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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-14129
STAR GROUP, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware
06-1437793
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
9 West Broad Street
Stamford, Connecticut
06902
(Address of principal executive office)
(Zip Code)
Registrant’s telephone number, including area code: (203) 328-7310
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 Units
SGU
New York Stock Exchange
Common Unit Purchase Rights
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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
☐
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 ☐ No ☒
At April 30, 2026, the registrant had 32,833,933 Common Units outstanding.
STAR GROUP, L.P. AND SUBSIDIARIES
INDEX TO FORM 10-Q
Page
Part I Financial Information
Item 1 - Condensed Consolidated Financial Statements
3
Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and September 30, 2025
Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended March 31, 2026 and March 31, 2025
4
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and six months ended March 31, 2026 and March 31, 2025
5
Condensed Consolidated Statement of Partners’ Capital (unaudited) for the three and six months ended March 31, 2026 and March 31, 2025
6-7
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended March 31, 2026 and March 31, 2025
8
Notes to Condensed Consolidated Financial Statements (unaudited)
9-22
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
23-40
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
41
Item 4 - Controls and Procedures
Part II Other Information:
42
Item 1 - Legal Proceedings
Item 1A - Risk Factors
Item 2 - Unregistered Sale of Equity Securities and Use of Proceeds
Item 3 - Defaults Upon Senior Securities
Item 4 - Mine Safety Disclosures
Item 5 - Other Information
Item 6 - Exhibits
43
Signatures
44
2
Part I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
September 30,
2026
2025
(in thousands)
(unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
12,190
24,683
Receivables, net of allowance of $7,660 and $7,196, respectively
262,181
102,119
Inventories
80,894
47,022
Fair asset value of derivative instruments
30,921
790
Prepaid expenses and other current assets
55,413
32,667
Total current assets
441,599
207,281
Property and equipment, net
127,550
128,605
Operating lease right-of-use assets
93,063
93,264
Goodwill
293,955
293,350
Intangibles, net
116,653
124,892
Restricted cash
250
Captive insurance collateral
79,673
78,189
Deferred charges and other assets, net
11,483
11,500
Total assets
1,164,226
937,331
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
Accounts payable
44,191
33,667
Revolving credit facility borrowings
87,436
—
Fair liability value of derivative instruments
1,398
Current maturities of long-term debt
21,000
Current portion of operating lease liabilities
20,383
19,934
Accrued expenses and other current liabilities
168,358
119,497
Unearned service contract revenue
76,086
66,927
Customer credit balances
29,674
86,810
Total current liabilities
447,128
349,233
Long-term debt
156,753
167,118
Long-term operating lease liabilities
76,074
77,206
Deferred tax liabilities, net
45,294
30,823
Other long-term liabilities
15,510
16,171
Partners’ capital
Common unitholders
439,963
314,733
General partner
(6,000
)
(6,605
Accumulated other comprehensive loss, net of taxes
(10,496
(11,348
Total partners’ capital
423,467
296,780
Total liabilities and partners’ capital
See accompanying notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three MonthsEnded March 31,
Six MonthsEnded March 31,
(in thousands, except per unit data - unaudited)
Sales:
Product
689,788
665,105
1,137,771
1,064,564
Installations and services
76,927
77,940
168,200
166,544
Total sales
766,715
743,045
1,305,971
1,231,108
Cost and expenses:
Cost of product
412,437
406,950
680,975
655,649
Cost of installations and services
78,409
76,210
164,087
157,875
(Increase) decrease in the fair value of derivative instruments
(26,812
(6,101
(21,417
(11,359
Delivery and branch expenses
129,774
124,927
239,711
224,254
Depreciation and amortization expenses
8,285
8,912
17,040
16,815
General and administrative expenses
8,716
8,187
16,309
15,370
Finance charge income
(1,275
(1,412
(2,153
(2,087
Operating income
157,181
125,372
211,419
174,591
Interest expense, net
(4,143
(4,464
(7,962
(7,475
