SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2000
Commission File Number 000-26591
RGC Resources, Inc.
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(Exact name of Registrant as Specified in its Charter)
VIRGINIA 54-1909697
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
519 Kimball Ave., N.E., Roanoke, VA 24016
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(Address of Principal Executive Offices) (Zip Code)
(540) 777-4427
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(Registrant's Telephone Number, Including Area Code)
None
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(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
Class Outstanding at March 31, 2000
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Common Stock, $5 Par Value 1,868,498
RGC RESOURCES, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
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UNAUDITED
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March 31, September 30,
ASSETS 2000 1999
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UTILITY PLANT:
Utility Plant in Service $76,617,369 $74,710,899
Accumulated Depreciation (27,638,450) (26,499,546)
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Utility Plant in Service, Net 48,978,919 48,211,353
Construction Work-In-Progress 1,344,366 1,425,918
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Utility Plant, Net 50,323,285 49,637,271
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NONUTILITY PROPERTY:
Nonutility Plant, net 15,799,112 13,463,990
Accumulated Depreciation (4,543,619) (3,984,241)
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Nonutility Property, Net 11,255,493 9,479,749
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CURRENT ASSETS:
Cash and Cash Equivalents 218,837 139,501
Accounts Receivable - (Less Allowance for Uncollectibles
of $727,282 and $202,652, Respectively) 11,565,267 6,306,117
Inventories 3,374,175 8,363,199
Prepaid Income Taxes - 430,992
Deferred Income Taxes 2,803,068 1,962,448
Purchased Gas Adjustments - -
Other 518,761 572,154
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Total Current Assets 18,480,108 17,774,411
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OTHER ASSETS 1,504,469 898,551
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TOTAL $81,563,355 $77,789,982
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See notes to condensed consolidated financial statements.
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2
RGC RESOURCES, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
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UNAUDITED
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March 31, September 30,
LIABILITIES 2000 1999
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CAPITALIZATION:
Stockholders' Equity:
Common Stock, $5 Par Value; Authorized,
10,000,000 Shares; Issued and Outstanding 1,868,498
and 1,832,771 Shares, Respectively $ 9,342,490 $ 9,163,855
Preferred Stock, no par, Authorized, 5,000,000 shares;
0 shares Issued and Outstanding in both 2000 and 1999 - -
Capital in Excess of Par Value 10,081,881 9,489,551
Retained Earnings 12,298,112 9,501,517
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Total Stockholders' Equity 31,722,483 28,154,923
Long-Term Debt (Less Current Maturities) 23,323,802 23,336,614
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Total Capitalization 55,046,285 51,491,537
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CURRENT LIABILITIES:
Current Maturities of Long-Term Debt 25,171 24,282
Notes Payable 6,210,000 6,363,000
Dividends Payable 514,312 495,055
Accounts Payable 6,222,305 9,206,173
Income Taxes Payable 1,940,719 -
Customers' Deposits 617,219 546,364
Accrued Expenses 3,811,569 4,605,376
Refunds From Suppliers - Due Customers 295,941 26,062
Purchased Gas Adjustments 2,454,663 684,155
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Total Current Liabilities 22,091,899 21,950,467
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DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 4,030,912 3,934,489
Deferred Investment Tax Credits 394,259 413,489
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Total Deferred Credits and Other Liabilities 4,425,171 4,347,978
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TOTAL $81,563,355 $77,789,982
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See notes to condensed consolidated financial statements.
