RGC Resources, Inc. Reports 2022 Earnings

Roanoke, Virginia, UNITED STATES


ROANOKE, Va., Nov. 16, 2022 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ: RGCO) announced a consolidated Company net loss of $31,732,602 or $3.48 per share for the fiscal year ended September 30, 2022. The net loss reflects total after-tax impairment charges of approximately $40.9 million related to RGC Midstream, LLC’s (“Midstream”) investment in the Mountain Valley Pipeline, LLC (“MVP”). Underlying net income, a non-GAAP measure that excludes the impairment, was $9,178,942 or $1.01 per share, which compares to underlying earnings of $10,102,062 or $1.22 per share for the year ended September 30, 2021.

Roanoke Gas continued executing its strategy of utility investment that increases system reliability and drives customer growth and earnings. CEO Paul Nester stated, “Utility margins increased $1.7 million, or 4%, on SAVE infrastructure replacement programs, customer expansion and higher industrial volumes, driving 4% Roanoke Gas net income growth. The overall underlying earnings decline was attributable to the lower non-cash MVP earnings and borrowing costs in the Midstream subsidiary.”

Net loss for the quarter ended September 30, 2022 was $11,415,229 or $1.16 per share, which includes an after-tax, non-cash MVP impairment charge of approximately $11.3 million. Underlying net loss for the fourth quarter, which excludes this impairment, was $75,660 or $0.01 per share, down from the fourth quarter 2021. 2022 fourth quarter results reflect increased returns from the SAVE infrastructure replacement program, higher industrial volumes and other income as compared to 2021 fourth quarter results, which included the recognition of $859,000 of American Rescue Plan Act funds earmarked for customers with arrearage balances.

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 after-tax impairment charges 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.

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 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,
 2022 2021 2022 2021
        
Operating revenues$14,112,560  $13,355,254  $84,165,222  $75,174,779 
Operating expenses 13,657,868   12,800,091   69,248,547   60,396,470 
Operating income 454,692   555,163   14,916,675   14,778,309 
Equity in earnings of unconsolidated affiliate 1,410   180,804   73,327   1,667,554 
Impairment of unconsolidated affiliates (15,270,090)  -   (55,092,303)  - 
Other income, net 568,893   164,386   1,456,983   912,146 
Interest expense 1,187,015   1,024,054   4,497,929   4,051,885 
Income (loss) before income taxes (15,432,110)  (123,701)  (43,143,247)  13,306,124 
Income tax expense (benefit) (4,016,881)  (124,182)  (11,410,645)  3,204,062 
        
Net income (loss)$(11,415,229) $481  $(31,732,602) $10,102,062 
        
Net earnings (loss) per share of common stock:       
Basic$(1.16) $-  $(3.48) $1.22 
Diluted$(1.16) $-  $(3.48) $1.22 
        
Cash dividends per common share$0.195  $0.185  $0.780  $0.740 
        
        
Reconciliation of GAAP net income to underlying net income:      
Net income (loss) as reported$(11,415,229) $481  $(31,732,602) $10,102,062 
Impairment - net of income tax 11,339,569   -   40,911,544   - 
Underlying net income (loss)$(75,660) $481  $9,178,942  $10,102,062 
        
Underlying earnings (loss) per share: basic and diluted$(0.01) $-  $1.01  $1.22 
        
        
Weighted average number of common shares outstanding:      
Basic 9,815,028   8,360,369   9,122,678   8,251,802 
Diluted 9,815,028   8,372,920   9,122,678   8,264,904 


Condensed Consolidated Balance Sheets
(Unaudited)
    
 September 30,
Assets2022 2021
Current assets$35,548,319  $25,143,855 
Utility property, net 229,861,074   211,649,684 
Other non-current assets 24,899,850   73,315,654 
    
Total Assets$290,309,243  $310,109,193 
    
Liabilities and Stockholders' Equity   
Current liabilities$22,315,310  $26,013,532 
Long-term debt, net 135,695,289   133,471,427 
Deferred credits and other non-current liabilities 39,207,988   50,922,525 
Total Liabilities 197,218,587   210,407,484 
Stockholders' Equity 93,090,656   99,701,709 
    
Total Liabilities and Stockholders' Equity$290,309,243  $310,109,193 

 

Contact:Jason A. Field
 Vice President and CFO
Telephone: (540) 777-3997