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Our press release today and our website provide a reconciliation of EBITDA to net income, to 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 for any reason, please visit our website that I just mentioned to see a copy.I will now turn the call over to our President and CEO, Rick Hubbell. Rick Hubbell Thank you Jim. This morning we issued our earnings press release for RPC’s first quarter of 2012. Following my comments, Ben Palmer will discuss our financial results in more detail. During the quarter we continued to improve our management of logistical issues and procurement of raw materials. This together with the delivery of additional revenue producing equipment ordered in 2011, combined to allow us to generate sequential and year-over-year improvements in revenue net income and EBITDA. I am pleased with our quarterly results, the decline in natural gas prices to a 10 year low and the resulting decline in natural gas drilling activity continues to impact RPC’s activity levels and pricing. This environment together with several operational issues is materiality affecting our industry. During the first quarter of 2012 RPC paid its largest dividend, repurchased the most stock and invested the highest capital expenditure amount in our history. Despite these uses of cash, the balance on our credit facility declined from the end of 2011 in our ratio of debt to total capitalization as a conservative 18%. We will discuss that in more detail in a few moments after our CFO Ben Palmer reviews our financial results for the first quarter of 2012. Ben Palmer Thank you, Rick. For the quarter ended March 31, 2012 revenues increased to $502.6 million, a 31.6% increase compared to the prior year. These higher revenues resulted from a larger fleet of equipment, higher activity levels and a favorable job mix in several service lines.
EBITDA for the first quarter was $183.3 million compared to $146.2 million for the same period last year and operating profit for the quarter was $130.9 million compared to $106.3 million in 2011. Our net income during the current quarter was $80.8 million or $0.37 per diluted earnings per share.Cost of revenues increased from $201.3 million in the prior year to $273.8 million in the current year, resulting from higher business activity levels and associated costs, including total employment in materials and supplies. Cost of revenues for the first quarter as a percentage of revenues increased from 52.7% in the prior year to 54.5%, due primarily to lower pricing in many of our service lines, as well as the lower margins generated on more service intensive jobs. Selling, general and administrative expenses during the quarter were $44.9 million, an increase of 24.6% compared to $36.1 million in the prior year, due to increased headcount consistent with higher activity levels. However, because of our ability to leverage these fixed costs over higher revenues, SG&A costs as a percentage of revenues decreased from 9.4% last year to 8.9% this year. Depreciation and amortization were $51.6 million for the first quarter, an increase of 30.4% compared to $39.5 million in the prior year. This increase is a result of additional equipment placed and serviced over the past 12 months. Our Technical Services segment revenues increased 32.1% due to an increase in the fleet of revenue producing equipment and higher activity levels. Operating profit increased to $123.5 million compared to $99.9 million in the prior year. This improvement was due to higher revenues from a lager fleet of revenues producing equipment. Read the rest of this transcript for free on seekingalpha.com