Amortization of debt issuance costs
(265
(230
(527
(530
Income before income taxes
152,773
120,678
202,930
166,586
Income tax expense
44,490
34,767
58,857
47,791
Net income
108,283
85,911
144,073
118,795
General Partner’s interest in net income
1,063
802
1,412
1,109
Limited Partners’ interest in net income
107,220
85,109
142,661
117,686
Basic and diluted income per Limited Partner Unit (1):
2.66
2.01
3.55
2.80
Weighted average number of Limited Partner units outstanding:
Basic and Diluted
32,885
34,569
32,985
34,578
(1)See Note 15 - Earnings Per Limited Partner Unit.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands - unaudited)
Other comprehensive income:
Unrealized gain on pension plan obligation
348
432
698
864
Tax effect of unrealized gain on pension plan obligation
(92
(33
(185
(228
Unrealized gain (loss) on captive insurance collateral
(17
125
50
171
Tax effect of unrealized gain (loss) on captive insurance collateral
(27
(11
(36
Unrealized gain (loss) on interest rate hedges
443
(636
412
(3
Tax effect of unrealized gain (loss) on interest rate hedges
(120
168
(112
1
Total other comprehensive income
565
29
852
769
Total comprehensive income
108,848
85,940
144,925
119,564
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL
Three Months Ended March 31, 2026
Number of Units
Accum. Other
Total
Common
GeneralPartner
ComprehensiveIncome (Loss)
Partners’Capital
Balance as of December 31, 2025
32,900
326
339,568
(6,660
(11,061
321,847
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
(6,082
(403
(6,485
Retirement of units
(61
(743
Balance as of March 31, 2026 (unaudited)
32,839
Three Months Ended March 31, 2025
Balance as of December 31, 2024
34,574
308,528
(5,775
(11,711
291,042
Unrealized gain on captive insurance collateral
Tax effect of unrealized gain on captive insurance collateral
Unrealized loss on interest rate hedges
Tax effect of unrealized loss on interest rate hedges
(5,963
(367
(6,330
(6
(71
Balance as of March 31, 2025 (unaudited)
34,568
387,603
(5,340
(11,682
370,581
6
Six Months Ended March 31, 2026
Balance as of September 30, 2025
33,278
(12,199
(807
(13,006
(439
(5,232
Six Months Ended March 31, 2025
Balance as of September 30, 2024
34,587
282,058
(5,714
(12,451
263,893
(11,929
(735
(12,664
(19
(212
7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows provided by (used in) operating activities:
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
(Increase) decrease in fair value of derivative instruments
Depreciation and amortization
17,567
17,345
Provision for losses on accounts receivable
2,804
3,169
Change in deferred taxes
14,163
11,404
Change in weather hedge contracts
5,000
3,108
Changes in operating assets and liabilities:
Increase in receivables
(162,868
(124,722
Increase in inventories
(33,777
(22,150
Increase in other assets
(32,363
(8,826
Increase in accounts payable
11,760
14,539
Decrease in customer credit balances
(57,304
(61,400
Increase in other current and long-term liabilities
51,285
44,138
Net cash used in operating activities
(61,077
(15,959
Cash flows provided by (used in) investing activities:
Capital expenditures
(7,733
(6,526
Proceeds from sales of fixed assets
516
391
Proceeds from sale of certain assets
282
Purchase of investments
(1,645
(999
Acquisitions
(957
(79,555
Net cash used in investing activities
(9,819
(86,407
Cash flows provided by (used in) financing activities:
93,575
75,359
Revolving credit facility repayments
(6,139
(53,016
Term loan repayments
(10,500
(5,250
Unit repurchases
Customer retainage payments
(295
(443
Payments of debt issue costs
(241
Net cash provided by financing activities
58,403
3,533
Net decrease in cash, cash equivalents, and restricted cash
(12,493
(98,833
Cash, cash equivalents, and restricted cash at beginning of period
24,933
117,585
Cash, cash equivalents, and restricted cash at end of period
12,440
18,752
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1) Organization
Star Group, L.P. (“Star,” the “Company,” “we,” “us,” or “our”) is a full service provider specializing in the sale of home heating and air conditioning products and services to residential and commercial home heating oil and propane customers. The Company has one reportable segment for accounting purposes. We also sell diesel fuel, gasoline and home heating oil on a delivery only basis. We believe we are the nation’s largest retail distributor of home heating oil based upon sales volume.
