Core Viewpoint - RGC Resources is presenting its financial results for the first quarter of the 2026 fiscal year, highlighting operational and financial performance along with future outlook [2]. Group 1: Presentation Overview - The presentation includes forecasts and projections regarding earnings, capital spending, and gas prices, emphasizing the importance of understanding risks and uncertainties associated with forward-looking statements [2]. - The agenda for the presentation includes a review of operational and financial highlights for the first quarter, followed by an outlook for the remainder of the 2026 fiscal year, with a focus on an eventful January [2]. Group 2: Participants - The presentation features key personnel from RGC Resources, including the Director of Finance, the President and CEO, the VP, Treasurer and CFO, and the Senior Vice President of Regulatory and External Affairs [1].

Financial Data and Key Metrics Changes - Net income for Q1 2026 was $4.8 million or $0.47 per share, down from $5.3 million or $0.51 per share in the same quarter last year [6] - Gas margins increased nominally, while lower interest expenses were noted due to Fed rate cuts, but these were offset by higher costs in personnel, IT, property taxes, and depreciation [6][7] - Total capital expenditures for Q1 2026 were $5.6 million, flat compared to the same period last year [5] Business Line Data and Key Metrics Changes - New main miles installed in Q1 2026 were 0.6, down from 1.1 in Q1 2025, while new service connections remained stable at 196 compared to 197 last year [4] - Residential gas usage increased by 8%, while commercial volumes rose due to an 11% increase in heating degree days compared to Q1 last year [5] Market Data and Key Metrics Changes - The recent cold snap, referred to as Winter Storm Fern, resulted in heating degree days being 53% colder than normal, with 680 heating degree days recorded versus a normal of 445 [11] - Natural gas prices spiked significantly during the cold snap, multiplying by a factor of approximately 10 on certain days [12] Company Strategy and Development Direction - The company is focused on enhancing safety and reliability for customers through continued investment in infrastructure, as evidenced by the increase in service renewals through the SAVE program by 80% [4] - The company is actively monitoring legislative changes in Virginia, which are not currently aimed at limiting natural gas usage, and is engaged with local lawmakers [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the local economy, despite a potential plant closure of a major industrial customer later in 2026 [10] - The company anticipates a weaker second quarter due to weather-related construction delays, with approximately 17% of working days lost [16] - Earnings per share forecast remains unchanged at $1.27-$1.35, influenced by the ongoing rate case and economic variables [17] Other Important Information - The company filed an expedited rate case seeking approximately $4.3 million in incremental annual revenue, with interim rates effective from January 1, 2026 [14] - An estimated undercollection of $8 million-$10 million in gas costs related to Winter Storm Fern is expected, which will be addressed with the commission [13] Q&A Session Summary - No questions were raised during the Q&A session, and the management thanked participants for their time and expressed anticipation for the next earnings call in May [18]

Financial Data and Key Metrics Changes - Net income for Q1 2026 was $4.8 million or $0.47 per share, down from $5.3 million or $0.51 per share in the same quarter last year [6] - Gas margins increased nominally, while lower interest expenses were noted due to the Fed lowering interest rates, but these were offset by higher costs in personnel, IT, property taxes, and depreciation [6][7] - Total capital expenditures for Q1 2026 were $5.6 million, flat compared to the same period last year [5] Business Line Data and Key Metrics Changes - New main miles installed in Q1 2026 were 0.6, down from 1.1 in Q1 2025, while new service connections remained stable at 196 compared to 197 last year [4] - Residential gas usage increased by 8%, while total gas volumes remained flat due to a decrease in usage from a large industrial customer [5] Market Data and Key Metrics Changes - The heating degree days increased by 11% compared to Q1 last year, contributing to the rise in residential usage [5] - The recent cold snap, referred to as Winter Storm Fern, resulted in a 53% increase in heating degree days compared to normal, with 680 heating degree days recorded [11] Company Strategy and Development Direction - The company is focused on enhancing safety and reliability for customers through continued investments, including a backlog of approximately 13,000 feet or 2.5 miles of new main to install [4] - The company is actively monitoring legislative changes in Virginia, which are not expected to limit natural gas usage or development, and is engaged with local senators and delegates [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the local economy and the performance of the distribution system during extreme weather conditions, noting no customer losses during the cold snap [11] - The company anticipates a weaker second quarter due to weather-related construction delays but remains hopeful about making up for lost time in the spring and summer [16] Other Important Information - The company filed an expedited rate case seeking approximately $4.3 million in incremental annual revenue, with interim rates effective January 1, 2026 [14] - An estimated undercollection of $8 million to $10 million in gas costs related to Winter Storm Fern is expected to be addressed with the commission over the next 12-18 months [13] Q&A Session Summary Question: What is the impact of the recent cold snap on operations? - Management noted that the distribution system performed flawlessly during Winter Storm Fern, with no customer losses reported [11] Question: What are the expectations regarding the rate case? - The expedited rate case seeks $4.3 million in additional revenue, with interim rates effective January 1, 2026, and a decision expected by the end of the calendar year [14][15] Question: How does the company plan to address the construction delays? - Management indicated that they are monitoring the situation and hope to make up for lost construction time once the weather improves [16]

