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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
May 1, 2024
STAR GROUP, L.P.
(Exact name of registrant as specified in its charter)
Delaware 001-14129 06-1437793
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9 West Broad Street
,
Suite 310
,
Stamford
,
CT
06902
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(203)
328-7310
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfythe filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Name of each exchange on which registered
Symbol(s)
Common Units SGU New York Stock Exchange
Common Unit Purchase Rights N/A New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule405 of the Securities Act of 1933 (17 CFR (s)230.405) or Rule
12b-2 of the Securities Exchange Act of 1934 (17 CFR (s)240.12b-2).Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to usethe extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a)of
the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On May 1, 2024 Star Group, L.P., a Delaware partnership, issued a pressrelease
announcing its financial results for the fiscal second quarter ended March 31,
2024. A copy of the press release is furnishedwithin this report as Exhibit
99.1.
The information in this report is being furnished and is not deemed as"filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
and shall not be deemed incorporatedby reference in any filings under the
Securities Act of 1933, as amended, unless specifically stated so therein.
Item 7.01 Regulation FD Disclosure.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 A copy of the Star Group, L.P. Press Release dated May 1, 2024
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
theregistrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STAR GROUP, L.P.
By: Kestrel Heat, LLC (General Partner)
By: /s/ Richard F. Ambury
Name: Richard F. Ambury
Title: Chief Financial Officer
Date: May 1, 2024
STAMFORD, Conn., May 01, 2024 (GLOBE NEWSWIRE) -- Star Group, L.P. (the
"Company" or "Star") (NYSE:SGU), a home energy distributor and services
provider, today announced financial results for its fiscal 2024 second
quarter, the three month period ended March 31, 2024.
Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31,
2023
For the fiscal 2024 second quarter, Star reported a 9.7 percent decrease in
total revenue to $666.0 million compared with $737.6 million in the prior-year
period, reflecting a decline in volume sold and lower selling prices for
petroleum products. The volume of home heating oil and propane sold during the
fiscal 2024 second quarter decreased by 4.0 million gallons, or 3.3 percent,
to 117.1 million gallons, as the additional volume provided from acquisitions
and colder weather was more than offset by the impact of net customer
attrition and other factors. Temperatures in Star's geographic areas of
operation for the three months ended March 31, 2024 were 6.9 percent colder
than the three months ended March 31, 2023 but 15.2 percent warmer than
normal, as reported by the National Oceanic and Atmospheric Administration.
Selling prices decreased largely due to a decline in wholesale product cost of
$0.3775 per gallon, or 12.5 percent.
Star's net income increased by $6.3 million in the quarter, to $68.4 million,
as a favorable change in the fair value of derivative instruments of $14.8
million and a $1.2 million decrease in interest expense was only partially
offset by a $5.8 million reduction in Adjusted EBITDA and a $3.6 million
increase in income tax expense.
The Company reported second quarter Adjusted EBITDA (a non-GAAP measure
defined below) of $96.3 million, versus $102.2 million in fiscal 2023, as
higher home heating oil and propane per-gallon margins were more than offset
by a 4.0 million gallon decrease in the volume of home heating oil and propane
sold and a $6.4 million reduction in the Company's weather hedge benefit
compared to the prior year.
"Temperatures in the second quarter were 15.2 percent warmer than normal
throughout Star's footprint. While slightly colder than the same period last
year, it was unfortunately not enough to drive higher delivery volumes.
However, we were able to mute the impact on adjusted EBITDA, even with a lower
weather hedge benefit and some ongoing inflationary pressures, by improving
per gallon margins and employing solid expense control," said Jeff Woosnam,
Star Group's President and Chief Executive Officer. "As previously noted, we
closed on two strategic acquisitions in February on Long Island, and we were
able to keep net customer attrition at modest levels during the quarter. We
believe we are well prepared for the months ahead and the opportunities summer
brings to further invest in our people and business development activity."