The Company is organized as follows:
2) Summary of Significant Accounting Policies
Basis of Presentation
The Consolidated Financial Statements include the accounts of Star and its subsidiaries. All material intercompany items and transactions have been eliminated in consolidation.
The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair statement of financial condition and results for the interim periods. Due to the seasonal nature of the Company’s business, the results of operations and cash flows for the six-month period ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year.
These interim financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025.
Comprehensive Income
Comprehensive income is comprised of Net income and Other comprehensive income. Other comprehensive income consists of the unrealized gain on amortization on the Company’s pension plan obligation for its frozen defined benefit pension plan, unrealized gain (loss) on available-for-sale investments, unrealized gain (loss) on interest rate hedges and the corresponding tax effects.
9
Cash, Cash Equivalents, and Restricted Cash
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2026, the $12.4 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $12.2 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2025, the $24.9 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $24.7 million of cash and cash equivalents and $0.3 million of restricted cash. Restricted cash represents deposits held by our captive insurance company that are required by state insurance regulations to remain in the captive insurance company as cash.
Fair Value Valuation Approach
The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
Captive Insurance Collateral
The captive insurance collateral is held by our captive insurance company in an irrevocable trust as collateral for certain workers’ compensation and automobile liability claims. The collateral is required by a third party insurance carrier that insures per claim amounts above a set deductible. If we did not deposit cash into the trust, the third party carrier would require that we issue an equal amount of letters of credit, which would reduce our availability under the credit agreement. Due to the expected timing of claim payments, the nature of the collateral agreement with the carrier, and our captive insurance company’s source of other operating cash, such as future premiums and earnings on investments, the collateral is not expected to be used to pay obligations within the next twelve months.
Unrealized gains and losses, net of related income taxes, are reported as accumulated other comprehensive income (loss), except for losses from impairments which are determined to be other-than-temporary. Realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are included in the determination of net income and are included in Interest expense, net, at which time the average cost basis of these securities are adjusted to fair value.
Weather Hedge Contract
To partially mitigate the adverse effect of warm weather on cash flows, the Company has used weather hedge contracts for a number of years. Weather hedge contracts are recorded in accordance with the intrinsic value method defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-45-15 Derivatives and Hedging, Weather Derivatives (EITF 99-2). The premium paid is included in the caption “Prepaid expenses and other current assets” in the accompanying balance sheets and amortized over the life of the contract, with the intrinsic value method applied at each interim period.
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. For each fiscal year under these contracts, the maximum amount the Company could receive is $15.0 million and the Company is additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.
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.
10
For fiscal 2027, the Company entered into a weather hedge contract with the same hedge period as described above; November 1 through March 31. The maximum that the Company can receive is $12.5 million annually and we are not obligated to make an annual payment if degree days exceed the Payment Threshold.
New England Teamsters and Trucking Industry Pension Fund (“the NETTI Fund”) Liability
As of March 31, 2026, we had $0.3 million and $15.2 million included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability. As of September 30, 2025, we had $0.3 million and $15.3 million reflected in these categories respectively. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal liability as of March 31, 2026, and September 30, 2025, was $17.9 million and $18.3 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.
