In today’s earnings release and conference call, we’ll be referring to EBITDA which is a non-GAAP measure of operating performance. RPC uses EBITDA as a measure of operating performance because it allows us to compare performance consistently over various periods without regard to changes in our capital structure. We’re also required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release today and our website provide a reconciliation of EBITDA to net income, which is the nearest GAAP financial measure.Please review that disclosure if you are interested in seeing how it’s calculated. If you’ve not received our press release, please call us at 404-321-2140 and we’ll provide one to you immediately. I will now turn the call over to our President and CEO, Rick Hubbell. Ric k Hubbell Thank you, Jim. This morning we issued our earnings press release for RPC’s fourth quarter ended December 31, 2011. Following my comments, Ben Palmer will discuss our financial results in more detail. I’m pleased to report that RPC generated record revenues, profits, and return on capital for the full year of 2011. I’m also pleased to announce that RPC’s Board of Directors in response to our strong results and balance sheet and as a show of confidence in our company’s future prospects, increased the quarterly dividend 20% from $0.10 to $0.12 per share. In addition, our Board approved a 3-for-2 stock split. Notwithstanding our record results for the first time in recent years, we experienced a sequential decline in our operating performance. Ben Palmer, our CFO, will provide more details. Ben Palmer Thank you, Rick. The quarter ended December 31, 2011 revenues increased to $482.8 million, a 47.1% increase compared to the prior year. These higher revenues resulted from a larger fleet of equipment, higher utilization across most of our service lines and improved pricing. EBITDA for the fourth quarter was $171.8 million compared to $125.2 million for the same period last year and our operating profit for the quarter was $122 million compared to $89.8 million in 2010. Our net income during the current quarter was $74.6 million or $0.51 diluted earnings per share.
Cost of revenues increased from $174.5 million in the prior year to $268.5 million in the current year. This increase in costs results from a higher business activity levels and associated costs including total employment costs and materials and supplies. Cost of revenues for the fourth quarter as a percentage of revenues increased 53.2% in the prior year to 55.6% due primarily to increased costs of high-demand raw materials used in our pressure pumping service line.Selling, general and administrative expenses during the quarter were $42.1 million, an increase of 33.9% compared to $31.4 million in the prior year. However, because of our ability to leverage these fixed costs over higher revenues, SG&A costs as a percentage of revenues decreased from 9.6% last year to 8.7% this year. Depreciation and amortization were $49 million for the fourth quarter, an increase of 41.5% compared to $34.6 million in the prior year. This increase is a result of additional equipment that we replaced and serviced over the past 12 months. Our Technical Services segment revenues increased 50.6% due to an increase in the fleet of revenue producing equipment and higher activity levels from customer commitment. Operating profit increased to a $114 million compared to $80.6 million in the prior year. This improvement was due to higher revenues together with the associated leverage and fixed costs. Revenues in our Support Services segment which comprise mainly of our rental tool service line increased by 16.5%. This segment generated an operating profit of $14.5 million compared to $10.5 million last year primarily due to higher pricing. Read the rest of this transcript for free on seekingalpha.com