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, 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, 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 Statements. Unless otherwise required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result …

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, such as the ongoing military conflicts in the Middle East, on wholesale product cost volatility, the price and supply of the products that we sell, our ability to purchase sufficient quantities of product to meet our customer’s needs, rapid increases in levels of inflation, the consumption patterns of our customers, our ability to obtain satisfactory gross profit margins, the effect of weather conditions on our financial performance, our ability to obtain new customers and retain existing customers, our ability to make strategic acquisitions, the impact of litigation, natural gas conversions and electrification of heating systems, 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 Statements. Unless otherwise required by law, we undertake no obligation to update or…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

(a) On April 30, 2026, the NYMEX ultra low sulfur diesel contract closed at $4.14 per gallon.

Current wording

(a) On July 31, 2026, the NYMEX ultra low sulfur diesel contract closed at $4.12 per gallon.

Previous wording

On February 28, 2026, the United States launched a joint military operation with Israel against Iran. After which, the wholesale prices of the products that we sell became more volatile and we experienced a significant increase in the cost of our product. The cost of home heating oil, as measured by the New York Mercantile Exchange (“NYMEX”), increased from $2.67 per gallon on February 27, 2026, peaked at $4.61 on March 20, 2026, and closed at $4.16 on March 31, 2026. The significant increase in volatility drove an increase in the cost of hedging instruments used for future price protected accounts and cash requirements for our current hedged inventory. Our seasonal net working capital needs increased to fund these higher costs and contributed to the cash required to finance our operating activities. The Company believes that it may experience a slowing of collection of our accounts receivable over the next few months as our customers respond to higher product prices. Further, interest expense may increase due to higher borrowings to finance higher receivables.

Current wording

On February 28, 2026, the United States launched a joint military operation with Israel against Iran. After which, the wholesale prices of the products that we sell became more volatile and we experienced a significant increase in the cost of our product. The cost of home heating oil, as measured by the New York Mercantile Exchange (“NYMEX”), increased from $2.67 per gallon on February 27, 2026, peaked at $4.61 on March 20, 2026. The significant increase in volatility drove an increase in the cost of hedging instruments used for future price protected accounts and cash requirements for our current hedged inventory. Our seasonal net working capital needs increased to fund these higher costs and contributed to the cash required to finance our operating activities. The Company believes that it may experience a slowing of collection of our accounts receivable over the next few months as our customers respond to higher product prices. Further, interest expense may increase due to higher borrowings to finance higher receivables.

Previous wording

As of March 31, 2026, and continuing into April 2026, the NYMEX heating oil futures prices were in severe backwardation (near term future prices are higher than prices for delivery further out in time). From an inventory cost perspective, backwardation has a discouraging effect on holding physical stocks. When future prices are lower than spot prices, storing heating oil becomes economically unattractive. As of March 31, 2026, we had 18.4 million gallon of heating oil inventory. For our variable priced customers, selling prices may be elevated in the near term due to higher front-month prices. Per gallon margins for our price protected customers may be adversely impacted as the inventory cost could be higher than the hedge utilized to secure the margin at the time of delivery.

Current wording

As of June 30, 2026, and continuing into July 2026, the NYMEX heating oil futures prices were in severe backwardation (near term future prices are higher than prices for delivery further out in time). From an inventory cost perspective, backwardation has a discouraging effect on holding physical stocks. When future prices are lower than spot prices, storing heating oil becomes economically unattractive. As of June 30, 2026, we had 10.0 million gallons of heating oil inventory on-hand. For our variable priced customers, selling prices may be elevated in the near term due to higher front-month prices. Per gallon margins for our price protected customers may be adversely impacted as the inventory cost could be higher than the hedge utilized to secure the margin at the time of delivery.

Previous wording

The temperatures experienced during the hedge periods through March 31, 2026, and March 31 2025, were colder than the strike prices in the weather hedge contracts. As a result, as of March 31, 2026, and March 31, 2025, we increased delivery and branch expense and recorded a payable under those weather hedge contracts of $5.0 million and $3.1 million, respectively.

Current wording

The temperatures experienced during the hedge periods through March 31, 2026, and March 31 2025, were colder than the strike prices in the weather hedge contracts. As a result, as of March 31, 2026, and March 31, 2025, we increased delivery and branch expense and recorded a payable under those weather hedge contracts of $5.0 million and $3.1 million, respectively. The amounts were paid in full in April 2026 and April 2025, respectively.