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3
RGC RESOURCES, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS FOR THE THREE-MONTH AND SIX-MONTH PERIODS
ENDED MARCH 31, 2000 AND 1999
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UNAUDITED
- --------- Three Months Ended Six Months Ended
March 31, March 31,
2000 1999 2000 1999
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OPERATING REVENUES:
Gas utilities $20,980,798 $19,092,546 $36,258,404 $33,121,805
Propane operations 5,140,888 3,935,263 8,282,975 6,350,196
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Total operating revenues 26,121,686 23,027,809 44,541,379 39,472,001
------------ ----------- ------------ ------------
COST OF GAS:
Gas utilities 13,740,905 12,042,015 23,354,501 20,763,662
Propane operations 2,600,649 1,695,103 4,093,522 2,796,869
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Total cost of gas 16,341,554 13,737,118 27,448,023 23,560,531
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OPERATING MARGIN 9,780,132 9,290,691 17,093,356 15,911,470
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OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 1,941,248 1,767,255 3,904,630 3,728,083
Maintenance 269,113 183,067 575,580 491,788
Taxes - general 812,730 772,998 1,504,398 1,397,594
Taxes - income 1,013,290 1,071,466 1,493,772 1,476,720
Depreciation and amortization 814,894 767,390 1,629,788 1,521,108
Propane operations (including taxes -
income of $448,618, $416,342,
$609,405 and $525,986,
respectively) 1,684,795 1,525,555 2,994,869 2,648,503
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Total other operating expenses 6,536,070 6,087,731 12,103,037 11,263,796
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OPERATING EARNINGS 3,244,062 3,202,960 4,990,319 4,647,674
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OTHER INCOME (DEDUCTIONS):
Gas utilities 18,540 3,299 63,705 33,072
Propane and other operations, net 32,827 21,086 29,647 60,752
Taxes - income (18,899) (3,293) (34,111) (13,742)
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Total other income and deductions 32,468 21,092 59,241 80,082
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EARNINGS BEFORE INTEREST CHARGES 3,276,530 3,224,052 5,049,560 4,727,756
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INTEREST CHARGES:
Gas utilities:
Long-term debt 394,623 391,635 789,648 783,795
Other interest 92,828 72,446 212,235 167,406
Propane operations 125,372 69,034 224,805 128,859
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Total interest charges 612,823 533,115 1,226,688 1,080,060
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NET EARNINGS $2,663,707 $2,690,937 $3,822,872 $3,647,696
============ =========== ============ ============
BASIC EARNINGS PER COMMON SHARE $1.43 $1.49 $2.07 $2.02
============ =========== ============ ============
DILUTED EARNINGS PER COMMON SHARE $1.42 $1.48 $2.06 $2.02
============ =========== ============ ============
See notes to condensed consolidated financial statements.
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4
RGC RESOURCES, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH AND SIX-MONTH
PERIODS ENDED MARCH 31, 2000 AND 1999
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UNAUDITED
- --------- Three Months Ended Six Months Ended
March 31, March 31,
2000 1999 2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 2,663,707 $ 2,690,937 $ 3,822,872 $ 3,647,696
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,158,071 1,029,871 2,308,485 2,046,213
(Gain) loss on disposal of property 970 (857) 17,250 (2,509)
Deferred taxes and investment tax credits (421,787) (528,343) (763,427) (730,165)
Changes in assets and liabilities which
provided cash, exclusive of changes and
noncash transactions shown separately 3,411,766 5,524,480 389,210 1,226,979
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Net cash provided by operating activities 6,812,727 8,716,088 5,774,390 6,188,214
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant and nonutility property (2,062,787) (1,965,933) (4,308,650) (4,751,215)
Cost of removal of utility plant, net (14,230) (19,376) (19,120) (30,210)
Proceeds from disposal of equipment 12,061 6,300 18,502 21,809
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Net cash used in investing activities (2,064,956) (1,979,009) (4,309,268) (4,759,616)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of long-term debt and capital leases (512,599) - (518,506) -
Net repayments under lines of credit (4,397,000) (5,961,000) (153,000) (371,000)
Cash dividends paid (511,965) (487,353) (1,007,020) (963,493)
Proceeds from issuance of stock 178,547 193,979 292,740 368,478
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Net cash used in financing activities (5,243,017) (6,254,374) (1,385,786) (966,015)
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (495,246) 482,705 79,336 462,583
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 714,083 63,915 139,501 84,037
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CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 218,837 $ 546,620 $ 218,837 $ 546,620
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SUPPLEMENTAL INFORMATION:
Interest paid $ 491,304 $ 170,011 $ 1,416,696 $ 1,060,164
Income taxes paid (refunded), net $ 529,530 $ (100,613) $ 529,005 $ (108,959)
NONCASH TRANSACTIONS:
A capital lease obligation of $170,510 was incurred when the Company entered
into an equipment lease in February 1999.
