RGC Resources(US:RGCO)2026-02-10 15:00Financial 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]