# RGC Resources Inc: Form 10-Q for the period ended Mar 31, 2026

- Company: [RGC Resources Inc](/companies/rgco.md) (CIK 1069533)
- Form: 10-Q
- Filed: 2026-05-07
- Accepted by EDGAR: May 7, 2026, 16:55 ET
- Period: 2026-03-31
- Accession: 0001437749-26-015653
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1069533/000143774926015653/rgco20260331_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1069533/000143774926015653/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $45.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-10-01 to 2026-03-31 | $75.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | $11.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-10-01 to 2026-03-31 | $17.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2026-01-01 to 2026-03-31 | $1.6m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2025-10-01 to 2026-03-31 | $3.3m | us-gaap:InterestExpense |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | $2.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-10-01 to 2026-03-31 | $3.9m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | $8.7m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-10-01 to 2026-03-31 | $13.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-01-01 to 2026-03-31 | $0.84 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-10-01 to 2026-03-31 | $1.31 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | $0.85 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-10-01 to 2026-03-31 | $1.34 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-01-01 to 2026-03-31 | 10,404,657 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-10-01 to 2026-03-31 | 10,378,996 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-10-01 to 2026-03-31 | $16.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-10-01 to 2026-03-31 | $9.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2025-10-01 to 2026-03-31 | $4.4m | us-gaap:PaymentsOfDividendsCommonStock |
| Current assets | at 2026-03-31 | $25.7m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $337.1m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $37.3m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2026-03-31 | $128.9m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2026-03-31 | $17.8m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2026-03-31 | $124.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 44,907 characters.

### Forward-Looking Statements

This report contains forward-looking statements that relate to future transactions, events or expectations. In addition, Resources may announce or publish forward-looking statements relating to such matters as anticipated financial performance, business prospects and closures, investments, inflation, ratemaking and other regulatory actions, debt refinancing, technological developments, new products, research and development activities, weather variations, operational impacts and similar matters. These statements are based on management’s current expectations and information available at the time of such statements and are believed to be reasonable and are made in good faith. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. 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 the anticipated results or other expectations expressed in the Company’s forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company’s business include, but are not limited to, those set forth in the following discussion and within Item 1A “Risk Factors” in the Company’s 2025 Annual Report on Form 10-K, as well as an updated risk within Item 1A "Risk Factors" in Part II below. These factors are difficult to predict and many are beyond the Company’s control. Accordingly, while the Company believes its forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. When used in the Company’s documents or news releases, the words “anticipate,” “believe,” “intend,” “plan,” “estimate,” “predict,” “target,” “expect,” “objective,” “projection,” “potential,” “forecast,” “budget,” “assume,” “indicate” or similar words or future or conditional verbs such as “will,” “would,” “should,” “can,” “could,” “may,” or “might” are intended to identify forward-looking statements.

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.

The three-month and six-month earnings presented herein should not be considered as reflective of the Company’s consolidated financial results for the fiscal year ending September 30, 2026. The total revenues and margins realized during the first six months reflect higher billings due to the weather-sensitive nature of the natural gas business.

### Overview

Resources is an energy services company primarily engaged in the regulated sale and distribution of natural gas to approximately 63,900 residential, commercial and industrial customers in Roanoke, Virginia and surrounding localities through its Roanoke Gas subsidiary. Midstream, a wholly owned subsidiary of Resources, is a less than 1% investor in the MVP, Southgate and Boost. The utility operations of Roanoke Gas are regulated by the SCC, which oversees the terms, conditions and rates charged to customers for natural gas service, safety standards, extension of service and depreciation. The Company is also subject to regulation from the United States Department of Transportation in regard to the construction, operation, maintenance, safety and integrity of its transmission and distribution pipelines. FERC regulates the prices for the transportation and delivery of natural gas to the Company’s distribution system and underground storage services. In addition, the Company is subject to other regulations which are not necessarily industry specific.

Nearly all of the Company’s revenues are derived from the sale and delivery of natural gas to Roanoke Gas customers based on rates and fees authorized by the SCC. These rates are designed to provide the Company with the opportunity to recover its gas and non-gas expenses and to earn a reasonable rate of return for shareholders based on normal weather. These rates are determined based on various rate applications filed with the SCC. Generally, investments related to extending service to new customers are recovered through the additional revenues generated by the non-gas base rates in place at that time. The investment in replacing and upgrading existing non-SAVE infrastructure, as well as recovering increases in non-gas expenses due to inflationary pressures, regulatory requirements or operational needs, are generally not recoverable until a formal rate application is filed to include the additional investment and higher costs, and new non-gas base rates are implemented.

On December 2, 2025, the Company filed for an expedited rate application with the SCC to increase non-gas base rates by $4.3 million annually. Pursuant to the Commission’s December 29, 2025 Order for Notice and Comment, the new base rates went into effect for service rendered on or after January 1, 2026, subject to refund. The SCC's review of Roanoke Gas' filing is underway and a hearing is set for July 15, 2026. Based on the procedural schedule established in the Commission’s Order, the Company anticipates final resolution of the case in the first quarter of fiscal 2027.

