Good day, and welcome to the Star Group Fiscal 2025 First Quarter Results Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Chris Witty, Investor Relations Adviser. Please go ahead.

Thank you, and good morning. With me on the call today are Jeff Woosnam, President and Chief Executive Officer; and Rich Ambury, Chief Financial Officer. I would now like to provide a brief safe harbor statement. This conference call may include forward-looking statements that represent the company's expectations and beliefs concerning future events that involve risks and uncertainties and may cause the company's actual performance to be materially different from the performance indicated or implied by such statements. All statements other than statements of historical facts included in this conference call are forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations are disclosed in this conference call, the company's annual report on Form 10-K for the fiscal year ended September 30, 2024, and the company's other filings with the SEC. 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 risk factors and other cautionary statements contained in the company's disclosures. Unless otherwise required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events, or otherwise after the date of this conference call. I would now like to turn the call over to Jeff Woosnam. Jeff?

Thanks, Chris, and good morning, everyone. The first quarter was a busy one for Star Group, L.P. due to our acquisition-related activities combined with slightly colder temperatures. Temperatures were 4.1% colder than the prior year quarter, and adjusted EBITDA rose $3 million year over year. Despite our increased workload from a busy quarter, I'm pleased with our overall ability to control expenses as well as our ongoing improvement in the performance and contribution of our service and installation business. Increased productivity and efficiency within our base business have been a specific area of focus for our operating team, so it's quite encouraging to see our work having a positive and meaningful impact on the bottom-line results. Looking ahead, we're benefiting from colder temperatures thus far in the second quarter, and in fact, January finished 20% colder than last year and 7% colder than normal. Through this period, our employees have been working tirelessly to serve our customers and keep pace with the added demand. I'm always delighted to see how well our entire team steps up when it matters the most, and I could not be more proud of their efforts. As previously reported, we've completed a sizable strategic acquisition after the quarter ended. This further strengthens our propane presence within the company's existing operating footprint, and we're excited to welcome our new employees as well as a quality, well-regarded brand to the Star Group family. We'll have to see how the remainder of the heating season progresses, but we remain 100% committed to providing our customers with the outstanding reliability and service they've come to expect. And at the same time, we will continue to focus on operational efficiency and controlling costs. I believe we are well positioned for the remainder of fiscal 2025. With that, I'll turn the call over to Rich to provide additional comments on the quarter's financial results. Rich?

Thanks, Jeff, and good morning, everyone. For the quarter, our home heating oil and propane volume rose by 2 million gallons or 3% to approximately 82 million gallons as the additional volume provided from acquisitions and somewhat colder temperatures was slightly offset by the impact of net customer attrition and other factors. Temperatures for the three months ending December 31, 2024, were 4% colder than the prior year and 10.5% colder than normal. Our product gross profit increased by $5.6 million or 4% to approximately $151 million due to an increase in per-gallon margins and higher home heating oil and propane volume. We realized a combined gross profit from service and installation of $6.9 million for the three months ending December 31, 2024, compared to a gross profit of $4.4 million in the prior year with a $2.5 million increase due in part to recent acquisitions, as well as improvements in the base business. Branch delivery and G&A expenses increased by $5 million in the first quarter of fiscal 2025 largely due to recent acquisitions. Expenses in the base business were largely unchanged. During the first quarter of fiscal 2025, we recorded a $5 million non-cash credit related to the change in fair value of our derivative instruments. By comparison, in the first quarter of fiscal 2024, we recorded a $19 million non-cash charge. Net income did increase by $20 million in the quarter to $33 million as the favorable non-cash change in the fair value of derivative instruments of $24 million and an increase in adjusted EBITDA of $3 million were only partially offset by higher income taxes of $8 million. Adjusted EBITDA increased by $3 million to $52 million as a $4 million increase in adjusted EBITDA from recent acquisitions and an increase in per-gallon margins in the base business more than offset the impact of a $3.8 million gallon decrease in home heating oil and propane volume sold in the base business. And with that, I'll turn the conversation and call back to Jeff.

Thanks, Rich. At this time, we're pleased to address any questions you may have. Wyatt, please open the phone lines for questions.

Thank you. We will now begin the question and answer session. At this time, you will pause momentarily to assemble our roster. And our first questioner comes from Tim Mullen with Narlington Management. Please go ahead.

