Chesapeake Utilities Corporation press release
CHESAPEAKE UTILITIES CORPORATION REPORTS THIRD QUARTER 2025 RESULTS
NYSE - New York Stock Exchange · Natural Gas · United States
PR Newswire
Net income and earnings per share ("EPS")* were $19.4 millionand $0.82, respectively, for the third quarter of 2025 and $94.2 millionand $4.03, respectively, for the nine months ended September 30, 2025 Adjusted net income and Adjusted EPS, which exclude transaction and transition-related expenses attributable to the acquisition and integration of Florida City Gas ("FCG"), were $19.5 millionand $0.82, respectively, for the third quarter of 2025 and $94.9 millionand $4.06, respectively, for the nine months ended September 30, 2025 Adjusted gross margin growth of $15.2 millionand $49.3 million, respectively, for the three- and nine-month periods ended September 30, 2025driven primarily by natural gas organic growth and transmission expansion projects, regulatory initiatives and infrastructure programs, and increased compressed natural gas, renewable natural gas and liquified natural gas services 2025 Adjusted EPS guidance of $6.15- $6.35re-affirmed, assuming a successful outcome on the FCG Depreciation Study The Company is increasing its 2025 capital guidance range to $425-$450 million The Company continues to affirm 2028 EPS and 2024-2028 capital expenditure guidance
DOVER, Del., Nov. 6, 2025/PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three and nine months ended September 30, 2025.
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Net income for the third quarter of 2025 was $19.4 million($0.82per share) compared to $17.5 million($0.78per share) in the third quarter of 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, adjusted net income was $19.5 million($0.82per share) compared to $18.1 million($0.80per share) in the prior-year period. The adjusted EPS growth reflects a $0.04per share impact from $92.0 millionof equity issued over the last twelve months to restore the Company's equity to total capitalization ratio closer to the target ratio.
Adjusted earnings for the third quarter of 2025 were largely driven by contributions from regulatory initiatives and infrastructure programs, organic growth in the natural gas distribution businesses and pipeline expansion projects driven by natural gas demand, and increased compressed natural gas (CNG), renewable natural gas (RNG) and liquified natural gas (LNG) services.
During the first nine months of 2025, net income was $94.2 million($4.03per share) compared to $81.9 million($3.66per share) in the prior-year period. Excluding the transaction and transition-related expenses, adjusted net income was $94.9 million($4.06per share) compared to $84.2 million($3.76per share) in the prior-year period. This resulted in EPS and adjusted EPS growth of 10.1 percent and 8.0 percent, respectively, compared to the prior-year period.
Year-to-date adjusted earnings for 2025 were primarily impacted by the factors discussed for the third quarter as well as additional adjusted gross margin from increased customer consumption experienced earlier in the year.
"Our performance in the third quarter of 2025 demonstrated continued operational excellence across our businesses to serve our customers and communities. In both the quarter and the year-to-date periods, we delivered double-digit growth in Adjusted Gross Margin and Operating Income relative to the prior year and we continued to strengthen our balance sheet with incremental long-term debt and equity issuances during the quarter," said Jeff Householder, the Company's Chair of the Board, President and Chief Executive Officer.
"These results demonstrate that we continue to deliver on our three growth pillars. Within the third quarter, we invested $123 millionof capital and generated over $20 millionof gross margin from transmission, infrastructure, and transportation projects. We also reached final completion of our Delawarerate case, with a settlement on tariff-related changes, including rate design. And finally, we took the next pivotal step in our continuous business transformation efforts, including officially kicking off our multi-year Enterprise Resource Plan (ERP) process, which was a primary driver in the increase and extension of our 2025 capital guidance to $425-$450 million. We remain focused on achieving our earnings and increased capital guidance in 2025, demonstrating record performance and reaching new heights of growth for the Company."
Earnings and Capital Investment Guidance
The Company continues to re-affirm its 2025 EPS guidance range of $6.15to $6.35per share, pending a successful outcome of the FCG excess depreciation filing. Given the Company's progress on a multitude of capital projects, the Company is further increasing and refining its 2025 capital guidance range to $425 millionto $450 million.
Looking to the future, the Company also continues to re-affirm its 2028 EPS guidance range of $7.75to $8.00per share, as well as its capital expenditure guidance range for the five-year period ending 2028 of $1.5 billionto $1.8 billion.
