Financial Data and Key Metrics Changes - In Q4 2024, net income was $141,000 or $0.01 per share, down from $1 million or $0.10 per share in Q4 2023, reflecting lower earnings from the investment in MVP and higher interest costs [13][14] - For the full fiscal year 2024, net income grew by $462,000 to $11.8 million or $1.16 per share, compared to $11.3 million or $1.14 per share in fiscal 2023 [15] Business Line Data and Key Metrics Changes - Capital spending for fiscal 2024 totaled $22.1 million, down from $25.3 million in the previous fiscal year, primarily due to reduced spending on the RNG facility [11][12] - Delivered gas volumes in Q4 2024 were 5% lower compared to Q4 2023, attributed to warm weather and lower commercial volumes [9] Market Data and Key Metrics Changes - The company expects to receive final approval for a rate case settlement that allows for an increase of $4.08 million in annual revenue, reflecting a return on equity (ROE) of 9.9% [6] Company Strategy and Development Direction - The company is focused on growth opportunities in Franklin County, leveraging the operational capacity of the Mountain Valley pipeline, which can transport up to 2 billion dekatherms a day [18][22] - A capital spending plan of $21.6 million for fiscal 2025 is in place, with investments aimed at expanding the distribution system and supporting new customer connections [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth potential in the Roanoke Valley and Franklin County, citing strong housing growth and ongoing medical complex expansions [20][35] - The company is addressing inflationary pressures and interest rate fluctuations, with a cautious outlook on expenses [26][30] Other Important Information - The board approved an annual dividend increase of just under 4% to $0.83, aligning with the company's operational success [33] - The company anticipates modest contributions from RGC midstream in 2025, estimating cash flow of approximately $3.2 million from the joint venture [30][32] Q&A Session Summary Question: What are the current flows for MVP given the cold weather? - Management indicated that the pipeline is mostly full, with flows between 1.5 Bcf to 2 Bcf a day [40] Question: Are there any changes regarding the expansion post-election? - Management noted that energy policy may become more favorable under the new administration, potentially accelerating expansion processes [42][44] Question: Will cash from MVP be reinvested in expansions? - Management confirmed that while covering interest costs is a priority, there are opportunities for reinvestment in expansions [45][47] Question: What is the rate base number for the Roanoke rate order? - The rate base was around $200 million, with total estimates between $210 million to $220 million [55][56] Question: What are the equity needs going forward? - Management stated that they feel well-capitalized in the regulated utility and do not anticipate a large equity infusion for 2025 [75]

