CHESAPEAKE UTILITIES CORPORATION REPORTS SECOND QUARTER 2025 RESULTS
Net income and earnings per share ("EPS")* were $23.9 million and $1.02, respectively, for the second quarter of 2025 and $74.8 million and $3.22, respectively, for the six months ended June 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 $24.3 million and $1.04, respectively, for the second quarter of 2025 and $75.4 million and $3.25, respectively, for the six months ended June 30, 2025
Adjusted gross margin** growth of $16.2 million and $34.1 million, respectively, for the three- and six-month periods ended June 30, 2025 driven by natural gas organic growth and transmission expansion projects, regulatory initiatives and infrastructure programs, increased compressed natural gas, renewable natural gas and liquified natural gas services, and increased customer consumption
Continued to execute the Company's 2025 financing plan by issuing equity and increasing debt capacity, including a $200 million long-term debt agreement in August 2025
Re-affirming 2025 Adjusted EPS guidance of $6.15 - $6.35, which assumes a successful outcome on the FCG Depreciation Study
The Company is increasing its 2025 capital guidance range to $375-$425 million in light of advances on various capital projects
The Company continues to affirm 2028 EPS and 2024-2028 capital expenditure guidance
DOVER, Del., Aug. 7, 2025 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three and six months ended June 30, 2025.
Net income for the second quarter of 2025 was $23.9 million ($1.02 per share) compared to $18.2 million ($0.82 per share) in the second quarter of 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, adjusted net income was $24.3 million, or $1.04 per share compared to $0.86 per share reported in the same prior-year period. This resulted in EPS and adjusted EPS growth of 24.4 percent and 20.9 percent, respectively, compared to the second quarter of 2024.
Adjusted earnings for the second 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 half of 2025, net income was $74.8 million ($3.22 per share) compared to $64.4 million ($2.89 per share) in the prior-year period. Excluding the transaction and transition-related expenses, adjusted net income was $75.4 million ($3.25 per share) compared to $66.1 million ($2.96 per share) for the same period in 2024. This resulted in EPS and adjusted EPS growth of 11.4 percent and 9.8 percent, respectively, compared to the prior-year period.
Year-to-date adjusted earnings for 2025 were primarily impacted by the factors discussed for the second quarter as well as additional adjusted gross margin from increased customer consumption experienced earlier in the year.
"Our second quarter 2025 results demonstrate yet another outstanding quarter of growth and solid execution by the team. Adjusted Gross Margin increased by 13 percent, which, alongside operational efficiency improvements, resulted in Adjusted EPS up 21 percent relative to the second quarter of 2024. This performance reinforces our ability to operate our regulated and unregulated businesses safely and efficiently to meet the rising demand for natural gas across the communities we serve," said Jeff Householder, the Company's Chair of the Board, President and Chief Executive Officer.
"We also continued to make significant progress within each of the three pillars of our growth strategy, starting with year-to-date capital deployment of $213 million, which enabled us to raise our full-year 2025 capital expenditure guidance by $50 million to $375 - $425 million. Our regulatory successes included resolution of all three active rate cases as well as FERC issuing a notice to proceed with site preparation work and approving updated rates for the Worcester Resiliency Upgrade project which will drive an additional $3.9 million of margin once the facility is in service. And finally, we made further strides in transforming the business for our next stage of growth as we concluded the Transition Services Agreement for FCG, expanded our debt capacity on multiple fronts and reached our target equity capitalization of 50 percent."
Earnings and Capital Investment Guidance
The Company continues to re-affirm its 2025 EPS guidance range of $6.15 to $6.35 per share, which includes approval of the pending FCG excess depreciation filing. The Company also continues to re-affirm the 2028 EPS guidance range of $7.75 to $8.00 per share.
The Company also continues to re-affirm its capital expenditure guidance range for the five-year period ended 2028 of $1.5 billion to $1.8 billion and has increased its projected guidance range for 2025 to $375 million to $425 million given its investments to date and expected level of spending in the second half of 2025.