Six Months Ended March 31, 2024 Compared to the Six Months Ended March 31, 2023
For the six months ended March 31, 2024, Star reported a 13.8 percent decrease
in total revenue to $1.2 billion compared with $1.4 billion in the prior-year
period, reflecting a decrease in total volume sold and a decline in selling
prices in response to lower wholesale product costs. The volume of home
heating oil and propane sold during the first six months of fiscal 2024
decreased by 13.0 million gallons, or 6.2 percent, to 197.3 million gallons as
the additional volume provided from acquisitions was more than offset by
slightly warmer temperatures, net customer attrition and other factors.
Temperatures in Star's geographic areas of operation fiscal year-to-date were
0.2 percent warmer than during the prior-year period and 14.7 percent warmer
than normal, as reported by the National Oceanic and Atmospheric Administration.
Star's net income increased by $5.8 million for the first six months of fiscal
2024, to $81.4 million, primarily due to a favorable change in the fair value
of derivative instruments of $13.4 million and a $2.1 million decrease in
interest expense, partially offset by a $5.9 million reduction in Adjusted
EBITDA, a $3.3 million higher income tax provision, and a $0.7 million
increase in depreciation and amortization expense.
Year-to-date Adjusted EBITDA decreased by $5.9 million, to $145.4 million,
compared to the prior-year period as an increase in home heating oil and
propane per-gallon margins and an increase in service and installation
profitability was more than offset by the 13.0 million gallon decrease in home
heating oil and propane volumes and a $5.0 million reduction in the Company's
weather hedge benefit.
EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)
EBITDA (Earnings from continuing operations before net interest expense,
income taxes, depreciation and amortization) and Adjusted EBITDA (Earnings
from continuing operations before net interest expense, income taxes,
depreciation and amortization, (increase) decrease in the fair value of
derivatives, other income (loss), net, multiemployer pension plan withdrawal
charge, gain or loss on debt redemption, goodwill impairment, and other
non-cash and non-operating charges) are non-GAAP financial measures that are
used as supplemental financial measures by management and external users of
the Company's financial statements, such as investors, commercial banks and
research analysts, to assess Star's position with regard to the following:
* compliance with certain financial covenants included in our debt agreements;
* financial performance without regard to financing methods, capital
structure, income taxes or historical cost basis;
* operating performance and return on invested capital compared to those of
other companies in the retail distribution of refined petroleum products,
without regard to financing methods and capital structure;
* ability to generate cash sufficient to pay interest on our indebtedness
and to make distributions to our partners; and
* the viability of acquisitions and capital expenditure projects and the
overall rates of return of alternative investment opportunities.
The method of calculating Adjusted EBITDA may not be consistent with that of
other companies, and EBITDA and Adjusted EBITDA both have limitations as
analytical tools and so should not be viewed in isolation but in conjunction
with measurements that are computed in accordance with GAAP. Some of the
limitations of EBITDA and Adjusted EBITDA are as follows:
* EBITDA and Adjusted EBITDA do not reflect cash used for capital
expenditures;
* although depreciation and amortization are non-cash charges, the assets
being depreciated or amortized often will have to be replaced and EBITDA and
Adjusted EBITDA do not reflect the cash requirements for such replacements;
* EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements
for, working capital;
* EBITDA and Adjusted EBITDA do not reflect the cash necessary to make
payments of interest or principal on indebtedness; and
* EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.
REMINDER:
Members of Star's management team will host a webcast and conference call at
11:00 a.m. Eastern Time tomorrow, May 2, 2024. The webcast will be accessible
on the company's website, at www.stargrouplp.com, and the telephone number for
the conference call is 888-346-3470 (or 412-317-5169 for international
callers).
About Star Group, L.P.
Star Group, L.P. is a full service provider specializing in the sale of home
heating products and services to residential and commercial customers to heat
their homes and buildings. The Company also sells and services heating and air
conditioning equipment to its home heating oil and propane customers and, to a
lesser extent, provides these offerings to customers outside of its home
heating oil and propane customer base. Star also sells diesel, gasoline and
home heating oil on a delivery only basis. We believe Star is the nation's
largest retail distributor of home heating oil based upon sales volume.
