RGC Resources, Inc. Reports 2021 Earnings

Rhea-AI Summary

RGC Resources, Inc. (NASDAQ: RGCO) reported consolidated earnings of $10,102,062 or $1.22 per share for the fiscal year ending September 30, 2021, down from $10,564,534 or $1.30 per share in 2020. The earnings decrease was mainly due to lower non-cash Mountain Valley Pipeline earnings. However, improved utility margins, customer growth, and a 10.5% reduction in operating expenses positively impacted the results. The fourth quarter broke even, benefiting from $859,000 in American Rescue Plan Act funds for customers in arrears.

Positive

• Improved utility margins due to infrastructure replacement programs.
• Customer growth contributing to earnings stability.
• Operating and maintenance expenses decreased by $1.7 million or 10.5%.

Negative

• Earnings decreased from $10,564,534 in 2020 to $10,102,062 in 2021.
• Significantly lower non-cash earnings from the Mountain Valley Pipeline impacted overall earnings.

ROANOKE, Va., Nov. 15, 2021 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ: RGCO) announced consolidated Company earnings of $10,102,062 or $1.22 per share for the fiscal year ended September 30, 2021. This compares to earnings of $10,564,534 or $1.30 per share for the year ended September 30, 2020. CEO Paul Nester stated, “Our 2021 earnings reflect improved utility margins associated with our infrastructure replacement programs, customer growth and reduced operating and maintenance expenses. Operating and maintenance expenses, net of gas costs, declined $1.7 million or 10.5% due to the accelerated recovery of certain regulatory assets and one-time maintenance investments incurred in 2020 as well as much lower bad debt expense in 2021. The overall earnings decline was primarily attributable to significantly lower non-cash Mountain Valley Pipeline earnings.”

Fourth quarter results, particularly bad debt expense, were favorably impacted by the $859,000 of American Rescue Plan Act (“ARPA”) funds earmarked for customers with arrearage balances and scheduled for receipt in the first quarter of fiscal 2022. Accordingly, the Company broke even for the quarter ending September 30, 2021 compared to a net loss of $329,296, or $0.04 per share, for the quarter ended September 30, 2020.

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.

From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. 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 the anticipated results or other expectations expressed in the Company’s forward-looking statements. Past performance is not necessarily a predictor of future results.

Summary financial statements for the fourth quarter and twelve months are as follows:

RGC Resources, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
		Three Months Ended								Twelve Months Ended
		September 30,								September 30,
			2021				2020				2021			2020
Operating revenues		$	13,355,254			$	9,780,289			$	75,174,779		$	63,075,391
Operating expenses			12,800,091				10,679,365				60,396,470			50,557,209
Operating income (loss)			555,163				(899,076	)			14,778,309			12,518,182
Equity in earnings of unconsolidated affiliate			180,804				1,326,621				1,667,554			4,814,874
Other income, net			164,386				108,205				912,146			636,296
Interest expense			1,024,054				989,477				4,051,885			4,099,158
Income (loss) before income taxes			(123,701	)			(453,727	)			13,306,124			13,870,194
Income tax expense (benefit)			(124,182	)			(124,431	)			3,204,062			3,305,660
Net income (loss)		$	481			$	(329,296	)		$	10,102,062		$	10,564,534
Net earnings (loss) per share of common stock:
Basic		$	-			$	(0.04	)		$	1.22		$	1.30
Diluted		$	-			$	(0.04	)		$	1.22		$	1.30
Cash dividends per common share		$	0.185			$	0.175			$	0.740		$	0.700
Weighted average number of common shares outstanding:
Basic			8,360,369				8,156,023				8,251,802			8,125,938
Diluted			8,372,920				8,156,023				8,264,904			8,146,666
Condensed Consolidated Balance Sheets
(Unaudited)
						September 30,
Assets							2021				2020
Current assets						$	25,143,855			$	14,436,561
Utility plant, net							211,649,684				198,445,093
Other assets							73,315,654				68,797,853
Total Assets						$	310,109,193			$	281,679,507
Liabilities and Stockholders' Equity
Current liabilities						$	26,013,532			$	16,570,742
Long-term debt, net							133,471,427				123,819,631
Deferred credits and other liabilities							50,922,525				52,401,157
Total Liabilities							210,407,484				192,791,530
Stockholders' Equity							99,701,709				88,887,977
Total Liabilities and Stockholders' Equity						$	310,109,193			$	281,679,507

Contact:
Paul W. Nester
President and CEO
Telephone: 540-777-3837

FAQ

What are RGC Resources' earnings for fiscal year 2021?

RGC Resources reported earnings of $10,102,062 or $1.22 per share for the fiscal year 2021.

How did RGC Resources perform in the fourth quarter of 2021?

RGC Resources broke even in the fourth quarter, compared to a net loss of $329,296 in the same period in 2020.

What factors contributed to RGC Resources' earnings decline in 2021?

The earnings decline was largely due to significantly lower non-cash earnings from the Mountain Valley Pipeline.

What improvements did RGC Resources see in operating expenses?

Operating and maintenance expenses were reduced by $1.7 million or 10.5% due to regulatory asset recovery and lower bad debt expense.