STAR GROUP, L.P.

Previous wording

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, tariff regimes, including newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, 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 operational and 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, 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 2024 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 2024 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 an…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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, tariff regimes, including newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, 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 federal, state and municipal laws restricting greenhouse gases ("GHG") emissions and federal, state and local 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 2025 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 2025 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 Stat…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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, tariff regimes 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, 2021, through 2025, on a quarterly basis, is illustrated in the following chart (price per gallon):

Current wording

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, 2022, through 2026, on a quarterly basis, is illustrated in the following chart (price per gallon):

Previous wording

(a) On July 31, 2025, the NYMEX ultra low sulfur diesel contract closed at $2.40 per gallon.

Current wording

(a) On February 2, 2026, the NYMEX ultra low sulfur diesel contract closed at $2.36 per gallon.

Previous wording

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.

Current wording

The amount of our cash flow generated in any given year depends upon a variety of factors including the amount of our cash income taxes. The amount of depreciation and amortization that we deduct for book (i.e., financial reporting) purposes differs 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 and placed in service. However, this table only includes assets purchased to date, and does not include any forecast for future annual capital purchases.

Previous wording

The Company entered into weather hedge contracts for fiscal year 2025 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 $15.0 million for fiscal 2025 and $12.5 million for fiscal 2024. For the contracts applicable to fiscal 2025, we are additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold. This obligation did not exist under the contract applicable for 2024.

Current wording

The Company entered into weather hedge contracts for fiscal years 2026 and 2025. 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 could receive is $15.0 million and is additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.

Previous wording

The temperatures experienced during the hedge period through March 31, 2025 were colder than the strikes in the weather hedge contracts. As a result as of March 31, 2025, we increased delivery and branch expense and recorded a payable under those weather hedge contracts of $3.1 million, and paid the amount in full in April 2025. By comparison, the temperatures experienced during the hedge period through March 31, 2024 were warmer than the strike in the weather hedge contract. As of March 31, 2024, we reduced delivery and branch expenses and recorded a receivable of $7.5 million under the weather hedge contract, and received the amount in full in April 2024.

Current wording

The temperatures experienced during the hedge period through December 31, 2025, were colder than the strikes in the weather hedge contracts. As a result as of December 31, 2025, we increased delivery and branch expense under those weather hedge contracts by $5.0 million. As of December 31, 2024, in accordance with ASC 815-45, we did not incur a benefit or expense related to the weather hedge contracts.

Previous wording

In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on some countries, including Canada and China. Current uncertainties about tariffs and their effects on trading relationships may affect the cost and availability of the Company's assets, such as trucks, and potentially the products and services we sell as well as potentially contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.

Current wording

In April 2025, the U.S. government announced a baseline tariff of 10% on certain products imported from all countries and an additional individualized reciprocal tariff on some countries, including Canada and China. Current uncertainties about tariffs and their effects on trading relationships may affect the cost and availability of the Company's assets, such as trucks, and potentially the products and services we sell as well as potentially contribute to inflation in the markets in which we operate. We are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs; however, these impacts remain uncertain.

Previous wording

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 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.

Current wording

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. We follow hedge accounting for our interest rate swaps, but we have opted out of, and do not follow hedge accounting for our commodity derivative instruments as hedging instruments. Regarding our interest rate hedges, 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 until the forecasted hedged item is recognized in earnings. As mentioned, 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 commodity derivative instruments are recognized in our 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.

Previous wording

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, natural gas and electric conversions 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. Customers sourced by our alliance partners are included in our home heating oil and propane customer base. Therefore, any changes in the relationships with our alliance partners could impact gross customer gains and losses going forward.

Current wording

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. Customers sourced by our buying group and association partners are included in our home heating oil and propane customer base. Therefore, any changes in the relationships with these partners could impact gross customer gains and losses going forward.

Previous wording

For the nine months ended June 30, 2025, the Company lost 13,000 accounts (net), or 3.1% of its home heating oil and propane customer base, compared to 12,100 accounts lost (net), or 3.1% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 1,300 accounts less than the prior year's comparable period and gross customer losses were 400 accounts less.

Current wording

For the three months ended December 31, 2025, the Company lost 1,500 accounts (net), or 0.4% of its home heating oil and propane customer base, compared to 1,400 accounts lost (net), or 0.3% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 500 accounts higher and gross customer losses were 600 accounts higher than the prior year's comparable period.

