SGU - Earnings call transcript Q4 2021

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Operator

Good morning, and welcome to the Star Group Fiscal 2021 Fourth Quarter Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Chris Witty, Investor Relations Advisor. Please go ahead.

Chris Witty

morning. good and you, Thank With me and Financial Jeff President today the Executive Officer; call Chief Chief are and Woosnam, on Rich Officer. Ambury, Harbor now a would to statement. Safe I like brief provide implied concerning statements This call the and performance involve cause that may the and forward-looking the performance or future conference materially that company's different that events from by actual include company's represent expectations uncertainties such may statements. risks beliefs to indicated be this statements All are historical of conference statements in call statements. included than other forward-looking facts

a oral persons company are result Woosnam. Jeff? or publicly acting revise forward-looking whether this the call, fiscal Although statements annual call believes their to Jeff for new now otherwise other on company subsequent no materially actual Form will cause Important XX-K statements. the that that ended on required give the to forward-looking over statements, undertakes or year filings the such the correct. the company could by entirety All expectations expectations Unless are obligation behalf or qualified company's and from in expectations after with like no results this the in law, to company's information, expressly future I'd the the report any reflected events prove written such to can been update that forward-looking XX, are September the to its XXXX, call. differ of as otherwise have conference of reasonable, statements disclosed it factors date SEC. and company's the conference in the to by cautionary turn assurance attributable

Jeff Woosnam

forward had fiscal passed you conference time It's call. another amazing us with our full of here lower of strong of as management performance new $XXX.X XX.X% warmer keenly of concluding focused that year push Star It's our team. was Chris, reported for of terms program than normal, certain our and million less our has our good COVID-XX and on and joining the parts under warmer that the core despite on Thanks, improvement was even proceeds of the in for $X.X volumes the pleased X.X% that the degree of seasonal quickly are leadership just million, second timing from lower Despite than morning, adjusted fiscal we days. impact overall notable report continuous business. XXXX. prior collecting this weather year, X.X% Thank and business, our I'm of due weather with we in slightly accomplished fundamentals how and everyone. than EBITDA so we the hedge to to lingering remain year strategy year-end

from those represents operating and our prior the many with in of that level our dedication apart in Reducing think years. best to year. customer an results XXXX believe exceptional loyal of team related our None would this the that recent to fiscal our factors employees, these in pandemic, to work Given XXXX provide who possible continue respects tirelessly I be performance the of contact, competitors. at with area every were of do of line customers a sets for point remains of us, great and net with attrition enthusiasm I focus so and us service without

improving currently nearly our are approximately additional We after XX additional end sales company. very experience. reviewing remain and support churn, made improvement to fiscal to deals would in which XXXX the are overall and customer annual overall completed opportunities. the We to one tuck-in small add expected to XX,XXX in customers, the of customer year total, and we've completed see to the gallons closed encouraged the November. the an fiscal of investments during are to acquisitions losses In committed separate million fourth we and product We appear included several acquisition in in quarter and five acquisition validate that program,

none prospects months. these While transformational steadily of level the activity mid-size has to are several last over increased in overall of small size, the

As year, we dealing industry effects some heating fiscal like costs, enter labor higher tight remaining constraints are season new many the and our pandemic-related a we and product of the in with market.

coming with to as headwinds, to challenges Rich that present to that, to or can our in opportunities year. other on call continue additional operations quarter results. Rich? we we However, turn and adjust year-end I'll the as the themselves these any proactively ensure well effectively the may over provide comments With deal

Rich Ambury

Jeff, good Thanks, morning, and everyone.

quarter fiscal additional X.X XXXX the volume million million was XX% acquisitions net and gallons to by customer offset about or by heating propane XX oil home gallons, partially as provided our fourth attrition. the For only volume by increased approximately

margins. did $X product Our and by increase the volume gross in $XX slightly profit or to higher X% to due gallon million, rise home million, heating oil and largely per sold

to and million, the volume. million reflecting higher X.X% branch the with in delivery and associated increased $XX.X expense, costs by $X increase additional expense or Our insurance XX% somewhat

in the was recorded sale $XX XXXX, decline The by value of in Our partially million derivative in fourth another certain non-cash factors the which fiscal by income instruments, $X.X of relating net million. to million a to fair benefit impact assets. loss million to the from the non-cash positive is these of in $X of million the charge quarter absence change due of the company's declined of $X.X in favorable offset tax $X.X non-strategic of quarter

