RGCO

Image source: The Motley Fool. Friday, August 7, 2026 at 9:00 a.m. ET Director of Finance - Kelsie Davenport Senior Vice President of Regulatory and External Affairs - Lawrence Oliver President and Chief Executive Officer - Paul Nester Kelsie Davenport: Good morning, and thank you for joining us as we discuss RGC Resources' 2026 third quarter results. I'm Kelsie Davenport, Director of Finance of RGC Resources, Inc. I am joined this morning by Paul Nester, President and CEO of RGC Resources; and Tommy Oliver, Senior Vice President of Regulatory and External Affairs. Tim is under the weather this morning and is unfortunately unable to be with us. Before we get started, let's review a few administrative items. [Operator Instructions] The link to today's presentation is available on the Investor and Financial Information page of our website at www.rgcresources.com. [Operator Instructions] Turning to Slide 1. This presentation contains forecasts and projections. Slide 1 has information about risks and uncertainties, including forward-looking statements that should be understood in the context of our public filings. Slide 2 contains our agenda. We will discuss our operational and financial highlights for the third quarter and first 9 months of our fiscal 2026 year. We will then review the outlook for the remainder of 2026, with time allotted for questions at the end. I will now turn the presentation over to Tommy. Lawrence Oliver: Well, thank you, Kelsie, and good morning, everybody. Turning now to operations on slide 3. Main extensions and renewal activity has continued on a steady pace through fiscal 2026. We installed 3.5 miles of new main through the first 3, I'm sorry, through the first 9 months of the current fiscal year, a little shy of our installation in the same period of fiscal 2025. In addition, we connected 464 new services in 2026, down from the previous same period last year. We do have a healthy backlog of main extensions, which speaks well of our continued residential development across the region. As shown on the right side of the slide, we renewed 2.7 miles of main and 322 services during the first 9 months of the 2026 fiscal year. While winter weather dampened the main mile renewal, renewed compared to the same period last year, the service renewals increased 40%. Let's transition over to slide 4. Slide 4 shows our delivered gas volumes for the quarter. Weather patterns during the third quarter resulted in some counterintuitive results, especially in May. The quarter was slightly colder than the same period a year ago, as shown on the slide, but those days occurred unevenly and, as a result, did not generate the typical gas usage you would expect from cooler weather. It did, however, resulted in a credit to customers under the weather normalization adjustment. Overall for the quarter, residential and commercial usage was flat. Industrial usage was up more than 25%, mostly attributable to our largest industrial customer. As a reminder, under our tiered rate structure in that customer class, those incremental dekatherms are delivered at our lowest margin. Transition over to slide 5, delivered gas volumes do not tell our exact same story for fiscal 2026 year-to-date. Residential and commercial volumes were down despite heating degree days increasing by 3%. Many of those heating degree days were generated around the Winter Storm Fern event, with other portions of the year warmer than the equivalent period a year ago. Volumes were up 1%, with the residential and commercial declines offset by industrial increases, again led by that same industrial customer just mentioned. Included within these numbers is the absence this quarter of a longtime top 10 customer who ceased operations in March. We discussed that situation more fully on the previous earnings call. Slide 6 shows CapEx for the first 9 months of fiscal 2026 compared to 2025. Overall investment was $16.1 million in the current year, up approximately 2% over the same period a year ago. As customary, we picked up the pace of capital spending in quarter 3 and made up most of the deficits that arose from weather delays in the prior quarter. We will discuss plans for the full year later in the presentation. I'm going to now turn the presentation back over to Kelsie to review our financial results for the quarter. Kelsie? Kelsie Davenport: Thank you, Tommy. Slide 7 shows both our third quarter and 9-month year-to-date financial results for fiscal 2026. Third quarter results were nominally ahead of the same period a year earlier. Net income was approximately $550,000, or $0.05 per diluted share, driven primarily by higher margins. The interim rates that went into effect January 1, along with the new state revenues, drove the margin increase despite the loss of the large industrial customer we've noted in previous calls and the weather Tommy just discussed. Operating expenses, as shown on the slide, are lower due to gas costs. However, non-gas operating and maintenance expenses are higher to fiscal 2025 third quarter, primarily due to inflationary pressures on personnel costs, professional services, and IT support. The year-to-date results are also shown on slide 7. Net income was $14.2 million in the first 9 months of fiscal 2026, or $1.37 per diluted share, compared to $1.31 per diluted share in the first 9 months of fiscal 2025, a 4.6% increase. The effect of the non-gas base rate increase was noticeable in the second quarter, largely driving our year-to-date results as the additional revenues affected the volumetric component. Thus, a larger portion of the increase was recognized during the winter heating season due to the higher energy demands. Accordingly, when delivered volumes are lower in the second half of the fiscal year, margin and net income are also lower. The items that have led to increased expenses in the quarter are also driving higher expenses in the year-to-date results. Moving to slide 8, our balance sheet remains strong. During the quarter, we refinanced a $15 million note that matures later this month and carries a 2% interest rate. It is classified as long-term debt at June 30. This forward starting note and its attendant interest rate swap is fixed for a 3-year term at 5.2%. I did want to add a few comments on the Mountain Valley Pipeline investment. The MVP mainline has been in service for just over 2 years now and is operating safely and reliably as expected. Our