RGC Resources, Inc. Reports Third Quarter Earnings
August 03, 2023 at 05:30 pm EDT
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ROANOKE, Va., Aug. 03, 2023 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ: RGCO) announced consolidated Company earnings of $686,816, or $0.07 per share, for the quarter ended June 30, 2023, compared to earnings of $592,527, or $0.06 per share, for the quarter ended June 30, 2022. CEO Paul Nester stated, “We experienced earnings growth driven primarily by improved utility margins and the investment in Mountain Valley Pipeline (MVP), net of higher interest expense.” Nester further commented, “We are pleased that the U.S. Supreme Court acted quickly, allowing the MVP project to resume forward construction and hopefully enabling a much needed, new supply of natural gas to the Roanoke region by this winter.”
Net loss for the twelve months ended June 30, 2023 was $1,130,122, or $0.11 per share. Underlying net income for the twelve months ended June 30, 2023 was $10,209,447, or $1.03 per share, compared to $9,255,083, or $1.06 per share, for the twelve months ended June 30, 2022. Nester attributed the underlying net income increase to improved utility margins associated with infrastructure replacement programs, the implementation of the new non-gas rates and the investment in the MVP. Underlying earnings per share declined due to the impact of the March 2022 equity offering on the weighted average shares outstanding.
RGC Resources, Inc. provides energy and related products and services to customers in Virginia through its operating subsidiaries Roanoke Gas Company and RGC Midstream, LLC.
Utility margins is a non-GAAP measure defined as utility revenues less cost of gas. Underlying net income removes the effect of the after-tax impairment charge specific to the MVP investment from the results of operations to enhance the comparability of financial results between periods. Management considers these non-GAAP measures to provide useful information to both management and investors for purpose of such comparability and in evaluating operating performance, but they should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for, or superior to, GAAP results.
Net income for the three months ended June 30, 2023 is not indicative of the results to be expected for the fiscal year ending September 30, 2023 as quarterly earnings are affected by the highly seasonal nature of the business and weather conditions generally result in greater earnings during the winter months.
The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company’s actual results and experience to differ materially from any expectations expressed in the Company’s forward-looking statements, regarding customer growth, infrastructure investment and margins. These risks and uncertainties include gas prices and supply, geopolitical considerations and regulatory and legal challenges and those set forth in Item 1-A of the Company’s fiscal 2022 Form 10-K. Forward-looking statements reflect the Company’s current expectations only as of the date they are made. The Company assumes no duty to update these statements should expectations change or actual results differ from current expectations except as required by applicable laws and regulations.
Past performance is not necessarily a predictor of future results.
Summary financial statements for the third quarter and twelve months are as follows:
RGC Resources, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
Twelve Months Ended
June 30,
June 30,
2023
2022
2023
2022
Operating revenues
$
13,660,245
$
17,259,899
$
99,084,797
$
83,407,916
Operating expenses
11,861,780
15,619,727
81,695,733
68,390,770
Operating income
1,798,465
1,640,172
17,389,064
15,017,146
Equity in earnings of unconsolidated affiliate
519,482
235
524,991
252,721
Impairment of unconsolidated affiliates
-
-
(15,270,090
)
(39,822,213
)
Other income, net
6,725
221,141
772,048
1,052,476
Interest expense
1,423,566
1,102,214
5,375,607
4,334,968
Income (loss) before income taxes
901,106
759,334
(1,959,594
)
(27,834,838
)
Income tax expense (benefit)
214,290
166,807
(829,472
)
(7,517,946
)
Net income (loss)
$
686,816
$
592,527
$
(1,130,122
)
$
(20,316,892
)
Net earnings (loss) per share of common stock:
Basic
$
0.07
$
0.06
$
(0.11
)
$
(2.32
)
Diluted
$
0.07
$
0.06
$
(0.11
)
$
(2.32
)
Cash dividends per common share
$
0.1975
$
0.1950
$
0.7875
$
0.7700
Reconciliation of GAAP net income to underlying net income:
Net income (loss) as reported
$
686,816
$
592,527
$
(1,130,122
)
$
(20,316,892
)
Impairment - net of income tax
-
-
11,339,569
29,571,975
Underlying net income
$
686,816
$
592,527
$
10,209,447
$
9,255,083
Underlying earnings per share: basic and diluted
$
0.07
$
0.06
$
1.03
$
1.06
Weighted average number of common shares outstanding:
Basic
9,939,843
9,798,700
9,873,686
8,756,025
Diluted
9,942,871
9,804,289
9,873,686
8,756,025
Condensed Consolidated Balance Sheets
(Unaudited)
June 30,
Assets
2023
2022
Current assets
$
25,754,930
$
35,589,886
Utility property, net
243,087,547
224,145,150
Other non-current assets
25,923,607
39,008,457
Total Assets
$
294,766,084
$
298,743,493
Liabilities and Stockholders’ Equity
Current liabilities
$
27,252,815
$
21,063,473
Long-term debt, net
126,252,586
130,265,070
Deferred credits and other non-current liabilities
RGC Resources, Inc. is an energy services company. It is primarily engaged in the sale and distribution of natural gas to residential, commercial and industrial customers in Roanoke, Virginia, and the surrounding localities, through its subsidiary, Roanoke Gas Company (Roanoke Gas). Roanoke Gas also provides certain unregulated services. Roanoke Gas maintains an integrated natural gas distribution system to deliver natural gas purchased from suppliers to residential, commercial, and industrial users in its service territory. Roanoke Gas owns and operates about six metering stations through, which it measures and regulates the gas being delivered by its suppliers. These stations are located at various points throughout its distribution system. Roanoke Gas owns a liquefied natural gas storage facility located in its service territory that has the capacity to store up to 200,000 dekatherms (DTH) of natural gas. It has approximately 1,168 miles of transmission and distribution pipeline.