Including its propane locations, Star serves customers in the more northern
and eastern states within the Northeast and Mid-Atlantic U.S. regions.
Additional information is available by obtaining the Company's SEC filings at
www.sec.gov and by visiting Star's website at www.stargrouplp.com, where unit
holders may request a hard copy of Star's complete audited financial
statements free of charge.
Forward Looking Information
This news release includes "forward-looking statements" which represent the
Company's expectations or beliefs concerning future events that involve risks
and uncertainties, including the impact of geopolitical events on wholesale
product cost volatility, the price and supply of the products that we sell,
our ability to purchase sufficient quantities of product to meet our
customer's needs, rapid increases in levels of inflation, the consumption
patterns of our customers, our ability to obtain satisfactory gross profit
margins, the effect of weather conditions on our financial performance, our
ability to obtain new customers and retain existing customers, our ability to
make strategic acquisitions, the impact of litigation, natural gas conversions
and electrification of heating systems, pandemic and future global health
pandemics, recessionary economic conditions, future union relations and the
outcome of current and future union negotiations, the impact of current and
future governmental regulations, including climate change, environmental,
health, and safety regulations, the ability to attract and retain employees,
customer credit worthiness, counterparty credit worthiness, marketing plans,
cyber-attacks, global supply chain issues, labor shortages and new technology,
including alternative methods for heating and cooling residences. All
statements other than statements of historical facts included in this Report
including, without limitation, the statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and elsewhere
herein, are forward-looking statements. Without limiting the foregoing, the
words "believe," "anticipate," "plan," "expect," "seek," "estimate," and
similar expressions are intended to identify forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such expectations
will prove to be correct. Actual results may differ materially from those
projected as a result of certain risks and uncertainties. These risks and
uncertainties include, but are not limited to, those set forth under the
heading "Risk Factors" and "Business Strategy" in our Annual Report on Form
10-K (the "Form 10-K") for the fiscal year ended September 30, 2023. Important
factors that could cause actual results to differ materially from the
Company's expectations ("Cautionary Statements") are disclosed in this news
release and in the Company's Form 10-K and our Quarterly Reports on Form 10-Q.
All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements. Unless otherwise required by law, the
Company undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise
after the date of this news release.
(financials follow)
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, September 30,
(in thousands) 2024 2023
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 12,063 $ 45,191
Receivables, net of allowance of $8,896 and $8,375, respectively 198,280 114,079
Inventories 63,293 56,463
Fair asset value of derivative instruments 222 10,660
Weather hedge contract receivable 7,498 -
Prepaid expenses and other current assets 28,574 28,308
Total current assets 309,930 254,701
Property and equipment, net 106,141 105,404
Operating lease right-of-use assets 87,834 90,643
Goodwill 268,360 262,103
Intangibles, net 81,359 76,306
Restricted cash 250 250
Captive insurance collateral 72,811 70,717
Deferred charges and other assets, net 13,067 15,354
Total assets $ 939,752 $ 875,478
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Accounts payable $ 37,597 $ 35,609
Revolving credit facility borrowings 29,239 240
Fair liability value of derivative instruments 2,189 118
Current maturities of long-term debt 16,500 20,500
Current portion of operating lease liabilities 18,030 18,085
Accrued expenses and other current liabilities 147,796 115,606
Unearned service contract revenue 72,900 63,215
Customer credit balances 51,276 111,508
Total current liabilities 375,527 364,881
Long-term debt 119,189 127,327
Long-term operating lease liabilities 74,615 77,600
Deferred tax liabilities, net 23,207 25,771
Other long-term liabilities 16,079 16,175
Partners' capital
Common unitholders 348,382 281,862
General partner (4,544 ) (4,615 )