Previous wording

During the nine months ended June 30, 2025, we estimate that we lost 1.0% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 1.1% and 1.3% lost for the nine months ended June 30, 2024 and 2023, respectively. 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.

Current wording

During the three months ended December 31, 2025, we estimate that we lost 0.4% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 0.4% lost for the three months ended December 31, 2024 and 2023, respectively. 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.

Previous wording

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. During the nine months ended June 30, 2025, the Company acquired one heating oil and three propane businesses for approximately $80.5 million. During fiscal 2024, the Company acquired one propane and four heating oil businesses for approximately $49.4 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.

Current wording

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. The Company did not complete any acquisitions during the three months ended December 31, 2025. In February 2026, the Company acquired one heating oil business for approximately $0.9 million. During fiscal 2025, the Company acquired one heating oil and three propane businesses for approximately $80.5 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.

Previous wording

For the three months ended June 30, 2025, retail volume of home heating oil and propane sold decreased by 1.5 million gallons, or 3.8%, to 36.2 million gallons, compared to 37.7 million gallons for the three months ended June 30, 2024. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended June 30, 2025 were 2.0% warmer than the three months ended June 30, 2024 and 19.3% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2025, net customer attrition for the base business was 4.4%. 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:

Current wording

For the three months ended December 31, 2025, retail volume of home heating oil and propane sold increased by 11.5 million gallons, or 13.9%, to 93.9 million gallons, compared to 82.4 million gallons for the three months ended December 31, 2024. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended December 31, 2025 were 18.8% colder than the three months ended December 31, 2024 and 6.1% colder than normal, as reported by NOAA. For the twelve months ended December 31, 2025, net customer attrition for the base business was 4.9%. 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:

Previous wording

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 June 30, 2025, compared to the three months ended June 30, 2024:

Current wording

The following table sets forth the percentage by volume of total home heating oil and propane sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the three months ended December 31, 2025, compared to the three months ended December 31, 2024:

Previous wording

Volume of motor fuel and other petroleum products sold decreased by 0.9 million gallons, or 2.7%, to 32.0 million gallons for the three months ended June 30, 2025, compared to 32.9 million gallons for the three months ended June 30, 2024.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 0.8 million gallons, or 2.6%, to 29.9 million gallons for the three months ended December 31, 2025, compared to 30.7 million gallons for the three months ended December 31, 2024.

Previous wording

For the three months ended June 30, 2025, installation and service revenue increased by $6.9 million, or 8.3%, to $89.5 million, compared to $82.6 million for the three months ended June 30, 2024 driven by $6.4 million of sales generated from recent acquisitions and the remainder was driven by a concerted effort to expand these offerings to our customers as well as annual price increases.

Current wording

For the three months ended December 31, 2025, installation and service revenue increased by $2.7 million, or 3.0%, to $91.3 million, compared to $88.6 million for the three months ended December 31, 2024, driven by $0.8 million of sales generated from recent acquisitions and the remainder was driven by a concerted effort to expand these offerings to our customers as well as price increases.

Previous wording

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 transactions. On that basis, home heating oil and propane margins for the three months ended June 30, 2025 decreased by $0.0413 per gallon, or 2.4%, to $1.6547 per gallon, from $1.6960 per gallon during the three months ended June 30, 2024. In the base business, home heating and propane margins for the three months ended June 30, 2025 decreased by $0.010 per gallon, or 0.6% to $1.6860 per gallon. Going forward, we cannot assume that per gallon margins realized during the three months ended June 30, 2025 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.

Current wording

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 transactions. On that basis, home heating oil and propane margins, for the three months ended December 31, 2025, increased by $0.0971 per gallon, or 5.7%, to $1.8010 per gallon, from $1.7039 per gallon during the three months ended December 31, 2024. Going forward, we cannot assume that per gallon margins realized during the three months ended December 31, 2025, 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.

Previous wording

For the nine months ended June 30, 2025, total product gross profit was $480.5 million, which was $54.7 million, or 12.8%, higher than the nine months ended June 30, 2024, due to an increase in home heating oil and propane volume sold ($46.5 million), an increase in home heating oil and propane margins ($6.9 million) and an increase in gross profit from other petroleum products ($1.3 million).

Current wording

For the three months ended December 31, 2025, total product gross profit was $179.5 million, which was $28.7 million, or 19.0%, higher than the three months ended December 31, 2024, due to an increase in home heating oil and propane volume sold ($19.5 million), increase in home heating oil and propane margins ($9.1 million) and an increase in gross profit from other petroleum products ($0.1 million).

