STAR GROUP, L.P. Three Months Ended
For the fiscal 2024 first quarter, Star reported an 18.5 percent decrease in total revenue to
Star’s net income decreased by
The Company reported first quarter Adjusted EBITDA (a non-GAAP measure defined below) of
“The beginning of fiscal 2024 has provided both challenges and opportunities, which we believe we have navigated well,”
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
About
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
(financials follow)
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | 2023 | 2023 | ||||||
| ASSETS | (unaudited) | |||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 19,925 | $ | 45,191 | ||||
| Receivables, net of allowance of | 187,122 | 114,079 | ||||||
| Inventories | 84,033 | 56,463 | ||||||
| Fair asset value of derivative instruments | — | 10,660 | ||||||
| Prepaid expenses and other current assets | 38,409 | 28,308 | ||||||
| Total current assets | 329,489 | 254,701 | ||||||
| Property and equipment, net | 105,158 | 105,404 | ||||||
| Operating lease right-of-use assets | 87,725 | 90,643 | ||||||
| 262,347 | 262,103 | |||||||
| Intangibles, net | 73,969 | 76,306 | ||||||
| Restricted cash | 250 | 250 | ||||||
| Captive insurance collateral | 72,020 | 70,717 | ||||||
| Deferred charges and other assets, net | 13,981 | 15,354 | ||||||
| Total assets | $ | 944,939 | $ | 875,478 | ||||
| LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 45,881 | $ | 35,609 | ||||
| Revolving credit facility borrowings | 51,877 | 240 | ||||||
| Fair liability value of derivative instruments | 14,832 | 118 | ||||||
| Current maturities of long-term debt | 20,625 | 20,500 | ||||||
| Current portion of operating lease liabilities | 17,923 | 18,085 | ||||||
| Accrued expenses and other current liabilities | 118,382 | 115,606 | ||||||
| Unearned service contract revenue | 75,371 | 63,215 | ||||||
| Customer credit balances | 90,916 | 111,508 | ||||||
| Total current liabilities | 435,807 | 364,881 | ||||||
| Long-term debt | 123,258 | 127,327 | ||||||
| Long-term operating lease liabilities | 74,752 | 77,600 | ||||||
| Deferred tax liabilities, net | 24,172 | 25,771 | ||||||
| Other long-term liabilities | 16,298 | 16,175 | ||||||
| Partners’ capital | ||||||||
| Common unitholders | 288,789 | 281,862 | ||||||
| General partner | (4,831 | ) | (4,615 | ) | ||||
| Accumulated other comprehensive loss, net of taxes | (13,306 | ) | (13,523 | ) | ||||
| Total partners’ capital | 270,652 | 263,724 | ||||||
| Total liabilities and partners’ capital | $ | 944,939 | $ | 875,478 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| Three Months Ended | ||||||||
| (in thousands, except per unit data - unaudited) | 2023 | 2022 | ||||||
| Sales: | ||||||||
| Product | $ | 448,550 | $ | 569,929 | ||||
| Installations and services | 79,546 | 78,258 | ||||||
| Total sales | 528,096 | 648,187 | ||||||
| Cost and expenses: | ||||||||
| Cost of product | 303,338 | 419,093 | ||||||
| Cost of installations and services | 75,107 | 76,543 | ||||||
| (Increase) decrease in the fair value of derivative instruments | 19,030 | 17,636 | ||||||
| Delivery and branch expenses | 94,364 | 97,936 | ||||||
| Depreciation and amortization expenses | 8,386 | 7,837 | ||||||
| General and administrative expenses | 7,021 | 6,856 | ||||||
| Finance charge income | (771 | ) | (1,319 | ) | ||||
| Operating income | 21,621 | 23,605 | ||||||
| Interest expense, net | (3,218 | ) | (4,274 | ) | ||||
| Amortization of debt issuance costs | (250 | ) | (329 | ) | ||||
| Income before income taxes | 18,153 | 19,002 | ||||||
| Income tax expense | 5,174 | 5,463 | ||||||
| Net income | $ | 12,979 | $ | 13,539 | ||||
| General Partner’s interest in net income | 118 | 122 | ||||||
| Limited Partners’ interest in net income | $ | 12,861 | $ | 13,417 | ||||
| Per unit data (Basic and Diluted): | ||||||||
| Net income available to limited partners | $ | 0.36 | $ | 0.37 | ||||
| Dilutive impact of theoretical distribution of earnings | 0.04 | 0.04 | ||||||
| Basic and diluted income per Limited Partner Unit: | $ | 0.32 | $ | 0.33 | ||||
| Weighted average number of Limited Partner units outstanding (Basic and Diluted) | 35,593 | 35,916 | ||||||
| SUPPLEMENTAL INFORMATION RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Net income | $ | 12,979 | $ | 13,539 | ||||
| Plus: | ||||||||
| Income tax expense | 5,174 | 5,463 | ||||||
| Amortization of debt issuance costs | 250 | 329 | ||||||
| Interest expense, net | 3,218 | 4,274 | ||||||
| Depreciation and amortization | 8,386 | 7,837 | ||||||
| EBITDA | 30,007 | 31,442 | ||||||
| (Increase) / decrease in the fair value of derivative instruments | 19,030 | 17,636 | ||||||
| Adjusted EBITDA | 49,037 | 49,078 | ||||||
| Add / (subtract) | ||||||||
| Income tax expense | (5,174 | ) | (5,463 | ) | ||||
| Interest expense, net | (3,218 | ) | (4,274 | ) | ||||
| Provision for losses on accounts receivable | 649 | 1,046 | ||||||
| Increase in accounts receivables | (73,590 | ) | (115,164 | ) | ||||
| Increase in inventories | (26,805 | ) | (28,717 | ) | ||||
| Decrease in customer credit balances | (21,852 | ) | (14,700 | ) | ||||
| Change in deferred taxes | (1,591 | ) | (1,224 | ) | ||||
| Change in other operating assets and liabilities | 22,236 | 26,677 | ||||||
| Net cash used in operating activities | $ | (60,308 | ) | $ | (92,741 | ) | ||
| Net cash used in investing activities | $ | (5,875 | ) | $ | (2,086 | ) | ||
| Net cash provided by financing activities | $ | 40,917 | $ | 102,798 | ||||
| Home heating oil and propane gallons sold | 80,100 | 89,200 | ||||||
| Other petroleum products | 32,400 | 35,600 | ||||||
| Total all products | 112,500 | 124,800 | ||||||
| CONTACT: | ||
| Investor Relations | ||
| 203/328-7310 | 646/438-9385 or cwitty@darrowir.com |
2024 GlobeNewswire, Inc., source