Previous 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.

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. These tariffs terminated on February 24, 2026 following the U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump holding these tariffs to be unlawful. In the aftermath of the Supreme Court’s decision, the Trump administration imposed a temporary 10% global tariff on worldwide imported goods, which temporary tariffs automatically expired on July 24, 2026. The Trump administration replaced the expired temporary tariffs with a new tariff regime in reliance upon Section 301 of the Trade Act of 1976 which authorizes the president to issue tariffs if the U.S. government finds evidence that other countries engaged in unfair trade practices. 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

At March 31, 2026, we had 29.5 million gallons of home heating oil hedged for our ceiling customers and 6.0 million gallons hedged for our fixed priced customers. Over 95% of the hedges for our ceiling customers were at their strike price (ceiling), which reduces the potential for per gallon margin expansion for these customers unless the price for home heating oil declines.

Current wording

At July 31, 2026, over 92% of the hedges for our ceiling customers were at their strike price (ceiling), which reduces the potential for per gallon margin expansion for these customers unless the price for home heating oil declines.

Previous wording

For the six months ended March 31, 2026, the Company lost 4,100 accounts (net), or 1.0% of its home heating oil and propane customer base, compared to 6,000 accounts lost (net), or 1.5% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 1,800 accounts higher and gross customer losses were 100 accounts lower than the prior year's comparable period.

Current wording

For the nine months ended June 30, 2026, the Company lost 11,000 accounts (net), or 2.7% of its home heating oil and propane customer base, compared to 13,000 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 higher and gross customer losses were 700 accounts lower than the prior year's comparable period.

Previous wording

During the six months ended March 31, 2026, we estimate that we lost 0.7% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 0.7% lost for the six months ended March 31, 2025 and 2024, 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 nine months ended June 30, 2026, we estimate that we lost 1.0% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 1.0% and 1.1% lost for the nine months ended June 30, 2025 and 2024, 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 six months ended March 31, 2026, the Company acquired one heating oil business for approximately $1.0 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.

Current 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, 2026, the Company acquired one heating oil business for approximately $1.0 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

A substantial majority of the Company’s price-protected customers have agreements with us that are subject to annual renewal in the period between April and November of each fiscal year. If a significant number of these customers elect not to renew their price-protected agreements with us and do not continue as our customers under a variable price-plan, the Company’s near term profitability, liquidity and cash flow will be adversely impacted. As of April 30, 2026, the wholesale cost of home heating oil as measured by the New York Mercantile Exchange was $4.14 per gallon, approximately $2.10 per gallon higher than at April 30, 2025.

Current wording

A substantial majority of the Company’s price-protected customers have agreements with us that are subject to annual renewal in the period between April and November of each fiscal year. If a significant number of these customers elect not to renew their price-protected agreements with us and do not continue as our customers under a variable price-plan, the Company’s near term profitability, liquidity and cash flow will be adversely impacted. As of July 31, 2026, the wholesale cost of home heating oil as measured by the New York Mercantile Exchange was $4.12 per gallon, approximately $1.72 per gallon higher than at July 31, 2025.

Previous wording

Based on these recent prices, our price-protected customers will be offered renewal contracts at significantly higher prices than last year which, may adversely impact the acceptance rate of these renewals.

Current wording

Based on these recent prices, our price-protected customers will be offered renewal contracts at significantly higher prices than last year, which, has adversely impacted the acceptance rate of these renewals.

Previous wording

For the three months ended March 31, 2026, retail volume of home heating oil and propane sold increased by 0.6 million gallons, or 0.4%, to 144.5 million gallons, compared to 143.9 million gallons for the three months ended March 31, 2025. 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 March 31, 2026, were 6.4% colder than the three months ended March 31, 2025, and 2.8% colder than normal, as reported by NOAA. For the twelve months ended March 31, 2026, net customer attrition for the base business was 4.2%. 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 June 30, 2026, retail volume of home heating oil and propane sold decreased by 3.4 million gallons, or 9.4%, to 32.8 million gallons, compared to 36.2 million gallons for the three months ended June 30, 2025. 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, 2026, were 15.9% colder than the three months ended June 30, 2025, and 5.9% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2026, net customer attrition for the base business was 4.2%. 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

