Group 1: Company Overview - RGC Resources Inc. (RGCO) is part of the Oils-Energy sector, which includes 245 companies and is currently ranked 16 in the Zacks Sector Rank [2] - The company has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook with a 1.6% increase in the consensus estimate for full-year earnings over the past quarter [3] Group 2: Performance Analysis - Year-to-date, RGC Resources Inc. has returned 3.3%, outperforming the average loss of 1.8% in the Oils-Energy sector [4] - In comparison, Subsea 7 SA (SUBCY) has shown a stronger performance with a 9.9% increase year-to-date [4] Group 3: Industry Context - RGC Resources Inc. operates within the Oil and Gas - Refining and Marketing industry, which has 12 stocks and is currently ranked 152 in the Zacks Industry Rank, with an average gain of 7.2% this year [6] - In contrast, Subsea 7 SA is in the Oil and Gas - Field Services industry, which has 23 stocks and is ranked 179, with a year-to-date decline of 12.9% [7]

Financial Data and Key Metrics Changes - The company reported a net income of $7.7 million or $0.74 per share for the second quarter, a 17% increase from $6.4 million or $0.63 per share in the same quarter last year [9] - Year-to-date net income reached $12.9 million or $1.26 per share, compared to $1.14 per share in the first half of the previous fiscal year, marking an 11% increase [10] - The company ended the second quarter with a strong balance sheet, having renewed its line of credit and raised maximum availability to $30 million [11] Business Line Data and Key Metrics Changes - Total delivered gas volumes increased by 20% in the second quarter compared to the same period last year, driven by higher consumption from an industrial customer [4] - Residential and commercial volumes also rose due to a 21% increase in heating degree days compared to the same quarter last year [5] - For the first half of the fiscal year, total gas volumes were up 18% compared to the first half of the previous fiscal year, with heating degree days increasing by 16% [5] Market Data and Key Metrics Changes - The company experienced strong residential development in the region, connecting 359 new services in the first six months of the fiscal year [4] - The regulatory environment remains stable, with a confirmed annual revenue increase of over $4 million based on a 9.9% return on equity and a 59% equity ratio [6] Company Strategy and Development Direction - The company is focused on enhancing safety and reliability through continued investment in its system, despite a slight decrease in renewal activity compared to the previous year [4] - The company is actively participating in discussions regarding potential data center locations in the region, leveraging its access to energy and infrastructure [20] - The company has raised its earnings per share guidance for 2025 to a range of $1.22 to $1.27, reflecting confidence in continued performance [23] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors have affected business activity, particularly for large customers in sensitive sectors [14] - The company is optimistic about recent economic development successes and potential growth opportunities in the Roanoke region [24] - Management emphasized the importance of weather patterns, stating that cooler weather significantly impacts business performance [36] Other Important Information - Capital expenditures for the first half of fiscal 2025 totaled $10.7 million, down approximately 5% from the same period last year [7] - The company is considering long-term refinancing options for its midstream debt, which is classified as current [11] Q&A Session Summary Question: Interest expense trends and refinancing - Management indicated that while interest expense has dropped quarter over quarter, future trends depend on economic conditions and Federal Reserve actions [28][29] Question: AFUDC for Southgate - Management clarified that due to the cost method of accounting, they do not recognize any AFUDC related to Southgate [31] Question: Customer refunds and WNA adjustment - Management confirmed that customer refunds associated with the rate case will be offset by the WNA adjustment [32][33]