As the Company’s business is seasonal in nature, volatility in winter weather and the commodity price of natural gas can impact the effectiveness of the Company’s rates in recovering its costs and providing a reasonable return for its shareholders. In order to mitigate the effect of weather variations and other factors not provided for in the Company's base rates, Roanoke Gas has certain approved rate mechanisms in place that help provide stability in earnings, adjust for volatility in the price of natural gas and provide a return on qualified infrastructure investment. These mechanisms include the SAVE Rider, WNA, ICC, RNG Rider and PGA.

The SAVE Plan and Rider provides the Company with a mechanism through which it recovers costs related to qualified SAVE infrastructure investments on a prospective basis, until a rate application is filed incorporating these investments in non-gas base rates. Roanoke Gas filed and received approval from the SCC for an updated annual SAVE Rider rate which became effective October 1, 2025. As a result of the updated SAVE Rider, SAVE Plan revenues increased by approximately $261,000 and $532,000, respectively, for the three-month and six-month periods ended March 31, 2026 compared to the same periods last year. The updated SAVE Rider is expected to result in approximately $2.61 million of annualized SAVE-related revenues during fiscal 2026. Additional information regarding the SAVE Plan and Rider is provided in Note 4 of the condensed consolidated financial statements.

The WNA mechanism reduces the volatility in earnings due to the variability in temperatures during the heating season. The WNA is based on the most recent 30-year temperature average and provides the Company with a level of earnings protection when weather is warmer than normal and provides its customers with price protection when weather is colder than normal. The WNA allows the Company to recover from its customers the lost margin (excluding gas costs) from warmer-than-normal weather and correspondingly requires the Company to refund the excess margin earned for colder-than-normal weather. The WNA mechanism used by the Company is based on a linear regression model that determines the value of a single heating degree day and thereby estimates the revenue adjustment based on weather variance from normal. Any billings or refunds related to the WNA are completed following each WNA year, which extends for the 12-month period from April to March. For the three months ended March 31, 2026, the Company accrued approximately $298,000 in additional revenues under the WNA model for weather that was 2% warmer than normal, compared to reducing revenues by approximately $27,000 for weather that was in line with normal for the corresponding period last year. For the six months ended March 31, 2026, the Company reduced revenues by approximately $21,000 for weather that was in line with normal, compared to approximately $473,000 in additional revenues for weather that was 2% warmer than normal for the corresponding period last year. The WNA for the 12-month period ended March 31, 2026 was approximately $483,000, which will be billed to customers during May 2026.

The Company has an approved rate structure to mitigate the impact of the financing costs of its natural gas inventory. Under this rate structure, Roanoke Gas recognizes revenue by applying the ICC factor, based on the Company’s weighted-average cost of capital, including interest rates on short-term and long-term debt, and the Company’s authorized return on equity, to the average cost of natural gas inventory during the period. Total ICC revenues decreased nominally for both the three-month and six-month periods ended March 31, 2026 compared to the corresponding periods last year. While the average price of gas in storage fluctuated nominally for the six-month period ended March 31, 2026 compared to the same period in the prior year, the average price of gas in storage decreased by 4% during the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025. If natural gas prices remain at or continue to decline as compared to the prior year, coupled with possible reduced storage levels at the LNG facility, the average dollar balance of gas in storage is expected to decrease, leading to lower ICC revenues in fiscal 2026.

Roanoke Gas operates an RNG facility, through a cooperative agreement with the Western Virginia Water Authority, to produce commercial quality RNG for delivery into its distribution system. Roanoke Gas is allowed to recover the costs associated with the investment in RNG facilities and the related operating costs through an RNG Rider added to customer bills that was approved by the SCC in 2023 and updated annually. Customers receive the benefit of environmental credits generated through the production of RNG. Roanoke Gas recognized approximately $450,000 and $934,000, respectively, in RNG revenue for the three and six months ended March 31, 2026 compared to approximately $429,000 and $817,000 for the corresponding periods in the prior year.

The cost of natural gas, which is a pass-through cost, is independent of the Company's non-gas rates. Accordingly, the Company's approved billing rates include a component designed to allow for the recovery of the cost of natural gas. This rate component, referred to as the PGA, allows the Company to pass along to its customers increases and decreases in natural gas costs through a quarterly filing, or more frequent if necessary, once SCC staff approval is received. As actual costs will differ from the projections used in establishing the PGA rate, the Company will either over-recover or under-recover its actual gas costs during the period. The difference between actual costs incurred and costs recovered through the application of the PGA is recorded as a regulatory asset or liability. At the end of the annual deferral period, the balance is amortized over a succeeding 12-month period through the ensuing non-gas rate component. Due to the extended and extreme cold weather experienced across the eastern half of the United States during Winter Storm Fern, natural gas prices spiked from less than $4 per DTH to well over $30 per DTH at the end of January and into February 2026. As such, the Company adjusted the PGA rate effective February 2026 to offset the increased under-recovery of gas costs, which are anticipated to be collected from customers over the ensuing 12 to 18 months.

### Results of Operations

The analysis on the results of operations is based on the consolidated operations of the Company, which is primarily associated with the utility segment. Additional segment analysis is provided when Midstream's investment in affiliates represents a significant component of the comparison.

