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, 1996
Commission File No. 0-367
ROANOKE GAS COMPANY
_________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
VIRGINIA 54-0359895
_________________________________________________________________
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification
No.)
519 Kimball Ave., N.E., Roanoke, VA 24016
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(540) 983-3800
________________________________________________________________
(Registrant's Telephone Number, Including Area Code)
None
________________________________________________________________
(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, 1996
__________________________ ______________________________
Common Stock, $5 Par Value 1,455,177 Shares
<PAGE>
<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND SEPTEMBER 30, 1995
- -----------------------------------------------------------------------------------------------------
UNAUDITED
- ---------
March 31, September 30,
1996 1995
--------- -------------
ASSETS
- ------
<S> <C> <C>
UTILITY PLANT:
In service $58,497,916 $56,834,174
Accumulated depreciation 20,427,445 19,262,416
----------- -----------
In service, net 38,070,471 37,571,758
Construction work-in-progress 689,438 535,107
----------- -----------
Utility plant, net 38,759,909 38,106,865
----------- -----------
NONUTILITY PROPERTY:
Propane 4,076,594 3,781,633
Accumulated depreciation 1,910,447 1,742,342
----------- -----------
Nonutility property, net 2,166,147 2,039,291
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents 584,309 502,895
Accounts receivable - (less allowance for
doubtful accounts of $683,420 and $171,947,
respectively) 11,863,416 3,463,104
Inventories 2,423,051 5,347,994
Deferred income taxes 1,026,362 967,732
Purchased gas adjustments 130,792 -
Other 423,844 181,190
----------- -----------
Total current assets 16,451,774 10,462,915
----------- -----------
OTHER ASSETS 995,146 1,005,596
----------- -----------
TOTAL $58,372,976 $51,614,667
=========== ===========
</TABLE>
See condensed notes to condensed consolidated financial statements.
- ------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
- --------- March 31, September 30,
1996 1995
--------- -------------
LIABILITIES
- -----------
<S> <C> <C>
CAPITALIZATION:
Stockholders' equity
Common stock, $5 par value. Authorized,
3,000,000 shares; issued and outstanding
1,455,177 and 1,432,512 Shares, respectively $ 7,275,885 $ 7,162,560
Capital in excess of par value 4,400,572 4,149,584
Retained earnings 8,891,860 6,243,028
------------ ------------
Total stockholders' equity 20,568,317 17,555,172
Long-term debt, excluding current maturities 11,228,913 17,504,047
------------ ------------
Total capitalization 31,797,230 35,059,219
------------ ------------
CURRENT LIABILITIES:
Current maturities of long-term debt 7,080,640 1,179,415
Borrowings under lines of credit 2,322,000 1,442,000
Dividends payable 371,478 358,743
Accounts payable 8,137,346 5,544,647
Accrued income taxes 1,377,845 476,410
Customers' deposits 438,884 314,647
Accrued expenses 3,318,964 3,027,825
Refunds from suppliers - due customers 167,920 682,851
Purchased gas adjustments - 236,999
------------ ------------
Total current liabilities 23,215,077 13,263,537
------------ ------------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 2,809,068 2,721,470
Deferred investment tax credits 551,601 570,441
------------ ------------
Total deferred credits and other liabilities 3,360,669 3,291,911
------------ ------------
TOTAL $58,372,976 $51,614,667
============ ============
</TABLE>
See condensed notes to condensed consolidated financial statements.