Accumulated other comprehensive loss, net of taxes (12,703 ) (13,523 )
Total partners' capital 331,135 263,724
Total liabilities and partners' capital $ 939,752 $ 875,478
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Six Months Ended March 31,
Ended March 31,
(in thousands, except per 2024 2023 2024 2023
unit data - unaudited)
Sales:
Product $ 595,298 $ 669,212 $ 1,043,848 $ 1,239,141
Installations 70,734 68,405 150,280 146,663
and services
Total 666,032 737,617 1,194,128 1,385,804
sales
Cost and
expenses:
Cost of 389,394 466,267 692,732 885,360
product
Cost of installations 70,592 68,311 145,699 144,854
and services
(Increase) decrease in the fair (11,752 ) 3,022 7,278 20,658
value of derivative instruments
Delivery and 104,085 95,942 198,449 193,878
branch expenses
Depreciation and 7,748 7,626 16,134 15,463
amortization expenses
General and 6,887 6,698 13,908 13,554
administrative expenses
Finance (1,253 ) (1,764 ) (2,024 ) (3,083 )
charge income
Operating 100,331 91,515 121,952 115,120
income
Interest (3,838 ) (4,963 ) (7,056 ) (9,237 )
expense, net
Amortization of (249 ) (258 ) (499 ) (587 )
debt issuance costs
Income before 96,244 86,294 114,397 105,296
income taxes
Income tax 27,870 24,253 33,044 29,716
expense
Net $ 68,374 $ 62,041 $ 81,353 $ 75,580
income
General Partner's 620 562 738 684
interest in net income
Limited Partners' $ 67,754 $ 61,479 $ 80,615 $ 74,896
interest in net income
Per unit data (Basic
and Diluted):
Net income available $ 1.91 $ 1.72 $ 2.27 $ 2.09
to limited partners
Dilutive impact of theoretical 0.35 0.30 0.39 0.35
distribution of earnings
Basic and diluted income $ 1.56 $ 1.42 $ 1.88 $ 1.74
per Limited Partner Unit:
Weighted average number of Limited Partner 35,549 35,653 35,571 35,786
units outstanding (Basic and Diluted)
SUPPLEMENTAL INFORMATION
STAR GROUP, L.P. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(Unaudited)
Three Months Ended March 31,
(in thousands) 2024 2023
Net income $ 68,374 $ 62,041
Plus:
Income tax expense 27,870 24,253
Amortization of debt issuance costs 249 258
Interest expense, net 3,838 4,963
Depreciation and amortization 7,748 7,626
EBITDA 108,079 99,141
(Increase) / decrease in the fair value of derivative instruments (11,752 ) 3,022
Adjusted EBITDA 96,327 102,163
Add / (subtract)
Income tax expense (27,870 ) (24,253 )
Interest expense, net (3,838 ) (4,963 )
Provision for losses on accounts receivable 3,023 3,722
Increase in accounts receivables (14,119 ) (9,600 )
Decrease in inventories 21,332 40,326
Decrease in customer credit balances (39,763 ) (27,068 )
Change in deferred taxes (1,165 ) (11,155 )
Change in other operating assets and liabilities 21,202 9,736
Net cash provided by operating activities $ 55,129 $ 78,908
Net cash used in investing activities $ (23,342 ) $ (2,013 )
Net cash used in financing activities $ (39,649 ) $ (77,401 )
Home heating oil and propane gallons sold 117,100 121,100
Other petroleum products 30,200 33,200
Total all products 147,300 154,300
SUPPLEMENTAL INFORMATION
STAR GROUP, L.P. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(Unaudited)
Six Months Ended March 31,
(in thousands) 2024 2023
Net income $ 81,353 $ 75,580
Plus:
Income tax expense 33,044 29,716
Amortization of debt issuance costs 499 587
Interest expense, net 7,056 9,237
Depreciation and amortization 16,134 15,463
EBITDA 138,086 130,583
(Increase) / decrease in the fair value of derivative instruments 7,278 20,658
Adjusted EBITDA 145,364 151,241
Add / (subtract)
Income tax expense (33,044 ) (29,716 )
Interest expense, net (7,056 ) (9,237 )
Provision for losses on accounts receivable 3,672 4,768
Increase in accounts receivables (87,709 ) (124,764 )
(Increase) decrease in inventories (5,473 ) 11,609
Decrease in customer credit balances (61,615 ) (41,768 )
Change in deferred taxes (2,756 ) (12,379 )
Change in other operating assets and liabilities 43,438 36,413
Net cash used in operating activities $ (5,179 ) $ (13,833 )
Net cash used in investing activities $ (29,217 ) $ (4,099 )
Net cash provided by financing activities $ 1,268 $ 25,397
Home heating oil and propane gallons sold 197,300 210,300
Other petroleum products 62,500 68,800
Total all products 259,800 279,100
CONTACT:
Star Group, L.P. Chris Witty
Investor Relations Darrow Associates
203/328-7310 646/438-9385 or cwitty@darrowir.com
STAMFORD, Conn., May 01, 2024 (GLOBE NEWSWIRE) -- Star Group, L.P. (the
"Company" or "Star") (NYSE:SGU), a home energy distributor and services
provider, today announced financial results for its fiscal 2024 second
quarter, the three month period ended March 31, 2024.
Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31,
2023
For the fiscal 2024 second quarter, Star reported a 9.7 percent decrease in
total revenue to $666.0 million compared with $737.6 million in the prior-year
period, reflecting a decline in volume sold and lower selling prices for
petroleum products. The volume of home heating oil and propane sold during the
fiscal 2024 second quarter decreased by 4.0 million gallons, or 3.3 percent,
to 117.1 million gallons, as the additional volume provided from acquisitions
and colder weather was more than offset by the impact of net customer
attrition and other factors. Temperatures in Star's geographic areas of
operation for the three months ended March 31, 2024 were 6.9 percent colder
than the three months ended March 31, 2023 but 15.2 percent warmer than
normal, as reported by the National Oceanic and Atmospheric Administration.
Selling prices decreased largely due to a decline in wholesale product cost of
$0.3775 per gallon, or 12.5 percent.
Star's net income increased by $6.3 million in the quarter, to $68.4 million,
as a favorable change in the fair value of derivative instruments of $14.8
million and a $1.2 million decrease in interest expense was only partially
offset by a $5.8 million reduction in Adjusted EBITDA and a $3.6 million
increase in income tax expense.
The Company reported second quarter Adjusted EBITDA (a non-GAAP measure
defined below) of $96.3 million, versus $102.2 million in fiscal 2023, as
higher home heating oil and propane per-gallon margins were more than offset
by a 4.0 million gallon decrease in the volume of home heating oil and propane
sold and a $6.4 million reduction in the Company's weather hedge benefit
compared to the prior year.
"Temperatures in the second quarter were 15.2 percent warmer than normal
throughout Star's footprint. While slightly colder than the same period last
year, it was unfortunately not enough to drive higher delivery volumes.
However, we were able to mute the impact on adjusted EBITDA, even with a lower
weather hedge benefit and some ongoing inflationary pressures, by improving
per gallon margins and employing solid expense control," said Jeff Woosnam,
Star Group's President and Chief Executive Officer. "As previously noted, we
closed on two strategic acquisitions in February on Long Island, and we were
able to keep net customer attrition at modest levels during the quarter. We
believe we are well prepared for the months ahead and the opportunities summer
brings to further invest in our people and business development activity."
Six Months Ended March 31, 2024 Compared to the Six Months Ended March 31, 2023
For the six months ended March 31, 2024, Star reported a 13.8 percent decrease
in total revenue to $1.2 billion compared with $1.4 billion in the prior-year
period, reflecting a decrease in total volume sold and a decline in selling
prices in response to lower wholesale product costs. The volume of home
heating oil and propane sold during the first six months of fiscal 2024
decreased by 13.0 million gallons, or 6.2 percent, to 197.3 million gallons as
the additional volume provided from acquisitions was more than offset by
slightly warmer temperatures, net customer attrition and other factors.
Temperatures in Star's geographic areas of operation fiscal year-to-date were
0.2 percent warmer than during the prior-year period and 14.7 percent warmer
than normal, as reported by the National Oceanic and Atmospheric Administration.
