Rgc Resources Inc (NASDAQ: RGCO)

Resources is a holding company incorporated in the Commonwealth of Virginia that operates through its subsidiaries Roanoke Gas and Midstream to provide natural gas services.

The company’s primary business is the regulated distribution and sale of natural gas to residential, commercial and industrial customers within its service territory centered on Roanoke, Virginia and surrounding localities.

In addition to its core utility operations Resources holds an equity interest in Mountain Valley Pipeline, LLC through the Midstream subsidiary which was formed to invest in the construction and operation of an interstate natural gas pipeline.

For the fiscal year ended September 30, 2025 Resources reported total revenues of $95,231,943 and a margin of $52,680,989 derived from its regulated natural gas distribution business which accounted for more than 99 percent of consolidated revenues.

Revenue is generated mainly from the sale of natural gas with residential customers contributing about 58 percent of revenue, commercial customers about 35 percent, industrial customers about 6 percent and other sources less than 1 percent.

The company also earns modest returns from its Midstream investment and from limited non regulated services such as LNG storage and renewable natural gas production which together represent a small fraction of total income.

The company operates through the following segments.

• Roanoke Gas: This segment operates an integrated natural gas distribution system that purchases gas from interstate pipelines and delivers it to approximately 62,527 residential, commercial and industrial customers in its service area, managing a total annual throughput of about 11,493,415 decatherms and maintaining assets such as an LNG facility capable of storing 200,000 decatherms and a renewable natural gas plant that supplies less than one percent of system demand.

• Midstream: This segment was created to hold Resources’ equity interest in Mountain Valley Pipeline, LLC, a partnership engaged in building and operating an interstate natural gas pipeline that transports gas from production areas to the Roanoke Gas distribution system and to other market participants, with the investment providing a source of earnings through equity method accounting.

Within its regulated service area Resources holds the exclusive franchise to distribute natural gas giving it a monopolistic position that is supported by a stable rate based revenue model and long term agreements for gas supply, transportation and storage.

The company competes with alternative energy providers such as fuel oil, electricity, propane and coal where price and the ability to switch fuels are the primary competitive factors, while its regulated nature limits direct competition for gas distribution services.

Resources benefits from exclusive franchises in the cities of Roanoke and Salem and the Town of Vinton that run through December 31, 2035 and from a certificated public convenience and necessity to serve Franklin County, Virginia, all of which are expected to be renewed absent regulatory changes.

The customer base consists mainly of residential accounts representing over ninety percent of total customers, commercial accounts comprising roughly eight and six tenths percent and industrial accounts making up a small fraction of the total.

Many industrial customers use the distribution system for transportation service only, purchasing their gas directly from other suppliers, while residential and commercial sales are strongly seasonal with about sixty three percent of annual volumes delivered during the five month heating period from November through March.