_*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 September 30, 2025 | | | | | | | | (in millions) | | Regulated Energy | | Unregulated Energy | | Other Businesses and Eliminations | | Total | | Operating Revenues | | $ 146.4 | | $ 40.7 | | $ (7.5) | | $ 179.6 | | Cost of Sales: | | | | | | | | | | Natural gas, propane and electric costs | | (31.7) | | (18.3) | | 7.6 | | (42.4) | | Depreciation & amortization | | (18.2) | | (5.1) | | — | | (23.3) | | Operations & maintenance expenses (1) | | (12.6) | | (9.5) | | — | | (22.1) | | Gross Margin (GAAP) | | 83.9 | | 7.8 | | 0.1 | | 91.8 | | Operations & maintenance expenses (1) | | 12.6 | | 9.5 | | — | | 22.1 | | Depreciation & amortization | | 18.2 | | 5.1 | | — | | 23.3 | | Adjusted Gross Margin (Non- GAAP) | | $ 114.7 | | $ 22.4 | | $ 0.1 | | $ 137.2 | | | | | | | | | | | | | | For the Three Months Ended September 30, 2024 | | | | | | | | (in millions) | | Regulated Energy | | Unregulated Energy | | Other Businesses and Eliminations | | Total | | Operating Revenues | | $ 130.6 | | $ 35.6 | | $ (6.0) | | $ 160.2 | | Cost of Sales: | | | | | | | | | | Natural gas, propane and electric costs | | (28.4) | | (15.8) | | 6.0 | | (38.2) | | Depreciation & amortization | | (12.3) | | (4.5) | | — | | (16.8) | | Operations & maintenance expenses (1) | | (10.7) | | (8.1) | | — | | (18.8) | | Gross Margin (GAAP) | | 79.2 | | 7.2 | | — | | 86.4 | | Operations & maintenance expenses (1) | | 10.7 | | 8.1 | | — | | 18.8 | | Depreciation & amortization | | 12.3 | | 4.5 | | — | | 16.8 | | Adjusted Gross Margin (Non- GAAP) | | $ 102.2 | | $ 19.8 | | $ — | | $ 122.0 | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2025 | | | | | | | | (in millions) | | Regulated Energy | | Unregulated Energy | | Other Businesses and Eliminations | | Total | | Operating Revenues | | $ 497.8 | | $ 195.3 | | $ (22.0) | | $ 671.1 | | Cost of Sales: | | | | | | | | | | Natural gas, propane and electric costs | | (137.3) | | (93.4) | | 22.0 | | (208.7) | | Depreciation & amortization | | (52.6) | | (15.1) | | — | | (67.7) | | Operations & maintenance expenses (1) | | (40.5) | | (29.0) | | (0.1) | | (69.6) | | Gross Margin (GAAP) | | 267.4 | | 57.8 | | (0.1) | | 325.1 | | Operations & maintenance expenses (1) | | 40.5 | | 29.0 | | 0.1 | | 69.6 | | Depreciation & amortization | | 52.6 | | 15.1 | | — | | 67.7 | | Adjusted Gross Margin (Non- GAAP) | | $ 360.5 | | $ 101.9 | | $ — | | $ 462.4 | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2024 | | | | | | | | (in millions) | | Regulated Energy | | Unregulated Energy | | Other Businesses and Eliminations | | Total | | Operating Revenues | | $ 429.7 | | $ 160.1 | | $ (17.6) | | $ 572.2 | | Cost of Sales: | | | | | | | | | | Natural gas, propane and electric costs | | (105.7) | | (70.9) | | 17.5 | | (159.1) | | Depreciation & amortization | | (39.5) | | (12.2) | | — | | (51.7) | | Operations & maintenance expenses (1) | | (35.7) | | (24.4) | | — | | (60.1) | | Gross Margin (GAAP) | | 248.8 | | 52.6 | | (0.1) | | 301.3 | | Operations & maintenance expenses (1) | | 35.7 | | 24.4 | | — | | 60.1 | | Depreciation & amortization | | 39.5 | | 12.2 | | — | | 51.7 | | Adjusted Gross Margin (Non- GAAP) | | $ 324.0 | | $ 89.2 | | $ (0.1) | | $ 413.1 |
| | | (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 | | Nine Months Ended | | | | | | | | September 30, | | September 30, | | | | | | _(dollars in millions, shares in thousands (except per share data))_ | | 2025 | | 2024 | | 2025 | | 2024 | | Net Income (GAAP) | | $ 19.4 | | $ 17.5 | | $ 94.2 | | $ 81.9 | | FCG transaction and transition-related expenses, net (1) | | 0.1 | | 0.6 | | 0.7 | | 2.3 | | Adjusted Net Income (Non-GAAP) | | $ 19.5 | | $ 18.1 | | $ 94.9 | | $ 84.2 | | | | | | | | | | | | Weighted average common shares outstanding - diluted | | 23,629 | | 22,564 | | 23,360 | | 22,402 | | | | | | | | | | | | Earnings Per Share - Diluted (GAAP) | | $ 0.82 | | $ 0.78 | | $ 4.03 | | $ 3.66 | | FCG transaction and transition-related expenses, net (1) | | — | | 0.02 | | 0.03 | | 0.10 | | Adjusted Earnings Per Share - Diluted (Non- GAAP) | | $ 0.82 | | $ 0.80 | | $ 4.06 | | $ 3.76 |
