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`

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-14129

STAR GROUP, L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware

06-1437793

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

9 West Broad Street

Stamford, Connecticut

06902

(Address of principal executive office)

(Zip Code)

 

Registrant’s telephone number, including area code: (203) 328-7310

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Units

 

SGU

 

New York Stock Exchange

Common Unit Purchase Rights

 

N/A

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

 

 

 

 

Non- accelerated filer

☐

Smaller reporting company

☐

 

 

 

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At January 31, 2024, the registrant had 35,574,434 Common Units outstanding.

 

 

 

 

STAR GROUP, L.P. AND SUBSIDIARIES

INDEX TO FORM 10-Q

 

 

Page

Part I Financial Information

 

 

Item 1 - Condensed Consolidated Financial Statements

 

3

Condensed Consolidated Balance Sheets as of December 31, 2023 (unaudited) and September 30, 2023

 

3

Condensed Consolidated Statements of Operations (unaudited) for the three months ended December 31, 2023 and December 31, 2022

 

4

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended December 31, 2023 and December 31, 2022

 

5

Condensed Consolidated Statement of Partners’ Capital (unaudited) for the three months ended December 31, 2023 and December 31, 2022

 

6

Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended December 31, 2023 and December 31, 2022

 

7

Notes to Condensed Consolidated Financial Statements (unaudited)

 

8-19

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

20-32

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

 

33

Item 4 - Controls and Procedures

 

33

Part II Other Information:

 

34

Item 1 - Legal Proceedings

 

34

Item 1A - Risk Factors

 

34

Item 2 - Purchase of Equity Securities by Issuer

 

34

Item 3 - Defaults Upon Senior Securities

 

34

Item 4 - Mine Safety Disclosures

 

34

Item 5 - Other Information

 

34

Item 6 - Exhibits

 

35

Signatures

 

36

2

 

Part I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

 

 

September 30,

 

 

 

2023

 

 

2023

 

(in thousands)

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,925

 

 

$

45,191

 

Receivables, net of allowance of $8,074 and $8,375, respectively

 

 

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

 

Goodwill

 

 

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

 

See accompanying notes to condensed consolidated financial statements.

3

 

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months
Ended December 31,

 

(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

 

 

 

 

 

 

Basic and diluted income per Limited Partner Unit (1):

 

$

0.32

 

$

0.33

 

Weighted average number of Limited Partner units outstanding:

 

 

 

 

 

Basic and Diluted

 

 

35,593

 

 

35,916

 

 

(1) See Note 15 - Earnings Per Limited Partner Unit.

See accompanying notes to condensed consolidated financial statements.

4

 

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

 

 

Three Months
Ended December 31,

 

(in thousands - unaudited)

 

2023

 

2022

 

Net income

 

$

12,979

 

$

13,539

 

Other comprehensive income:

 

 

 

 

 

Unrealized gain on pension plan obligation

 

 

319

 

 

380

 

Tax effect of unrealized gain on pension plan obligation

 

 

(75

)

 

(97

)

Unrealized gain on captive insurance collateral

 

 

932

 

 

355

 

Tax effect of unrealized gain on captive insurance collateral

 

 

(202

)

 

(74

)

Unrealized loss on interest rate hedges

 

 

(1,042

)

 

(377

)

Tax effect of unrealized loss on interest rate hedges

 

 

285

 

 

102

 

Total other comprehensive income

 

 

217

 

 

289

 

Total comprehensive income

 

$

13,196

 

$

13,828

 

See accompanying notes to condensed consolidated financial statements.

 

5

 

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

 

 

 

Three Months Ended December 31, 2023

 

 

 

Number of Units

 

 

 

 

 

 

 

 

Accum. Other

 

 

Total

 

(in thousands - unaudited)

 

Common

 

 

General
Partner

 

 

Common

 

 

General
Partner

 

 

Comprehensive
Income (Loss)

 

 

Partners’
Capital

 

Balance as of September 30, 2023

 

 

35,603

 

 

 

326

 

 

$

281,862

 

 

$

(4,615

)

 

$

(13,523

)

 

$

263,724

 

Net income

 

 

—

 

 

 

—

 

 

 

12,861

 

 

 

118

 

 

 

—

 

 

 

12,979

 

Unrealized gain on pension plan obligation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

319

 

 

 

319

 

Tax effect of unrealized gain on pension plan obligation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(75

)

 

 

(75

)

Unrealized gain on captive insurance collateral

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

932

 

 

 

932

 

Tax effect of unrealized gain on captive insurance collateral

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(202

)

 

 

(202

)

Unrealized loss on interest rate hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,042

)

 

 

(1,042

)

Tax effect of unrealized loss on interest rate hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

285

 

 

 

285

 

Distributions

 

 

—

 

 

 

—

 

 

 

(5,784

)

 

 

(334

)

 

 

—

 

 

 

(6,118

)

Retirement of units

 

 

(13

)

 

 

—

 

 

 

(150

)

 

 

—

 

 

 

—

 

 

 

(150

)

Balance as of December 31, 2023 (unaudited)

 

 

35,590

 

 

 

326

 

 

$

288,789

 

 

$

(4,831

)

 

$

(13,306

)

 

$

270,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2022

 

 

 

Number of Units

 

 

 

 

 

 

 

 

Accum. Other

 

 

Total

 

(in thousands - unaudited)

 

Common

 

 

General
Partner

 

 

Common

 

 

General
Partner

 

 

Comprehensive
Income (Loss)

 

 

Partners’
Capital

 

Balance as of September 30, 2022

 

 

36,092

 

 

 

326

 

 

$

277,177

 

 

$

(3,656

)

 

$

(15,606

)

 

$

257,915

 

Net income

 

 

—

 

 

 

—

 

 

 

13,417

 

 

 

122

 

 

 

—

 

 

 

13,539

 

Unrealized gain on pension plan obligation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

380

 

 

 

380

 

Tax effect of unrealized gain on pension plan obligation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(97

)

 

 

(97

)

Unrealized gain on captive insurance collateral

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

355

 

 

 

355

 

Tax effect of unrealized gain on captive insurance collateral

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(74

)

 

 

(74

)

Unrealized loss on interest rate hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(377

)

 

 

(377

)

Tax effect of unrealized loss on interest rate hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

102

 

 

 

102

 

Distributions

 

 

—

 

 

 

—

 

 

 

(5,482

)

 

 

(292

)

 

 

—

 

 

 

(5,774

)

Retirement of units

 

 

(411

)

 

 

—

 

 

 

(3,596

)

 

 

—

 

 

 

—

 

 

 

(3,596

)

Balance as of December 31, 2022 (unaudited)

 

 

35,681

 

 

 

326

 

 

$

281,516

 

 

$

(3,826

)

 

$

(15,317

)

 

$

262,373

 

See accompanying notes to condensed consolidated financial statements.

 

6

 

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Three Months
Ended December 31,

 

(in thousands - unaudited)

 

2023

 

 

2022

 

Cash flows provided by (used in) operating activities:

 

 

 

 

 

 

Net income

 

$

12,979

 

 

$

13,539

 

Adjustment to reconcile net income to net cash provided by (used in)
   operating activities:

 

 

 

 

 

 

(Increase) decrease in fair value of derivative instruments

 

 

19,030

 

 

 

17,636

 

Depreciation and amortization

 

 

8,636

 

 

 

8,166

 

Provision for losses on accounts receivable

 

 

649

 

 

 

1,046

 

Change in deferred taxes

 

 

(1,591

)

 

 

(1,224

)

Change in weather hedge contracts

 

 

(980

)

 

 

350

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Increase in receivables

 

 

(73,590

)

 

 

(115,164

)

Increase in inventories

 

 

(26,805

)

 

 

(28,717

)

Decrease (increase) in other assets

 

 

704

 

 

 

(2,005

)

Increase in accounts payable

 

 

11,095

 

 

 

22,366

 

Decrease in customer credit balances

 

 

(21,852

)

 

 

(14,700

)

Increase in other current and long-term liabilities

 

 

11,417

 

 

 

5,966

 

Net cash used in operating activities

 

 

(60,308

)

 

 

(92,741

)

Cash flows provided by (used in) investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(3,174

)

 

 

(3,095

)

Proceeds from sales of fixed assets

 

 

185

 

 

 

215

 

Proceeds from sale of certain assets

 

 

—

 

 

 

2,202

 

Purchase of investments

 

 

(409

)

 

 

(215

)

Acquisitions

 

 

(2,477

)

 

 

(1,193

)

Net cash used in investing activities

 

 

(5,875

)

 

 

(2,086

)

Cash flows provided by (used in) financing activities:

 

 

 

 

 

 

Revolving credit facility borrowings

 

 

51,637

 

 

 

116,298

 

Term loan repayments

 

 

(4,000

)

 

 

(4,125

)

Distributions

 

 

(6,118

)

 

 

(5,774

)

Unit repurchases

 

 

(150

)

 

 

(3,596

)

Customer retainage payments

 

 

(452

)

 

 

(5

)

Net cash provided by financing activities

 

 

40,917

 

 

 

102,798

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(25,266

)

 

 

7,971

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

45,441

 

 

 

14,870

 

Cash, cash equivalents, and restricted cash at end of period

 

$

20,175

 

 

$

22,841

 

 

See accompanying notes to condensed consolidated financial statements.

7

 

STAR GROUP, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1) Organization

Star Group, L.P. (“Star,” the “Company,” “we,” “us,” or “our”) is a full service provider specializing in the sale of home heating and air conditioning products and services to residential and commercial home heating oil and propane customers. The Company has one reportable segment for accounting purposes. We also sell diesel fuel, gasoline and home heating oil on a delivery only basis. We believe we are the nation’s largest retail distributor of home heating oil based upon sales volume.

The Company is organized as follows:

•
Star is a limited partnership, which at December 31, 2023, had outstanding 35.6 million Common Units (NYSE: “SGU”), representing a 99.1% limited partner interest in Star, and 0.3 million general partner units, representing a 0.9% general partner interest in Star. Our general partner is Kestrel Heat, LLC, a Delaware limited liability company (“Kestrel Heat” or the “general partner”). The Board of Directors of Kestrel Heat (the “Board”) is appointed by its sole member, Kestrel Energy Partners, LLC, a Delaware limited liability company (“Kestrel”). Although Star is a partnership, it is taxed as a corporation and its distributions to unitholders are treated as taxable dividends.
•
Star owns 100% of Star Acquisitions, Inc. (“SA”), a Minnesota corporation that owns 100% of Petro Holdings, Inc. (“Petro”). SA and its subsidiaries are subject to Federal and state corporate income taxes. Star’s operations are conducted through Petro and its subsidiaries. Petro is primarily a Northeast and Mid-Atlantic U.S. region retail distributor of home heating oil and propane that at December 31, 2023 served approximately 404,800 full service residential and commercial home heating oil and propane customers and 57,600 customers on a delivery only basis. We also sell gasoline and diesel fuel to approximately 26,900 customers. We install, maintain, and repair heating and air conditioning equipment and to a lesser extent provide these services outside our heating oil and propane customer base including approximately 21,200 service contracts for natural gas and other heating systems.
•
Petroleum Heat and Power Co., Inc. (“PH&P”) is a wholly owned subsidiary of Star. PH&P is the borrower and Star is the guarantor of the sixth amended and restated credit agreement’s $165 million five-year senior secured term loan and the $400 million ($550 million during the heating season of December through April of each year) revolving credit facility, both due July 6, 2027. (See Note 11—Long-Term Debt and Bank Facility Borrowings).

 

2) Summary of Significant Accounting Policies

 

Basis of Presentation

The Consolidated Financial Statements include the accounts of Star and its subsidiaries. All material intercompany items and transactions have been eliminated in consolidation.

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair statement of financial condition and results for the interim periods. Due to the seasonal nature of the Company’s business, the results of operations and cash flows for the three-month period ended December 31, 2023 are not necessarily indicative of the results to be expected for the full year.

These interim financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023.

Comprehensive Income

Comprehensive income is comprised of Net income and Other comprehensive income. Other comprehensive income consists of the unrealized gain on amortization on the Company’s pension plan obligation for its two frozen defined benefit pension plans, unrealized gain on available-for-sale investments, unrealized loss on interest rate hedges and the corresponding tax effects.

8

 

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At December 31, 2023, the $20.2 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $19.9 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2023, the $45.4 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $45.2 million of cash and cash equivalents and $0.3 million of restricted cash. Restricted cash represents deposits held by our captive insurance company that are required by state insurance regulations to remain in the captive insurance company as cash.

Fair Value Valuation Approach

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

•
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•
Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•
Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Captive Insurance Collateral

The captive insurance collateral is held by our captive insurance company in an irrevocable trust as collateral for certain workers’ compensation and automobile liability claims. The collateral is required by a third party insurance carrier that insures per claim amounts above a set deductible. If we did not deposit cash into the trust, the third party carrier would require that we issue an equal amount of letters of credit, which would reduce our availability under the sixth amended and restated credit agreement. Due to the expected timing of claim payments, the nature of the collateral agreement with the carrier, and our captive insurance company’s source of other operating cash, the collateral is not expected to be used to pay obligations within the next twelve months.

Unrealized gains and losses, net of related income taxes, are reported as accumulated other comprehensive income (loss), except for losses from impairments which are determined to be other-than-temporary. Realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are included in the determination of net income and are included in Interest expense, net, at which time the average cost basis of these securities are adjusted to fair value.

Weather Hedge Contract

To partially mitigate the adverse effect of warm weather on cash flows, the Company has used weather hedge contracts for a number of years. Weather hedge contracts are recorded in accordance with the intrinsic value method defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-45-15 Derivatives and Hedging, Weather Derivatives (EITF 99-2). The premium paid is included in the caption “Prepaid expenses and other current assets” in the accompanying balance sheets and amortized over the life of the contract, with the intrinsic value method applied at each interim period.

The Company entered into weather hedge contracts for fiscal years 2023 and 2024. The hedge period runs from November 1 through March 31, taken as a whole. The “Payment Thresholds,” or strikes, are set at various levels and are referenced against degree days for the prior ten year average. Under these contracts the maximum amount the Company can receive is $12.5 million annually. For the contracts applicable to fiscal 2023, we were additionally obligated to make an annual payment capped at $5.0 million if degree days exceeded the Payment Threshold. This obligation does not exist under the contract applicable to 2024.

In accordance with ASC 815-45, we recorded a $1.0 million benefit to delivery and branch expenses for the first quarter of fiscal 2024. The final settlement under this weather hedge contract for fiscal 2024 may differ depending on the actual degree-days recorded in the period January 1, 2024 through March 31, 2024. For the first quarter of fiscal 2023, we recorded an expense of $0.4 million which was subsequently reversed as the actual degree-days for the second quarter of fiscal 2023 were warmer than the Payment Thresholds and the Company recorded a benefit of $12.9 million in the second quarter of fiscal 2023.

9

 

New England Teamsters and Trucking Industry Pension Fund (“the NETTI Fund”) Liability

As of December 31, 2023, we had $0.3 million and $15.9 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability. As of September 30, 2023, we had $0.3 million and $16.0 million balances reflected in these categories respectively. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal liability as of December 31, 2023 and September 30, 2023 was $19.6 million and $18.5 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC No. 606. The Company adopted the ASU effective October 1, 2023. The Company's adoption of the ASU did not have an impact on the Company's condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to income tax disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company has not determined the timing of adoption and is currently evaluating the impact of the new standard on its condensed consolidated financial statements.

3) Revenue Recognition

The following disaggregates our revenue by major sources for the three months ended December 31, 2023 and December 31, 2022:

 

 

Three Months
Ended December 31,

 

(in thousands)

 

2023

 

 

2022

 

Petroleum Products:

 

 

 

 

 

 

Home heating oil and propane

 

$

351,214

 

 

$

435,523

 

Other petroleum products

 

 

97,336

 

 

 

134,406

 

   Total petroleum products

 

 

448,550

 

 

 

569,929

 

Installations and Services:

 

 

 

 

 

 

Equipment installations

 

 

34,315

 

 

 

32,789

 

Equipment maintenance service contracts

 

 

28,916

 

 

 

28,716

 

Billable call services

 

 

16,315

 

 

 

16,753

 

   Total installations and services

 

 

79,546

 

 

 

78,258

 

   Total Sales

 

$

528,096

 

 

$

648,187

 

 

Deferred Contract Costs

We recognize an asset for incremental commission expenses paid to sales personnel in conjunction with obtaining new residential customer product and equipment maintenance service contracts. We defer these costs only when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract. Costs to obtain a contract are amortized and recorded ratably as delivery and branch expenses over the period representing the transfer of goods or services to which the assets relate. Costs to obtain new residential product and equipment maintenance service contracts are amortized as expense over the estimated customer relationship period of approximately five years. Deferred contract costs are classified as current or non-current within “Prepaid expenses and other current assets” and “Deferred charges and other assets, net,” respectively. At December 31, 2023, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.3 million and $5.6 million, respectively. At September 30, 2023, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.3 million and $5.4 million, respectively. For the three months ended December 31, 2023 and December 31, 2022 we recognized expense of $1.0 million

10

 

associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations.

Contract Liability Balances

The Company has contract liabilities for advanced payments received from customers for future oil deliveries (primarily amounts received from customers on “smart pay” budget payment plans in advance of oil deliveries) and obligations to service customers with equipment maintenance service contracts. Contract liabilities are recognized straight-line over the service contract period, generally one year or less. As of December 31, 2023 and September 30, 2023 the Company had contract liabilities of $161.9 million and $170.3 million, respectively. During the three months ended December 31, 2023, the Company recognized $91.6 million of revenue that was included in the September 30, 2023 contract liability balance. During the three months ended December 31, 2022 the Company recognized $85.6 million of revenue that was included in the September 30, 2022 contract liability balance.

Receivables and Allowance for Doubtful Accounts

Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.

The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.

Changes in the allowance for credit losses are as follows:

 

(in thousands)

Credit Loss Allowance

 

Balance at September 30, 2023

$

8,375

 

Current period provision

 

649

 

Write-offs, net and other

 

(950

)

Balance as of December 31, 2023

$

8,074

 

 

4) Common Unit Repurchase and Retirement

In July 2012, the Board adopted a plan to repurchase certain of the Company’s Common Units (the “Repurchase Plan”). Through May 2023, the Company had repurchased approximately 20.5 million Common Units under the Repurchase Plan. In May 2023, the Board authorized an increase of the number of Common Units that remained available for the Company to repurchase from 1.1 million to a total of 2.6 million, of which, approximately 2.3 million were available for repurchase in open market transactions and approximately 0.3 million were available for repurchase in privately-negotiated transactions. There is no guarantee of the number of units that will be purchased under the Repurchase Plan and the Company may discontinue purchases at any time. The Repurchase Plan does not have a time limit. The Board may also approve additional purchases of units from time to time in private transactions. The Company’s repurchase activities take into account SEC safe harbor rules and guidance for issuer repurchases. All of the Common Units purchased under the Repurchase Plan will be retired.

Under the Company’s sixth amended and restated credit agreement dated July 6, 2022, as amended, in order to pay distributions and repurchase Common Units, we must maintain Availability (as defined in the sixth amended and restated credit agreement) of $60 million, 15.0% of the facility size of $400 million (assuming no borrowings under the seasonal advance) on a historical pro forma and forward-looking basis, and a fixed charge coverage ratio of not less than 1.0 through February 27, 2024 and 1.15 thereafter measured as of the date of repurchase or distribution. (See Note 11—Long-Term Debt and Bank Facility Borrowings).

11

 

The following table shows repurchases under the Repurchase Plan:

 

(in thousands, except per unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 


Period

 

Total Number of
Units Purchased

 

 

Average Price
Paid per Unit (a)

 

 

Total Number of
Units Purchased as Part of Publicly Announced Plans or Programs

 

 

Maximum Number
of Units that May
Yet Be Purchased

 

 

 Fiscal year 2012 to 2023 total

 

 

25,422

 

 

$

8.82

 

 

 

20,534

 

 

 

2,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 2023

 

 

13

 

 

$

11.27

 

 

 

13

 

 

 

2,555

 

 

November 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,555

 

 

December 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,555

 

 

 First quarter fiscal year 2024 total

 

 

13

 

 

$

11.27

 

 

 

13

 

 

 

2,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 2024

 

 

15

 

 

$

11.27

 

 

 

15

 

 

 

2,540

 

(b)

 

(a)
Amount includes repurchase costs.
(b)
Of the total available for repurchase, approximately 2.2 million units are available for repurchase in open market transactions and approximately 0.3 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.

5) Captive Insurance Collateral

The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at December 31, 2023 consist of the following (in thousands):

 

 

 

Amortized Cost

 

Gross Unrealized Gain

 

 

Gross Unrealized (Loss)

 

 

Fair Value

 

Cash and Receivables

 

$

6,365

 

 

$

—

 

 

$

—

 

 

$

6,365

 

U.S. Government Sponsored Agencies

 

 

50,813

 

 

 

11

 

 

 

(966

)

 

 

49,858

 

Corporate Debt Securities

 

 

16,209

 

 

 

3

 

 

 

(415

)

 

 

15,797

 

Total

 

$

73,387

 

 

$

14

 

 

$

(1,381

)

 

$

72,020

 

 

Investments at September 30, 2023 consist of the following (in thousands):

 

 

 

Amortized Cost

 

Gross Unrealized Gain

 

 

Gross Unrealized (Loss)

 

 

Fair Value

 

Cash and Receivables

 

$

4,335

 

 

$

—

 

 

$

—

 

 

$

4,335

 

U.S. Government Sponsored Agencies

 

 

50,471

 

 

 

—

 

 

 

(1,620

)

 

 

48,851

 

Corporate Debt Securities

 

 

18,210

 

 

 

12

 

 

 

(691

)

 

 

17,531

 

Total

 

$

73,016

 

 

$

12

 

 

$

(2,311

)

 

$

70,717

 

 

Maturities of investments were as follows at December 31, 2023 (in thousands):

 

 

 

Net Carrying Amount

 

Due within one year

 

$

52,825

 

Due after one year through five years

 

 

19,195

 

Due after five years through ten years

 

 

—

 

Total

 

$

72,020

 

 

 

12

 

6) Derivatives and Hedging—Disclosures and Fair Value Measurements

The Company uses derivative instruments such as futures, options and swap agreements in order to mitigate exposure to market risk associated with the purchase of home heating oil for price-protected customers, physical inventory on hand, inventory in transit, priced purchase commitments and internal fuel usage. FASB ASC 815-10-05 Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities, along with qualitative disclosures regarding the derivative activity. The Company has elected not to designate its commodity derivative instruments as hedging derivatives, but rather as economic hedges whose change in fair value is recognized in its statement of operations in the caption “(Increase) decrease in the fair value of derivative instruments.” Depending on the risk being economically hedged, realized gains and losses are recorded in cost of product, cost of installations and services, or delivery and branch expenses.

