Star Group, L.P. Reports Fiscal 2025 Second Quarter Results

STAMFORD, Conn., May 07, 2025 (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 2025 second quarter, the three month period ended March 31, 2025. Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024For the fiscal 2025 second quarter, Star reported an 11.6 percent increase in total revenue to $743.0 million compared with $666.0 million in the prior-year period, largely reflecting higher volumes sold, which more than offset the impact from lower selling prices for petroleum products. The volume of home heating oil and propane sold during the fiscal 2025 second quarter rose by 26.8 million gallons, or 22.9 percent, to 143.9 million gallons, as the additional volume provided from colder weather, acquisitions and other factors more than offset the impact of net customer attrition. Temperatures in Star's geographic areas of operation for the three months ended March 31, 2025 were 12.9 percent colder than the three months ended March 31, 2024 but 4.5 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 $0.2887 per gallon, or 10.9 percent. Star’s net income increased by $17.5 million in the quarter, to $85.9 million, as a $31.9 million increase in Adjusted EBITDA was partially offset by a $6.9 million greater income tax expense, a $5.7 million unfavorable change in the fair value of derivative instruments, $1.2 million of higher depreciation and amortization expenses and a $0.7 million increase in net interest expense. The Company reported second quarter Adjusted EBITDA (a non-GAAP measure defined below) of $128.2 million, versus $96.3 million in fiscal 2024, due to higher home heating oil and propane per-gallon margins and an increase in volume sold due to colder weather and recent acquisitions. This more than offset the negative impact year-over-year – $9.6 million – from the Company’s weather hedge. The temperatures experienced during the second quarter of fiscal 2025 were colder than the strike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $3.1 million. This compares to the prior-year period which, due to warmer weather, the Company recorded a credit of $6.5 million under its weather hedge contract. “Our performance this quarter was positively impacted by recent acquisitions and weather that, while 4.5 percent warmer than normal, was almost 13 percent colder than in fiscal 2024. This led to a nearly 23 percent volume increase in home heating oil and propane versus the prior-year period,” said Jeff Woosnam, Star Group’s President and Chief Executive Officer. “Since February 1, 2024 we’ve completed $126.5 million of acquisitions, some of which were acquired during our current heating season and, therefore, are not fully reflected in our results. In addition, we recently raised our annual dividend by 5 cents, to 74 cents per unit. As we near the end of the heating season, we continue to focus on operational execution and efficiency and expanding our HVAC business while remaining committed to the best in customer service. We are pleased with our results year-to-date and look forward to enhancing our services in the months to come.” Six Months Ended March 31, 2025 Compared to the Six Months Ended March 31, 2024For the six months ended March 31, 2025, Star reported a 3.1 percent increase in total revenue to $1.2 billion, reflecting higher volumes sold, offsetting 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 2025 increased by 29.0 million gallons, or 14.7 percent, to 226.3 million gallons, reflecting colder temperatures, the additional volume provided from acquisitions and other factor, more than offsetting net customer attrition. Temperatures in Star’s geographic areas of operation fiscal year-to-date were 9.4 percent colder than during the prior-year period but 6.8 percent warmer than normal, as reported by the National Oceanic and Atmospheric Administration. Star’s net income increased by $37.4 million for the first six months of fiscal 2025, to $118.8 million, primarily due to $34.7 million of higher Adjusted EBITDA and an $18.6 million favorable change in the fair value of derivative instruments that was partially offset by a $14.8 million higher income tax provision, a $0.7 million increase in depreciation and amortization expenses and a $0.4 million increase in net interest expense. Year-to-date Adjusted EBITDA increased by $34.7 million, to $180.0 million, compared to the prior-year period due to an increase in home heating oil and propane per-gallon margins and volume, reflecting acquisitions and colder weather, more than offsetting a $10.6 million reduction in the Company’s weather hedge benefit. The temperatures experienced during the weather hedge period ending March 31, 2025 were colder than the strike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $3.1 million. This compares to the prior-year period which, due to warmer weather, the Company recorded a credit of $7.5 million under its weather hedge contract. 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; andthe 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; andEBITDA 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 8, 2025. 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 InformationThis 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, tariff regimes, including newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, 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 operational and 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, 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, 2024. 