share of the joint venture earnings is comparable this year to a year ago, and we continue to receive excess cash distributions on a quarterly basis. To enhance future cash flow from MVP, there are 2 projects underway, Southgate and Boost. Southgate will move gas from the end of the mainline into North Carolina, and Boost will enable a 30% increase in the amount of gas that can be transported through the mainline. Southgate is in the construction phase and progressing as expected. Boost is actively working on its permits and has placed orders for equipment. We have invested just over $1 million in the fiscal year for these projects, with the funding coming from lines of credit that we established in September of last year. We are pleased with the progress and prospects of both projects. I will now pass the presentation to RGC's CEO, Paul Nester. Paul? Paul Nester: Thank you, Kelsie, and good morning. Thank you for joining us for the third quarter earnings call. We're on Slide 9. We have a few items to discuss as we are close to wrapping up fiscal 2026. We're going to start on Slide 10 with an update on our LNG facility. If you were with us last quarter, and if you've read our 10-Q, we've disclosed that we did have some structural damage in the fiscal second quarter at the LNG facility. Our teams are still there working to assess that damage and to keep that facility safe. They're doing a great job. I'd like to thank them for all their fantastic work over the last 6 months. We continue to be in touch with the State Corporation Commission on that matter as well as our insurance carrier. Certainly, when we have more information to disclose, we'll do that appropriately. We, as you can see on the slide, have been aggressively working to replace the peak shaving supply that our LNG facility provided. You may recall that facility was used by the company on the coldest winter days to supplement our interstate pipeline volume. Without the facility being available, you can see we've added gas through one of our primary interstate pipelines, the Columbia Pipeline, or referred to as TCO. We're excited about that and grateful for that. We're going to talk about a capital project that's now underway, that's going to bring more Mountain Valley gas further into the Roanoke Gas distribution system. That project's begun as well, and we're in the process of procuring truck LNG. That's something we've done in the past, particularly before Mountain Valley was completed. Moving on to slide 11, we've kept the capital forecast for 2026 about the same as what we showed you last quarter at $22 million. We have changed some of the buckets, if you will, of that spending. We have pulled forward again this Mountain Valley-Lafayette main extension into this year. That project was in our 5-year capital forecast, so it was something that the company fully intended to do, but we've now pulled that forward a little bit into 2026. When we start showing you our 2027 capital forecast, it's going to be a larger component of that. I would now like to ask Tommy to address the recent rate case results and some other regulatory happenings. Tommy? Lawrence Oliver: Yes, thank you, Paul. We're on Slide 12 now. As we discussed in our most recent earnings call, Roanoke Gas filed an expedited rate case on December 2 of last year seeking approximately $4.3 million in incremental annual revenues based on our currently authorized return on equity of 9.9% and a 59% equity ratio. Rates became effective January 1, 2026, subject to refund. Happy to report that we reached a settlement with the SCC staff on July 1, 2026, that resolved all issues in the case. We did participate in the scheduled hearing on July 15, 2026. The stipulated incremental revenue agreed to in the settlement was $3.85 million, and we began charging those lower rates that resulted from the settlement beginning August 1. We are pleased to have reached agreement and believe this was a reasonable outcome. As of June 30, we have $275,000 accrued for refunds to customers related to the rates charged beginning January 1, 2026. The ongoing cost associated with the LNG facility event was not addressed in this case, however. We continue to update the staff and work with them through the process. And we have established a regulatory asset, and we expect recovery in some future proceedings. Paul Nester: Yes, thank you, Tommy. It's a great result, and I just want to thank Tommy and his team and the rest of the RGC team on that. That truly is a company-wide effort. It reflects the investment in the system to continue making it safe or keeping it safe and reliable, I should say. And a lot of support across the company goes into the ratemaking. And we're really pleased with this result. I think it's fair and appropriate at this point in time. We're of course always mindful, right, Tommy, of the impact on the customer and what it means to customer bills. Lawrence Oliver: Absolutely, yes. Thank you. Paul Nester: All right, before we open the line for questions, let's look at our 2026 forecast. We've narrowed the range from what we presented last quarter. A lot of that is the result of some of that unusual weather pattern and natural gas delivery that was associated with that in that May timeframe. So we're now showing the lower end of the range at $1.29 and the higher end at $1.32. Similar to 2025, we are projecting a small loss in the fiscal, the typical fourth quarter. Kelsie and Tommy both talked about that. The nature of the volumetric rates certainly lends itself to higher margins in the first and second quarters, less so in the third and fourth quarters. A lot of discussion on interest rates and inflationary pressure, certainly in the last few weeks. I think most folks now believe we may have a rate increase at some point a little bit later this year. If you go back to last year at this time, there were projections of 3 to 4 rate decreases. Obviously, that's just not possible with the importance of inflationary pressure. Kelsie talked about the note that we refinanced. That was really a great effort by the team here, and I appreciate our bank partners that worked with us on that. Tommy talked about the housing starts and the residential development. The Roanoke Valley economy continues to be, I would say, net positive. We talked about our large industrial customer that unfortunately ceased operations back in March, but otherwise, I think