The Company's operating revenues are affected by the cost of natural gas, as reflected in the condensed consolidated statements of income under cost of gas - utility. The cost of natural gas, which includes commodity price, transportation, storage, injection and withdrawal fees, with any increase or decrease offset by a correlating change in revenue through the PGA, is passed through to customers at cost. Accordingly, management believes that gross utility margin, a non-GAAP financial measure defined as utility revenues less cost of gas, is a useful and relevant measure to analyze financial performance. The term gross utility margin is not intended to represent or replace gross margin, the most comparable GAAP financial measure, as an indicator of operating performance and is not necessarily comparable to similarly titled measures reported by other companies. A reconciliation between gross utility margin and gross margin is presented under the Gross Utility Margin section below. The following results of operations analyses will reference gross utility margin.

### Three Months Ended March 31, 2026:

Net income increased by $1,068,282 for the three months ended March 31, 2026, compared to the same period last year, primarily due to implementation of higher non-gas base rates effective January 1, 2026.

The tables below reflect operating revenues, volume activity and heating degree days.

| Operating Revenues | Three Months Ended March 31, 2026 | 2025 | Increase / (Decrease) Percentage |  |
| --- | ---: | ---: | ---: | ---: |
| Gas utility | $45,432,878 | $36,435,936 | $8,996,942 | 25% |
| Non utility | 24,131 | 26,161 | (2,030) | (8)% |
| Total operating revenues | $45,457,009 | $36,462,097 | $8,994,912 | 25% |
| **Delivered Volumes** |  |  |  |  |
| Regulated natural gas (DTH) |  |  |  |  |
| Residential and commercial | 3,190,805 | 3,361,037 | (170,232) | (5)% |
| Transportation and interruptible | 1,093,433 | 1,163,021 | (69,588) | (6)% |
| Total delivered volumes | 4,284,238 | 4,524,058 | (239,820) | (5)% |
| HDD | 1,975 | 2,025 | (50) | (2)% |

Total operating revenues for the three months ended March 31, 2026, compared to the same period last year, increased by approximately 25% primarily due to the implementation of a non-gas base rate increase, higher natural gas commodity prices and increased SAVE revenues, slightly offset by a reduction in delivered volumes. Roanoke Gas placed new non-gas rates into effect for natural gas service rendered on or after January 1, 2026, subject to refund. These new non-gas rates will generate approximately $4.3 million in additional annual revenues, all of which was allocated to the volumetric component; and as such, a larger portion of the rate increase was recognized during the quarter due to the volume of gas consumption. Additionally, total natural gas costs increased by 44% compared to the same period last year, primarily due to pipeline capacity charges increasing over $1.2 million, which corresponds to a 54% increase in the gas cost component included in the total customer billing rate. The average commodity price per dekatherm during the current quarter was $5.90 compared to $3.80 per dekatherm for the corresponding quarter in the prior year. Overall volumes delivered decreased in line with the decrease in HDD as weather for the whole quarter was 2% warmer compared to the 30-year normal despite Winter Storm Fern. Transportation and interruptible volumes declined by 6% as a single, multi-fuel customer that had been utilizing natural gas as its primary fuel source reduced its consumption during the quarter, however, the Company expects this customer's usage to return to normal levels. SAVE Plan revenues increased by approximately $261,000 compared to the same period in the prior year as Roanoke Gas continues to invest in qualified SAVE infrastructure projects.

| Gross Utility Margin | Three Months Ended March 31, 2026 | 2025 | Increase Percentage |  |
| --- | ---: | ---: | ---: | ---: |
| Gas utility revenues | $45,432,878 | $36,435,936 | $8,996,942 | 25% |
| Cost of gas - utility | 24,611,552 | 17,062,153 | 7,549,399 | 44% |
| Gross utility margin | $20,821,326 | $19,373,783 | $1,447,543 | 7% |

26

Gross utility margin increased 7% from the same period last year primarily as a result of the aforementioned increases in non-gas base rates, as well as increased SAVE and RNG revenues, which contributed $611,000 and $298,000, respectively. As discussed in the Overview section, the WNA model adjusts for the impact of variability of temperatures during the heating season. The WNA model calculates what the corresponding volumes would be if temperatures were equivalent to the 30-year normal during each period and adjusts for the difference in margin from normal. In applying the WNA model to both the current and prior periods, the volumetric margin, inclusive of the WNA, increased by approximately $1.1 million due to weather that was 2% warmer than normal.

The changes in the components of gas utility margin are summarized below:

|  | Three Months Ended March 31, 2026 | 2025 | Increase/ (Decrease) |
| --- | ---: | ---: | ---: |
| Customer base charge | $4,154,529 | $4,118,891 | $35,638 |
| ICC | 86,194 | 101,758 | (15,564) |
| SAVE Plan | 610,703 | 350,192 | 260,511 |
| Volumetric | 15,162,185 | 14,349,462 | 812,723 |
| WNA | 298,337 | (26,990) | 325,327 |
| RNG | 450,008 | 428,930 | 21,078 |
| Other revenues | 59,370 | 51,540 | 7,830 |
| Total | $20,821,326 | $19,373,783 | $1,447,543 |

