RGC Resources, Inc. Second Quarter Financial Results


ROANOKE, Va., May 8, 2008 (PRIME NEWSWIRE) -- RGC Resources, Inc. (Nasdaq:RGCO) announced consolidated Company earnings of $2,418,609 or $1.10 per average share outstanding on continuing and total operations for the quarter ended March 31, 2008. This compares to consolidated earnings of $2,286,035 or $1.06 per average share outstanding on continuing operations and earnings of $2,592,704 or $1.20 per average share outstanding on total operations for the quarter ended March 31, 2007. Chairman, President and CEO John Williamson attributed the improvement in earnings on continuing operations to improvement in gross margins and lower operating expenses.

Earnings per share for the twelve months ending March 31, 2008 were $1.81 on continuing operations and $1.59 on total operations compared to $1.74 on continuing operations and $1.95 on total operations for the twelve months ended March 31, 2007. Earnings on continuing operations for the twelve months ended March 31, 2008 were positively impacted by improved margins compared to the prior period.

RGC Resources, Inc. provides energy and related products and services to customers in Virginia through its operating subsidiaries Roanoke Gas Company, Diversified Energy Company and RGC Ventures of Virginia, Inc.

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.

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



               RGC Resources, Inc. and Subsidiaries
 Condensed Consolidated Statements of Income and Comprehensive Income
                           (Unaudited)

                       Three Months Ended      Twelve Months Ended
                           March 31,                 March 31,
                       2008         2007         2008         2007
                   ------------------------  ------------------------

 Revenues          $39,564,378  $37,572,113  $91,216,830  $86,708,076
 Cost of sales      30,911,562   29,031,997   65,756,959   62,313,414
                   -----------  -----------  -----------  -----------
 Gross margin        8,652,816    8,540,116   25,459,871   24,394,662
 Other operating
  expenses           4,221,079    4,372,255   17,137,710   16,590,125
 Interest expense      518,029      481,375    2,007,110    1,908,855
                   -----------  -----------  -----------  -----------
 Income from
  continuing
  operations
  before income
  taxes              3,913,708    3,686,486    6,315,051    5,895,682
 Income tax expense
  from continuing
  operations         1,495,099    1,400,451    2,362,453    2,165,357
                   -----------  -----------  -----------  -----------
 Net income from
  continuing
  operations         2,418,609    2,286,035    3,952,598    3,730,325
 Net income (loss)
  from discontinued
  operations, net
  of income taxes           --      306,669     (476,681)     450,169
                   -----------  -----------  -----------  -----------
 Net income          2,418,609    2,592,704    3,475,917    4,180,494
 Other
  comprehensive
  loss, net of tax    (447,040)     (23,762)    (820,920)     (90,722)
                   -----------  -----------  -----------  -----------
 Comprehensive
  income           $ 1,971,569  $ 2,568,942  $ 2,654,997  $ 4,089,772
                   ===========  ===========  ===========  ===========

 Basic earnings per
  share of
  common stock:
  Income from
   continuing
   operations      $      1.10  $      1.06  $      1.81  $      1.74
  Discontinued
   operations               --         0.14        (0.22)        0.21
                   -----------  -----------  -----------  -----------
  Net income       $      1.10  $      1.20  $      1.59  $      1.95
                   ===========  ===========  ===========  ===========

 Diluted earnings
  per share of
  common stock:
  Income from
   continuing
   operations      $      1.10  $      1.06  $      1.80  $      1.73
  Discontinued
   operations               --         0.14        (0.22)        0.21
                   -----------  -----------  -----------  -----------
  Net income       $      1.10  $      1.20  $      1.58  $      1.94
                   ===========  ===========  ===========  ===========

 Cash dividends
  per common share $    0.3125  $    0.3050  $    1.2350  $    1.2100
                   ===========  ===========  ===========    =========

 Weighted average
  number of common
  shares
  outstanding:
  Basic              2,198,624    2,157,532    2,183,930    2,142,079
  Diluted            2,208,143    2,168,174    2,194,532    2,152,274



               Condensed Consolidated Balance Sheets
                            (Unaudited)

                                                   March 31,
                                               2008          2007
 Assets                                    ------------  ------------
 Current assets                            $ 38,213,104  $ 41,053,603
 Total property, plant and equipment, net    74,118,513    71,365,305
 Other assets                                 3,474,118       387,987
                                           ------------  ------------

  Total Assets                             $115,805,735  $112,806,895
                                           ============  ============

 Liabilities and Stockholders' Equity
 Current liabilities                       $ 30,212,434  $ 27,217,693
 Long-term debt                              23,000,000    28,000,000
 Deferred credits and other liabilities      18,027,180    13,629,013
                                           ------------  ------------
   Total Liabilities                         71,239,614    68,846,706
 Stockholders' Equity                        44,566,121    43,960,189
                                           ------------  ------------

  Total Liabilities and
   Stockholders' Equity                    $115,805,735  $112,806,895
                                           ============  ============


            

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