Financial Data and Key Metrics Changes - The company reported a net income of $7.7 million or $0.74 per share for the second quarter, a 17% increase from $6.4 million or $0.63 per share in the same quarter last year [8][9] - Year-to-date net income reached $12.9 million or $1.26 per share, up 11% from $1.14 per share in the first half of the previous fiscal year [9][10] - The company ended the second quarter with a strong balance sheet, having renewed its line of credit and raised maximum availability to $30 million [11] Business Line Data and Key Metrics Changes - Total delivered gas volumes increased by 20% in the second quarter compared to the same period last year, driven by higher consumption from an industrial customer [4][5] - Residential and commercial volumes also rose due to a 21% increase in heating degree days compared to the same quarter last year [5] Market Data and Key Metrics Changes - The company connected 359 new services in the first half of fiscal 2025, indicating robust residential development in the region [3] - The company renewed 1.9 miles of main and 59 services during the first half of the fiscal year, reflecting continued investment in system safety and reliability [3] Company Strategy and Development Direction - The company plans to focus on economic development opportunities in the Roanoke Valley, highlighting recent expansions by local businesses [16][19] - The company is actively participating in discussions regarding data centers, leveraging the region's access to energy and infrastructure [20] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors have affected business activity, particularly for large customers in sensitive sectors [14][15] - The company raised its earnings per share guidance for 2025 to a range of $1.22 to $1.27, despite expecting a small net loss in the fourth quarter [23][24] Other Important Information - Capital expenditures for the first half of fiscal 2025 totaled $10.7 million, down approximately 5% from the previous year [7] - The company is considering long-term refinancing options for its midstream debt, which is classified as current [11] Q&A Session Summary Question: Interest expense trends and refinancing - Management indicated that while interest expense has dropped, future trends depend on economic conditions and Federal Reserve actions [28][29] Question: AFUDC for Southgate - Management clarified that due to the cost method of accounting, they will not recognize any AFUDC related to Southgate [31] Question: Customer refunds and WNA adjustment - Management confirmed that customer refunds associated with the rate case will be offset by the WNA adjustment [32][33]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) The unaudited financial statements for March 31, 2025, reflect increased assets and net income, alongside a going concern warning due to significant maturing debt - Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern due to **$35.6 million** of current maturities of long-term debt, which it expects to refinance[26](index=26&type=chunk) [Financial Statements](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The unaudited financial statements for March 31, 2025, reflect increased assets and net income, but also highlight a going concern issue due to significant maturing debt [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets and stockholders' equity increased, while total liabilities also rose, primarily due to higher current maturities of long-term debt Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$326,421,287** | **$320,699,223** | | Total Current Assets | $25,777,943 | $25,072,301 | | Utility Property, Net | $267,560,507 | $262,041,454 | | **Total Liabilities** | **$208,588,064** | **$212,562,448** | | Total Current Liabilities | $45,489,019 | $28,698,430 | | Long-Term Debt, Net | $115,226,622 | $136,672,908 | | **Total Stockholders' Equity** | **$117,833,223** | **$108,136,775** | [Condensed Consolidated Statements of Income](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the six months ended March 31, 2025, net income increased to $12.9 million, driven by a 12% rise in total operating revenues Income Statement Summary (Unaudited) | Metric | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total Operating Revenues | $63,751,583 | $57,078,728 | | Operating Income | $17,727,963 | $15,281,746 | | Net Income | $12,945,897 | $11,463,382 | | Diluted EPS | $1.26 | $1.13 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended March 31, 2025, operating cash flow significantly increased, while investing activities used slightly less cash and financing activities shifted to a net cash outflow Cash Flow Summary (Unaudited) | Cash Flow Activity | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $21,834,963 | $11,202,002 | | Net Cash used in Investing Activities | ($10,708,806) | ($11,280,748) | | Net Cash (used in) provided by Financing Activities | ($9,867,571) | $585,498 | | **Net Increase in Cash** | **$1,258,586** | **$506,752** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes provide details on financial statement presentation, including a going concern warning, revenue