RGC Resources, Inc. Q4 FY2025 earnings call

• Main Extensions: Strong year for main extensions, residential growth in Roanoke Valley, installed nearly 5 main miles (50% higher than 2024), connected over 700 new services, reconnected over 500 customers since October, SAVE program renewed 4.2 miles of main and nearly 350 services.
• Gas Volumes: Record volumes in fiscal 2025, fourth quarter 2025 volumes up 8% vs Q4 2024, full year 2025 gas delivery a new record with heating degree days up 18% and volumes up 14% vs 2024.
• CapEx: Fiscal 2025 CapEx $20.7 million, down 6% from 2024, no one-time MVP interconnection expenditure in 2025.
• Financial Results: Fourth quarter 2025 net loss $204,000 vs net income $141,000 in Q4 2024; fiscal 2025 net income $13.3 million vs $11.8 million in 2024, increase of 15%.
• Rate Case: Filed expedited rate case on December 2 seeking ~$4.3 million annual revenue increase, expected to be effective January 1, 2026, with tax credits to be returned to customers over next 12 months.
• 2026 Outlook: Capital budget $22 million led by SAVE program, housing authority transfers impact, record gas deliveries in 2025 not planned for in 2026, Board authorized $0.04 per share annualized increase to $0.87 per share.

Main Extensions: Had a strong year with nearly 5 main miles installed (50% higher than fiscal 2024), connected over 700 new services. Residential growth in the Roanoke Valley continued. The SAVE program renewed 4.2 miles of main and nearly 350 services. Gas Volumes: Fiscal 2025 delivered record volumes. Fourth quarter 2025 total volumes increased 8% compared to Q4 2024. Full year 2025 gas delivery was a new record with heating degree days up 18% and total volumes up 14% vs 2024. CapEx: Fiscal 2025 CapEx was $20.7 million, down 6% from 2024, excluding the $3.2 million MVP interconnections in 2024.

• Fiscal 2026 capital budget set at $22 million, led by SAVE program renewals.
• Rate case expected to result in new rates effective January 1, 2026, subject to refund after 12-18 months of regulatory adjudication.
• Planning to not assume record gas volumes in 2026 for expense management purposes.
• For MVP projects, expect to invest $4 million to $5 million over several years, with the first $1 million to $1.5 million in 2026.

• Seasonal customer disconnects and reconnects that affect the customer count.
• Inflationary pressures still present, impacting operating expenses.
• Uncertainty in gas volumes due to weather patterns and customer behavior.
• Regulatory process for the rate case taking 12-18 months with potential refunds to customers.

Q: Michael Gaugler asks about weather tracking versus last year.

A: Paul Nester talks about strange weather patterns in October and November, cold air mass in Roanoke, and high natural gas prices.

Q: Michael Gaugler asks about MVP capital requirements in 2026.

A: Tim Mulvaney says they set up facilities to fund Boost and Southgate projects, expecting $4 million to $5 million investment over several years, with the first $1 million to $1.5 million in 2026.

Q: Michael Gaugler asks about data centers.

A: Paul Nester talks about Google's investment in Virginia, interest in Southwest Virginia, and more precise announcements expected in 2026 regarding Google's intentions in the region.