it's still very positive. The Google Data Center is moving forward. There continues to be investment in the medical complex here, notably the Taubman Cancer Center. Just the construction on that is phenomenal, and a few other developments around that, so we're excited about that. There was a large foreign direct investment announced in the region, end of the third quarter. That company is going to spend about $85 million and add almost 500 jobs. We're really excited about that as well. So again, as always, we just want to thank our customers, first and foremost. Without them, we would not be here. And I'd also like to again thank our employees. We've had another quarter of working very safely, and I'm proud of their efforts in that regard. So with that, we'd like to open the line for questions. Paul Nester: [Operator Instructions] Unknown Analyst: Good morning, everyone. Paul Nester: Oh, my. Good morning. So nice to have you with us. Unknown Analyst: Looking across your slide here on the LNG update. So, I was wondering if you could give us a little more color as to maybe what the problem really, what the problem is and maybe potential solution for it. I mean, is this a situation where the tank's got to come out and be replaced or is it something else? Paul Nester: Yes, happy to answer that question, [ Mike ]. In February, around the Winter Storm Fern event where we had really extraordinarily cold weather for an extended period of time, and of course, that cold weather enveloped most of the country, as you know. We did have some what's known as icing around the ground of the tank, and that caused the tank to just move a little bit, if you will, and cause some structural damage to the tank. Maybe one term to think of is metal fatigue, if you will. Now, we did not have any leaking or any unsafe condition as a result of that, thankfully, and we're again very grateful for that. The tank was constructed and put in operation in 1972, so it's 54 years old. While it's approximately a 90 to 95-year asset, if you will, it's halfway through that and again had a little metal and structural compromise. So we're working through the engineers that we've retained who are tank specialists to help us ascertain what our options are, Mike, for the tank. Are we able to make repairs in some of those spots where there was some metal stress? Or we are evaluating, for example, possibly newer, more modern tank holding apparatus. As a reminder, our tank is approximately a 200,000-gallon, which also equates to approximately 220,000-dekatherm tank. I would say has been well-sized, if not maybe a little larger than what we've needed in the Roanoke Gas system, which again is a great thing. It's been just wonderful for resilience and reliability over many, many years. So we're still evaluating what the future looks like, what our future options are for storage. For sure, we want on-system storage to help with peak shaving. We're fortunate now to have the third pipeline, Mountain Valley. And you may remember over many years ago, we always talked about if something were to happen to one component of our supply, having that additional supply source available would make the difference, and that's truly the case today. Unknown Analyst: So you think you'll have, obviously not for this winter season, but the next winter season? If it's taken care of? Paul Nester: That's the plan right now. We're working to having that peak shaving capability via on-system storage for the 2027-2028 winter season. Correct. That's our goal right now. Any other questions? [Operator Instructions] We'll wait just one more moment to see if there are any further questions. Okay. Hearing none, this concludes the third quarter earnings call. Again, we just want to thank each and every one of you for taking time to be with us, and we very much look forward to you listening. Look forward to being with you in December when we share the full year 2026 results. As Kelsie and Tommy reported, we're off to just a good first 9 months and look forward to completing the fiscal year. Wishing everyone a safe and happy weekend. Thank you. Before you buy stock in Rgc Resources, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rgc Resources wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. RGC Resources (RGCO) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Income (Q3 FY2026): Approximately $550,000, or $0.05 per diluted share. Net Income (9M FY2026): $14.2 million, or $1.37 per diluted share, a 4.6% increase from $1.31 per diluted share in the prior-year period. Delivered Gas Volumes (Q3): Residential and commercial usage flat; industrial usage up more than 25%, driven by the largest industrial customer. Delivered Gas Volumes (9M FY2026): Residential and commercial volumes down despite a 3% increase in heating degree days; total volumes up 1%, offset by industrial increases. Capital Expenditures (9M FY2026): $16.1 million, up approximately 2% year-over-year. Operating Expenses: Lower due to gas costs, but non-gas operating and maintenance expenses higher due to inflationary pressures on personnel, professional services, and IT support. Rate Case Settlement: Stipulated incremental revenue of $3.85 million, effective August 1, 2026; $275,000 accrued for customer refunds as of June 30. Debt Refinancing: Refinanced a $15 million note, fixed for a three-year term at 5.2% interest. FY2026 EPS Forecast: Narrowed range of $1.29 to $1.32 per diluted share. Main Extensions: Installed 3.5 miles of new main and connected 464 new services in the first nine months of fiscal 2026. Renewals: Renewed 2.7 miles of main and 322 services during the first nine months of fiscal 2026; service renewals increased 40%. Warning! GuruFocus has detected 4 Warning Signs with RGCO. Is RGCO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net income for the first nine months of fiscal 2026 increased 4.6% to $1.37 per diluted share, driven by higher margins from interim rates and new state revenues. The company reached a favorable settlement with the SCC staff for a $3.85 million incremental revenue increase, which was approved in a hearing and is considered a reasonable outcome. The Mountain Valley Pipeline (MVP) mainline is operating safely and reliably, with comparable earnings and excess cash distributions received quarterly, and progress on Southgate and Boost projects to enhance future cash flow. The Roanoke Valley economy remains