- ------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS FOR THE THREE-MONTH AND SIX-MONTH PERIODS
ENDED MARCH 31, 1996 AND 1995
- --------------------------------------------------------------------------------------------------------
UNAUDITED Three Months Ended Six Months Ended
- --------- March 31, March 31,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Gas utilities $27,129,480 $16,923,932 $43,413,411 $29,710,076
Propane operations 2,495,910 2,025,695 4,205,738 3,355,277
----------- ----------- ----------- -----------
Total operating revenues 29,625,390 18,949,627 47,619,149 33,065,353
----------- ----------- ----------- -----------
COST OF GAS:
Gas utilities 20,018,797 10,543,025 30,401,222 18,671,212
Propane operations 1,355,634 940,557 2,171,777 1,568,958
----------- ----------- ----------- -----------
Total cost of gas 21,374,431 11,483,582 32,572,999 20,240,170
----------- ----------- ----------- -----------
OPERATING MARGIN 8,250,959 7,466,045 15,046,150 12,825,183
----------- ----------- ----------- -----------
OTHER OPERATING EXPENSES:
Gas Utilities:
Other operations 2,238,246 2,165,365 4,138,006 4,177,926
Maintenance 456,357 310,681 887,506 693,026
Taxes - general 840,805 717,696 1,516,968 1,307,179
Taxes - income 888,243 754,651 1,536,007 983,881
Depreciation and amortization 585,113 527,691 1,169,424 1,053,452
Propane operations (including taxes
- income of $169,251, $219,433,
$299,233 and $298,191,
respectively) 829,446 722,442 1,519,989 1,295,671
----------- ----------- ----------- -----------
Total other operating expenses 5,838,210 5,198,526 10,767,900 9,511,135
----------- ----------- ----------- -----------
OPERATING EARNINGS 2,412,749 2,267,519 4,278,250 3,314,048
----------- ----------- ----------- -----------
OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Interest income 244 195 244 195
Merchandising and jobbing 38,003 36,907 61,648 100,306
Other deductions (29,776) (20,421) (49,550) (89,873)
Taxes - income (3,129) (5,589) (4,647) (3,179)
Propane operations, net 6,567 34,669 47,409 64,586
----------- ----------- ----------- -----------
Total other income and deductions 11,909 45,761 55,104 72,035
----------- ----------- ----------- -----------
<PAGE>
EARNINGS BEFORE INTEREST CHARGES 2,424,658 2,313,280 4,333,354 3,386,083
----------- ----------- ----------- -----------
INTEREST CHARGES:
Gas utilities:
Long-term debt 411,987 419,079 825,782 831,444
Other interest 57,816 91,251 117,290 188,058
Propane operations, net 599 7,213 1,254 12,242
----------- ----------- ----------- -----------
Total interest charges 470,402 517,543 944,326 1,031,744
----------- ----------- ----------- -----------
NET EARNINGS $1,954,256 $1,795,737 $3,389,028 $2,354,339
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE $1.35 $1.28 $2.35 $1.69
=========== =========== =========== ===========
CASH DIVIDENDS PER SHARE $0.255 $0.250 $0.510 $0.500
=========== =========== =========== ===========
</TABLE>
See condensed notes to condensed consolidated financial statements.
- ------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS FOR THE THREE-MONTH AND SIX-MONTH PERIODS
ENDED MARCH 31, 1996 AND 1995
- --------------------------------------------------------------------------------------------------------
UNAUDITED Three Months Ended Six Months Ended
- --------- March 31, March 31,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings $1,954,256 $1,795,737 $3,389,028 $2,354,339
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 710,070 631,455 1,419,091 1,262,244
(Gain) loss from disposal of
property 343 (765) 588 2,246
Changes in working capital,
operating assets and liabilities
exclusive of changes shown
separately 573,840 5,495,008 (2,670,655) 2,863,724
----------- ----------- ----------- -----------
Net cash provided by operating
activities 3,238,509 7,921,435 2,138,052 6,482,553
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Construction expenditures (1,017,977) (1,808,279) (2,195,558) (3,912,886)
Other (21,965) (32,610) (49,715) (75,139)
Proceeds from disposal of
equipment 38,942 20,928 45,694 48,498
----------- ----------- ----------- -----------
Net cash used in investing
activities (1,001,000) (1,819,961) (2,199,579) (3,939,527)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of
long-term debt - - - 1,700,000
Retirement of long-term debt (354,029) (351,065) (373,909) (371,071)
Net borrowings (payments) on
line of credit agreements (1,859,000) (5,021,000) 880,000 (3,070,000)
Cash dividends paid (368,721) (348,186) (727,464) (694,218)
Proceeds from issuance of stock 208,888 215,020 364,314 373,729
Capital stock expense - - - (4,450)
----------- ----------- ----------- -----------
Net cash provided by (used in)
financing activities (2,372,862) (5,505,231) 142,941 (2,066,010)
----------- ----------- ----------- -----------
<PAGE>
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (135,353) 596,243 81,414 477,016
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 719,662 58,042 502,895 177,269
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $584,309 $654,285 $584,309 $654,285
=========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Interest paid $306,391 $736,877 $565,101 $1,003,076
Income taxes paid, net 531,311 277,750 $862,011 $352,750
NONCASH TRANSACTIONS:
A capital lease obligation was
incurred when the Company
entered into an equipment lease - $10,500 - $10,500
</TABLE>
See condensed notes to condensed consolidated financial statements.