Volume of motor fuel and other petroleum products sold decreased by 2.1 million gallons, or 7.3%, to 26.8 million gallons for the three months ended March 31, 2026, compared to 28.9 million gallons for the three months ended March 31, 2025.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 2.9 million gallons, or 9.2%, to 29.1 million gallons for the three months ended June 30, 2026, compared to 32.0 million gallons for the three months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, product sales increased by $24.7 million, or 3.7%, to $689.8 million, compared to $665.1 million for the three months ended March 31, 2025, due to an increase in average selling prices that was driven by an increase in combined wholesale product cost of $0.0530 per gallon, or 2.3% calculated on a weighted average.

Current wording

For the three months ended June 30, 2026, product sales increased by $50.8 million, or 23.5%, to $267.0 million, compared to $216.2 million for the three months ended June 30, 2025, due to an increase in average selling prices that was driven by an increase in combined wholesale product cost of $1.0359 per gallon, or 48.9% calculated on a weighted average, partially offset by a decrease in total volume sold of 9.3%.

Previous wording

For the three months ended March 31, 2026, installation and service revenue decreased by $1.0 million, or 1.3%, to $76.9 million, compared to $77.9 million for the three months ended March 31, 2025.

Current wording

For the three months ended June 30, 2026, installation and service revenue increased by $1.6 million, or 1.8%, to $91.1 million, compared to $89.5 million for the three months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, cost of product increased $5.5 million, or 1.3%, to $412.4 million, compared to $406.9 million for the three months ended March 31, 2025, due to an increase in combined wholesale product cost of $0.0530 per gallon, or 2.3% calculated on a weighted average basis, partially offset by a decrease in total volume sold of 0.9%. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Current wording

For the three months ended June 30, 2026, cost of product increased $50.7 million, or 35.1%, to $195.2 million, compared to $144.5 million for the three months ended June 30, 2025, due to an increase in combined wholesale product cost of $1.0359 per gallon, or 48.9% calculated on a weighted average basis, partially offset by a decrease in total volume sold of 9.3%. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

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 March 31, 2026, increased by $0.1251 per gallon, or 7.3%, to $1.8446 per gallon, from $1.7195 per gallon during the three months ended March 31, 2025. Going forward, we cannot assume that per gallon margins realized during the three months ended March 31, 2026, 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 June 30, 2026, increased by $0.1368 per gallon, or 8.3%, to $1.7915 per gallon, from $1.6547 per gallon during the three months ended June 30, 2025. Going forward, we cannot assume that per gallon margins realized during the three months ended June 30, 2026, 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 three months ended March 31, 2026, total product gross profit was $277.4 million, which was $19.2 million, or 7.4%, higher than the three months ended March 31, 2025, due to increase in home heating oil and propane margins ($18.1 million), an increase in home heating oil and propane volume sold ($1.0 million) and an increase in gross profit from other petroleum products ($0.1 million).

Current wording

For the three months ended June 30, 2026, total product gross profit was $71.8 million, which was $0.1 million, or 0.2%, higher than the three months ended June 30, 2025, due to increase in home heating oil and propane margins ($4.5 million) and an increase in gross profit from other petroleum products ($1.3 million), partially offset by a decrease in home heating oil and propane volume sold ($5.7 million).

Previous wording

Total installation costs, for the three months ended March 31, 2026, decreased by $0.7 million or 3.1%, to $23.6 million, compared to $24.3 million of installation costs for the three months ended March 31, 2025. Installation costs as a percentage of installation sales were 83.2% for the three months ended March 31, 2026, and 84.2% for the three months ended March 31, 2025. The gross profit from installation increased by $0.2 million, compared to the three months ended March 31, 2025.

Current wording

Total installation costs, for the three months ended June 30, 2026, decreased by $1.5 million or 5.5%, to $25.8 million, compared to $27.3 million of installation costs for the three months ended June 30, 2025. Installation costs as a percentage of installation sales were 78.8% for the three months ended June 30, 2026, and 82.0% for the three months ended June 30, 2025. The gross profit from installation increased by $1.0 million, compared to the three months ended June 30, 2025.

