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

STAMFORD, Conn., Feb. 05, 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 first quarter, the three month period ended December 31, 2024.

Three Months Ended December 31, 2024 Compared to the Three Months Ended December 31, 2023
For the fiscal 2025 first quarter, Star reported a 7.6 percent decrease in total revenue to $488.1 million compared with $528.1 million in the prior-year period, reflecting lower average petroleum prices even as product volumes rose slightly year-over-year and service and installation revenue increased. The volume of home heating oil and propane sold during the fiscal 2025 first quarter rose by 2.3 million gallons, or 2.8 percent, to 82.4 million gallons, as the additional volume provided from acquisitions and colder temperatures was only slightly offset by the impact of net customer attrition and other factors. Temperatures in Star’s geographic areas of operation for the three months ended December 31, 2024 were 4.1 percent colder than the three months ended December 31, 2023 but 10.5 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 $0.4969 per gallon, or 18.4 percent, compared to the prior-year period.

Star’s net income increased by $19.9 million in the quarter, to $32.9 million, as a favorable change in the fair value of derivative instruments of $24.3 million, a $2.8 million increase in Adjusted EBITDA, and a $0.5 million decrease in depreciation and amortization expenses was only partially offset by a $7.8 million increase in income taxes.

The Company reported first quarter Adjusted EBITDA (a non-GAAP measure defined below) of $51.9 million, or $2.8 million more than in the prior-year period, as a $4.0 million increase in Adjusted EBITDA from recent acquisitions and higher per gallon margins in the base business more than offset the impact of a 3.8 million gallon decrease in home heating oil and propane volume sold in the base business.

“The first quarter was a busy one for Star due to acquisition-related activities combined with slightly colder temperatures,” said Jeff Woosnam, Star Group’s President and Chief Executive Officer. “While selling prices fell, volumes rose modestly year-over-year, and we continued to improve the performance and contribution of our service and installation business concurrently. As previously announced, we completed a sizable strategic acquisition after the quarter ended. We believe this has further strengthened our propane presence within the Company’s existing operating footprint, and we’re excited to welcome our new employees and a well-known brand to the Star Group family. Looking ahead, we’re benefitting from colder temperatures thus far in the second quarter and, with our ongoing focus on service quality and reliability, believe we are well positioned for the remainder of the year.”

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, 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, February 6, 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 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 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.

(financials follow)