Financial Data and Key Metrics Changes - Net income for Q1 2026 was $4.8 million or $0.47 per share, down from $5.3 million or $0.51 per share in the same quarter last year [6] - Gas margins increased nominally, while lower interest expenses were noted due to Fed rate cuts, but these were offset by higher costs in personnel, IT, property taxes, and depreciation [6] Business Line Data and Key Metrics Changes - Total gas volumes remained flat compared to Q1 2025, with residential usage increasing by 8% and commercial volumes rising due to an 11% increase in heating degree days [5] - The company installed 0.6 new main miles and connected 196 new services, which is consistent with the previous year [4] Market Data and Key Metrics Changes - The recent cold snap, referred to as Winter Storm Fern, resulted in a 53% increase in heating degree days compared to normal, significantly impacting gas demand [10] - Natural gas prices experienced an unprecedented spike, multiplying by a factor of approximately 10 during the cold snap [11] Company Strategy and Development Direction - The company is focused on enhancing safety and reliability for customers, with a backlog of approximately 2.5 miles of new main to install [4] - Legislative activity in Virginia is being monitored, with a focus on ensuring that new laws do not hinder natural gas usage or development [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the local economy, despite a potential plant closure of a major industrial customer later in 2026 [9] - The company anticipates a weaker second quarter due to weather-related construction delays, but remains optimistic about making up for lost time in the spring and summer [15] Other Important Information - An expedited rate case was filed seeking approximately $4.3 million in incremental annual revenue, with interim rates effective from January 1, 2026 [13] - The company expects an estimated undercollection of $8 million to $10 million in gas costs related to Winter Storm Fern, which will be addressed with the commission [12] Q&A Session Summary Question: What is the impact of the recent cold snap on operations? - Management noted that the distribution system performed flawlessly during the cold snap, and there were no customer losses [10] Question: How is the company addressing the rate case? - The company filed an expedited rate case seeking $4.3 million in additional revenue, with interim rates already in effect [13] Question: What are the expectations for capital expenditures moving forward? - The capital forecast remains at $22 million for the fiscal year, but weather conditions may impact the second quarter's performance [15]

