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RGC Resources (RGCO): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jun 30, 2026, filed Aug 6, 2026; rules v1.1
RGC Resources (RGCO): 1 rule of 10 triggered on the filings to Jun 30, 2026: low net debt = no refinancing risk; 2 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Low net debt = no refinancing risk Triggered · severity high · confidence medium
$18M of debt comes due within a year against $2M of cash and investments and $2M of free cash flow over the last twelve months: $13M short, to be refinanced or raised. Net debt of $146M says nothing about when the debt falls due.
Innocent reading: A committed, undrawn credit facility covers the gap (not visible in the balance sheet).
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $13M to $8M; working capital and lower capex explain 11% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $17M |
| Operating cash flow | $29M |
| Capex, year before | $22M |
| Capex | $21M |
| Free cash flow, year before | −$5M |
| Free cash flow | $8M |
| Change in FCF | $13M |
| Change in capex | −$1M |
| Working capital: change in its cash contribution | −$2M |
| Of which: capex cut | $1M |
| Of which: working capital released | 0.00 |
| Share of the increase that need not repeat | +10.6% |
| Operating cash flow before working capital: change | 13349354.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 0.7% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $673K |
| Revenue | $95M |
| SBC / revenue | +0.7% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 10.2M shares |
| Diluted shares | 10.3M shares |
| Diluted shares: change | +1.5% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 3% against revenue -1% in Q3 FY26; DSO 52 against a median of 34: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | -0.9% |
| Receivables, year over year | +2.9% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | +24.7% |
| Receivables y/y, quarter before | -3.6% |
| Days sales outstanding | 51.7 |
| DSO, median of eight quarters | 34.3 |
| Receivables | $6M |
| Revenue | $17M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 FY26 (receivables and revenue) · Q3 FY25 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Not triggered confidence low
Adjusted and GAAP EPS were within 10% of each other in the last 3 quarters.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-12-31 / 0.47 / 0.47 / 0.0; 2026-03-31 / 0.84 / 0.84 / 0.0; 2026-06-30 / 0.05 / 0.05 / 0.0 |
| Quarters with adjusted ≥ 10% above GAAP | 0 |
| Quarters compared | 3 |
| Latest gap | +0.0% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-12-31 (adjusted 0.47 vs GAAP 0.47) · 2026-03-31 (adjusted 0.84 vs GAAP 0.84) · 2026-06-30 (adjusted 0.05 vs GAAP 0.05)
C02 Low net debt = no refinancing risk Triggered severity high · confidence medium
$18M of debt comes due within a year against $2M of cash and investments and $2M of free cash flow over the last twelve months: $13M short, to be refinanced or raised. Net debt of $146M says nothing about when the debt falls due.
The figures and how they are read
| Cash and investments | $2M |
| Debt | $148M |
| Net debt | $146M |
| Due within a year | $18M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $2M |
| Cash plus free cash flow | $4M |
| Coverage of what is due | 0.2 |
| Due in the second year | $3M |
| Balance sheet date | 2026-06-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY25 (debt maturities, cash and investments)
What would explain it innocently
- A committed, undrawn credit facility covers the gap (not visible in the balance sheet)
- The notes are routinely rolled over in the commercial-paper or bond market at an investment-grade rating
- Cash held abroad or in subsidiaries can be moved to where the debt is
- A sale of a business or asset already agreed brings the cash
What to look for in the filing
- Undrawn committed facilities and their covenants
- The cost and rating of the refinancing
- Restricted cash and the operating minimum
What would show the trap does not apply
- The 10-K lists an undrawn credit facility that covers the debt due, or the maturity is refinanced before it falls due
- Cash plus FCF of the next quarter exceeds the debt due within a year
Look again: next filing.
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 4% and net income rose 4% in Q3 FY26; the share count rose 0.9%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 FY26 |
| Quarter before | Q3 FY25 |
| EPS, year before | $0.05 |
| EPS | $0.05 |
| Net income, year before | $538K |
| Net income | $559K |
| Diluted shares, year before | 10.3M shares |
| Diluted shares | 10.4M shares |
| EPS growth | +3.9% |
| Net income growth | +3.8% |
| Diluted shares: change | +0.9% |
| eps from profit | $0.00 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 FY26 (net income, diluted shares, EPS) · Q3 FY25 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → RGC Resources: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.