Previous wording

We realized a combined loss from service and installation of $1.5 million for the three months ended March 31, 2026 compared to a gross profit of $1.7 million for the three months ended March 31, 2025, a $3.2 million decrease. While installation gross profit increased by $0.2 million, the service loss increased by $3.4 million largely due to the extreme weather conditions during the quarter.

Current wording

We realized a combined gross profit from service and installation of $15.6 million for the three months ended June 30, 2026 compared to a gross profit of $14.2 million for the three months ended June 30, 2025, a $1.4 million increase.

Previous wording

During the three months ended March 31, 2025, the change in the fair value of derivative instruments resulted in a $6.1 million credit as a $2.1 million decrease in the market value for unexpired hedges was more than offset by an $8.2 million credit due to the expiration of certain hedged positions.

Current 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 a $2.8 million credit due to the expiration of certain hedged positions.

Previous wording

For the three months ended March 31, 2026, depreciation and amortization expenses decreased $0.6 million, or 7.0%, to $8.3 million, compared to $8.9 million for the three months ended March 31, 2025, primarily due to intangible assets that fully amortized in the prior fiscal year.

Current wording

For the three months ended June 30, 2026, depreciation and amortization expenses decreased $0.9 million, or 9.4%, to $8.3 million, compared to $9.2 million for the three months ended June 30, 2025, primarily due to intangible assets that fully amortized in the prior fiscal year.

Previous wording

For the six months ended March 31, 2026, general and administrative expenses increased by $0.9 million or 6.1%, to $16.3 million, from $15.4 million for the six months ended March 31, 2025, primarily due to a $0.7 million increase in profit sharing expense and a $0.7 million increase in salaries and benefits, that was partially offset by a $0.5 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.

Current wording

For the three months ended June 30, 2026, general and administrative expenses increased by $0.4 million or 6.3%, to $8.0 million, from $7.6 million for the three months ended June 30, 2025, due primarily to a $0.3 million increase in profit sharing expense and a $0.1 million increase in salaries and benefits 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 three months ended March 31, 2026, finance charge income decreased $0.1 million or 9.7%, to $1.3 million, from $1.4 million for the three months ended March 31, 2025, due to less late customer payment charges received on aged receivables.

Current wording

For the three months ended June 30, 2026, finance charge income increased $0.1 million or 5.9%, to $1.9 million, from $1.8 million for the three months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, interest expense, net decreased by $0.4 million, or 7.2%, to $4.1 million compared to $4.5 million for the three months ended March 31, 2025 as average borrowings decreased by $5.2 million from $260.9 million for the three months ended March 31, 2025, to $255.7 million for the three months ended March 31, 2026, and the weighted average interest rate declined from 6.8% for the three months ended March 31, 2025, to 6.3% for the three months ended March 31, 2026. To hedge against rising interest rates, the Company utilizes interest rate swaps. At March 31, 2026, approximately 41% of borrowings under Star's variable-rate long term debt were not subject to interest rate changes as a result of interest rate swaps.

Current wording

For the three months ended June 30, 2026, interest expense was $3.6 million, essentially unchanged from the three months ended June 30, 2025. Average borrowings increased by $4.9 million from $203.5 million for the three months ended June 30, 2025, to $208.4 million for the three months ended June 30, 2026, and were offset by the weighted average interest rate decline from 7.0% for the three months ended June 30, 2025, to 6.6% for the three months ended June 30, 2026. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2026, approximately 41% 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 six months ended March 31, 2026, the Company’s income tax expense increased by $11.1 million to $58.9 million, from $47.8 million for the six months ended March 31, 2025. The increase in the income tax expense was driven by a $36.3 million increase in income before income taxes.

Current wording

For the three months ended June 30, 2026, the Company’s income tax benefit increased by $3.4 million to $9.9 million, from $6.5 million for the three months ended June 30, 2025. The increase in the income tax benefit was driven by a $14.8 million increase in the loss before income taxes.

Previous wording

For the six months ended March 31, 2026, Star’s net income increased $25.3 million, to $144.1 million, compared to the six months ended March 31, 2025, primarily due to a $27.0 million increase in the Adjusted EBITDA and a favorable change in the fair value of derivative instruments of $10.1 million, that was partially offset by an $11.1 million increase in income tax expense, a $0.5 million increase in net interest expense and a $0.2 million increase in depreciation and amortization expenses.

