RGC Resources, Inc. (NASDAQ:RGCO) Q4 2019 Earnings Conference Call - Preliminary Transcript
Dec 06, 2019 • 09:00 am ET
Well, good morning. I'm John D'Orazio, President and CEO of RGC Resources Inc. Welcome and thank you for joining us, as we discuss RGC Resources Fourth Quarter 2019 Results. First, I would like to go over a few administrative items. We have muted all lines and I ask that all participants remain muted during the presentation. After the presentation is completed, we will take questions. The link to today's presentation is available on the Investor and Financial Information page of our website at www.rgcresources.com.
We begin the presentation with a quick reminder on forward-looking statements as shown on slide one. Moving on to slide two, today, we plan to review key operational and financial highlights, our 2020 outlook and then with Q&A. As shown on slide three. The results for fiscal 2019 well exceeded the prior year as earnings per share increased 14% to $1.08. Our financial results will be discussed in more detail later in the presentation.
As slide four highlights, we invested $5.3 million in a regulated utility in the fourth quarter, a 10% decrease compared to the same period last year. We spent approximately $3.4 million on infrastructure replacement, $0.8 billion on customer growth and $1.1 million on other capital needs. The quarter-to-quarter change was primarily due to timing of several 2018 customer growth and system expansion projects. Net, an increase of more than $1.5 million and save eligible infrastructure renewal and replacements.
As shown on slide five, our fiscal year capital spending decreased approximately $1.4 million from fiscal 2018, primarily related to several large system expansion projects that occurred during the second half of fiscal 2018. Slide six, we continue to experience steady customer growth, we added another 152 customers during the fourth quarter, bringing total customer additions in fiscal 2019 to 668, a 12% increase over 2018.
As noted on slide seven, total volumes for the fourth quarter 2019 increased approximately 7% compared to prior year. This was driven by
significant increase in the usage of our industrial customers, which increased approximately 8% compared to the same period in the prior year. Over on to slide eight, despite 4% warmer weather, fiscal 2019 volumes remained flat compared to the prior year. Commercial industrial volumes fall the same trend, as total volumes experienced a 1% growth compared to fiscal 2018.
Now I'd like to introduce Paul Nester, Chief Financial Officer to review our financial results.
Thank you, John. For those of you following along via webcast, we are on slide nine. We will begin by reviewing fourth quarter results. Operating income decrease to approximately $500,000 in 2019. During the fourth quarter, we continue to accruing a rate refund reserve based on the most recent staff and hearing examiners reports, also expenses were higher in the current year related to the timing of several operating and maintenance activities. In combination, these factors offset the effects of the rate increase during the quarter.
Equity earnings in our Mountain Valley Pipeline investment increased over $980,000 due to continued construction.