positive, with new developments like the Google Data Center, Taubman Cancer Center, and a large foreign direct investment adding 500 jobs, supporting future growth. The company successfully refinanced a $15 million note at a fixed rate of 5.2% for three years, strengthening the balance sheet and managing interest rate risk. The LNG facility suffered structural damage in February, which has reduced peak shaving supply and required the company to rely on alternative sources, with recovery uncertain and not addressed in the recent rate case. Residential and commercial gas volumes declined year-to-date despite colder weather, partly due to the loss of a longtime top 10 customer that ceased operations in March. Operating expenses increased due to inflationary pressures on personnel costs, professional services, and IT support, which are expected to continue. The company accrued $275,000 for customer refunds related to the rate case settlement, which will reduce future revenues. The fiscal 2026 earnings forecast was narrowed to a range of $1.29 to $1.32 per share, reflecting a projected small loss in the fourth quarter due to lower volumetric margins in the second half of the year. Q: Can you provide more color on the LNG facility structural damage, the potential solution, and the timeline for restoring peak shaving capability?A: Paul Nester, President and CEO, explained that during the Winter Storm Fern event in February, icing around the base of the tank caused it to shift slightly, leading to structural damage akin to metal fatigue. The tank, which is 54 years old and has a 200,000-gallon capacity, did not leak and was safe. The company is working with tank specialists to evaluate options, including repairs or a more modern tank holding apparatus. The goal is to have on-system storage peak shaving capability restored for the 2027-2028 winter season. Q: What was the outcome of the expedited rate case, and what are the financial implications?A: Lawrence Oliver, Senior Vice President of Regulatory and External Affairs, reported that a settlement was reached with the SCC staff on July 1, 2026, for $3.85 million in incremental annual revenues, down from the $4.3 million originally sought. The new rates took effect August 1, 2026. As of June 30, the company has accrued $275,000 for customer refunds related to the interim rates charged since January 1. The LNG facility event costs were not included in this case and are expected to be recovered in future proceedings. Q: How did the third-quarter and year-to-date financial results compare to the prior year?A: Kelsie Davenport, Director of Finance, stated that third-quarter net income was approximately $550,000, or $0.05 per diluted share, driven by higher margins from interim rates and new state revenues. For the first nine months of fiscal 2026, net income was $14.2 million, or $1.37 per diluted share, a 4.6% increase from $1.31 per diluted share in the same period last year. The increase was largely driven by the non-gas base rate increase, which had a more significant impact during the winter heating season. Q: What is the company's updated earnings forecast for fiscal 2026?A: Paul Nester, President and CEO, narrowed the fiscal 2026 EPS forecast range to $1.29 to $1.32 per diluted share, down from the previous range. This adjustment reflects unusual weather patterns in May that impacted natural gas delivery. The company projects a small loss in the typical fourth quarter due to the volumetric nature of its rate structure, which yields higher margins in the first and second quarters. Q: Can you provide an update on the Mountain Valley Pipeline (MVP) investment and related expansion projects?A: Kelsie Davenport noted that the MVP mainline has been in service for over two years and is operating safely and reliably. The company continues to receive excess cash distributions quarterly. Two expansion projects are underway: Southgate, which will move gas into North Carolina and is in the construction phase, and Boost, which will enable a 30% increase in mainline capacity and is in the permitting phase. RGC has invested just over $1 million in these projects this fiscal year, funded by lines of credit established in September. Q: How did operational metrics, such as main extensions and new services, perform in the first nine months?A: Lawrence Oliver reported that the company installed 3.5 miles of new main and connected 464 new services, both slightly down from the prior year. However, there is a healthy backlog of main extensions, indicating continued residential development. The company renewed 2.7 miles of main and 322 services, with service renewals increasing 40% year-over-year, despite winter weather dampening main mile renewals. Q: What were the drivers behind the changes in delivered gas volumes for the quarter and year-to-date?A: Lawrence Oliver explained that third-quarter weather was slightly colder than last year, but the cold days occurred unevenly, resulting in flat residential and commercial usage. Industrial usage was up over 25%, driven by the largest industrial customer, though at lower margins. Year-to-date, residential and commercial volumes were down despite a 3% increase in heating degree days, largely due to the Winter Storm Fern event. Industrial increases offset these declines, but the quarter was impacted by the loss of a longtime top 10 customer who ceased operations in March. Q: How is the company managing its capital expenditures and financing in light of current interest rates?A: Kelsie Davenport stated that capital expenditures for the first nine months were $16.1 million, up 2% year-over-year. The full-year forecast remains at $22 million, with some reallocation of spending buckets. The company refinanced a $15 million note maturing in August, fixing a three-year term at 5.2% with a forward-starting interest rate swap. Paul Nester noted that inflationary pressures have shifted expectations from potential rate decreases to a possible rate increase later this year. Q: What is the outlook for the Roanoke Valley economy and its impact on customer growth?A: Paul Nester described the regional economy as net positive, highlighting the ongoing Google Data Center project, investment in the Taubman Cancer Center medical complex, and a new large foreign direct investment of approximately $85 million that will add nearly 500 jobs. These developments are expected to support continued residential and commercial growth, despite the loss of one large industrial customer earlier in the year. Q: How is the company addressing the loss of peak shaving supply from the LNG facility?A: Paul Nester explained that the company has been aggressively working to replace the peak shaving supply by adding gas through the Columbia Pipeline (TCO) and is procuring truck LNG, a method used before the Mountain Valley Pipeline was completed. A capital project is underway to bring more Mountain Valley gas further into the Roanoke Gas distribution system, which has been pulled forward into fiscal 2026 from the five-year capital forecast. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in RGC Resources Inc.? Here are five stocks we like better. Fiscal 2026 earnings improved year to date: Net income for the first nine months rose to $14.2 million, or $1.37 per diluted share, up 4.6% from the prior-year period. Higher margins from the non-gas base rate increase and interim rates offset uneven weather, higher operating costs and the loss of a large industrial customer. Rate settlement and financing provide support: Roanoke Gas settled its expedited rate case for $3.85 million in annual incremental revenue, below its $4.3 million request, with customer refunds accrued for interim-rate differences. The company also refinanced a $15 million note at a fixed 5.13% rate for three years. LNG facility repairs remain under review: Engineers are assessing structural damage caused by icing at the company’s LNG tank, while replacement peak-shaving capacity is being secured through pipeline capacity and trucked LNG. RGC Resources narrowed its fiscal 2026 earnings outlook to $1.29–$1.32 per share and expects a small fourth-quarter loss. RGC Resources (NASDAQ:RGCO) reported fiscal 2026 third-quarter net income of about $550,000, or $0.05 per diluted share, as higher margins supported results despite uneven weather patterns, increased operating expenses and the loss of a large industrial customer. For the first nine months of fiscal 2026, the company reported net income of $14.2 million, or $1.37 per diluted share, compared with $1.31 per diluted share in the comparable fiscal 2025 period. The 4.6% per-share increase was driven largely by the company’s non-gas base rate increase, which had a greater effect during the winter heating season because of higher energy demand. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Kelsie Davenport, RGC Resources’ Director of Finance, said third-quarter margins benefited from interim rates effective Jan. 1 and new stay revenues. Those items offset impacts from weather and the previously disclosed loss of a large industrial customer. Operating expenses declined due to lower gas costs, Davenport said, though non-gas operations and maintenance expenses increased from the prior-year quarter. She cited inflationary pressures affecting personnel costs, professional services and information technology support. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Tommy Oliver, Senior Vice President of Regulatory and External Affairs, said residential and commercial gas usage was flat during the third quarter, despite the period being slightly colder than a year earlier. Cooler days occurred unevenly, particularly in May, and did not produce the typical increase in gas consumption. The weather patterns also resulted in a credit to customers under the weather normalization adjustment. Industrial usage increased more than 25% in the quarter, primarily because of the company’s largest industrial customer. However, Oliver noted that incremental volumes in that customer class are delivered at the company’s lowest margin under its tiered rate structure. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Year to date, total delivered gas volumes increased 1%. Residential and commercial volumes declined even as heating degree days rose 3%, as much of the increase was associated with Winter Storm Fern while other periods were warmer than the prior year. Industrial growth, again led by the largest industrial customer, offset the declines. The figures also reflect the absence of a long-time top-10 customer that ceased operations in March. RGC Resources installed 3.5 miles of new main and connected 464 new services during the first nine months of fiscal 2026, both below the prior-year pace. Oliver said the company maintains a healthy backlog of main extensions tied to residential development in its service area. The company also renewed 2.7 miles of main and 322 services; service renewals rose 40% from the prior-year period, while winter weather reduced main renewal activity. Capital expenditures totaled $16.1 million for the first nine months, up about 2% from a year earlier. The company maintained its full-year capital spending forecast of approximately $22 million, although it shifted spending categories and accelerated a Mountain Valley Lafayette main extension project into fiscal 2026. Roanoke Gas reached a settlement with Virginia State Corporation Commission staff on July 1 concerning its expedited rate case. The company had sought about $4.3 million in incremental annual revenue based on its authorized 9.9% return on equity and 59% equity ratio. The settlement provided for $3.85 million in stipulated incremental revenue. Interim rates had been effective since Jan. 1, subject to refund, and lower rates resulting from the settlement began Aug. 1. As of June 30, RGC Resources had accrued $275,000 for customer refunds. Oliver said costs associated with a structural event at the company’s liquefied natural gas facility were not addressed in the rate case. The company has established a regulatory asset and expects to seek recovery in a future proceeding. During the quarter, RGC Resources refinanced a $15 million note that was due to mature later in the month. The replacement forward-starting note and related interest-rate swap are fixed for three years at 5.13%. President and CEO Paul Nester said the company continues to assess structural damage at its LNG facility following icing around the tank during Winter Storm Fern in February. The icing caused the tank to move slightly and resulted in structural damage, though Nester said there were no leaks or unsafe conditions. The tank entered service in 1972 and is approximately 200,000 gallons, or about 220,000 dekatherms. Nester said engineers specializing in tanks are evaluating repair options, including potential