RGC Resources, Inc.

Third-quarter net income was approximately $550,000, or $0.05 per diluted share, slightly ahead of the same period last year, driven primarily by higher margins from interim rates effective January 1 and new state revenues. For the first 9 months of fiscal 2026, net income was $14.2 million, or $1.37 per diluted share, versus $1.31 per diluted share in the prior-year period, a 4.6% increase. Capex was $16.1 million for the first 9 months, up approximately 2% year over year. On guidance, management narrowed full-year fiscal 2026 EPS to $1.29-$1.32 and said it still expects a small loss in the fourth quarter. The rate case settlement reduced the requested annual revenue increase from approximately $4.3 million to $3.85 million, with lower rates effective August 1; $275,000 had been accrued for customer refunds as of June 30.

Paul Nester struck an upbeat but measured tone, emphasizing operational resilience, system safety, and continued customer demand in the region. He said the company is adjusting to the LNG facility outage by adding pipeline supply, pursuing Mountain Valley-related infrastructure, and procuring truck LNG as needed. He also highlighted a net-positive Roanoke Valley economy, including the Google data center, medical complex investment, and a new announced foreign direct investment project.

Kelsie Davenport focused on the quarter’s margin improvement, noting that interim rates and new state revenues offset the loss of a large industrial customer and weather-related volatility. She said non-gas operating and maintenance expenses were higher due to inflationary pressure in personnel, professional services, and IT support, while gas costs lowered operating expenses. On the balance sheet, she highlighted the refinancing of a $15 million note at a fixed 5.2% for three years, and she said MVP continues to provide comparable JV earnings and excess cash distributions, with just over $1 million invested this fiscal year in Southgate and Boost.

The main analyst question centered on the LNG facility damage and whether the tank would need to be replaced. Management said the issue came from icing and movement during Winter Storm Fern, causing structural/metal fatigue damage, but no leak or unsafe condition; they are still evaluating repair options versus newer tank-holding equipment. When asked about timing, Paul Nester said the goal is to restore on-system storage and peak-shaving capability for the 2027-2028 winter season.