Previous wording

Total installation costs for the three months ended June 30, 2025 increased by $2.5 million or 10.2%, to $27.3 million, compared to $24.8 million of installation costs for the three months ended June 30, 2024. This increase was largely due to higher installation sales from recent acquisitions. Installation costs as a percentage of installation sales were 82.0% for the three months ended June 30, 2025 and 82.2% for the three months ended June 30, 2024. The gross profit from installation increased by $0.7 million.

Current wording

Total installation costs, for the three months ended December 31, 2025, increased by $0.4 million or 1.3%, to $30.7 million, compared to $30.3 million of installation costs for the three months ended December 31, 2024. This increase was largely due to higher installation sales. Installation costs as a percentage of installation sales were 77.4% for the three months ended December 31, 2025, and 79.9% for the three months ended December 31, 2024. The gross profit from installation increased by $1.4 million, compared to the three months ended December 31, 2024.

Previous wording

Service expense increased by $3.6 million, or 8.1%, to $47.9 million for the three months ended June 30, 2025, representing 85.4% of service sales, versus $44.3 million, or 84.4% of service sales, for the three months ended June 30, 2024. This increase was largely due to higher service sales from recent acquisitions. 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. The gross profit from service did not change compared to the three months ended June 30, 2024.

Current wording

Service expense increased by $3.6 million, or 7.0%, to $55.0 million for the three months ended December 31, 2025, representing 106.5% of service sales, versus $51.4 million, or 101.3% of service sales, for the three months ended December 31, 2024. The increase in service expense was driven by higher service call volume due to the colder weather and increase in propane tank sets. 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. The loss from service increased by $2.7 million compared to the three months ended December 31, 2024.

Previous wording

We realized a combined gross profit from service and installation of $14.2 million for the three months ended June 30, 2025 compared to a gross profit of $13.5 million for the three months ended June 30, 2024, a $0.7 million increase.

Current wording

We realized a combined gross profit from service and installation of $5.6 million for the three months ended December 31, 2025 compared to a gross profit of $6.9 million for the three months ended December 31, 2024, a $1.3 million decrease. While installation gross profit increased by $1.4 million, the service gross profit loss increased by $2.7 million due to demand for service and an increase in propane tank sets.

Previous wording

During the three months ended June 30, 2025, the change in the fair value of derivative instruments resulted in a $0.6 million credit as a decrease in the market value for unexpired hedges (a $2.2 million charge) was more than offset by an $2.8 million credit due to the expiration of certain hedged positions.

Current wording

During the three months ended December 31, 2024, the change in the fair value of derivative instruments resulted in a $5.3 million credit as a decrease in the market value for unexpired hedges (a $1.2 million charge) was more than offset by a $6.5 million credit due to the expiration of certain hedged positions.

Previous wording

For the nine months ended June 30, 2025, delivery and branch expense increased $29.9 million, or 10.5%, to $314.9 million, compared to $285.0 million for the nine months ended June 30, 2024. During the nine months ended June 30, 2025, the Company's weather hedge contracts accounted for a $10.6 million increase in expense. The temperatures experienced from November 2024 through March 2025 (the weather hedge period) were colder than the strike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $3.1 million. This compares to the prior-year period which, due to warmer weather, the Company recorded a credit of $7.5 million under its weather hedge contract. The increase was also driven by $18.9 million of expenses from recent acquisitions and a $0.4 million increase in net base business expenses. The increase in the base business expenses was driven by a $1.4 million, or 1.6%, increase in delivery expenses due to a 4.2 million gallon, or 1.8%, increase in home heating oil and propane volume sold in the base business compared to the prior year and $1.9 million of other net expense increases that were partially offset by a $2.9 million decrease in insurance related costs.

Current wording

For the three months ended December 31, 2025, delivery and branch expense increased $10.6 million, or 10.7%, to $109.9 million, compared to $99.3 million for the three months ended December 31, 2024. During the three months ended December 31, 2025, the Company's weather hedge contracts accounted for a $5.0 million increase in expense. The temperatures experienced from November 2025 through December 2025 were colder than the strike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $5.0 million, as compared to no liability for the three months ended December 31, 2024. The increase was also driven by a $3.5 million increase in net base business expenses and $2.1 million of expenses from recent acquisitions. The increase in the base business expenses was driven by a $2.7 million, or 9.1%, increase in delivery expenses due to a 7.6 million gallon, or 9.2%, increase in home heating oil and propane volume sold in the base business, and a $0.8 million or 0.8% in other net expense increases.

