Star Group LP (SGU) 2024 Q1 法說會逐字稿

Good day, and welcome to the Star Group fiscal 2024 first-quarter results conference call and webcast. (Operator Instructions) Please note that this event is being recorded.

美好的一天，歡迎來到星空集團 2024 財年第一季業績電話會議和網路廣播。（操作員說明）請注意，該事件正在被記錄。

I would now like to turn the conference over to Chris Witty, Investor Relations Advisor. Please go ahead, sir.

我現在想將會議交給投資者關係顧問克里斯·威蒂 (Chris Witty)。請繼續，先生。

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.

謝謝你，早安。今天與我一起參加電話會議的是總裁兼執行長 Jeff Woosnam；和財務長 Rich Ambury。

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 that may cause the company's actual performance to be materially different from the performance indicated or implied by such statements.

我現在想提供一份簡短的安全港聲明。本次電話會議可能包括前瞻性陳述，代表公司對未來事件的期望和信念，這些未來事件涉及風險和不確定性，可能導致公司的實際業績與此類陳述所表明或暗示的業績存在重大差異。

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, we can give no assurance that such expectations will prove to have been correct.

本次電話會議中除歷史事實陳述外的所有陳述均為前瞻性陳述。儘管公司認為此類前瞻性陳述中反映的預期是合理的，但我們不能保證此類預期將被證明是正確的。

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, 2023, and the company's other filings with the SEC.

本次電話會議、本公司截至 2023 年 9 月 30 日的財政年度 10-K 表格年度報告以及公司向 SEC 提交的其他文件中披露了可能導致實際結果與公司預期存在重大差異的重要因素。

All subsequent written and oral forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements. Unless otherwise required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise after the date of this conference call.

所有隨後由本公司或代表本公司行事的人員所作的書面和口頭前瞻性陳述均明確符合警告性陳述的全部要求。除非法律另有要求，本公司不承擔公開更新或修改任何前瞻性聲明的義務，無論是由於新資訊、未來事件或本次電話會議之後的其他情況。

I'd now like to turn the call over to Jeff Woosnam. Please go ahead, Jeff.

我現在想把電話轉給傑夫·伍斯南。請繼續，傑夫。

Thanks, Chris, and good morning, everyone. The beginning of fiscal 2024 has provided both challenges and opportunities, which we believe we have navigated well. While product cost declined, providing relief to customers, warmer temperatures resulted in lower demand and therefore reduced overall volumes. However, due to cost discipline, a weather hedge benefit, and a higher per-gallon margins, adjusted EBITDA was nearly equivalent to the prior-year period.

謝謝克里斯，大家早安。2024 財年伊始，挑戰與機會並存，我們相信我們已經很好地應對了。雖然產品成本下降，為客戶帶來了緩解，但氣溫升高導致需求下降，從而減少了總產量。然而，由於成本控制、天氣對沖收益以及每加侖利潤率的提高，調整後的 EBITDA 幾乎與去年同期持平。

New customer additions were down from the extraordinary levels we experienced in the first quarter of fiscal 2023. This was due in part to the mild weather but also reflected much different market conditions, resulting in lower lead activity.

新客戶數量較 2023 財年第一季的非凡水準有所下降。這部分是由於天氣溫和，但也反映了截然不同的市場狀況，導致鉛活動減少。

Customer losses, however, remained in check for the quarter. And more recently, we were encouraged by improved net customer attrition results in January versus the same period a year ago. We'll have to see how the remainder of the heating season progresses, but we remain 100% dedicated to providing the best customer service and responsiveness possible.

然而，本季的客戶損失仍然受到控制。最近，我們對 1 月份淨客戶流失結果較去年同期有所改善感到鼓舞。我們必須看看暖氣季的剩餘時間如何進展，但我們仍然 100% 致力於提供最好的客戶服務和回應能力。

We're pleased to see continued improvement in our internal customer satisfaction indicators, most notably our net promoter scores, a well-known metric that measures customer loyalty and specifically the willingness to recommend our brands.

我們很高興看到我們的內部客戶滿意度指標持續改善，最顯著的是我們的淨推薦分數，這是衡量客戶忠誠度，特別是推薦我們品牌的意願的眾所周知的指標。

As previously reported, we completed two small heating oil acquisitions during the quarter in November, and I'm pleased to announce that we closed two more businesses just this week. One is a heating oil provider; and another, a propane dealer. Both are located on Long Island and serve to further strengthen our presence in that market. Our acquisition program continues to be an important part of our growth strategy, and we have been very busy of late working on a few other attractive opportunities that we feel would be great additions to the organization.