modernized tank-holding equipment, and the company remains in contact with regulators and its insurance carrier. RGC Resources has been replacing the peak-shaving supply previously provided by the facility through additional capacity on Columbia Gas Transmission, a project to move more Mountain Valley Pipeline gas into the Roanoke distribution system, and procured trucked LNG. Nester said the company’s goal is to restore on-system storage and peak-shaving capability for the 2027-2028 winter season. The company narrowed its fiscal 2026 earnings outlook to $1.29 to $1.32 per diluted share and expects a small loss in the fiscal fourth quarter, reflecting the seasonal effect of lower delivered volumes and margins outside the winter heating period. RGC Resources, Inc (NASDAQ: RGCO) is a natural gas distribution and transmission company headquartered in Wheeling, West Virginia. Through its regulated subsidiaries, the company provides energy delivery services to residential, commercial and industrial customers across northern West Virginia, western Pennsylvania and parts of Maryland. RGC Resources focuses on maintaining a safe and efficient local pipeline network to ensure reliable supply to its service areas. The company operates two primary business segments: distribution and transmission. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RGC Resources Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by higher margins from interim rates effective January 1, which offset the total loss of a top-10 industrial customer that ceased operations in March. Industrial volume growth of 25% was concentrated in a single large customer, though these incremental deliveries occur at the company's lowest margin tier. Residential and commercial volumes declined despite a 3% increase in heating degree days, as weather patterns were uneven and concentrated around a single storm event rather than sustained cold. Management attributed rising non-gas operating expenses to persistent inflationary pressures affecting personnel costs, professional services, and IT support. The Mountain Valley Pipeline (MVP) investment continues to provide stable joint venture earnings and quarterly cash distributions, serving as a critical hedge against local supply disruptions. Capital investment increased 2% year-over-year as the company accelerated spending in the third quarter to recover from weather-related delays in the first half of the year. Fiscal 2026 earnings guidance was narrowed to $1.29–$1.32 per share, factoring in recent weather patterns and the typical seasonal loss expected in the fourth quarter. The company is pulling forward the Mountain Valley-Lafayette main extension project into 2026, which will become a larger component of the 2027 capital forecast. Management assumes continued regional economic growth supported by a new $85 million foreign direct investment and ongoing construction of the Taubman Cancer Center. Future cash flow projections include contributions from MVP expansion projects, Southgate and Boost, which are currently in construction and permitting phases respectively. Interest rate assumptions have shifted from expecting multiple decreases to anticipating potential increases due to sustained inflationary pressure. Structural damage at the LNG facility caused by ground icing during Winter Storm Fern has rendered the peak shaving asset unavailable; management is currently assessing repair versus replacement options. A regulatory asset has been established for ongoing costs related to the LNG facility event, with management expecting recovery in future proceedings. The company successfully refinanced a $15 million note, moving from a 2% interest rate to a fixed 5.2% rate for a 3-year term via an interest rate swap. A rate case settlement reached in July will result in $3.85 million in incremental annual revenue, slightly lower than the $4.3 million originally sought. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that 'metal fatigue' and structural compromise occurred due to icing around the tank base during extreme cold, though no leaks were detected. The company is evaluating whether to repair the 54-year-old tank or invest in a modern storage apparatus, noting the current tank was perhaps oversized for their needs. The strategic goal is to have on-system storage peak shaving capability restored for the 2027-2028 winter season. RGC is aggressively replacing the lost LNG supply by adding capacity through the Columbia (TCO) interstate pipeline and procuring trucked LNG. Management emphasized that the completion of the Mountain Valley Pipeline provides a critical third supply source that ensures system resilience despite the facility failure.

ROANOKE, Va., Aug. 05, 2026 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (Nasdaq: RGCO) announced consolidated earnings of $559,000, or $0.05 per diluted share, for the third quarter ended June 30, 2026, compared to $538,000, or $0.05 per diluted share, for the third quarter ended June 30, 2025. Operating margin for the third quarter was $757,000 higher than the equivalent period a year earlier aided by higher non-gas base rates that became effective January 1, 2026. Operating expenses were higher by a similar amount resulting in a nominal decline in operating earnings. CEO Paul Nester stated, “This year’s third quarter included improved margins from higher base rates and SAVE investment, as well as continued residential growth, offset by persistent inflation and the effect of an industrial customer ceasing operations. Delivered firm volumes were steady to the prior year, and interruptible volumes to industrial customers increased, albeit at lower-tiered margins.” The Company’s net income of $14.2 million, or $1.37 per diluted share, in the first nine months of fiscal 2026 was up 5.2% from $13.5 million, or $1.31 per diluted share, a year earlier due to stronger operating margins and lower interest expense, particularly early in the year. RGC Resources, Inc. provides energy and related products and services to customers in Virginia through its operating subsidiaries Roanoke Gas Company and RGC Midstream, LLC. 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 statements, regarding inflation, customer growth, ratemaking, infrastructure investment and margins. These risks and uncertainties include gas prices and supply, geopolitical considerations, expectations regarding the MVP and the Company’s rate application along with risks included under Item 1-A in the Company’s fiscal 2025 Form 10-K updated by the Company’s March 31, 2026 Form 10-Q. Forward-looking statements reflect the Company’s current expectations only as of the date they are made. The Company assumes no duty to update these statements should expectations change or actual results differ from current expectations except as required by applicable laws and regulations. Past performance is not necessarily a predictor of future results. Summary financial statements for the third quarter and fiscal year to date are as follows: Contact: Timothy J. Mulvaney Vice President, Treasurer and CFOTelephone: (540) 777-3997