As of December 31, 2023, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to its price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: 14.2 million gallons of swap contracts, 8.8 million gallons of call options, 6.6 million gallons of put options, and 61.4 million net gallons of synthetic call options. To hedge its physical inventory on hand, inventory in transit and basis risk, the Company, as of December 31, 2023, held 0.2 million gallons of swap contracts and 20.7 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal 2024, the Company held 5.3 million gallons of swap contracts that settle in future months.

As of December 31, 2022, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to its price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: 9.4 million gallons of swap contracts, 23.2 million gallons of call options, 4.3 million gallons of put options, and 61.3 million net gallons of synthetic call options. To hedge its physical inventory on hand, inventory in transit and basis risk, the Company, as of December 31, 2022, held 25.3 million gallons of swap contracts and 7.3 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal 2023, the Company held 3.7 million gallons of swap contracts that settle in future months.

As of December 31, 2023, the Company has interest rate swap agreements in order to mitigate exposure to market risk associated with variable rate interest on $54.6 million, or 38%, of its long term debt. The Company has designated its interest rate swap agreements as cash flow hedging derivatives. To the extent these derivative instruments are effective and the accounting standard’s documentation requirements have been met, changes in fair value are recognized in other comprehensive income (loss) until the underlying hedged item is recognized in earnings. As of December 31, 2023 the fair value of the swap contracts was $0.6 million. As of September 30, 2023, the notional value of the swap contracts was $55.5 million and the fair value of the swap contracts was $1.6 million. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of the swap contracts.

The Company’s derivative instruments are with the following counterparties: Bank of America, N.A., Bank of Montreal, Cargill, Inc., Citibank, N.A., JPMorgan Chase Bank, N.A., Key Bank, N.A. and Wells Fargo Bank, N.A. The Company assesses counterparty credit risk and considers it to be low. We maintain master netting arrangements that allow for the non-conditional offsetting of amounts receivable and payable with counterparties to help manage our risks and record derivative positions on a net basis. The Company generally does not receive cash collateral from its counterparties and does not restrict the use of cash collateral it maintains at counterparties. At December 31, 2023, the aggregate cash posted as collateral in the normal course of business at counterparties was $1.6 million and recorded in “Prepaid expense and other current assets.” Positions with counterparties who are also parties to our credit agreement are collateralized under that facility. As of December 31, 2023, $15.7 million hedge positions or payable amounts were secured under the credit facility.

The Company’s Level 1 derivative assets and liabilities represent the fair value of commodity contracts used in its hedging activities that are identical and traded in active markets. The Company’s Level 2 derivative assets and liabilities represent the fair value of commodity and interest rate contracts used in its hedging activities that are valued using either directly or indirectly observable inputs, whose nature, risk and class are similar. No significant transfers of assets or liabilities have been made into and out of the Level 1 or Level 2 tiers. All derivative instruments were non-trading positions and were either a Level 1 or Level 2 instrument. The Company had no Level 3 derivative instruments. The fair market value of our Level 1 and Level 2 derivative assets and liabilities are calculated by our counter-parties and are independently validated by the Company. The Company’s calculations are, for Level 1 derivative assets and liabilities, based on the published New York Mercantile Exchange (“NYMEX”) market prices for the commodity contracts open at the end of the period. For Level 2 derivative assets and liabilities the calculations performed by the Company are based on a combination of the NYMEX published market prices and other inputs, including such factors as present value, volatility and duration.

13

 

The Company had no assets or liabilities that are measured at fair value on a nonrecurring basis subsequent to their initial recognition. The Company’s commodity financial assets and liabilities measured at fair value on a recurring basis are listed on the following table.

 

(In thousands)

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using:

 

Derivatives Not Designated
   as Hedging Instruments

 

 

 

 

 

 

Quoted Prices in
Active Markets for
Identical Assets

 

 

Significant Other
Observable Inputs

 

Under FASB ASC 815-10

 

Balance Sheet Location

 

Total

 

 

Level 1

 

 

Level 2

 

Asset Derivatives at December 31, 2023

 

Commodity contracts

 

Fair liability value of derivative instruments

 

$

17,620

 

 

$

—

 

 

$

17,620

 

Commodity contracts

 

Other long-term liabilities, net balance

 

 

1,198

 

 

 

—

 

 

 

1,198

 

Commodity contract assets at December 31, 2023

 

$

18,818

 

 

$

—

 

 

$

18,818

 

Liability Derivatives at December 31, 2023

 

Commodity contracts

 

Fair liability value of derivative instruments

 

$

(32,452

)

 

$

—

 

 

$

(32,452

)

Commodity contracts

 

Other long-term liabilities, net balance

 

 

(1,404

)

 

 

—

 

 

 

(1,404

)

Commodity contract liabilities at December 31, 2023

 

$

(33,856

)

 

$

—

 

 

$

(33,856

)

Asset Derivatives at September 30, 2023

 

Commodity contracts

 

Fair asset and liability value of derivative instruments

 

$

17,891

 

 

$

—

 

 

$

17,891

 

Commodity contracts

 

Long-term derivative assets included in the deferred charges and other assets, net and other long-term liabilities, net balances

 

 

779

 

 

 

—

 

 

 

779

 

Commodity contract assets September 30, 2023

 

$

18,670

 

 

$

—

 

 

$

18,670

 

Liability Derivatives at September 30, 2023

 

Commodity contracts

 

Fair asset and liability value of derivative instruments

 

$

(7,349

)

 

$

—

 

 

$

(7,349

)

Commodity contracts

 

Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances

 

 

(679

)

 

 

—

 

 

 

(679

)

Commodity contract liabilities September 30, 2023

 

$

(8,028

)

 

$

—

 

 

$

(8,028

)

 

14

 

The Company’s commodity derivative assets (liabilities) offset by counterparty and subject to an enforceable master netting arrangement are listed on the following table.

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

Offsetting of Financial Assets (Liabilities)
   and Derivative Assets (Liabilities)

 

Gross
Assets
Recognized

 

 

Gross
Liabilities
Offset in the
Statement
of Financial
Position

 

 

Net Assets
(Liabilities)
Presented in the
Statement
of Financial
Position

 

 

Financial
Instruments

 

 

Cash
Collateral
Received

 

 

Net
Amount

 

Fair liability value of derivative instruments

 

$

17,620

 

 

$

(32,452

)

 

$

(14,832

)

 

$

—

 

 

$

—

 

 

$

(14,832

)

Long-term derivative liabilities included in
   other long-term liabilities, net

 

 

1,198

 

 

 

(1,404

)

 

 

(206

)

 

 

—

 

 

 

—

 

 

 

(206

)

Total at December 31, 2023

 

$

18,818

 

 

$

(33,856

)

 

$

(15,038

)

 

$

—

 

 

$

—

 

 

$

(15,038

)

Fair asset value of derivative instruments

 

$

17,815

 

 

$

(7,155

)

 

$

10,660

 

 

$

—

 

 

$

—

 

 

$

10,660

 

Long-term derivative assets included in deferred charges and other assets, net

 

 

567

 

 

 

(452

)

 

 

115

 

 

 

—

 

 

 

—

 

 

 

115

 

Fair liability value of derivative instruments

 

 

76

 

 

 

(194

)

 

 

(118

)

 

 

—

 

 

 

—

 

 

 

(118

)

Long-term derivative liabilities included in other long-term liabilities, net

 

 

212

 

 

 

(227

)

 

 

(15

)

 

 

—

 

 

 

—

 

 

 

(15

)

Total at September 30, 2023

 

$

18,670

 

 

$

(8,028

)

 

$

10,642

 

 

$

—

 

 

$

—

 

 

$

10,642

 

 

(In thousands)

 

 

 

 

 

 

 

 

The Effect of Derivative Instruments on the Statement of Operations

 

 

 

 

 

 

 

 

 

Amount of (Gain) or Loss Recognized

 

Derivatives Not Designated as Hedging Instruments Under FASB ASC 815-10

 

Location of (Gain) or Loss
Recognized in Income on Derivative

 

Three Months Ended December 31,
2023

 

 

Three Months Ended December 31,
2022

 

Commodity contracts

 

Cost of product (a)

 

$

4,723

 

 

$

(8,942

)

Commodity contracts

 

Cost of installations and service (a)

 

$

14

 

 

$

40

 

Commodity contracts

 

Delivery and branch expenses (a)

 

$

(392

)

 

$

(200

)

Commodity contracts

 

(Increase) / decrease in the fair
 value of derivative instruments (b)

 

$

19,030

 

 

$

17,636

 

 

(a)
Represents realized closed positions and includes the cost of options as they expire.
(b)
Represents the change in value of unrealized open positions and expired options.

7) Inventories

The Company’s product inventories are stated at the lower of cost and net realizable value computed on the weighted average cost method. All other inventories, representing parts and equipment are stated at the lower of cost and net realizable value using the FIFO method. The components of inventory were as follows (in thousands):

 

 

 

December 31,
2023

 

 

September 30,
2023

 

Product

 

$

61,859

 

 

$

33,994

 

Parts and equipment

 

 

22,174

 

 

 

22,469

 

Total inventory

 

$

84,033

 

 

$

56,463

 

 

15

 

8) Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization is computed over the estimated useful lives of the depreciable assets using the straight-line method (in thousands):

 

 

 

December 31,
2023

 

 

September 30,
2023

 

Property and equipment

 

$

246,555

 

 

$

244,816

 

Less: accumulated depreciation and amortization

 

 

141,397

 

 

 

139,412

 

Property and equipment, net

 

$

105,158

 

 

$

105,404

 

 

9) Business Combinations and Divestitures

During the three months ended December 31, 2023 the Company acquired two heating oil businesses for an aggregate purchase price of approximately $2.5 million in cash. The gross purchase price was allocated $2.7 million to intangible assets, $0.2 million to goodwill, $0.8 million to fixed assets and reduced by $1.2 million of negative working capital. The acquired companies’ operating results are included in the Company’s consolidated financial statements starting on their respective acquisition date, and are not material to the Company’s financial condition, results of operations, or cash flows.

During the three months ended December 31, 2022, the Company sold certain assets for cash proceeds of $2.2 million and acquired two heating oil businesses for an aggregate purchase price of approximately $1.2 million in cash. The gross purchase price was allocated $1.7 million to intangible assets, $0.2 million to goodwill, $0.2 million to fixed assets and reduced by $0.9 million of negative working capital.

10) Goodwill and Intangible Assets, net

Goodwill

A summary of changes in Company’s goodwill is as follows (in thousands):

 

Balance as of September 30, 2023

 

$

262,103

 

Fiscal year 2024 business combinations

 

 

244

 

Balance as of December 31, 2023

 

$

262,347

 

Intangibles, net

The gross carrying amount and accumulated amortization of intangible assets subject to amortization are as follows (in thousands):

 

 

 

December 31, 2023

 

 

September 30, 2023

 

 

 

Gross

 

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

 

 

 

Carrying

 

 

Accum.

 

 

 

 

 

Carrying

 

 

Accum.

 

 

 

 

 

 

Amount

 

 

Amortization

 

 

Net

 

 

Amount

 

 

Amortization

 

 

Net

 

Customer lists

 

$

420,460

 

 

$

362,914

 

 

$

57,546

 

 

$

418,190

 

 

$

358,855

 

 

$

59,335

 

Trade names and other intangibles

 

 

42,197

 

 

 

25,774

 

 

 

16,423

 

 

 

41,782

 

 

 

24,811

 

 

 

16,971

 

Total

 

$

462,657

 

 

$

388,688

 

 

$

73,969

 

 

$

459,972

 

 

$

383,666

 

 

$

76,306

 

 

Amortization expense for intangible assets was $5.0 million for the three months ended December 31, 2023, compared to $4.3 million for the three months ended December 31, 2022.

11) Long-Term Debt and Bank Facility Borrowings

The Company’s debt is as follows (in thousands):

 

 

December 31,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

 

Carrying
Amount

 

 

Fair Value (a)

 

 

Carrying
Amount

 

 

Fair Value (a)

 

Revolving Credit Facility Borrowings

 

$

51,877

 

 

$

51,877

 

 

$

240

 

 

$

240

 

Senior Secured Term Loan (b)

 

 

143,883

 

 

 

144,500

 

 

 

147,827

 

 

 

148,500

 

Total debt

 

$

195,760

 

 

$

196,377

 

 

$

148,067

 

 

$

148,740

 

Total short-term portion of debt

 

$

72,502

 

 

$

72,502

 

 

$

20,740

 

 

$

20,740

 

Total long-term portion of debt (b)

 

$

123,258

 

 

$

123,875

 

 

$

127,327

 

 

$

128,000

 

 

16

 

(a)
The face amount of the Company’s variable rate long-term debt approximates fair value.
(b)
Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of December 31, 2023 and $0.7 million as of September 30, 2023.

On July 6, 2022, the Company refinanced its five-year term loan and the revolving credit facility with the execution of the sixth amended and restated revolving credit facility agreement (the “credit agreement”) with a bank syndicate comprised of ten participants, which enables the Company to borrow up to $400 million ($550 million during the heating season of December through April of each year) on a revolving credit facility for working capital purposes (subject to certain borrowing base limitations and coverage ratios), provides for a $165 million five-year senior secured term loan (“Term Loan”), allows for the issuance of up to $25 million in letters of credit, and has a maturity date of July 6, 2027.

The Company can increase the revolving credit facility size by an additional $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent (as defined in the credit agreement), which shall not be unreasonably withheld. Obligations under the credit agreement are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s assets, including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.

All amounts outstanding under the sixth amended and restated revolving credit facility become due and payable on the facility termination date of July 6, 2027. The Term Loan is repayable in quarterly payments of $4.1 million, the first of which was made December 30, 2022, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the credit agreement (an amount not to exceed $8.5 million annually), less certain voluntary prepayments made during the year, with final payment at maturity. In the first quarter of 2024 the Company repaid $4.0 million of additional loan repayments due to Excess Cash Flow related to fiscal 2023. There was no additional loan repayments due to Excess Cash Flow in the first quarter of fiscal 2023 related to fiscal 2022. The $4.1 million quarterly payment for the quarter ended December 31, 2023 was made on January 2, 2024.

The interest rate on the revolving credit facility and the term loan is based on a margin over Adjusted Term Secured Overnight Financing Rate ("SOFR") or a base rate. At December 31, 2023, the effective interest rate on the term loan (considering the impact of interest rate hedges) and revolving credit facility borrowings was approximately 7.4% and 8.6%, respectively, compared to 6.6% and 6.3%, respectively at September 30, 2023.

The commitment fee on the unused portion of the revolving credit facility is 0.30% from December through April, and 0.20% from May through November.

The credit agreement requires the Company to meet certain financial covenants, including a fixed charge coverage ratio (as defined in the credit agreement) of not less than 1.1 as long as the Term Loan is outstanding or revolving credit facility availability is less than 12.5% of the facility size. In addition, as long as the Term Loan is outstanding, a senior secured leverage ratio cannot be more than 3.0 as calculated as of the quarters ending June or September, and no more than 5.5 as calculated as of the quarters ending December or March.

On September 26, 2023, the Company signed a first amendment (the “Amendment”) to its Sixth Amended and Restated Credit Agreement with a group of banks, which provides temporary relief from certain financial covenants under the Credit Agreement that must be satisfied in order for the Company to make distributions and unit repurchases or, if availability under the Credit Agreement drops below a minimum threshold due to, among other things, the Company making acquisitions. In particular, the Amendment reduces the minimum fixed charge coverage ratio for distributions and unit repurchases during the period commencing October 31, 2023 and ending February 27, 2024 (the “Relief Period”) from 1.15-to-1.00 down to 1.00-to-1.00. The Amendment also reduces the minimum fixed charge coverage ratio that must be maintained by the Company if availability under the under the Credit Agreement drops below 12.5% of the facility size during the Relief Period from 1.10-to-1.00 down to 1.00-to-1.00. The Company’s fixed charge coverage ratio as of December 31, 2023 was 1.39 to 1.00.

Certain restrictions are also imposed by the sixth amended and restated credit agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, repurchase units, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.

At December 31, 2023, $144.5 million of the Term Loan was outstanding, $51.9 million was outstanding under the revolving credit facility, $15.7 million hedge positions were secured under the credit agreement, and $3.2 million of letters of credit were issued and outstanding. At September 30, 2023, $148.5 million of the term loan was outstanding, $0.2 million was outstanding under the revolving credit facility, $0.1 million hedge positions were secured under the credit agreement and $3.2 million of letters of credit were issued and outstanding.

At December 31, 2023, availability was $189.2 million, and the Company was in compliance with the financial covenants. At September 30, 2023, availability was $202.1 million, and the Company was in compliance with the financial covenants.

17

 

12) Income Taxes

The accompanying financial statements are reported on a fiscal year, however, the Company and its corporate subsidiaries file Federal and State income tax returns on a calendar year.

The current and deferred income tax expense for the three months ended December 31, 2023 and December 31, 2022 are as follows:

 

 

 

Three Months Ended

 

 

 

December 31,

 

(in thousands)

 

2023

 

 

2022

 

Income before income taxes

 

$

18,153

 

 

$

19,002

 

Current income tax expense

 

 

6,765

 

 

 

6,687

 

Deferred income tax expense (benefit)

 

 

(1,591

)

 

 

(1,224

)

Total income tax expense

 

$

5,174

 

 

$

5,463

 

 

At December 31, 2023, we did not have unrecognized income tax benefits.

Our continuing practice is to recognize interest and penalties related to income tax matters as a component of income tax expense. We file U.S. Federal income tax returns and various state and local returns. A number of years may elapse before an uncertain tax position is audited and finally resolved. For our Federal income tax returns we have four tax years subject to examination. In our major state tax jurisdictions of New York, Connecticut and Pennsylvania, we have four years that are subject to examination. In the state tax jurisdiction of New Jersey we have five tax years that are subject to examination. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, based on our assessment of many factors, including past experience and interpretation of tax law, we believe that our provision for income taxes reflect the most probable outcome. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.

13) Supplemental Disclosure of Cash Flow Information

 

 

Three Months Ended

 

 

Cash paid during the period for:

 

December 31,

 

 

(in thousands)

 

2023

 

 

2022

 

 

Income taxes, net

 

$

4,819

 

 

$

5,479

 

 

Interest

 

$

3,768

 

 

$

4,286

 

 

 

14) Commitments and Contingencies

The Company’s operations are subject to the operating hazards and risks normally incidental to handling, storing and transporting and otherwise providing for use by consumers hazardous liquids such as home heating oil and propane. In the ordinary course of business, the Company is a defendant in various legal proceedings and litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We do not believe these matters, when considered individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

The Company maintains insurance policies with insurers in amounts and with coverages and deductibles we believe are reasonable and prudent. However, the Company cannot assure that this insurance will be adequate to protect it from all material expenses related to current and potential future claims, legal proceedings and litigation, as certain types of claims may be excluded from our insurance coverage. If we incur substantial liability and the damages are not covered by insurance, or are in excess of policy limits, or if we incur liability at a time when we are not able to obtain liability insurance, then our business, results of operations and financial condition could be materially adversely affected.

18

 

15) Earnings Per Limited Partner Unit

The following table presents the net income allocation and per unit data:

 

 

 

Three Months Ended

 

Basic and Diluted Earnings Per Limited Partner:

 

December 31,

 

(in thousands, except per unit data)

 

2023

 

 

2022

 

Net income

 

$

12,979

 

 

$

13,539

 

Less General Partner’s interest in net income

 

 

118

 

 

 

122

 

Net income available to limited partners

 

 

12,861

 

 

 

13,417

 

Less dilutive impact of theoretical distribution of earnings *

 

 

1,588

 

 

 

1,723

 

Limited Partner’s interest in net income

 

$

11,273

 

 

$

11,694

 

Per unit data:

 

 

 

 

 

 

Basic and diluted net income available to limited partners

 

$

0.36

 

 

$

0.37

 

Less dilutive impact of theoretical distribution of earnings *

 

 

0.04

 

 

 

0.04

 

Limited Partner’s interest in net income

 

$

0.32

 

 

$

0.33

 

Weighted average number of Limited Partner units outstanding

 

 

35,593

 

 

 

35,916

 


* In any accounting period where the Company’s aggregate net income exceeds its aggregate distribution for such period, the Company is required to present net income per Limited Partner unit as if all of the earnings for the period were distributed, based on the terms of the Partnership agreement, regardless of whether those earnings would actually be distributed during a particular period from an economic or practical perspective. This allocation does not impact the Company’s overall net income or other financial results.

16) Subsequent Events

Quarterly Distribution Declared

In January 2024, we declared a quarterly distribution of $0.1625 per unit, or $0.65 per unit on an annualized basis, on all Common Units with respect to the first quarter of fiscal 2024, paid on January 31, 2024, to holders of record on January 22, 2024. The amount of distributions in excess of the minimum quarterly distribution of $0.0675 are distributed in accordance with our Partnership Agreement, subject to the management incentive compensation plan. As a result, $5.8 million was paid to the Common Unit holders, $0.3 million to the General Partner unit holders (including $0.3 million of incentive distribution as provided in our Partnership Agreement) and $0.3 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner.

 

Acquisitions

Subsequent to December 31, 2023, the Company purchased the customer list and assets of one propane business and one heating oil business for an aggregate amount of approximately $19.9 million.

