Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Transition Period From to Commission File Number 000-26591 RGC Resources, Inc. (Exact name of Registrant as Specified in its Charter) Virginia 54-1909697 (State or Other Ju ...

RGC Resources, Inc. (NASDAQ:RGCO) Q2 2023 Earnings Conference Call May 8, 2023 9:00 AM ET Company Participants Tommy Oliver - Senior Vice President of Regulatory and External Affairs Paul Nester - President and Chief Executive Officer Jason Field - Chief Financial Officer and Treasurer Conference Call Participants Michael Gaugler - Janney Montgomery Scott Tommy Oliver Good morning, everybody. I'm Tommy Oliver, Senior Vice President of Regulatory and External Affairs for RGC Resources, Inc. I want to thank y ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of Registrant as Specified in its Charter) Virginia 54-1909697 (State or Other Jurisdiction of Incorporation or Organization) 519 Kimball Ave., N.E., Roanoke, VA 2 ...

RGC Resources, Inc. (NASDAQ:RGCO) Q1 2023 Earnings Conference Call February 10, 2023 9:00 AM ET Company Participants Paul Nester - President, CEO & Director Jason Field - VP, CFO & Treasurer Tommy Oliver - SVP, Regulatory and External Affairs Conference Call Participants Paul Nester Good morning, and welcome to RGC Resources 2023 First Quarter Earnings Call. I am Paul Nester, President and CEO of RGC Resources. Let's review a few administrative items. [Operator Instructions]. At the conclusion of the presen ...

Form 10-Q (Mark One) Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended December 31, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Transition Period From to Commission File Number 000-26591 RGC Resources, Inc. (Exact name of Registrant as Specified in its Charter) Virginia 54-1909697 (State or Other ...

RGC Resources, Inc. (NASDAQ:RGCO) Q4 2022 Earnings Conference Call December 5, 2022 9:00 AM ET Company Participants Paul Nester - President and CEO Jason Field - CFO Tommy Oliver - VP, Regulatory Affairs and Strategy Kelsie Davenport - Director of Finance Conference Call Participants Paul Nester Good morning, everyone. I'm Paul Nester, President and CEO of RGC Resources Inc. Thank you for joining us as we discuss RGC Resources 2022 Fourth Quarter Results. We do have a few administrative items to cover. [Op ...

RGC Resources, Inc. (NASDAQ:RGCO) Q3 2022 Earnings Conference Call August 11, 2022 9:00 AM ET Company Participants Paul Nester - President, CEO Jason Field - CFO Tommy Oliver - VP, RA&S Kelsie Davenport - DoF Conference Call Participants Paul Nester Good morning. I'm Paul Nester, President and CEO of RGC Resources. Thank you for joining us as we discuss RGC Resources 2022 third quarter results. Let's review a few administrative items. We have muted all lines [Operator Instructions]. The link to today's pres ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended June 30, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Transition Period From to Commission File Number 000-26591 RGC Resources, Inc. (Exact name of Registrant as Specified in its Charter) Virginia 54-1909697 (State or Other Juri ...

RGC Resources, Inc. (NASDAQ:RGCO) Q2 2022 Earnings Conference Call May 11, 2022 9:00 AM ET Company Participants Paul Nester - President, CEO & Director Jason Field - VP, CFO & Treasurer Conference Call Participants Paul Nester Good morning. I'm Paul Nester, President and CEO of RGC Resources. Welcome, and thank you for joining us as we discuss our 2022 second quarter results. We would like to apologize for the technical issues we experienced Monday with our conference call line. We do appreciate your patien ...