Hi, thanks very much. I have two quick questions. One is, just curious to hear your views in terms of what's driving the increase in the service and installation business. I don't know if it was maybe a focus for some of the recent acquisitions or maybe it's a function of colder weather that we're requiring more services to be completed. And then the second question is just in terms of customer credit. It didn't seem like there were any dramatic changes in terms of provisions and write-offs, but just curious, anecdotally, if you've seen any weakening in terms of people's ability to pay and pay on time?

Thanks. Yeah, Tim, in regard to service and installation, the improvement in the results, certainly, there's a component of that—rather significant component—that's related to recent acquisitions. And that's helped improve the results overall. But we have also undertaken an initiative internally on our base business to really focus on improving performance, notably, productivity, which our employees have really bought into, and we've seen some progress and gained some traction there. And then we're also looking to every opportunity to sell more products and services to our existing customers. And that's been a program that has been recently launched and has so far gone well for us. So we're optimistic about that. We'll have to see how it goes, but, certainly, we're pleased with the results overall. Now with regard to credit, we—yeah, there has been some, in the general economy—you keep hearing about, you know, weakness in credit. I can't say that that doesn't exist, but, to a certain extent, our customers did get a bit of a relief, if you will, in the quarter as the cost of product is down and selling prices, you know, generally are down this year versus last year because of the lower cost of product. We did sell a little bit more because it was a bit colder, and we had some acquisitions. But you know, sales are down even though EBITDA is up because of the lower underlying cost of product. But, you know, we'll have to see how this all settles up at the end of the heating season.

Right. Sure. Alright. Thanks very much.

And our next question comes from Michael Prouting with ten ks Capital. Please go ahead.

Good morning, guys. Congratulations on just terrific execution across the board. Just a couple of questions. So as far as capital allocation is concerned, congratulations on the recent spate of acquisitions. I'm just wondering what you're thinking at this point in terms of your—in terms of both additional further acquisitions, your ability to execute on those, and also capital allocation in terms of dividends and share buybacks. Thanks.

So, Michael, I would say in terms of capital allocation, you know, we typically wait when we talk about the distribution. We typically wait until after the heating season to make any decisions on changes or increases to the distribution. We just want to have a better sense of how the year is progressing. You know, we know we need to make what we consider to be replacement acquisitions to replace any business that has been lost. And then, you know, it really basically boils down to unit repurchases and growth acquisitions, and those are decisions we make on a regular basis. Just in terms of the economics and the return as well as just the timing because, as you're aware, you know, some of the most ideal acquisitions and sizable deals aren't always available. They kind of tend to come in chunks. So it's timing and things that we talk about all the time in terms of what's the best investment for the company.

Okay. Terrific. So it doesn't sound like—then, and obviously this is a—alright. As I'm sure, Rich is wanting to remind us, obviously it is a decision for the board of directors, but it doesn't sound like the recent acquisitions you've made should prevent further modest increases in the distribution going forward.

Yeah, I would say you're trying to put words in my mouth, but before we make that decision at the next time we get together, which I believe is in April.

Yeah. Sure. But, you know, we'll have to see, Mike.

Okay. Terrific. Thanks. And just finally, Jeff, any observations on customer churn? You know, either as a function of the current heating season or acquisitions you've made or just, I guess, anything new on the customer churn front. Thanks.

Yeah. I'd say reflecting on the first quarter, our customer losses remain in check. And in fact, on a percentage and a gross basis, we probably had one of our better quarters in a number of years from a loss standpoint. The new customer additions have continued to be sluggish. I think to some degree, that's a reflection of, while the temperatures were slightly cooler than last year, the prior quarter, they're still 10% warmer than normal, and there was relative price stability in that period. So there wasn't as much movement in the marketplace as there was in fiscal 2023 in the first quarter that we observed. So those things kind of all combined for fewer gains in the first quarter. I am pleased to report, and we'll have to see how the rest of the quarter progresses, but, you know, we're off to a pretty—we got off to a pretty cold January, and it looks like we've got a pretty stable forecast for February. And thus far in January, it seems like our new customer additions have rebounded. We'll see how the quarter progresses.

Okay. Great. Thanks for the updates.

Yep.

With no further questions, this concludes our question and answer session. I would like to turn the conference back over to Jeff Woosnam for any closing remarks.

Well, thank you for taking the time to join today and your ongoing interest in Star Group, L.P. We look forward to sharing our 2025 fiscal second quarter results in May. Thanks, everybody.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.