19

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statement Regarding Forward-Looking Disclosure

This Quarterly Report on Form 10-Q (this “Report”) includes “forward-looking statements” which represent our 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, and 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 in this Report under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our Fiscal 2023 Form 10-K under Part I Item 1A “Risk Factors.” Important factors that could cause actual results to differ materially from our expectations (“Cautionary Statements”) are disclosed in this Report and in our Fiscal 2023 Form 10-K. 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, we undertake 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 Report.

Liquid Product Price Volatility

Volatility, which is reflected in the wholesale price of liquid products, including home heating oil, propane and motor fuels, has a larger impact on our business when prices rise. Home heating oil consumers are sensitive to heating cost increases, and this often leads to customer conservation and increased gross customer losses. As a commodity, the price of home heating oil is generally impacted by many factors, including economic and geopolitical forces and is closely linked to the price of diesel fuel. The volatility in the wholesale cost of diesel fuel as measured by the New York Mercantile Exchange (“NYMEX”), for the fiscal years ending September 30, 2020, through 2024, on a quarterly basis, is illustrated in the following chart (price per gallon):

 

 

 

Fiscal 2024

 

 

Fiscal 2023

 

 

Fiscal 2022

 

 

Fiscal 2021

 

 

Fiscal 2020

 

Quarter Ended

 

Low

 

 

High

 

 

Low

 

 

High

 

 

Low

 

 

High

 

 

Low

 

 

High

 

 

Low

 

 

High

 

December 31

 

$

2.51

 

 

$

3.22

 

 

$

2.78

 

 

$

4.55

 

 

$

2.06

 

 

$

2.59

 

 

$

1.08

 

 

$

1.51

 

 

$

1.86

 

 

$

2.05

 

March 31

 

 

—

 

 

 

—

 

 

 

2.61

 

 

 

3.55

 

 

 

2.36

 

 

 

4.44

 

 

 

1.46

 

 

 

1.97

 

 

 

0.95

 

 

 

2.06

 

June 30

 

 

—

 

 

 

—

 

 

 

2.23

 

 

 

2.73

 

 

 

3.27

 

 

 

5.14

 

 

 

1.77

 

 

 

2.16

 

 

 

0.61

 

 

 

1.22

 

September 30

 

 

—

 

 

 

—

 

 

 

2.38

 

 

 

3.48

 

 

 

3.13

 

 

 

4.01

 

 

 

1.91

 

 

 

2.34

 

 

 

1.08

 

 

 

1.28

 

 

20

 

Income Taxes

Book versus Tax Deductions

The amount of cash flow generated in any given year depends upon a variety of factors including the amount of cash income taxes required, which will increase as depreciation and amortization decreases. The amount of depreciation and amortization that we deduct for book (i.e., financial reporting) purposes will differ from the amount that the Company can deduct for Federal tax purposes. The table below compares the estimated depreciation and amortization for book purposes to the amount that we expect to deduct for Federal tax purposes, based on currently owned assets. While we file our tax returns based on a calendar year, the amounts below are based on our September 30 fiscal year, and the tax amounts include any bonus depreciation available for fixed assets purchased. However, this table does not include any forecast of future annual capital purchases.

Estimated Depreciation and Amortization Expense

 

(In thousands) Fiscal Year

 

Book

 

Tax

 

2024

 

$

29,986

 

$

25,741

 

2025

 

 

24,386

 

 

22,580

 

2026

 

 

19,818

 

 

21,667

 

2027

 

 

17,650

 

 

19,781

 

2028

 

 

14,003

 

 

18,467

 

2029

 

 

12,026

 

 

15,818

 

Weather Hedge Contracts

Weather conditions have a significant impact on the demand for home heating oil and propane because certain customers depend on these products principally for space heating purposes. Actual weather conditions may vary substantially from year to year, significantly affecting the Company’s financial performance. To partially mitigate the adverse effect of warm weather on cash flow, we have used weather hedging contracts for a number of years with several providers.

The Company entered into weather hedge contracts for fiscal years 2023 and 2024. The hedge period runs from November 1 through March 31, taken as a whole. The “Payment Thresholds,” or strikes, are set at various levels and are referenced against degree days for the prior ten year average. Under these contracts the maximum amount the Company can receive is $12.5 million annually. For the contracts applicable to fiscal 2023, we were additionally obligated to make an annual payment capped at $5.0 million if degree days exceeded the Payment Threshold. This obligation does not exist under the contract applicable to 2024.

In accordance with ASC 815-45, we recorded a $1.0 million benefit to delivery and branch expenses for the first quarter of fiscal 2024. The final settlement under this weather hedge contract for fiscal 2024 may differ depending on the actual degree-days recorded in the period January 1, 2024 through March 31, 2024. For the first quarter of fiscal 2023, we recorded an expense of $0.4 million which was subsequently reversed as the actual degree-days for the second quarter of fiscal 2023 were warmer than the Payment Thresholds and the Company recorded a benefit of $12.9 million in the second quarter of fiscal 2023.

Per Gallon Gross Profit Margins

We believe home heating oil and propane margins should be evaluated on a cents per gallon basis before the effects of increases or decreases in the fair value of derivative instruments, as we believe that such per gallon margins are best at showing profit trends in the underlying business without the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction.

A significant portion of our home heating oil volume is sold to individual customers under an arrangement pre-establishing a ceiling price or fixed price for home heating oil over a set period of time, generally twelve to twenty-four months (“price-protected” customers). When these price-protected customers agree to purchase home heating oil from us for the next heating season, we purchase option contracts, swaps and futures contracts for a substantial majority of the heating oil that we expect to sell to these customers. The amount of home heating oil volume that we hedge per price-protected customer is based upon the estimated fuel consumption per average customer per month. In the event that the actual usage exceeds the amount of the hedged volume on a monthly basis, we may be required to obtain additional volume at unfavorable costs. In addition, should actual usage in any month be less than the hedged volume, our hedging costs and losses could be greater, thus reducing expected margins.

Derivatives

FASB ASC 815-10-05 Derivatives and Hedging requires that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities. To the extent our interest rate derivative instruments designated as cash flow hedges are effective, as defined under this guidance, changes in fair value are recognized in other comprehensive income (loss) until the forecasted hedged item is recognized in earnings. We have elected not to designate our commodity derivative instruments as hedging instruments under this guidance and, as a result, the changes in fair value of the derivative instruments are recognized in our

21

 

statement of operations. Therefore, we experience volatility in earnings as outstanding derivative instruments are marked to market and non-cash gains and losses are recorded prior to the sale of the commodity to the customer. The volatility in any given period related to unrealized non-cash gains or losses on derivative instruments can be significant to our overall results. However, we ultimately expect those gains and losses to be offset by the cost of product when purchased.

Customer Attrition

We measure net customer attrition on an ongoing basis for our full service residential and commercial home heating oil and propane customers. Net customer attrition is the difference between gross customer losses and customers added through marketing efforts. Customers added through acquisitions are not included in the calculation of gross customer gains. However, additional customers that are obtained through marketing efforts or lost at newly acquired businesses are included in these calculations from the point of closing going forward. Customer attrition percentage calculations include customers added through acquisitions in the denominators of the calculations on a weighted average basis from the closing date. Gross customer losses are the result of a number of factors, including price competition, move-outs, credit losses, conversions to natural gas and service disruptions. When a customer moves out of an existing home, we count the “move out” as a loss, and, if we are successful in signing up the new homeowner, the “move in” is treated as a gain. The impact of certain geopolitical forces on liquid product prices could increase future attrition due to higher losses from credit related issues.

Customer gains and losses of home heating oil and propane customers

 

 

 

Fiscal Year Ended

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

Net

 

 

 

Gross Customer

 

 

Gains /

 

 

Gross Customer

 

 

Gains /

 

 

Gross Customer

 

 

Gains /

 

 

 

Gains

 

 

Losses

 

 

(Attrition)

 

 

Gains

 

 

Losses

 

 

(Attrition)

 

 

Gains

 

 

Losses

 

 

(Attrition)

 

First Quarter

 

 

17,100

 

 

 

17,800

 

 

 

(700

)

 

 

26,500

 

 

 

19,500

 

 

 

7,000

 

 

 

19,800

 

 

 

18,500

 

 

 

1,300

 

Second Quarter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,300

 

 

 

18,100

 

 

 

(8,800

)

 

 

12,700

 

 

 

17,300

 

 

 

(4,600

)

Third Quarter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,300

 

 

 

12,600

 

 

 

(7,300

)

 

 

6,400

 

 

 

14,300

 

 

 

(7,900

)

Fourth Quarter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,900

 

 

 

14,600

 

 

 

(5,700

)

 

 

11,400

 

 

 

15,800

 

 

 

(4,400

)

Total

 

 

17,100

 

 

 

17,800

 

 

 

(700

)

 

 

50,000

 

 

 

64,800

 

 

 

(14,800

)

 

 

50,300

 

 

 

65,900

 

 

 

(15,600

)

Customer gains (attrition) as a percentage of home heating oil and propane customer base

 

 

 

Fiscal Year Ended

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

Net

 

 

 

Gross Customer

 

 

Gains /

 

 

Gross Customer

 

 

Gains /

 

 

Gross Customer

 

 

Gains /

 

 

 

Gains

 

 

Losses

 

 

(Attrition)

 

 

Gains

 

 

Losses

 

 

(Attrition)

 

 

Gains

 

 

Losses

 

 

(Attrition)

 

First Quarter

 

 

4.3

%

 

 

4.5

%

 

 

(0.2

%)

 

 

6.4

%

 

 

4.7

%

 

 

1.7

%

 

 

4.7

%

 

 

4.4

%

 

 

0.3

%

Second Quarter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2.2

%

 

 

4.3

%

 

 

(2.1

%)

 

 

3.0

%

 

 

4.1

%

 

 

(1.1

%)

Third Quarter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1.3

%

 

 

3.1

%

 

 

(1.8

%)

 

 

1.5

%

 

 

3.4

%

 

 

(1.9

%)

Fourth Quarter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2.1

%

 

 

3.5

%

 

 

(1.4

%)

 

 

2.7

%

 

 

3.7

%

 

 

(1.0

%)

Total

 

 

4.3

%

 

 

4.5

%

 

 

(0.2

%)

 

 

12.0

%

 

 

15.6

%

 

 

(3.6

%)

 

 

11.9

%

 

 

15.6

%

 

 

(3.7

%)

For the three months ended December 31, 2023, the Company lost 700 accounts (net), or 0.2% of its home heating oil and propane customer base, compared to 7,000 accounts gained (net), or 1.7% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 9,400 less than the prior year's comparable period primarily due to market conditions with regard to physical supply in the first quarter of fiscal 2023 that did not repeat in the current fiscal year, warmer weather and less customer move-ins. Gross customer losses were 1,700 less primarily due to reduction in number of customer relocations.

During the three months ended December 31, 2023, we estimate that we lost 0.4% of our home heating oil and propane accounts to natural gas and electricity conversions versus 0.4% for the three months ended December 31, 2022 and 0.4% for the three months ended December 31, 2021. Losses to natural gas and electricity in our footprint for the heating oil and propane industry could be greater or less than the Company’s estimates.

Acquisitions

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. During the three months ended December 31, 2023, the Company acquired two heating oil businesses for approximately $2.5 million and in February 2024 purchased the customer list and assets of one propane business and one heating oil business for an aggregate amount of

22

 

approximately $19.9 million. During fiscal 2023 the Company acquired one propane and two heating oil businesses for approximately $19.8 million. The following tables detail the Company’s acquisition activity and the associated volume sold during the 12-month period prior to the date of acquisition.

 

(in thousands of gallons)

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2024 Acquisitions

 

Acquisition Number

 

Month of Acquisition

 

Home Heating Oil and Propane

 

 

Other Petroleum Products

 

 

Total

 

1

 

November

 

 

1,210

 

 

 

222

 

 

 

1,432

 

2

 

November

 

 

885

 

 

 

369

 

 

 

1,254

 

3

 

February

 

 

1,473

 

 

 

1,097

 

 

 

2,570

 

4

 

February

 

 

1,936

 

 

 

—

 

 

 

1,936

 

 

 

 

 

 

5,504

 

 

 

1,688

 

 

 

7,192

 

 

(in thousands of gallons)

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2023 Acquisitions

 

Acquisition Number

 

Month of Acquisition

 

Home Heating Oil and Propane

 

 

Other Petroleum Products

 

 

Total

 

1

 

October

 

 

556

 

 

 

403

 

 

 

959

 

2

 

November

 

 

494

 

 

 

—

 

 

 

494

 

3

 

August

 

 

1,447

 

 

 

—

 

 

 

1,447

 

 

 

 

 

 

2,497

 

 

 

403

 

 

 

2,900

 

Sale of Certain Assets

In October 2022 we sold certain assets, which included a customer list of approximately 6,500 customers, for $2.7 million (including a deferred purchase price of $0.5 million). The following table details sales generated from the assets sold:

 

 

Years Ended September 30,

 

(in thousands)

2022

 

 

2021

 

 

2020

 

Volume:

 

 

 

 

 

 

 

 

Home heating oil and propane

 

2,147

 

 

 

2,163

 

 

 

2,345

 

Motor fuel and other petroleum products

 

27

 

 

 

37

 

 

 

38

 

Sales:

 

 

 

 

 

 

 

 

Petroleum products

$

9,355

 

 

$

6,102

 

 

$

6,524

 

Installations and services

 

1,323

 

 

 

1,384

 

 

 

1,292

 

   Total Sales

$

10,678

 

 

$

7,486

 

 

$

7,816

 

Protected Price Account Renewals

A substantial majority of the Company’s price-protected customers have agreements with us that are subject to annual renewal in the period between April and November of each fiscal year. If a significant number of these customers elect not to renew their price-protected agreements with us and do not continue as our customers under a variable price-plan, the Company’s near term profitability, liquidity and cash flow will be adversely impacted.

Seasonality

The Company’s fiscal year ends on September 30. All references to quarters and years, respectively, in this document are to the fiscal quarters and fiscal years unless otherwise noted. The seasonal nature of our business has resulted, on average, during the last five years, in the sale of approximately 30% of the volume of home heating oil and propane in the first fiscal quarter and 50% of the volume in the second fiscal quarter, the peak heating season. Approximately 25% of the volume of motor fuel and other petroleum products is sold in each of the four fiscal quarters. We generally realize net income during the quarters ending December and March and net losses during the quarters ending June and September. In addition, sales volume typically fluctuates from year to year in response to variations in weather, wholesale energy prices and other factors.

Degree Day

A “degree day” is an industry measurement of temperature designed to evaluate energy demand and consumption. Degree days are based on how far the average daily temperature departs from 65°F. Each degree of temperature above 65°F is counted as one cooling degree day, and each degree of temperature below 65°F is counted as one heating degree day. Degree days are accumulated

23

 

each day over the course of a year and can be compared to a monthly or a long-term (multi-year) average to see if a month or a year was warmer or cooler than usual. Degree days are officially observed by the National Weather Service.

Every ten years, the National Oceanic and Atmospheric Administration (“NOAA”) computes and publishes average meteorological quantities, including the average temperature for the last 30 years by geographical location, and the corresponding degree days. The latest and most widely used data covers the years from 1991 to 2020. Our calculations of “normal” weather are based on these published 30 year averages for heating degree days, weighted by volume for the locations where we have existing operations.

Consolidated Results of Operations

The following is a discussion of the consolidated results of operations of the Company and its subsidiaries and should be read in conjunction with the historical financial and operating data and Notes thereto included elsewhere in this Quarterly Report.

24

 

Three Months Ended December 31, 2023

Compared to the Three Months Ended December 31, 2022

Volume

For the three months ended December 31, 2023, retail volume of home heating oil and propane sold decreased by 9.1 million gallons, or 10.2%, to 80.1 million gallons, compared to 89.2 million gallons for the three months ended December 31, 2022. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended December 31, 2023 were 9.6% warmer than the three months ended December 31, 2022 and 13.8% warmer than normal, as reported by NOAA. For the twelve months ended December 31, 2023, net customer attrition for the base business was 5.4%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

 

(in millions of gallons)

 

Heating Oil
and Propane

 

Volume - Three months ended December 31, 2022

 

 

89.2

 

Net customer attrition

 

 

(5.3

)

Impact of warmer temperatures

 

 

(8.5

)

Acquisitions

 

 

0.8

 

Sale of certain assets

 

 

(0.1

)

Other (a)

 

 

4.0

 

Change

 

 

(9.1

)

Volume - Three months ended December 31, 2023

 

 

80.1

 

 

(a) This favorable change may reverse in subsequent periods over the balance of 2024.

The following chart sets forth the percentage by volume of total home heating oil sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the three months ended December 31, 2023, compared to the three months ended December 31, 2022:

 

 

 

Three Months Ended

 

Customers

 

December 31,
2023

 

 

December 31,
2022

 

Residential Variable

 

 

42.1

%

 

 

42.7

%

Residential Price-Protected (Ceiling and Fixed Price)

 

 

43.8

%

 

 

43.9

%

Commercial/Industrial

 

 

14.1

%

 

 

13.4

%

Total

 

 

100.0

%

 

 

100.0

%

Volume of motor fuel and other petroleum products sold decreased by 3.2 million gallons, or 9.2%, to 32.4 million gallons for the three months ended December 31, 2023, compared to 35.6 million gallons for the three months ended December 31, 2022.

Product Sales

For the three months ended December 31, 2023, product sales decreased by $121.3 million, or 21.3%, to $448.6 million, compared to $569.9 million for the three months ended December 31, 2022, due to a decrease in total volume sold of 9.9% and a decrease in average selling prices. Selling prices decreased largely due to a decrease in wholesale product cost of $0.6605 per gallon, or 19.7%, compared to the three months ended December 31, 2022. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Installations and Service

For the three months ended December 31, 2023, installation and service revenue increased by $1.2 million, or 1.6%, to $79.5 million, compared to $78.3 million for the three months ended December 31, 2022 driven by an increase in installation sales.

25

 

Cost of Product

For the three months ended December 31, 2023, cost of product decreased $115.8 million, or 27.6%, to $303.3 million, compared to $419.1 million for the three months ended December 31, 2022, due to a decrease in total volume sold of 9.9% and a decrease in wholesale product cost of $0.6605 per gallon, or 19.7%. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Gross Profit — Product

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the three months ended December 31, 2023 increased by $0.1306 per gallon, or 8.5%, to $1.6758 per gallon, from $1.5452 per gallon during the three months ended December 31, 2022. Going forward, we cannot assume that per gallon margins realized during the three months ended December 31, 2023 are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

 

 

 

Three Months Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Home Heating Oil and Propane

 

Amount
(in millions)

 

 

Per
Gallon

 

 

Amount
(in millions)

 

 

Per
Gallon

 

Volume

 

 

80.1

 

 

 

 

 

 

89.2

 

 

 

 

Sales

 

$

351.2

 

 

$

4.3822

 

 

$

435.5

 

 

$

4.8818

 

Cost

 

$

216.9

 

 

$

2.7064

 

 

$

297.7

 

 

$

3.3366

 

Gross Profit

 

$

134.3

 

 

$

1.6758

 

 

$

137.8

 

 

$

1.5452

 

 

Motor Fuel and Other Petroleum Products

 

Amount
(in millions)

 

 

Per
Gallon

 

 

Amount
(in millions)

 

 

Per
Gallon

 

Volume

 

 

32.4

 

 

 

 

 

 

35.6

 

 

 

 

Sales

 

$

97.3

 

 

$

3.0071

 

 

$

134.4

 

 

$

3.7703

 

Cost

 

$

86.4

 

 

$

2.6703

 

 

$

121.4

 

 

$

3.4061

 

Gross Profit

 

$

10.9

 

 

$

0.3368

 

 

$

13.0

 

 

$

0.3642

 

 

Total Product

 

Amount
(in millions)

 

 

 

 

Amount
(in millions)

 

 

 

Sales

 

$

448.5

 

 

 

 

$

569.9

 

 

 

Cost

 

$

303.3

 

 

 

 

$

419.1

 

 

 

Gross Profit

 

$

145.2

 

 

 

 

$

150.8

 

 

 

 

For the three months ended December 31, 2023, total product gross profit was $145.2 million, which was $5.6 million, or 3.7%, lower than the three months ended December 31, 2022, due to a decrease in home heating oil and propane volume sold ($14.0 million) and decrease in gross profit from other petroleum products ($2.1 million), that was partially offset by an increase in home heating oil and propane margins ($10.5 million).

Cost of Installations and Service

Total installation costs for the three months ended December 31, 2023 increased by $0.8 million or 2.8%, to $27.5 million, compared to $26.7 million of installation costs for the three months ended December 31, 2022. This increase was largely due to higher installation sales. Installation costs as a percentage of installation sales were 80.1% for the three months ended December 31, 2023 and 81.6% for the three months ended December 31, 2022. Gross profit from installation increased by $0.8 million.

Service expense decreased by $2.2 million, or 4.4%, to $47.6 million for the three months ended December 31, 2023, representing 105.3% of service sales, versus $49.8 million, or 109.5% of service sales, for the three months ended December 31, 2022. The warmer temperatures drove a decrease in service calls and related expenses. In addition, a large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. Gross loss from service decreased by $1.9 million.

26

 

We realized a combined gross profit from service and installation of $4.4 million for the three months ended December 31, 2023 compared to a gross profit of $1.7 million for the three months ended December 31, 2022, a $2.7 million increase.

(Increase) Decrease in the Fair Value of Derivative Instruments

During the three months ended December 31, 2023, the change in the fair value of derivative instruments resulted in a $19.0 million charge as a decrease in the market value for unexpired hedges (a $19.1 million charge) was partially offset by a $0.1 million credit due to the expiration of certain hedged positions.

During the three months ended December 31, 2022, the change in the fair value of derivative instruments resulted in a $17.6 million charge due to a decrease in the market value for unexpired hedges (a $9.6 million charge) and an $8.0 million charge due to the expiration of certain hedged positions.

