31,                    1997        1996        1995    
--------------------------------------------------------------- 
                                       (in thousands)           
                                                                
Revenue:                                                        
  Oil and gas services      $ 137,599    $ 101,741    $  79,943 
  Boat manufacturing           95,029       86,225       70,218 
  Other                        13,171       12,867       11,218 
--------------------------------------------------------------- 
Total revenue               $ 245,799    $ 200,833    $ 161,379 
--------------------------------------------------------------- 
Operating income(loss):                                         
  Oil and gas services      $  23,106    $  16,631    $   9,233 
  Boat manufacturing           11,742        8,035        5,980 
  Other                        (3,261)      (6,447)      (1,243)
--------------------------------------------------------------- 
Total operating income      $  31,587    $  18,219    $  13,970 
--------------------------------------------------------------- 
Identifiable assets:                                            
  Oil and gas services      $  86,578    $  68,692    $  51,145 
  Boat manufacturing           25,076       26,167       23,019 
  Other, including                                              
      corporate assets         70,864       57,941       58,492 
--------------------------------------------------------------- 
Total identifiable assets   $ 182,518    $ 152,800    $ 132,656 
--------------------------------------------------------------- 

   Revenue from international operations in the oil and gas services
segment totaled $17,407,000 in 1997, $12,851,000 in 1996, and $7,159,000 in     
1995. The respective operating profits were $2,720,000 in 1997, $3,096,000 in   
1996, and $1,680,000 in 1995. There were $9,987,000 in identifiable assets      
attributable to these operations in 1997, $8,351,000 in 1996, and $4,709,000 in 
1995. There were no material amounts of international operations in the boat    
manufacturing segment.                                                          

Note 10: Unaudited Quarterly Data                                               

                                                                [Download Table]

----------------------------------------------------------------------
Quarter                 First       Second        Third       Fourth  
----------------------------------------------------------------------
                             (in thousands except per share data)     
                                                                      
1997                                                                  
Revenue              $   58,203   $   67,032   $   57,857   $   62,707
Net income                4,307        5,912        5,410        6,616
Earnings per share                                                    
    Basic                   .15          .20          .19          .23
    Diluted                 .15          .20          .18          .22

1996                                                                  
Revenue              $   49,717   $   52,204   $   44,942   $   53,970
Net income                3,450        3,161        2,813        3,831
Earnings per share                                                    
    Basic                   .12          .11          .10          .13
    Diluted                 .12          .11          .10          .13

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Part III                                                                        

Item 9. Changes in and Disagreements with Accountants on Accounting and         
Financial Disclosure                                                            

        This item is not applicable to RPC because there has been no change in
or disagreements with its independent public accountants.                       

Item 10. Directors and Executive Officers of the Registrant                     

        Information concerning directors and executive officers is included in
the RPC Proxy for its 1998 Annual Meeting of Stockholders, in the sections      
entitled "Election of Directors" and "Section 16(a) Beneficial Ownership        
Reporting Compliance." This information is incorporated herein by reference.    
Information about executive officers is contained on page 10.                   

Item 11. Executive Compensation                                                 

      Information concerning executive compensation is included in the RPC
Proxy for its 1998 Annual Meeting of Stockholders, in the section entitled      
"Executive Compensation." This information is incorporated herein by reference. 

Item 12. Security Ownership of Certain Beneficial Owners and Management         

        Information concerning security ownership is included in the RPC Proxy
for its 1998 Annual Meeting of Stockholders, in the sections entitled "Capital  
Stock" and "Election of Directors." This information is incorporated herein by  
reference.                                                                      

Item 13. Certain Relationships and Related Transactions                         

       Information concerning certain relationships and related transactions
is included in the RPC Proxy for its 1998 Annual Meeting of Stockholders, in the
sections entitled "Certain Relationships and Related Transactions" and          
"Compensation Committee Interlocks and Insider Participation." This information 
is incorporated herein by reference.                                            

Part IV                                                                         

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K       

The following documents are filed as part of this report.     

                                                                [Download Table]

FINANCIAL STATEMENTS                                PAGE
                                                        
Balance Sheets as of December 31, 1997                15
         and 1996                                       
Statements of Income for the three years ended        16
         December 31, 1997                              
Statements of Stockholders' Equity for the three      16
         years ended December 31, 1997                  
Statements of Cash Flows for the three years          17
         ended December 31, 1997                        
Notes to Financial Statements                      18-23

SCHEDULES                                               
Schedule II-Valuation and Qualifying Accounts         25

EXHIBITS                                                                        

Exhibit                                                                         
Number                       Description                                        
--------------------------------------------------------------------------------
(3)(i)(a)   RPC's Certificate of Incorporation is incorporated herein by        
 reference to Exhibit (3)(a) to the fiscal 1992 Form 10-K.