The assets of a heating and air conditioning company were acquired in exchange
for 22,243 shares of stock valued at $478,225 in January 2000. Subsequent to
the acquisition, the Company retired $506,583 in debt associated with the
heating and air conditioning company
See notes to condensed consolidated financial statements.
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5
RGC RESOURCES, INC. AND SUBSIDIARIES
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CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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UNAUDITED
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1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly RGC Resources,
Inc.'s financial position as of March 31, 2000 and September 30, 1999, and
the results of its operations and its cash flows for the three and six
months ended March 31, 2000 and 1999. The results of operations for the six
months ended March 31, 2000 are not indicative of the results to be
expected for the fiscal year ending September 30, 2000.
2. The condensed consolidated financial statements and condensed notes are
presented as permitted by Form 10-Q and do not contain certain information
included in the Company's annual consolidated financial statements and
notes thereto.
3. Quarterly earnings are affected by the highly seasonal nature of the
business as variations in weather conditions generally result in greater
earnings during the winter months.
4. In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. In June
1999, the FASB issued SFAS No. 137 which deferred the effective date of
SFAS No 133 to all fiscal quarters of fiscal years beginning after June 15,
2000. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. It requires the recognition
of all derivative instruments as assets or liabilities in the Company's
balance sheet and measurement of those instruments at fair value. The
accounting treatment of changes in fair value is dependent upon whether or
not a derivative instrument is designated as a hedge and if so, the type of
hedge. The Company has entered from time to time into arrangements for
hedging the price of natural gas and propane gas for the purpose of
providing price stability during the winter months. The Company has not
fully analyzed the impact of the provisions of FAS No. 133 on the Company's
financial statements.
5. On January 14, 2000, the Company acquired Cox Heating and Cooling,
Incorporated, a provider of sales, installation and service for heating,
ventilation and air conditioning equipment in West Virginia. The
acquisition was accounted for by the purchase method of accounting with a
total purchase price of approximately $985,000 in stock and cash, with an
additional earn out provision. Goodwill will be amortized over a 15 year
period.
6. Earnings per common share are based on the weighted average number of
shares outstanding during each period. The weighted average number of
shares outstanding for the three-month and six-month periods ended March
31, 2000 were 1,864,579 and 1,850,197 compared to 1,809,707 and 1,805,149
for the same periods last year. The weighted average number of shares
outstanding assuming dilution were 1,870,731 and 1,856,377 for the
three-month and six-month periods ended March 31, 2000 compared to
1,813,547 and 1,808,522 for the same periods last year. The difference
between the weighted average number of shares for the calculation of basic
and diluted earnings per share relates to the dilutive effect associated
with the assumed issuance of stock options as calculated using the Treasury
Stock method.
7. Both Roanoke Gas Company and Bluefield Gas Company, subsidiaries of RGC
Resources, Inc., operated manufactured gas plants (MGPs) as a source of
fuel for lighting and heating until the early 1950's. A by-product of
operating MGPs was coal tar, and the potential exists for on-site tar waste
contaminants at the former plant sites. The extent of contaminants at these
sites, if any, is unknown at this time. An analysis
6
RGC RESOURCES, INC. AND SUBSIDIARIES
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CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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UNAUDITED
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at the Bluefield Gas Company site indicates some soil contamination. The
Company, with concurrence of legal counsel, does not believe any events
have occurred requiring regulatory reporting. Further, the Company has not
received any notices of violation or liabilities associated with
environmental regulations related to the MGP sites and is not aware of any
off-site contamination or pollution as a result of prior operations.
