--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 8-K
--------------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 8, 2006
RPC, INC.
(Exact name of registrant as specified in its charter)
-------------------------
DELAWARE 1-8726 58-1550825
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
2170 Piedmont Road, NE, Atlanta, Georgia 30324
(Address of principal executive office) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 321-2140
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
--------------------------------------------------------------------------------
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
As reported in the press release dated September 14, 2006, a copy of which
is filed as Exhibit 99.2 hereto, on September 8, 2006, RPC, Inc. ("RPC"), a
Delaware corporation, replaced its $50 million credit facility with a new
revolving credit agreement (the "Revolving Credit Agreement") with SunTrust
Capital Markets, Inc, as Joint Lead Arranger and Sole Book Manager, Banc of
America Securities LLC as Joint Lead Arranger, and a syndicate of other lenders
including SunTrust Bank, Bank of America, N.A., Wachovia Bank, N.A., Branch
Banking and Trust Company, Regions Bank, Wells Fargo Bank, N.A., Comerica Bank,
Fifth Third Bank, N.A., and Mercantile-Safe Deposit & Trust Company. The
Revolving Credit Agreement is filed as Exhibit 99.1 hereto and is incorporated
herein by reference.
The Revolving Credit Agreement is guaranteed by those of RPC's domestic
subsidiaries whose assets equal 5% or more of the consolidated assets of RPC and
its subsidiaries and those whose operating income equals 5% or more of the
consolidated operating income of RPC and its subsidiaries.
Neither RPC nor any of its affiliates has any material relationship with
any of the parties to the Revolving Credit Agreement apart from RPC's ownership
of its domestic subsidiaries and ordinary banking relationships.
Borrowings.
The Revolving Credit Agreement has a general term of 5 years and provides
for an unsecured line of credit of up to $250 million, which includes a $50
million letter of credit subfacility, and a $20 million swingline subfacility.
Under certain circumstances more particularly described in the Revolving Credit
Agreement, the line of credit may be increased by an additional amount of up to
$50 million. The maturity date of all revolving loans under the Credit Agreement
is September 8, 2011, although RPC may request two one-year extensions of the
maturity date.
Interest Rates.
Revolving loans under the Revolving Credit Agreement bear interest at one
of the following two rates, at RPC's election:
o the Base Rate, which is the greater of SunTrust Bank's "prime rate"
for the day of the borrowing and a fluctuating rate per annum equal to
the Federal Funds Rate plus .50%; or
o with respect to any Eurodollar borrowings, Adjusted LIBOR (which
equals LIBOR as increased to account for the maximum reserve
percentages established by the U.S. Federal Reserve) plus a margin
ranging from .40% to .80%, based upon RPC's then-current
debt-to-EBITDA ratio.
In addition, RPC will pay an annual fee ranging from .10% to .20% of the
total credit facility based upon RPC's then-current consolidated debt-to-EBITDA
ratio.
2
Financial Covenants and Events of Default.
The Revolving Credit Agreement contains customary terms and conditions,
including certain financial covenants including covenants restricting RPC's
ability to incur liens, merge or consolidate with another entity. Further, the
Revolving Credit Agreement contains financial covenants restricting RPC's
ability to permit the ratio of RPC's consolidated debt to EBITDA to exceed 2.5
to 1, and to permit the ratio of RPC's consolidated EBIT to interest expense to
exceed 2 to 1.
Draw-downs.
RPC has not yet made any borrowings under the Revolving Credit Agreement.
ITEM 1.02. TERMINATION OF A MATERIAL CONTRACT.
The Revolving Credit Agreement described under Item 1.01 above replaced
RPC's previous credit facility which was entered into on March 10, 2006, with
SunTrust Bank. The previous credit facility provided RPC with access to a $50
million credit facility encompassing letters of credit and a demand note.
RPC has not incurred any material early termination penalties, and does not
have any material relationships with any of the parties thereto apart from their
relationships as lenders to RPC and as disclosed elsewhere in this Form 8-K. For
further information, see the "Liquidity and Capital Resources" section of
Management's Discussion and Analysis contained in RPC's Quarterly Report on Form
10-Q for the period ended June 30, 2006.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information disclosed above under Items 1.01 and 1.02 is incorporated
herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit Number Description
99.1 Revolving Credit Agreement dated September 8, 2006
between RPC, Bank of America, N.A., SunTrust Bank,
and certain other Lenders party thereto.
99.2 Press Release dated September 14, 2006.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, RPC,
Inc. has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
RPC, Inc.
Date: September 14, 2006 /s/ Ben M. Palmer
---------------------------------------
Ben M. Palmer
Vice President, Chief Financial Officer
and Treasurer
4