Our increased adjusted slightly $XX.X approximately $XXX,XXX EBITDA million. by loss to

at decreased heating oil XXX benefits attrition X by oil gallon As and sold our million other gallons volumes X.X% provided were factors. gallons, propane margins. the temperatures per slightly And the heating home higher the million acquisitions fiscal and expenses volume to propane and higher heating most looking as XXXX, home warmer operating and increase from more in by and part reduced home or oil offset customer than net for

a additional volumes million home $X increase $XX EBITDA as million. was in per $XXX than costs million branch by increase as by to in the of $X.X associated declined gallon than favorable base the margins. per a more reported EBITDA decline increased home benefit adjusted delivery in Net from million higher $XXX.X expenses an the weather than expense oil million by decline $X acquisitions million hedges decrease decline rise a expense. the offset base in and our million operating was the $X.X of a by our lower propane was instruments profit in by to hedges. and oil the and gross in more million Delivery were more $X the heating gallon branch $X under million, the did income and million from Our the and in expenses and recorded a as under by did income product benefits reduced business offset million, as acquisitions charge a $XX in by derivative of tax heating of decline offset EBITDA non-cash to higher million million margins in value of adjusted business, propane absence by and fair change Adjusted of $X $X.X weather $XX

that distributions same believe the provides now our unit into at to will time, turn an As XXXX units Jeff. manner this meet We look continue greatest strategy, to the our I'd price, return return a our repurchase conversation disciplined forward the at and holders. to acquire attractive like we criteria. with to companies our And back that in beyond, and we along

Jeff Woosnam

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

Operator

from question session. begin the Instructions] question-and-answer will comes Management. first [Operator We Tim Our with Laurelton now Mullen

may You ahead. go

Tim Mullen

you could there you're Thanks I on for been M&A more any Has give was front? kind little very terms being that businesses much. of change on just that front, in prices just paid valuations the color of acquiring? a wondering the

Jeff Woosnam

to Yeah, specifics multiples I in of terms want get of don't EBITDA. necessarily into

for valuations have We of its the each increase us on in an last a the for we individual look opportunity has bit own and over at fit that Star. But really seen it merit year.

Tim Mullen

Okay. Thank you.

Jeff Woosnam

Sure.

Operator

Capital. Michael question Our comes from Prouting next with XXK Instructions] [Operator

ahead. You may go

Michael Prouting

you. I somebody quick Good the questions Great hear Rich, morning, asking guys. call. a to question had else for on

up nicely the looking the was as just actually a year EBITDA So, at whole. pretty fiscal

And other very capital. the looks from it work free $XX changes fair me, that, to And be I maybe time was other ‘XX? like through On rather then I'm free to fiscal operations from ‘XX was not completely But fiscal obviously, wondering, hand, a of or It's so flow fiscal or just in working ’XX… for cash flow factors haven't part cash in are or bit. there cash small it. flow million decline operations like had a to down honest, caused versus clear a cash that

Jeff Woosnam

at which ago, prices. of it of kind get was You're decline ‘XX, were I of oil now, years you're cost guess $X.XX we looking for product right, two In two buying looking gallon. my a cost different environments. at heating the April XXXX, in Fiscal years

a you receivables inventory, your higher no down. collecting goes you're much at if So will, price, cost and

the your that to pack So look impact customer other cost had the a play to balances. credit it's to also And, like a going had going your and receivables. accounts going a get little And a bit flow year in certain cash this with year. better opposite, probably might free the same you extent where we product, excuse in And which your that. payable, increase valuations slight to impact is inventory of and me, accounts we

we're not sales outstanding actually on look accounts this on year year look four or I you state Now, at by down days if or receivable, And receivable outstanding think at is our last sales inventory, if you or how the that's doing five our sort of so how our cash. accounts kind my receivable. good we're well day bellwethers with the and on of

Michael Prouting

receivables to like, it. strong. the it through I'll board just some very yeah, I take looking more complete. mean wasn't looks time is across It And work management

Just themselves wash just flow have impact right. cash to on operations derivatives through. no clarify, the a They're from though, complete

Jeff Woosnam

when goods or cost -- That's it's increase themselves do being now. Certainly, correct. they And increase derivatives sold. a out, non-cash them value, the to that or ended the work. the the we items close of up in Well, fair decrease

Michael Prouting

terms Jeff, exactly. be might be cash on the what just to I to looks fiscal levels. like to operations the was trends flow just year churn, ‘XX fair, of like has due A try was fiscal seeing feel But other But sort from questions, for fiscal concise. wondering Yeah, going how to wanted How your Yeah. that. ‘XX And on high customer more factors mean, normalized churn, no, it crazy you what be now? those customer understand I returned customer a of I'll mentioned. churn you're to in outlook Thanks. you just of to forward? better try couple ‘XX