| | | (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 September 30, 2025and 2024
Consolidated Results
| | Three Months Ended | | | | | | | | | September 30, | | | | | | | | (in millions) | 2025 | | 2024 | | Change | | Percent Change | | Adjusted gross margin | $ 137.2 | | $ 122.0 | | $ 15.2 | | 12.5 % | | Depreciation, amortization and property taxes (1) | 32.7 | | 25.0 | | (7.7) | | (30.8) % | | Other operating expenses | 59.3 | | 55.3 | | (4.0) | | (7.2) % | | FCG transaction and transition-related expenses | 0.2 | | 0.8 | | 0.6 | | NMF | | Operating income | $ 45.0 | | $ 40.9 | | $ 4.1 | | 10.0 % |
| | | (1)Includes the absence of an RSAM adjustment from FCG which represented a $3.2 million benefit in the third quarter of 2024. |
Operating income for the third quarter of 2025 was $45.0 million, an increase of $4.1 millionor 10.0 percent compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $3.5 millionor 8.4 percent compared to the prior-year period. The increase in adjusted gross margin in the third quarter of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, increased CNG, RNG and LNG services and natural gas organic growth. The increase in operating expenses was driven largely by higher depreciation attributable to growth projects and the absence of a reserve surplus amortization mechanism ("RSAM") adjustment from FCG (which represented a $3.2 millionbenefit in the third quarter of 2024). Higher expenses associated with facilities, maintenance and outside services compared to the prior-year period also contributed to the increase.
Regulated Energy Segment
| | Three Months Ended | | | | | | | | | September 30, | | | | | | | | (in millions) | 2025 | | 2024 | | Change | | Percent Change | | Adjusted gross margin | $ 114.7 | | $ 102.2 | | $ 12.5 | | 12.2 % | | Depreciation, amortization and property taxes (1) | 26.9 | | 19.8 | | (7.1) | | (35.9) % | | Other operating expenses | 38.7 | | 37.6 | | (1.1) | | (2.9) % | | FCG transaction and transition-related expenses | 0.2 | | 0.8 | | 0.6 | | NMF | | Operating income | $ 48.9 | | $ 44.0 | | $ 4.9 | | 11.1 % |
| | | (1)Includes the absence of an RSAM adjustment from FCG which represented a $3.2 million benefit in the third quarter of 2024. |
The key components of the increase in adjusted gross margin are shown below:
| (in millions) | | | Natural gas transmission service expansions, including interim services | $ 5.6 | | Contributions from regulated infrastructure programs | 3.9 | | Rate changes associated with recent rate case activities (1) | 3.6 | | Natural gas growth including conversions (excluding service expansions) | 1.5 | | Changes in customer consumption | (0.9) | | Other variances | (1.2) | | Quarter-over-quarter increase in adjusted gross margin | $ 12.5 |
| | | (1)Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects and Initiatives discussion for additional information. |
The major components of the increase in other operating expenses are as follows:
| (in millions) | | | Facilities expenses, maintenance costs and outside services | $ (2.1) | | Payroll, benefits and other employee-related expenses | 0.9 | | Other variances | 0.1 | | Quarter-over-quarter increase in other operating expenses | $ (1.1) |
Unregulated Energy Segment
| | Three Months Ended | | | | | | | | | September 30, | | | | | | | | (in millions) | 2025 | | 2024 | | Change | | Percent Change | | Adjusted gross margin | $ 22.4 | | $ 19.8 | | $ 2.6 | | 13.1 % | | Depreciation, amortization and property taxes | 5.8 | | 5.1 | | (0.7) | | (13.7) % | | Other operating expenses | 20.5 | | 17.8 | | (2.7) | | (15.2) % | | Operating income (loss) | $ (3.9) | | $ (3.1) | | $ (0.8) | | 25.8 % |
Operating results for the second and third quarters historically have been lower due to reduced customer demand during warmer periods of the year. The impact to operating income may not align with the seasonal variations in adjusted gross margin as many of the operating expenses are recognized ratably over the course of the year.