*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. Our 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 our 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 June 30, 2025
(in millions)
Regulated Energy
UnregulatedEnergy
Other Businessesand Eliminations
Total
Operating Revenues
$ 151.8
$ 47.9
$ (6.9)
$ 192.8
Cost of Sales:
Natural gas, propane and electric costs
(34.1)
(22.9)
7.0
(50.0)
Depreciation & amortization
(16.8)
(5.1)
—
(21.9)
Operations & maintenance expenses (1)
(14.6)
(9.8)
0.4
(24.0)
Gross Margin (GAAP)
86.3
10.1
0.5
96.9
Operations & maintenance expenses (1)
14.6
9.8
(0.4)
24.0
Depreciation & amortization
16.8
5.1
—
21.9
Adjusted Gross Margin (Non-GAAP)
$ 117.7
$ 25.0
$ 0.1
$ 142.8
For the Three Months Ended June 30, 2024
(in millions)
Regulated Energy
UnregulatedEnergy
Other Businessesand Eliminations
Total
Operating Revenues
$ 130.7
$ 41.4
$ (5.8)
$ 166.3
Cost of Sales:
Natural gas, propane and electric costs
(27.4)
(18.0)
5.7
(39.7)
Depreciation & amortization
(14.7)
(3.2)
—
(17.9)
Operations & maintenance expenses (1)
(12.3)
(7.9)
—
(20.2)
Gross Margin (GAAP)
76.3
12.3
(0.1)
88.5
Operations & maintenance expenses (1)
12.3
7.9
—
20.2
Depreciation & amortization
14.7
3.2
—
17.9
Adjusted Gross Margin (Non-GAAP)
$ 103.3
$ 23.4
$ (0.1)
$ 126.6
For the Six Months Ended June 30, 2025
(in millions)
Regulated Energy
UnregulatedEnergy
Other Businessesand Eliminations
Total
Operating Revenues
$ 351.4
$ 154.6
$ (14.5)
$ 491.5
Cost of Sales:
Natural gas, propane and electric costs
(105.6)
(75.1)
14.4
(166.3)
Depreciation & amortization
(34.4)
(10.0)
—
(44.4)
Operations & maintenance expenses (1)
(27.9)
(19.5)
0.7
(46.7)
Gross Margin (GAAP)
183.5
50.0
0.6
234.1
Operations & maintenance expenses (1)
27.9
19.5
(0.7)
46.7
Depreciation & amortization
34.4
10.0
—
44.4
Adjusted Gross Margin (Non-GAAP)
$ 245.8
$ 79.5
$ (0.1)
$ 325.2
For the Six Months Ended June 30, 2024
(in millions)
Regulated Energy
UnregulatedEnergy
Other Businessesand Eliminations
Total
Operating Revenues
$ 299.1
$ 124.5
$ (11.6)
$ 412.0
Cost of Sales:
Natural gas, propane and electric costs
(77.3)
(55.1)
11.5
(120.9)
Depreciation & amortization
(27.2)
(7.7)
—
(34.9)
Operations & maintenance expenses (1)
(25.0)
(16.3)
—
(41.3)
Gross Margin (GAAP)
169.6
45.4
(0.1)
214.9
Operations & maintenance expenses (1)
25.0
16.3
—
41.3
Depreciation & amortization
27.2
7.7
—
34.9
Adjusted Gross Margin (Non-GAAP)
$ 221.8
$ 69.4
$ (0.1)
$ 291.1
(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
Six Months Ended
June 30,
June 30,
(dollars in millions, shares in thousands (except per share data))
2025
2024
2025
2024
Net Income (GAAP)
$ 23.9
$ 18.2
$ 74.8
$ 64.4
FCG transaction and transition-related expenses, net (1)
0.4
1.1
0.6
1.7
Adjusted Net Income (Non-GAAP)
$ 24.3
$ 19.3
$ 75.4
$ 66.1
Weighted average common shares outstanding - diluted
23,402
22,335
23,223
22,320
Earnings Per Share - Diluted (GAAP)
$ 1.02
$ 0.82
$ 3.22
$ 2.89
FCG transaction and transition-related expenses, net (1)
0.02
0.04
0.03
0.07
Adjusted Earnings Per Share - Diluted (Non-GAAP)
$ 1.04
$ 0.86
$ 3.25
$ 2.96
(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 June 30, 2025 and 2024
Consolidated Results
Three Months Ended
June 30,
(in millions)
2025
2024
Change
PercentChange
Adjusted gross margin**
$ 142.8
$ 126.6
$ 16.2
12.8 %
Depreciation, amortization and property taxes
31.2
26.7
(4.5)
(16.9) %
Other operating expenses
60.8
57.7
(3.1)
(5.4) %
FCG transaction and transition-related expenses
0.5
1.4
0.9
NMF
Operating income
$ 50.3
$ 40.8
$ 9.5
23.3 %
Operating income for the second quarter of 2025 was $50.3 million, an increase of $9.5 million or 23.3 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 $8.6 million or 20.4 percent compared to the prior-year period. The increase in adjusted gross margin in the second 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. Operating expenses were driven largely by the absence of a reserve surplus amortization mechanism ("RSAM") adjustment from FCG (representing $2.3 million in the second quarter of 2024), higher depreciation attributable to growth projects and expenses associated with facilities, maintenance and outside services. These increases were partially offset by reduced payroll, benefits and other employee-related expenses compared to the prior-year period.