- ------------------------------------------------------------------
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------
UNAUDITED
- ---------
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 Roanoke Gas
Company's consolidated financial position as of March 31, 1996 and
September 30, 1995 and the results of operations and cash flows for the
three-month and six-month periods ended March 31, 1996 and 1995.
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.
2. On January 22, 1996, the Shareholders of Roanoke Gas Company approved
the Roanoke Gas Company Key Employee Stock Option Plan. The plan provides
for the issuance of stock options to officers and certain other full time
salaried employees granting the purchase of not more than 50,000 shares of
Company common stock. The exercise price of each option will be equal to
the fair market value of the Company's common stock at the grant date.
Options amounting to 13,000 shares were issued on October 30, 1995 at an
exercise price of $15.50 a share. As the exercise price of the option
equalled the fair market value of the stock at the issue date, no
compensation expense was recorded by the Company.
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. Earnings per share is based on the weighted average number of shares
outstanding during each period (1,450,842 and 1,399,303 for the three-month
periods ended March 31, 1996 and 1995 and 1,445,176 and 1,393,800 for the
six-month periods ended March 31, 1996 and 1995, respectively).
5. Both Roanoke Gas Company and Bluefield Gas Company operated
manufactured gas plants (MGPs) as a source of fuel for lighting and heating
until the early 1950's. The process involved heating coal in a low-oxygen
environment to produce a manufactured gas that could be distributed through
the Company's pipeline system to customers. A by-product of the process
was coal tar, and the potential exists for on-site tar waste contaminants
at both former plant sites. The extent of contaminants at these sites, if
any, is unknown at this time, and the Company has not performed formal
analysis at the Roanoke Gas Company MGP site. 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 these prior operations.
Therefore, the Company has no plans for subsurface remediation at either of
the MGP sites. Should the Company be required to remediate either of the
MGP sites, 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
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------
UNAUDITED
- ---------
required. Based upon prior orders of the State Corporation Commission of
Virginia related to environmental matters at other companies, the Company
believes it will be able to recover prudently incurred costs.
Additionally, a stipulated rate case agreement between the Company and the
West Virginia Public Service Commission recognizes 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 which are anticipated to be
recoverable in future rates. Based on anticipated regulatory actions and
current practices, management believes that any costs incurred related to
the previously-mentioned environmental matters will not have a material
effect on the Company's consolidated financial position.
6. Roanoke Gas Company and Commonwealth Public Service Corporation, a
subsidiary of Bluefield Gas Company, currently hold the only franchises
and/or certificates of public convenience and necessity to distribute
natural gas in their respective Virginia service areas. The franchises
generally extend for a period of twenty years and are renewable by the
municipalities. Certificates of public convenience and necessity, which
are issued by the Virginia State Corporation Commission, are of perpetual
duration, subject to compliance with regulatory standards. The franchise
for the City of Roanoke, the Company's largest service area, expired on
August 30, 1993. On August 23, 1993, the Board of Directors of the Company
approved an agreement with the City of Roanoke under which such franchise
agreement was extended for a term of 180 days from August 30, 1993, upon
the same terms and conditions, except that a provision of the existing
franchise agreement giving the City the option to purchase the property of
the Company located within the City was deleted. The 180-day extension
period expired February 26, 1994. The parties have not yet reached an
agreement on a new multi-year franchise agreement; however, negotiations
are on-going, and the Company continues to provide natural gas services to
customers in the City of Roanoke. The Company believes that it ultimately
will secure a new franchise agreement on terms acceptable to the Company.
In addition, the franchise for the City of Salem expired on July 22, 1994,
and the franchise for the Town of Vinton expired on December 10, 1994.
Negotiations between the Company and the City of Salem and the Town of
Vinton are on-going, and the Company continues to provide natural gas
services to customers in the City of Salem and the Town of Vinton. The
Company also believes that it will ultimately secure new franchise
agreements with the City of Salem and the Town of Vinton on terms
acceptable to the Company. Bluefield Gas Company holds the only franchise
to distribute natural gas in its West Virginia service area. Its franchise
extends for a period of thirty years from August 23, 1979.
Management anticipates that the Company will be able to renew all of
its franchises. There can be no assurance, however, that a given
jurisdiction will not refuse to renew a franchise or will not in connection
with the renewal of a franchise, impose certain restrictions or conditions
that could adversely affect the Company's business operations or financial
condition.
