Chesapeake Utilities Corporation press release

CHESAPEAKE UTILITIES CORPORATION REPORTS FIRST QUARTER 2026 RESULTS

2026-05-06

NYSE - New York Stock Exchange · Natural Gas · United States · Corporate Finance

PR Newswire

Net income and earnings per share ("EPS")* were $59.3 million and $2.47, respectively, representing an EPS growth rate of 11.8 percent compared to the prior year Adjusted gross margin growth of $23.8 million during the first quarter of 2026 driven primarily by regulatory initiatives and infrastructure programs, natural gas organic growth and transmission expansion projects, and increased customer consumption Capital investment of $121.9 million during the first quarter of 2026 Florida City Gas ("FCG") filed a petition in April 2026 seeking a general rate base increase, subject to review and approval by the Florida Public Service Commission ("PSC") The Company continues to re-affirm its 2026 and 2024-2028 capital expenditure guidance ranges, as well as its 2028 EPS guidance range

DOVER, Del., May 6, 2026/PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three months ended March 31, 2026.

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Net income for the first quarter of 2026 was $59.3 million ($2.47 per share) compared to $50.9 million ($2.21 per share) in the first quarter of 2025. Adjusted net income for the first quarter of 2026 was $59.3 million ($2.47 per share) compared with $51.1 million ($2.22 per share) in the prior-year period.

First quarter 2026 highlights include:

Organic customer growth across all service areas drove $2.0 million of incremental adjusted gross margin or $0.06 per share Transmission system expansions to support increased distribution demand generated an incremental $6.9 million of adjusted gross margin or $0.21 per share Infrastructure programs to enhance reliability provided an incremental $5.5 million of adjusted gross margin or $0.17 per share Colder weather within the first quarter produced an incremental $4.5 million of adjusted gross margin or $0.14 per share Improved rates from three rate cases completed in 2025 provided an incremental $4.1 million of adjusted gross margin or $0.13 per share

"Our performance in the first quarter reflects a strong start to 2026, as we remain focused on our growth strategy: prudently deploying capital, proactively managing our regulatory agenda and transforming operations across the business," said Jeff Householder, the Company's Chair of the Board, President and Chief Executive Officer. "Our theme for the year is 'Transforming for Growth, Powered by People'. Achieving meaningful growth and delivering reliable and affordable service to customers depends on our dedicated teammates working together. I'm especially grateful for the exemplary performance of our team and the resilience of our system during the winter storms earlier this year."

"We are also recognizing the significant contributions of Beth Cooper, who announced her retirement in March following 36 years of service at the Company. In the last 18 years as our Chief Financial Officer, Beth's strategic and financial leadership has led to incomparable growth, including a $3 billion increase in our market capitalization, 10x growth in total assets and net income, as well as a 366 percent increase in earnings per share. Most importantly, Beth embodies the best of Chesapeake Utilities, including an authentic passion for delivering results and an impressive ability to build connections and relationships internally and externally," continued Householder. "While Beth is not easily replaced, I am confident in the abilities of Jeff Sylvester, our current Chief Operating Officer, who will assume the Chief Financial Officer role on July 1, 2026. Under his leadership, we are well-positioned to continue our long-standing track record."

Earnings and Capital Investment Guidance

The Company continues to re-affirm its 2026 full year capital guidance range of $450 million to $500 million. The Company also continues to re-affirm its five-year (2024-2028) capital guidance range of $1.5 billion to $1.8 billion and 2028 EPS guidance range of $7.75 to $8.00 per share.

_*Unless otherwise noted, EPS and Adjusted EPS information are presented on a diluted basis._

Non-GAAP Financial Measures

This press release including the tables herein, include references to both Generally Accepted Accounting Principles ("GAAP") and non-GAAP financial measures, including Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS. A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. The Company's management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.

The Company calculates Adjusted Gross Margin by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue-producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements. The Company calculates Adjusted Net Income and Adjusted EPS by deducting costs and expenses associated with significant acquisitions that may affect the comparison of period-over-period results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. The Company believes that these non-GAAP measures are useful and meaningful to investors as a basis for making investment decisions, and provide investors with information that demonstrates the profitability achieved by the Company under allowed rates for regulated energy operations and under the Company's competitive pricing structures for unregulated energy operations. The Company's management uses these non-GAAP financial measures in assessing a business unit and Company performance. Other companies may calculate these non-GAAP financial measures in a different manner.