正如之前報導的，我們在 11 月的季度完成了兩項小型取暖油收購，我很高興地宣布，我們在本週又關閉了兩項業務。一是取暖油供應商；另一個是丙烷經銷商。兩者均位於長島，有助於進一步加強我們在該市場的影響力。我們的收購計劃仍然是我們成長策略的重要組成部分，最近我們一直非常忙於尋找其他一些有吸引力的機會，我們認為這些機會將對該組織產生巨大的補充。

While it is too early to say how fiscal 2024 will play out, we remain focused on operational efficiency, controlling expenses, and solid margin management, and believe we are well positioned to address whatever challenges or opportunity might present themselves going forward.

雖然現在判斷 2024 財年的結果還為時過早，但我們仍然專注於營運效率、控製成本和穩健的利潤管理，並相信我們有能力應對未來可能出現的任何挑戰或機會。

With that, I'll turn the call over to Rich to provide additional comments on the quarter's financial results. Rich?

接下來，我將把電話轉給 Rich，以提供有關本季財務表現的更多評論。富有的？

Thanks, Jeff, and good morning, everyone. For the quarter, our home heating oil and propane volume decreased by 9 million gallons or 10% to approximately 80 million gallons as the additional volume provided from acquisitions was more than offset by the impact of warmer weather, net customer attrition, and other factors. Temperatures in Star's geographic areas of operations for the three months ending December 31, 2023, were 9.6% warmer than the three months ending December 31, 2022, and 13.8% warmer than normal.

謝謝傑夫，大家早安。本季度，我們的家用暖氣油和丙烷數量減少了 900 萬加侖或 10%，至約 8,000 萬加侖，因為收購提供的額外數量被天氣變暖、客戶淨流失和其他因素的影響所抵消。截至 2023 年 12 月 31 日的三個月，Star 營運地理區域的氣溫比截至 2022 年 12 月 31 日的三個月高 9.6%，比正常水準高 13.8%。

Our product gross profit fell by $5.6 million or 4% to approximately $145 million as the impact of an increase in per-gallon margins was more than offset by the decline in volume sales. We did realize a combined gross profit from service and installation of $4.4 million for the three months ending December 31, 2023, compared to a gross profit of $1.7 million for the three months ending December 31, 2022, a $2.7 million increase in profitability.

我們的產品毛利下降了 560 萬美元或 4%，至約 1.45 億美元，因為每加侖利潤成長的影響被銷量下降所抵消。截至2023年12月31日的三個月，我們確實實現了服務和安裝的綜合毛利為440萬美元，而截至2022年12月31日的三個月的毛利為170萬美元，盈利能力增加了270萬美元。

Branch delivery and G&A expenses decreased by $3 million or 3% to $101 million. During the first quarter of fiscal 2024, the company recorded a benefit under its weather hedge of $1 million compared to a charge of $400,000 in the prior year's comparable period, accounting for a $1.4 million favorable change in expense year over year. Delivery expense declined by $2.9 million or 9% due to the 10% decline in home heating oil and propane volume.

分行交付和一般管理費用減少 300 萬美元，或 3%，達到 1.01 億美元。2024 財年第一季度，該公司的天氣對沖收益為 100 萬美元，而上年同期的費用為 40 萬美元，導致費用同比出現 140 萬美元的有利變化。由於家庭暖氣油和丙烷數量下降 10%，運輸費用下降了 290 萬美元，即 9%。

Sales and marketing costs also declined by $1 million, reflecting a lower level of customer gains and related expenses. However, insurance expense rose by $2.3 million, largely due to higher premiums and expected claim costs. During the first quarter of fiscal 2024, we recorded $19 million non-cash charge related to the change in the fair value of our derivative instruments. By comparison, in the first quarter of fiscal 2023, we recorded a $17.6 million charge.

銷售和行銷成本也下降了 100 萬美元，反映出客戶收益和相關費用水準較低。然而，保險費用增加了 230 萬美元，主要是由於保費和預期索賠成本增加。在 2024 財年第一季度，我們記錄了與衍生性工具公允價值變動相關的 1,900 萬美元非現金費用。相較之下，在 2023 財年第一季度，我們記錄了 1,760 萬美元的費用。

Net income decreased by $600,000 in the quarter to $13 million as the aforementioned unfavorable change in the fair market value of derivative instruments of $1.4 million and higher depreciation and amortization expense of $600,000 was only partially offset by lower interest expense of $1.1 million.

本季淨利潤減少60 萬美元，至1,300 萬美元，原因是上述衍生工具公平市場價值140 萬美元的不利變化以及60 萬美元的折舊和攤銷費用增加，僅被利息費用減少110 萬美元部分抵消。

Adjusted EBITDA was unchanged at approximately $49 million as an increase in home heating oil and propane per-gallon margins, higher service and installation profitability, and lower operating costs were offset by the decline in home heating oil and propane volume of 10%.