Regulated Energy Segment
Three Months Ended
June 30,
(in millions)
2025
2024
Change
PercentChange
Adjusted gross margin**
$ 117.7
$ 103.3
$ 14.4
13.9 %
Depreciation, amortization and property taxes
25.5
22.8
(2.7)
(11.8) %
Other operating expenses
39.9
38.6
(1.3)
(3.4) %
FCG transaction and transition-related expenses
0.5
1.4
0.9
NMF
Operating income
$ 51.8
$ 40.5
$ 11.3
27.9 %
The key components of the increase in adjusted gross margin** are shown below:
(in millions)
Rate changes associated with recent rate case activities (1)
$ 4.1
Natural gas transmission service expansions, including interim services
3.9
Contributions from regulated infrastructure programs
3.7
Natural gas growth including conversions (excluding service expansions)
1.8
Changes in customer consumption
1.1
Other variances
(0.2)
Quarter-over-quarter increase in adjusted gross margin**
$ 14.4
(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects 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
$ (3.1)
Payroll, benefits and other employee-related expenses
1.7
Other variances
0.1
Quarter-over-quarter increase in other operating expenses
$ (1.3)
Unregulated Energy Segment
Three Months Ended
June 30,
(in millions)
2025
2024
Change
PercentChange
Adjusted gross margin**
$ 25.0
$ 23.4
$ 1.6
6.8 %
Depreciation, amortization and property taxes
5.5
3.8
(1.7)
(44.7) %
Other operating expenses
21.0
19.2
(1.8)
(9.4) %
Operating income (loss)
$ (1.5)
$ 0.4
$ (1.9)
NMF
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
Decreased propane customer consumption
$ (1.3)
Decreased propane margins and service fees
(1.0)
CNG/RNG/LNG Transportation and Infrastructure
Increased CNG/RNG/LNG services
3.5
Aspire Energy
Increased customer consumption
0.4
Quarter-over-quarter increase in adjusted gross margin**
$ 1.6
The major components of the increase in other operating expenses are as follows:
(in millions)
Facilities expenses, maintenance costs and outside services
$ (1.2)
Payroll, benefits and other employee-related expenses
(0.4)
Other variances
(0.2)
Quarter-over-quarter increase in other operating expenses
$ (1.8)
Operating Results for the Six Months Ended June 30, 2025 and 2024
Consolidated Results
Six Months Ended
June 30,
(in millions)
2025
2024
Change
Percent Change
Adjusted gross margin**
$ 325.2
$ 291.1
$ 34.1
11.7 %
Depreciation, amortization and property taxes
62.5
52.8
(9.7)
(18.4) %
Other operating expenses
124.8
115.6
(9.2)
(8.0) %
FCG transaction and transition-related expenses
0.8
2.3
1.5
NMF
Operating income
$ 137.1
$ 120.4
$ 16.7
13.9 %
Operating income for the six months ended June 30, 2025 was $137.1 million, an increase of $16.7 million compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $15.2 million or 12.4 percent compared to the prior-year period. The increase in adjusted gross margin in the first half of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, increased CNG, RNG and LNG services, pipeline expansion projects, increased customer consumption resulting from year-over-year colder temperatures in our Mid-Atlantic and Ohio service territories and natural gas organic growth. These increases were partially offset by a reduced volume of off system sales and service fees and lower margins per gallon and related fees in our propane distribution business. Higher operating expenses were driven largely by the absence of a RSAM adjustment from FCG (representing $5.7 million during the first half of 2024), higher depreciation attributable to growth projects, increased facilities, maintenance and outside services, and increased payroll, benefits and other employee-related expenses. Additional expenses associated with insurance related costs also contributed to the increase compared to the prior-year period.
Regulated Energy Segment
Six Months Ended
June 30,
(in millions)
2025
2024
Change
PercentChange
Adjusted gross margin**
$ 245.8
$ 221.8
$ 24.0
10.8 %
Depreciation, amortization and property taxes
51.4
43.8
(7.6)
(17.4) %
Other operating expenses
81.3
77.1
(4.2)
(5.4) %
FCG transaction and transition-related expenses
0.8
2.3
1.5
NMF
Operating income
$ 112.3
$ 98.6
$ 13.7
13.9 %
The key components of the increase in adjusted gross margin** are shown below:
(in millions)
Contributions from regulated infrastructure programs
$ 7.1
Natural gas transmission service expansions, including interim services
6.1
Rate changes associated with recent rate case activities (1)
5.6
Natural gas growth including conversions (excluding service expansions)
4.0
Changes in customer consumption
1.8
Adjusted gross margin from off-system natural gas capacity sales
(0.7)
Other variances
0.1
Period-over-period increase in adjusted gross margin**
$ 24.0
(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects 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
$ (2.4)
Insurance related costs
(0.8)
Payroll, benefits and other employee-related expenses
(0.8)
Other variances
(0.2)
Period-over-period increase in other operating expenses
$ (4.2)
Unregulated Energy Segment
Six Months Ended June 30,
(in millions)
2025
2024
Change
Percent