Revenue and Growth - Total operating revenues for the three months ended December 31, 2025, increased by approximately 11% to $30,260,468 compared to $27,289,486 in the same period last year, primarily due to higher gas costs and increased residential and commercial delivered volumes [127]. - Gas utility operating revenues for the three months ended December 31, 2025, were $30,235,141, an increase from $27,263,204 in the same period of 2024, representing an increase of approximately 7.2% [132]. - Total operating revenues for the three months ended December 31, 2025, were $30,260,468, compared to $27,289,486 for the same period in 2024, reflecting a growth of about 11.5% [132]. - Delivered volumes of regulated natural gas for residential and commercial customers increased by 6% to 2,306,247 DTH, while transportation and interruptible volumes decreased by 10% to 1,187,981 DTH [127]. - The Company recognized approximately $271,000 in additional SAVE Plan revenues for the three months ended December 31, 2025, compared to the same period last year, contributing to the overall revenue increase [117]. - RNG revenue for the three months ended December 31, 2025, was approximately $484,000, up from $388,000 in the prior year, indicating growth in renewable natural gas operations [120]. Expenses and Costs - Operations and maintenance expenses increased by $533,810, or 11%, due to inflationary pressures and increased staffing costs [132]. - The Company experienced a net income decrease of $386,824 for the three months ended December 31, 2025, primarily due to inflationary pressures on operating costs [126]. - The effective tax rate for the three-month periods ended December 31, 2025, was 21.4%, down from 23.4% in 2024, primarily due to a decrease in pre-tax income [136]. Rate Applications and Regulatory Matters - The Company filed for an expedited rate application with the SCC to increase non-gas base rates by $4.3 million annually, with new rates effective from January 1, 2026, subject to review [114]. - The Company anticipates final resolution of the SCC's review of the rate application in the first quarter of fiscal 2027 [114]. Financial Position and Cash Flow - Cash and cash equivalents increased by $335,665 for the three months ended December 31, 2025, compared to an increase of $1,204,178 for the same period in 2024 [145]. - Cash flows from operating activities increased by $252,670 compared to the same period last year, driven by colder weather and increased gas costs [147]. - Roanoke Gas has a term note of $15 million due in August 2026 and believes it has sufficient financing resources for the next year [151]. Capital Expenditures and Investments - Total capital expenditures for the three-month period ended December 31, 2025, were approximately $5.6 million, slightly down from $5.7 million in the same period last year [148]. - The company anticipates total fiscal 2026 capital expenditures to be approximately $22 million, focusing on infrastructure replacement and system improvements [148]. Debt and Financing - Interest expense decreased by $108,780, or 6%, as the weighted-average interest rate on total debt fell from 4.45% to 4.14% [135]. - Midstream established new amortizing term notes totaling $53.6 million, maturing on September 5, 2032, which refinanced all outstanding debt [152]. - Midstream's total debt principal payments over the next 12 months amount to $2,846,018 [152]. - Midstream received a quarterly cash distribution of approximately $753,000 from MVP in fiscal 2026, with expectations for similar distributions going forward [152]. Weather Impact - The WNA mechanism resulted in a revenue reduction of approximately $319,000 for the three months ended December 31, 2025, due to weather being 4% colder than normal, compared to an increase of approximately $500,000 for the same period last year when it was 6% warmer [118]. - The average price of gas in storage during the first quarter of fiscal 2026 increased by 3% compared to the same period in fiscal 2025, which may lead to higher ICC revenues if natural gas prices remain stable [119]. Utility Margin - Gross utility margin for the same period increased slightly to $15,653,526, reflecting a 1% increase from $15,560,495, driven by higher SAVE and RNG revenues [130]. - Gross utility margin (Non-GAAP) for the three months ended December 31, 2025, was $15,653,526, up from $15,560,495 in 2024, indicating a slight increase of 0.6% [132].

Financial Performance - RGC Resources, Inc. reported consolidated earnings of $4.9 million, or $0.47 per share, for Q1 2026, a decrease from $5.3 million, or $0.51 per share, in Q1 2025[2] - Operating revenues increased to $30.26 million in Q1 2026 from $27.29 million in Q1 2025, reflecting a growth of approximately 7.3%[8] - Operating expenses rose to $23.71 million in Q1 2026, up from $19.96 million in Q1 2025, indicating an increase of about 18.0%[8] - Cash dividends per common share increased to $0.2175 in Q1 2026 from $0.2075 in Q1 2025, representing a growth of approximately 9.6%[8] Rate Case and Revenue - The company filed a rate case seeking $4.3 million in additional annualized revenue to address higher costs, with interim rates effective January 1, 2026[2] Assets and Liabilities - Total assets as of December 31, 2025, were $341.04 million, a slight increase from $335.17 million in 2024[10] - Current liabilities decreased significantly to $40.10 million in Q1 2026 from $64.32 million in Q1 2025, a reduction of about 37.6%[10] - Long-term debt increased to $137.99 million in Q1 2026 from $111.34 million in Q1 2025, reflecting an increase of approximately 24.0%[10] Customer Growth and Infrastructure - The company emphasized continued customer growth and infrastructure investments, with a focus on system reliability[3] - CEO Paul Nester noted that customer growth was supported by new housing and a higher-than-normal number of reconnections this quarter[3]