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. STAR GROUP, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS March 31, September 30,(in thousands) 2025 2024ASSETS (unaudited) Current assets Cash and cash equivalents $18,502 $117,335 Receivables, net of allowance of $7,149 and $6,434, respectively 216,542 94,981 Inventories 65,941 41,587 Prepaid expenses and other current assets 29,822 27,566 Total current assets 330,807 281,469 Property and equipment, net 127,970 104,534 Operating lease right-of-use assets 92,344 91,141 Goodwill 292,457 275,829 Intangibles, net 126,578 98,712 Restricted cash 250 250 Captive insurance collateral 76,496 74,851 Deferred charges and other assets, net 12,564 12,825 Total assets $1,059,466 $939,611 LIABILITIES AND PARTNERS’ CAPITAL Current liabilities Accounts payable $45,277 $31,547 Revolving credit facility borrowings 22,348 5 Fair liability value of derivative instruments 1,629 13,971 Current maturities of long-term debt 21,000 21,000 Current portion of operating lease liabilities 21,117 19,832 Accrued expenses and other current liabilities 154,455 116,317 Unearned service contract revenue 75,732 66,424 Customer credit balances 44,537 104,700 Total current liabilities 386,095 373,796 Long-term debt 177,494 187,811 Long-term operating lease liabilities 75,700 75,916 Deferred tax liabilities, net 33,589 21,922 Other long-term liabilities 16,007 16,273 Partners’ capital Common unitholders 387,603 282,058 General partner (5,340) (5,714)Accumulated other comprehensive loss, net of taxes (11,682) (12,451)Total partners’ capital 370,581 263,893 Total liabilities and partners’ capital $1,059,466 $939,611 STAR GROUP, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three MonthsEnded March 31, Six Months Ended March 31,(in thousands, except per unit data - unaudited) 2025 2024 2025 2024 Sales: Product $665,105 $595,298 $1,064,564 $1,043,848 Installations and services 77,940 70,734 166,544 150,280 Total sales 743,045 666,032 1,231,108 1,194,128 Cost and expenses: Cost of product 406,950 389,394 655,649 692,732 Cost of installations and services 76,210 70,592 157,875 145,699 (Increase) decrease in the fair value of derivative instruments (6,101) (11,752) (11,359) 7,278 Delivery and branch expenses 124,927 104,085 224,254 198,449 Depreciation and amortization expenses 8,912 7,748 16,815 16,134 General and administrative expenses 8,187 6,887 15,370 13,908 Finance charge income (1,412) (1,253) (2,087) (2,024)Operating income 125,372 100,331 174,591 121,952 Interest expense, net (4,464) (3,838) (7,475) (7,056)Amortization of debt issuance costs (230) (249) (530) (499)Income before income taxes $120,678 $96,244 $166,586 $114,397 Income tax expense 34,767 27,870 47,791 33,044 Net income $85,911 $68,374 $118,795 $81,353 General Partner’s interest in net income 802 620 1,109 738 Limited Partners’ interest in net income $85,109 $67,754 $117,686 $80,615 Per unit data (Basic and Diluted): Net income available to limited partners $2.46 $1.91 $3.40 $2.27 Dilutive impact of theoretical distribution of earnings 0.45 0.35 0.60 0.39 Basic and diluted income per Limited Partner Unit: $2.01 $1.56 $2.80 $1.88 Weighted average number of Limited Partner units outstanding (Basic and Diluted) 34,569 35,549 34,578 35,571 SUPPLEMENTAL INFORMATIONSTAR GROUP, L.P. AND SUBSIDIARIESRECONCILIATION OF EBITDA AND ADJUSTED EBITDA(Unaudited) Three Months Ended March 31,(in thousands) 2025 2024 Net income $85,911 $68,374 Plus: Income tax expense 34,767 27,870 Amortization of debt issuance costs 230 249 Interest expense, net 4,464 3,838 Depreciation and amortization 8,912 7,748 EBITDA 134,284 108,079 (Increase) / decrease in the fair value of derivative instruments (6,101) (11,752)Adjusted EBITDA 128,183 96,327 Add / (subtract) Income tax expense (34,767) (27,870)Interest expense, net (4,464) (3,838)Provision for losses on accounts receivable 2,987 3,023 Increase in accounts receivables (43,246) (14,119)Decrease in inventories 4,520 21,332 Decrease in customer credit balances (45,201) (39,763)Change in deferred taxes 8,737 (1,165)Change in other operating assets and liabilities 31,856 21,202 Net cash provided by operating activities $48,605 $55,129 Net cash used in investing activities $(81,755) $(23,342)Net cash provided by (used in) financing activities $2,860 $(39,649) Home heating oil and propane gallons sold 143,900 117,100 Other petroleum products 28,900 30,200 Total all products 172,800 147,300 SUPPLEMENTAL INFORMATIONSTAR GROUP, L.P. AND SUBSIDIARIESRECONCILIATION OF EBITDA AND ADJUSTED EBITDA(Unaudited) Six Months Ended March 31,(in thousands) 2025 2024 Net income $118,795 $81,353 Plus: Income tax expense 47,791 33,044 Amortization of debt issuance costs 530 499 Interest expense, net 7,475 7,056 Depreciation and amortization 16,815 16,134 EBITDA 191,406 138,086 (Increase) / decrease in the fair value of derivative instruments (11,359) 7,278 Adjusted EBITDA 180,047 145,364 Add / (subtract) Income tax expense (47,791) (33,044)Interest expense, net (7,475) (7,056)Provision for losses on accounts receivable 3,169 3,672 Increase in accounts receivables (124,722) (87,709)Increase in inventories (22,150) (5,473)Decrease in customer credit balances (61,400) (61,615)Change in deferred taxes 11,404 (2,756)Change in other operating assets and liabilities 52,959 43,438 Net cash used in operating activities $(15,959) $(5,179)Net cash used in investing activities $(86,407) $(29,217)Net cash provided by financing activities $3,533 $1,268 Home heating oil and propane gallons sold 226,300 197,300 Other petroleum products 59,600 62,500 Total all products 285,900 259,800 CONTACT: Star Group, L.P. Chris WittyInvestor Relations Darrow Associates203/328-7310 646/438-9385 or cwitty@darrowir.com

Star Group, L.P. Reports Fiscal 2025 Second Quarter Results

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