調整後的 EBITDA 保持在約 4900 萬美元不變，因為家用取暖油和丙烷每加侖利潤的增加、服務和安裝盈利能力的提高以及運營成本的降低被家用取暖油和丙烷用量下降 10% 所抵消。

And with that, I like to turn the call back over to Jeff.

說到這裡，我想把電話轉回給傑夫。

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

謝謝，里奇。目前，我們很樂意解答您可能提出的任何問題。克里斯，您可以撥打電話詢問問題嗎？

(Operator Instructions) Tim Mullen, Laurelton Management.

（操作員說明）Tim Mullen，Laurelton Management。

Hey, thanks for taking my questions. Two quick questions, first is just in terms of credit worthiness of customers. Have you seen anything change over the past few quarters? Obviously, prices have come down, which I assume has been helpful on the margin, but any kind of color or commentary on that front would be appreciated.

嘿，謝謝你回答我的問題。兩個簡單的問題，第一個是關於客戶的信用度。您在過去幾季中看到什麼變化嗎？顯然，價格已經下降，我認為這在一定程度上有所幫助，但任何有關這方面的顏色或評論都將受到讚賞。

And then the second question just revolves around the buyback activity, obviously slowing quite a bit without any activity in November and December, it looks like. Obviously, that program is -- the buyback is somewhat problematic. But do you anticipate any changes based where the stock price is now? And if so, when would those be announced? Thanks.

第二個問題圍繞著回購活動，看起來 11 月和 12 月沒有任何活動，回購活動明顯放緩了很多。顯然，該計劃的回購有些問題。但您預期目前股價會發生什麼變化嗎？如果是這樣，什麼時候會宣布？謝謝。

Well, I'll answer the second question first. We don't expect any changes to the unit repurchase plan. I believe it does expire in the next couple of months, so I imagine we're going to roll it over like we always have in the past. And again, that's a program that we're not really directing on a day-to-day basis as it's automatic, depending on where the share price is. And we buy as many units in as we can under the calculations.

嗯，我先回答第二個問題。我們預計單位回購計劃不會有任何變更。我相信它會在接下來的幾個月內到期，所以我想我們會像過去一樣將其展期。再說一次，我們並沒有真正每天指導這個程序，因為它是自動的，這取決於股價的位置。我們根據計算購買了盡可能多的單位。

With regards to customer credit, I think we're in a little bit better shape this year than last year. The receivables are down on a comparable basis, December-December. Customer credit balances are up. So I don't believe we're going to see any further -- not that there was a whole heck of a lot of deterioration in the customer base, but a significant increase in charge-offs for delinquent accounts. But the economy is a little tight when it comes to credit as we will do kind of know.

就客戶信用而言，我認為今年我們的狀況比去年好一些。12 月至 12 月，應收帳款以可比較基礎計算下降。客戶信用餘額上升。因此，我認為我們不會看到任何進一步的情況——並不是客戶群大幅惡化，而是拖欠帳戶的核銷大幅增加。但正如我們所知，在信貸方面，經濟有點緊張。

Yeah, okay. Thank you.

好的。謝謝。

You're welcome.

不客氣。

Michael Prouting, 10K Capital.

邁克爾·普羅廷，10K Capital。

Good morning, guys.

早上好傢伙。

Good morning, Michael.

早上好，麥可。

So Jeff, I'll surprise you by starting off with a question on churn or customer attrition. Normally, I believe you guys see customer gains in the first fiscal quarter, whereas you had -- albeit very small, but you had some customer losses in the past quarter. So I just wanted to get your commentary around that and also your expectations for attrition for the current fiscal year.

所以傑夫，我會讓你大吃一驚，我會從一個關於客戶流失或客戶流失的問題開始。通常情況下，我相信你們會在第一財季看到客戶成長，而在上個季度你們卻有一些客戶流失，儘管數量很小。因此，我只是想了解您對此的評論以及您對本財年人員流失的預期。

And then the other question I had was on the acquisition front. By the way, congratulations on the recent acquisitions. I guess, three questions around acquisitions.

我的另一個問題是關於收購方面的。順便說一句，祝賀最近的收購。我想，關於收購的三個問題。

First, if you could just characterize the pipeline right now. Second, as always, curious to know if there's any larger deals that might be on the horizon. And then thirdly, I'm wondering if you can just give us some thoughts around pricing of acquisitions, particularly given the history we've seen of warmer weather the last few years. How do you factor that into your acquisition pricing? Thanks.

