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 December 31, 1998
Commission File No. 0-367
ROANOKE GAS COMPANY
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(Exact name of Registrant as Specified in its Charter)
VIRGINIA 54-0359895
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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 December 31, 1998
Common Stock, $5 Par Value 1,803,334 Shares
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ROANOKE GAS COMPANY AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
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UNAUDITED
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December 31, September 30,
ASSETS 1998 1998
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UTILITY PLANT:
Utility Plant in Service $ 71,489,278 $ 69,986,124
Accumulated Depreciation (25,154,260) (24,644,581)
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Utility Plant in Service, Net 46,335,018 45,341,543
Construction Work-In-Progress 1,323,247 1,674,543
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Utility Plant, Net 47,658,265 47,016,086
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NONUTILITY PROPERTY:
Propane 11,533,716 10,188,124
Accumulated Depreciation (3,281,724) (3,059,870)
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Nonutility Property, Net 8,251,992 7,128,254
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CURRENT ASSETS:
Cash and Cash Equivalents 63,915 84,037
Accounts Receivable - (Less Allowance
for Uncollectibles of $489,121
and $368,345, Respectively) 9,857,172 3,051,474
Inventories 7,070,396 7,969,730
Prepaid Income Taxes - 712,687
Deferred Income Taxes 2,109,341 1,868,888
Other 518,790 451,027
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Total Current Assets 19,619,614 14,137,843
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OTHER ASSETS 878,171 852,737
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TOTAL $ 76,408,042 $ 69,134,920
=============== ==============
See condensed notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
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UNAUDITED
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December 31, September 30,
LIABILITIES 1998 1998
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CAPITALIZATION:
Stockholders' Equity:
Common Stock - Par Value $5; Authorized,
3,000,000 Shares; Issued and Outstanding
1,803,334 and 1,794,416 Shares, Respectively $ 9,016,670 $ 8,972,080
Capital in Excess of Par Value 9,039,054 8,909,145
Retained Earnings 9,052,764 8,583,356
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Total Stockholders' Equity 27,108,488 26,464,581
Long-Term Debt (Less Current Maturities) 20,700,000 20,700,000
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Total Capitalization 47,808,488 47,164,581
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CURRENT LIABILITIES:
Notes Payable 10,174,000 4,584,000
Dividends Payable 487,352 476,140
Accounts Payable 7,856,339 6,968,594
Income Taxes Payable 22,828 -
Customers' Deposits 553,333 399,750
Accrued Expenses 4,066,983 4,224,693
Refunds From Suppliers - Due Customers 85,121 85,572
Purchased Gas Adjustments 1,353,206 1,269,829
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Total Current Liabilities 24,599,162 18,008,578
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DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 3,557,084 3,508,838
Deferred Investment Tax Credits 443,308 452,923
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Total Deferred Credits and Other Liabilities 4,000,392 3,961,761
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TOTAL $ 76,408,042 $ 69,134,920
=============== ==============
</TABLE>
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<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS FOR THE THREE-MONTH PERIODS
ENDED DECEMBER 31, 1998 AND 1997
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UNAUDITED
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Three Months Ended
December 31,
1998 1997
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<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Gas utilities $ 14,029,259 $ 18,083,161
Propane operations 2,414,933 2,712,860
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Total operating revenues 16,444,192 20,796,021
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COST OF GAS:
Gas utilities 8,721,647 11,980,888
Propane operations 1,101,766 1,349,854
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Total cost of gas 9,823,413 13,330,742
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OPERATING MARGIN 6,620,779 7,465,279
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OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 1,960,828 1,939,223
Maintenance 308,721 312,053
Taxes - general 624,596 739,391
Taxes - income 405,254 638,173
Depreciation and amortization 753,718 711,880
Propane operations (including taxes - income of
$109,644 and $212,344, respectively) 1,122,948 1,052,614
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Total other operating expenses 5,176,065 5,393,334
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OPERATING EARNINGS 1,444,714 2,071,945
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OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Merchandising and jobbing, net 50,512 30,188
Other deductions (20,739) (26,642)
Taxes - income (10,449) (1,234)
Propane operations, net 39,666 63,508
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Total other income and deductions 58,990 65,820
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EARNINGS BEFORE INTEREST CHARGES 1,503,704 2,137,765
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INTEREST CHARGES:
Gas utilities:
Long-term debt 392,160 389,345
Other interest 94,960 179,432
Propane operations 59,825 24,754
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Total interest charges 546,945 593,531
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NET EARNINGS 956,759 1,544,234
=============== ==============
BASIC AND DILUTED EARNINGS PER COMMON SHARE $0.53 $1.00
=============== ==============
CASH DIVIDENDS PER COMMON SHARE $0.270 $0.265
=============== ==============
See consolidated notes to condensed consolidated financial statements.
