`
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
|
(Address of principal executive office) |
(Zip Code) |
Registrant’s telephone number, including area code: (
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
|||
Common Unit Purchase Rights |
|
N/A |
|
New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
☒ |
|
|
|
|
|
Non- accelerated filer |
☐ |
Smaller reporting company |
|
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
At July 31, 2023, the registrant had
STAR GROUP, L.P. AND SUBSIDIARIES
INDEX TO FORM 10-Q
|
|
Page |
Part I Financial Information |
|
|
|
3 |
|
Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and September 30, 2022 |
|
3 |
|
4 |
|
|
5 |
|
|
6-7 |
|
|
8 |
|
Notes to Condensed Consolidated Financial Statements (unaudited) |
|
9-21 |
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
22-38 |
Item 3 - Quantitative and Qualitative Disclosures About Market Risk |
|
39 |
|
39 |
|
Part II Other Information: |
|
40 |
|
40 |
|
|
40 |
|
|
40 |
|
|
40 |
|
|
40 |
|
|
40 |
|
|
41 |
|
|
42 |
2
Part I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
June 30, |
|
|
September 30, |
|
||
|
|
2023 |
|
|
2022 |
|
||
(in thousands) |
|
(unaudited) |
|
|
|
|
||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Receivables, net of allowance of $ |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
|
||
Fair asset value of derivative instruments |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Assets held for sale |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Intangibles, net |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Captive insurance collateral |
|
|
|
|
|
|
||
Deferred charges and other assets, net |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES AND PARTNERS’ CAPITAL |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Revolving credit facility borrowings |
|
|
|
|
|
|
||
Fair liability value of derivative instruments |
|
|
|
|
|
|
||
Current maturities of long-term debt |
|
|
|
|
|
|
||
Current portion of operating lease liabilities |
|
|
|
|
|
|
||
Accrued expenses and other current liabilities |
|
|
|
|
|
|
||
Unearned service contract revenue |
|
|
|
|
|
|
||
Customer credit balances |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Long-term debt |
|
|
|
|
|
|
||
Long-term operating lease liabilities |
|
|
|
|
|
|
||
Deferred tax liabilities, net |
|
|
|
|
|
|
||
Other long-term liabilities |
|
|
|
|
|
|
||
Partners’ capital |
|
|
|
|
|
|
||
Common unitholders |
|
|
|
|
|
|
||
General partner |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss, net of taxes |
|
|
( |
) |
|
|
( |
) |
Total partners’ capital |
|
|
|
|
|
|
||
Total liabilities and partners’ capital |
|
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
3
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months |
|
|
Nine Months |
|
|||||||||
(in thousands, except per unit data - unaudited) |
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Sales: |
|
|
|
|
|
|
|
|
|
|
||||
Product |
$ |
|
$ |
|
|
$ |
|
|
$ |
|
||||
Installations and services |
|
|
|
|
|
|
|
|
|
|
||||
Total sales |
|
|
|
|
|
|
|
|
|
|
||||
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
||||
Cost of product |
|
|
|
|
|
|
|
|
|
|
||||
Cost of installations and services |
|
|
|
|
|
|
|
|
|
|
||||
(Increase) decrease in the fair value of derivative instruments |
|
( |
) |
|
( |
) |
|
|
|
|
|
( |
) |
|
Delivery and branch expenses |
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expenses |
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
||||
Finance charge income |
|
( |
) |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Operating income (loss) |
|
( |
) |
|
( |
) |
|
|
|
|
|
|
||
Interest expense, net |
|
( |
) |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of debt issuance costs |
|
( |
) |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income (loss) before income taxes |
|
( |
) |
|
( |
) |
|
|
|
|
|
|
||
Income tax expense (benefit) |
|
( |
) |
|
( |
) |
|
|
|
|
|
|
||
Net income (loss) |
$ |
( |
) |
$ |
( |
) |
|
$ |
|
|
$ |
|
||
General Partner’s interest in net income (loss) |
|
( |
) |
|
( |
) |
|
|
|
|
|
|
||
Limited Partners’ interest in net income (loss) |
$ |
( |
) |
$ |
( |
) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted income (loss) per Limited Partner Unit (1): |
$ |
( |
) |
$ |
( |
) |
|
$ |
|
|
$ |
|
||
Weighted average number of Limited Partner units outstanding: |
|
|
|
|
|
|
|
|
|
|
||||
Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
||||
(1) See Note 15 - Earnings Per Limited Partner Unit.
See accompanying notes to condensed consolidated financial statements.
4
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
Three Months |
|
|
Nine Months |
|
|||||||||
(in thousands - unaudited) |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net income (loss) |
|
$ |
( |
) |
$ |
( |
) |
|
$ |
|
|
$ |
|
||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain on pension plan obligation |
|
|
|
|
|
|
|
|
|
|
|
||||
Tax effect of unrealized gain on pension plan obligation |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Unrealized gain (loss) on captive insurance collateral |
|
|
( |
) |
|
( |
) |
|
|
|
|
|
( |
) |
|
Tax effect of unrealized gain (loss) on captive insurance collateral |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Unrealized gain (loss) on interest rate hedges |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Tax effect of unrealized gain (loss) on interest rate hedges |
|
|
( |
) |
|
( |
) |
|
|
|
|
|
( |
) |
|
Total other comprehensive income (loss) |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Total comprehensive income (loss) |
|
$ |
( |
) |
$ |
( |
) |
|
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
5
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL
|
|
Three Months Ended June 30, 2023 |
|
|||||||||||||||||||||
|
|
Number of Units |
|
|
|
|
|
|
|
|
Accum. Other |
|
|
Total |
|
|||||||||
(in thousands - unaudited) |
|
Common |
|
|
General |
|
|
Common |
|
|
General |
|
|
Comprehensive |
|
|
Partners’ |
|
||||||
Balance as of March 31, 2023 |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unrealized gain on pension plan obligation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Tax effect of unrealized gain on pension plan obligation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Unrealized loss on captive insurance collateral |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Tax effect of unrealized loss on captive insurance collateral |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Unrealized gain on interest rate hedges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Tax effect of unrealized gain on interest rate hedges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance as of June 30, 2023 (unaudited) |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended June 30, 2022 |
|
|||||||||||||||||||||
|
|
Number of Units |
|
|
|
|
|
|
|
|
Accum. Other |
|
|
Total |
|
|||||||||
(in thousands - unaudited) |
|
Common |
|
|
General |
|
|
Common |
|
|
General |
|
|
Comprehensive |
|
|
Partners’ |
|
||||||
Balance as of March 31, 2022 |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unrealized gain on pension plan obligation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Tax effect of unrealized gain on pension plan obligation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Unrealized loss on captive insurance collateral |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Tax effect of unrealized loss on captive insurance collateral |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Unrealized gain on interest rate hedges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Tax effect of unrealized gain on interest rate hedges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Retirement of units |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance as of June 30, 2022 (unaudited) |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes to condensed consolidated financial statements.
6
STAR GROUP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL
|
|
Nine Months Ended June 30, 2023 |
|
|||||||||||||||||||||
|
|
Number of Units |
|
|
|
|
|
|
|
|
Accum. Other |
|
|
Total |
|
|||||||||
(in thousands - unaudited) |
|
Common |
|
|
General |
|
|
Common |
|
|
General |
|
|
Comprehensive |
|
|
Partners’ |
|
||||||
Balance as of September 30, 2022 |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Unrealized gain on pension plan obligation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Tax effect of unrealized gain on pension plan obligation |
||||||||||||||||||||||||