Star's net income increased by $5.8 million for the first six months of fiscal
2024, to $81.4 million, primarily due to a favorable change in the fair value
of derivative instruments of $13.4 million and a $2.1 million decrease in
interest expense, partially offset by a $5.9 million reduction in Adjusted
EBITDA, a $3.3 million higher income tax provision, and a $0.7 million
increase in depreciation and amortization expense.
Year-to-date Adjusted EBITDA decreased by $5.9 million, to $145.4 million,
compared to the prior-year period as an increase in home heating oil and
propane per-gallon margins and an increase in service and installation
profitability was more than offset by the 13.0 million gallon decrease in home
heating oil and propane volumes and a $5.0 million reduction in the Company's
weather hedge benefit.
EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)
EBITDA (Earnings from continuing operations before net interest expense,
income taxes, depreciation and amortization) and Adjusted EBITDA (Earnings
from continuing operations before net interest expense, income taxes,
depreciation and amortization, (increase) decrease in the fair value of
derivatives, other income (loss), net, multiemployer pension plan withdrawal
charge, gain or loss on debt redemption, goodwill impairment, and other
non-cash and non-operating charges) are non-GAAP financial measures that are
used as supplemental financial measures by management and external users of
the Company's financial statements, such as investors, commercial banks and
research analysts, to assess Star's position with regard to the following:
* compliance with certain financial covenants included in our debt agreements;
* financial performance without regard to financing methods, capital
structure, income taxes or historical cost basis;
* operating performance and return on invested capital compared to those of
other companies in the retail distribution of refined petroleum products,
without regard to financing methods and capital structure;
* ability to generate cash sufficient to pay interest on our indebtedness
and to make distributions to our partners; and
* the viability of acquisitions and capital expenditure projects and the
overall rates of return of alternative investment opportunities.
The method of calculating Adjusted EBITDA may not be consistent with that of
other companies, and EBITDA and Adjusted EBITDA both have limitations as
analytical tools and so should not be viewed in isolation but in conjunction
with measurements that are computed in accordance with GAAP. Some of the
limitations of EBITDA and Adjusted EBITDA are as follows:
* EBITDA and Adjusted EBITDA do not reflect cash used for capital
expenditures;
* although depreciation and amortization are non-cash charges, the assets
being depreciated or amortized often will have to be replaced and EBITDA and
Adjusted EBITDA do not reflect the cash requirements for such replacements;
* EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements
for, working capital;
* EBITDA and Adjusted EBITDA do not reflect the cash necessary to make
payments of interest or principal on indebtedness; and
* EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.
REMINDER:
Members of Star's management team will host a webcast and conference call at
11:00 a.m. Eastern Time tomorrow, May 2, 2024. The webcast will be accessible
on the company's website, at www.stargrouplp.com, and the telephone number for
the conference call is 888-346-3470 (or 412-317-5169 for international
callers).
About Star Group, L.P.
Star Group, L.P. is a full service provider specializing in the sale of home
heating products and services to residential and commercial customers to heat
their homes and buildings. The Company also sells and services heating and air
conditioning equipment to its home heating oil and propane customers and, to a
lesser extent, provides these offerings to customers outside of its home
heating oil and propane customer base. Star also sells diesel, gasoline and
home heating oil on a delivery only basis. We believe Star is the nation's
largest retail distributor of home heating oil based upon sales volume.
Including its propane locations, Star serves customers in the more northern
and eastern states within the Northeast and Mid-Atlantic U.S. regions.
Additional information is available by obtaining the Company's SEC filings at
www.sec.gov and by visiting Star's website at www.stargrouplp.com, where unit
holders may request a hard copy of Star's complete audited financial
statements free of charge.