The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to the Company's non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for each of the periods presented.

Adjusted Gross Margin

| | | For the Three Months Ended March 31, 2026 | | | | | | | | (in millions) | | Regulated Energy | | Unregulated Energy | | Other Businesses and Eliminations | | Total | | Operating Revenues | | $ 249.3 | | $ 113.7 | | $ (9.9) | | $ 353.1 | | Cost of Sales: | | | | | | | | | | Natural gas, propane and electric costs | | (101.6) | | (55.1) | | 9.8 | | (146.9) | | Depreciation & amortization | | (16.1) | | (5.4) | | — | | (21.5) | | Operations & maintenance expenses (1) | | (16.7) | | (10.9) | | 0.1 | | (27.5) | | Gross Margin (GAAP) | | 114.9 | | 42.3 | | — | | 157.2 | | Operations & maintenance expenses (1) | | 16.7 | | 10.9 | | (0.1) | | 27.5 | | Depreciation & amortization | | 16.1 | | 5.4 | | — | | 21.5 | | Adjusted Gross Margin (Non- GAAP) | | $ 147.7 | | $ 58.6 | | $ (0.1) | | $ 206.2 | | | | | | | | | | | | | | For the Three Months Ended March 31, 2025 | | | | | | | | (in millions) | | Regulated Energy | | Unregulated Energy | | Other Businesses and Eliminations | | Total | | Operating Revenues | | $ 199.6 | | $ 106.7 | | $ (7.6) | | $ 298.7 | | Cost of Sales: | | | | | | | | | | Natural gas, propane and electric costs | | (71.5) | | (52.2) | | 7.4 | | (116.3) | | Depreciation & amortization | | (17.6) | | (4.9) | | — | | (22.5) | | Operations & maintenance expenses (1) | | (13.3) | | (9.7) | | 0.3 | | (22.7) | | Gross Margin (GAAP) | | 97.2 | | 39.9 | | 0.1 | | 137.2 | | Operations & maintenance expenses (1) | | 13.3 | | 9.7 | | (0.3) | | 22.7 | | Depreciation & amortization | | 17.6 | | 4.9 | | — | | 22.5 | | Adjusted Gross Margin (Non- GAAP) | | $ 128.1 | | $ 54.5 | | $ (0.2) | | $ 182.4 |

| | | (1)Operations & maintenance expenses within the condensed consolidated statements of income are presented in accordance with regulatory requirements and to provide comparability within the industry. Operations & maintenance expenses which are deemed to be directly attributable to revenue producing activities have been separately presented above in order to calculate Gross Margin as defined under GAAP. |

Adjusted Net Income and Adjusted EPS

| | | Three Months Ended | | | | | | March 31, | | | | (dollars in millions, shares in thousands (except per share data)) | | 2026 | | 2025 | | Net Income (GAAP) | | $ 59.3 | | $ 50.9 | | FCG transaction and transition-related expenses, net (1) | | — | | 0.2 | | Adjusted Net Income (Non-GAAP) | | $ 59.3 | | $ 51.1 | | | | | | | | Weighted average common shares outstanding - diluted | | 24,053 | | 23,041 | | | | | | | | Earnings Per Share - Diluted (GAAP) | | $ 2.47 | | $ 2.21 | | FCG transaction and transition-related expenses, net (1) | | — | | 0.01 | | Adjusted Earnings Per Share - Diluted (Non-GAAP) | | $ 2.47 | | $ 2.22 |

| | | (1)Transaction and transition-related expenses represent non-recurring costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding, and legal fees. |

Operating Results for the Quarters Ended March 31, 2026 and 2025

Consolidated Results

| | Three Months Ended | | | | | | | | | March 31, | | | | | | | | (in millions) | 2026 | | 2025 | | Change | | Percent Change | | Adjusted gross margin | $ 206.2 | | $ 182.4 | | $ 23.8 | | 13.0 % | | Depreciation, amortization and property taxes | 30.9 | | 31.3 | | 0.4 | | 1.3 % | | Other operating expenses | 75.9 | | 64.0 | | (11.9) | | (18.6) % | | FCG transaction and transition-related expenses | — | | 0.3 | | 0.3 | | NMF | | Operating income | $ 99.4 | | $ 86.8 | | $ 12.6 | | 14.5 % |

