RGC Resources(US:RGCO)2025-08-12 20:41PART I. FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements detail the company's financial position and performance Condensed Consolidated Statements of Income Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $17,264,615 | $14,458,202 | $81,016,198 | $71,536,930 | | Operating income | $1,196,560 | $1,557,593 | $18,924,523 | $16,839,339 | | Net income | $538,412 | $156,692 | $13,484,309 | $11,620,074 | | Diluted EPS | $0.05 | $0.02 | $1.31 | $1.15 | Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Assets | $324,757,993 | $320,699,223 | | Total Liabilities | $208,496,675 | $212,562,448 | | Total Stockholders' Equity | $116,261,318 | $108,136,775 | Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,273,016 | $17,056,186 | | Net cash used in investing activities | ($15,756,669) | ($16,544,262) | | Net cash (used in) provided by financing activities | ($11,283,643) | $516,738 | | Net increase in cash and cash equivalents | $1,232,704 | $1,028,662 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies and significant developments including the MVP's operation and a rate case settlement - The company's two reportable segments are Gas Utility and Investment in Affiliates, with the Gas Utility segment generating $18.98 million in operating income and the Investment in Affiliates segment contributing $2.43 million in equity earnings for the nine months ended June 30, 20254749 - On April 10, 2025, the SCC approved a settlement agreement for Roanoke Gas, resulting in an annual incremental revenue increase of $4.08 million based on a return on equity of 9.90%53 - The Mountain Valley Pipeline (MVP) entered commercial operation on June 14, 2024, and the company received approximately $2.7 million in cash distributions from the MVP joint venture during the first nine months of fiscal 20255658 - The company secured a firm commitment to refinance $53.6 million of Midstream-related debt with a new seven-year loan at an interest rate of SOFR plus 1.55%71 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management analyzes financial performance, focusing on regulatory impacts, weather, and the MVP investment Results of Operations Net income and gross utility margin increased due to rate changes, higher volumes, and MVP equity earnings Q3 2025 vs Q3 2024 Performance | Metric | Q3 2025 | Q3 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Income | $381,720 | $156,692 | $381,720 | 243.6% | | Gross Utility Margin | $9,423,369 | $9,086,695 | $336,674 | 4% | | Equity in Earnings | $772,082 | $282,604 | $489,478 | 173.2% | Nine Months 2025 vs 2024 Performance | Metric | 9M 2025 | 9M 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Income | $13,484,309 | $11,620,074 | $1,864,235 | 16.0% | | Gross Utility Margin | $44,357,647 | $40,714,474 | $3,643,173 | 9% | | Total Delivered Volumes (DTH) | 9,901,163 | 8,580,005 | 1,321,158 | 15% | - The nine-month gross utility margin increase was driven by a $5.4 million rise in non-gas volumetric revenues and $855,000 from the SAVE Plan, offset by a $2.7 million decrease in WNA revenue139140141 Capital Resources and Liquidity Liquidity improved with increased operating cash flow, while capital expenditures and debt refinancing are planned - Net cash from operating activities increased to $28.3 million for the nine months ended June 30, 2025, up from $17.1 million in the prior year, aided by $2.7 million in cash distributions from the MVP affiliate156158 - Capital expenditures for the nine months were $15.7 million, with total fiscal 2025 expenditures projected to be approximately $22 million160 - The company has secured a commitment to refinance Midstream debt with a new seven-year loan, expected to be finalized in Q4 fiscal 2025164 - As of June 30, 2025, the company's long-term capitalization ratio was 45% equity and 55% debt166 Quantitative and Qualitative Disclosures About Market Risk This item is not applicable for the current reporting period - The company has indicated that this item is not applicable167 Controls and Procedures Disclosure controls were deemed effective, and a new ERP system implementation altered internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025169 - On April 1, 2025, the company implemented a new ERP system, leading to enhancements and changes in its internal control over financial reporting170 PART II. OTHER INFORMATION Legal Proceedings The company reports no legal proceedings for the period - There are no legal proceedings to report174 Risk Factors No material changes to risk factors from the prior annual report are noted - No material changes have been made to the risk factors disclosed in the 2024 Annual Report on Form 10-K175 Exhibits Filed exhibits include a new asset management agreement and officer certifications - Key exhibits filed include a Natural Gas Asset Management Agreement with DTE Energy Trading, Inc, and certifications by the Principal Executive and Financial Officers181