Previous wording

For the three months ended June 30, 2025, depreciation and amortization expenses increased $2.0 million, or 27.0%, to $9.2 million, compared to $7.2 million for the three months ended June 30, 2024, primarily due to acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.

Current wording

For the three months ended December 31, 2025, depreciation and amortization expenses increased $0.9 million, or 10.8%, to $8.8 million, compared to $7.9 million for the three months ended December 31, 2024, primarily due to acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.

Previous wording

For the nine months ended June 30, 2025, general and administrative expenses increased by $1.6 million, or 7.5%, to $22.9 million, from $21.3 million for the nine months ended June 30, 2024, due to a $1.4 million increase in profit sharing expense and $0.2 million of other net expense increases. 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.

Current wording

For the three months ended December 31, 2025, general and administrative expenses increased by $0.4 million or 5.7%, to $7.6 million, from $7.2 million for the three months ended December 31, 2024, due primarily a $0.7 million increase in salaries and benefits expenses including profit sharing expense, that was partially offset by a $0.3 million decrease in legal, professional and other expenses. 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 if/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.

Previous wording

For the nine months ended June 30, 2025, finance charge income increased by $0.2 million, or 5.0%, to $3.9 million, compared to $3.7 million for the nine months ended June 30, 2024.

Current wording

For the three months ended December 31, 2025, finance charge income increased $0.2 million or 29.9%, to $0.9 million, from $0.7 million for the three months ended December 31, 2024, due to higher late customer payment charges on aged receivables.

Previous wording

For the three months ended June 30, 2025, net interest expense increased by $0.9 million, or 36.7%, to $3.6 million compared to $2.7 million for the three months ended June 30, 2024. The year-over-year change was driven by an increase in average borrowings of $60.3 million from $143.2 million for the three months ended June 30, 2024 to $203.5 million for the three months ended June 30, 2025 that was partially offset by a decrease in the weighted average interest rate from 7.2% for the three months ended June 30, 2024 to 7.0% for the three months ended June 30, 2025. The increase in average borrowings was attributable to financing acquisitions. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2025, approximately 39% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

Current wording

For the three months ended December 31, 2025, interest expense, net increased by $0.8 million, or 26.9%, to $3.8 million compared to $3.0 million for the three months ended December 31, 2024. The year-over-year change was attributable to a reduction in interest income of $1.0 million due to lower invested cash balances of $78.0 million. In September 2024, the company increased its term loan and prefunded an acquisition that closed in January 2025 for $66.9 million. Gross interest expense decreased by $0.2 million as an increase in average borrowings of $4.3 million from $210.7 million for the three months ended December 31, 2024, to $215.0 million for the three months ended December 31, 2025, was more than offset by a decline in the weighted average interest rate from 7.2% for the three months ended December 31, 2024 to 6.9% for the three months ended December 31, 2025. To hedge against rising interest rates, the Company utilizes interest rate swaps. At December 31, 2025, approximately 40% of borrowings under Star's variable-rate long term debt were not subject to interest rate changes as a result of interest rate swaps.

Previous wording

For the three months ended June 30, 2025, the Company’s income tax benefit increased by $2.3 million to $6.5 million, from $4.2 million for the three months ended June 30, 2024. The increase in the income tax benefit was driven by a $7.9 million increase in loss before income taxes.

Current wording

For the three months ended December 31, 2025, the Company’s income tax expense increased by $1.4 million to $14.4 million, from $13.0 million for the three months ended December 31, 2024. The increase in the income tax expense was driven by a $4.2 million increase in income before income taxes.

Previous wording

For the three months ended June 30, 2025, Star’s net loss increased $5.6 million, to $16.6 million, compared to the three months ended June 30, 2024, primarily due to a $6.5 million increase in the Adjusted EBITDA loss, a $2.0 million increase in depreciation and amortization expenses and a $0.9 million increase in net interest expense that was partially offset by a $2.3 million increase in income tax benefit and a favorable change in the fair value of derivative instruments of $1.6 million.