Operating income for the first quarter of 2026 was $99.4 million, an increase of $12.6 million compared to the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $12.3 million or 14.1 percent compared to the prior-year period. The increase in adjusted gross margin for the first quarter of 2026 was primarily driven by incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects and natural gas organic growth, increased customer consumption resulting from year-over-year colder temperatures largely in the Company's Delmarva service areas, and improved performance at Aspire Energy. Higher operating expenses were driven largely by increased payroll, benefits and other employee-related expenses and higher facilities, maintenance costs and outside services compared to the prior-year period. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study. These amounts were largely offset by additional depreciation, amortization and property taxes associated with growth.

Regulated Energy Segment

| | Three Months Ended | | | | | | | | | March 31, | | | | | | | | (in millions) | 2026 | | 2025 | | Change | | Percent Change | | Adjusted gross margin(1) | $ 147.7 | | $ 128.1 | | $ 19.6 | | 15.3 % | | Depreciation, amortization and property taxes (1) | 25.0 | | 25.9 | | 0.9 | | 3.5 % | | Other operating expenses | 51.6 | | 41.4 | | (10.2) | | (24.6) % | | FCG transaction and transition-related expenses | — | | 0.3 | | 0.3 | | NMF | | Operating income | $ 71.1 | | $ 60.5 | | $ 10.6 | | 17.5 % |

| | | (1) The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael. See Key variances table below for additional information. |

The key components of the increase in adjusted gross margin are shown below:

| (in millions) | | | Natural gas transmission service expansions, including interim services | $ 6.9 | | Contributions from regulated infrastructure programs | 5.5 | | Rate changes associated with recent rate case activities (1) | 4.1 | | Natural gas growth including conversions (excluding service expansions) | 2.0 | | Changes in customer consumption | 1.7 | | Change in off-system natural gas capacity sales | 1.1 | | Absence of recovered costs associated with Hurricane Michael (2) | (2.0) | | Other variances | 0.3 | | Quarter-over-quarter increase in adjusted gross margin | $ 19.6 |

| | | (1)Includes adjusted gross margin contributions from permanent base rates. Refer to Major Projects and Initiatives discussion for additional information. | | (2) The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael. |

The major components of the increase in other operating expenses are as follows:

| (in millions) | | | Payroll, benefits and other employee-related expenses | $ (5.0) | | Facilities expenses, maintenance costs and outside services | (2.7) | | Credit, collections and customer service costs | (1.4) | | Other variances | (1.1) | | Quarter-over-quarter increase in other operating expenses | $ (10.2) |

Unregulated Energy Segment

| | Three Months Ended | | | | | | | | | March 31, | | | | | | | | (in millions) | 2026 | | 2025 | | Change | | Percent Change | | Adjusted gross margin | $ 58.6 | | $ 54.5 | | $ 4.1 | | 7.5 % | | Depreciation, amortization and property taxes | 5.8 | | 5.5 | | (0.3) | | (5.5) % | | Other operating expenses | 24.5 | | 22.7 | | (1.8) | | (7.9) % | | Operating income | $ 28.3 | | $ 26.3 | | $ 2.0 | | 7.6 % |

The major components of the increase in adjusted gross margin are shown below:

| (in millions) | | | | Propane Operations | | | | Increased propane customer consumption | | $ 2.4 | | Aspire Energy | | | | Increased performance from Aspire Energy - rate changes and gathering fees | | 1.4 | | Increased customer consumption | | 0.4 | | Other variances | | (0.1) | | Quarter-over-quarter increase in adjusted gross margin | | $ 4.1 |

The major components of the increase in other operating expenses are as follows:

| (in millions) | | | | Payroll, benefits and other employee-related expenses | | $ (1.6) | | Facilities expenses, maintenance costs and outside services | | (0.4) | | Other variances | | 0.2 | | Quarter-over-quarter increase in other operating expenses | | $ (1.8) |

Forward-Looking Statements

Matters included in this release may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking Statements in the Company's 2025 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the first quarter of 2026 for further information on the risks and uncertainties related to the Company's forward-looking statements.

