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RGC Resources, Inc. Reports Third Quarter Earnings

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RGC Resources, Inc. reports Q2 2023 earnings of $0.07 per share, an increase from Q2 2022. CEO optimistic about the resumption of the MVP project and new gas supply. Net loss for the twelve months ended June 30, 2023. Underlying net income increases due to utility margins and MVP investment.
Positive
  • RGC Resources, Inc. reports Q2 2023 earnings of $0.07 per share, an increase from Q2 2022
  • CEO optimistic about the resumption of the MVP project and new gas supply
  • Underlying net income increases due to utility margins and MVP investment
Negative
  • Net loss for the twelve months ended June 30, 2023

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   40,312,870  41,832,326   
Total Liabilities    193,818,271  193,160,869   
Stockholders’ Equity    100,947,813  105,582,624   
         
Total Liabilities and Stockholders’ Equity  $294,766,084 $298,743,493   


Contact:Paul Nester
 President and CEO
Telephone:540-777-3831

FAQ

What were the Q2 2023 earnings per share for RGC Resources, Inc.?

The Q2 2023 earnings per share for RGC Resources, Inc. were $0.07

What is the CEO optimistic about?

The CEO is optimistic about the resumption of the MVP project and new gas supply

Why did underlying net income increase?

Underlying net income increased due to utility margins and the MVP investment

RGC Resources Inc

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Utilities - Regulated Gas
Natural Gas Transmission & Distribution
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United States of America
ROANOKE