Delivery and Branch Expenses

For the three months ended December 31, 2023, delivery and branch expense decreased $3.5 million, or 3.6%, to $94.4 million, compared to $97.9 million for the three months ended December 31, 2022. During the first quarter of fiscal 2024, the company recorded a benefit under the weather hedge of $1.0 million compared to a charge of $0.4 million in the prior year’s comparable quarter that accounts for a decrease in expense of $1.4 million. The decrease was also driven by a $2.9 million, or 9.0% reduction in delivery expenses due to the 10.2% decline in home heating oil and propane volume, a $1.0 million decrease in sales and marketing expenses due to a lower level of customer gains and related expenses, and $0.5 million of other net expense reductions. These decreases were partially offset by a $2.3 million increase in insurance expenses due to increasing premiums and expected claim costs.

Depreciation and Amortization Expenses

For the three months ended December 31, 2023, depreciation and amortization expenses increased $0.6 million, or 7.0%, to $8.4 million, compared to $7.8 million for the three months ended December 31, 2022, primarily due to acquisitions.

General and Administrative Expenses

For the three months ended December 31, 2023, general and administrative expenses increased by $0.1 million or 2.4%, to $7.0 million, from $6.9 million for the three months ended December 31, 2022, due to a $0.3 million increase in salaries and benefits expenses and $0.1 million of other net expense increases, that were partially offset by a $0.3 million decrease in profit sharing expense. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees. This amount is payable when the Company achieves Adjusted EBITDA of at least 70% of the amount budgeted. The dollar amount of the profit sharing pool adjusts accordingly based on Adjusted EBITDA levels achieved.

Finance Charge Income

For the three months ended December 31, 2023, finance charge income decreased by $0.5 million or 41.5% to $0.8 million, from $1.3 million for the three months ended December 31, 2022, due to less late customer payment charges received on aged receivables.

Interest Expense, Net

For the three months ended December 31, 2023, net interest expense decreased by $1.1 million, or 24.7%, to $3.2 million compared to $4.3 million for the three months ended December 31, 2022. The year-over-year change was driven by a decrease in average borrowings of $87.7 million from $244.3 million for the three months ended December 31, 2022 to $156.6 million for the three months ended December 31, 2023 that was partially offset by an increase in the weighted average interest rate from 6.1% for the three months ended December 31, 2022 to 7.4% for the three months ended December 31, 2023. To hedge against rising interest rates, the Company utilizes interest rate swaps. At December 31, 2023, approximately 38% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

Amortization of Debt Issuance Costs

For the three months ended December 31, 2023, amortization of debt issuance cost was $0.3 million, essentially unchanged from the three months ended December 31, 2022.

27

 

Income Tax Expense

For the three months ended December 31, 2023, the Company’s income tax expense decreased by $0.3 million to $5.2 million, from $5.5 million for the three months ended December 31, 2022. The decrease in the income tax expense was driven by a $0.8 million decline in income before income taxes.

Net Income

For the three months ended December 31, 2023, Star’s net income decreased $0.6 million, to $13.0 million, compared to the three months ended December 31, 2022, primarily due to an unfavorable change in the fair value of derivative instruments of $1.4 million and a $0.6 million increase in depreciation and amortization expenses that was partially offset by a $1.1 million decrease in interest expense and a $0.3 million decrease in income tax expense.

Adjusted EBITDA

For the three months ended December 31, 2023, Adjusted EBITDA was $49.0 million, essentially unchanged from the three months ended December 31, 2022, as an increase in home heating oil and propane per gallon margins, an increase in service and installation profitability and lower operating costs offset a 9.1 million gallon decrease in home heating oil and propane volume sold.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income, as an indicator of operating performance, or as an alternative to cash flow, as a measure of liquidity or ability to service debt obligations, but provides additional information for evaluating the Company’s ability to make the Minimum Quarterly Distribution. EBITDA and Adjusted EBITDA are calculated as follows:

 

 

 

Three Months
Ended December 31,

 

(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 (a)

 

 

30,007

 

 

 

31,442

 

(Increase) / decrease in the fair value of derivative instruments

 

 

19,030

 

 

 

17,636

 

Adjusted EBITDA (a)

 

 

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

 

 

(a)
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 our financial statements, such as investors, commercial banks and research analysts, to assess:

• our compliance with certain financial covenants included in our debt agreements;

• our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;

• our 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;

28

 

• our 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:

• EBITDA and Adjusted EBITDA do not reflect our 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, our working capital requirements;

• EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.

29

 

 

DISCUSSION OF CASH FLOWS

We use the indirect method to prepare our Consolidated Statements of Cash Flows. Under this method, we reconcile net income to cash flows provided by operating activities by adjusting net income for those items that impact net income but do not result in actual cash receipts or payment during the period.

Operating Activities

Due to the seasonal nature of our business, cash is generally used in operations during the winter (our first and second fiscal quarters) as we require additional working capital to support the high volume of sales during this period, and cash is generally provided by operating activities during the spring and summer (our third and fourth fiscal quarters) when customer payments exceed the cost of deliveries.

During the three months ended December 31, 2023, cash used in operating activities decreased $32.4 million, to $60.3 million, compared to $92.7 million in cash used in operating activities during the three months ended December 31, 2022. The decrease was driven by an increase in collection of trade receivables on a comparable basis (including accounts receivable and customer credit balance accounts) of $34.4 million, a $10.0 million increase in collection of derivative settlement receivables on a comparative basis and a $1.9 million decrease in cash required to purchase liquid product inventory. Further, we paid $5.2 million less in payroll taxes in the first fiscal quarter of 2024 versus the first fiscal quarter of 2023 as the result of deferring payment of certain payroll tax withholdings in first quarter of fiscal 2021 to the first fiscal quarter of fiscal 2023. The increases were partially offset by an $11.3 million unfavorable change in accounts payable due to timing of inventory purchases, a $6.8 million increase in net cash paid for certain hedge positions, a $0.5 million decrease in cash flows from operations and $0.5 million of other net changes in working capital.

Investing Activities

During the three months ended December 31, 2023, the Company acquired two heating oil businesses for an aggregate price of approximately $2.5 million in cash. The gross purchase price was allocated $2.7 million to intangible assets, $0.2 million to goodwill, $0.8 million to fixed assets and reduced by $1.2 million of negative working capital.

Our capital expenditures for the three months ended December 31, 2023 totaled $3.2 million, as we invested in computer hardware and software ($0.3 million), refurbished certain physical plants ($0.9 million), expanded our propane operations ($0.4 million) and made additions to our fleet and other equipment ($1.6 million).

During the three months ended December 31, 2023, $0.4 million of earnings were reinvested into an irrevocable trust established in connection with our captive insurance company. The cash deposited into the trust is shown on our balance sheet as captive insurance collateral and, correspondingly, reduced cash on our balance sheet. We believe that investments into the irrevocable trust lower our letter of credit fees, increase interest income on invested cash balances, and provide us with certain tax advantages attributable to a captive insurance company.

During the three months ended December 31, 2022, the Company sold certain assets for cash proceeds of $2.2 million and acquired two heating oil businesses for an aggregate price of approximately $1.2 million in cash. The gross purchase price was allocated $1.7 million to intangible assets, $0.2 million to goodwill, $0.2 million to fixed assets and reduced by $0.9 million of negative working capital.

Our capital expenditures for the three months ended December 31, 2022 totaled $3.1 million, as we invested in computer hardware and software ($0.1 million), refurbished certain physical plants ($0.3 million), expanded our propane operations ($0.2 million) and made additions to our fleet and other equipment ($2.5 million).

During the three months ended December 31, 2022, $0.2 million of earnings were reinvested into the irrevocable trust.

Financing Activities

During the three months ended December 31, 2023, we repaid $4.0 million of our term loan, borrowed $51.6 million under our revolving credit facility, repurchased fewer than 0.1 million Common Units, at an average price paid of $11.27 per unit, for $0.2 million, in connection with our unit repurchase plan, and paid distributions of $5.8 million to our Common Unit holders and $0.3 million to our General Partner unit holders (including $0.3 million of incentive distributions as provided in our Partnership Agreement).

30

 

During the three months ended December 31, 2022, we repaid $4.1 million of our term loan, borrowed $116.3 million under our revolving credit facility, repurchased 0.4 million Common Units for $3.6 million, in connection with our unit repurchase plan, and paid distributions of $5.5 million to our Common Unit holders and $0.3 million to our General Partner unit holders (including $0.3 million of incentive distributions as provided in our Partnership Agreement).

FINANCING AND SOURCES OF LIQUIDITY

Liquidity and Capital Resources Comparatives

Our primary uses of liquidity are to provide funds for our working capital, capital expenditures, distributions on our units, acquisitions and unit repurchases. Our ability to provide funds for such uses depends on our future performance, which will be subject to prevailing economic, financial, geopolitical and business conditions, weather, the ability to collect current and future accounts receivable, the ability to pass on the full impact of high product costs to customers, the effects of high net customer attrition, conservation, inflation and other factors. Capital requirements, at least in the near term, are expected to be provided by cash flows from operating activities, cash on hand as of December 31, 2023 ($19.9 million) or a combination thereof. We believe that these cash sources will also be sufficient to satisfy our capital requirements in the longer-term. However, if they are not sufficient, we anticipate that working capital will be financed by our revolving credit facility, as discussed below, and from subsequent seasonal reductions in inventory and accounts receivable. As of December 31, 2023, we had accounts receivable of $187.1 million of which $139.8 million is due from residential customers and $47.3 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivable. If these balances do not meet the eligibility tests as defined in our sixth amended and restated credit agreement, our ability to borrow will be reduced and our anticipated cash flow from operating activities will also be reduced. As of December 31, 2023, we had $51.9 million of borrowings under our revolving credit facility, $144.5 million outstanding under our term loan, $3.2 million in letters of credit outstanding and $15.7 million hedge positions were secured under the credit agreement.

Under the terms of the sixth amended and restated credit agreement, as amended, we are required to maintain at all times a fixed charge coverage ratio of not less than 1.0 through February 27, 2024 and 1.15 thereafter if Availability (borrowing base less amounts borrowed and letters of credit issued) is less than 12.5% of the maximum facility size. We are also required to maintain a senior secured leverage ratio that cannot be more than 3.0 as of June 30th or September 30th, and no more than 5.5 as of December 31st or March 31st. As of December 31, 2023, Availability, as defined in the sixth amended and restated revolving credit facility agreement, as amended, was $189.2 million and we were in compliance with the financial covenants.

Maintenance capital expenditures for the remainder of fiscal 2024 are estimated to be approximately $9.0 million to $10.0 million, excluding the capital requirements for leased fleet. In addition, we plan to invest $1.0 million to $2.0 million in our propane operations. If, and only to the extent that, cash distributions to our unitholders remain at the current quarterly level of $0.1625 per unit for the balance of fiscal 2024, the Company would make aggregate payments of approximately $17.3 million to Common Unit holders, $1.0 million to our General Partner (including $0.9 million of incentive distribution as provided for in our Partnership Agreement) and $0.9 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner. The amount of cash distributions payable to our unitholders, if any, depends on the amount of cash flow generated by the Company and our compliance with certain financial covenants under our sixth amended and restated revolving credit facility agreement. Under the terms of our sixth amended and restated revolving credit facility agreement, our term loan is repayable in quarterly payments of $4.1 million and we expect to pay $16.5 million for the remainder of fiscal 2024. Further, subject to any additional liquidity issues or concerns resulting from wholesale price volatility and our compliance with the financial covenants under our sixth amended and restated revolving credit facility agreement, we may repurchase Common Units pursuant to our unit repurchase plan, as amended from time to time, and seek attractive acquisition opportunities within the Availability constraints of our revolving credit facility and funding resources.

Contractual Obligations and Off-Balance Sheet Arrangements

There has been no material change to Contractual Obligations and Off-Balance Sheet Arrangements since our September 30, 2023 Form 10-K disclosure and therefore, the table has not been included in this Form 10-Q.

31

 

Recent Accounting Pronouncements

Refer to Note 2 – Summary of Significant Accounting Policies for discussion regarding the impact of accounting standards that were recently adopted and issued but not yet effective, on our consolidated financial statements.

Critical Accounting Policy and Critical Accounting Estimates

We believe that there have been no significant changes to our critical accounting policy and critical accounting estimates during the three months ended December 31, 2023 as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the fiscal year ended September 30, 2023. While our critical accounting policies and estimates have not changed in any significant way during the three months ended December 31, 2023, the following provides disclosures about our critical accounting policy and critical accounting estimates.

Critical Accounting Policy

Fair Values of Derivatives

FASB ASC 815-10-05, Derivatives and Hedging, requires that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities. The Company has elected not to designate its commodity derivative instruments as hedging instruments under this guidance, and therefore the change in fair value of those derivative instruments are recognized in our statement of operations.

We have established the fair value of our derivative instruments using estimates determined by our counterparties and subsequently evaluated them internally using established index prices and other sources. These values are based upon, among other things, futures prices, volatility, time-to-maturity value and credit risk. The estimate of fair value we report in our financial statements changes as these estimates are revised to reflect actual results, changes in market conditions, or other factors, many of which are beyond our control.

Critical Accounting Estimates

Self-Insurance Liabilities

We currently self-insure a portion of workers’ compensation, auto, general liability and medical claims. We establish and periodically evaluate self-insurance liabilities based upon expectations as to what our ultimate liability may be for outstanding claims using developmental factors based upon historical claim experience, including frequency, severity, demographic factors and other actuarial assumptions, supplemented with the support of a qualified third-party actuary. As of September 30, 2023, we had approximately $77.5 million of self-insurance liabilities. The ultimate resolution of these claims could differ materially from the assumptions used to calculate the self-insurance liabilities, which could have a material adverse effect on results of operations.

32

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to interest rate risk primarily through our bank credit facilities. We utilize these borrowings to meet our working capital needs.

At December 31, 2023, we had outstanding borrowings totaling $196.4 million, of which $141.8 million are subject to variable interest rates under our credit agreement. In the event that interest rates associated with this facility were to increase 100 basis points, the after tax impact on annual future cash flows would be a decrease of $1.0 million.

Market Risk

We regularly use derivative financial instruments to manage our exposure to market risk related to changes in the current and future market price of home heating oil and vehicle fuels. The value of market sensitive derivative instruments is subject to change as a result of movements in market prices. Sensitivity analysis is a technique used to evaluate the impact of hypothetical market value changes. Based on a hypothetical ten percent increase in the cost of product at December 31, 2023, the potential impact on our hedging activity would be to increase the fair market value of these outstanding derivatives by $6.7 million to a fair market value of $(8.3) million; and conversely a hypothetical ten percent decrease in the cost of product would decrease the fair market value of these outstanding derivatives by $4.1 million to a fair market value of $(19.2) million.

Item 4.

Controls and Procedures

a) Evaluation of disclosure controls and procedures

The General Partner’s chief executive officer and chief financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of December 31, 2023. Based on that evaluation, such chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2023 at the reasonable level of assurance. For purposes of Rule 13a-15(e), the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

b) Change in internal control over financial reporting

No changes in the Company’s internal control over financial reporting occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

c) Other

The General Partner and the Company believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a Company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and the chief executive officer and chief financial officer of the General Partner have concluded, as of December 31, 2023, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

33

 

PART II OTHER INFORMATION

Item 1.

In the opinion of management, we are not a party to any litigation, which individually or in the aggregate could reasonably be expected to have a material adverse effect on our results of operations, financial position or liquidity.

Item 1A.

Risk Factors

In addition to the other information set forth in this Report, investors should carefully review and consider the information regarding certain factors, which could materially affect our business, results of operations, financial condition and cash flows set forth in Part I Item 1A. “Risk Factors” in our Fiscal 2023 Form 10-K. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Item 2.

Purchase of Equity Securities by Issuer

Note 4 to the Condensed Consolidated Financial Statements concerning the Company’s repurchase of Common Units during the three months ended December 31, 2023 is incorporated into this Item 2 by reference.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

N/A

Item 5.

Other Information

(a) N/A

(b) N/A

(c) Trading Plans. During the quarter ended December 31, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements.

34

 

Item 6.

Exhibits

(a)
Exhibits Included Within:

 

 

3.1

Amended and Restated Certificate of Limited Partnership (Incorporated by reference to an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on May 9, 2006.)

 

 

3.2

Certificate of Amendment to Amended and Restated Certificate of Limited Partnership (Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K with the Commission on October 27, 2017.)

 

 

3.3

Third Amended and Restated Agreement of Limited Partnership (Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K with the Commission on November 6, 2017.)

 

 

31.1*

Certification of Chief Executive Officer, Star Group, L.P., pursuant to Rule 13a-14(a)/15d-14(a).

 

 

31.2*

Certification of Chief Financial Officer, Star Group, L.P., pursuant to Rule 13a-14(a)/15d-14(a).

 

 

32.1**

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

32.2**

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

101

The following materials from the Star Group, L.P. Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Partners’ Capital, (v) the Condensed Consolidated Statements of Cash Flows and (vi) related notes.

 

 

101.INS

Inline XBRL Instance Document.

 

 

   101.SCH

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.

 

 

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

* Filed herewith

 

** The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in such filing.

35

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized:

 

 

 

Star Group, L.P.

(Registrant)

 

 

By:

Kestrel Heat LLC AS GENERAL PARTNER

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ Richard F. Ambury

Richard F. Ambury

 

Executive Vice President, Chief Financial Officer,

Treasurer and Secretary of Kestrel Heat LLC

(Principal Financial Officer)

 

February 7, 2024

 

 

 

 

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ Cory A. Czekanski

Cory A. Czekanski

 

Vice President – Controller of Kestrel Heat LLC

(Principal Accounting Officer)

 

February 7, 2024

 

36

Exhibit 31.1

CERTIFICATIONS

I, Jeffrey M. Woosnam, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Star Group, L.P. (“Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information and;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: February 7, 2024

 

/s/ Jeffrey M. Woosnam

Jeffrey M. Woosnam

President and Chief Executive Officer

Star Group, L.P.

 

Exhibit 31.2

CERTIFICATIONS

I, Richard F. Ambury, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Star Group, L.P. (“Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(c) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information and;

(d) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: February 7, 2024

 

/s/ Richard F. Ambury

Richard F. Ambury

Chief Financial Officer

Star Group, L.P.

 

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Star Group, L.P. (the “Company”) on Form 10-Q for the quarterly period ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey M. Woosnam, President and Chief Executive Officer of the Company, certify to my knowledge pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, following due inquiry, I believe that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Star Group, L.P. and will be retained by Star Group, L.P. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

STAR GROUP, L.P.

 

 

 

 

 

 

 

By:

 

KESTREL HEAT, LLC (General Partner)

Date: February 7, 2024

 

 

 

 

 

 

By:

 

/s/ Jeffrey M. Woosnam

 

 

 

 

Jeffrey M. Woosnam

 

 

 

 

President and Chief Executive Officer

 

 

 

 

Star Group, L.P.

 

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Star Group, L.P. (the “Company”) on Form 10-Q for the quarterly period ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard F. Ambury, Chief Financial Officer of the Company, certify to my knowledge pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, following due inquiry, I believe that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Star Group, L.P. and will be retained by Star Group, L.P. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

STAR GROUP, L.P.

 

 

 

 

 

 

 

By:

 

KESTREL HEAT, LLC (General Partner)

 

 

 

 

 

 

 

 

 

/s/ Richard F. Ambury

Date: February 7, 2024

 

By:

 

Richard F. Ambury

 

 

 

 

Chief Financial Officer

 

 

 

 

Star Group, L.P.

