Star Group(SGU) - 2024 Q4 - Annual Results

Financial Performance Overview Fourth Quarter Fiscal 2024 Results (vs. Q4 2023) Q4 FY2024 revenue decreased 10.0% to $240.3M; net loss widened to $35.1M, Adjusted EBITDA loss narrowed to $29.7M Q4 FY2024 vs. Q4 FY2023 Financial Highlights | Metric | Q4 2024 ($) | Q4 2023 ($) | Change ($/%) | | :--- | :--- | :--- | :--- | | Total Revenue | $240.3M | $266.9M | -10.0% | | Net Loss | ($35.1M) | ($19.7M) | +$15.4M | | Adjusted EBITDA Loss | ($29.7M) | ($31.4M) | -$1.7M | | Volume Sold (HHO & Propane) (gallons) | 18.5M | 18.8M | -1.5% | - The increase in net loss was primarily driven by a $28.4 million unfavorable change in the fair value of derivative instruments, which was only partially offset by factors like a higher income tax benefit and a smaller Adjusted EBITDA loss[4] - The improvement in Adjusted EBITDA loss was attributed to higher home heating oil and propane per-gallon margins, increased profitability from service and installations, and contributions from acquisitions[5] Full Fiscal Year 2024 Results (vs. FY 2023) FY2024 revenue decreased 9.6% to $1.8B; net income increased to $35.2M, and Adjusted EBITDA rose to $111.6M Fiscal Year 2024 vs. 2023 Financial Highlights | Metric | FY 2024 ($) | FY 2023 ($) | Change ($/%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1.8B | $2.0B | -9.6% | | Net Income | $35.2M | $31.9M | +$3.3M | | Adjusted EBITDA | $111.6M | $96.9M | +$14.7M | | Volume Sold (HHO & Propane) (gallons) | 253.4M | 259.2M | -2.2% | - Temperatures during fiscal 2024 were comparable to the prior year but were 15.1% warmer than normal, impacting energy consumption[7] - The increase in Adjusted EBITDA was primarily due to higher home heating oil and propane per-gallon margins, increased service and installation profitability, and contributions from acquisitions[9] Management Commentary CEO highlighted FY2024 Adjusted EBITDA growth, focusing on cost containment, acquisitions, and 4.2% customer attrition - Despite slightly lower volumes and selling prices, full-year Adjusted EBITDA rose by $14.7 million, driven by improved margins and service profitability[6] - Key strategic priorities include cost containment and the pursuit of attractive acquisitions[6] - The company is vigilant in addressing net customer attrition, which stood at 4.2% in fiscal 2024, a slight increase year-over-year[6] Financial Statements Consolidated Balance Sheets Total assets increased to $939.6M as of Sept 30, 2024, driven by cash and long-term debt; partners' capital stable Key Balance Sheet Items (in thousands) | Account | Sept 30, 2024 (thousands $) | Sept 30, 2023 (thousands $) | | :--- | :--- | :--- | | Cash and cash equivalents | $117,335 | $45,191 | | Total current assets | $281,469 | $254,701 | | Total assets | $939,611 | $875,478 | | Total current liabilities | $373,796 | $364,881 | | Long-term debt | $187,811 | $127,327 | | Total partners' capital | $263,893 | $263,724 | Consolidated Statements of Operations FY2024 sales decreased to $1.77B, net income rose to $35.2M; Q4 net loss widened to $35.1M from derivatives Full Fiscal Year 2024 vs. 2023 (in thousands) | Metric | FY 2024 (thousands $) | FY 2023 (thousands $) | | :--- | :--- | :--- | | Total Sales | $1,766,099 | $1,952,862 | | Operating Income | $61,102 | $62,545 | | Net Income | $35,223 | $31,945 | | Basic and Diluted EPS ($) | $0.90 | $0.81 | Fourth Quarter 2024 vs. 2023 (in thousands) | Metric | Q4 2024 (thousands $) | Q4 2023 (thousands $) | | :--- | :--- | :--- | | Total Sales | $240,331 | $266,937 | | Operating Loss | ($48,559) | ($22,989) | | Net Loss | ($35,086) | ($19,729) | | Basic and Diluted EPS ($) | ($1.00) | ($0.55) | Non-GAAP Financial Measures Definition and Use of EBITDA & Adjusted EBITDA EBITDA and Adjusted EBITDA are non-GAAP measures for financial performance and debt servicing, with cash limitations - EBITDA and Adjusted EBITDA are used by management and investors to assess: - Compliance with debt covenants - Financial and operating performance compared to peers - Ability to generate cash for interest payments and distributions - Viability of acquisitions and investments[11] - Limitations of these non-GAAP measures include that they do not reflect cash used for capital expenditures, asset replacements, working capital, debt payments, or taxes[12] Reconciliation of Net Income (Loss) to Adjusted EBITDA Reconciliation of GAAP net income (loss) to Adjusted EBITDA: FY2024 $35.2M to $111.6M; Q4 $35.1M to $29.7M loss Q4 2024 Reconciliation (in thousands) | Metric | Amount (thousands $) | | :--- | :--- | | Net Loss | ($35,086) | | Adjustments (Taxes, Interest, D&A) | ($5,356) | | EBITDA | ($40,442) | | Change in fair value of derivatives | $10,756 | | Adjusted EBITDA | ($29,686) | Fiscal Year 2024 Reconciliation (in thousands) | Metric | Amount (thousands $) | | :--- | :--- | | Net Income | $35,223 | | Adjustments (Taxes, Interest, D&A) | $57,373 | | EBITDA | $92,596 | | Change in fair value of derivatives | $19,018 | | Adjusted EBITDA | $111,614 | Corporate Information About Star Group, L.P. Star Group, L.P. is the largest U.S. retail home heating oil distributor, offering services in Northeast and Mid-Atlantic regions - Star Group is a full-service provider of home heating products and services to residential and commercial customers[14] - The company believes it is the largest retail distributor of home heating oil in the U.S. by sales volume[14] - Its primary operational areas are the northern and eastern states within the Northeast and Mid-Atlantic U.S. regions[14] Forward-Looking Statements Forward-looking statements are subject to risks like cost volatility, inflation, weather, and regulatory changes, no updates - The news release includes forward-looking statements that are not guarantees of future performance and involve risks and uncertainties[15] - Identified risks include, but are not limited to, wholesale product cost volatility, inflation, weather conditions, customer attrition, strategic acquisitions, and the impact of governmental regulations like those related to climate change[15][16]