Conference Call

Chesapeake Utilities (NYSE: CPK) will host a conference call on Thursday, May 7, 2026, at 8:30 a.m. Eastern Time to discuss the Company's financial results for the three months ended March 31, 2026. To listen to the Company's conference call via live webcast, please visit the Events & Presentations section of the Investors page on www.chpk.comFor investors and analysts that wish to participate by phone for the question and answer portion of the call, please use the following dial-in information:

Toll-free: 800.245.3047 International: 203.518.9765 Conference ID: CPKQ126

A replay of the presentation will be made available on the previously noted website following the conclusion of the call.

About Chesapeake Utilities Corporation

Chesapeake Utilities Corporation is a diversified energy delivery company, listed on the New York Stock Exchange. Chesapeake Utilities Corporation offers sustainable energy solutions through its natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses.

For more information, contact:

Beth W. Cooper Executive Vice President and Chief Financial Officer 302.363.2467

Lucia M. Dempsey Head of Investor Relations 347.804.9067

Financial Summary Highlights

Key variances between the three months ended March 31, 2025 and March 31, 2026 included:

| (in millions, except per share data) | | Pre-tax

Income | | Net

Income | | Earnings

PerShare | | Three Months Ended March 31, 2025 Adjusted Results (1) | | $ 69.7 | | $ 51.1 | | $ 2.22 | | | | | | | | | | Change in Adjusted Gross Margins: | | | | | | | | Natural gas transmission service expansions, including interim services(2) | | 6.9 | | 5.1 | | 0.21 | | Contributions from regulated infrastructure programs (2) | | 5.5 | | 4.0 | | 0.17 | | Changes in customer consumption | | 4.5 | | 3.3 | | 0.14 | | Rate changes associated with recent rate case activities (2) | | 4.1 | | 3.0 | | 0.13 | | Natural gas growth including conversions (excluding service expansions) | | 2.0 | | 1.5 | | 0.06 | | Increased Aspire Energy performance - rate changes and gathering fees | | 1.4 | | 1.0 | | 0.04 | | Change in off-system natural gas capacity sales | | 1.1 | | 0.8 | | 0.03 | | Absence of recovered costs associated with Hurricane Michael (3) | | (2.0) | | (1.5) | | (0.06) | | | | 23.5 | | 17.2 | | 0.72 | | | | | | | | | | Increased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs): | | | | | | | | Payroll, benefits and other employee-related expenses | | (6.6) | | (4.9) | | (0.20) | | Facilities expenses, maintenance costs and outside services | | (3.1) | | (2.2) | | (0.09) | | Depreciation, amortization and property taxes | | (1.5) | | (1.1) | | (0.05) | | Credit, collections and customer service costs | | (1.4) | | (1.1) | | (0.04) | | Absence of amortization of costs associated with Hurricane Michael recovery (3) | | 2.0 | | 1.5 | | 0.06 | | | | (10.6) | | (7.8) | | (0.32) | | | | | | | | | | Interest charges | | (0.6) | | (0.4) | | (0.02) | | Increase in shares outstanding due to 2025 and 2026 equity offerings (4) | | — | | — | | (0.09) | | Net other changes | | (1.3) | | (0.8) | | (0.04) | | | | (1.9) | | (1.2) | | (0.15) | | Three Months Ended March 31, 2026 Adjusted Results (1) | | $ 80.7 | | $ 59.3 | | $ 2.47 |

| | | (1)Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from Company's non-GAAP measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures. | | (2)Refer to Major Projects and Initiatives table for additional information. | | (3) The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael. | | (4)Reflects the impact of approximately 0.8 million common shares issued under the Company's dividend reinvestment and direct stock purchase plan and at the market program. |

Recently Completed and Ongoing Major Projects and Initiatives

The Company continuously pursues and develops additional projects and regulatory initiatives to serve existing and new customers, further grow its businesses and earnings, and increase shareholder value. The following table includes all major projects and initiatives that are currently underway or recently completed. The Company's practice is to add incremental margin associated with new projects and regulatory initiatives to this table once negotiations or details are substantially final and/or the associated earnings can be estimated. Major projects and initiatives that have generated consistent year-over-year adjusted gross margin contributions are removed from the table at the beginning of the next calendar year.