Revenue and Rate Changes - Roanoke Gas implemented interim non-gas base rates effective January 1, 2023, aimed at generating an additional $8.55 million in annual revenues due to higher operating costs[96]. - The SCC approved a final non-gas base rate increase of $7.45 million on December 19, 2023, with a refund of excess revenues collected during interim rates to be issued in February 2024[96]. - The SAVE Plan revenues decreased to approximately $461,000 in fiscal 2024 from approximately $1,104,000 in fiscal 2023, reflecting the reset of the SAVE Plan and Rider effective January 1, 2023[100]. - The WNA mechanism generated approximately $3,761,000 in additional revenues for fiscal 2024 due to weather being approximately 20% warmer than normal[102]. - Gas utility revenues decreased by $12,792,206, or 13%, to $84,533,101 for the year ended September 30, 2024, compared to $97,325,307 in 2023[117]. Operating Performance - Total operating revenues for the year ended September 30, 2024, decreased by 13% to $84,641,232, primarily due to lower natural gas commodity prices and reduced deliveries[114]. - Natural gas commodity prices for fiscal 2024 purchases declined by 43% per DTH compared to the prior year, contributing to a 29% decrease in total gas costs[116]. - The operation of the RNG facility resulted in total RNG revenue increasing from approximately $712,000 in fiscal 2023 to $1,629,000 in fiscal 2024[104]. - ICC revenues decreased from approximately $967,000 in fiscal 2023 to $728,000 in fiscal 2024, attributed to lower natural gas commodity prices[103]. - The total delivered volumes of regulated natural gas decreased by 1% to 10,048,770 DTH for the year ended September 30, 2024[114]. Financial Metrics - Net income increased by $461,614 from the prior year, driven by AFUDC and earnings from the MVP, despite inflationary pressures on operating expenses[110]. - Gross utility margin increased by $2,982,525, or 7%, reaching $48,565,114 in fiscal 2024, primarily due to new non-gas base rates and increased RNG Rider contributions[117]. - Basic and diluted earnings per share increased to $1.16 in fiscal 2024 from $1.14 in fiscal 2023, while dividends declared per share rose to $0.80 from $0.79[132]. Expenses and Cash Flow - Operations and maintenance expenses increased by $2,450,764, or 15%, primarily due to inflationary effects on personnel costs and increased professional services[122]. - Total interest expense rose by $886,080, or 16%, driven by higher interest rates on variable rate debt, with the average interest rate increasing from 3.83% to 4.27%[128]. - Cash and cash equivalents decreased by approximately $618,000 in fiscal 2024, compared to a decrease of $3.4 million in fiscal 2023[135]. - Operating cash flows decreased by $6.4 million, from $23.8 million in 2023 to $17.4 million in 2024[137]. - The average price of gas in storage decreased from over $6.00 per DTH in 2023 to approximately $4.00 per DTH in 2024, impacting cash flow levels[137]. Capital Expenditures and Financing - Capital expenditures were approximately $22.1 million in 2024, down from $25.3 million in 2023, primarily due to reduced investment in the RNG project[138]. - Financing activities provided approximately $4.0 million in 2024, an increase of $3.8 million from $200,000 in 2023, driven by net borrowings of $6.8 million[143]. - The company's consolidated capitalization was 44.1% equity and 55.9% long-term debt as of September 30, 2024[143]. - The company expects capital expenditures to remain around $22 million annually over the next few years[140]. Investments and Earnings - The equity in earnings of the MVP investment increased by $1,766,881 due to ongoing construction activities, with operational earnings now being recognized[126]. - The first cash distribution from the MVP was approximately $800,000 in October 2024, with similar distributions expected quarterly[146]. - The company recorded equity in earnings of consolidated affiliates of $3.9 million in 2024, up from $2.1 million in 2023[152]. Pension and Postretirement Plans - The pension plan's funded status improved to 104% as of September 30, 2024, up from 100% in 2023, with a fair value of assets at $31,054,138 and a benefit obligation of $29,873,428[165]. - The postretirement plan's funded status increased to 139% as of September 30, 2024, compared to 116% in 2023, with a fair value of assets at $15,078,281 and a benefit obligation of $10,842,455[165]. - The long-term rate of return assumptions for the pension plan increased from 4.50% in fiscal 2024 to 4.95% for fiscal 2025, while the postretirement plan's rate rose from 4.21% to 4.95%[166]. - The company does not expect to make contributions to its pension and postretirement plans in fiscal 2025 due to their funded positions[167]. - The pension plan's sensitivity analysis indicates a $106,000 increase in pension costs with a 0.25% decrease in the discount rate[169]. Asset Allocation and Risk Management - The company transitioned the pension plan's asset allocation from 60% equity and 40% fixed income to 25% equity and 75% fixed income since January 2017[162]. - The postretirement plan's asset allocation was revised from 50% equity and 50% fixed income to 30% equity and 70% fixed income[163]. - A 25 basis point decrease in the yield curve would result in a $228,248 decrease in the fair value of the company's interest rate swaps[170]. - The company will continue to evaluate its benefit plan funding levels and make adjustments as necessary to avoid benefit restrictions[167].

Core Viewpoint - RGC Resources Inc. reported quarterly earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.01 per share, indicating a significant earnings surprise of 200% [1] Financial Performance - The company posted revenues of $13.1 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 0.80% and showing an increase from $12.47 million in the same quarter last year [2] - Over the last four quarters, RGC Resources has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance - RGC Resources shares have increased by approximately 6.6% since the beginning of the year, while the S&P 500 has gained 25.5% [3] Future Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.50 on revenues of $26 million, and for the current fiscal year, it is $1.22 on revenues of $89 million [7] Industry Context - The Oil and Gas - Refining and Marketing industry, to which RGC Resources belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, which may impact the stock's performance [8]

RGC Resources Inc. (RGCO) shares soared 13% in the last trading session to close at $23.49. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1% gain over the past four weeks.RGC Resources has shown strong growth, with its recent stock performance reflecting growing confidence from investors. This upward trend is driven by the company’s strategic initiatives, along with favorable market conditions like increased energy demand and s ...

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, 2024 (540) 777-4427 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 (St ...

ROANOKE, Va., June 14, 2024 (GLOBE NEWSWIRE) -- In the midst of celebrating more than 140 years of serving the Roanoke Valley, Roanoke Gas Company, a subsidiary of RGC Resources, Inc. (Nasdaq: RGCO) announced a significant milestone in its long, proud history. For the first time since 1965, the Roanoke Valley now has access to a new interstate natural gas pipeline, the Mountain Valley Pipeline (MVP). Roanoke Gas has two interconnects with the new pipeline and began receiving delivery of natural gas from MVP ...

