Executive Summary

Q1 FY2025 EPS was $0.51 on net income of $5.27M, up 2% YoY; revenue rose 11.8% YoY to $27.29M. Strength came from new base rates effective July 1, 2024, colder December weather, and strong usage from a large transportation customer, partially offset by lower MVP equity earnings (AFUDC last year) and higher interest expense .
Management maintained FY2025 EPS guidance of $1.18–$1.25 and reiterated full‑year capex of ~$21.6M; a hearing examiner recommended adoption of the $4.08M revenue requirement settlement (9.9% ROE), with final commission order pending .
MVP is contributing cash; the company received ~$0.8M in October and expects quarterly distributions to continue, with equity earnings of $0.85M in Q1 as the pipeline operates (vs AFUDC in prior year) .
Utilities operations showed healthy demand: total delivered volumes +16% YoY, residential/small commercial +4% on +10% heating degree days; capex execution was solid at $5.7M in Q1, supporting growth in Franklin County and system reliability .
Potential stock catalysts near term: sustained winter volume strength into January, progress to final SCC order, clarity on refinancing the $25M midstream note due 12/31/2025, and continued MVP cash distributions .

What Went Well and What Went Wrong

What Went Well
- Base rate uplift and weather/usage supported higher margins and earnings: “Colder weather in December and strong usage by our largest transportation customer also contributed to a higher quarterly performance.” — CEO Paul Nester .
- Strong demand trends and system expansion: delivered volumes +16% YoY; residential/small commercial +4% on +10% heating degree days; 1.1 main miles installed and 197 new services connected in Q1 .
- Guidance intact and regulatory progress: FY25 EPS $1.18–$1.25 maintained; hearing examiner recommended adopting the $4.08M revenue increase settlement (rate year through June 30, 2025), reflecting a 9.9% ROE .
What Went Wrong
- MVP equity earnings stepped down YoY as AFUDC rolled off: $0.85M vs $1.47M a year ago; management flagged “apples‑to‑oranges” comparisons for two more quarters .
- Higher interest expense: up $144K YoY in the quarter due to higher average balances and rates (midstream refinancing in prior year, Roanoke Gas LOC) .
- Refinancing overhang: ~$25M non‑revolving midstream note due 12/31/2025; conversations are positive, and management expects to refinance before maturity, but it remains an execution item .

Financial Results

Sequential performance (fiscal quarters; oldest → newest)

Metric	Q3 2024 (Jun)	Q4 2024 (Sep)	Q1 2025 (Dec)
Revenue ($M)	$14.46	$13.10	$27.29
Operating Income ($M)	$1.56	$0.24	$7.33
Equity in Earnings of Unconsolidated Affiliate ($M)	$0.28	$0.87	$0.85
Interest Expense ($M)	$1.57	$1.73	$1.78
Net Income ($M)	$0.16	$0.14	$5.27
Diluted EPS ($)	$0.02	$0.01	$0.51
Operating Margin (%)	10.8%	1.9%	26.9%
Net Income Margin (%)	1.1%	1.1%	19.3%

Year-over-year Q1 comparison

Metric	Q1 2024 (Dec)	Q1 2025 (Dec)	YoY Change
Revenue ($M)	$24.42	$27.29	+11.8%
Operating Income ($M)	$6.65	$7.33	+10.2%
Equity in Earnings of Unconsolidated Affiliate ($M)	$1.47	$0.85	−41.8%
Interest Expense ($M)	$1.64	$1.78	+8.8%
Net Income ($M)	$5.02	$5.27	+5.0%
Diluted EPS ($)	$0.50	$0.51	+2.0%

Earnings composition (Q1)

Metric	Q1 2024	Q1 2025
Operating Income ($M)	$6.65	$7.33
Equity in Earnings of Unconsolidated Affiliate ($M)	$1.47	$0.85
Other Income, net ($M)	$0.12	$0.47
Interest Expense ($M)	$1.64	$1.78
Income Before Taxes ($M)	$6.60	$6.88

KPIs and operating execution

KPI	Q1 2025	Prior/Context
Delivered Volumes YoY	+16% (total)	Residential/small commercial +4% YoY
Heating Degree Days	+10% YoY	Weather tailwind
Main Miles Installed	1.1 miles	—
New Services Connected	197	185 in Q1 FY2024
Services Renewed	65	—
Capex (Quarter)	$5.7M (+8.4% YoY)	Full‑year plan ~$21.6M
MVP Cash Distributions	~$0.8M received in Oct; next distribution received recently	—

Estimates vs Actuals (S&P Global consensus)

Consensus for Q1 FY2025 EPS and revenue was unavailable via S&P Global at the time of this analysis; therefore, no beat/miss determination vs Street can be made. Values from S&P Global were not retrievable due to access limits at query time.