Current wording

For the three months ended June 30, 2026, Star’s net loss increased $11.4 million, to $28.0 million, compared to the three months ended June 30, 2025, primarily due to an unfavorable change in the fair value of derivative instruments of $8.6 million and a $7.1 million increase in the Adjusted EBITDA loss that was partially offset by a $3.4 million increase in income tax benefit and a $0.9 million decrease in depreciation and amortization expenses.

Previous wording

For the six months ended March 31, 2026, retail volume of home heating oil and propane sold increased by 12.1 million gallons, or 5.3%, to 238.4 million gallons, compared to 226.3 million gallons for the six months ended March 31, 2025. 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 six months ended March 31, 2026, were 11.0% colder than the six months ended March 31, 2025, and 4.1% colder than normal, as reported by NOAA. For the twelve months ended March 31, 2026, net customer attrition for the base business was 4.2%. 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 nine months ended June 30, 2026, retail volume of home heating oil and propane sold increased by 8.6 million gallons, or 3.3%, to 271.2 million gallons, compared to 262.6 million gallons for the nine months ended June 30, 2025. 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 nine months ended June 30, 2026, were 11.5% colder than the nine months ended June 30, 2025, and 2.9% colder than normal, as reported by NOAA. For the twelve months ended June 30, 2026, net customer attrition for the base business was 4.2%. 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 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 six months ended March 31, 2026, compared to the six months ended March 31, 2025:

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 nine months ended June 30, 2026, compared to the nine months ended June 30, 2025:

Previous wording

Volume of motor fuel and other petroleum products sold decreased by 3.0 million gallons, or 4.9%, to 56.6 million gallons for the six months ended March 31, 2026, compared to 59.6 million gallons for the six months ended March 31, 2025.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 5.9 million gallons, or 6.4%, to 85.7 million gallons for the nine months ended June 30, 2026, compared to 91.6 million gallons for the nine months ended June 30, 2025.

Previous wording

For the six months ended March 31, 2026, product sales increased by $73.2 million, or 6.9%, to $1,137.8 million, compared to $1,064.6 million for the six months ended March 31, 2025, due to an increase in average selling prices and an increase in total volume sold of 3.2%.

Current wording

For the nine months ended June 30, 2026, product sales increased by $124.1 million, or 9.7%, to $1,404.8 million, compared to $1,280.7 million for the nine months ended June 30, 2025, due to an increase in average selling prices and an increase in total volume sold of 0.8%.

Previous wording

For the six months ended March 31, 2026, installation and service revenue increased by $1.7 million, or 1.0%, to $168.2 million, compared to $166.5 million for the six months ended March 31, 2025, driven by $0.9 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.

Current wording

For the nine months ended June 30, 2026, installation and service revenue increased by $3.3 million, or 1.3%, to $259.3 million, compared to $256.0 million for the nine months ended June 30, 2025, driven by a concerted effort to expand these offerings to our customers as well as price increases and $1.0 million of sales generated from recent acquisitions.

Previous wording

For the six months ended March 31, 2026, cost of product increased $25.4 million, or 3.9%, to $681.0 million, compared to $655.6 million for the six months ended March 31, 2025, due to an increase in total volume sold of 3.2% slightly offset by a decrease in the combined wholesale product cost of $0.0149 per gallon, or 0.6% calculated on a weighted average basis. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Current wording

For the nine months ended June 30, 2026, cost of product increased $76.0 million, or 9.5%, to $876.2 million, compared to $800.2 million for the nine months ended June 30, 2025, due to an increase in the combined wholesale product cost of $0.1954 per gallon, or 8.6% calculated on a weighted average and an increase in total volume sold of 0.8%. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

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 six months ended March 31, 2026, increased by $0.1136 per gallon, or 6.6%, to $1.8274 per gallon, from $1.7138 per gallon during the six months ended March 31, 2025. Going forward, we cannot assume that per gallon margins realized during the six months ended March 31, 2026, 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 nine months ended June 30, 2026, increased by $0.1174 per gallon, or 6.9%, to $1.8230 per gallon, from $1.7056 per gallon during the nine months ended June 30, 2025. Going forward, we cannot assume that per gallon margins realized during the nine months ended June 30, 2026, 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 six months ended March 31, 2026, total product gross profit was $456.8 million, which was $47.9 million, or 11.7%, higher than the six months ended March 31, 2025, due to an increase in home heating oil and propane margins ($27.1 million), an increase in home heating oil and propane volume sold ($20.6 million), and an increase in gross profit from other petroleum products ($0.2 million).