The tables below provide a reconciliation between gross utility margin and gross margin:

| Three Months Ended March 31, 2026 Operating revenues | Gas Utility | Investment in Affiliates | Consolidated Total |
| --- | ---: | ---: | ---: |
| Gas utility | $45,432,878 | $— | $45,432,878 |
| Non utility | 24,131 | — | 24,131 |
| Total operating revenues | 45,457,009 | — | 45,457,009 |
| Cost of sales |  |  |  |
| Cost of gas - utility | (24,611,552) | — | (24,611,552) |
| Cost of sales - non utility | (4,866) | — | (4,866) |
| Depreciation and amortization | (3,071,105) | — | (3,071,105) |
| Operations and maintenance | (5,591,695) | (27,271) | (5,618,966) |
| Total cost of sales | (33,279,218) | (27,271) | (33,306,489) |
| **Gross margin (GAAP)** | 12,177,791 | (27,271) | 12,150,520 |
| Corporate and other, net | (19,265) | — | (19,265) |
| Depreciation and amortization | 3,071,105 | — | 3,071,105 |
| Operations and maintenance | 5,591,695 | 27,271 | 5,618,966 |
| **Gross utility margin (Non-GAAP)** | $20,821,326 | $— | $20,821,326 |

27

#### RGC RESOURCES, INC. AND SUBSIDIARIES

| Three Months Ended March 31, 2025 Operating revenues | Gas Utility | Investment in Affiliates | Consolidated Total |
| --- | ---: | ---: | ---: |
| Gas utility | $36,435,936 | $— | $36,435,936 |
| Non utility | 26,161 | — | 26,161 |
| Total operating revenues | 36,462,097 | — | 36,462,097 |
| Cost of sales |  |  |  |
| Cost of gas - utility | (17,062,153) | — | (17,062,153) |
| Cost of sales - non utility | (5,418) | — | (5,418) |
| Depreciation and amortization | (2,856,768) | — | (2,856,768) |
| Operations and maintenance | (5,285,738) | (37,453) | (5,323,191) |
| Total cost of sales | (25,210,077) | (37,453) | (25,247,530) |
| **Gross margin (GAAP)** | 11,252,020 | (37,453) | 11,214,567 |
| Corporate and other, net | (20,743) | — | (20,743) |
| Depreciation and amortization | 2,856,768 | — | 2,856,768 |
| Operations and maintenance | 5,285,738 | 37,453 | 5,323,191 |
| **Gross utility margin (Non-GAAP)** | $19,373,783 | $— | $19,373,783 |

Operations and maintenance expenses increased $295,775, or 6%. The Company continues to experience inflation over the 2% level historically targeted by the Federal Reserve. Inflation levels in health care benefits, certain types of insurance, contracted services and IT service costs, as well as other items, continue to put upward pressure on the Company's expenses. Contracted services increased by approximately $86,000 also due to inflationary pressures as well as increased customer turn-ons. Capitalized construction overheads declined by approximately $124,000 due to a reduction in Roanoke Gas capital projects as a result of winter weather. Higher corporate insurance premiums accounted for much of the remaining cost increase.

Taxes other than income taxes increased by $51,945, or 6%, due to higher property taxes associated with growth in utility property and increased tax rates.

Depreciation expense increased by $214,337, or 8%, corresponding to a similar increase in investments in depreciable utility property. Increases over the last year in capitalized software, with shorter useful lives, resulted in depreciation expense increasing slightly more than the 5% increase in the average utility property balance from the prior year quarter.

Equity in earnings of unconsolidated affiliate increased by $102,816, or 13%. See Note 5 of the consolidated financial statements for additional information related to the MVP.

Other income, net increased by $228,788, or 49%, primarily due to increased interest income and postretirement income, partially offset by a decrease in revenue sharing related to the renewed asset management agreement.

Interest expense decreased by $44,437, or 3%, as the weighted-average interest rate on total debt decreased from 4.33% during the second quarter of fiscal 2025 to 4.10% in the current quarter. Midstream's interest expense decreased by $89,017, or 13%, as the total average debt outstanding decreased by approximately $1,586,000 as a result of principal payments made on term notes, along with the weighted-average interest rate decreasing from 5.06% during the second quarter of fiscal 2025 to 4.53% in the current quarter. Roanoke Gas' interest expense increased by $44,580, or 5%, as total average debt outstanding increased by approximately $3,870,000 associated with higher net borrowings under the Company's line-of-credit. Roanoke Gas' weighted-average interest rate remained relatively flat from the second quarter of fiscal 2025 to the current quarter. See Notes 6 and 7 of the consolidated financial statements for more information on the Company's debt.

Income tax expense increased by $191,767, or 8%, primarily corresponding to the increase in pre-tax income. The effective tax rate was 22.6% and 23.5% for the three-month periods ended March 31, 2026 and 2025, respectively. The effective tax rate is below the combined statutory state and federal rate due to the amortization of excess deferred taxes and tax credits. Additionally, certain restricted stock-related tax deductions contributed to a further reduction to the effective tax rate during the current period.

### Six Months Ended March 31, 2026:

Net income increased by $681,458 for the six months ended March 31, 2026, compared to the same period last year, primarily due to the aforementioned implementation of higher non-gas base rates this quarter, lower interest expense and income taxes, slightly offset by continued inflationary pressures on operating costs.