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------
Consolidated net earnings for the three-month and six-month periods
ended March 31, 1996 were $1,954,256 and $3,389,028 compared to $1,795,737
and $2,354,339 for the same periods last year.
For the three-month period ended March 31, 1996, operating margin
increased $784,914, or 10.5 percent, from last year due to increases in
delivered gas volumes associated with a quarter that was 20.3 percent
colder than the same quarter last year. Total MCF deliveries were up 10.6
percent, or 429,265 MCF, with an increase of 16.8 percent in the higher
margin firm gas sales and a decline of 17.7 percent in interruptible
deliveries. The firm volume increase correlates strongly with the increase
in heating degree days during the quarter. The interruptible volume
decrease is also attributable to the colder winter as these customers
experienced more and longer interruptions of gas service due to the
temperatures. Propane deliveries also contributed to the improved margin
for the quarter as deliveries increased 20.8%, or 434,695 gallons.
Other operations expenses for the quarter ended March 31, 1996
increased moderately over last year's levels due to additional operating
costs associated with the colder weather and the acceleration of the
amortization of certain deferred regulatory assets over a period shorter
than originally established. A portion of the increased costs were offset
by reductions in employee benefit costs primarily due to reduced health
insurance costs associated with lower claim activity. Maintenance expenses
increased $145,676 as the colder weather caused a redirection toward
maintenance of the distribution system and away from capital projects.
Additional costs were incurred with the completion of renovations to the
corporate office. General taxes rose as a result of an increase in revenue
sensitive taxes. Depreciation expense has grown as the Company continues
to add plant for new customers and renew existing facilities. Propane
operations expense increased due to higher delivery costs associated with
the near record snowfalls during the quarter. Additional manpower and
overtime were required to ensure uninterrupted service to our propane
customers. Other income and deductions declined from last year due to the
significant revenue reductions in the gas marketing area. Increasing gas
costs made purchasing and transporting of gas by our larger industrial
customers less attractive than the purchase of interruptible gas supply
directly from the Company. Interest charges declined as short-term
borrowing remained below last year's levels.
For the six-month period end March 31, 1996, operating margins
increased to $2,220,967, or 17.3 percent, resulting from a 15.4 percent
increase in natural gas volumes and a 24.8 percent rise in propane
deliveries. The improved results correlate to a 26 percent colder period
than a year ago. Furthermore, the current period was almost 12 percent
colder than normal. Expenses for the six-month period ended March 31, 1996
in relation to the same period last year mirrored the results for the
current quarter.
On January 22, 1996 the Shareholders of Roanoke Gas Company approved
the Roanoke Gas Company Key Employee Stock Option Plan. The plan provides
for the issuance of stock options to officers and certain other full time
salaried employees granting the purchase of not more than 50,000 shares of
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------
Company common stock. The exercise price of each option will be equal to
the fair market value of the Company's common stock at the grant date.
Options amounting to 13,000 shares were issued on October 30, 1995 at an
exercise price of $15.50 a share. As the exercise price of the option
equalled the fair market value of the stock at the issue date, no
compensation expense was recorded by the Company.
Both Roanoke Gas Company and Bluefield Gas Company operated
manufactured gas plants (MGPs) as a source of fuel for lighting and heating
until the early 1950's. The process involved heating coal in a low-oxygen
environment to produce a manufactured gas that could be distributed through
the Company's pipeline system to customers. A by-product of the process
was coal tar, and the potential exists for on-site tar waste contaminants
at both former plant sites. The extent of contaminants at these sites, if
any, is unknown at this time, and the Company has not performed formal
analysis at the Roanoke Gas Company MGP site. 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 these prior operations.
Therefore, the Company has no plans for subsurface remediation at either of
the MGP sites. Should the Company be required to remediate either of the
MGP sites, 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. Based upon prior orders of the State Corporation Commission of
Virginia related to environmental matters at other companies, the Company
believes it will be able to recover prudently incurred costs.
Additionally, a stipulated rate case agreement between the Company and the
West Virginia Public Service Commission recognizes 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 which are anticipated to be
recoverable in future rates. Based on anticipated regulatory actions and
current practices, management believes that any costs incurred related to
the previously-mentioned environmental matters will not have a material
effect on the Company's consolidated financial position.