Forward Looking Information
This news release includes "forward-looking statements" which represent the
Company's expectations or beliefs concerning future events that involve risks
and uncertainties, including the impact of geopolitical events on wholesale
product cost volatility, the price and supply of the products that we sell,
our ability to purchase sufficient quantities of product to meet our
customer's needs, rapid increases in levels of inflation, the consumption
patterns of our customers, our ability to obtain satisfactory gross profit
margins, the effect of weather conditions on our financial performance, our
ability to obtain new customers and retain existing customers, our ability to
make strategic acquisitions, the impact of litigation, natural gas conversions
and electrification of heating systems, pandemic and future global health
pandemics, recessionary economic conditions, future union relations and the
outcome of current and future union negotiations, the impact of current and
future governmental regulations, including climate change, environmental,
health, and safety regulations, the ability to attract and retain employees,
customer credit worthiness, counterparty credit worthiness, marketing plans,
cyber-attacks, global supply chain issues, labor shortages and new technology,
including alternative methods for heating and cooling residences. All
statements other than statements of historical facts included in this Report
including, without limitation, the statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and elsewhere
herein, are forward-looking statements. Without limiting the foregoing, the
words "believe," "anticipate," "plan," "expect," "seek," "estimate," and
similar expressions are intended to identify forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such expectations
will prove to be correct. Actual results may differ materially from those
projected as a result of certain risks and uncertainties. These risks and
uncertainties include, but are not limited to, those set forth under the
heading "Risk Factors" and "Business Strategy" in our Annual Report on Form
10-K (the "Form 10-K") for the fiscal year ended September 30, 2023. Important
factors that could cause actual results to differ materially from the
Company's expectations ("Cautionary Statements") are disclosed in this news
release and in the Company's Form 10-K and our Quarterly Reports on Form 10-Q.
All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements. Unless otherwise required by law, the
Company undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise
after the date of this news release.
(financials follow)
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, September 30,
(in thousands) 2024 2023
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 12,063 $ 45,191
Receivables, net of allowance of $8,896 and $8,375, respectively 198,280 114,079
Inventories 63,293 56,463
Fair asset value of derivative instruments 222 10,660
Weather hedge contract receivable 7,498 -
Prepaid expenses and other current assets 28,574 28,308
Total current assets 309,930 254,701
Property and equipment, net 106,141 105,404
Operating lease right-of-use assets 87,834 90,643
Goodwill 268,360 262,103
Intangibles, net 81,359 76,306
Restricted cash 250 250
Captive insurance collateral 72,811 70,717
Deferred charges and other assets, net 13,067 15,354
Total assets $ 939,752 $ 875,478
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Accounts payable $ 37,597 $ 35,609
Revolving credit facility borrowings 29,239 240
Fair liability value of derivative instruments 2,189 118
Current maturities of long-term debt 16,500 20,500
Current portion of operating lease liabilities 18,030 18,085
Accrued expenses and other current liabilities 147,796 115,606
Unearned service contract revenue 72,900 63,215
Customer credit balances 51,276 111,508
Total current liabilities 375,527 364,881
Long-term debt 119,189 127,327
Long-term operating lease liabilities 74,615 77,600
Deferred tax liabilities, net 23,207 25,771
Other long-term liabilities 16,079 16,175
Partners' capital
Common unitholders 348,382 281,862
General partner (4,544 ) (4,615 )
Accumulated other comprehensive loss, net of taxes (12,703 ) (13,523 )
Total partners' capital 331,135 263,724