The tables below reflect operating revenues, volume activity and heating degree days.

| Operating Revenues | Six Months Ended March 31, 2026 | 2025 | Increase/ (Decrease) | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Gas utility | $75,668,019 | $63,699,140 | $11,968,879 | 19% |
| Non utility | 49,458 | 52,443 | (2,985) | (6)% |
| Total operating revenues | $75,717,477 | $63,751,583 | $11,965,894 | 19% |
| **Delivered Volumes** |  |  |  |  |
| Regulated natural gas (DTH) |  |  |  |  |
| Residential and commercial | 5,497,052 | 5,535,590 | (38,538) | (1)% |
| Transportation and interruptible | 2,281,414 | 2,483,870 | (202,456) | (8)% |
| Total delivered volumes | 7,778,466 | 8,019,460 | (240,994) | (3)% |
| HDD | 3,489 | 3,391 | 98 | 3% |

Total operating revenues for the six months ended March 31, 2026, compared to the same period last year, increased by approximately 19% for similar reasons as previously discussed for the quarter. Total natural gas costs increased by 36% compared to the same period last year, primarily due to pipeline capacity charges increasing over $2.3 million, which corresponds to a 38% increase in the gas cost component included in the total customer billing rate. The average commodity price per dekatherm for the first half of fiscal 2026 was $5.10 compared to $3.70 per dekatherm for the same period in the prior year. Although weather was 3% colder than the prior year and almost even with the 30-year normal, delivered volumes decreased 3%. Weather-sensitive residential and commercial volumes declined 1%, while transportation and interruptible volumes declined by 8% as a single, multi-fuel customer that had been utilizing natural gas as its primary fuel source reduced its consumption, however, the Company expects this customer's usage to return to normal levels. SAVE Plan revenues increased by approximately $532,000 compared to the same period in the prior year as Roanoke Gas continues to invest in qualified SAVE infrastructure projects.

| Gross Utility Margin | Six Months Ended March 31, 2026 | 2025 | Increase | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Gas utility revenues | $75,668,019 | $63,699,140 | $11,968,879 | 19% |
| Cost of gas - utility | 39,193,167 | 28,764,862 | 10,428,305 | 36% |
| Gross utility margin | $36,474,852 | $34,934,278 | $1,540,574 | 4% |

Gross utility margin increased 4% from the same period last year primarily as a result of the aforementioned increases in non-gas base rates and gas costs, as well as increased SAVE and RNG revenues, which contributed $1.2 million and $934,000, respectively, to margin.

The changes in the components of gas utility margin are summarized below:

|  | Six Months Ended March 31, 2026 | 2025 | Increase/ (Decrease) |
| --- | ---: | ---: | ---: |
| Customer base charge | $8,233,457 | $8,184,039 | $49,418 |
| ICC | 278,952 | 291,665 | (12,713) |
| SAVE Plan | 1,175,879 | 644,191 | 531,688 |
| Volumetric | 25,739,522 | 24,416,549 | 1,322,973 |
| WNA | (21,110) | 473,456 | (494,566) |
| RNG | 934,259 | 816,933 | 117,326 |
| Other revenues | 133,893 | 107,445 | 26,448 |
| Total | $36,474,852 | $34,934,278 | $1,540,574 |

29

The tables below provide a reconciliation between gross utility margin and gross margin:

| Six Months Ended March 31, 2026 Operating revenues | Gas Utility | Investment in Affiliates | Consolidated Total |
| --- | ---: | ---: | ---: |
| Gas utility | $75,668,019 | $— | $75,668,019 |
| Non utility | 49,458 | — | 49,458 |
| Total operating revenues | 75,717,477 | — | 75,717,477 |
| Cost of sales |  |  |  |
| Cost of gas - utility | (39,193,167) | — | (39,193,167) |
| Cost of sales - non utility | (9,738) | — | (9,738) |
| Depreciation and amortization | (6,142,210) | — | (6,142,210) |
| Operations and maintenance | (10,775,319) | (66,128) | (10,841,447) |
| Total cost of sales | (56,120,434) | (66,128) | (56,186,562) |
| **Gross margin (GAAP)** | 19,597,043 | (66,128) | 19,530,915 |
| Corporate and other, net | (39,720) | — | (39,720) |
| Depreciation and amortization | 6,142,210 | — | 6,142,210 |
| Operations and maintenance | 10,775,319 | 66,128 | 10,841,447 |
| **Gross utility margin (Non-GAAP)** | $36,474,852 | $— | $36,474,852 |

| Six Months Ended March 31, 2025 Operating revenues | Gas Utility | Investment in Affiliates | Consolidated Total |
| --- | ---: | ---: | ---: |
| Gas utility | $63,699,140 | $— | $63,699,140 |
| Non utility | 52,443 | — | 52,443 |
| Total operating revenues | 63,751,583 | — | 63,751,583 |
| Cost of sales |  |  |  |
| Cost of gas - utility | (28,764,862) | — | (28,764,862) |
| Cost of sales - non utility | (9,767) | — | (9,767) |
| Depreciation and amortization | (5,700,128) | — | (5,700,128) |
| Operations and maintenance | (9,939,694) | (72,168) | (10,011,862) |
| Total cost of sales | (44,414,451) | (72,168) | (44,486,619) |
| **Gross margin (GAAP)** | 19,337,132 | (72,168) | 19,264,964 |
| Corporate and other, net | (42,676) | — | (42,676) |
| Depreciation and amortization | 5,700,128 | — | 5,700,128 |
| Operations and maintenance | 9,939,694 | 72,168 | 10,011,862 |
| **Gross utility margin (Non-GAAP)** | $34,934,278 | $— | $34,934,278 |

