EX-99.1 2 exhibit991q12018.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
NEWS RELEASE
RGC RESOURCES, INC.
 
Release Date:
  
February 5, 2018
Contact:
  
Paul W. Nester
 
  
Vice President and CFO
Telephone:
  
540-777-3837


RGC RESOURCES, INC. REPORTS
FIRST QUARTER EARNINGS


ROANOKE, Va. (February 5, 2018)--RGC Resources, Inc. (NASDAQ: RGCO) announced consolidated Company earnings of $2,059,462 or $0.28 per share for the quarter ended December 31, 2017. This includes a one-time, non-cash charge of $208,288 resulting from the tax reform law and a $462,442 refund reserve for excess revenues billed to Roanoke Gas customers attributable to the corresponding reduction in income tax expense. This compares to consolidated earnings of $2,232,218 or $0.31 per share for the quarter ended December 31, 2016.

Earnings for the twelve months ending December 31, 2017 were $6,060,109 or $0.84 per share compared to$6,116,294 or $0.85 per share for the twelve months ended December 31, 2016. Excluding the one-time charge, twelve-month earnings would have increased by 2.5%. CEO John D’Orazio attributed the increase in to improved utility margins associated with infrastructure replacement programs, increased gas volumes attributed to customer growth, and the investment in the MVP.

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.

Net income for the three months ended December 31, 2017 is not indicative of the results to be expected for the fiscal year ending September 30, 2018 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. Past performance is not necessarily a predictor of future results.

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







RGC Resources, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
 
 
 
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2017
 
2016
 
2017
 
2016
Revenues
 
$
18,756,051

 
$
18,788,585

 
$
62,264,336

 
$
61,841,820

Cost of sales
 
9,682,616

 
9,397,680

 
29,772,649

 
29,624,117

Gross margin
 
9,073,435

 
9,390,905

 
32,491,687

 
32,217,703

Equity in earnings of MVP
 
148,811

 
84,540

 
485,917

 
215,867

Other operating expenses, net
 
5,414,443

 
5,412,342

 
21,277,395

 
20,776,812

Interest expense
 
612,645

 
458,521

 
2,071,378

 
1,686,486

Income before income taxes
 
3,195,158

 
3,604,582

 
9,628,831

 
9,970,272

Income tax expense
 
1,135,696

 
1,372,364

 
3,568,722

 
3,853,978

Net income
 
$
2,059,462

 
$
2,232,218

 
$
6,060,109

 
$
6,116,294

Net earnings per share of common stock:
 
 
 
 
 
 
 
 
Basic
 
$
0.28

 
$
0.31

 
$
0.84

 
$
0.85

Diluted
 
$
0.28

 
$
0.31

 
$
0.83

 
$
0.85

Cash dividends per common share
 
$
0.1550

 
$
0.1450

 
$
0.5900

 
$
0.5500

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
7,248,094

 
7,194,594

 
7,232,171

 
7,168,049

Diluted
 
7,296,180

 
7,210,547

 
7,276,772

 
7,180,686


Condensed Consolidated Balance Sheets
(Unaudited)
 
 
 
December 31,
Assets
 
2017
 
2016
Current assets
 
$
21,881,630

 
$
21,453,170

Total property, plant and equipment, net
 
151,909,137

 
135,780,493

Other assets
 
22,490,552

 
18,728,080

Total Assets
 
$
196,281,319

 
$
175,961,743

Liabilities and Stockholders’ Equity
 
 
 
 
Current liabilities
 
$
17,876,580

 
$
28,756,950

Long-term debt
 
69,793,783

 
41,135,426

Deferred credits and other liabilities
 
47,309,921

 
48,788,676

Total Liabilities
 
134,980,284

 
118,681,052

Stockholders’ Equity
 
61,301,035

 
57,280,691

Total Liabilities and Stockholders’ Equity
 
$
196,281,319

 
$
175,961,743