Current wording

For the nine months ended June 30, 2026, total product gross profit was $528.6 million, which was $48.1 million, or 10.0%, higher than the nine months ended June 30, 2025, due to an increase in home heating oil and propane margins ($31.9 million), an increase in home heating oil and propane volume sold ($14.7 million), and an increase in gross profit from other petroleum products ($1.5 million).

Previous wording

Total installation costs, for the six months ended March 31, 2026, decreased by $0.4 million or 0.7%, to $54.2 million, compared to $54.6 million of installation costs for the six months ended March 31, 2025. Installation costs as a percentage of installation sales were 79.8% for the six months ended March 31, 2026, and 81.7% for the six months ended March 31, 2025. The gross profit from installation increased by $1.5 million, compared to the six months ended March 31, 2025.

Current wording

Total installation costs, for the nine months ended June 30, 2026, decreased by $1.9 million or 2.3%, to $80.0 million, compared to $81.9 million of installation costs for the nine months ended June 30, 2025. Installation costs as a percentage of installation sales were 79.5% for the nine months ended June 30, 2026, and 81.8% for the nine months ended June 30, 2025. The gross profit from installation increased by $2.5 million, compared to the nine months ended June 30, 2025.

Previous wording

Service expense increased by $2.9 million, or 5.7%, to $54.8 million for the three months ended March 31, 2026, representing 112.9% of service sales, versus $51.9 million, or 105.8% of service sales, for the three months ended March 31, 2025. The increase in service expense was driven by higher service call volume due to the extreme weather conditions that were 6.4% colder than last year and were approximately 25% colder than expected for a three week period. We experienced a significant increase in the number of snowstorms as well as an increase in snowfall levels across our operating areas with some areas experiencing over 60 inches of snow, which negatively impacted our operational efficiency. Propane tank installations were higher as well which led to higher service expenses. 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 $3.4 million compared to the three months ended March 31, 2025.

Current wording

Service expense increased by $8.4 million, or 5.5%, to $159.6 million for the nine months ended June 30, 2026, representing 100.6% of service sales, versus $151.2 million, or 97.0% of service sales, for the nine months ended June 30, 2025. The increase in service expense was driven by higher service call volume due to the extreme weather conditions that were 11.5% colder than last year and were approximately 25% colder than expected for a three week period. We experienced a significant increase in the number of snowstorms as well as an increase in snowfall levels across our operating areas with some areas experiencing over 60 inches of snow which negatively impacted our operational efficiency. Propane tank installations were higher as well which led to higher service expenses. 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 $5.7 million compared to the nine months ended June 30, 2025.

Previous wording

We realized a combined gross profit from service and installation of $4.1 million for the six months ended March 31, 2026 compared to a gross profit of $8.7 million for the six months ended March 31, 2025, a $4.6 million decrease. While installation gross profit increased by $1.5 million, the service gross profit loss increased by $6.1 million due to higher expenses due to increased demand for service and an increase in propane tank installations.

Current wording

We realized a combined gross profit from service and installation of $19.7 million for the nine months ended June 30, 2026 compared to a gross profit of $22.9 million for the nine months ended June 30, 2025, a $3.2 million decrease. While installation gross profit increased by $2.5 million, the service gross profit loss increased by $5.7 million due to higher expenses from increased demand for service and an increase in propane tank installations.

Previous wording

During the six months ended March 31, 2026, the change in the fair value of derivative instruments resulted in a $21.4 million credit due to a $20.2 million increase in the market value for unexpired hedges and an $1.2 million credit due to the expiration of certain hedged positions.

Current wording

During the nine months ended June 30, 2026, the change in the fair value of derivative instruments resulted in a $13.4 million credit due to a $12.1 million increase in the market value for unexpired hedges and an $1.3 million credit due to the expiration of certain hedged positions.