Operations and maintenance expenses increased $829,585, or 8%. The Company continues to experience inflation over the 2% level historically targeted by the Federal Reserve. Inflation levels in health care benefits, certain types of insurance, contracted services and IT service costs, as well as other items, continue to put upward pressure on the Company's expenses. Personnel costs increased by approximately $147,000 due to increased staffing and the inflationary impact on salaries and benefits. Contracted services increased by approximately $274,000 also due to inflationary pressures as well as increased customer turn-ons. Capitalized construction overheads declined by approximately $311,000 due to a reduction in Roanoke Gas capital projects as a result of winter weather. Higher corporate insurance premiums and RNG-related costs accounted for much of the remaining increase, which were slightly offset by a decrease in professional services expenses.

Taxes other than income taxes increased by $159,627, or 10%, due to higher property taxes associated with growth in utility property and increased tax rates, as well as increases in payroll taxes.

Depreciation expense increased by $442,082, or 8%, corresponding to a similar increase in investments in depreciable utility property. Increases over the last year in capitalized software, with shorter useful lives, resulted in depreciation expense increasing slightly more than the 5% increase in the average utility property balance.

Equity in earnings of unconsolidated affiliate increased by $75,673, or 5%. See Note 5 of the consolidated financial statements for additional information related to the MVP.

Other income, net increased by $260,441, or 28%, primarily due to additional interest income and increased postretirement income, partially offset by a decrease in revenue sharing related to the asset management agreement.

Interest expense decreased by $153,217, or 4%, as the weighted-average interest rate on total debt decreased from 4.40% during the first six months of fiscal 2025 to 4.12% in the current year. Midstream's interest expense decreased by $210,295, or 15%, as the total average debt outstanding decreased by approximately $1,460,000 as a result of principal payments made on term notes, along with the weighted-average interest rate decreasing from 5.22% during the first six months of fiscal 2025 to 4.58 % in the current year. Roanoke Gas' interest expense increased by $57,078, or 3%, as total average debt outstanding increased by approximately $2,727,000 associated with net borrowings under the Company's line-of-credit. Roanoke Gas' weighted-average interest rate remained relatively flat from the first six months of fiscal 2025 to the current year. See Notes 6 and 7 of the consolidated financial statements for more information on the Company's debt.

Income tax expense decreased by $85,803, or 2%. The effective tax rate was 22.2% and 23.4% for the six-month periods ended March 31, 2026 and 2025, respectively. The effective tax rate is below the combined statutory state and federal rate due to the amortization of excess deferred taxes and tax credits. Additionally, amortization recognition related to R&D tax credits and certain restricted stock-related tax deductions contributed to a further reduction to the effective tax rate during the current period.

### Critical Accounting Policies and Estimates

The consolidated financial statements of Resources are prepared in accordance with GAAP. The amounts of assets, liabilities, revenues and expenses reported in the Company’s consolidated financial statements are affected by accounting policies, estimates and assumptions that are necessary to comply with generally accepted accounting principles. Estimates used in the financial statements are derived from prior experience, statistical analysis and management judgments. Actual results may differ significantly from these estimates and assumptions.

There have been no significant changes to the critical accounting policies as reflected in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025.

### Asset Management and Gas Supply

Roanoke Gas relies on multiple interstate pipelines and gas storage to transport natural gas from production and storage fields into the Company's distribution system. Roanoke Gas is currently served directly by three primary pipelines and uses a third-party asset manager to oversee its pipeline transportation, storage rights and gas supply inventories and deliveries in order to provide a secure and reliable source of natural gas to its customers. In return for utilizing the excess capacities of the transportation and storage rights, the asset manager pays Roanoke Gas a monthly utilization fee. In accordance with an SCC order issued in 2018, a portion of the utilization fee is retained by the Company with the balance passed through to customers through reduced gas costs. The current asset management contract is for a three-year term, expiring in March 2028.

In addition, the Company produces commercial quality RNG for delivery into its distribution system and operates and maintains an LNG liquefaction, vaporization and storage tank facility to supplement heating season gas supply requirements on the coldest days (the LNG peak shaving facility). During a routine inspection in the second quarter of fiscal 2026, the Company noted damage to its LNG tank. The Company has hired subject matter experts to help assess the cause(s) and scope of the damage and to design possible solutions. While that work is ongoing, the Company believes that the LNG peak shaving facility is unlikely to be available in the 2026 to 2027 winter heating season and is developing plans to provide service without this facility. Currently, the Company is unable to estimate the cost to complete the assessment and design processes as well as any investment necessary to repair the damage or replace the LNG facility. The Company has held discussions with the SCC Staff about establishing a regulatory asset related to the event for amounts not covered by insurance.