 

 

v3.24.0.1
Document and Entity Information - shares
 3 Months Ended
Dec. 31, 2023
Jan. 31, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Dec. 31, 2023  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Trading Symbol SGU  
Title of 12(b) Security Common Units  
Security Exchange Name NYSE  
Entity Registrant Name STAR GROUP, L.P.  
Entity Central Index Key 0001002590  
Entity Tax Identification Number 06-1437793  
Current Fiscal Year End Date --09-30  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 001-14129  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   35,574,434
Entity Address, Address Line One 9 West Broad Street  
Entity Address, City or Town Stamford  
Entity Address, State or Province CT  
Entity Address, Postal Zip Code 06902  
City Area Code (203)  
Local Phone Number 328-7310  
v3.24.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Current assets    
Cash and cash equivalents $ 19,925 $ 45,191
Receivables, net of allowance of $8,074 and $8,375, respectively 187,122 114,079
Inventories 84,033 56,463
Fair asset value of derivative instruments 0 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
Goodwill 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
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 [1] 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
[1] Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of December 31, 2023 and $0.7 million as of September 30, 2023
v3.24.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Statement of Financial Position [Abstract]    
Receivables, allowance $ 8,074 $ 8,375
v3.24.0.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Sales:    
Total sales $ 528,096 $ 648,187
Cost and expenses:    
(Increase) decrease in the fair value of derivative instruments [1] 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
Basic and diluted income per Limited Partner Unit: [2] $ 0.32 $ 0.33
Weighted average number of Limited Partner units outstanding:    
Weighted average number of Limited Partner units outstanding, Basic 35,593 35,916
Weighted average number of Limited Partner units outstanding, Diluted 35,593 35,916
Product    
Sales:    
Total sales $ 448,550 $ 569,929
Installations and services    
Sales:    
Total sales 79,546 78,258
Cost of product    
Cost and expenses:    
Cost and expenses 303,338 419,093
Cost of installations and services    
Cost and expenses:    
Cost and expenses $ 75,107 $ 76,543
[1] Represents the change in value of unrealized open positions and expired options.
[2] See Note 15 - Earnings Per Limited Partner Unit.
v3.24.0.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]    
Net income $ 12,979 $ 13,539
Other comprehensive income:    
Unrealized gain on pension plan obligation 319 380
Tax effect of unrealized gain on pension plan obligation (75) (97)
Unrealized gain on captive insurance collateral 932 355
Tax effect of unrealized gain on captive insurance collateral (202) (74)
Unrealized loss on interest rate hedges (1,042) (377)
Tax effect of unrealized loss on interest rate hedges 285 102
Total other comprehensive income 217 289
Total comprehensive income $ 13,196 $ 13,828
v3.24.0.1
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($)
shares in Thousands, $ in Thousands
Total
General Partner
Common Stock
Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Sep. 30, 2022 $ 257,915 $ (3,656) $ 277,177 $ (15,606)
Beginning Balance, unit at Sep. 30, 2022   326 36,092  
Net income 13,539 $ 122 $ 13,417  
Unrealized gain on pension plan obligation 380     380
Tax effect of unrealized gain on pension plan obligation (97)     (97)
Unrealized gain on captive insurance collateral 355     355
Tax effect of unrealized gain on captive insurance collateral (74)     (74)
Unrealized loss on interest rate hedges (377)     (377)
Tax effect of unrealized loss on interest rate hedges 102     102
Distributions (5,774) (292) (5,482)  
Retirement of units (3,596)   $ (3,596)  
Retirement of units, shares     (411)  
Ending Balance at Dec. 31, 2022 262,373 $ (3,826) $ 281,516 (15,317)
Ending Balance, Unit at Dec. 31, 2022   326 35,681  
Beginning Balance at Sep. 30, 2023 263,724 $ (4,615) $ 281,862 (13,523)
Beginning Balance, unit at Sep. 30, 2023   326 35,603  
Net income 12,979 $ 118 $ 12,861  
Unrealized gain on pension plan obligation 319     319
Tax effect of unrealized gain on pension plan obligation (75)     (75)
Unrealized gain on captive insurance collateral 932     932
Tax effect of unrealized gain on captive insurance collateral (202)     (202)
Unrealized loss on interest rate hedges (1,042)     (1,042)
Tax effect of unrealized loss on interest rate hedges 285     285
Distributions (6,118) (334) (5,784)  
Retirement of units (150)   $ (150)  
Retirement of units, shares     (13)  
Ending Balance at Dec. 31, 2023 $ 270,652 $ (4,831) $ 288,789 $ (13,306)
Ending Balance, Unit at Dec. 31, 2023   326 35,590  
v3.24.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash flows provided by (used in) operating activities:    
Net income $ 12,979 $ 13,539
Adjustment to reconcile net income to net cash provided by (used in) operating activities:    
(Increase) decrease in the fair value of derivative instruments [1] 19,030 17,636
Depreciation and amortization 8,636 8,166
Provision for losses on accounts receivable 649 1,046
Change in deferred taxes (1,591) (1,224)
Change in weather hedge contracts (980) 350
Changes in operating assets and liabilities:    
Increase in receivables (73,590) (115,164)
Increase in inventories (26,805) (28,717)
Decrease (increase) in other assets 704 (2,005)
Increase in accounts payable 11,095 22,366
Decrease in customer credit balances (21,852) (14,700)
Increase in other current and long-term liabilities 11,417 5,966
Net cash used in operating activities (60,308) (92,741)
Cash flows provided by (used in) investing activities:    
Capital expenditures (3,174) (3,095)
Proceeds from sales of fixed assets 185 215
Proceeds from sale of certain assets 0 2,202
Purchase of investments (409) (215)
Acquisitions (2,477) (1,193)
Net cash used in investing activities (5,875) (2,086)
Cash flows provided by (used in) financing activities:    
Revolving credit facility borrowings 51,637 116,298
Term loan repayments (4,000) (4,125)
Distributions (6,118) (5,774)
Unit repurchases (150) (3,596)
Customer retainage payments (452) (5)
Net cash provided by financing activities 40,917 102,798
Net (decrease) increase in cash, cash equivalents, and restricted cash (25,266) 7,971
Cash, cash equivalents, and restricted cash at beginning of period 45,441 14,870
Cash, cash equivalents, and restricted cash at end of period $ 20,175 $ 22,841
[1] Represents the change in value of unrealized open positions and expired options.
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Pay vs Performance Disclosure    
Net Income (Loss) $ 12,979 $ 13,539
v3.24.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2023
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.0.1
Organization
 3 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Organization

1) Organization

Star Group, L.P. (“Star,” the “Company,” “we,” “us,” or “our”) is a full service provider specializing in the sale of home heating and air conditioning products and services to residential and commercial home heating oil and propane customers. The Company has one reportable segment for accounting purposes. We also sell diesel fuel, gasoline and home heating oil on a delivery only basis. We believe we are the nation’s largest retail distributor of home heating oil based upon sales volume.

The Company is organized as follows:

•
Star is a limited partnership, which at December 31, 2023, had outstanding 35.6 million Common Units (NYSE: “SGU”), representing a 99.1% limited partner interest in Star, and 0.3 million general partner units, representing a 0.9% general partner interest in Star. Our general partner is Kestrel Heat, LLC, a Delaware limited liability company (“Kestrel Heat” or the “general partner”). The Board of Directors of Kestrel Heat (the “Board”) is appointed by its sole member, Kestrel Energy Partners, LLC, a Delaware limited liability company (“Kestrel”). Although Star is a partnership, it is taxed as a corporation and its distributions to unitholders are treated as taxable dividends.
•
Star owns 100% of Star Acquisitions, Inc. (“SA”), a Minnesota corporation that owns 100% of Petro Holdings, Inc. (“Petro”). SA and its subsidiaries are subject to Federal and state corporate income taxes. Star’s operations are conducted through Petro and its subsidiaries. Petro is primarily a Northeast and Mid-Atlantic U.S. region retail distributor of home heating oil and propane that at December 31, 2023 served approximately 404,800 full service residential and commercial home heating oil and propane customers and 57,600 customers on a delivery only basis. We also sell gasoline and diesel fuel to approximately 26,900 customers. We install, maintain, and repair heating and air conditioning equipment and to a lesser extent provide these services outside our heating oil and propane customer base including approximately 21,200 service contracts for natural gas and other heating systems.
•
Petroleum Heat and Power Co., Inc. (“PH&P”) is a wholly owned subsidiary of Star. PH&P is the borrower and Star is the guarantor of the sixth amended and restated credit agreement’s $165 million five-year senior secured term loan and the $400 million ($550 million during the heating season of December through April of each year) revolving credit facility, both due July 6, 2027. (See Note 11—Long-Term Debt and Bank Facility Borrowings).
v3.24.0.1
Summary of Significant Accounting Policies
 3 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2) Summary of Significant Accounting Policies

 

Basis of Presentation

The Consolidated Financial Statements include the accounts of Star and its subsidiaries. All material intercompany items and transactions have been eliminated in consolidation.

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair statement of financial condition and results for the interim periods. Due to the seasonal nature of the Company’s business, the results of operations and cash flows for the three-month period ended December 31, 2023 are not necessarily indicative of the results to be expected for the full year.

These interim financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023.

Comprehensive Income

Comprehensive income is comprised of Net income and Other comprehensive income. Other comprehensive income consists of the unrealized gain on amortization on the Company’s pension plan obligation for its two frozen defined benefit pension plans, unrealized gain on available-for-sale investments, unrealized loss on interest rate hedges and the corresponding tax effects.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At December 31, 2023, the $20.2 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $19.9 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2023, the $45.4 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $45.2 million of cash and cash equivalents and $0.3 million of restricted cash. Restricted cash represents deposits held by our captive insurance company that are required by state insurance regulations to remain in the captive insurance company as cash.

Fair Value Valuation Approach

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

•
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•
Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•
Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Captive Insurance Collateral

The captive insurance collateral is held by our captive insurance company in an irrevocable trust as collateral for certain workers’ compensation and automobile liability claims. The collateral is required by a third party insurance carrier that insures per claim amounts above a set deductible. If we did not deposit cash into the trust, the third party carrier would require that we issue an equal amount of letters of credit, which would reduce our availability under the sixth amended and restated credit agreement. Due to the expected timing of claim payments, the nature of the collateral agreement with the carrier, and our captive insurance company’s source of other operating cash, the collateral is not expected to be used to pay obligations within the next twelve months.

Unrealized gains and losses, net of related income taxes, are reported as accumulated other comprehensive income (loss), except for losses from impairments which are determined to be other-than-temporary. Realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are included in the determination of net income and are included in Interest expense, net, at which time the average cost basis of these securities are adjusted to fair value.

Weather Hedge Contract

To partially mitigate the adverse effect of warm weather on cash flows, the Company has used weather hedge contracts for a number of years. Weather hedge contracts are recorded in accordance with the intrinsic value method defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-45-15 Derivatives and Hedging, Weather Derivatives (EITF 99-2). The premium paid is included in the caption “Prepaid expenses and other current assets” in the accompanying balance sheets and amortized over the life of the contract, with the intrinsic value method applied at each interim period.

The Company entered into weather hedge contracts for fiscal years 2023 and 2024. The hedge period runs from November 1 through March 31, taken as a whole. The “Payment Thresholds,” or strikes, are set at various levels and are referenced against degree days for the prior ten year average. Under these contracts the maximum amount the Company can receive is $12.5 million annually. For the contracts applicable to fiscal 2023, we were additionally obligated to make an annual payment capped at $5.0 million if degree days exceeded the Payment Threshold. This obligation does not exist under the contract applicable to 2024.

In accordance with ASC 815-45, we recorded a $1.0 million benefit to delivery and branch expenses for the first quarter of fiscal 2024. The final settlement under this weather hedge contract for fiscal 2024 may differ depending on the actual degree-days recorded in the period January 1, 2024 through March 31, 2024. For the first quarter of fiscal 2023, we recorded an expense of $0.4 million which was subsequently reversed as the actual degree-days for the second quarter of fiscal 2023 were warmer than the Payment Thresholds and the Company recorded a benefit of $12.9 million in the second quarter of fiscal 2023.

New England Teamsters and Trucking Industry Pension Fund (“the NETTI Fund”) Liability

As of December 31, 2023, we had $0.3 million and $15.9 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability. As of September 30, 2023, we had $0.3 million and $16.0 million balances reflected in these categories respectively. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal liability as of December 31, 2023 and September 30, 2023 was $19.6 million and $18.5 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC No. 606. The Company adopted the ASU effective October 1, 2023. The Company's adoption of the ASU did not have an impact on the Company's condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to income tax disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company has not determined the timing of adoption and is currently evaluating the impact of the new standard on its condensed consolidated financial statements.
v3.24.0.1
Revenue Recognition
 3 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

3) Revenue Recognition

The following disaggregates our revenue by major sources for the three months ended December 31, 2023 and December 31, 2022:

 

 

Three Months
Ended December 31,

 

(in thousands)

 

2023

 

 

2022

 

Petroleum Products:

 

 

 

 

 

 

Home heating oil and propane

 

$

351,214

 

 

$

435,523

 

Other petroleum products

 

 

97,336

 

 

 

134,406

 

   Total petroleum products

 

 

448,550

 

 

 

569,929

 

Installations and Services:

 

 

 

 

 

 

Equipment installations

 

 

34,315

 

 

 

32,789

 

Equipment maintenance service contracts

 

 

28,916

 

 

 

28,716

 

Billable call services

 

 

16,315

 

 

 

16,753

 

   Total installations and services

 

 

79,546

 

 

 

78,258

 

   Total Sales

 

$

528,096

 

 

$

648,187

 

 

Deferred Contract Costs

We recognize an asset for incremental commission expenses paid to sales personnel in conjunction with obtaining new residential customer product and equipment maintenance service contracts. We defer these costs only when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract. Costs to obtain a contract are amortized and recorded ratably as delivery and branch expenses over the period representing the transfer of goods or services to which the assets relate. Costs to obtain new residential product and equipment maintenance service contracts are amortized as expense over the estimated customer relationship period of approximately five years. Deferred contract costs are classified as current or non-current within “Prepaid expenses and other current assets” and “Deferred charges and other assets, net,” respectively. At December 31, 2023, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.3 million and $5.6 million, respectively. At September 30, 2023, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.3 million and $5.4 million, respectively. For the three months ended December 31, 2023 and December 31, 2022 we recognized expense of $1.0 million

associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations.

Contract Liability Balances

The Company has contract liabilities for advanced payments received from customers for future oil deliveries (primarily amounts received from customers on “smart pay” budget payment plans in advance of oil deliveries) and obligations to service customers with equipment maintenance service contracts. Contract liabilities are recognized straight-line over the service contract period, generally one year or less. As of December 31, 2023 and September 30, 2023 the Company had contract liabilities of $161.9 million and $170.3 million, respectively. During the three months ended December 31, 2023, the Company recognized $91.6 million of revenue that was included in the September 30, 2023 contract liability balance. During the three months ended December 31, 2022 the Company recognized $85.6 million of revenue that was included in the September 30, 2022 contract liability balance.

Receivables and Allowance for Doubtful Accounts

Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.

The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.

Changes in the allowance for credit losses are as follows:

 

(in thousands)

Credit Loss Allowance

 

Balance at September 30, 2023

$

8,375

 

Current period provision

 

649

 

Write-offs, net and other

 

(950

)

Balance as of December 31, 2023

$

8,074

 
v3.24.0.1
Common Unit Repurchase and Retirement
 3 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Common Unit Repurchase and Retirement

4) Common Unit Repurchase and Retirement

In July 2012, the Board adopted a plan to repurchase certain of the Company’s Common Units (the “Repurchase Plan”). Through May 2023, the Company had repurchased approximately 20.5 million Common Units under the Repurchase Plan. In May 2023, the Board authorized an increase of the number of Common Units that remained available for the Company to repurchase from 1.1 million to a total of 2.6 million, of which, approximately 2.3 million were available for repurchase in open market transactions and approximately 0.3 million were available for repurchase in privately-negotiated transactions. There is no guarantee of the number of units that will be purchased under the Repurchase Plan and the Company may discontinue purchases at any time. The Repurchase Plan does not have a time limit. The Board may also approve additional purchases of units from time to time in private transactions. The Company’s repurchase activities take into account SEC safe harbor rules and guidance for issuer repurchases. All of the Common Units purchased under the Repurchase Plan will be retired.

Under the Company’s sixth amended and restated credit agreement dated July 6, 2022, as amended, in order to pay distributions and repurchase Common Units, we must maintain Availability (as defined in the sixth amended and restated credit agreement) of $60 million, 15.0% of the facility size of $400 million (assuming no borrowings under the seasonal advance) on a historical pro forma and forward-looking basis, and a fixed charge coverage ratio of not less than 1.0 through February 27, 2024 and 1.15 thereafter measured as of the date of repurchase or distribution. (See Note 11—Long-Term Debt and Bank Facility Borrowings).

The following table shows repurchases under the Repurchase Plan:

 

(in thousands, except per unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 


Period

 

Total Number of
Units Purchased

 

 

Average Price
Paid per Unit (a)

 

 

Total Number of
Units Purchased as Part of Publicly Announced Plans or Programs

 

 

Maximum Number
of Units that May
Yet Be Purchased

 

 

 Fiscal year 2012 to 2023 total

 

 

25,422

 

 

$

8.82

 

 

 

20,534

 

 

 

2,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 2023

 

 

13

 

 

$

11.27

 

 

 

13

 

 

 

2,555

 

 

November 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,555

 

 

December 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,555

 

 

 First quarter fiscal year 2024 total

 

 

13

 

 

$

11.27

 

 

 

13

 

 

 

2,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 2024

 

 

15

 

 

$

11.27

 

 

 

15

 

 

 

2,540

 

(b)

 

(a)
Amount includes repurchase costs.
(b)
Of the total available for repurchase, approximately 2.2 million units are available for repurchase in open market transactions and approximately 0.3 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.
v3.24.0.1
Captive Insurance Collateral
 3 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Captive Insurance Collateral

5) Captive Insurance Collateral

The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at December 31, 2023 consist of the following (in thousands):

 

 

 

Amortized Cost

 

Gross Unrealized Gain

 

 

Gross Unrealized (Loss)

 

 

Fair Value

 

Cash and Receivables

 

$

6,365

 

 

$

—

 

 

$

—

 

 

$

6,365

 

U.S. Government Sponsored Agencies

 

 

50,813

 

 

 

11

 

 

 

(966

)

 

 

49,858

 

Corporate Debt Securities

 

 

16,209

 

 

 

3

 

 

 

(415

)

 

 

15,797

 

Total

 

$

73,387

 

 

$

14

 

 

$

(1,381

)

 

$

72,020

 

 

Investments at September 30, 2023 consist of the following (in thousands):

 

 

 

Amortized Cost

 

Gross Unrealized Gain

 

 

Gross Unrealized (Loss)

 

 

Fair Value

 

Cash and Receivables

 

$

4,335

 

 

$

—

 

 

$

—

 

 

$

4,335

 

U.S. Government Sponsored Agencies

 

 

50,471

 

 

 

—

 

 

 

(1,620

)

 

 

48,851

 

Corporate Debt Securities

 

 

18,210

 

 

 

12

 

 

 

(691

)

 

 

17,531

 

Total

 

$

73,016

 

 

$

12

 

 

$

(2,311

)

 

$

70,717

 

 

Maturities of investments were as follows at December 31, 2023 (in thousands):

 

 

 

Net Carrying Amount

 

Due within one year

 

$

52,825

 

Due after one year through five years

 

 

19,195

 

Due after five years through ten years

 

 

—

 

Total

 

$

72,020

 
v3.24.0.1
Derivatives and Hedging-Disclosures and Fair Value Measurements
 3 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging-Disclosures and Fair Value Measurements

6) Derivatives and Hedging—Disclosures and Fair Value Measurements

The Company uses derivative instruments such as futures, options and swap agreements in order to mitigate exposure to market risk associated with the purchase of home heating oil for price-protected customers, physical inventory on hand, inventory in transit, priced purchase commitments and internal fuel usage. FASB ASC 815-10-05 Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities, along with qualitative disclosures regarding the derivative activity. The Company has elected not to designate its commodity derivative instruments as hedging derivatives, but rather as economic hedges whose change in fair value is recognized in its statement of operations in the caption “(Increase) decrease in the fair value of derivative instruments.” Depending on the risk being economically hedged, realized gains and losses are recorded in cost of product, cost of installations and services, or delivery and branch expenses.

As of December 31, 2023, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to its price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: 14.2 million gallons of swap contracts, 8.8 million gallons of call options, 6.6 million gallons of put options, and 61.4 million net gallons of synthetic call options. To hedge its physical inventory on hand, inventory in transit and basis risk, the Company, as of December 31, 2023, held 0.2 million gallons of swap contracts and 20.7 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal 2024, the Company held 5.3 million gallons of swap contracts that settle in future months.

As of December 31, 2022, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to its price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: 9.4 million gallons of swap contracts, 23.2 million gallons of call options, 4.3 million gallons of put options, and 61.3 million net gallons of synthetic call options. To hedge its physical inventory on hand, inventory in transit and basis risk, the Company, as of December 31, 2022, held 25.3 million gallons of swap contracts and 7.3 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal 2023, the Company held 3.7 million gallons of swap contracts that settle in future months.

As of December 31, 2023, the Company has interest rate swap agreements in order to mitigate exposure to market risk associated with variable rate interest on $54.6 million, or 38%, of its long term debt. The Company has designated its interest rate swap agreements as cash flow hedging derivatives. To the extent these derivative instruments are effective and the accounting standard’s documentation requirements have been met, changes in fair value are recognized in other comprehensive income (loss) until the underlying hedged item is recognized in earnings. As of December 31, 2023 the fair value of the swap contracts was $0.6 million. As of September 30, 2023, the notional value of the swap contracts was $55.5 million and the fair value of the swap contracts was $1.6 million. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of the swap contracts.

The Company’s derivative instruments are with the following counterparties: Bank of America, N.A., Bank of Montreal, Cargill, Inc., Citibank, N.A., JPMorgan Chase Bank, N.A., Key Bank, N.A. and Wells Fargo Bank, N.A. The Company assesses counterparty credit risk and considers it to be low. We maintain master netting arrangements that allow for the non-conditional offsetting of amounts receivable and payable with counterparties to help manage our risks and record derivative positions on a net basis. The Company generally does not receive cash collateral from its counterparties and does not restrict the use of cash collateral it maintains at counterparties. At December 31, 2023, the aggregate cash posted as collateral in the normal course of business at counterparties was $1.6 million and recorded in “Prepaid expense and other current assets.” Positions with counterparties who are also parties to our credit agreement are collateralized under that facility. As of December 31, 2023, $15.7 million hedge positions or payable amounts were secured under the credit facility.

The Company’s Level 1 derivative assets and liabilities represent the fair value of commodity contracts used in its hedging activities that are identical and traded in active markets. The Company’s Level 2 derivative assets and liabilities represent the fair value of commodity and interest rate contracts used in its hedging activities that are valued using either directly or indirectly observable inputs, whose nature, risk and class are similar. No significant transfers of assets or liabilities have been made into and out of the Level 1 or Level 2 tiers. All derivative instruments were non-trading positions and were either a Level 1 or Level 2 instrument. The Company had no Level 3 derivative instruments. The fair market value of our Level 1 and Level 2 derivative assets and liabilities are calculated by our counter-parties and are independently validated by the Company. The Company’s calculations are, for Level 1 derivative assets and liabilities, based on the published New York Mercantile Exchange (“NYMEX”) market prices for the commodity contracts open at the end of the period. For Level 2 derivative assets and liabilities the calculations performed by the Company are based on a combination of the NYMEX published market prices and other inputs, including such factors as present value, volatility and duration.

The Company had no assets or liabilities that are measured at fair value on a nonrecurring basis subsequent to their initial recognition. The Company’s commodity financial assets and liabilities measured at fair value on a recurring basis are listed on the following table.