recognition, segment performance, MVP investment impact, debt agreements, and regulatory matters - The company's subsidiary, Midstream, has **$35.6 million** in long-term debt maturing in the next 12 months, which exceeds available liquidity, creating substantial doubt about the company's ability to continue as a going concern[26](index=26&type=chunk) - On April 10, 2025, the SCC approved a settlement for Roanoke Gas's general rate application, resulting in a **$4.08 million** annual revenue increase based on a **9.90%** return on equity[50](index=50&type=chunk) - The Mountain Valley Pipeline (MVP) entered commercial operation on June 14, 2024, with the company recognizing its share of earnings and receiving approximately **$1.8 million** in cash distributions in the first half of fiscal 2025[54](index=54&type=chunk)[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the increase in net income driven by higher rates and volumes, alongside liquidity challenges from maturing debt, expressing confidence in refinancing efforts [Overview](index=41&type=section&id=Overview) The company, primarily a regulated natural gas distributor, is influenced by SCC-approved rates and weather, with a recent rate case settlement approving a $4.08 million annual revenue increase - A settlement with the SCC resulted in an approved annual revenue increase of **$4.08 million** and a return on equity of **9.90%**[111](index=111&type=chunk) - The Weather Normalization Adjustment (WNA) mechanism mitigated earnings volatility, with the company accruing approximately **$473,000** in additional revenue for the six months ended March 31, 2025, compared to **$2.9 million** in the prior year[115](index=115&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Net income increased by $1.5 million for the six months ended March 31, 2025, driven by higher operating revenues and gross utility margin, despite reduced MVP equity earnings Three Months Ended March 31, 2025 vs 2024 | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenues | $36,462,097 | $32,659,376 | $3,802,721 | 12% | | Gross Utility Margin | $19,373,783 | $17,332,941 | $2,040,842 | 12% | | Net Income | $7,676,208 | $6,443,390 | $1,232,818 | 19% | Six Months Ended March 31, 2025 vs 2024 | Metric | YTD 2025 | YTD 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenues | $63,751,583 | $57,078,728 | $6,672,855 | 12% | | Gross Utility Margin | $34,934,278 | $31,627,779 | $3,306,499 | 10% | | Net Income | $12,945,897 | $11,463,382 | $1,482,515 | 13% | - Equity in earnings of unconsolidated affiliate (primarily MVP) decreased by **$1,041,831 (39%)** for the six-month period, as in-service operational earnings did not fully replace AFUDC recognized during the prior year's construction phase[144](index=144&type=chunk) [Capital Resources and Liquidity](index=55&type=section&id=Capital%20Resources%20and%20Liquidity) Liquidity is driven by operating cash flows, with projected $22 million in capital expenditures and a significant challenge from $35.6 million in maturing Midstream debt, which management expects to refinance - Total fiscal 2025 capital expenditures are expected to be approximately **$22 million**, focused on SAVE infrastructure replacement projects and system expansion[162](index=162&type=chunk) - Midstream's debt service over the next 12 months includes **$35.6 million** to retire maturing debt, which management believes it will be able to renegotiate and resolve[166](index=166&type=chunk) - The company's long-term capitalization ratio as of March 31, 2025, was **45% equity** and **55% debt**[167](index=167&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is not applicable for the current reporting period - Not applicable[168](index=168&type=chunk) [Controls and Procedures](index=60&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of March 31, 2025, with a new ERP system implemented post-period expected to impact internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of **March 31, 2025**[170](index=170&type=chunk) - On April 1, 2025, the Company implemented a new enterprise resource planning (ERP) system, which will result in changes to internal control over financial reporting[172](index=172&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes information on legal proceedings, risk factors, and a list of filed exhibits [Legal Proceedings](index=61&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reported no legal proceedings for the current period - None[176](index=176&type=chunk) [Risk Factors](index=61&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended September 30, 2024 - There have been no material changes to the risk factors previously disclosed in Resources' Annual Report on Form 10-K for the year ended **September 30, 2024**[177](index=177&type=chunk) [Exhibits](index=62&type=section&id=ITEM%206.%20EXHIBITS) The report lists several filed exhibits, including agreements, promissory notes, and officer certifications - Exhibits filed include a Natural Gas Asset Management Agreement with DTE Energy Trading, an Amended and Restated Promissory Note with Pinnacle Bank, and CEO/CFO certifications[182](index=182&type=chunk)