Roanoke Gas Company and Commonwealth Public Service Corporation, a
subsidiary of Bluefield Gas Company, currently hold the only franchises
and/or certificates of public convenience and necessity to distribute
natural gas in their respective Virginia service areas. The franchises
generally extend for a period of twenty years and are renewable by the
municipalities. Certificates of public convenience and necessity, which
are issued by the Virginia State Corporation Commission, are of perpetual
duration, subject to compliance with regulatory standards. The franchise
for the City of Roanoke, the Company's largest service area, expired on
August 30, 1993. On August 23, 1993, the Board of Directors of the Company
approved an agreement with the City of Roanoke under which such franchise
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
- ------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------
agreement was extended for a term of 180 days from August 30, 1993, upon
the same terms and conditions, except that a provision of the existing
franchise agreement giving the City the option to purchase the property of
the Company located within the City was deleted. The 180-day extension
period expired February 26, 1994. The parties have not yet reached an
agreement on a new multi-year franchise agreement; however, negotiations
are on-going, and the Company continues to provide natural gas services to
customers in the City of Roanoke. The Company believes that it ultimately
will secure a new franchise agreement on terms acceptable to the Company.
In addition, the franchise for the City of Salem expired on July 22, 1994,
and the franchise for the Town of Vinton expired on December 10, 1994.
Negotiations between the Company and the City of Salem and the Town of
Vinton are ongoing, and the Company continues to provide natural gas
services to customers in the City of Salem and the Town of Vinton. The
Company also believes that it will ultimately secure new franchise
agreements with the City of Salem and the Town of Vinton on terms
acceptable to the Company. Bluefield Gas Company holds the only franchise
to distribute natural gas in its West Virginia service area. Its franchise
extends for a period of thirty years from August 23, 1979.
Management anticipates that the Company will be able to renew all of
its franchises. There can be no assurance, however, that a given
jurisdiction will not refuse to renew a franchise or will not in connection
with the renewal of a franchise, impose certain restrictions or conditions
that could adversely affect the Company's business operations or financial
condition.
The three-month and six-month periods' earnings presented herein
should not be considered as reflective of the Company's consolidated
financial results for the fiscal year ending September 30, 1996. The total
revenues during the first six months reflect higher billings due to the
weather sensitive nature of the gas business. As warmer weather dominates
the remaining six months of the Company's fiscal year, net operating losses
are normally expected for the final two quarters which will reduce the
Company's net earnings for the fiscal year.
<PAGE>
PART II - OTHER INFORMATION
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, 1996.
<PAGE>
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 thereunto duly authorized.
ROANOKE GAS COMPANY
Date: April 19, 1996 By: /s/Roger L. Baumgardner
_______________________
Roger L. Baumgardner
Vice President/Secretary,
Treasurer and Principal
Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROANOKE GAS
COMPANY'S UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT FOR THE QUARTER
ENDED MARCH 31, 1996, AS SET FORTH IN THE COMPANY'S QUARTERLY REPORT ON FORM
10-Q, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 38,759,909
<OTHER-PROPERTY-AND-INVEST> 2,166,147
<TOTAL-CURRENT-ASSETS> 16,451,774
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 995,146
<TOTAL-ASSETS> 58,372,976
<COMMON> 7,275,885
<CAPITAL-SURPLUS-PAID-IN> 4,400,572
<RETAINED-EARNINGS> 8,891,860
<TOTAL-COMMON-STOCKHOLDERS-EQ> 20,568,317
0
0
<LONG-TERM-DEBT-NET> 11,228,913
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 7,080,640
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 19,495,106
<TOT-CAPITALIZATION-AND-LIAB> 58,372,976
<GROSS-OPERATING-REVENUE> 47,619,149
<INCOME-TAX-EXPENSE> 1,536,007
<OTHER-OPERATING-EXPENSES> 41,804,892
<TOTAL-OPERATING-EXPENSES> 43,340,899
<OPERATING-INCOME-LOSS> 4,278,250
<OTHER-INCOME-NET> 55,104
<INCOME-BEFORE-INTEREST-EXPEN> 4,333,354
<TOTAL-INTEREST-EXPENSE> 944,326
<NET-INCOME> 3,389,028
0
<EARNINGS-AVAILABLE-FOR-COMM> 3,389,028
<COMMON-STOCK-DIVIDENDS> 740,199
<TOTAL-INTEREST-ON-BONDS> 765,736
<CASH-FLOW-OPERATIONS> 2,138,052
<EPS-PRIMARY> 2.35
<EPS-DILUTED> 2.35
</TABLE>