Jeff Woosnam

further business training, past call experience. track that, CRM we've part. strategy of that a we've see that significant line a the to about do into working business, that that challenging, make hybrid year. in customer Clearly progress. scores enhanced our impact with to We've find our made scores but XXXX propane a had really in promoter that and the streamline earlier we on put development That constraints to reduction can positively you as just ways was we do. in or overall. of we to to our of remote attrition to the remove in areas even is of result and Those continued a and move We impact optimistic how closely, our our overall those want in our And that net want attrition trying from continue fully but the with of of of environment assets this very have customer But that Yes. items the to use progress strategic ourselves And saw they things where a a really And trying in pandemic more include to some implement really say it to am some churn more of to talked churn. will overall. impacted, there. employee improvements -- customers creative essentially us. evaluate some seen can customer the reinvest XXXX, improve impacted the reduction of I I I've determine position in in on we that platform, XXXX optimistic. improvement made southern But we're shouldn't we've when sale terms XXXX. the

and October size, of losses to far improved and an And a additions so in have check, to sample new limited November be so able keep We'll we're start. XXXX, far, it's off customer fiscal in customer but increased.

see have the out. how rest of that the question. hope So we'll your quarter But, to plays I answers

Michael Prouting

understand and a long-term. can like dramatic to You then value Again, actually quickly And that on this much encouraging. on of like Rich allocation you're And I relatively some gears that definitely. that, know sustained very capital very customer I company but know, to the repurchase churn small looks mean, switch sounds very even on starting low remarks. think sound I covered changes over or encouraging. his the just you broken in the extent so in to then that to impacts share to authorization. have sounds record, But not the parties. And get pretty improvements it

we I'll should cash Thanks. I increase So unit think And my position increase the forward customary is strong up guess, authorization? look reasonable do see ‘XX? And, given in repurchase to in to there. it an dividend the questions calendar the you wrap company's

Rich Ambury

the the plan I we which by we're rate the to will be repurchasing of beginning with the next guess, the end next that us, XX-Q. of for carry covered -- At open which the once units, Sure. is, were will that being, February us which window going file SEC again,

to evaluate as the historically, will see normally year. And don't for or And almost believe do. increase, that's after distribution we the XX-years it But, have I meeting. whether you distribution, results evaluate April got so. we've I then, the we know haven't a well. as other to I repurchase for So plan board don’t unit had

and half, months yet. We a have four of another winner five

Michael Prouting

Right.

say, how Jeff one of based fair fuels updates in Okay, initiatives, positioned I'll Actually, any and enough. if going the final terms company terms thinking heating ask of there's non-oil around cheat climate just is forward. question. and your in wondering

Jeff Woosnam

viable in bio to a and is noted essentially as company, we of And of ultra-low means oil an And, use got stepped to a industry, we've we feel blend reducing in pathway a sulfur to carbon we've tried heat, kind in take as to renewable years. heat as industry united that a like very leadership as emissions Michael, the the XX-K a of emissions. heating a the we've of coming some pledge which approach an role use that. in biodiesel. made a bio reduce And, through

So, we and that. which heating ultra-low XX/XX of do And our delivered been B continue essentially biodiesel. of increasing is sulfur an renewable mix rate oil XX, we'll have to

So we addressing like a industry. and to and that's change feel viable cost realistic an effective approach climate very approach as

Michael Prouting

questions. update. the again thanks taking And Okay, for great. my Appreciate

Jeff Woosnam

bet. You

Operator

from Retail Riley next Our question Jean with comes [ph].

ahead. You may go

Unidentified Analyst

much for very you Thank taking my question.

balance the steady the collateral, it reached sheet, a that statement? Is Looking it's captive at looks insurance state. true the like

Rich Ambury

claims Yeah, state, it's it does certain a look of like sort on to that pretty versus which out extent steady the is captive reached provide current well in as state. open basis a paying our claims the from much credits we what much means adding a that claims we're that steady we're a that reinsurance in state, given because as AIG, support steady as the a were they do as is have, in pretty well in

that some have year, to capital gone any we this or upcoming but our which in due just had XXXX. into deposits to value so yeah, investment happy It had XXXX kind haven't income, increase the up year. that So contribute haven't to we we're of is for in to insurance might

Unidentified Analyst

thank just guys Well, job. very much. to think you want I doing a are And add, you I great

Jeff Woosnam

Thank you.

Operator

concludes Woosnam I'd any back conference This Jeff remarks. turn for closing like session. your over to the question-and-answer to

Jeff Woosnam

interest in and first Well, Star the XXXX In forward to in wonderful happy Thank us sharing thank results a look our to fiscal you holiday. meantime, join ongoing We the time have and today your February. taking for Group. you. quarter

Operator

attending today's Thank concluded. is now conference you presentation. The for

may You disconnect. now

Star (SGU) 9 Dec 212021 Q4 Earnings call transcript