Core Insights - RGC Resources Inc. reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.68 per share, and showing an increase from $0.63 per share a year ago, resulting in an earnings surprise of 8.82% [1] - The company achieved revenues of $36.46 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 7.24% and up from $32.66 million year-over-year [2] - RGC Resources has outperformed the S&P 500, gaining approximately 4.7% since the beginning of the year, while the S&P 500 has declined by 3.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $15 million, and for the current fiscal year, it is $1.23 on revenues of $89 million [7] - The estimate revisions trend for RGC Resources is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Oil and Gas - Refining and Marketing industry is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

NEWS RELEASE Through the first six months of fiscal 2025, the Company's net income of $12,945,897, or $1.26 per share, was up 12.9% from $11,463,382, or $1.14 per share, with similar reasons as the quarter – higher utility margin offset by lower earnings from the Company's investment in MVP and higher interest expense. In early April, the State Corporation Commission issued a final order and made permanent the negotiated rates from the Company's 2024 rate case filing. RGC Resources, Inc. provides energy and ...

ROANOKE, Va., May 06, 2025 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (Nasdaq: RGCO) announced consolidated Company earnings of $7,676,208, or $0.74 per share, for the second quarter ended March 31, 2025, compared to $6,443,390, or $0.63 per share, for the second quarter ended March 31, 2024. The primary drivers of the increased earnings were higher base rates that went into effect July 1, 2024 and increased volumes, offset by lower earnings from unconsolidated affiliate and higher interest expense. Cooler win ...

ROANOKE, Va., April 24, 2025 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (NASDAQ:RGCO) will host its quarterly conference call and webcast to review the results of its fiscal second quarter 2025 on Thursday, May 8, 2025 at 9:00 a.m. eastern time. Related presentation materials will be available before the call on the Company website on the Investor & Financial Information page at https://www.rgcresources.com/investor-financial-information/. Interested parties may access the conference call by dialing toll-free ...

Financial Data and Key Metrics Changes - Net income for Q1 2025 was $5.3 million or $0.51 per share, compared to $5 million or $0.50 per share in Q1 2024, indicating a slight increase in profitability [12] - Equity in earnings from unconsolidated affiliates was $854,000 pre-tax, down from $1.5 million in the same quarter last year, reflecting a change in revenue recognition due to operational differences [12][13] - Interest expense increased by $143,000 compared to the same quarter last year, attributed to higher average balances and interest rates [13] Business Line Data and Key Metrics Changes - Main extensions and renewal activity showed strong performance with 1.1% increase in main miles and 197 new service connections, up from 185 in Q1 2024 [7] - Delivered gas volumes increased by 16% year-over-year, driven by a transportation customer increasing natural gas consumption [8] - Residential and small commercial volumes rose by 4%, supported by a 10% increase in heating degree days compared to Q1 2024 [9] Market Data and Key Metrics Changes - The company noted steady housing growth in the region, with new neighborhoods under development, which is expected to drive future service connections [18] - The economic environment is characterized by uncertainty due to recent political changes, which may have inflationary effects [22] Company Strategy and Development Direction - The company plans to maintain total capital spending at approximately $21.6 million for fiscal 2025, with potential adjustments based on conditions [21] - The company is focused on expanding its service area, particularly in Franklin County, and expects progress as winter weather subsides [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the earnings per share forecast of $1.18 to $1.25 for the fiscal year, with a clearer outlook expected after the second quarter [28] - The company has effectively managed inflationary pressures through recent rate cases, which are expected to mitigate some cost increases [23][26] - The management highlighted the successful performance of the system during extreme cold weather, with no customer outages reported [29] Other Important Information - The company is in discussions with lenders regarding refinancing a $25 million non-revolving line of credit, with positive feedback anticipated [14] - The company expects to renew its Roanoke Gas line of credit in the upcoming month [15] Q&A Session Summary Question: What is the outlook for the company's growth in the current economic environment? - Management acknowledged economic uncertainty but emphasized the solid footing of the local market and growth opportunities in the Roanoke region [30] Question: How is the company addressing inflationary pressures? - Management noted that back-to-back rate cases have helped manage inflationary pressures, with stipulated rates capturing much of the current inflation [23][26] Question: What are the expectations for capital spending in fiscal 2025? - Management confirmed that total capital spending is expected to remain in the range of $21.5 million to $22 million, with potential adjustments based on conditions [21]

RGC Resources Inc. (RGCO) came out with quarterly earnings of $0.51 per share, beating the Zacks Consensus Estimate of $0.50 per share. This compares to earnings of $0.50 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2%. A quarter ago, it was expected that this company would post a loss of $0.01 per share when it actually produced earnings of $0.01, delivering a surprise of 200%.Over the last four quarters, the company has s ...