RGC Resources Inc.

Good morning and thank you for joining us as we discuss RGC Resources 2025 third quarter results. I'm Kelsey Davenport, Director of Finance of RGC Resources, Inc. I am joined today this morning by Paul Nestor, our President and CEO, and Tim Mulvaney, our VP, Treasurer, and Chief Financial Officer. Let's review a few administrative items before we start. We have muted all lines and ask that all participants remain muted. The link to today's presentation is available on the investor and financial information page of our website at www.rgcresources.com. At the conclusion of the presentation, in our remarks, we will take questions. Turning to slide one. This presentation contains forecasts and projections. Slide one has information about risk and uncertainties, including forward-looking statements that should be understood in the context of our public filings. Slide two contains our agenda. We will discuss our operational and financial highlights for the third quarter and first nine months of our 2025 fiscal year. We will then review our outlook for the remainder of the 2025 fiscal year with time allotted for questions at the end. I will now turn the presentation over to Paul. Paul?

Thank you, Kelsey, and good morning. Just to put everyone's mind at ease, Tommy is not with us today as he's spending some time with his recently arrived grandchild. We're wishing Tommy and his family well. Let's begin on slide three. Main extensions were strong and renewal activity was steady for the first nine months of fiscal 2025. Investing in our system safety and reliability remains a high priority for us. Through our SAFE program, we have renewed 3.1 miles of main and 228 services year to date. We continue to experience robust residential growth. We installed 3.9 new main miles, which is already 50% higher than the total main miles installed in all of fiscal 2024. And we've connected 541 new services through June 30. Both of those are just outstanding numbers nine months into the year. Slide four shows delivered gas volumes for the quarter. Total volumes increased 6%. compared to the third quarter of 2024 as one industrial customer who has fuel switching capability continued their high natural gas consumption this year. Residential and commercial volumes were slightly down compared to the same quarter in the prior year. As most of you know, the April, May, June period is considered a shoulder period. Sometimes you have colder weather and warmer weather, and the mix of that can impact those volumes. On slide five, though, there's a different story in our delivered gas volumes for the year to date of fiscal 2025. We simply had a colder winter, as we've discussed on our first and second quarter calls. With heating degree days up 18%, total volumes moved up 15% compared to 2024 across all three categories shown on the slide. The same large industrial customer continues to be up year over year and, in fact, has already established through June 30th, a new annual delivery record of 1.5 BCF through June. So just an outstanding consumption there. I would like to provide a couple of quick updates on the regulatory front. As we discussed on our most recent call, we received the final order from the 2024 rate case in early April. We also filed our normal rider updates for SAE and the renewable natural gas facility in May and June respectively, and we expect to receive those final orders prior to September 30, 2025. Slide 6 shows year-to-date CapEx. Total spending was $15.7 million in the current year, which is down approximately 5 percent from the same period a year ago. You may recall as we were moving toward Mountain Valley in-service on June 14, 2024 and the conclusion of June 30 quarter that we invested $3.2 million to complete our two Mountain Valley interconnects and establish our first customer in Franklin County with the main and service installation there. We just haven't had that kind of one-time capital expenditure so far in 2025. We will provide more color on CapEx as we discuss the four-year outlook later in the presentation. I will now I'll turn the microphone over to our Chief Financial Officer, Tim Mulvaney, to review our financial results and some outstanding developments related to our balance sheet. Tim?

Thank you, Paul. Moving to slide seven, we had another good quarter, albeit with a different formulation than last quarter. Higher earnings in the current quarter from our share of the MVP's normal operations, along with lower interest expense, overcame lower operating income. In the prior year, our earnings from MVP related to AFUDC, which was trailing off as the pipeline went into service. Net income of 538,000, or five cents a share, compared to net income in the same quarter a year ago of 157,000, or two cents a share. The year-to-date results are shown on slide seven as well. Performance for the nine months of the fiscal year compared to the same period last year are strong. Higher Roanoke gas margins aided by higher base rates more than compensated for lower MVP earnings due to AFUDC in the prior year and higher interest expense. Net income was up nicely to $13.5 million in the first nine months of fiscal 2025 or $1.31 per share compared to $1.15 per share in the first nine months of fiscal 2024. a robust 16% increase. To provide a reminder for the fourth quarter, the rates that were finalized went into effect July 1st of 2024, so there will be no corresponding lift in gas margins in the fourth quarter of this year. In fact, we anticipate a small loss for the quarter as more of the revenues were captured in volumes under the rate case. The MVP pipeline went into service in June 2024 and the shipper agreements became active July 1st of 2024. As a result, our share of MVP earnings should be comparable to the fourth quarter a year ago. Moving to slide eight, we ended the third quarter with a strong balance sheet. We continue to invest and grow our utility property. We renewed the Roanoke gas line of credit for two years and raised our maximum availability to 30 million at the end of March. Last quarter, we indicated that we were having positive conversations regarding our midstream debt. Subsequent to this quarter end, we reached an agreement with two banks related to our debt at midstream, which will serve us well for years to come and results in classifying most of this debt as long term. Moving to slide nine, before I turn the presentation back to Paul to talk about economic development our forecast for capital, and our expectations for full year earnings, let me provide a little more detail about the agreement we reached for Midstream's debt. On slide 10, we received a commitment from two banks to provide us a new note to refinance all debt related to Midstream. That's four separate facilities currently. This new note will be for seven years and carry interest at SOFR plus 155. We plan to swap that variable rate to fixed rate while keeping our two existing interest rate swaps which have very favorable rates until each of those swaps mature. We will begin to amortize the debt based on the remaining life of the MVP shipping contracts. This amounts to about $711,000 per quarter. Separately, we expect to enter into a new line of credit facility with one of the banks that will enable us to invest in projects at MVP to enhance future cash flows. These arrangements position us well as it provides us time and the means to enhance MVP cash flows with manageable amortization. Now, let me turn the presentation back to Paul.