RGC Resources, Inc.
Q2 2021 Earnings Call Transcript

Published: 14 May 2021

[Paul Nester:]

Good morning. I'm Paul Nester, President and CEO of RGC Resources, Inc. I hope it is beautiful and pleasant wherever you may be today as it is here in the Roanoke Valley. With me today are Tommy Oliver, our CFO; and David Garcia, our Director of Financial. Again welcome, and thank you for joining us as we discuss RGC Resources' Fiscal 2021 Second Quarter Results. First, a few housekeep items. We have muted all lines and ask that all participants remain muted. After the presentation is completed, we will take questions. The link to today's presentation is available on the Investor & Financial Information page of our website at www.rgcresources.com. Let’s get started. Slide 1 contains our forward-looking statements disclaimer. This presentation contains forecasts and projections. This morning's agenda is on Slide 2. We will review the second quarter and year-to-date operational and financial results followed by our outlook for the second half of fiscal 2021. We will conclude with an opportunity for you to ask questions.

[Tommy Oliver:]

Thank you, Paul. And good morning everyone. I will now review our operating results. To aid in this discussion, we have included our condensed consolidated statements of income on Slide 1. Let's start with our quarter-over-quarter results. As indicated on Slide 7, Resources completed its first quarter of fiscal 2021 with earnings of $0.58 per diluted share, compared to $0.70 for the same quarter of the prior year. While operating income was favorably impacted by customer growth, SAVE revenues and firm volumes, this was offset by a one-time rate case adjustment that increased revenues in the prior year. I would also note that the significant increase in operating expenses in quarter two of 2021 was driven primarily by a 67% increase in gas costs and colder weather compared to last year. The increase in gas costs was driven by both the February, 2021 polar vortex that affected gas supplies throughout much of the U.S. and higher transportation charges from our interstate pipeline suppliers.

[Paul Nester:]

Thank you, Tommy. We are excited about that news related to the vaccination and the willingness of our employees to be vaccinated. By definition, our company will have herd immunity by the end of May. We're happy about that. Let's discuss the remainder of fiscal 2021, starting with Roanoke Gas capital on Slide 9. We still plan to spend $21.1 million this fiscal year with $12 million expected in the back half of fiscal 2021. Momentum on main extensions and new customer additions has continued into the third quarter. And we expect that trend to continue throughout the summer and into the early fall.

[Operator:]

[Q -:]

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