Current wording

For the three months ended December 31, 2025, Star’s net income increased $2.9 million, to $35.8 million, compared to the three months ended December 31, 2024, primarily due to a $16.5 million increase in the Adjusted EBITDA, that was partially offset by an unfavorable change in the fair value of derivative instruments of $10.7 million, a $1.4 million increase in income tax expense, a $0.9 million increase in depreciation and amortization expenses and a $0.8 million increase in net interest expense.

Previous wording

For the nine months ended June 30, 2025, Adjusted EBITDA increased $28.2 million, to $169.5 million, compared to the nine months ended June 30, 2024, primarily due to a $21.1 million increase in Adjusted EBITDA in the base business and a $17.7 million increase in Adjusted EBITDA from recent acquisitions that was partially offset by a $10.6 million increase in expense related to the Company's weather hedge contracts. The increase in Adjusted EBITDA in the base business was driven by an increase in home heating oil and propane per gallon margins, higher home heating oil and propane volume sold due to colder weather and an improvement in service and installation profitability.

Current wording

For the three months ended December 31, 2025, Adjusted EBITDA increased $16.5 million, to $68.4 million, compared to the three months ended December 31, 2024, primarily due to a $16.8 million increase in Adjusted EBITDA in the base business and a $4.7 million increase in Adjusted EBITDA from recent acquisitions that was partially offset by a $5.0 million increase in expense related to the Company's weather hedge contracts. The increase in Adjusted EBITDA in the base business was driven by higher home heating oil and propane volume sold due to colder weather, an increase in home heating oil and propane per gallon margins, higher installation profitability partially reduced by an increase in operating expenses and an increase in the demand for service also due to colder weather.

Previous wording

During the nine months ended June 30, 2025, cash provided by operating activities decreased $15.9 million, to $56.5 million, compared to $72.4 million in cash provided by operating activities during the nine months ended June 30, 2024, as a $26.8 million increase in cash flows from operations and a $4.8 million increase in cash from the timing of accounts payable payments, was more than offset by an $18.5 million increase in accounts receivable due from customers on a comparable basis (including accounts receivable and customer credit balance accounts), a $16.5 million greater use of cash for inventory purchases as we entered the 2025 heating season with a lower level of inventory than in fiscal 2024, $6.3 million of additional cash required for collateral and option premiums at derivative counterparties and $6.2 million of other net changes in working capital. The increase in accounts receivable was due to an increase in budget customer balances in debit positions.

Current wording

During the three months ended December 31, 2025, cash used in operating activities decreased $9.4 million, to $55.2 million, compared to $64.6 million during the three months ended December 31, 2024, as a $25.7 million increase in accounts receivable due from customers on a comparable basis (including accounts receivable and customer credit balance accounts), more than offset a $17.4 million increase in cash flows from operations, $5.5 million less cash required for collateral at derivative counterparties, $4.1 million less cash used for inventory purchases, a $5.0 million increase in cash from the timing of accounts payable payments and $3.1 million of other changes in working capital.

Previous wording

Our capital expenditures for the nine months ended June 30, 2024 totaled $7.6 million, as we invested in computer hardware and software ($1.0 million), refurbished certain physical plants ($1.7 million), expanded our propane operations ($1.1 million) and made additions to our fleet and other equipment ($3.8 million).

Current wording

For the three months ended December 31, 2025, our capital expenditures totaled $4.6 million, as we invested in computer hardware and software ($0.4 million), refurbished certain physical plants ($1.7 million), expanded our propane operations ($0.2 million) and made additions to our fleet and other equipment ($2.3 million).

Previous wording

During the nine months ended June 30, 2025, $1.8 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.

Current wording

During the three months ended December 31, 2025, $0.8 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.

Previous wording

During the nine months ended June 30, 2025, the Company acquired one heating oil and three propane businesses for approximately $80.5 million in cash. The gross purchase price was allocated $38.7 million to intangible assets, $17.7 million to goodwill, $25.2 million to fixed assets and reduced by $1.1 million of negative working capital. The Company also acquired certain intangible and fixed assets for $7.7 million and sold certain assets for cash proceeds of $0.3 million.

Current wording

During the three months ended December 31, 2024, the Company acquired a heating oil business for approximately $0.7 million in cash. The gross purchase price was allocated $0.8 million to intangible assets, $0.4 million to goodwill, $0.3 million to fixed assets and reduced by $0.8 million of negative working capital. The Company also sold certain assets for cash proceeds of $0.3 million.