Therefore, the Company has no plans for subsurface remediation at the MGP
sites. Should the Company eventually be required to remediate either site,
the Company will pursue all prudent and reasonable means to recover any
related costs, including insurance claims and regulatory approval for rate
case recognition of expenses associated with any work required. A
stipulated rate case agreement between the Company and the West Virginia
Public Service Commission recognized the Company's right to defer MGP
clean-up costs, should any be incurred, and to seek rate relief for such
costs. If the Company eventually incurs costs associated with a required
clean-up of either MGP site, the Company anticipates recording a regulatory
asset for such clean-up costs to be recovered in future rates. Based on
anticipated regulatory actions and current practices, management believes
that any costs incurred related to this matter will not have a material
effect on the Company's financial condition or results of operations.
7
RGC RESOURCES, INC. AND SUBSIDIARIES
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
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OPERATIONS
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Results of Operations
Consolidated net earnings for the three-month period and six-month periods ended
March 31, 2000 were $2,663,707 and $3,822,872, respectively, compared to
$2,690,937 and $3,647,696 for the same period last year.
Total operating margin for the three months ended March 31, 2000 increased
$489,441, or 5.3 percent, over the same period last year due to increases in
base charges for natural gas customers and additional propane deliveries. Total
natural gas deliveries increased by 27,957 dekatherms ("DTH"), or less than 1
percent on weather that was approximately 5 percent warmer than the same period
last year. Most of the natural gas margin increase resulted from the increase in
customer base charges implemented last year as a result of the last rate filing
for Roanoke Gas Company. Propane deliveries increased by 159,748 gallons, or
approximately 4 percent, mainly due to customer growth. Propane deliveries were
impacted by an approximately 47 percent increase in the average price of propane
for the quarter. Propane prices have mirrored the price volatility of the
gasoline market, resulting in reduced demand during the period. Total propane
customer base is approximately 16 percent higher than last March. Two warm
winters have significantly affected the Company's margin: the quarter ended
March 31, 2000 was 11.6 percent warmer than normal, and the same quarter last
year was 6.2 percent warmer than normal.
Other operations expenses for the current quarter increased $173,993 from the
same period last year as the Company incurred higher contractor charges for its
gas pipeline location services and increased labor costs as a result of the
Company's reorganization last year and current diversification efforts.
Furthermore, maintenance expenses increased $86,046 as pipeline and system
maintenance returned to a more normal pattern after last year's reductions of
all nonessential maintenance and a focus on replacement instead of repair.
Maintenance activities still remain below normal levels as a result of the
continuing trend of warmer than normal winters, but safety issues continue to
receive full and complete attention. General taxes increased for the current
quarter compared to the same period last year with most of the increase
attributed to increases in the revenue-sensitive gross receipts taxes. Gas
utility revenues grew nearly 10 percent as a result of higher gas costs.
Continued growth in the Company's utility property, related to the addition of
new customers to the distribution system and the Company's renewal program for
replacement of older facilities, have increased depreciation expense over last
year's levels. Propane operations expense increased by $159,240 over the same
period last year due to depreciation, bad debt reserves and income taxes. Gross
propane plant increased nearly 22 percent leading to the increase in
depreciation, while a 30 percent increase in gross propane revenues resulted in
a corresponding increase in bad debt reserves. The increase in income taxes
follows the $145,000 increase in pretax income for the quarter. Interest charges
increased $79,708 from the same period last year due to an increase of nearly
$3,000,000 in the Company's average daily debt balance and a slight increase in
the average interest rates. The higher average debt balance resulted from growth
in both the utility and non-utility plant assets and the recent acquisition of
Cox Heating and Cooling, Incorporated, discussed in more detail below.
For the six-month period ended March 31, 2000, total operating margin increased
$1,181,886 or 7.4 percent, from the same period last year. The natural gas
margin increased $545,760 as natural gas deliveries grew by 176,330 DTH, or 2.3
percent, from the same period last year, on weather that was 2.7 percent warmer.