Recently Adopted Accounting Pronouncements
No new Accounting Pronouncements were adopted through the fiscal six months ended March 31, 2026.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to income tax disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring disclosure in the notes to the financial statements for specified information about certain costs and expenses. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption and retrospective application permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for all entities to simplify the estimation of expected credit losses on current accounts receivable and current contract assets arising from revenue contracts under Topic 606. The standard is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the guidance on capitalizing costs for internal-use software by eliminating predefined development stages and introducing a principles-based approach focused on probable completion and use. The standard is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
11
3) Revenue Recognition
The following disaggregates our revenue by major sources for the three and six months ended March 31, 2026, and March 31, 2025:
Petroleum Products:
Home heating oil and propane
608,655
587,878
981,212
910,718
Other petroleum products
81,133
77,227
156,559
153,846
Total petroleum products
Installations and Services:
Equipment installations
28,332
28,882
67,946
66,765
Equipment maintenance service contracts
30,171
31,020
60,421
61,975
Billable call services
18,424
18,038
39,833
37,804
Total installations and services
Total Sales
Deferred Contract Costs
We recognize an asset for incremental commission expenses paid to sales personnel in conjunction with obtaining new residential customer product and equipment maintenance service contracts. We defer these costs only when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract. Costs to obtain a contract are amortized and recorded ratably as delivery and branch expenses over the period representing the transfer of goods or services to which the assets relate. Costs to obtain new residential product and equipment maintenance service contracts are amortized as expense over the estimated customer relationship period of approximately five years. Deferred contract costs are classified as current or non-current within “Prepaid expenses and other current assets” and “Deferred charges and other assets, net,” respectively. At March 31, 2026, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $2.8 million and $4.4 million, respectively. At September 30, 2025, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $2.8 million and $4.2 million, respectively. For the six months ended March 31, 2026, we recognized expense of $1.6 million and for the six months ended March 31, 2025, we recognized expense of $1.8 million associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations.
Contract Liability Balances
The Company has contract liabilities for advanced payments received from customers for future oil deliveries (primarily amounts received from customers on “smart pay” budget payment plans in advance of oil deliveries) and obligations to service customers with equipment maintenance service contracts. Contract liabilities are recognized straight-line over the service contract period, generally one year or less. As of March 31, 2026 and September 30, 2025 the Company had contract liabilities of $100.9 million and $149.7 million, respectively. During the six months ended March 31, 2026, the Company recognized $115.5 million of revenue that was included in the September 30, 2025 contract liability balance. During the six months ended March 31, 2025, the Company recognized $130.6 million of revenue that was included in the September 30, 2024 contract liability balance.
Receivables and Allowance for Doubtful Accounts
Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.
The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.
12
Changes in the allowance for credit losses are as follows:
Credit Loss Allowance
Balance at September 30, 2025
7,196
Current period provision
Write-offs, net and other
(2,340
Balance as of March 31, 2026
7,660
4) Common Unit Repurchase and Retirement
In July 2012, the Board adopted a plan to repurchase certain of the Company’s Common Units (the “Repurchase Plan”). Through February 2026, the Company had repurchased approximately 22.6 million Common Units under the Repurchase Plan. In February 2026, the Board authorized an increase of the number of Common Units that remained available for the Company to repurchase from 0.5 million to a total of 2.1 million, of which, 2.0 million were available for repurchase in open market transactions and approximately 0.1 million were available for repurchase in privately-negotiated transactions. There is no guarantee of the number of units that will be purchased under the Repurchase Plan and the Company may discontinue purchases at any time. The Repurchase Plan does not have a time limit. The Board may also approve additional purchases of units from time to time in private transactions. The Company’s repurchase activities take into account SEC safe harbor rules and guidance for issuer repurchases. All of the Common Units purchased under the Repurchase Plan will be retired.
Under the credit agreement dated September 27, 2024, in order to repurchase Common Units we must maintain Availability (as defined in the credit agreement) of not less than the greater of (i) 15% of the Line Cap (lesser of the aggregate revolving commitment and the borrowing base) which was $50.2 million as of March 31, 2026 and (ii) $40 million on a historical pro forma and forward-looking basis, and a fixed charge coverage ratio of not less than 1.15 measured as of the date of repurchase or distribution. (See Note 11—Long-Term Debt and Bank Facility Borrowings).