Total liabilities and partners' capital $ 939,752 $ 875,478
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Six Months Ended March 31,
Ended March 31,
(in thousands, except per 2024 2023 2024 2023
unit data - unaudited)
Sales:
Product $ 595,298 $ 669,212 $ 1,043,848 $ 1,239,141
Installations 70,734 68,405 150,280 146,663
and services
Total 666,032 737,617 1,194,128 1,385,804
sales
Cost and
expenses:
Cost of 389,394 466,267 692,732 885,360
product
Cost of installations 70,592 68,311 145,699 144,854
and services
(Increase) decrease in the fair (11,752 ) 3,022 7,278 20,658
value of derivative instruments
Delivery and 104,085 95,942 198,449 193,878
branch expenses
Depreciation and 7,748 7,626 16,134 15,463
amortization expenses
General and 6,887 6,698 13,908 13,554
administrative expenses
Finance (1,253 ) (1,764 ) (2,024 ) (3,083 )
charge income
Operating 100,331 91,515 121,952 115,120
income
Interest (3,838 ) (4,963 ) (7,056 ) (9,237 )
expense, net
Amortization of (249 ) (258 ) (499 ) (587 )
debt issuance costs
Income before 96,244 86,294 114,397 105,296
income taxes
Income tax 27,870 24,253 33,044 29,716
expense
Net $ 68,374 $ 62,041 $ 81,353 $ 75,580
income
General Partner's 620 562 738 684
interest in net income
Limited Partners' $ 67,754 $ 61,479 $ 80,615 $ 74,896
interest in net income
Per unit data (Basic
and Diluted):
Net income available $ 1.91 $ 1.72 $ 2.27 $ 2.09
to limited partners
Dilutive impact of theoretical 0.35 0.30 0.39 0.35
distribution of earnings
Basic and diluted income $ 1.56 $ 1.42 $ 1.88 $ 1.74
per Limited Partner Unit:
Weighted average number of Limited Partner 35,549 35,653 35,571 35,786
units outstanding (Basic and Diluted)
SUPPLEMENTAL INFORMATION
STAR GROUP, L.P. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(Unaudited)
Three Months Ended March 31,
(in thousands) 2024 2023
Net income $ 68,374 $ 62,041
Plus:
Income tax expense 27,870 24,253
Amortization of debt issuance costs 249 258
Interest expense, net 3,838 4,963
Depreciation and amortization 7,748 7,626
EBITDA 108,079 99,141
(Increase) / decrease in the fair value of derivative instruments (11,752 ) 3,022
Adjusted EBITDA 96,327 102,163
Add / (subtract)
Income tax expense (27,870 ) (24,253 )
Interest expense, net (3,838 ) (4,963 )
Provision for losses on accounts receivable 3,023 3,722
Increase in accounts receivables (14,119 ) (9,600 )
Decrease in inventories 21,332 40,326
Decrease in customer credit balances (39,763 ) (27,068 )
Change in deferred taxes (1,165 ) (11,155 )
Change in other operating assets and liabilities 21,202 9,736
Net cash provided by operating activities $ 55,129 $ 78,908
Net cash used in investing activities $ (23,342 ) $ (2,013 )
Net cash used in financing activities $ (39,649 ) $ (77,401 )
Home heating oil and propane gallons sold 117,100 121,100
Other petroleum products 30,200 33,200
Total all products 147,300 154,300
SUPPLEMENTAL INFORMATION
STAR GROUP, L.P. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(Unaudited)
Six Months Ended March 31,
(in thousands) 2024 2023
Net income $ 81,353 $ 75,580
Plus:
Income tax expense 33,044 29,716
Amortization of debt issuance costs 499 587
Interest expense, net 7,056 9,237
Depreciation and amortization 16,134 15,463
EBITDA 138,086 130,583
(Increase) / decrease in the fair value of derivative instruments 7,278 20,658
Adjusted EBITDA 145,364 151,241
Add / (subtract)
Income tax expense (33,044 ) (29,716 )
Interest expense, net (7,056 ) (9,237 )
Provision for losses on accounts receivable 3,672 4,768
Increase in accounts receivables (87,709 ) (124,764 )
(Increase) decrease in inventories (5,473 ) 11,609
Decrease in customer credit balances (61,615 ) (41,768 )
Change in deferred taxes (2,756 ) (12,379 )
Change in other operating assets and liabilities 43,438 36,413
Net cash used in operating activities $ (5,179 ) $ (13,833 )
Net cash used in investing activities $ (29,217 ) $ (4,099 )
Net cash provided by financing activities $ 1,268 $ 25,397
Home heating oil and propane gallons sold 197,300 210,300
Other petroleum products 62,500 68,800
Total all products 259,800 279,100
CONTACT:
Star Group, L.P. Chris Witty
Investor Relations Darrow Associates
203/328-7310 646/438-9385 or cwitty@darrowir.com
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