Previous wording

Our capital expenditures for the nine months ended June 30, 2025 totaled $10.4 million, as we invested in computer hardware and software ($1.3 million), refurbished certain physical plants ($1.2 million), expanded our propane operations ($1.0 million) and made additions to our fleet and other equipment ($6.9 million).

Current wording

Our capital expenditures for the three months ended December 31, 2024 totaled $4.0 million, as we invested in computer hardware and software ($0.4 million), refurbished certain physical plants ($0.7 million), expanded our propane operations ($0.3 million) and made additions to our fleet and other equipment ($2.6 million).

Previous wording

During the nine months ended June 30, 2024, $1.4 million of earnings were reinvested into the irrevocable trust.

Current wording

During the three months ended December 31, 2024, $0.4 million of earnings were reinvested into the irrevocable trust.

Previous wording

During the nine months ended June 30, 2025, we repaid $15.8 million of our term loan, borrowed $75.4 million under our revolving credit facility and subsequently repaid $75.4 million, repurchased 0.8 million Common Units, at an average price paid of $11.99 per unit, for $10.0 million, in connection with our unit repurchase plan, and paid distributions of $18.3 million to our Common Unit holders and $1.2 million to our General Partner unit holders (including $1.1 million of incentive distributions as provided in our Partnership Agreement).

Current wording

During the three months ended December 31, 2025, we repaid $5.3 million of our term loan, borrowed $71.9 million under our revolving credit facility, repurchased 0.4 million Common Units, at an average price paid of $11.87 per unit, for $4.5 million, in connection with our unit repurchase plan, and paid distributions of $6.1 million to our Common Unit holders and $0.4 million to our General Partner unit holders (including $0.4 million of incentive distributions as provided in our Partnership Agreement).

Previous wording

During the nine months ended June 30, 2024, we repaid $12.3 million of our term loan, borrowed $79.6 million under our revolving credit facility and subsequently repaid $79.6 million, repurchased approximately 0.8 million Common Units, at an average price paid of $10.88 per unit, for $9.0 million, in connection with our unit repurchase plan, and paid distributions of $17.7 million to our Common Unit holders and $1.0 million to our General Partner unit holders (including $1.0 million of incentive distributions as provided in our Partnership Agreement).

Current wording

During the three months ended December 31, 2024, we borrowed $7.8 million under our revolving credit facility, repurchased fewer than 0.1 million Common Units, at an average price paid of $11.20 per unit, for $0.1 million, in connection with our unit repurchase plan, and paid distributions of $6.0 million to our Common Unit holders and $0.4 million to our General Partner unit holders (including $0.3 million of incentive distributions as provided in our Partnership Agreement).

Previous wording

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, tariff regimes, 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 June 30, 2025 ($28.1 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 June 30, 2025, we had accounts receivable of $129.3 million of which $93.0 million is due from residential customers and $36.3 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivables. If these balances do not meet the eligibility tests as defined in our credit agreement, our ability to borrow will be reduced and our anticipated cash flow from operating activities will also be reduced. As of June 30, 2025, we had no borrowings under our revolving credit facility, $194.3 million outstanding under our term loan, $5.2 million in letters of credit outstanding and $2.2 million hedge positions were secured under the credit agreement.

Current wording

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, tariff regimes, 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, 2025 ($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, 2025, we had accounts receivable of $198.2 million of which $154.9 million is due from residential customers and $43.3 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivables. If these balances do not meet the eligibility tests as defined in our 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, 2025, we had $71.9 million of borrowings under the revolving credit facility, $183.8 million outstanding under our term loan, $5.1 million in letters of credit outstanding and $9.8 million hedge positions were secured under the credit agreement.

Previous wording

Under the terms of the credit agreement, if Availability (as defined in the credit agreement) is less than the greater of (a) 12.5% of the Line Cap (lesser of the aggregate revolving commitment and the borrowing base) and (b) $35.0 million, we must maintain a fixed charge coverage ratio of 1.10. 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 June 30, 2025, Availability, as defined in the credit agreement, as amended, was $167.6 million and we were in compliance with the financial covenants.

Current wording

Under the terms of the credit agreement, if Availability (as defined in the credit agreement) is less than the greater of (a) 12.5% of the Line Cap (lesser of the aggregate revolving commitment and the borrowing base) which was $31.9 million as of December 31, 2025 and (b) $35.0 million, we must maintain a fixed charge coverage ratio of 1.10. 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, 2025, Availability, as defined in the credit agreement, as amended, was $168.6 million and we were in compliance with the financial covenants.