### Equity Investment in Mountain Valley Pipeline

The Company owns a less than 1% interest in the LLC that owns and operates the MVP, Southgate and Boost, as defined in the respective operating agreements. The Company accounts for its interest in the LLC under the equity method of accounting given the LLC maintains specific ownership accounts for each investor, and also considering the Company's rights under the LLC management agreement and the Company's involvement as a stakeholder of the MVP. The Company has been using the equity method since the inception of its investment in fiscal 2016.

The Company recognizes its share of earnings from the LLC, favorably adjusted for a basis difference between the Company's proportional share of assets and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in 2022. This basis difference amortization is a favorable non-cash adjustment over the operational life of the MVP, or 40 years. For the second quarter of fiscal 2026 and 2025, the Company recorded equity in earnings of consolidated affiliates of approximately $904,000 and $801,000, respectively. For the first six months of fiscal 2026 and 2025, the Company recorded equity in earnings of consolidated affiliates of approximately $1.7 million in both periods. The Company received a quarterly cash distribution of its share from the LLC totaling approximately $641,000 and $983,000 during the second quarter of fiscal 2026 and 2025, respectively, which was a return on its invested capital, and expects future quarterly distributions to be of a similar magnitude. For the first half of fiscal 2026 and 2025, quarterly cash distributions totaled $1.4 million and $1.8 million, respectively. The Company is using this cash to pay interest and other expenditures related to Midstream. The Company refinanced all of the debt supporting its investment in the MVP in September 2025, as described in the liquidity section.

### Regulatory

See Note 4 of the condensed consolidated financial statements for discussion on Regulatory matters.

### Capital Resources and Liquidity

Due to the capital-intensive nature of the utility business, as well as the impact of weather variability, the Company’s primary capital needs are the funding of its capital projects, the seasonal funding of its natural gas inventories and accounts receivables, debt service and payments of dividends to shareholders. The Company anticipates funding these items through its operating cash flows, credit availability under short-term and long-term debt agreements and proceeds from the sale of its common stock.

Cash and cash equivalents increased by $1,071,617 for the six-month period ended March 31, 2026 compared to an increase of $1,258,586 for the six-month period ended March 31, 2025. The following table summarizes the sources and uses of cash:

| Cash Flow Summary | Six Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $16,470,727 | $21,834,963 |
| Net cash used in investing activities | (10,514,346) | (10,708,806) |
| Net cash used in financing activities | (4,884,764) | (9,867,571) |
| Increase in cash and cash equivalents | $1,071,617 | $1,258,586 |

32

### Cash Flows Provided by Operating Activities:

The seasonal nature of the natural gas business causes operating cash flows to fluctuate significantly during the year as well as from year-to-year. Factors including weather, energy prices, natural gas storage levels and customer collections contribute to working capital levels and related cash flows. Generally, operating cash flows are positive during the second and third fiscal quarters as a combination of earnings, declining storage gas levels and collections on customer accounts contribute to higher cash inflows. During the first and fourth fiscal quarters, operating cash flows are generally moderate and decrease due to increases in natural gas storage levels and rising customer receivable balances.

Cash flows from operating activities for the six months ended March 31, 2026 decreased by $5,364,236 compared to the same period last year. Under-recovered gas costs increased approximately $384,000 during the six months ended March 31, 2026 compared to a $5.8 million increase in over-recovered gas cost during the same period in the prior year. The fluctuation from a liability position to an asset position resulted in a decline of approximately $6.2 million in operating cash flows between periods. As previously discussed, due to the extended and extreme cold weather experienced across the eastern half of the United States during Winter Storm Fern, natural gas prices spiked from less than $4 per DTH to well over $30 per DTH at the end of January and into February 2026. As a result, total commodity costs increased from $3.70 per DTH in the first half of fiscal 2025 to $5.07 per DTH in the first half of fiscal 2026. Although incurred by the Company during the six months ended March 31, 2026, the recovery of these costs will be collected from customers over the ensuing 12 to 18 months. The colder weather and increased gas costs also resulted in higher accounts receivable balances.

### Cash Flows Used in Investing Activities:

Investing activities primarily consist of expenditures related to Roanoke Gas' utility property, which includes replacing aging natural gas pipe with new plastic or coated steel pipe, improvements to the LNG plant and gas distribution system facilities and expansion of its natural gas system to meet new customer demand. The Company is continuing its focus on SAVE infrastructure replacement projects, including the replacement of pre-1973 first generation plastic pipe. New customer demand for natural gas continues to be steady and therefore extending the natural gas distribution system within its service territory is also a priority. Roanoke Gas' total capital expenditures for the six-month period ended March 31, 2026 were approximately $9.8 million compared to $10.7 million during the same period last year. The decline is a result of colder weather delaying completion of capital projects. Total fiscal 2026 capital expenditures are expected to be approximately $22 million.

Investing cash flows also include the Company's funding of its participation in Southgate and Boost, with a total cash investment of approximately $731,000 for the six months ended March 31, 2026, which are being funded by dedicated revolving credit facilities as described below. With FERC approval and issuance of the Notice to Proceed on the Southgate extension, construction activities have begun. While the Boost expansion is pending FERC approval, investments have been made for materials related to the construction of the pipeline and other pre-constructions costs. With MVP in service, Midstream will incur periodic, future capital investment related to ongoing MVP operations requirements and system improvements.