 

(In thousands)

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using:

 

Derivatives Not Designated
   as Hedging Instruments

 

 

 

 

 

 

Quoted Prices in
Active Markets for
Identical Assets

 

 

Significant Other
Observable Inputs

 

Under FASB ASC 815-10

 

Balance Sheet Location

 

Total

 

 

Level 1

 

 

Level 2

 

Asset Derivatives at December 31, 2023

 

Commodity contracts

 

Fair liability value of derivative instruments

 

$

17,620

 

 

$

—

 

 

$

17,620

 

Commodity contracts

 

Other long-term liabilities, net balance

 

 

1,198

 

 

 

—

 

 

 

1,198

 

Commodity contract assets at December 31, 2023

 

$

18,818

 

 

$

—

 

 

$

18,818

 

Liability Derivatives at December 31, 2023

 

Commodity contracts

 

Fair liability value of derivative instruments

 

$

(32,452

)

 

$

—

 

 

$

(32,452

)

Commodity contracts

 

Other long-term liabilities, net balance

 

 

(1,404

)

 

 

—

 

 

 

(1,404

)

Commodity contract liabilities at December 31, 2023

 

$

(33,856

)

 

$

—

 

 

$

(33,856

)

Asset Derivatives at September 30, 2023

 

Commodity contracts

 

Fair asset and liability value of derivative instruments

 

$

17,891

 

 

$

—

 

 

$

17,891

 

Commodity contracts

 

Long-term derivative assets included in the deferred charges and other assets, net and other long-term liabilities, net balances

 

 

779

 

 

 

—

 

 

 

779

 

Commodity contract assets September 30, 2023

 

$

18,670

 

 

$

—

 

 

$

18,670

 

Liability Derivatives at September 30, 2023

 

Commodity contracts

 

Fair asset and liability value of derivative instruments

 

$

(7,349

)

 

$

—

 

 

$

(7,349

)

Commodity contracts

 

Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances

 

 

(679

)

 

 

—

 

 

 

(679

)

Commodity contract liabilities September 30, 2023

 

$

(8,028

)

 

$

—

 

 

$

(8,028

)

 

The Company’s commodity derivative assets (liabilities) offset by counterparty and subject to an enforceable master netting arrangement are listed on the following table.

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

Offsetting of Financial Assets (Liabilities)
   and Derivative Assets (Liabilities)

 

Gross
Assets
Recognized

 

 

Gross
Liabilities
Offset in the
Statement
of Financial
Position

 

 

Net Assets
(Liabilities)
Presented in the
Statement
of Financial
Position

 

 

Financial
Instruments

 

 

Cash
Collateral
Received

 

 

Net
Amount

 

Fair liability value of derivative instruments

 

$

17,620

 

 

$

(32,452

)

 

$

(14,832

)

 

$

—

 

 

$

—

 

 

$

(14,832

)

Long-term derivative liabilities included in
   other long-term liabilities, net

 

 

1,198

 

 

 

(1,404

)

 

 

(206

)

 

 

—

 

 

 

—

 

 

 

(206

)

Total at December 31, 2023

 

$

18,818

 

 

$

(33,856

)

 

$

(15,038

)

 

$

—

 

 

$

—

 

 

$

(15,038

)

Fair asset value of derivative instruments

 

$

17,815

 

 

$

(7,155

)

 

$

10,660

 

 

$

—

 

 

$

—

 

 

$

10,660

 

Long-term derivative assets included in deferred charges and other assets, net

 

 

567

 

 

 

(452

)

 

 

115

 

 

 

—

 

 

 

—

 

 

 

115

 

Fair liability value of derivative instruments

 

 

76

 

 

 

(194

)

 

 

(118

)

 

 

—

 

 

 

—

 

 

 

(118

)

Long-term derivative liabilities included in other long-term liabilities, net

 

 

212

 

 

 

(227

)

 

 

(15

)

 

 

—

 

 

 

—

 

 

 

(15

)

Total at September 30, 2023

 

$

18,670

 

 

$

(8,028

)

 

$

10,642

 

 

$

—

 

 

$

—

 

 

$

10,642

 

 

(In thousands)

 

 

 

 

 

 

 

 

The Effect of Derivative Instruments on the Statement of Operations

 

 

 

 

 

 

 

 

 

Amount of (Gain) or Loss Recognized

 

Derivatives Not Designated as Hedging Instruments Under FASB ASC 815-10

 

Location of (Gain) or Loss
Recognized in Income on Derivative

 

Three Months Ended December 31,
2023

 

 

Three Months Ended December 31,
2022

 

Commodity contracts

 

Cost of product (a)

 

$

4,723

 

 

$

(8,942

)

Commodity contracts

 

Cost of installations and service (a)

 

$

14

 

 

$

40

 

Commodity contracts

 

Delivery and branch expenses (a)

 

$

(392

)

 

$

(200

)

Commodity contracts

 

(Increase) / decrease in the fair
 value of derivative instruments (b)

 

$

19,030

 

 

$

17,636

 

 

(a)
Represents realized closed positions and includes the cost of options as they expire.
(b)
Represents the change in value of unrealized open positions and expired options.
v3.24.0.1
Inventories
 3 Months Ended
Dec. 31, 2023
Inventory Disclosure [Abstract]  
Inventories

7) Inventories

The Company’s product inventories are stated at the lower of cost and net realizable value computed on the weighted average cost method. All other inventories, representing parts and equipment are stated at the lower of cost and net realizable value using the FIFO method. The components of inventory were as follows (in thousands):

 

 

 

December 31,
2023

 

 

September 30,
2023

 

Product

 

$

61,859

 

 

$

33,994

 

Parts and equipment

 

 

22,174

 

 

 

22,469

 

Total inventory

 

$

84,033

 

 

$

56,463

 
v3.24.0.1
Property and Equipment
 3 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Property and Equipment

8) Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization is computed over the estimated useful lives of the depreciable assets using the straight-line method (in thousands):

 

 

 

December 31,
2023

 

 

September 30,
2023

 

Property and equipment

 

$

246,555

 

 

$

244,816

 

Less: accumulated depreciation and amortization

 

 

141,397

 

 

 

139,412

 

Property and equipment, net

 

$

105,158

 

 

$

105,404

 
v3.24.0.1
Business Combinations and Divestitures
 3 Months Ended
Dec. 31, 2023
Business Combinations [Abstract]  
Business Combinations and Divestitures

9) Business Combinations and Divestitures

During the three months ended December 31, 2023 the Company acquired two heating oil businesses for an aggregate purchase price of approximately $2.5 million in cash. The gross purchase price was allocated $2.7 million to intangible assets, $0.2 million to goodwill, $0.8 million to fixed assets and reduced by $1.2 million of negative working capital. The acquired companies’ operating results are included in the Company’s consolidated financial statements starting on their respective acquisition date, and are not material to the Company’s financial condition, results of operations, or cash flows.

During the three months ended December 31, 2022, the Company sold certain assets for cash proceeds of $2.2 million and acquired two heating oil businesses for an aggregate purchase price of approximately $1.2 million in cash. The gross purchase price was allocated $1.7 million to intangible assets, $0.2 million to goodwill, $0.2 million to fixed assets and reduced by $0.9 million of negative working capital.
v3.24.0.1
Goodwill and Intangible Assets, net
 3 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, net

10) Goodwill and Intangible Assets, net

Goodwill

A summary of changes in Company’s goodwill is as follows (in thousands):

 

Balance as of September 30, 2023

 

$

262,103

 

Fiscal year 2024 business combinations

 

 

244

 

Balance as of December 31, 2023

 

$

262,347

 

Intangibles, net

The gross carrying amount and accumulated amortization of intangible assets subject to amortization are as follows (in thousands):

 

 

 

December 31, 2023

 

 

September 30, 2023

 

 

 

Gross

 

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

 

 

 

Carrying

 

 

Accum.

 

 

 

 

 

Carrying

 

 

Accum.

 

 

 

 

 

 

Amount

 

 

Amortization

 

 

Net

 

 

Amount

 

 

Amortization

 

 

Net

 

Customer lists

 

$

420,460

 

 

$

362,914

 

 

$

57,546

 

 

$

418,190

 

 

$

358,855

 

 

$

59,335

 

Trade names and other intangibles

 

 

42,197

 

 

 

25,774

 

 

 

16,423

 

 

 

41,782

 

 

 

24,811

 

 

 

16,971

 

Total

 

$

462,657

 

 

$

388,688

 

 

$

73,969

 

 

$

459,972

 

 

$

383,666

 

 

$

76,306

 

 

Amortization expense for intangible assets was $5.0 million for the three months ended December 31, 2023, compared to $4.3 million for the three months ended December 31, 2022.

v3.24.0.1
Long-Term Debt and Bank Facility Borrowings
 3 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Long-Term Debt and Bank Facility Borrowings

11) Long-Term Debt and Bank Facility Borrowings

The Company’s debt is as follows (in thousands):

 

 

December 31,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

 

Carrying
Amount

 

 

Fair Value (a)

 

 

Carrying
Amount

 

 

Fair Value (a)

 

Revolving Credit Facility Borrowings

 

$

51,877

 

 

$

51,877

 

 

$

240

 

 

$

240

 

Senior Secured Term Loan (b)

 

 

143,883

 

 

 

144,500

 

 

 

147,827

 

 

 

148,500

 

Total debt

 

$

195,760

 

 

$

196,377

 

 

$

148,067

 

 

$

148,740

 

Total short-term portion of debt

 

$

72,502

 

 

$

72,502

 

 

$

20,740

 

 

$

20,740

 

Total long-term portion of debt (b)

 

$

123,258

 

 

$

123,875

 

 

$

127,327

 

 

$

128,000

 

 

(a)
The face amount of the Company’s variable rate long-term debt approximates fair value.
(b)
Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of December 31, 2023 and $0.7 million as of September 30, 2023.

On July 6, 2022, the Company refinanced its five-year term loan and the revolving credit facility with the execution of the sixth amended and restated revolving credit facility agreement (the “credit agreement”) with a bank syndicate comprised of ten participants, which enables the Company to borrow up to $400 million ($550 million during the heating season of December through April of each year) on a revolving credit facility for working capital purposes (subject to certain borrowing base limitations and coverage ratios), provides for a $165 million five-year senior secured term loan (“Term Loan”), allows for the issuance of up to $25 million in letters of credit, and has a maturity date of July 6, 2027.

The Company can increase the revolving credit facility size by an additional $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent (as defined in the credit agreement), which shall not be unreasonably withheld. Obligations under the credit agreement are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s assets, including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.

All amounts outstanding under the sixth amended and restated revolving credit facility become due and payable on the facility termination date of July 6, 2027. The Term Loan is repayable in quarterly payments of $4.1 million, the first of which was made December 30, 2022, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the credit agreement (an amount not to exceed $8.5 million annually), less certain voluntary prepayments made during the year, with final payment at maturity. In the first quarter of 2024 the Company repaid $4.0 million of additional loan repayments due to Excess Cash Flow related to fiscal 2023. There was no additional loan repayments due to Excess Cash Flow in the first quarter of fiscal 2023 related to fiscal 2022. The $4.1 million quarterly payment for the quarter ended December 31, 2023 was made on January 2, 2024.

The interest rate on the revolving credit facility and the term loan is based on a margin over Adjusted Term Secured Overnight Financing Rate ("SOFR") or a base rate. At December 31, 2023, the effective interest rate on the term loan (considering the impact of interest rate hedges) and revolving credit facility borrowings was approximately 7.4% and 8.6%, respectively, compared to 6.6% and 6.3%, respectively at September 30, 2023.

The commitment fee on the unused portion of the revolving credit facility is 0.30% from December through April, and 0.20% from May through November.

The credit agreement requires the Company to meet certain financial covenants, including a fixed charge coverage ratio (as defined in the credit agreement) of not less than 1.1 as long as the Term Loan is outstanding or revolving credit facility availability is less than 12.5% of the facility size. In addition, as long as the Term Loan is outstanding, a senior secured leverage ratio cannot be more than 3.0 as calculated as of the quarters ending June or September, and no more than 5.5 as calculated as of the quarters ending December or March.

On September 26, 2023, the Company signed a first amendment (the “Amendment”) to its Sixth Amended and Restated Credit Agreement with a group of banks, which provides temporary relief from certain financial covenants under the Credit Agreement that must be satisfied in order for the Company to make distributions and unit repurchases or, if availability under the Credit Agreement drops below a minimum threshold due to, among other things, the Company making acquisitions. In particular, the Amendment reduces the minimum fixed charge coverage ratio for distributions and unit repurchases during the period commencing October 31, 2023 and ending February 27, 2024 (the “Relief Period”) from 1.15-to-1.00 down to 1.00-to-1.00. The Amendment also reduces the minimum fixed charge coverage ratio that must be maintained by the Company if availability under the under the Credit Agreement drops below 12.5% of the facility size during the Relief Period from 1.10-to-1.00 down to 1.00-to-1.00. The Company’s fixed charge coverage ratio as of December 31, 2023 was 1.39 to 1.00.

Certain restrictions are also imposed by the sixth amended and restated credit agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, repurchase units, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.

At December 31, 2023, $144.5 million of the Term Loan was outstanding, $51.9 million was outstanding under the revolving credit facility, $15.7 million hedge positions were secured under the credit agreement, and $3.2 million of letters of credit were issued and outstanding. At September 30, 2023, $148.5 million of the term loan was outstanding, $0.2 million was outstanding under the revolving credit facility, $0.1 million hedge positions were secured under the credit agreement and $3.2 million of letters of credit were issued and outstanding.

At December 31, 2023, availability was $189.2 million, and the Company was in compliance with the financial covenants. At September 30, 2023, availability was $202.1 million, and the Company was in compliance with the financial covenants.

v3.24.0.1
Income Taxes
 3 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

12) Income Taxes

The accompanying financial statements are reported on a fiscal year, however, the Company and its corporate subsidiaries file Federal and State income tax returns on a calendar year.

The current and deferred income tax expense for the three months ended December 31, 2023 and December 31, 2022 are as follows:

 

 

 

Three Months Ended

 

 

 

December 31,

 

(in thousands)

 

2023

 

 

2022

 

Income before income taxes

 

$

18,153

 

 

$

19,002

 

Current income tax expense

 

 

6,765

 

 

 

6,687

 

Deferred income tax expense (benefit)

 

 

(1,591

)

 

 

(1,224

)

Total income tax expense

 

$

5,174

 

 

$

5,463

 

 

At December 31, 2023, we did not have unrecognized income tax benefits.

Our continuing practice is to recognize interest and penalties related to income tax matters as a component of income tax expense. We file U.S. Federal income tax returns and various state and local returns. A number of years may elapse before an uncertain tax position is audited and finally resolved. For our Federal income tax returns we have four tax years subject to examination. In our major state tax jurisdictions of New York, Connecticut and Pennsylvania, we have four years that are subject to examination. In the state tax jurisdiction of New Jersey we have five tax years that are subject to examination. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, based on our assessment of many factors, including past experience and interpretation of tax law, we believe that our provision for income taxes reflect the most probable outcome. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.

v3.24.0.1
Supplemental Disclosure of Cash Flow Information
 3 Months Ended
Dec. 31, 2023
Supplemental Cash Flow Elements [Abstract]  
Supplemental Disclosure of Cash Flow Information

13) Supplemental Disclosure of Cash Flow Information

 

 

Three Months Ended

 

 

Cash paid during the period for:

 

December 31,

 

 

(in thousands)

 

2023

 

 

2022

 

 

Income taxes, net

 

$

4,819

 

 

$

5,479

 

 

Interest

 

$

3,768

 

 

$

4,286

 

 
v3.24.0.1
Commitments and Contingencies
 3 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

14) Commitments and Contingencies

The Company’s operations are subject to the operating hazards and risks normally incidental to handling, storing and transporting and otherwise providing for use by consumers hazardous liquids such as home heating oil and propane. In the ordinary course of business, the Company is a defendant in various legal proceedings and litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We do not believe these matters, when considered individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

The Company maintains insurance policies with insurers in amounts and with coverages and deductibles we believe are reasonable and prudent. However, the Company cannot assure that this insurance will be adequate to protect it from all material expenses related to current and potential future claims, legal proceedings and litigation, as certain types of claims may be excluded from our insurance coverage. If we incur substantial liability and the damages are not covered by insurance, or are in excess of policy limits, or if we incur liability at a time when we are not able to obtain liability insurance, then our business, results of operations and financial condition could be materially adversely affected.

v3.24.0.1
Earnings Per Limited Partner Unit
 3 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Earnings Per Limited Partner Unit

15) Earnings Per Limited Partner Unit

The following table presents the net income allocation and per unit data:

 

 

 

Three Months Ended

 

Basic and Diluted Earnings Per Limited Partner:

 

December 31,

 

(in thousands, except per unit data)

 

2023

 

 

2022

 

Net income

 

$

12,979

 

 

$

13,539

 

Less General Partner’s interest in net income

 

 

118

 

 

 

122

 

Net income available to limited partners

 

 

12,861

 

 

 

13,417

 

Less dilutive impact of theoretical distribution of earnings *

 

 

1,588

 

 

 

1,723

 

Limited Partner’s interest in net income

 

$

11,273

 

 

$

11,694

 

Per unit data:

 

 

 

 

 

 

Basic and diluted net income available to limited partners

 

$

0.36

 

 

$

0.37

 

Less dilutive impact of theoretical distribution of earnings *

 

 

0.04

 

 

 

0.04

 

Limited Partner’s interest in net income

 

$

0.32

 

 

$

0.33

 

Weighted average number of Limited Partner units outstanding

 

 

35,593

 

 

 

35,916

 


* In any accounting period where the Company’s aggregate net income exceeds its aggregate distribution for such period, the Company is required to present net income per Limited Partner unit as if all of the earnings for the period were distributed, based on the terms of the Partnership agreement, regardless of whether those earnings would actually be distributed during a particular period from an economic or practical perspective. This allocation does not impact the Company’s overall net income or other financial results.
v3.24.0.1
Subsequent Events
 3 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events

16) Subsequent Events

Quarterly Distribution Declared

In January 2024, we declared a quarterly distribution of $0.1625 per unit, or $0.65 per unit on an annualized basis, on all Common Units with respect to the first quarter of fiscal 2024, paid on January 31, 2024, to holders of record on January 22, 2024. The amount of distributions in excess of the minimum quarterly distribution of $0.0675 are distributed in accordance with our Partnership Agreement, subject to the management incentive compensation plan. As a result, $5.8 million was paid to the Common Unit holders, $0.3 million to the General Partner unit holders (including $0.3 million of incentive distribution as provided in our Partnership Agreement) and $0.3 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner.

 

Acquisitions

Subsequent to December 31, 2023, the Company purchased the customer list and assets of one propane business and one heating oil business for an aggregate amount of approximately $19.9 million.
v3.24.0.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The Consolidated Financial Statements include the accounts of Star and its subsidiaries. All material intercompany items and transactions have been eliminated in consolidation.

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair statement of financial condition and results for the interim periods. Due to the seasonal nature of the Company’s business, the results of operations and cash flows for the three-month period ended December 31, 2023 are not necessarily indicative of the results to be expected for the full year.

These interim financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023.

Comprehensive Income

Comprehensive Income

Comprehensive income is comprised of Net income and Other comprehensive income. Other comprehensive income consists of the unrealized gain on amortization on the Company’s pension plan obligation for its two frozen defined benefit pension plans, unrealized gain on available-for-sale investments, unrealized loss on interest rate hedges and the corresponding tax effects.
Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At December 31, 2023, the $20.2 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $19.9 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2023, the $45.4 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $45.2 million of cash and cash equivalents and $0.3 million of restricted cash. Restricted cash represents deposits held by our captive insurance company that are required by state insurance regulations to remain in the captive insurance company as cash.

Fair Value Valuation Approach

Fair Value Valuation Approach

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

•
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•
Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•
Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
Captive Insurance Collateral

Captive Insurance Collateral

The captive insurance collateral is held by our captive insurance company in an irrevocable trust as collateral for certain workers’ compensation and automobile liability claims. The collateral is required by a third party insurance carrier that insures per claim amounts above a set deductible. If we did not deposit cash into the trust, the third party carrier would require that we issue an equal amount of letters of credit, which would reduce our availability under the sixth amended and restated credit agreement. Due to the expected timing of claim payments, the nature of the collateral agreement with the carrier, and our captive insurance company’s source of other operating cash, the collateral is not expected to be used to pay obligations within the next twelve months.

Unrealized gains and losses, net of related income taxes, are reported as accumulated other comprehensive income (loss), except for losses from impairments which are determined to be other-than-temporary. Realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are included in the determination of net income and are included in Interest expense, net, at which time the average cost basis of these securities are adjusted to fair value.
Weather Hedge Contract

Weather Hedge Contract

To partially mitigate the adverse effect of warm weather on cash flows, the Company has used weather hedge contracts for a number of years. Weather hedge contracts are recorded in accordance with the intrinsic value method defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-45-15 Derivatives and Hedging, Weather Derivatives (EITF 99-2). The premium paid is included in the caption “Prepaid expenses and other current assets” in the accompanying balance sheets and amortized over the life of the contract, with the intrinsic value method applied at each interim period.

The Company entered into weather hedge contracts for fiscal years 2023 and 2024. The hedge period runs from November 1 through March 31, taken as a whole. The “Payment Thresholds,” or strikes, are set at various levels and are referenced against degree days for the prior ten year average. Under these contracts the maximum amount the Company can receive is $12.5 million annually. For the contracts applicable to fiscal 2023, we were additionally obligated to make an annual payment capped at $5.0 million if degree days exceeded the Payment Threshold. This obligation does not exist under the contract applicable to 2024.

In accordance with ASC 815-45, we recorded a $1.0 million benefit to delivery and branch expenses for the first quarter of fiscal 2024. The final settlement under this weather hedge contract for fiscal 2024 may differ depending on the actual degree-days recorded in the period January 1, 2024 through March 31, 2024. For the first quarter of fiscal 2023, we recorded an expense of $0.4 million which was subsequently reversed as the actual degree-days for the second quarter of fiscal 2023 were warmer than the Payment Thresholds and the Company recorded a benefit of $12.9 million in the second quarter of fiscal 2023.
New England Teamsters and Trucking Industry Pension Fund ("the NETTI Fund") Liability

New England Teamsters and Trucking Industry Pension Fund (“the NETTI Fund”) Liability

As of December 31, 2023, we had $0.3 million and $15.9 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability. As of September 30, 2023, we had $0.3 million and $16.0 million balances reflected in these categories respectively. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal liability as of December 31, 2023 and September 30, 2023 was $19.6 million and $18.5 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.
Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC No. 606. The Company adopted the ASU effective October 1, 2023. The Company's adoption of the ASU did not have an impact on the Company's condensed consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to income tax disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company has not determined the timing of adoption and is currently evaluating the impact of the new standard on its condensed consolidated financial statements.
Deferred Contract Costs

Deferred Contract Costs

We recognize an asset for incremental commission expenses paid to sales personnel in conjunction with obtaining new residential customer product and equipment maintenance service contracts. We defer these costs only when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract. Costs to obtain a contract are amortized and recorded ratably as delivery and branch expenses over the period representing the transfer of goods or services to which the assets relate. Costs to obtain new residential product and equipment maintenance service contracts are amortized as expense over the estimated customer relationship period of approximately five years.
Receivables and Allowance for Doubtful Accounts

Receivables and Allowance for Doubtful Accounts

Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.

