GlobeNewswire

RGC Resources, Inc. Reports 2023 Earnings

ROANOKE, Va., Nov. 20, 2023 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ: RGCO) announced consolidated Company earnings of $11,299,282, or $1.14 per share, for the fiscal year ended September 30, 2023, compared to a net loss of $31,732,602, or $3.48 per share, for the fiscal year ended September 30, 2022. The 2022 net loss reflected 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 in 2022, a non-GAAP measure that excludes the impairment, was $9,178,942, or $1.01 per share, compared to the $11,299,282, or $1.14 per share, for fiscal 2023.

Roanoke Gas continued executing its strategy of utility infrastructure investment to increase system reliability and drive customer growth and earnings. CEO Paul Nester stated, “Higher utility margins and the start-up of the renewable natural gas facility in March drove utility income growth. We were also excited to see construction of the MVP resume this year and look forward to completion of the pipeline in early 2024. Additionally, the overall earnings improvement included the increased non-cash MVP earnings offset by higher borrowing costs in the Midstream subsidiary.”

Net income for the quarter ended September 30, 2023 was $1,014,175, or $0.10 per share, compared to a net loss of $11,415,229, or $1.16 per share, for the quarter ended September 30, 2022. The fourth quarter of 2022 included an after-tax, non-cash MVP impairment charge of approximately $11.3 million. Underlying net loss for the fourth quarter of 2022, which excludes this impairment, was $75,660 or $0.01 per share. The significant increase in 2023 earnings reflected non-cash MVP income resulting from the resumption of construction in June of 2023.

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 revenue 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, expectations regarding the MVP construction and operation, and regulatory and legal challenges along with risks included under Item 1-A in the Company’s fiscal 2022 Form10-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,
  2023 2022 2023 2022
         
Operating revenues $12,467,528  $14,112,560  $97,439,765  $84,165,222 
Operating expenses  11,723,420   13,657,868   79,761,285   69,248,547 
Operating income  744,108   454,692   17,678,480   14,916,675 
Equity in earnings of unconsolidated affiliate  1,561,409   1,410   2,084,990   73,327 
Impairment of unconsolidated affiliates -   (15,270,090)  -   (55,092,303)
Other income, net  443,373   568,893   646,528   1,456,983 
Interest expense  1,430,213   1,187,015   5,618,805   4,497,929 
Income (loss) before income taxes  1,318,677   (15,432,110)  14,791,193   (43,143,247)
Income tax expense (benefit)  304,502   (4,016,881)  3,491,911   (11,410,645)
         
Net income (loss) $1,014,175  $(11,415,229) $11,299,282  $(31,732,602)
         
Net earnings (loss) per share of common stock:        
Basic $0.10  $(1.16) $1.14  $(3.48)
Diluted $0.10  $(1.16) $1.14  $(3.48)
         
Cash dividends per common share$0.1975  $0.1950  $0.7900  $0.7800 
         
         
Reconciliation of GAAP net income to underlying net income:      
Net income (loss) as reported$1,014,175  $(11,415,229) $11,299,282  $(31,732,602)
Impairment - net of income tax -   11,339,569   -   40,911,544 
Underlying net income (loss)$1,014,175  $(75,660) $11,299,282  $9,178,942 
         
Underlying earnings (loss) per share: basic and diluted $0.10  $(0.01) $1.14  $1.01 
         
         
Weighted average number of common shares outstanding:      
Basic  10,009,491   9,815,028   9,922,701   9,122,678 
Diluted  10,011,039   9,815,028   9,927,157   9,122,678 
         
         
Condensed Consolidated Balance Sheets  
(Unaudited)  
         
    September 30,  
Assets   2023 2022  
Current assets   $26,795,262  $35,548,319   
Utility property, net    247,583,551   229,861,074   
Other non-current assets    29,350,527   24,899,850   
         
Total Assets   $303,729,340  $290,309,243   
         
Liabilities and Stockholders' Equity       
Current liabilities   $32,918,787  $22,315,310   
Long-term debt, net    125,844,728   135,695,289   
Deferred credits and other non-current liabilities   44,233,200   39,207,988   
Total Liabilities    202,996,715   197,218,587   
Stockholders' Equity    100,732,625   93,090,656   
         
Total Liabilities and Stockholders' Equity  $303,729,340  $290,309,243   
         


   
Contact: Timothy J. Mulvaney
Interim CFO and Treasurer
Telephone: (540) 777-3997
   

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