Metric	Actual	Consensus	Surprise
EPS (Diluted)	$0.51	N/A	N/A
Revenue ($M)	$27.29	N/A	N/A

Note: S&P Global consensus was unavailable at the time of request.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS	FY2025	$1.18–$1.25 (Q4 FY2024 call)	$1.18–$1.25 (Q1 call)	Maintained
Capital Expenditures	FY2025	~$21.6M (Q4 FY2024 call)	~$21.6M (Q1 call)	Maintained
Rate Case Revenue Requirement/ROE	Rate Year through 6/30/2025	Settlement reached; $4.08M increase; 9.9% ROE; interim rates effective 7/1/2024	Hearing examiner recommended adoption; awaiting final SCC order	Progressed toward final order
Dividend	Ongoing	Annual dividend raised to $0.83 (11/22/2024); quarterly run‑rate $0.2075	Quarterly dividend declared $0.2075 on 3/28/2025 ; Q1 dividend per share $0.2075 in statements	Maintained payout level

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3–Q4 FY2024)	Current Period (Q1 FY2025)	Trend
Regulatory/rate case	Settlement for $4.08M annual revenue; 9.9% ROE; interim rates effective 7/1/2024	Hearing examiner recommended adopting the stipulation; awaiting full commission order	Progressing toward final approval
MVP midstream contribution	Transition from AFUDC to operating earnings; first distribution ~$0.8M in Oct; expect >$3M cash in FY2025	Equity earnings $0.85M in Q1 (vs $1.47M prior year AFUDC); received October distribution and next distribution recently	Lower accounting earnings YoY; cash flow positive
Demand/volumes and weather	Q4 FY2024 volumes −5% YoY on warm weather and temp commercial shutdown	Delivered volumes +16% YoY; res/small commercial +4%; HDD +10%	Improving demand backdrop
Capex & expansion	FY2024 capex $22.1M; FY2025 plan $21.6M; Franklin County initial service	Q1 capex $5.7M (+8.4% YoY); continued Franklin County expansion planning	Steady execution
Interest rates & financing	Floating rate exposure; monitoring post‑election rate path	Interest expense +$144K YoY; expect renewal of Roanoke Gas LOC; plan to refinance $25M midstream note due 12/31/2025	Active liability management

Management Commentary

“Colder weather in December and strong usage by our largest transportation customer also contributed to a higher quarterly performance.” — CEO Paul Nester .
“We had a good quarter with increased Roanoke Gas margins due to higher rates…overcoming lower equity earnings… and higher interest expense.” — CFO Tim Mulvaney .
“We’re still comfortable with [FY2025 EPS] $1.18 to $1.25 range… as we come out of the second quarter… we should have a finer point.” — CEO Paul Nester .
“Yesterday, the hearing examiner… recommended adoption of the stipulation… The last step… is… the full commission to issue a final order.” — SVP Tommy Oliver .
“We installed 1.1 main miles and connected 197 new services… Total [delivered] volumes were up 16%… [HDD] up 10%.” — SVP Tommy Oliver .

Q&A Highlights

The Q1 FY2025 call ended without questions from analysts; no additional clarifications beyond prepared remarks were provided .
For context, prior quarter Q&A addressed MVP flows and potential expansion, rate base levels, and capital structure/equity needs (no changes to those topics this quarter) .

Estimates Context

Street consensus from S&P Global for Q1 FY2025 EPS and revenue was unavailable at the time of this analysis; therefore, we cannot assess a beat/miss vs consensus. Management’s EPS guidance for FY2025 was maintained at $1.18–$1.25, which may anchor expectations until updated estimates are accessible .

Key Takeaways for Investors

Core utility performance is healthy: revenue +11.8% YoY and EPS +2% YoY on new base rates and stronger December weather/usage; winter strength appears to have continued into January, supporting near‑term sentiment .
Guidance intact: FY2025 EPS $1.18–$1.25 and capex ~$21.6M maintained; pending SCC final order on $4.08M revenue increase is a visible catalyst .
MVP shifts from accounting tailwind to cash generator: YoY equity earnings down (AFUDC roll‑off), but cash distributions commenced and should continue quarterly, supporting liquidity and optionality .
Watch the liability side: interest expense remains a headwind; track renewal of the Roanoke Gas LOC and progress on refinancing the $25M midstream note due 12/31/2025 .
Operating execution remains strong: capex deployment, network reliability through extreme cold, and expansion into Franklin County underpin medium‑term customer and volume growth .
Regulatory backdrop favorable: Virginia’s forward test year structure and the stipulated revenue requirement (9.9% ROE) help offset inflationary pressures, supporting margin stability into FY2025 .
Near‑term trading setup: absent Street estimates, catalysts include weather‑driven volume realization in Q2, SCC final order timing, and clarity on financing; downside risks are interest rate volatility and any delays in refinancing or regulatory approvals .

Sources: Q1 FY2025 8‑K/press release financials and commentary ; Q1 FY2025 earnings call transcript ; Q4 FY2024 and Q3 FY2024 context ; Dividend and other press releases .

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