The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.
Derivatives and Hedging

The Company uses derivative instruments such as futures, options and swap agreements in order to mitigate exposure to market risk associated with the purchase of home heating oil for price-protected customers, physical inventory on hand, inventory in transit, priced purchase commitments and internal fuel usage. FASB ASC 815-10-05 Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities, along with qualitative disclosures regarding the derivative activity. The Company has elected not to designate its commodity derivative instruments as hedging derivatives, but rather as economic hedges whose change in fair value is recognized in its statement of operations in the caption “(Increase) decrease in the fair value of derivative instruments.” Depending on the risk being economically hedged, realized gains and losses are recorded in cost of product, cost of installations and services, or delivery and branch expenses.
v3.24.0.1
Revenue Recognition (Tables)
 3 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Summary of Disaggregation of Revenue by Major Sources

The following disaggregates our revenue by major sources for the three months ended December 31, 2023 and December 31, 2022:

 

 

Three Months
Ended December 31,

 

(in thousands)

 

2023

 

 

2022

 

Petroleum Products:

 

 

 

 

 

 

Home heating oil and propane

 

$

351,214

 

 

$

435,523

 

Other petroleum products

 

 

97,336

 

 

 

134,406

 

   Total petroleum products

 

 

448,550

 

 

 

569,929

 

Installations and Services:

 

 

 

 

 

 

Equipment installations

 

 

34,315

 

 

 

32,789

 

Equipment maintenance service contracts

 

 

28,916

 

 

 

28,716

 

Billable call services

 

 

16,315

 

 

 

16,753

 

   Total installations and services

 

 

79,546

 

 

 

78,258

 

   Total Sales

 

$

528,096

 

 

$

648,187

 
Summary of Changes in Allowance for Credit Losses

Changes in the allowance for credit losses are as follows:

 

(in thousands)

Credit Loss Allowance

 

Balance at September 30, 2023

$

8,375

 

Current period provision

 

649

 

Write-offs, net and other

 

(950

)

Balance as of December 31, 2023

$

8,074

 
v3.24.0.1
Common Unit Repurchase and Retirement (Tables)
 3 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Company's Repurchase Activities

The following table shows repurchases under the Repurchase Plan:

 

(in thousands, except per unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 


Period

 

Total Number of
Units Purchased

 

 

Average Price
Paid per Unit (a)

 

 

Total Number of
Units Purchased as Part of Publicly Announced Plans or Programs

 

 

Maximum Number
of Units that May
Yet Be Purchased

 

 

 Fiscal year 2012 to 2023 total

 

 

25,422

 

 

$

8.82

 

 

 

20,534

 

 

 

2,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 2023

 

 

13

 

 

$

11.27

 

 

 

13

 

 

 

2,555

 

 

November 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,555

 

 

December 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,555

 

 

 First quarter fiscal year 2024 total

 

 

13

 

 

$

11.27

 

 

 

13

 

 

 

2,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 2024

 

 

15

 

 

$

11.27

 

 

 

15

 

 

 

2,540

 

(b)

 

(a)
Amount includes repurchase costs.
(b)
Of the total available for repurchase, approximately 2.2 million units are available for repurchase in open market transactions and approximately 0.3 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.
v3.24.0.1
Captive Insurance Collateral (Tables)
 3 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Captive Insurance Collateral to be Available-for-sale Investments

The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at December 31, 2023 consist of the following (in thousands):

 

 

 

Amortized Cost

 

Gross Unrealized Gain

 

 

Gross Unrealized (Loss)

 

 

Fair Value

 

Cash and Receivables

 

$

6,365

 

 

$

—

 

 

$

—

 

 

$

6,365

 

U.S. Government Sponsored Agencies

 

 

50,813

 

 

 

11

 

 

 

(966

)

 

 

49,858

 

Corporate Debt Securities

 

 

16,209

 

 

 

3

 

 

 

(415

)

 

 

15,797

 

Total

 

$

73,387

 

 

$

14

 

 

$

(1,381

)

 

$

72,020

 

 

Investments at September 30, 2023 consist of the following (in thousands):

 

 

 

Amortized Cost

 

Gross Unrealized Gain

 

 

Gross Unrealized (Loss)

 

 

Fair Value

 

Cash and Receivables

 

$

4,335

 

 

$

—

 

 

$

—

 

 

$

4,335

 

U.S. Government Sponsored Agencies

 

 

50,471

 

 

 

—

 

 

 

(1,620

)

 

 

48,851

 

Corporate Debt Securities

 

 

18,210

 

 

 

12

 

 

 

(691

)

 

 

17,531

 

Total

 

$

73,016

 

 

$

12

 

 

$

(2,311

)

 

$

70,717

 
Schedule of Maturities of Investments

Maturities of investments were as follows at December 31, 2023 (in thousands):

 

 

 

Net Carrying Amount

 

Due within one year

 

$

52,825

 

Due after one year through five years

 

 

19,195

 

Due after five years through ten years

 

 

—

 

Total

 

$

72,020

 
v3.24.0.1
Derivatives and Hedging-Disclosures and Fair Value Measurements (Tables)
 3 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Company's Commodity Financial Assets and Liabilities Measured at Fair Value on Recurring Basis The Company’s commodity financial assets and liabilities measured at fair value on a recurring basis are listed on the following table.

(In thousands)

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using:

 

Derivatives Not Designated
   as Hedging Instruments

 

 

 

 

 

 

Quoted Prices in
Active Markets for
Identical Assets

 

 

Significant Other
Observable Inputs

 

Under FASB ASC 815-10

 

Balance Sheet Location

 

Total

 

 

Level 1

 

 

Level 2

 

Asset Derivatives at December 31, 2023

 

Commodity contracts

 

Fair liability value of derivative instruments

 

$

17,620

 

 

$

—

 

 

$

17,620

 

Commodity contracts

 

Other long-term liabilities, net balance

 

 

1,198

 

 

 

—

 

 

 

1,198

 

Commodity contract assets at December 31, 2023

 

$

18,818

 

 

$

—

 

 

$

18,818

 

Liability Derivatives at December 31, 2023

 

Commodity contracts

 

Fair liability value of derivative instruments

 

$

(32,452

)

 

$

—

 

 

$

(32,452

)

Commodity contracts

 

Other long-term liabilities, net balance

 

 

(1,404

)

 

 

—

 

 

 

(1,404

)

Commodity contract liabilities at December 31, 2023

 

$

(33,856

)

 

$

—

 

 

$

(33,856

)

Asset Derivatives at September 30, 2023

 

Commodity contracts

 

Fair asset and liability value of derivative instruments

 

$

17,891

 

 

$

—

 

 

$

17,891

 

Commodity contracts

 

Long-term derivative assets included in the deferred charges and other assets, net and other long-term liabilities, net balances

 

 

779

 

 

 

—

 

 

 

779

 

Commodity contract assets September 30, 2023

 

$

18,670

 

 

$

—

 

 

$

18,670

 

Liability Derivatives at September 30, 2023

 

Commodity contracts

 

Fair asset and liability value of derivative instruments

 

$

(7,349

)

 

$

—

 

 

$

(7,349

)

Commodity contracts

 

Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances

 

 

(679

)

 

 

—

 

 

 

(679

)

Commodity contract liabilities September 30, 2023

 

$

(8,028

)

 

$

—

 

 

$

(8,028

)

 
Company's Commodity Derivatives Assets (Liabilities) Offset by Counterparty

The Company’s commodity derivative assets (liabilities) offset by counterparty and subject to an enforceable master netting arrangement are listed on the following table.

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

Offsetting of Financial Assets (Liabilities)
   and Derivative Assets (Liabilities)

 

Gross
Assets
Recognized

 

 

Gross
Liabilities
Offset in the
Statement
of Financial
Position

 

 

Net Assets
(Liabilities)
Presented in the
Statement
of Financial
Position

 

 

Financial
Instruments

 

 

Cash
Collateral
Received

 

 

Net
Amount

 

Fair liability value of derivative instruments

 

$

17,620

 

 

$

(32,452

)

 

$

(14,832

)

 

$

—

 

 

$

—

 

 

$

(14,832

)

Long-term derivative liabilities included in
   other long-term liabilities, net

 

 

1,198

 

 

 

(1,404

)

 

 

(206

)

 

 

—

 

 

 

—

 

 

 

(206

)

Total at December 31, 2023

 

$

18,818

 

 

$

(33,856

)

 

$

(15,038

)

 

$

—

 

 

$

—

 

 

$

(15,038

)

Fair asset value of derivative instruments

 

$

17,815

 

 

$

(7,155

)

 

$

10,660

 

 

$

—

 

 

$

—

 

 

$

10,660

 

Long-term derivative assets included in deferred charges and other assets, net

 

 

567

 

 

 

(452

)

 

 

115

 

 

 

—

 

 

 

—

 

 

 

115

 

Fair liability value of derivative instruments

 

 

76

 

 

 

(194

)

 

 

(118

)

 

 

—

 

 

 

—

 

 

 

(118

)

Long-term derivative liabilities included in other long-term liabilities, net

 

 

212

 

 

 

(227

)

 

 

(15

)

 

 

—

 

 

 

—

 

 

 

(15

)

Total at September 30, 2023

 

$

18,670

 

 

$

(8,028

)

 

$

10,642

 

 

$

—

 

 

$

—

 

 

$

10,642

 
Company's Effect on Derivative Instruments on the Statement of Operations

(In thousands)

 

 

 

 

 

 

 

 

The Effect of Derivative Instruments on the Statement of Operations

 

 

 

 

 

 

 

 

 

Amount of (Gain) or Loss Recognized

 

Derivatives Not Designated as Hedging Instruments Under FASB ASC 815-10

 

Location of (Gain) or Loss
Recognized in Income on Derivative

 

Three Months Ended December 31,
2023

 

 

Three Months Ended December 31,
2022

 

Commodity contracts

 

Cost of product (a)

 

$

4,723

 

 

$

(8,942

)

Commodity contracts

 

Cost of installations and service (a)

 

$

14

 

 

$

40

 

Commodity contracts

 

Delivery and branch expenses (a)

 

$

(392

)

 

$

(200

)

Commodity contracts

 

(Increase) / decrease in the fair
 value of derivative instruments (b)

 

$

19,030

 

 

$

17,636

 
(a)
Represents realized closed positions and includes the cost of options as they expire.
(b)
Represents the change in value of unrealized open positions and expired options.
v3.24.0.1
Inventories (Tables)
 3 Months Ended
Dec. 31, 2023
Inventory Disclosure [Abstract]  
Components of Inventory The components of inventory were as follows (in thousands):

 

 

 

December 31,
2023

 

 

September 30,
2023

 

Product

 

$

61,859

 

 

$

33,994

 

Parts and equipment

 

 

22,174

 

 

 

22,469

 

Total inventory

 

$

84,033

 

 

$

56,463

 
v3.24.0.1
Property and Equipment (Tables)
 3 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization is computed over the estimated useful lives of the depreciable assets using the straight-line method (in thousands):

 

 

 

December 31,
2023

 

 

September 30,
2023

 

Property and equipment

 

$

246,555

 

 

$

244,816

 

Less: accumulated depreciation and amortization

 

 

141,397

 

 

 

139,412

 

Property and equipment, net

 

$

105,158

 

 

$

105,404

 
v3.24.0.1
Goodwill and Intangible Assets, net (Tables)
 3 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Changes in Company's Goodwill

A summary of changes in Company’s goodwill is as follows (in thousands):

 

Balance as of September 30, 2023

 

$

262,103

 

Fiscal year 2024 business combinations

 

 

244

 

Balance as of December 31, 2023

 

$

262,347

 
Intangible Assets Subject to Amortization

The gross carrying amount and accumulated amortization of intangible assets subject to amortization are as follows (in thousands):

 

 

 

December 31, 2023

 

 

September 30, 2023

 

 

 

Gross

 

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

 

 

 

Carrying

 

 

Accum.

 

 

 

 

 

Carrying

 

 

Accum.

 

 

 

 

 

 

Amount

 

 

Amortization

 

 

Net

 

 

Amount

 

 

Amortization

 

 

Net

 

Customer lists

 

$

420,460

 

 

$

362,914

 

 

$

57,546

 

 

$

418,190

 

 

$

358,855

 

 

$

59,335

 

Trade names and other intangibles

 

 

42,197

 

 

 

25,774

 

 

 

16,423

 

 

 

41,782

 

 

 

24,811

 

 

 

16,971

 

Total

 

$

462,657

 

 

$

388,688

 

 

$

73,969

 

 

$

459,972

 

 

$

383,666

 

 

$

76,306

 
v3.24.0.1
Long-Term Debt and Bank Facility Borrowings (Tables)
 3 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Company's Debt

The Company’s debt is as follows (in thousands):

 

 

December 31,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

 

Carrying
Amount

 

 

Fair Value (a)

 

 

Carrying
Amount

 

 

Fair Value (a)

 

Revolving Credit Facility Borrowings

 

$

51,877

 

 

$

51,877

 

 

$

240

 

 

$

240

 

Senior Secured Term Loan (b)

 

 

143,883

 

 

 

144,500

 

 

 

147,827

 

 

 

148,500

 

Total debt

 

$

195,760

 

 

$

196,377

 

 

$

148,067

 

 

$

148,740

 

Total short-term portion of debt

 

$

72,502

 

 

$

72,502

 

 

$

20,740

 

 

$

20,740

 

Total long-term portion of debt (b)

 

$

123,258

 

 

$

123,875

 

 

$

127,327

 

 

$

128,000

 

 

(a)
The face amount of the Company’s variable rate long-term debt approximates fair value.
(b)
Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of December 31, 2023 and $0.7 million as of September 30, 2023.
v3.24.0.1
Income Taxes (Tables)
 3 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Current and Deferred Income Tax Expense

The current and deferred income tax expense for the three months ended December 31, 2023 and December 31, 2022 are as follows:

 

 

 

Three Months Ended

 

 

 

December 31,

 

(in thousands)

 

2023

 

 

2022

 

Income before income taxes

 

$

18,153

 

 

$

19,002

 

Current income tax expense

 

 

6,765

 

 

 

6,687

 

Deferred income tax expense (benefit)

 

 

(1,591

)

 

 

(1,224

)

Total income tax expense

 

$

5,174

 

 

$

5,463

 
v3.24.0.1
Supplemental Disclosure of Cash Flow Information (Tables)
 3 Months Ended
Dec. 31, 2023
Supplemental Cash Flow Elements [Abstract]  
Schedule of Supplemental Disclosure of Cash Flow Information

 

 

Three Months Ended

 

 

Cash paid during the period for:

 

December 31,

 

 

(in thousands)

 

2023

 

 

2022

 

 

Income taxes, net

 

$

4,819

 

 

$

5,479

 

 

Interest

 

$

3,768

 

 

$

4,286

 

 
v3.24.0.1
Earnings Per Limited Partner Unit (Tables)
 3 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Net Income Allocation and Per Unit Data

The following table presents the net income allocation and per unit data:

 

 

 

Three Months Ended

 

Basic and Diluted Earnings Per Limited Partner:

 

December 31,

 

(in thousands, except per unit data)

 

2023

 

 

2022

 

Net income

 

$

12,979

 

 

$

13,539

 

Less General Partner’s interest in net income

 

 

118

 

 

 

122

 

Net income available to limited partners

 

 

12,861

 

 

 

13,417

 

Less dilutive impact of theoretical distribution of earnings *

 

 

1,588

 

 

 

1,723

 

Limited Partner’s interest in net income

 

$

11,273

 

 

$

11,694

 

Per unit data:

 

 

 

 

 

 

Basic and diluted net income available to limited partners

 

$

0.36

 

 

$

0.37

 

Less dilutive impact of theoretical distribution of earnings *

 

 

0.04

 

 

 

0.04

 

Limited Partner’s interest in net income

 

$

0.32

 

 

$

0.33

 

Weighted average number of Limited Partner units outstanding

 

 

35,593

 

 

 

35,916

 