(3)(i)(b)   RPC's Certificate of Amendment of the Certificate of                
    Incorporation is incorporated herein by reference to Exhibit
(3)(i)(b) to the fiscal 1995 Form 10-K.                 

(3)(ii)     By-laws of RPC are incorporated herein                              
by reference to Exhibit (3)(b) to the fiscal            
1993 Form 10-K.                                         

(10)        RPC's 1994 Employee Stock Incentive Plan is incorporated            
     herein by reference to Exhibit A of the 1994 Proxy Statement.

(21)        Subsidiaries of RPC.                                                

(23)        Consent of Arthur Andersen LLP.                                     

(24)        Powers of Attorney for Directors.                                   

(27)        Financial Data Schedule                                             

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Reports on Form 8-K                                                             

         No reports on Form 8-K were required to be filed by RPC for the quarter
ended December 31, 1997. Any schedules or exhibits not shown above have been    
omitted because they are not applicable.                                        

Schedule II-Valuation and Qualifying Accounts                                   

RPC, INC. AND SUBSIDIARIES                                                      
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (in thousands of dollars)  

                                                        [Enlarge/Download Table]

                                        Balance at      Charged to       Net         Balance at
                                         Beginning      Costs and    (Write-Offs)      End of  
       Description                       of Period       Expenses      Recoveries       Period 
-----------------------------------------------------------------------------------------------
                                                                                               
Year ended December 31, 1997                                                                   
   Allowance for Doubtful Accounts        $ 7,058        $   137        ($  228)        $ 6,967
-----------------------------------------------------------------------------------------------
Year ended December 31, 1996                                                                   
   Allowance for Doubtful Accounts        $ 4,205        $ 2,624        $   229         $ 7,058
-----------------------------------------------------------------------------------------------
Year ended December 31, 1995                                                                   
   Allowance for Doubtful Accounts        $ 6,300        $ 1,339        ($3,434)        $ 4,205
-----------------------------------------------------------------------------------------------

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Report of Independent Public Accountants                                        

To the Directors and Stockholders of RPC, Inc.:                                 

      We have audited the accompanying consolidated balance sheets of RPC,
Inc. (a Delaware corporation) and subsidiaries as of December 31, 1997 and 1996,
and the related consolidated statements of income, stockholders' equity, and    
cash flows for each of the three years in the period ended December 31, 1997.   
These financial statements and schedule referred to below are the responsibility
of the Company's management. Our responsibility is to express an opinion on     
these financial statements and schedule based on our audits.                    

        We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free from       
material                                                                        

misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of RPC, Inc. and       
subsidiaries as of December 31, 1997 and 1996, and the results of their         
operations and their cash flows for each of the three years in the period ended 
December 31, 1997, in conformity with generally accepted accounting principles. 

       Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14 is        
presented for the purposes of complying with the Securities and Exchange        
Commission's rules and is not part of the basic financial statements. This      
schedule has been subjected to the auditing procedures applied in our audit of  
the basic financial statements and, in our opinion, fairly states in all        
material respects, the financial data required to be set forth therein in       
relation to the basic financial statements taken as a whole.                    

Atlanta, Georgia                                      /s/  Arthur Andersen LLP  
March 12, 1998                                                                  

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Signatures                                                                      

       Pursuant to the requirements of Section 13 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.
       By:

                          /s/ R. Randall Rollins
                      R. Randall Rollins
                                      Chairman of the Board of Directors
                                 (Principal Executive Officer)
                  March 12, 1998

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.                               

/s/ R. Randall Rollins                           /s/ Ben M. Palmer              
R. Randall Rollins                               Ben M. Palmer                  
Chairman of the Board of Directors               Chief Financial Officer        
(Principal Executive Officer)                    (Principal Financial and       
March 12, 1998                                   Accounting Officer)            
                                March 12, 1998

        The Directors of RPC, Inc. (listed below) executed a power of attorney
appointing Richard A. Hubbell their attorney- in-fact, empowering him to sign   
this report on their behalf.                                                    

                            Bobby Joe Cudd, Director
                                James A. Lane, Jr., Director
                           Wilton Looney, Director
                             Gary W. Rollins, Director
                             John W. Rollins, Director
                             Henry B. Tippie, Director
                               James B. Williams, Director

                          /s/ Richard A. Hubbell
                      Richard A. Hubbell
                                    Director and as Attorney-in-fact
                  March 12, 1998

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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		4/26/04		17					4
		1/31/02		4
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		1/24/99		17
Filed on:		3/27/98							DEF 14A
		3/12/98		20		21
		3/2/98		1
For Period End:		12/31/97		1		20
		12/15/97		14		17
		12/11/97		5
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		9/10/97		5
		12/31/96		5		20			10-K405
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		1/25/94		16
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