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</TABLE>
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<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS
ENDED DECEMBER 31, 1998 AND 1997
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UNAUDITED
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Three Months Ended
December 31,
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 956,759 $ 1,544,234
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,016,342 946,151
Gain on disposal of utility and nonutility property (1,652) -
Loss on sale of other assets - 566
Decrease in Deferred taxes and investment tax credits (201,822) (748,117)
Changes in assets and liabilities which used cash, exclusive of
changes and noncash transactions shown separately (4,297,501) (3,345,971)
--------------------- --------------------
Net cash used in operating activities (2,527,874) (1,603,137)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant in service and under construction
and nonutility property (2,785,282) (2,257,297)
Cost of removal of utility plant, net (10,834) (20,603)
Proceeds from disposal of equipment 15,509 13,470
Proceeds from sale of other assets - 173,334
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Net cash used in investing activities (2,780,607) (2,091,096)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt - 1,700,000
Retirement of long-term debt and payments on obligations
under capital leases - (2,521,166)
Net borrowings under lines of credit 5,590,000 4,718,000
Cash dividends paid (476,140) (397,527)
Proceeds from issuance of stock 174,499 177,168
Capital stock expense - (7,142)
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Net cash provided by financing activities 5,288,359 3,669,333
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NET DECREASE IN CASH AND CASH EQUIVALENTS (20,122) (24,900)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 84,037 116,045
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CASH AND CASH EQUIVALENTS AT END OF PERIOD 63,915 91,145
===================== ====================
SUPPLEMENTAL INFORMATION:
Interest paid 890,153 798,008
Income taxes paid (refunded), net (8,346) 99,003
NONCASH TRANSACTIONS:
The assets of a propane company were acquired in 1997 in exchange for 34,317
shares of stock for a total value of $617,706 in December 1997.
See condensed notes to condensed consolidated financial statements
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ROANOKE GAS COMPANY 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 Roanoke Gas
Company's financial position as of December 31, 1998 and September 30,
1998, and the results of its operations and its cash flows for the three
months ended December 31, 1998 and 1997. The results of operations for the
three months ended December 31, 1998 are not indicative of the results to
be expected for the fiscal year ending September 30, 1999.
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. 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 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. The Company acquired the bulk propane assets of Four C's Enterprises,
Inc., a small propane company in West Virginia, on December 15, 1998. The
acquisition was accounted for by the purchase method of accounting with a
total purchase price of $408,000. Goodwill will be amortized on a
straight-line basis over a 15 year period.
6. Earnings per common share are based on the weighted average number of
shares outstanding during each period (1,800,690 and 1,542,418 for the
three-month periods ended December 31, 1998 and 1997, respectively) and
the weighted average number of shares outstanding assuming dilution
(1,803,582 and 1,547,476 for the three-month periods ended December 31,
1998 and 1997, respectively). The difference between the weighted average
number of shares relates to the dilutive effect of 2,892 and 5,058 shares
for the three-month periods ended December 31, 1998 and 1997 associated
with the assumed issuance of stock options as calculated using the
Treasury Stock method.
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
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CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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UNAUDITED
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7. 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. 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 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.
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Results of Operations
Consolidated net earnings for the three-month period ended December 31,
1998 was $956,759 compared to $1,544,234 for the same period last year.
The operating margin decreased $844,500, or 11.3 percent, in the current quarter
from the same period last year due to sharply warmer weather. The weather was
unusually mild in November and December with temperatures averaging 24 percent
warmer than for the same quarter last year. As a result of the weather, total
natural gas deliveries decreased by 617,660 MCF, or 17 percent. Propane
deliveries declined by 92,444 gallons, or 3.5 percent, as the impact of the
weather was mitigated by a 29 percent increase in the number of propane
customers from the same quarter last year. The impressive customer growth has
been achieved through an aggressive marketing campaign and from the addition of
customers resulting from the propane company acquisition completed in December
1998.