This article first appeared on GuruFocus. Release Date: May 08, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. RGC Resources Inc (NASDAQ:RGCO) reported a 14% increase in net income for the second quarter, reaching $8.7 million, or $0.84 per diluted share. The company experienced a 5.3% increase in net income for the first half of 2026 compared to the same period in 2025. RGC Resources Inc (NASDAQ:RGCO) successfully implemented new rates on January 1, which contributed to increased gas margins. The company's balance sheet remains strong, with ongoing positive discussions with lenders to refinance a $15 million note. RGC Resources Inc (NASDAQ:RGCO) has maintained a steady local economy with ongoing developments like the Google data centers, supporting regional growth. Total gas volumes delivered were down 5% in the second quarter compared to the same period in 2025. One of the company's top five customers by volume ceased operations, posing a headwind for the second half of 2026. The LNG peak shaving facility sustained damage, and the company does not expect it to be operational for the upcoming winter season. RGC Resources Inc (NASDAQ:RGCO) faces challenges with inflationary pressures remaining above the Fed's 2% target. The company is unable to estimate the costs associated with the LNG facility damage or the investment required for repairs or replacement. Warning! GuruFocus has detected 9 Warning Signs with RGCO. Is RGCO fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an update on the financial performance for the second quarter of 2026? A: Tim Mulvaney, VP, Treasurer, and CFO, reported a robust quarter with increased gas margins due to new rates effective January 1, higher earnings from the unconsolidated affiliate MVP, and lower interest expenses. Net income was $8.7 million, or $0.84 per diluted share, a 14% increase from the previous year. Q: What challenges did RGC Resources face in the second quarter? A: Paul Mester, President and CEO, mentioned two main challenges: a top customer idled operations, impacting gas usage, and damage to the LNG peak shaving facility, which will not be operational for the coming winter season. The company is assessing the damage and planning to provide service without the facility. Q: How is RGC Resources addressing the idling of a major customer? A: Tommy Oliver, Senior VP of Regulatory and External Affairs, stated that the SEC staff has been informed, and they are optimistic that the expected decline in usage will be incorporated into the recommended revenue requirement in the upcoming rate case. Q: What is the status of the pending rate case? A: Tommy Oliver explained that Roanoke Gas filed an expedited rate case seeking $4.3 million in incremental annual revenues. The interim rate became effective on January 1, 2026, and the SEC staff is auditing, with a hearing scheduled for July 15, 2026. A final resolution is expected by year-end. Q: What are the expectations for capital spending and earnings for the rest of 2026? A: Paul Mester noted that the capital spending forecast remains at $22 million, with flexibility to adjust as needed. The earnings per share range has been narrowed and raised to $1.31 to $1.37, considering the strong second quarter and ongoing macroeconomic concerns. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Net income growth of 14% in Q2 was primarily driven by new interim rates effective January 1, alongside higher earnings from the MVP affiliate and lower interest expenses. Residential development remains steady across the region, evidenced by 340 new service connections and 2.7 main miles installed, matching prior year activity levels. A significant industrial headwind emerged as a top-five customer idled operations in March after 60 years, contributing to a 3% decline in total six-month gas volumes. Operational spending and renewals were hampered by extreme winter weather in late January and early February, though service renewals still increased by almost 25%. Management is addressing inflationary pressures and higher-than-target Fed rates by focusing on organizational efficiency and expense management. The local economy remains stable with growth catalysts like the Google data center and ongoing collaboration with regional economic development partners. The 2026 earnings per share guidance has been narrowed and raised to a range of $1.31 to $1.37, reflecting strong Q2 performance. Management expects the LNG peak shaving facility to be unavailable for the upcoming winter season following mid-quarter damage, necessitating intense alternative service planning. The company is in active negotiations to refinance a 15 million dollar note maturing in August, acknowledging that the new rate will be significantly higher than the current 2% rate. Full-year capital spending is projected at 22 million dollars, with management maintaining flexibility to reposition investments based on LNG facility remediation needs. Final resolution of the expedited rate case, seeking 4.3 million dollars in incremental annual revenue, is expected from the Commission by the end of the calendar year. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The company is unable to estimate the costs or investment required to repair or replace the damaged LNG peak shaving tank at this time. Management has requested the establishment of a regulatory asset to handle costs associated with the LNG facility damage. The SEC staff has been notified of the major industrial customer exit, with the company optimistic that the decline in usage will be incorporated into the final revenue requirement. A four-month tax credit refund program for customers concluded in April, which had previously been offsetting the impact of new interim rates.