### Cash Flows Provided by Financing Activities:

Financing activities generally consist of borrowings and repayments under credit agreements, issuance of common stock and the payment of dividends. Net cash flows used in financing activities were approximately $4.9 million for the six months ended March 31, 2026, compared to approximately $9.9 million for the same period last year. The $5 million reduction in financing cash flows is primarily attributable to a decrease in net repayments under Roanoke Gas' line-of-credit, slightly offset by an increase in net payments under Midstream's notes payable. The Company's net payments on Roanoke Gas' line-of-credit during the first six months of fiscal 2026 were $1.2 million compared to $7.0 million in the same period last year. Additionally, during the first half of fiscal 2026, Midstream repaid a net $692,000 compared to borrowing a net $145,000 during the same period in the prior year. Notes 6 and 7 provide details on the Company's line-of-credit and borrowing activity.

Resources issued a total of 67,503 shares of common stock resulting in net proceeds of approximately $1.4 million during the first six months of fiscal 2026, compared to issuing 59,986 shares of common stock resulting in net proceeds of approximately $1.2 million during the first six months of fiscal 2025. The ATM program was not utilized during either period.

Management regularly evaluates the Company’s liquidity through a review of its available financing resources and its cash flows. Roanoke Gas has a term note in the principal amount of $15 million coming due in August 2026. Management believes Roanoke Gas has access to sufficient financing resources to meet its cash requirements for the next year, including cash from operations, the line of credit and a private shelf facility. Roanoke Gas may also adjust capital spending as necessary, if such a need would arise.

Midstream's future cash requirements will relate to regular monthly operating expenses, debt service and capital contributions. The Company received two quarterly cash distributions from MVP in fiscal 2026 totaling approximately $1.4 million, and should receive similar quarterly distributions going forward. On September 5, 2025, Midstream established new amortizing term notes with two banks in the initial amounts of $38.6 million and $15 million, which refinanced and replaced all of Midstream's outstanding debt. The term notes mature on September 5, 2032. Also on September 5, 2025, Midstream entered into a new Loan Agreement for the MVP Southgate extension and MVP Boost expansion that can be drawn to principal amounts of $1.85 million and $3.65 million, respectively. These loans mature on September 5, 2030, at which time the outstanding principal balance on each note is due. With the establishment of the new term notes, Midstream's total debt principal payments over the succeeding 12 months is $2,846,018. Management believes that it will be able to meet Midstream's cash requirements over the ensuing 12-month period with availability on the Southgate and Boost revolving credit facilities and its quarterly cash distributions from MVP.

As of March 31, 2026, Resources' long-term capitalization ratio was 46% equity and 54% debt.

## Controls and procedures

As filed, 2,464 characters.

### Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to be effective in providing reasonable assurance that information required to be disclosed in reports under the Exchange Act are identified, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management to allow for timely decisions regarding required disclosure.

Through March 31, 2026, the Company has evaluated, under the supervision and with the participation of management, including the chief executive officer and the chief financial officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2026.

### Changes in Internal Control over Financial Reporting

Management routinely reviews the Company’s internal control over financial reporting and makes changes, as necessary, to enhance the effectiveness of the internal controls. There were no changes in internal control over financial reporting that occurred during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

On April 1, 2026, the Company implemented a new system of record for revenue transactions with customers. While the Company expects this implementation to either strengthen or have minimal impact to existing internal controls, we will continue to evaluate and monitor our internal control over financial reporting as processes and procedures are finalized with the implementation.

### Limitations on the Effectiveness of Controls

Because of the inherent limitations in an effective internal control system, any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will prevent or detect all misstatements, due to error or fraud, from occurring in the consolidated financial statements. Additionally, management is required to use judgment in evaluating controls and procedures.

## Risk factors

As filed, 1,728 characters.

There have been no material changes to the risk factors previously disclosed in Resources' Annual Report on Form 10-K for the year ended September 30, 2025; one risk factor has been revised as follows:

***Risks associated with the operation of a natural gas distribution pipeline and LNG storage facility.***

Numerous potential risks are inherent in the operation of a natural gas distribution system and LNG storage facility, including unanticipated or unforeseen events that are beyond the control of the Company. Examples of such events include adverse weather conditions, acts of terrorism or sabotage, accidents and damage caused by third parties, equipment failure or damage, failure of upstream pipelines and storage facilities, as well as catastrophic events such as explosions, fires, earthquakes, floods, or other similar events. These risks could result in injury or loss of life, property damage, pollution and customer service disruption resulting in potentially significant financial losses. The Company has experienced damage at its LNG storage facility as described in Note 14. The Company maintains insurance coverage to protect against many of these risks. However, if losses result from an event that is not fully covered by insurance, the Company’s financial condition could be significantly impacted if it were unable to recover such losses from customers through the regulatory rate-making process. Even if the Company did not incur a direct financial loss as a result of any of the events noted above, it could encounter significant reputational damage from a reliability, safety, integrity or similar viewpoint, potentially resulting in a longer-term negative earnings impact or decline in share price.

Filed May 7, 2026.
Source: SEC EDGAR, the filing index for accession 0001437749-26-015653. Last ingested by Listed: Nov 4, 2026, 14:35 ET. No prices; not investment advice.