* In any accounting period where the Company’s aggregate net income exceeds its aggregate distribution for such period, the Company is required to present net income per Limited Partner unit as if all of the earnings for the period were distributed, based on the terms of the Partnership agreement, regardless of whether those earnings would actually be distributed during a particular period from an economic or practical perspective. This allocation does not impact the Company’s overall net income or other financial results.
v3.24.0.1
Organization - Additional Information (Detail)
shares in Thousands
 3 Months Ended
Jul. 06, 2022
USD ($)
Dec. 31, 2023
Customer
Segment
shares
Sep. 30, 2023
shares
Dec. 31, 2022
shares
Sep. 30, 2022
shares
Limited Partners' Capital Account [Line Items]          
Number of reportable segments | Segment   1      
Number of residential and commercial home heating oil and propane customers served   21,200      
Number of customers to whom sell gasoline and diesel fuel   26,900      
Sixth Amendment          
Limited Partners' Capital Account [Line Items]          
Non Seasonal maximum borrowing capacity under revolving credit facility | $ $ 400,000,000        
Maximum borrowing capacity (heating season December to April) under revolving credit facility | $ $ 550,000,000        
Due date of debt Jul. 06, 2027        
Sixth Amendment | Term Loan          
Limited Partners' Capital Account [Line Items]          
Outstanding term loan | $ $ 165,000,000        
Senior secured term loan maturity period 5 years        
Petro Holdings, Inc          
Limited Partners' Capital Account [Line Items]          
Ownership interest of Star Acquisitions Inc.   100.00%      
Number of customers to whom only home heating oil, gasoline and diesel were sells on a delivery only basis   57,600      
Number of residential and commercial home heating oil and propane customers served   404,800      
Star Group L.P.          
Limited Partners' Capital Account [Line Items]          
Percentage of limited partner interest   99.10%      
Percentage of general partner interest   0.90%      
Star Acquisitions, Inc          
Limited Partners' Capital Account [Line Items]          
Ownership interest of partnership   100.00%      
Common Stock          
Limited Partners' Capital Account [Line Items]          
Number of outstanding units | shares   35,590 35,603 35,681 36,092
General Partner          
Limited Partners' Capital Account [Line Items]          
Number of outstanding units | shares   326 326 326 326
v3.24.0.1
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)
 3 Months Ended
Dec. 31, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Schedule Of Significant Accounting Policies [Line Items]          
Cash, cash equivalents, and restricted cash $ 20,175,000   $ 22,841,000 $ 45,441,000 $ 14,870,000
Cash and cash equivalents 19,925,000     45,191,000  
Restricted cash 250,000     250,000  
Derivative maximum payout       5,000,000  
Accrued expenses and other current liabilities 118,382,000     115,606,000  
Other long-term liabilities 16,298,000     16,175,000  
New England Teamsters & Trucking Industry Pension Fund          
Schedule Of Significant Accounting Policies [Line Items]          
Accrued expenses and other current liabilities 300,000     300,000  
Other long-term liabilities 15,900,000     16,000,000.0  
New England Teamsters & Trucking Industry Pension Fund | Significant Other Observable Inputs Level 2          
Schedule Of Significant Accounting Policies [Line Items]          
Multiemployer plan discounted withdrawal liability 19,600,000     $ 18,500,000  
Financial Products Corporation          
Schedule Of Significant Accounting Policies [Line Items]          
Delivery and branch expense increased (reduced) under weather hedge contract $ 1,000,000 $ 12,900,000 $ (400,000)    
Maximum          
Schedule Of Significant Accounting Policies [Line Items]          
Cash equivalents, highly liquid investments maturity 3 months        
Derivative maximum receivable $ 12,500,000        
v3.24.0.1
Revenue Recognition - Summary of Disaggregation of Revenue by Major Sources (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Disaggregation Of Revenue [Line Items]    
Total sales $ 528,096 $ 648,187
Home heating oil and propane    
Disaggregation Of Revenue [Line Items]    
Total sales 351,214 435,523
Other petroleum products    
Disaggregation Of Revenue [Line Items]    
Total sales 97,336 134,406
Petroleum products    
Disaggregation Of Revenue [Line Items]    
Total sales 448,550 569,929
Equipment installations    
Disaggregation Of Revenue [Line Items]    
Total sales 34,315 32,789
Equipment maintenance service contracts    
Disaggregation Of Revenue [Line Items]    
Total sales 28,916 28,716
Billable call services    
Disaggregation Of Revenue [Line Items]    
Total sales 16,315 16,753
Installations and services    
Disaggregation Of Revenue [Line Items]    
Total sales $ 79,546 $ 78,258
v3.24.0.1
Revenue Recognition - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Sep. 30, 2023
Revenue Recognition [Line Items]      
Contract costs, amortization period 5 years    
Contract liabilities $ 161.9   $ 170.3
Contract with customer liability, revenue recognized $ 91.6 $ 85.6  
Maximum      
Revenue Recognition [Line Items]      
Contract liabilities recognition service contract period 1 year    
Delivery and Branch Expenses      
Revenue Recognition [Line Items]      
Amortization of deferred contract costs $ 1.0 $ 1.0  
Prepaid Expense and Other Current Assets      
Revenue Recognition [Line Items]      
Deferred contract costs,current 3.3   3.3
Deferred Charges and Other Assets, Net      
Revenue Recognition [Line Items]      
Deferred contract costs,non current $ 5.6   $ 5.4
v3.24.0.1
Revenue Recognition - Summary of Changes in Allowance for Credit Losses (Detail)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
USD ($)
Revenue from Contract with Customer [Abstract]  
Balance at September 30, 2022 $ 8,375
Current period provision 649
Write-offs, net and other (950)
Balance as of December 31, 2023 $ 8,074
v3.24.0.1
Common Unit Repurchase and Retirement - Additional Information (Detail) - USD ($)
 1 Months Ended 3 Months Ended 4 Months Ended 131 Months Ended 132 Months Ended
Feb. 28, 2024
Jul. 06, 2022
Jan. 31, 2024
Oct. 31, 2023
Oct. 30, 2023
Dec. 31, 2023
Feb. 27, 2024
May 31, 2023
Sep. 30, 2023
Jul. 31, 2022
Capital Unit [Line Items]                    
Company's common units authorized for repurchase               2,600,000   1,100,000
Sixth Amendment                    
Capital Unit [Line Items]                    
Availability required to repurchase common units   $ 60,000,000                
Percentage of the maximum facility size on a historical proforma and forward-looking basis   15.00%                
Non Seasonal maximum borrowing capacity under revolving credit facility   $ 400,000,000                
Minimum fixed charge coverage ratio for distributions to unit holders or to repurchase common units   100.00%     1.15%          
Sixth Amendment | Scenario Forecast                    
Capital Unit [Line Items]                    
Minimum fixed charge coverage ratio for distributions to unit holders or to repurchase common units 1.15%           1.00%      
Repurchase Plan                    
Capital Unit [Line Items]                    
Company's common units repurchased and retired       13,000   13,000   20,500,000 25,422,000  
Repurchase Plan | Subsequent Event                    
Capital Unit [Line Items]                    
Company's common units repurchased and retired     15,000              
Common Stock Available for Repurchase Under Privately Negotiated Transactions                    
Capital Unit [Line Items]                    
Company's common units authorized for repurchase               300,000    
Common Stock Available for Repurchase Under Privately Negotiated Transactions | Subsequent Event                    
Capital Unit [Line Items]                    
Company's common units authorized for repurchase     300,000              
Common Stock Available for Repurchase Under Open Market Transactions                    
Capital Unit [Line Items]                    
Company's common units authorized for repurchase               2,300,000    
Common Stock Available for Repurchase Under Open Market Transactions | Subsequent Event                    
Capital Unit [Line Items]                    
Company's common units authorized for repurchase     2,200,000              
v3.24.0.1
Common Unit Repurchase and Retirement - Company's Repurchase Activities (Detail) - $ / shares
shares in Thousands
 1 Months Ended 3 Months Ended 131 Months Ended 132 Months Ended
Jan. 31, 2024
Oct. 31, 2023
Dec. 31, 2023
May 31, 2023
Sep. 30, 2023
Nov. 30, 2023
Repurchase Plan            
Capital Unit [Line Items]            
Total Number of Units Purchased   13 13 20,500 25,422  
Average Price Paid per Unit [1]   $ 11.27 $ 11.27   $ 8.82  
Maximum Number of Units that May Yet Be Purchased   2,555 2,555   2,568 2,555
Repurchase Plan | Subsequent Event            
Capital Unit [Line Items]            
Total Number of Units Purchased 15          
Average Price Paid per Unit [1] $ 11.27          
Maximum Number of Units that May Yet Be Purchased [2] 2,540          
Publicly Announced Plans or Programs As Part of Repurchase Plan            
Capital Unit [Line Items]            
Total Number of Units Purchased   13 13   20,534  
Publicly Announced Plans or Programs As Part of Repurchase Plan | Subsequent Event            
Capital Unit [Line Items]            
Total Number of Units Purchased 15          
[1] Amount includes repurchase costs.
[2] Of the total available for repurchase, approximately 2.2 million units are available for repurchase in open market transactions and approximately 0.3 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.
v3.24.0.1
Common Unit Repurchase and Retirement - Company's Repurchase Activities (Parenthetical) (Detail) - shares
Jan. 31, 2024
May 31, 2023
Jul. 31, 2022
Capital Unit [Line Items]      
Company's common units authorized for repurchase   2,600,000 1,100,000
Common Stock Available for Repurchase Under Open Market Transactions      
Capital Unit [Line Items]      
Company's common units authorized for repurchase   2,300,000  
Common Stock Available for Repurchase Under Open Market Transactions | Subsequent Event      
Capital Unit [Line Items]      
Company's common units authorized for repurchase 2,200,000    
Common Stock Available for Repurchase Under Privately Negotiated Transactions      
Capital Unit [Line Items]      
Company's common units authorized for repurchase   300,000  
Common Stock Available for Repurchase Under Privately Negotiated Transactions | Subsequent Event      
Capital Unit [Line Items]      
Company's common units authorized for repurchase 300,000    
v3.24.0.1
Captive Insurance Collateral - Schedule of Captive Insurance Collateral to be Available-for-sale Investments (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost $ 73,387 $ 73,016
Gross Unrealized Gain 14 12
Gross Unrealized (Loss) (1,381) (2,311)
Fair Value 72,020 70,717
Cash and Receivables    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost 6,365 4,335
Gross Unrealized Gain 0 0
Gross Unrealized (Loss) 0 0
Fair Value 6,365 4,335
U.S. Government Sponsored Agencies    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost 50,813 50,471
Gross Unrealized Gain 11 0
Gross Unrealized (Loss) (966) (1,620)
Fair Value 49,858 48,851
Corporate Debt Securities    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost 16,209 18,210
Gross Unrealized Gain 3 12
Gross Unrealized (Loss) (415) (691)
Fair Value $ 15,797 $ 17,531
v3.24.0.1
Captive Insurance Collateral - Schedule of Maturities of Investments (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]    
Due within one year $ 52,825  
Due after one year through five years 19,195  
Due after five years through ten years 0  
Total $ 72,020 $ 70,717
v3.24.0.1
Derivatives and Hedging-Disclosures and Fair Value Measurements - Additional Information (Detail)
gal in Millions
 3 Months Ended
Dec. 31, 2023
USD ($)
gal
Dec. 31, 2022
gal
Sep. 30, 2023
USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Hedging positions or payable amounts secured under credit facility | $ $ 15,700,000   $ 100,000
Prepaid expense and other current assets      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Aggregated cash posted as collateral in normal course of business | $ 1,600,000    
Interest rate swap      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Notional Value | $ $ 54,600,000   55,500,000
Percentage of market risk exposure of long term debt 38.00%    
Fair Value | $ $ 600,000   $ 1,600,000
Call Option      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 8.8 23.2  
Call Option | Synthetic calls      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 61.4 61.3  
Put Option      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 6.6 4.3  
Swap Contracts Bought      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 14.2 9.4  
Swap Contracts Bought | Short      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 0.2 25.3  
Future Contracts | Short      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 20.7 7.3  
Hedge its Internal Fuel Usage and Other Related Activities Swap Contracts Bought      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative activity volume 5.3 3.7  
v3.24.0.1
Derivatives and Hedging-Disclosures and Fair Value Measurements - Company's Commodity Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 - Commodity Contract - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts $ 18,818 $ 18,670
Derivative Liabilities, commodity contracts (33,856) (8,028)
Fair liability and fair asset value of derivative instruments    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts 17,620 17,891
Derivative Liabilities, commodity contracts (32,452) (7,349)
Other long-term liabilities, net balance    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts 1,198  
Derivative Liabilities, commodity contracts (1,404)  
Deferred charges and other assets, net and other long-term liabilities, net balances    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts   779
Derivative Liabilities, commodity contracts   (679)
Significant Other Observable Inputs Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts 18,818 18,670
Derivative Liabilities, commodity contracts (33,856) (8,028)
Significant Other Observable Inputs Level 2 | Fair liability and fair asset value of derivative instruments    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts 17,620 17,891
Derivative Liabilities, commodity contracts (32,452) (7,349)
Significant Other Observable Inputs Level 2 | Other long-term liabilities, net balance    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts 1,198  
Derivative Liabilities, commodity contracts $ (1,404)  
Significant Other Observable Inputs Level 2 | Deferred charges and other assets, net and other long-term liabilities, net balances    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Assets, commodity contracts   779
Derivative Liabilities, commodity contracts   $ (679)
v3.24.0.1
Derivatives and Hedging-Disclosures and Fair Value Measurements - Offsetting of Financial Assets (Liabilities) and Derivative Assets (Liabilities) (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]    
Net Assets (Liabilities) Presented in the Statement of Financial Position $ (14,832) $ (118)
Subject to an enforceable master netting arrangement    
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]    
Net Assets (Liabilities) Presented in the Statement of Financial Position (14,832) (118)
Net Assets (Liabilities) Presented in the Statement of Financial Position (206) (15)
Gross Assets Recognized 18,818 18,670
Gross Liabilities Offset in the Statement of Financial Position (33,856) (8,028)
Net Assets (Liabilities) Presented in the Statement of Financial Position (15,038) 10,642
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount (15,038) 10,642
Subject to an enforceable master netting arrangement | Fair asset value of derivative instruments    
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]    
Gross Assets Recognized   17,815
Gross Liabilities Offset in the Statement of Financial Position   (7,155)
Net Assets (Liabilities) Presented in the Statement of Financial Position   $ 10,660
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration]   Derivative Asset, Current
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount   $ 10,660
Subject to an enforceable master netting arrangement | Other long-term assets, net    
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]    
Gross Assets Recognized   567
Gross Liabilities Offset in the Statement of Financial Position   (452)
Net Assets (Liabilities) Presented in the Statement of Financial Position   $ 115
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration]   Derivative Asset, Current
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount   $ 115
Subject to an enforceable master netting arrangement | Fair liability value of derivative instruments    
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]    
Gross Assets Recognized 17,620 76
Gross Liabilities Offset in the Statement of Financial Position (32,452) (194)
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount (14,832) (118)
Subject to an enforceable master netting arrangement | Other long-term liabilities, net    
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]    
Gross Assets Recognized 1,198 212
Gross Liabilities Offset in the Statement of Financial Position (1,404) (227)
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount $ (206) $ (15)
v3.24.0.1
Derivatives and Hedging-Disclosures and Fair Value Measurements - Effect of Derivative Instruments on Statement of Operations (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of (Gain) or Loss Unrealized, commodity contracts [1] $ 19,030 $ 17,636
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Commodity Contract | Cost of product    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of (Gain) or Loss Recognized, commodity contracts [2] $ 4,723 $ (8,942)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Cost and expenses Cost and expenses
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Commodity Contract | Cost of installations and service    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of (Gain) or Loss Recognized, commodity contracts [2] $ 14 $ 40
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Cost and expenses Cost and expenses
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Commodity Contract | Delivery and branch expenses    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of (Gain) or Loss Recognized, commodity contracts [2] $ (392) $ (200)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Delivery and branch expenses Delivery and branch expenses
[1] Represents the change in value of unrealized open positions and expired options.
[2] Represents realized closed positions and includes the cost of options as they expire.
v3.24.0.1
Inventories - Components of Inventory (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Inventory Disclosure [Abstract]    
Product $ 61,859 $ 33,994
Parts and equipment 22,174 22,469
Total inventory $ 84,033 $ 56,463
v3.24.0.1
Property and Equipment - Component of Property and Equipment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Property, Plant and Equipment [Abstract]    
Property and equipment $ 246,555 $ 244,816
Less: accumulated depreciation and amortization 141,397 139,412
Property and equipment, net $ 105,158 $ 105,404
v3.24.0.1
Business Combinations and Divestitures - Additional Information (Detail)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
USD ($)
PartnershipUnit
Dec. 31, 2022
USD ($)
PartnershipUnit
Sep. 30, 2023
USD ($)
Business Acquisition [Line Items]      
Goodwill $ 262,347   $ 262,103
Heating Oil Businesses      
Business Acquisition [Line Items]      
Number of businesses acquired | PartnershipUnit 2 2  
Cash and assuming $ 2,500 $ 1,200  
Aggregate purchase price allocation, intangible assets 2,700 1,700  
Goodwill 200 200  
Aggregate purchase price allocation, fixed assets 800 200  
Gross purchase price increased (reduced) by working capital credits $ 1,200 (900)  
Cash proceeds from sale of assets   $ 2,200  
v3.24.0.1
Goodwill and Intangible Assets, net - Summary of Changes in Company's Goodwill (Detail)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Balance on beginning $ 262,103
Fiscal year 2024 business combinations 244
Balance on ending $ 262,347
v3.24.0.1
Goodwill and Intangible Assets, net - Intangible Assets Subject to Amortization (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Finite Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 462,657 $ 459,972
Accum. Amortization 388,688 383,666
Net 73,969 76,306
Customer Lists    
Finite Lived Intangible Assets [Line Items]    
Gross Carrying Amount 420,460 418,190
Accum. Amortization 362,914 358,855
Net 57,546 59,335
Trade Names And Other Intangibles    
Finite Lived Intangible Assets [Line Items]    
Gross Carrying Amount 42,197 41,782
Accum. Amortization 25,774 24,811
Net $ 16,423 $ 16,971
v3.24.0.1
Goodwill and Intangible Assets, net - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]    
Amortization expense for intangible assets $ 5.0 $ 4.3
v3.24.0.1
Long-Term Debt and Bank Facility Borrowings - Company's Debt (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Debt Instrument [Line Items]    
Long-term debt, carrying Amount $ 195,760 $ 148,067
Current maturities of long-term debt, carrying Amount 72,502 20,740
Long-term debt [1] 123,258 127,327
Long-term debt, fair value [2] 196,377 148,740
Current maturities of long-term debt, fair value [2] 72,502 20,740
Long-term portion of debt, fair value [1],[2] 123,875 128,000
Revolving Credit Facility    
Debt Instrument [Line Items]    
Credit facility borrowings, carrying Amount 51,877 240
Credit facility borrowings, fair value [2] 51,877 240
Term Loan    
Debt Instrument [Line Items]    
Long-term debt, carrying Amount [1] 143,883 147,827
Long-term debt, fair value [1],[2] $ 144,500 $ 148,500
[1] Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of December 31, 2023 and $0.7 million as of September 30, 2023
[2] The face amount of the Company’s variable rate long-term debt approximates fair value.
v3.24.0.1
Long-Term Debt and Bank Facility Borrowings - Company's Debt (Parenthetical) (Detail) - USD ($)
$ in Millions
Dec. 31, 2023
Sep. 30, 2023
Term Loan    
Debt Instrument [Line Items]    
Unamortized debt issuance costs $ 0.6 $ 0.7
v3.24.0.1
Long-Term Debt and Bank Facility Borrowings - Additional Information (Detail)
 1 Months Ended 3 Months Ended 4 Months Ended
Feb. 28, 2024
Sep. 30, 2023
USD ($)
Jul. 06, 2022
USD ($)
Oct. 30, 2023
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Feb. 27, 2024
Debt Instrument [Line Items]              
Additional loan repayments         $ 4,000,000 $ 4,125,000  
Fixed charge coverage ratio         1.39    
Hedging positions and payable amounts secured under credit facility   $ 100,000     $ 15,700,000    
Letters of credit issued and outstanding   3,200,000     3,200,000    
Long-term debt, fair value [1]   148,740,000     196,377,000    
Revolving credit facility outstanding   240,000     51,877,000    
Availability under credit agreement   $ 202,100,000     $ 189,200,000    
Term Loan              
Debt Instrument [Line Items]              
Debt instrument, effective interest rate   6.60%     7.40%    
Long-term debt, fair value [1],[2]   $ 148,500,000     $ 144,500,000    
Revolving Credit Facility              
Debt Instrument [Line Items]              
Debt instrument, effective interest rate   6.30%     8.60%    
Revolving credit facility outstanding   $ 200,000     $ 51,900,000    
Credit Agreement              
Debt Instrument [Line Items]              
Non Seasonal maximum borrowing capacity under revolving credit facility     $ 400,000,000        
Maximum borrowing capacity (heating season December to April) under revolving credit facility     550,000,000        
Issuance of line of credit for working capital purposes     $ 25,000,000        
Senior secured term loan maturity date     Jul. 06, 2027        
Facility size that can be increased additional without consulting bank group         200,000,000    
Facility size that can be increased without consulting bank group         200,000,000    
Term loan annual payment percentage     25.00%        
Additional loan repayments         4,000,000.0 $ 0  
Commitment fee on the unused portion of the facility from December through April     0.30%        
Commitment fee on the unused portion of the facility from May through November     0.20%        
Minimum fixed charge coverage ratio     110.00%        
Availability percentage to maximum facility size   12.50% 12.50%        
Minimum fixed charge coverage ratio to be maintained credit facilities       1.10%      
Credit Agreement | Scenario Forecast              
Debt Instrument [Line Items]              
Minimum fixed charge coverage ratio to be maintained credit facilities             1.00%
Credit Agreement | Maximum              
Debt Instrument [Line Items]              
Senior secured leverage ratio during quarters ending June or September     300.00%        
Senior secured leverage ratio during quarters ending December or March     550.00%        
Credit Agreement | Quarterly              
Debt Instrument [Line Items]              
Term loan periodic payment     $ 4,100,000   4,100,000    
Credit Agreement | Annually | Maximum              
Debt Instrument [Line Items]              
Term loan periodic payment         $ 8,500,000    
Credit Agreement | Term Loan              
Debt Instrument [Line Items]              
Outstanding term loan     $ 165,000,000        
Senior secured term loan maturity period     5 years        
Sixth Amendment              
Debt Instrument [Line Items]              
Non Seasonal maximum borrowing capacity under revolving credit facility     $ 400,000,000        
Maximum borrowing capacity (heating season December to April) under revolving credit facility     $ 550,000,000        
Minimum fixed charge coverage ratio for distributions to unit holders or to repurchase common units     100.00% 1.15%      
Sixth Amendment | Scenario Forecast              
Debt Instrument [Line Items]              
Minimum fixed charge coverage ratio for distributions to unit holders or to repurchase common units 1.15%           1.00%
Sixth Amendment | Term Loan              
Debt Instrument [Line Items]              
Outstanding term loan     $ 165,000,000        
Senior secured term loan maturity period     5 years        
[1] The face amount of the Company’s variable rate long-term debt approximates fair value.
[2] Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of December 31, 2023 and $0.7 million as of September 30, 2023
v3.24.0.1
Income Taxes - Current and Deferred Income Tax Expense (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Deferred Income Tax Assets And Liabilities    
Income before income taxes $ 18,153 $ 19,002
Current income tax expense 6,765 6,687
Deferred income tax expense (benefit) (1,591) (1,224)
Total income tax expense $ 5,174 $ 5,463
v3.24.0.1
Income Taxes - Additional Information (Detail)
 3 Months Ended
Dec. 31, 2023
USD ($)
Income Tax Disclosure [Line Items]  
Unrecognized income tax benefits $ 0
Federal  
Income Tax Disclosure [Abstract]  
Number of years for examination 4 years
New York  
Income Tax Disclosure [Abstract]  
Number of years for examination 4 years
Connecticut  
Income Tax Disclosure [Abstract]  
Number of years for examination 4 years
Pennsylvania  
Income Tax Disclosure [Abstract]  
Number of years for examination 4 years
New Jersey  
Income Tax Disclosure [Abstract]  
Number of years for examination 5 years
v3.24.0.1
Supplemental Disclosure of Cash Flow Information - Schedule of Supplemental Disclosure of Cash Flow Information (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash paid during the period for:    
Income taxes, net $ 4,819 $ 5,479
Interest $ 3,768 $ 4,286
v3.24.0.1
Earnings Per Limited Partner Unit - Net Income Allocation and Per Unit Data (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Basic and Diluted Earnings Per Limited Partner:    
Net income $ 12,979 $ 13,539
Less General Partner's interest in net income 118 122
Net income available to limited partners 12,861 13,417
Less dilutive impact of theoretical distribution of earnings [1] 1,588 1,723
Limited Partner's interest in net income $ 11,273 $ 11,694
Per unit data:    
Basic net income available to limited partners $ 0.36 $ 0.37
Diluted net income available to limited partners 0.36 0.37
Less dilutive impact of theoretical distribution of earnings [1] 0.04 0.04
Limited Partner's interest in net income [2] $ 0.32 $ 0.33
Weighted average number of Limited Partner units outstanding, Basic 35,593 35,916
Weighted average number of Limited Partner units outstanding, Diluted 35,593 35,916
[1] In any accounting period where the Company’s aggregate net income exceeds its aggregate distribution for such period, the Company is required to present net income per Limited Partner unit as if all of the earnings for the period were distributed, based on the terms of the Partnership agreement, regardless of whether those earnings would actually be distributed during a particular period from an economic or practical perspective. This allocation does not impact the Company’s overall net income or other financial results.
[2] See Note 15 - Earnings Per Limited Partner Unit.
v3.24.0.1
Subsequent Events - Additional Information (Detail)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended
Jan. 31, 2024
USD ($)
PartnershipUnit
$ / shares
Dec. 31, 2023
PartnershipUnit
Dec. 31, 2022
PartnershipUnit
Heating Oil Businesses      
Subsequent Event [Line Items]      
Number of businesses acquired | PartnershipUnit   2 2
Subsequent Event      
Subsequent Event [Line Items]      
Aggregate purchase price partnership acquired $ 19.9    
Subsequent Event | Dividend Declared      
Subsequent Event [Line Items]      
Distribution declared | $ / shares $ 0.1625    
Partners capital projected distribution amount on annualized basis | $ / shares 0.65    
Minimum dividend distribution per unit | $ / shares $ 0.0675    
Amount to paid to common unit holders $ 5.8    
Amount to paid to the General Partner 0.3    
Incentive distribution to the General Partner 0.3    
Incentive distributions to management $ 0.3    
Dividend payable date Jan. 31, 2024    
Dividend record date Jan. 22, 2024    
Subsequent Event | Heating Oil Businesses      
Subsequent Event [Line Items]      
Number of businesses acquired | PartnershipUnit 1    
Subsequent Event | Propane business      
Subsequent Event [Line Items]      
Number of businesses acquired | PartnershipUnit 1    
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