Paul Nester, President and CEO of Roanoke Gas stated, "The new and abundant supply of natural gas that MVP provides will allow Roanoke Gas to meet the continually increasing residential, commercial and industrial demand for natural gas in our service territory and will further propel economic development in the region. In addition, the energy supply the MVP delivers enhances the reliability of our system and allows us access to cheaper natural gas markets, both of which benefit our customers. Roanoke Gas wo ...

RGC Resources, Inc. (NASDAQ:RGCO) Q2 2024 Earnings Conference Call May 6, 2024 9:00 AM ET Company Participants Tommy Oliver - Senior Vice President of Regulatory & External Affairs Tim Mulvaney - Treasurer & Chief Financial Officer Paul Nester - President & Chief Executive Officer Conference Call Participants Michael Gaugler - Janney Montgomery Scott Tommy Oliver Good morning and thank you for joining us as we discuss RGC Resources, Inc.'s 2024 Second Quarter Results. I am Tommy Oliver, Senior Vice Presiden ...

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=8&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) RGC Resources, Inc. reported net income of **$6.44 million** for three months and **$11.46 million** for six months ended March 31, 2024, reflecting asset and equity growth [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets increased to **$313.4 million** as of March 31, 2024, driven by utility property and accounts receivable, with stockholders' equity reaching **$110.5 million** Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2024 (USD) | September 30, 2023 (USD) | | :--- | :--- | :--- | | **Total Current Assets** | 28,525,645 | 26,795,262 | | **Utility Property, Net** | 254,140,117 | 247,583,551 | | **Total Assets** | 313,359,530 | 303,729,340 | | **Total Current Liabilities** | 21,702,382 | 32,918,787 | | **Long-Term Debt, Net** | 135,916,887 | 125,844,728 | | **Total Stockholders' Equity** | 110,543,862 | 100,732,625 | | **Total Liabilities and Stockholders' Equity** | 313,359,530 | 303,729,340 | [Condensed Consolidated Statements of Income](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Net income for the six months ended March 31, 2024, increased to **$11.46 million**, driven by equity in affiliate earnings despite lower operating revenues Key Income Statement Data (Unaudited) | Metric | Three Months Ended Mar 31, 2024 (USD) | Three Months Ended Mar 31, 2023 (USD) | Six Months Ended Mar 31, 2024 (USD) | Six Months Ended Mar 31, 2023 (USD) | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | 32,659,376 | 38,029,657 | 57,078,728 | 71,311,992 | | **Operating Income** | 8,629,709 | 9,591,422 | 15,281,746 | 15,135,907 | | **Equity in Earnings of Unconsolidated Affiliate** | 1,229,384 | 2,867 | 2,697,219 | 4,099 | | **Net Income** | 6,443,390 | 6,341,886 | 11,463,382 | 9,598,291 | | **Diluted EPS** | 0.63 | 0.64 | 1.13 | 0.97 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities decreased to **$11.2 million** for the six months ended March 31, 2024, while financing activities provided **$0.59 million** Summary of Cash Flows (Unaudited) | Cash Flow Activity | Six Months Ended March 31, 2024 (USD) | Six Months Ended March 31, 2023 (USD) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | 11,202,002 | 16,965,342 | | **Net Cash Used in Investing Activities** | (11,280,748) | (14,350,139) | | **Net Cash Provided by (Used in) Financing Activities** | 585,498 | (888,144) | | **Net Increase in Cash and Cash Equivalents** | 506,752 | 1,727,059 | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Key notes detail accounting policies, a February 2024 rate application, significant equity earnings from the near-complete MVP project, and debt refinancing from LIBOR to SOFR - The company's subsidiary, Midstream, refinanced nearly **$34 million** of long-term debt maturing in fiscal 2024, resolving previously disclosed uncertainties[25](index=25&type=chunk) - The company has transitioned all but one LIBOR-based variable rate note to a new reference rate (SOFR) as of March 31, 2024. The final note was refinanced in April 2024[29](index=29&type=chunk) - On February 2, 2024, Roanoke Gas filed a general rate application seeking to increase non-gas base rates by **$4.33 million** and raise its permitted rate of return from **9.44% to 10.35%**[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Net income increased by **$1.87 million** for the six months ended March 31, 2024, driven by MVP AFUDC and new rates, with gross utility margin up **8%** to **$31.6 million** [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Gross utility margin increased by **$2.5 million (8%)** to **$31.6 million** for the six months ended March 31, 2024, despite a **20%** decline in operating revenues Gross Utility Margin (Six Months Ended March 31) | Component | 2024 (USD) | 2023 