RGC Resources, Inc. Reports Third Quarter Earnings
August 08, 2022 at 05:01 pm EDT
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ROANOKE, Va., Aug. 08, 2022 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ: RGCO) announced consolidated Company earnings of $592,527 or $0.06 per share for the quarter ended June 30, 2022. This compares to consolidated earnings of $610,840 or $0.07 per share for the quarter ended June 30, 2021. CEO Paul Nester stated, “We continue to experience customer growth and improved utility margins associated with infrastructure replacement programs. The overall earnings decline was primarily attributable to the lower non-cash MVP AFUDC income.”
Net loss for the twelve months ended June 30, 2022 was $20,316,892 or $2.32 per share. Underlying net income, a non-GAAP measure that excludes the after-tax impairment recorded in the second quarter, for the twelve months ended June 30, 2022 was $9,255,083 or $1.06 per share compared to $9,772,285 or $1.19 per share for the twelve months ended June 30, 2021. Nester attributed the underlying net income decline in trailing twelve-month net income to lower non-cash MVP AFUDC income, partially offset by stronger utility margins due to infrastructure replacement programs.
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 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 and underlying net income for the three months ended June 30, 2022 is not indicative of the results to be expected for the fiscal year ending September 30, 2022 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 the Company’s Form 10-Q for the quarter ended June 30, 2022 and Item 1-A in the Company’s fiscal 2021 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,
2022
2021
2022
2021
Operating revenues
$
17,259,899
$
14,048,846
$
83,407,916
$
71,599,814
Operating expenses
15,619,727
12,506,513
68,390,770
58,275,744
Operating income
1,640,172
1,542,333
15,017,146
13,324,070
Equity in earnings of unconsolidated affiliate
235
133,864
252,721
2,813,371
Impairment of unconsolidated affiliates
-
-
(39,822,213
)
-
Other income, net
221,141
130,186
1,052,476
855,965
Interest expense
1,102,214
1,000,238
4,334,968
4,017,308
Income (loss) before income taxes
759,334
806,145
(27,834,838
)
12,976,098
Income tax expense (benefit)
166,807
195,305
(7,517,946
)
3,203,813
Net income (loss)
$
592,527
$
610,840
$
(20,316,892
)
$
9,772,285
Net earnings (loss) per share of common stock:
Basic
$
0.06
$
0.07
$
(2.32
)
$
1.19
Diluted
$
0.06
$
0.07
$
(2.32
)
$
1.19
Cash dividends per common share
$
0.195
$
0.185
$
0.770
$
0.730
Reconciliation of GAAP net income to underlying net income:
Net income (loss) as reported
$
592,527
$
610,840
$
(20,316,892
)
$
9,772,285
Impairment - net of income tax
-
-
29,571,975
-
Underlying net income
$
592,527
$
610,840
$
9,255,083
$
9,772,285
Underlying earnings per share: basic and diluted
$
0.06
$
0.07
$
1.06
$
1.19
Weighted average number of common shares outstanding:
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.
RGC RESOURCES, INC. 
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