Financial Performance - RGC Resources, Inc. reported consolidated earnings of $4.9 million, or $0.47 per share, for Q1 2026, a decrease from $5.3 million, or $0.51 per share, in Q1 2025, attributed to flat margins and increased costs [1] - Operating revenues increased to $30.26 million in Q1 2026 from $27.29 million in Q1 2025, while operating expenses rose to $23.71 million from $19.96 million [4] - Net income for the quarter was $4.88 million, down from $5.27 million in the previous year [5] Cost and Revenue Drivers - The decrease in earnings was influenced by higher costs related to personnel, IT, property taxes, and depreciation, which were partially offset by lower interest expenses [1] - The company filed a rate case seeking an additional $4.3 million in annualized revenue to address rising costs, with interim rates effective January 1, 2026, pending review [1] Operational Highlights - The distribution system performed well despite fluctuating temperatures, with customer growth continuing due to new housing and a higher-than-normal number of reconnections [2] - RGC Resources, Inc. focuses on enhancing system reliability and investing in utility infrastructure [2] Balance Sheet Overview - Total assets increased to $341.04 million as of December 31, 2025, compared to $335.17 million in 2024 [5] - Current liabilities decreased significantly to $40.10 million from $64.32 million, while long-term debt rose to $138.00 million from $111.34 million [5]

Core Points - RGC Resources held its virtual annual meeting of stockholders, presided over by Chairman John Williamson and attended by key executives [2] - The company reported a quorum with 82.68% of shares voted, allowing the meeting to proceed [3] Meeting Materials - The board set November 28, 2025, as the record date for determining stockholders entitled to vote, with meeting materials available online [3] - A total of 10,350,531 shares were outstanding, with 8,558,392 shares voted [3] Proposals and Voting Results - Four proposals were presented to stockholders, including the election of Class B directors and the ratification of auditors [4][6] - Shareholders elected Class B directors Jacqueline L. Archer, Frank Russell Ellett, and Robert Johnston with 6,968,792 votes in favor [5] - Deloitte & Touche LLP was ratified as auditors for fiscal 2026 with 8,534,492 votes for and 19,687 against [5] - An additional 50,000 common shares were authorized for the company's stock bonus plan, and a non-binding advisory vote on executive compensation received 7,100,740 votes in favor [5][6]

Core Viewpoint - RGC Resources, Inc. will host a quarterly conference call on February 10, 2026, to discuss its fiscal first quarter 2026 results [1]. Group 1: Conference Call Details - The conference call will take place at 9:00 a.m. eastern time [1]. - Interested parties can access the call by dialing toll-free 1-877-304-9269 and entering the conference identification number 917621 [2]. - An archive of the webcast will be available for one year on the company's investor relations website [2]. Group 2: Company Overview - RGC Resources, Inc. provides energy and related products and services to customers in Virginia through its subsidiaries, Roanoke Gas Company and RGC Midstream, LLC [2].

Financial Data and Key Metrics Changes - As of the record date, there were 10,350,531 shares outstanding, with 8,558,392 shares, or 82.68%, voted [8] - The shareholders ratified the appointment of Deloitte & Touche LLP as auditors for 2026 with 8,534,492 votes in favor [15][16] Business Line Data and Key Metrics Changes - Proposal three authorized an additional 50,000 common shares for issuance under the stock bonus plan, with 7,100,740 votes in favor [18][19] Company Strategy and Development Direction - The company is focused on maintaining strong governance and has recognized the contributions of retiring directors, indicating a commitment to continuity and stability in leadership [24][28] Management's Comments on Operating Environment and Future Outlook - The company encourages participation in its upcoming earnings call scheduled for February 10, which will review first-quarter results and provide an outlook for fiscal year 2026, suggesting a proactive approach to communication with shareholders [30] Other Important Information - The meeting acknowledged the passing of a former board member, highlighting the company's respect for its history and leadership [5] - Resolutions of appreciation were passed for retiring directors, indicating a culture of valuing long-term service and contributions [24][28] Q&A Session Summary - No questions were submitted during the Q&A session, indicating either a lack of inquiries from shareholders or satisfaction with the information provided [30]