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Gas utility revenues | 57,024,185 | 71,253,744 | (14,229,559) | | Cost of gas - utility | 25,396,406 | 42,089,210 | (16,692,804) | | **Gross utility margin** | **31,627,779** | **29,164,534** | **2,463,245** | - For the six months ended March 31, 2024, net income increased by **$1,865,091** compared to the prior year, primarily due to AFUDC on the MVP project and new non-gas base rates, partially offset by inflation and higher interest rates[135](index=135&type=chunk) - For the three months ended March 31, 2024, net income increased by **$101,504**, also driven by MVP's AFUDC and RNG revenues, offset by increased operating expenses and interest rates[126](index=126&type=chunk) [Equity Investment in Mountain Valley Pipeline](index=54&type=section&id=Equity%20Investment%20in%20Mountain%20Valley%20Pipeline) The company's less than **1%** equity interest in MVP saw earnings surge to **$2.7 million** in fiscal H1 2024, with the project expected in service Q2 2024 - The LLC filed an in-service request for the MVP with FERC on April 22, 2024, expecting gas to flow during the second calendar quarter of 2024[149](index=149&type=chunk) - The company recorded **$2,697,219** in earnings from its MVP investment in the first half of fiscal 2024, primarily from AFUDC, compared to just **$4,099** in the same period last year[149](index=149&type=chunk) [Regulatory Matters](index=54&type=section&id=Regulatory) Roanoke Gas filed for a **$4.33 million** non-gas base rate increase and a higher rate of return in February 2024, with a new five-year SAVE Plan also approved - A general rate application was filed on February 2, 2024, seeking a **$4.33 million** increase in non-gas base rates and an increased rate of return to **10.35%** from **9.44%**. A hearing is set for November 7, 2024[151](index=151&type=chunk) - A new SAVE Plan was approved by the SCC, effective October 1, 2023, allowing recovery for an estimated **$8.5 million** in eligible investments in fiscal 2024 and **$49.5 million** over five years[154](index=154&type=chunk) [Capital Resources and Liquidity](index=56&type=section&id=Capital%20Resources%20and%20Liquidity) Liquidity remains strong, with cash from operations at **$11.2 million** for the six months ended March 31, 2024, and a long-term capitalization ratio of **45% equity** and **55% debt** Cash Flow Summary (Six Months Ended March 31) | Cash Flow Summary | 2024 (USD) | 2023 (USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | 11,202,002 | 16,965,342 | | Net cash used in investing activities | (11,280,748) | (14,350,139) | | Net cash provided by (used in) financing activities | 585,498 | (888,144) | - Subsequent to the quarter end, on May 2, 2024, Midstream established a new **$9 million** line of credit facility maturing May 2, 2026, providing the ability to refinance a maturing note[166](index=166&type=chunk) - As of March 31, 2024, the company's long-term capitalization ratio 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) Quantitative and qualitative disclosures regarding market risk are not applicable for this reporting period - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable[168](index=168&type=chunk) [Controls and Procedures](index=59&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[170](index=170&type=chunk) - No changes occurred during the fiscal quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[171](index=171&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=61&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) No material legal proceedings were reported during the current reporting period - There are no material legal proceedings to report[174](index=174&type=chunk) [Risk Factors](index=61&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K have occurred - No material changes to risk factors have occurred since the last Annual Report on Form 10-K[175](index=175&type=chunk) [Other Information](index=61&type=section&id=ITEM%205.%20OTHER%20INFORMATION) RGC Midstream, LLC entered a new **$9 million** credit agreement with Bank of America on May 2, 2024, maturing May 2, 2026, at Daily SOFR plus **2.215%** - On May 2, 2024, Midstream entered into a new **$9 million** credit agreement with Bank of America, maturing on May 2, 2026[179](index=179&type=chunk) [Exhibits](index=62&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including credit agreements and officer certifications - Exhibits filed include amendments to credit agreements, a new credit agreement for RGC Midstream, and certifications by the Principal Executive and Financial Officers[181](index=181&type=chunk)

Exhibit 99.1 NEWS RELEASE The statements in this release that are not historical facts constitute "forward-looking statements" made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from any expectations expressed in the Company's forward-looking statemen ...