Interested in RGC Resources Inc.? Here are five stocks we like better. RGC Resources posted stronger Q2 fiscal 2026 results, with net income rising 14% year over year to $8.7 million, or $0.84 per diluted share, helped by new gas rates, higher MVP affiliate earnings, and lower interest expense. The company faces meaningful second-half headwinds after a top-five industrial customer idled operations in March, and it also said damage at its LNG peak-shaving facility means it likely won’t be available for the coming winter season. Management raised and narrowed full-year EPS guidance to $1.31-$1.37, while continuing work on an expedited rate case and planning to refinance a $15 million note due in August. RGC Resources (NASDAQ:RGCO) reported higher second-quarter earnings for fiscal 2026, citing increased Roanoke Gas margins from new rates that took effect Jan. 1, higher earnings from its unconsolidated affiliate MVP and lower interest expense. The company also discussed operational headwinds, including the shutdown of a large customer’s facility and damage at its LNG peak-shaving facility. Tim Mulvaney, vice president, treasurer and chief financial officer, said net income for the quarter was $8.7 million, or $0.84 per diluted share, compared with $7.4 million, or $0.74 per diluted share, in the same quarter a year earlier. That represented a 14% increase. → Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30% For the first six months of fiscal 2026, net income was $13.6 million, or $1.31 per diluted share, compared with $1.26 per diluted share in the first half of fiscal 2025, a 5.3% increase. Mulvaney said the second quarter drove the six-month performance because the first quarter did not include the benefit of the January rate increase. “We had a robust quarter with increased Roanoke Gas margins due to the rates that went into effect January 1st, combined with higher earnings from our unconsolidated affiliate, MVP, and lower interest expense to overcome higher expenses related to investment in our gas system and inflationary pressures,” Mulvaney said. → Light Speed Returns: Corning Cashes In on NVIDIA Growth Tommy Oliver, senior vice president of regulatory and external affairs, said main extension and renewal activity was steady in the first half of fiscal 2026. RGC installed 2.7 main miles, similar to the total installed in the first half of fiscal 2025, and connected 340 new services, compared with 359 in the prior-year period. Oliver said that activity was evidence that residential development continued across the region. The company renewed 1.5 miles of main and 196 services during the first half of fiscal 2026. While main miles renewed were down in part because of weather, service renewals increased by almost 25%, Oliver said. → Years in the Making, AMD’s Upside Movement Has Just Begun Delivered gas volumes declined in both the quarter and first half. Oliver said that despite an extreme cold spell in late January and early February, the second quarter overall was warmer than the same period in fiscal 2025. Total volumes were down 5% year over year, with residential and commercial volumes both declining by about 5%. Heating degree days were down 2% from the prior-year quarter. For the first six months, total volumes were down 3% compared with the first half of fiscal 2025, even though heating degree days increased 3%. Oliver said the decline was primarily attributable to lower industrial usage from one customer. President and Chief Executive Officer Paul Nester said one of the company’s top five customers by volume, a longtime manufacturer in the Roanoke Valley, idled its operations in March. Nester said the manufacturer had operated in the region for more than 60 years and that the closure affected employees at the facility. “As Tim said, it’s a headwind really into the second half of 2026,” Nester said. “Again, they were a large gas customer.” Oliver said the company informed the Virginia State Corporation Commission staff of the customer closure and said RGC is optimistic that the SCC staff will incorporate the expected decline in usage over the coming year into its recommended revenue requirement when testimony is filed in June. Nester also discussed damage at the company’s LNG peak-shaving facility, which was described in RGC’s quarterly filing. He said the company has hired tank experts and other specialists to assess the cause and nature of the damage and potentially design remediation solutions. RGC does not expect to have use of the LNG peak-shaving facility for the coming winter season, Nester said. He added that the company has begun “intense and thorough planning” to provide service without the facility. “As we disclosed in the 10-Q, right now we’re unable to estimate the costs associated with this event, and we’re unable to estimate the investment required to possibly repair or, if needed, replace the tank,” Nester said. Oliver said the company has alerted SCC staff to the situation and has discussed establishing a regulatory asset for the related costs. Oliver said Roanoke Gas filed an expedited rate case on Dec. 2 seeking about $4.3 million in incremental annual revenues based on its current authorized return on equity of 9.9%. Interim rates became effective Jan. 1, subject to refund. SCC staff is conducting an audit and is scheduled to file testimony in June. A hearing is scheduled for July 15, 2026, and the company expects a final resolution from the commission by the end of the calendar year. Oliver also said that for four months beginning in January, RGC offset the new rates through bill credits to return tax credits to customers that were resolved with the IRS late in fiscal 2025 and had been included as regulatory liabilities on the balance sheet. Those refunds concluded in April. Capital spending for the first half of fiscal 2026 totaled $9.8 million, down about 8% from the same period a year earlier. Oliver said Winter Storm Fern in late January and early February affected spending, though activity picked back up in March. Nester said the company’s capital spending forecast remains $22 million for the fiscal year, though the mix of spending has been adjusted slightly from what was presented after the first quarter. He said RGC may reposition certain investments or potentially add to the plan as more facts become known about the LNG facility. RGC raised and narrowed its fiscal 2026 earnings per share outlook to a range of $1.31 to $1.37. Nester said the strong second-quarter results contributed to the updated outlook, while Mulvaney reminded investors that the business is seasonal and that the third and fourth quarters will not resemble the first and second quarters from an earnings standpoint. Mulvaney said the company’s balance sheet remains strong. Roanoke Gas has a $15 million note maturing in August, which is included in current maturities of long-term debt. He said the company is in discussions with lenders to refinance the note and does not expect to replicate the 2% rate it previously had. Nester said the company continues to face macroeconomic concerns, including inflation above the Federal Reserve’s 2% target and interest rate volatility. He also said the local economy remains steady, citing the Google Data Center project and other recent positive announcements across the Roanoke Valley. No questions were asked during the call’s question-and-answer portion. Nester said company representatives plan to attend the AGA Financial Forum and expect to report third-quarter fiscal 2026 results in August. RGC Resources, Inc (NASDAQ: RGCO) is a natural gas distribution and transmission company headquartered in Wheeling, West Virginia. Through its regulated subsidiaries, the company provides energy delivery services to residential, commercial and industrial customers across northern West Virginia, western Pennsylvania and parts of Maryland. RGC Resources focuses on maintaining a safe and efficient local pipeline network to ensure reliable supply to its service areas. The company operates two primary business segments: distribution and transmission. The article "RGC Resources Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.