ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, January 23, 1996 TAG: 9601230060
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
A smaller work force, a rate increase and a change in the way its rates are structured helped Roanoke Gas Co. increase its profits last year even though its heating fuel sales competed with weather that was 10 percent warmer than normal, officials told shareholders Monday.
Roughly 100 people turned out for the meeting at the company's offices on Kimball Avenue. "Pardon us for harping on how [well] we're doing, but it's been a long time," company President Frank Farmer said.
For its fiscal year ending Sept. 30, the company reported net earnings of $1.78 million or $1.26 per share of common stock, compared with $1.68 million or $1.25 per share in the previous year.
Earnings for the first quarter of the company's 1996 fiscal year, the quarter ending Dec. 31, were nearly as high as those for all of the previous fiscal year. They were up 157 percent to $1.4 million or $1 per share compared with $558,602 or 40 cents per share during the first quarter last year. Operating revenues for the quarter were up 27 percent, while operating expenses increased only 14 percent.
The company cut its work force by 12 percent last year to 154 people, putting employment at the levels of the late 1970s, according to Jane O'Keeffe, assistant vice president for human resources. The company has changed its ratio of customers to employees from 285 to 362 over the past five years.
The job reductions were achieved through early retirements, normal attrition and a hiring freeze, O'Keeffe said.
The introduction of new technology to control the gas supply has also helped save the company money, said Vice President for Operations Art Pendleton. Overall, the company spent $5.6 million on capital improvements last year, including $2.8 million for the addition of new business, he said. Lower capital expenses of $4.5 million are planned this year.
As it has cut costs, the company has increased its customer base to 56,000 homes and businesses. Roanoke Gas saw its natural gas customers increase by 2.6 percent last year and expects similar growth this year, Pendleton said. The company's Highland Propane Co. subsidiary had a 6 percent increase in customers.
Also, the company saw its commercial customers use more gas last year because of the strength of the economy, said John Williamson III, vice president for rates and finance. New businesses came from companies such as Connex Pipe in Troutville and the Hotel Roanoke and Conference Center, he said.
After the election of the company's board of directors toward the end of the meeting, stockholder John St. Leger asked Farmer if the board wasn't composed entirely of white men, suggesting it needed some diversity. Neither Farmer nor other company officials responded.
Because of a remark that Farmer had made at the beginning of the meeting that the company hoped to remain locally owned, St. Leger also asked Farmer if Roanoke Gas was being targeted by some other company for a takeover. Farmer said the company has looked during the year for other companies to buy but faces no threats, itself, of a hostile takeover.
LENGTH: Medium: 61 linesby CNB