Other operations expenses and maintenance expenses for the current quarter were
comparable to the same period last year. Increases in benefit costs were offset
by declines in bad debt and other expenses. General taxes declined 15.5 percent
from last year as revenue-sensitive taxes followed a 21 percent decline in
revenues. Capital expenditures for adding new customers to the natural gas
distribution system and renewing older facilities have increased depreciation
expense over last year's levels. Propane operations reflected a modest increase
in expenses of $70,334, or 6.7 percent with increases in depreciation, marketing
expenses and property taxes resulting from the exceptional growth in customers
in the Company's propane subsidiary. Interest charges decreased as the Company's
average total debt position and average effective interest rate for the quarter
decreased due to the equity issue in January 1998 and long-term debt refinancing
also completed last year.
The three-month earnings presented herein should not be considered as reflective
of the Company's consolidated financial results for the fiscal year ending
September 30, 1999. The total revenues during the first three 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 winter months. Furthermore, as the warm weather
has significantly impacted the first quarter's results of operations, management
is implementing a major expense reduction program over the remaining nine
months. All nonessential expense budgets have been reduced or eliminated with a
strong emphasis on using expense reductions to help offset the impact of
weather. Critical operations and safety will remain a top priority.
On December 15, 1998, the Company completed the acquisition of the bulk propane
assets of Four C's Enterprises, Inc., a small propane company located in West
Virginia. The acquisition, accounted for under the purchase method of
accounting, added 388 customers to the propane operations.
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Regulatory Affairs
The Company has one rate case application pending before regulatory bodies.
Roanoke Gas Company filed an application with the Virginia State Corporation
Commission on September 30, 1998, requesting an annual increase in non-gas rates
of $877,000. New rates will be placed into effect on March 1, 1999, subject to
refund. A hearing on the rate case is scheduled for April 1999 with a final
order expected in late 1999.
In the federal regulatory arena, the Company filed a Form U-1 with the
Securities and Exchange Commission on October 16, 1998, seeking approval to
reorganize the Company into a holding company with three separate subsidiaries.
The filing provides that the holding company will be established as RGC
Resources, Inc., and the subsidiaries will be Roanoke Gas Company, Bluefield Gas
Company, and Diversified Energy Company.
The West Virginia Public Service Commission has approved the reorganization
based upon an administrative law judge's approval on January 7, 1999. The
Virginia State Corporation Commission issued a final order on January 11, 1999
approving the requested merger and reorganization. The Securities and Exchange
Commission approved the Company's S-4 filing on January 28, 1999. The S-4 is a
required exhibit to the U-1 filing. The only remaining item required is
shareholder approval of the reorganization.
Year 2000
Roanoke Gas Company has made significant progress in addressing the Year 2000
issue. The Year 2000 concern is caused by the movement from 1999 to the year
2000. Many computer-based systems rely on the last two numbers of the date to
distinguish the year, and many of these systems will not recognize "00" as an
acceptable date. Even if systems will accept "00" as an appropriate date, many
systems will not distinguish the year 2000 from year 1900. Like all other
companies that use application software and rely on a computer-based
infrastructure that includes microprocessor systems, the Year 2000 issue affects
many areas of the Company's operations. The Company has formed a Year 2000 Task
Force comprised of a comprehensive group of employees who have developed a
written plan that addresses communications, system conversions, system testing
and contingency planning.
The Company has conducted an extensive inventory to identify and categorize all
of its internal systems which may be date-sensitive. These internal systems
control, monitor, or assist in the operation of the Company, its equipment and
machinery. Generally, these systems contain microprocessor chips, integrated
circuits, or computer boards. The Company identified date-sensitive applications
in customer service, operations, financial systems, end-user applications,
storage and distribution systems, meters, telecommunications, vehicles, building
controls and other areas. With these systems identified, each system is reviewed
to determine how it can be tested. When applicable, manufacturers of each item
are contacted concerning available compliance information. An industry
consultant is assisting the Company with this phase.
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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The Company started upgrading internal systems in the winter of 1996 and
completed the majority of the upgrades by the fall of 1997. These systems cover
the entire scope of the business, ranging from the Payroll System to the
Customer Information System. There is a plan in place to upgrade the remaining
internal system applications by the spring of 1999. Most systems have been in
production for a minimum of ten months. With baseline validation complete,
testing for the Year 2000 and other key dates has begun. In October 1998, the
Company set up a training and testing lab, and operating system testing was
completed in November 1998. The Company began performing tests on all software
applications in December 1998 and such testing is scheduled to be completed in
the spring of 1999. The Company intends to perform necessary remediation on
systems that fail. Over 70% of the Company's systems have successfully completed
testing and were found to be Year 2000 compliant. The remaining 30%, which
includes the propane system, remains to be tested.