The remainder of the natural gas increase derived from the increase in customer
base charges as discussed above. During the same period, propane margins
increased $636,126 on 445,319 additional gallons, or 6.8 percent. An increase in
the average unit margin realized on propane sales accounted for the remainder of
the higher propane margin.
8
RGC RESOURCES, INC. AND SUBSIDIARIES
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
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OPERATIONS
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For the six-month period ended March 31, 2000, other operations and maintenance
expenses increased $260,339 from the same period last year. These increases
occurred in the second quarter and are discussed above. General taxes increased
$106,804 from the same period last year as revenue-sensitive taxes increased on
higher natural gas revenues and property taxes increased on greater utility
plant balances. Likewise, depreciation increased $108,680 on the greater utility
plant balances. Propane operations expense increased by $346,366 compared to the
same period last year. The increase in propane operations expense corresponds to
increases in depreciation, bad debt expense and income taxes as discussed in the
above quarterly results. Interest charges for the six-month period ended March
31, 2000 as compared to the same period last year, are consistent with
differences defined above for the quarter.
The six-month earnings presented herein should not be considered as reflective
of the Company's consolidated financial results for the fiscal year ending
September 30, 2000. The total revenues during the first six months reflect
higher billings due to the weather sensitive nature of the gas business.
Improvement or decline in earnings depends primarily on temperature and weather
conditions during the remaining months.
Regulatory Affairs
The Virginia State Corporation Commission authorized Roanoke Gas Company to
convert its billing method from volumetric to thermal value billing beginning in
October 1999. Therm billing has become the standard throughout the natural gas
industry because it provides consistent billing units as gas flows from the
production well to the individual customer's meter. Therm billing allows Roanoke
Gas Company to bill customers for the energy value consumed and helps to
eliminate fluctuations caused by the chemical makeup of the gas supply. As a
result of the change to therm billing for Roanoke Gas Company, RGC Resources,
Inc. began reporting natural gas sales and purchases activities in DTH. All
prior year sales data has been restated from MCFs to DTHs for purposes of
providing comparability between years.
Acquisitions
On January 14, 2000, RGC Resources, Inc., through its wholly owned subsidiary
RGC Ventures, Inc., acquired Cox Heating and Cooling, Incorporated, a provider
of sales, installation and service for heating, ventilation and air conditioning
equipment in West Virginia. The newly-acquired entity will do business as
Highland/Cox Heating and Cooling, Incorporated. The acquisition will be
accounted for by the purchase method of accounting with a total purchase price
of approximately $985,000 in stock and cash, with an additional earn out
provision. Goodwill will be amortized over a 15 year period.
RGC Resources, Inc. continues to look for new business opportunities either
through acquisition of existing businesses or the start-up of new operations
which will fit into the Company's core business of energy distribution or serve
to complement the Company's core business and provide diversification into other
areas which are less weather sensitive.
9
RGC RESOURCES, INC. AND SUBSIDIARIES
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
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OPERATIONS
- ----------
Environmental Issues
Both Roanoke Gas Company and Bluefield Gas Company, subsidiaries of RGC
Resources, Inc., operated manufactured gas plants (MGPs) as a source of fuel for
lighting and heating until the early 1950's. A by-product of operating MGPs was
coal tar, and the potential exists for on-site tar waste contaminants at the
former plant sites. The extent of contaminants at these sites, if any, is
unknown at this time. An analysis at the Bluefield Gas Company site indicates
some soil contamination. The Company, with concurrence of legal counsel, does
not believe any events have occurred requiring regulatory reporting. Further,
the Company has not received any notices of violation or liabilities associated
with environmental regulations related to the MGP sites and is not aware of any
off-site contamination or pollution as a result of prior operations. Therefore,
the Company has no plans for subsurface remediation at the MGP sites. Should the
Company eventually be required to remediate either site, the Company will pursue
all prudent and reasonable means to recover any related costs, including
insurance claims and regulatory approval for rate case recognition of expenses
associated with any work required. A stipulated rate case agreement between the
Company and the West Virginia Public Service Commission recognized the Company's
right to defer MGP clean-up costs, should any be incurred, and to seek rate
relief for such costs. If the Company eventually incurs costs associated with a
required clean-up of either MGP site, the Company anticipates recording a
regulatory asset for such clean-up costs to be recovered in future rates. Based
on anticipated regulatory actions and current practices, management believes
that any costs incurred related to this matter will not have a material effect
on the Company's financial condition or results of operations.