Part I [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The company reported a significant net loss for the period, primarily due to a $39.8 million MVP impairment, affecting assets but boosting equity [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $288.4 million due to reduced affiliate investment, while stockholders' equity increased to $105.5 million from stock issuance Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2022 | September 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$288,358,485** | **$310,109,193** | | Cash and cash equivalents | $9,431,990 | $1,518,317 | | Investment in unconsolidated affiliates | $27,321,251 | $64,867,319 | | **Total Liabilities** | **$182,895,756** | **$210,407,484** | | Long-term debt, net | $104,841,078 | $133,471,427 | | **Total Stockholders' Equity** | **$105,462,729** | **$99,701,709** | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company shifted from net income to a $24.5 million net loss in Q2 2022, primarily due to a $39.8 million MVP impairment, despite increased operating revenues Income Statement Summary (Unaudited) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $29,529,683 | $28,253,662 | $52,792,763 | $47,770,679 | | Operating Income | $7,443,388 | $7,099,426 | $12,821,811 | $12,680,813 | | Impairment of unconsolidated affiliates | ($39,822,213) | $0 | ($39,822,213) | $0 | | **Net Income (Loss)** | **($24,494,429)** | **$4,767,478** | **($20,909,900)** | **$9,490,741** | | **Diluted EPS (Loss)** | **($2.89)** | **$0.58** | **($2.48)** | **$1.16** | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to $13.0 million due to non-cash adjustments, while financing activities rose significantly from a $28.3 million stock issuance Cash Flow Summary (Six Months Ended March 31, Unaudited) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,992,906 | $9,611,402 | | Net cash used in investing activities | ($14,278,880) | ($11,691,440) | | Net cash provided by financing activities | $9,199,647 | $2,515,521 | | **Net increase in cash** | **$7,913,673** | **$435,483** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail a $27 million equity offering, a $39.8 million MVP impairment, segment results, and compliance with debt covenants - In March 2022, the Company issued 1,350,000 shares of common stock, raising net proceeds of nearly **$27 million** to strengthen its balance sheet and fund infrastructure programs[25](index=25&type=chunk) - A pre-tax impairment loss of approximately **$39.8 million** was recognized in Q2 2022 on the company's investment in the Mountain Valley Pipeline (MVP) and Southgate projects due to unfavorable court rulings that increased uncertainty about the projects' completion[42](index=42&type=chunk)[44](index=44&type=chunk) Segment Income (Loss) Before Income Taxes (Three Months Ended March 31, 2022) | Segment | Income (Loss) Before Taxes | | :--- | :--- | | Gas Utility | $7,117,202 | | Investment in Affiliates | ($40,279,495) | | Parent and Other | $23,689 | | **Consolidated Total** | **($33,138,604)** | - The company was in compliance with **all debt covenants** as of March 31, 2022, including a key covenant that excludes the non-cash impairment on LLC investments from the interest coverage ratio calculation[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the $39.8 million MVP impairment, stable Gas Utility business, $27 million equity raise, and ongoing MVP project challenges [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Net income fell to a loss due to the $39.8 million MVP impairment, while gross utility margin increased by 6% to $14.6 million, and O&M expenses rose Gross Utility Margin Comparison (Three Months Ended March 31) | Metric | 2022 | 2021 | Increase | Percentage | | :--- | :--- | :--- | :--- | :--- | | Gas Utility Revenues | $29,499,219 | $28,221,274 | $1,277,945 | 5% | | Cost of Gas - Utility | $14,923,575 | $14,447,057 | $476,518 | 3% | | **Gross Utility Margin** | **$14,575,644** | **$13,774,217** | **$801,427** | **6%** | - The increase in gross utility margin for Q2 2022 was driven by higher SAVE revenues (+$193k), WNA revenues (+$307k), and transportation volumes[115](index=115&type=chunk)[117](index=117&type=chunk) - Operations and maintenance expenses for Q2 2022 increased by **8%** (**$310,537**), primarily due to higher bad debt expense (+$194k), insurance premiums (+$43k), and professional services for the LLC impairment valuation (+$44k)[117](index=117&type=chunk) [Equity Investment in Mountain Valley Pipeline](index=48&type=section&id=Equity%20Investment%20in%20Mountain%20Valley%20Pipeline) The MVP project faced significant legal setbacks, leading to a $39.8 million impairment loss and a revised completion target of H2 2023 at $6.6 billion - The Fourth Circuit vacated and remanded key permits for the MVP project in January and February 2022, creating significant uncertainty[148](index=148&type=chunk) - As a result of legal setbacks, the company recorded a pre-tax impairment loss of approximately **$39.8 million** on its LLC investment in the second quarter of fiscal 2022[154](index=154&type=chunk) - The MVP operator is now targeting a full in-service date in the **second half of 2023** with a revised total project cost of approximately **$6.6 billion** (excluding AFUDC)[148](index=148&type=chunk) [Capital Resources and Liquidity](index=52&type=section&id=Capital%20Resources%20and%20Liquidity) The company's liquidity improved with a $27 million equity offering, increased operating cash flow, renewed credit lines, and a 46% equity to 54% debt capitalization ratio - A March 2022 equity offering of 1,350,000 common shares resulted in net proceeds of nearly **$27 million**, which was used to strengthen the balance sheet and reduce debt[170](index=170&type=chunk) - On March 31, 2022, Roanoke Gas entered into a new one-year unsecured line-of-credit agreement with borrowing limits ranging from **$21 million to $33 million**[168](index=168&type=chunk) - The company's long-term capitalization ratio stood at **46% equity** and **54% debt** as of March 31, 2022[173](index=173&type=chunk) Part II [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight increased uncertainty for the MVP investment due to adverse court rulings, potentially leading to further impairment and impacting financial position - The primary updated risk factor relates to the Investment in Mountain Valley Pipeline, LLC, following adverse rulings by the Fourth Circuit Court in early 2022[181](index=181&type=chunk) - The company warns that future circumstances, such as construction delays or further permit denials, could lead to additional and possibly **full impairment** of the remaining investment in the LLC[181](index=181&type=chunk) - Significant delays or failure to receive requisite approvals for the MVP could **materially impact** Resources' consolidated financial position, results of operations, and ability to pay shareholder dividends at the current level[182](index=182&type=chunk)[185](index=185&type=chunk) [Other Items](index=56&type=section&id=Other%20Items) No material legal proceedings, unregistered equity sales, senior security defaults, or mine safety disclosures were reported for the period - Item 1 – Legal Proceedings: No material proceedings[179](index=179&type=chunk) - Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds: None[189](index=189&type=chunk) - Item 3 – Defaults Upon Senior Securities: None[190](index=190&type=chunk)