The major components of the increase in adjusted gross margin are shown below:
| (in millions) | | | | Propane Operations | | | | Change in propane margins and service fees | | $ (0.7) | | CNG/RNG/LNG Transportation and Infrastructure | | | | Increased CNG/RNG/LNG services | | 3.1 | | Aspire Energy | | | | Increased performance from Aspire Energy | | 0.4 | | Other variances | | (0.2) | | Quarter-over-quarter increase in adjusted gross margin | | $ 2.6 |
The major components of the increase in other operating expenses are as follows:
| (in millions) | | | | Payroll, benefits and other employee-related expenses | | $ (1.5) | | Facilities expenses, maintenance costs and outside services | | (1.3) | | Other variances | | 0.1 | | Quarter-over-quarter increase in other operating expenses | | $ (2.7) |
Operating Results for the Nine Months Ended September 30, 2025and 2024
Consolidated Results
| | Nine Months Ended | | | | | | | | | September 30, | | | | | | | | (in millions) | 2025 | | 2024 | | Change | | Percent Change | | Adjusted gross margin | $ 462.4 | | $ 413.1 | | $ 49.3 | | 11.9 % | | Depreciation, amortization and property taxes (1) | 95.2 | | 77.8 | | (17.4) | | (22.4) % | | Other operating expenses | 184.1 | | 170.9 | | (13.2) | | (7.7) % | | FCG transaction and transition-related expenses | 1.0 | | 3.1 | | 2.1 | | NMF | | Operating income | $ 182.1 | | $ 161.3 | | $ 20.8 | | 12.9 % |
| | | (1)Includes the absence of an RSAM adjustment from FCG which represented an $8.9 million benefit during the nine months ended September 30, 2024. |
Operating income for the nine months ended September 30, 2025was $182.1 million, an increase of $20.8 millionor 12.9 percent compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $18.7 millionor 11.4 percent compared to the prior-year period. The increase in adjusted gross margin in the first nine months of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, increased CNG, RNG and LNG services, pipeline expansion projects and natural gas organic growth, and increased customer consumption resulting from year-over-year colder temperatures in the Company's Mid-Atlantic and Ohioservice territories. These increases were partially offset by lower margins per gallon and related fees in the Company's propane distribution business and a reduced volume of off-system sales and service fees in its natural gas business. Higher operating expenses were driven largely by the absence of an RSAM adjustment from FCG (which represented an $8.9 millionbenefit during the nine months ended September 30, 2024) and higher depreciation attributable to growth projects. Higher facilities, maintenance and outside services, insurance, and payroll, benefits and other employee-related expenses compared to the prior-year period also contributed to the increase.
Regulated Energy Segment
| | Nine Months Ended | | | | | | | | | September 30, | | | | | | | | (in millions) | 2025 | | 2024 | | Change | | Percent Change | | Adjusted gross margin | $ 360.5 | | $ 324.0 | | $ 36.5 | | 11.3 % | | Depreciation, amortization and property taxes (1) | 78.3 | | 63.6 | | (14.7) | | (23.1) % | | Other operating expenses | 120.0 | | 114.7 | | (5.3) | | (4.6) % | | FCG transaction and transition-related expenses | 1.0 | | 3.1 | | 2.1 | | NMF | | Operating income | $ 161.2 | | $ 142.6 | | $ 18.6 | | 13.0 % |