RGC Resources, Inc. Reports Second Quarter Earnings

RGC Resources, Inc. Reports Second Quarter Earnings

ROANOKE, Va., May 05, 2023 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ: RGCO) announced consolidated Company earnings of $6,341,886, or $0.64 per share, for the quarter ended March 31, 2023, compared to a net loss of $24,494,429, or $2.89 per share, for the quarter ended March 31, 2022. Underlying earnings of $6,341,886, a non-GAAP measure that excludes the after-tax impairments recorded in fiscal 2022, for the current fiscal quarter represents a 25% increase over the prior year second fiscal quarter underlying earnings of $5,077,546. CEO Paul Nester stated, “We experienced strong underlying earnings growth from improved utility margins associated with customer growth and implementation of the new non-gas rates.”

Net loss for the twelve months ended March 31, 2023 was $1,224,411, or $0.12 per share. Underlying net income for the twelve months ended March 31, 2023 was $10,115,158, or $1.03 per share, compared to $9,273,396, or $1.11 per share, for the twelve months ended March 31, 2022. Nester attributed the underlying net income increase to improved utility margins associated with infrastructure replacement programs, customer growth and the implementation of the new non-gas rates. The underlying earnings per share change is 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 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 March 31, 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 second quarter and twelve months are as follows:

RGC Resources, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
        
 Three Months Ended Twelve Months Ended
 March 31, March 31,
  2023   2022   2023   2022 
        
Operating revenues$38,029,657  $29,529,683  $102,684,451  $80,196,863 
Operating expenses 28,438,235   22,086,295   85,453,680   65,277,556 
Operating income 9,591,422   7,443,388   17,230,771   14,919,307 
Equity in earnings (loss) of unconsolidated affiliate 2,867   (445)  5,744   386,350 
Impairment of unconsolidated affiliates -   (39,822,213)  (15,270,090)  (39,822,213)
Other income, net 121,824   344,510   986,464   961,521 
Interest expense 1,395,862   1,103,844   5,054,255   4,232,992 
Income (loss) before income taxes 8,320,251   (33,138,604)  (2,101,366)  (27,788,027)
Income tax expense (benefit) 1,978,365   (8,644,175)  (876,955)  (7,489,448)
        
Net income (loss)$6,341,886  $(24,494,429) $(1,224,411) $(20,298,579)
        
Net earnings (loss) per share of common stock:       
Basic$0.64  $(2.89) $(0.12) $(2.42)
Diluted$0.64  $(2.89) $(0.12) $(2.42)
        
Cash dividends per common share$0.1975  $0.1950  $0.7850  $0.7600 
        
        
Reconciliation of GAAP net income to underlying net income:      
Net income (loss) as reported$6,341,886  $(24,494,429) $(1,224,411) $(20,298,579)
Impairment - net of income tax -   29,571,975   11,339,569   29,571,975 
Underlying net income$6,341,886  $5,077,546  $10,115,158  $9,273,396 
        
Underlying earnings per share: basic and diluted$0.64  $0.60  $1.03  $1.11 
        
        
        
Weighted average number of common shares outstanding:      
Basic 9,911,202   8,486,518   9,838,497   8,372,548 
Diluted 9,918,708   8,486,518   9,838,497   8,372,548 
        


Condensed Consolidated Balance Sheets
(Unaudited)
    
 March 31,
Assets 2023   2022 
Current assets$32,360,035  $32,520,634 
Utility property, net 239,285,862   218,709,630 
Other non-current assets 24,806,325   37,128,221 
    
Total Assets$296,452,222  $288,358,485 
    
Liabilities and Stockholders' Equity   
Current liabilities$43,632,463  $36,576,652 
Long-term debt, net 112,762,045   104,841,078 
Deferred credits and other non-current liabilities 39,779,306   41,478,026 
Total Liabilities 196,173,814   182,895,756 
Stockholders' Equity 100,278,408   105,462,729 
    
Total Liabilities and Stockholders' Equity$296,452,222  $288,358,485 
        


Contact:   Jason A. Field
VP, CFO
Telephone: 540-777-3997