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Operator: Good day. And welcome to the Star Group Fiscal 2023 Third Quarter Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Chris Witty, the Investor Relations Adviser. Please go ahead.

Chris Witty: Thank you and good morning. With me on the call today are Jeff Woosnam, President and Chief Executive Officer; and Rich Ambury, Chief Financial Officer. I would now like to provide a brief Safe Harbor statement. This conference call may include forward-looking statements that represent the company’s expectations and beliefs concerning future events that involve risks and uncertainties and may cause the company’s actual performance to be materially different than the performance indicated or implied by such statements. All statements other than statements of historical facts included in this conference call are forward-looking statements. Although, the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

Important factors that could cause actual results to differ materially from the company’s expectations are disclosed in this conference call, the company’s annual report on Form 10-K for the fiscal year ended September 30, 2022, and the company’s other filings with the SEC. All subsequent written and oral forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements. Unless otherwise required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this conference call. I’d now like to turn the call over to Jeff Woosnam.

Jeff?

Jeff Woosnam: Thanks, Chris, and good morning, everyone. Thank you for joining us to discuss our third quarter and fiscal year-to-date results. The weather this year certainly continued to be much warmer than anticipated. Temperatures within Star’s geographic footprint during Q3 were 12% warmer than last year and 19% warmer than normal, which significantly impacted our results. Year-to-date, temperatures were the third warmest on record over the past 123 years in the New York Metropolitan area, a key market for Star. While we cannot control mother nature, we did take steps to reduce operating expenses and have maintained our focus on customer retention and providing excellent service. In addition, even as weather negatively impacted our performance, we are actually in a very strong position from a liquidity standpoint, given that home heating oil product costs are down approximately $0.60 per gallon from this time last year.

As of June 30, 2023, we now have approximately $57 million in cash on the balance sheet and our inventory and accounts receivable in aggregate are lower by some $77 million year-over-year. Our bank borrowings are down approximately $73 million year-over-year. Therefore, we have approximately $218 million of availability under our bank agreement to fund growth initiatives and our working capital requirements, despite the extremely warm weather this year. We are also trying to make the most of the non-heating season, evaluating a number of possible acquisitions, working on home heating or HVAC repairs and upgrades, controlling operating expenses and otherwise preparing for the upcoming heating season. Reducing net customer attrition continues to be a critical area of focus for us.

As you may recall, we took advantage of market conditions with regard to supply during the first quarter achieving 1.7 net account growth and our best results in many years. This set us up to achieve gross customer gains and reduced net attrition during the nine-month period as compared to the prior year’s period, notwithstanding the unusually warm weather. While there’s still room for improvement, we believe our results validate the investment we have made in enhancing the overall customer experience, as well as reflect the strength of our brands and appeal of Stars product and service offerings. As we near the end of fiscal 2023, we believe the company is well prepared to respond to whatever weather comes our way. With that, I will turn the call over to Rich to provide additional comments on the quarter’s results.

Rich?

Rich Ambury: Thanks, Jeff, and good morning, everyone. For the third quarter, our home heating oil and propane volume decreased by 11 million gallons or 26% to 30 million gallons as the additional volume provided from acquisitions was more than offset by warm weather, net customer attrition and other factors. As previously mentioned, temperatures for the fiscal 2023 third quarter were 12% warmer than last year and 19% warmer than normal. Our product gross profit decreased by $12 million or 19% to $55 million as the 26% decline in home heating oil and propane volumes sold, and lower gross profit from motor fuels more than offset an increase in per gallon margins. Delivery, branch and G&A expenses decreased by $1 million year-over-year as we were successful in managing such costs and mitigating the impact from inflationary pressure.

We posted a net loss of $24 million in the third quarter of fiscal 2023 or $13 million greater than the prior year period, reflecting the after-tax impact of a non-cash unfavorable change in the fair value of derivative instruments of $7 million and a $12 million increase in the adjusted EBITDA loss. The adjusted EBITDA loss increased by $12 million to $23 million as the impact of lower home heating oil and propane volume of 11 million gallons more than offset an increase in home heating oil and propane per gallon margins and a slight decrease in operating expenses. Turning to the results for the nine months — first nine months of fiscal 2023, our home heating oil and propane volume declined by 36 million gallons or 13% to 240 million gallons as the additional volume provided from acquisitions was more than offset by warmer temperatures, net customer attrition and other factors.

Temperatures for the period were 8% warmer than last year and 16% warmer than normal. Our product gross profit did decrease by $16 million or 4% to $408 million as higher home heating oil and propane margins only partially offset the 13% decline in home heating oil and propane volume and lower gross profit from the sale of motor fuels. Branch, delivery and G&A expenses were lower by $2.6 million year-over-year, which included $11.4 million attributable to our weather hedging program. As a reminder, in fiscal 2023, we recorded a benefit of $12.5 million under our weather hedge, compared to a benefit of $1.1 million recorded in fiscal 2022. Recent acquisitions accounted for an increase of $2 million in operating expense and the base business costs rose by $6.8 million.

Credit card fees, vehicle fuels and bad debt expense rose by $6 million, largely due to higher product costs with remaining expenses in the base business of just $800,000 or three-tenths of 1%. We posted net income of $52 million for the first nine months of fiscal 2023 or $34 million lower than the prior year period due to the after-tax impact of a non-cash unfavorable change in the fair value of derivative instruments of $32 million, an increase in net interest expense of $5 million and an increase in the adjusted EBITDA loss of — an increase in the adjusted EBITDA loss. Adjusted EBITDA declined by $13 million to $128 million as the impact of lower home heating oil and propane volume of 36 million gallons and higher operating expenses more than offset an increase in home heating oil and propane per gallon margins and the weather hedge benefit of $11.4 million.

And now I’d like to turn the call back over to Jeff.

Jeff Woosnam: Thanks, Rich. At this time, we are pleased to address any questions you may have. Operator, please open the phone lines for questions.

Operator: [Operator Instructions]

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Operator: There appears to be no questions at this time. So I will turn it over to Mr. Woosnam for any closing remarks.

Jeff Woosnam: Okay. Well, thank you for taking the time to join us today and for your ongoing interest in Star Group. We look forward to sharing our 2023 fiscal fourth quarter results in December. Thanks, everybody.

Operator: The conference has now ended. Thank you for attending today’s presentation. You may all now disconnect.