Forward-Looking Statements
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. The risks and uncertainties that may affect the
operations, performance, development and results of the Company's business
include the following ones: (i) temporary rate freezes in both regulated
jurisdictions; (ii) failure to earn on a consistent basis an adequate return on
invested capital; (iii) increasing expenses and labor costs and labor
availability; (iv) price competition from alternative fuels; (v) volatility in
the prices of natural gas and propane; (vi) uncertainty in the projected rate of
growth of natural gas and propane requirements in the Company's service area;
(vii) general economic conditions both locally and nationally; (viii) increases
in interest rates; and (ix) developments in electricity and natural gas
deregulation and associated industry restructuring. In addition, the Company's
business is seasonal in character and strongly influenced by weather conditions.
Substantial changes in winter heating degree days from normal or mean can have
significant short-term impacts on revenues and gross margin.
10
Part II - Other Information
Item 2. Changes in Securities
Pursuant to the RGC Resources Restricted Stock Plan for Outside
Directors (the "Restricted Stock Plan"), 40% of the monthly retainer fee
of each non-employee director of the Company is paid in shares of
unregistered common stock and is subject to vesting and transferability
restrictions ("restricted stock"). A participant can, subject to
approval of the Board, elect to receive up to 100% of his retainer fee
in restricted stock. The number of shares of restricted stock is
calculated each month based on the closing sales price of the Company's
common stock on the Nasdaq-NMS on the first day of the month. The shares
of restricted stock are issued in reliance on Section 3(a)(11) and
Section 4(2) exemptions under the Securities Act of 1993 (the "Act") and
will vest only in the case of the participant's death, disability,
retirement or in the event of a change in control of the Company. Shares
of restricted stock will be forfeited to the Company by the
participant's voluntary resignation during his term on the Board or
removal for cause as a director. During the quarter ended March 31,
2000, the Company issued a total of 367 shares of restricted stock
pursuant to the Restricted Stock Plan as follows:
Investment Date Price Number of Shares
--------------- ----- ----------------
1-1-2000 $22.000 127.272
2-1-2000 $22.500 115.555
3-1-2000 $21.000 123.812
On March 1, 2000, the Company issued 417.179 shares of its common stock
as bonuses to certain employees and management personnel as rewards for
perfect attendance and performance. The 417.179 shares were not issued
in a transaction constituting a "sale" within the meaning of Section
2(3) of the Act.
Item 4. Submission of Matters to a vote of Security Holders
On January 24, 2000, the Company held its Annual Meeting of
Shareholders. At the meeting, Frank T. Ellett and Frank A. Farmer, Jr.
were each reelected as Class C directors until the Annual Meeting of
Shareholders to be held in 2003. For the Class C directors, 1,463,728
votes were cast in favor, and 6,054 votes were withheld. There were no
broker non-votes.
The shareholders also approved an amendment to the RGC Resources, Inc.
Key Employee Stock Option Plan increasing the number of shares of common
stock authorized for issuance by 50,000 shares. 1,400,814 votes were
cast in favor, 46,802 were voted against, and 22,165 abstained. There
were no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months
ended March 31, 2000.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
RGC Resources, Inc.
Date: May 12, 2000 By: s/Roger L. Baumgardner
---------------------------
Roger L. Baumgardner
Vice President/Secretary and
Treasurer
12