首先，您現在是否可以描述管道的特徵。其次，一如既往，我很想知道是否有任何更大的交易即將發生。第三，我想知道您是否可以給我們一些關於收購定價的想法，特別是考慮到過去幾年我們看到天氣變暖的歷史。您如何將其納入收購定價？謝謝。

So in terms of attrition, I think we were in a very good position to take advantage of a lot of market activity in the first quarter of 2023. And I think we've commented on this before, but we believe the factors that contributed to that certainly were a combination of a tremendous price volatility. There were some isolated supply concerns in the marketplace. And of course, we had colder weather.

因此，就人員流失而言，我認為我們處於非常有利的位置，可以利用 2023 年第一季的大量市場活動。我想我們之前已經對此發表過評論，但我們相信造成這種情況的因素肯定是巨大的價格波動的綜合作用。市場上存在一些孤立的供應問題。當然，我們的天氣更冷了。

This year, those conditions just simply did not exist. Weather was 14% warmer than the normal, I think 9%, 9.5% warmer than the prior year. And we've seen some receding in the cost of product and some stability in the costs. So those conditions overall just didn't exist, and that certainly affected the lead activity and opportunity in the marketplace this quarter.

今年，這些條件根本不存在。天氣比正常溫度高 14%，我認為比去年高 9%、9.5%。我們看到產品成本下降，成本保持穩定。因此，這些條件總體上並不存在，這肯定會影響本季市場的領先活動和機會。

As I mentioned in my comments, we were able to hold losses in check. And even on a percentage of count basis, I think they were slightly lower. So from that standpoint, I think it explains the quarter-to-quarter difference. And going forward, we were encouraged by improved net customer attrition this January as compared to January a year ago. And we're just going to have to see how the rest of the year progresses.

正如我在評論中提到的，我們能夠控制損失。即使按照計數百分比，我認為它們也略低一些。因此，從這個角度來看，我認為這可以解釋季度與季度之間的差異。展望未來，與去年同期相比，今年 1 月客戶淨流失率有所改善，這讓我們深受鼓舞。我們只需要看看今年剩餘時間的進展如何。

Okay, great. Thanks.

好的，太好了。謝謝。

And on the acquisition front, I would just tell you that we're very pleased that we closed two strategic deals in November, two more this week, and we do have a number of attractive opportunities in the pipeline.

在收購方面，我只想告訴您，我們非常高興我們在 11 月完成了兩項策略交易，本週又完成了兩項策略交易，而且我們確實有許多有吸引力的機會正在醞釀中。

We probably -- or the team is probably as busy as it's been in a few years, and that's very encouraging to us. As you know, it's a long and detailed process, and we'll have to see which of those opportunities come to fruition.

我們可能會—或者團隊可能像幾年前一樣忙碌，這對我們來說非常令人鼓舞。如您所知，這是一個漫長而詳細的過程，我們必須看看哪些機會可以實現。

Okay, fair enough. And then how do you factor in the warmer weather trends when you look at pricing on an acquisition?

好吧，很公平。那麼，當您考慮收購定價時，您如何考慮氣候暖化的趨勢呢？

We just look at each opportunity individually, Michael, and on an individual basis. And we certainly -- weather adjusts and make considerations in our valuation. And again, we just look at each opportunity on its own merit.

邁克爾，我們只是單獨考慮每個機會，而且是在個人的基礎上。當然，我們會根據天氣狀況進行調整並在估值時進行考慮。再說一遍，我們只是根據每個機會本身的優點來看待。

Okay, fair enough. And just curious then, have you seen -- or what trends you might be seeing around pricing on acquisitions? And I'll leave it at that. Thanks.

好吧，很公平。那麼我很好奇，您是否看到了收購定價方面的趨勢？或者您可能看到了哪些趨勢？我就這樣吧。謝謝。

I don't know that I've seen any significant change in valuations recently.

我不知道最近估值有什麼重大變化。

Okay, all right. Thanks.

好吧，好吧。謝謝。

You're welcome.

不客氣。

(Operator Instructions) At this time, we are showing no further questioners in the queue. And this does conclude our question-and-answer session. I would now like to turn the call back over to Jeff Woosnam for any closing remarks.

（操作員說明） 目前，佇列中沒有顯示更多提問者。我們的問答環節到此結束。我現在想將電話轉回給傑夫·伍斯南 (Jeff Woosnam)，讓其發表結束語。

Well, thank you for taking the time to join us today and your ongoing interest in Star Group. We look forward to sharing our 2024 fiscal second-quarter results in April. Thanks, everybody.

好的，感謝您今天抽出時間加入我們以及您對星空集團的持續關注。我們期待在 4 月分享 2024 財年第二季業績。謝謝大家。

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

會議現已結束。感謝您參加今天的演示，您現在可以斷開連接了。