The following table shows repurchases under the Repurchase Plan:
(in thousands, except per unit amounts)
Period
Total Number ofUnits Purchased
Average PricePaid per Unit (a)
Total Number ofUnits Purchased as Part of Publicly Announced Plans or Programs
Maximum Numberof Units that MayYet Be Purchased
Fiscal year 2012 to 2025 total
27,747
9.05
22,159
943
First quarter fiscal year 2026 total
378
11.87
(b)
January 2026
20
11.95
545
February 2026
2,137
(c)
March 2026
12.46
2,096
Second quarter fiscal year 2026 total
61
12.29
April 2026
12.49
2,091
(d)
13
5) Captive Insurance Collateral
The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at March 31, 2026 consist of the following (in thousands):
Amortized Cost
Gross Unrealized Gain
Gross Unrealized (Loss)
Fair Value
Cash and Receivables
306
U.S. Government Debt Securities
77,371
16
(14
77,373
Corporate Debt Securities
2,067
(73
1,994
79,744
(87
Investments at September 30, 2025 consist of the following (in thousands):
343
71,453
79
71,521
6,515
(190
6,325
78,311
(201
Maturities of investments were as follows at March 31, 2026 (in thousands):
Net Carrying Amount
Due within one year
Due after one year through five years
Due after five years through ten years
6) Derivatives and Hedging—Disclosures and Fair Value Measurements
The Company uses derivative instruments such as futures, options and swap agreements in order to mitigate exposure to market risk associated with the purchase of home heating oil for price-protected customers, physical inventory on hand, inventory in transit, priced purchase commitments and internal fuel usage. FASB ASC 815-10-05 Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities, along with qualitative disclosures regarding the derivative activity. The Company has elected not to designate its commodity derivative instruments as hedging derivatives, but rather as economic hedges whose change in fair value is recognized in its statement of operations in the caption “(Increase) decrease in the fair value of derivative instruments.” Depending on the risk being economically hedged, realized gains and losses are recorded in cost of product, cost of installations and services, or delivery and branch expenses.
As of March 31, 2026, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to our price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: 6.5 million gallons of swap contracts, 2.4 million gallons of call options, 2.7 million gallons of put options, and 29.5 million net gallons of synthetic call options. To hedge its physical inventory on hand, inventory in transit and basis risk, the Company, as of March 31, 2026, held 1.3 million gallons of swap contracts and 15.7 million gallons of short future contracts that settle in future months. To hedge our internal fuel usage and other activities for fiscal 2026 and 2027, the Company held 2.2 million gallons of swap contracts that settle in future months.
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As of March 31, 2025, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to our price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: 9.0 million gallons of swap contracts, 2.6 million gallons of call options, 4.0 million gallons of put options, and 30.9 million net gallons of synthetic call options. To hedge its physical inventory on hand, inventory in transit and basis risk, the Company, as of March 31, 2025, held 1.2 million gallons of swap contracts and 15.5 million gallons of short future contracts that settle in future months. To hedge our internal fuel usage and other activities for fiscal 2025 and 2026, the Company held 4.2 million gallons of swap contracts that settle in future months.
As of March 31, 2026, the Company has interest rate swap agreements in order to mitigate exposure to market risk associated with variable rate interest on $72.8 million, or 41%, of our long term debt. The Company has designated its interest rate swap agreements as cash flow hedging derivatives. To the extent these derivative instruments are effective and the accounting standard’s documentation requirements have been met, changes in fair value are recognized in other comprehensive income (loss) until the underlying hedged item is recognized in earnings. As of March 31, 2026, the fair value of the swap contracts was $(0.2) million. As of September 30, 2025, the notional value of the swap contracts was $74.5 million and the fair value of the swap contracts was $(0.6) million. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of the swap contracts.
The Company’s derivative instruments are with the following counterparties: Bank of America, N.A., Bank of Montreal, Cargill, Inc., Citibank, N.A., Citizens Bank, N.A., JPMorgan Chase Bank, N.A., Swiss Re Corporate Solutions Global Markets, Inc. and Wells Fargo Bank, N.A. The Company assesses counterparty credit risk and considers it to be low. We maintain master netting arrangements that allow for the non-conditional offsetting of amounts receivable and payable with counterparties to help manage our risks and record derivative positions on a net basis. The Company generally does not receive cash collateral from its counterparties and does not restrict the use of cash collateral it maintains at counterparties. At March 31, 2026, the aggregate cash posted as collateral in the normal course of business at counterparties was $16.1 million and recorded in “Prepaid expense and other current assets.” Positions with counterparties who are also parties to our credit agreement are collateralized under that facility. As of March 31, 2026, $0.3 million hedge positions or payable amounts were secured under the credit facility.