Roanoke Gas has made considerable progress in upgrading its information systems
to be Year 2000 compliant. Essentially, all of the core IBM AS/400 systems have
been upgraded, with the exception of propane, which should be completed by
mid-1999. All Local Area Network (LAN) and Wide Area Network (WAN) systems have
been upgraded. The remaining systems are believed to be compliant or a plan is
in place to reach compliance. We believe that most of our vendors, suppliers and
major customers are dedicated to the problem with intentions of completing their
efforts in a timely manner. Though our list of systems seems complete,
management continues to search for systems throughout the Company that may need
attention. Employee awareness and planning are a top priority of the Company's
Year 2000 task force.
The Company added a segregated test environment that included a second AS/400
and an additional network file server. This should help facilitate the
implementation of the new CIS, allow thorough Year 2000 testing and improve the
test environment for all systems development. The segregated test environment
also upgrades the Company's Disaster Recovery Planning by enabling an internal
recovery hot-site.
The Company is developing a contingency plan to identify the areas with the
highest potential risk of Year 2000 exposure and determining the functions that
need contingency plans. The Company anticipates that the contingency plans will
be developed and documented by the spring of 1999.
The Virginia Commission and the West Virginia Commission are both closely
monitoring the Year 2000 conversions of all utilities in their respective
states. On July 1, 1998 the Virginia Commission Staff initiated a process which
required all utilities to file a summary of their progress toward Year 2000
compliance on July 22, 1998 with quarterly updates beginning in October 1998.
The West Virginia Commission issued General Order No. 253 on April 30, 1998 and
a Year 2000 Survey. The Order required responses by July 31, 1998, with
semi-annual updates beginning in January 1999.
The Company maintains emergency operating plans for problems that could arise
from both internal and external sources. With regard to internal systems, the
Company believes that it has
<PAGE>
ROANOKE GAS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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identified and is addressing the Year 2000 compliance of the systems that
pose the most significant risk to its ability to provide safe and reliable
service to customers. Externally, the Company has initiated discussions with
suppliers of interstate transportation capacity and relies on their testing and
remediation methods to continue the supply of natural gas to its distribution
system. Furthermore, the Company has received and responded to letters from many
of its customers concerning our Year 2000 compliance status. Likewise, the
Company has held discussions with large-volume customers concerning their Year
2000 concerns. The Company intends to continually monitor any new developments.
The Company believes that it is taking reasonable measures to ensure the safe
and uninterrupted delivery on natural gas. There can be no guarantee that the
systems of other companies and external services, such as water, electricity,
and telephone, on which the Company's operations rely, will be timely converted,
or will be converted in a manner compatible with the Company's systems. If this
were to occur, it would create a significant barrier to providing service to the
Company's customers and could result in material increases in operating expenses
and lost revenues.
To date, the Company has spent approximately $35,000 on Year 2000
remediation activities. The Company projects that it will spend an additional
$109,000, over and above otherwise planned upgrades to systems and hardware,
over the course of the next year to complete its Year 2000 readiness plan.
Environmental Issues
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. 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 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 site. Should the Company eventually 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. 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.
<PAGE>
Part II - Other Information
Item 2. Changes in Securities.
Pursuant to the Roanoke Gas Company 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 December 31,
1998, the Company issued a total of 410 shares of restricted stock
pursuant to the Restricted Stock Plan as follows:
Investment Date Price Number of Shares
10-1-98 $20.000 135
11-1-98 $19.250 140
12-1-98 $20.063 135
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 December 31, 1998.
<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 there unto duly authorized.
ROANOKE GAS COMPANY
Date: February 9, 1999 By: s/Roger L. Baumgardner
Roger L. Baumgardner
Vice President/Secretary, Treasurer
And Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMAITON EXTRACTED FROM ROANOKE
GAS COMPANY'S UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT FOR THE
QUARTER ENDED DECEMBER 31, 1998, 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> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 47,658,265
<OTHER-PROPERTY-AND-INVEST> 8,251,992
<TOTAL-CURRENT-ASSETS> 19,619,614
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 878,171
<TOTAL-ASSETS> 76,408,042
<COMMON> 9,016,670
<CAPITAL-SURPLUS-PAID-IN> 9,039,054
<RETAINED-EARNINGS> 9,052,764
<TOTAL-COMMON-STOCKHOLDERS-EQ> 27,108,488
0
0
<LONG-TERM-DEBT-NET> 20,700,000
<SHORT-TERM-NOTES> 10,174,000
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0
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