The Company’s Level 1 derivative assets and liabilities represent the fair value of commodity contracts used in its hedging activities that are identical and traded in active markets. The Company’s Level 2 derivative assets and liabilities represent the fair value of commodity and interest rate contracts used in its hedging activities that are valued using either directly or indirectly observable inputs, whose nature, risk and class are similar. No significant transfers of assets or liabilities have been made into and out of the Level 1 or Level 2 tiers. All derivative instruments were non-trading positions and were either a Level 1 or Level 2 instrument. The Company had no Level 3 derivative instruments. The fair market value of our Level 1 and Level 2 derivative assets and liabilities are calculated by our counter-parties and are independently validated by the Company. The Company’s calculations are, for Level 1 derivative assets and liabilities, based on the published New York Mercantile Exchange (“NYMEX”) market prices for the commodity contracts open at the end of the period. For Level 2 derivative assets and liabilities the calculations performed by the Company are based on a combination of the NYMEX published market prices and other inputs, including such factors as present value, volatility and duration.
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The Company had no assets or liabilities that are measured at fair value on a nonrecurring basis subsequent to their initial recognition. The Company’s commodity financial assets and liabilities measured at fair value on a recurring basis are listed on the following table.
(In thousands)
Fair Value Measurements at Reporting Date Using:
Derivatives Not Designated as Hedging Instruments
Quoted Prices inActive Markets forIdentical Assets
Significant OtherObservable Inputs
Under FASB ASC 815-10
Balance Sheet Location
Level 1
Level 2
Asset Derivatives at March 31, 2026
Commodity contracts
32,247
Long-term derivative assets included in the deferred charges and other assets, net
637
Commodity contract assets at March 31, 2026
32,884
Liability Derivatives at March 31, 2026
(1,326
(171
Commodity contract liabilities at March 31, 2026
(1,497
Asset Derivatives at September 30, 2025
Fair asset and liability value of derivative instruments
7,561
755
Commodity contract assets September 30, 2025
8,316
Liability Derivatives at September 30, 2025
(8,169
(653
Commodity contract liabilities September 30, 2025
(8,822
The Company’s commodity derivative assets (liabilities) offset by counterparty and subject to an enforceable master netting arrangement are listed on the following table.
Gross Amounts Not Offset in theStatement of Financial Position
Offsetting of Financial Assets (Liabilities) and Derivative Assets (Liabilities)
GrossAssetsRecognized
GrossLiabilitiesOffset in theStatementof FinancialPosition
Net Assets(Liabilities)Presented in theStatementof FinancialPosition
FinancialInstruments
CashCollateralReceived
NetAmount
Long-term derivative assets included in deferred charges and other assets, net
466
Total at March 31, 2026
31,387
3,630
(2,840
102
3,931
(5,329
(1,398
Total at September 30, 2025
(506
The Effect of Derivative Instruments on the Statement of Operations
Amount of (Gain) or Loss Recognized
Derivatives Not Designated as Hedging Instruments Under FASB ASC 815-10
Location of (Gain) or LossRecognized in Income on Derivative
Three Months Ended March 31,2026
Three Months Ended March 31,2025
Six Months Ended March 31,2026
Six Months Ended March 31,2025
Cost of product (a)
1,726
6,863
3,037
13,754
Cost of installations and service (a)
(107
131
Delivery and branch expenses (a)
(1,812
245
(2,080
656
(Increase) / decrease in the fair value of derivative instruments (b)
7) Inventories
The Company’s product inventories are stated at the lower of cost and net realizable value computed on the weighted average cost method. All other inventories, representing parts and equipment are stated at the lower of cost and net realizable value using the FIFO method. The components of inventory were as follows (in thousands):
March 31,2026
September 30,2025
55,826
22,040
Parts and equipment
25,068
24,982
Total inventory
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8) Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization is computed over the estimated useful lives of the depreciable assets using the straight-line method (in thousands):
Property and equipment
287,191
282,870
Less: accumulated depreciation and amortization
159,641
154,265
9) Business Combinations and Divestitures
During the six months ended March 31, 2026 the Company acquired one heating oil business for approximately 1.0 million in cash. The gross purchase price was allocated $1.2 million to intangible assets, $0.6 million to goodwill, $0.3 million to fixed assets and reduced by $1.1 million of negative net working capital. The acquired company's operating results are included in the Company’s consolidated financial statements starting on its acquisition date, and are not material to the Company’s financial condition, results of operations, or cash flows.
During the six months ended March 31, 2025, the Company sold certain assets for cash proceeds of $0.3 million and acquired one heating oil and two propane businesses for approximately $79.6 million in cash. The gross purchase price for the three businesses was allocated $37.5 million to intangible assets, $16.8 million to goodwill, $25.2 million to fixed assets and $0.1 million of working capital.
10) Goodwill and Intangible Assets, net
A summary of changes in Company’s goodwill is as follows (in thousands):
Fiscal year 2026 business combination
605
The gross carrying amount and accumulated amortization of intangible assets subject to amortization are as follows (in thousands):
March 31, 2026
September 30, 2025
Gross
Carrying
Accum.
Amount
Amortization
Net
Customer lists
493,431
400,029
93,402
391,702
101,729
Trade names and other intangibles
53,213
29,962
23,251
52,028
28,865
23,163
546,644
429,991
545,459
420,567
Amortization expense for intangible assets was $9.4 million for the six months ended March 31, 2026, compared to $9.6 million for the six months ended March 31, 2025.
11) Long-Term Debt and Bank Facility Borrowings
The Company’s debt is as follows (in thousands):
CarryingAmount
Fair Value (a)
Revolving Credit Facility Borrowings
Senior Secured Term Loan (b)
177,753
178,500
188,118
189,000
Total debt
265,189
265,936
Total short-term portion of debt
108,436
Total long-term portion of debt (b)
157,500
168,000
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On September 27, 2024, the Company refinanced its five-year term loan and the revolving credit facility with the execution of the seventh amended and restated revolving credit facility agreement (the “credit agreement”) with a bank syndicate comprised of ten participants, which enables the Company to borrow up to $400 million ($475 million during the heating season of December through April of each year) on a revolving credit facility for working capital purposes (subject to certain borrowing base limitations and coverage ratios), provides for a $210 million five-year senior secured term loan (“Term Loan”), allows for the issuance of up to $25 million in letters of credit, and has a maturity date of September 27, 2029.
The Company can increase the revolving credit facility size by $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent, which shall not be unreasonably withheld. Obligations under the credit agreement are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s assets including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.
All amounts outstanding under the credit agreement become due and payable on the facility termination date of September 27, 2029. The Term Loan is repayable in quarterly payments of $5.3 million, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the credit agreement (an amount not to exceed $4.0 million annually), less certain voluntary prepayments made during the year, with final payment at maturity. The Company was not required to make additional term loan repayments due to Excess Cash Flow for the fiscal year ended September 30, 2025.
The interest rate on the revolving credit facility and the term loan is based on a margin over Adjusted Term Secured Overnight Financing Rate ("SOFR") or a base rate. At March 31, 2026, the effective interest rate on the term loan (considering the impact of interest rate hedges) and revolving credit facility borrowings was approximately 6.8% and 5.9%, respectively, compared to 7.1% and 6.4%, respectively at September 30, 2025.
The commitment fee on the unused portion of the revolving credit facility is 0.30% from December through April, and 0.20% from May through November.
The credit agreement requires the Company to meet certain financial covenants, including a fixed charge coverage ratio of 1.10 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 $41.8 million as of March 31, 2026, and (b) $35.0 million. In addition, as long as the Term Loan is outstanding, a senior secured leverage ratio cannot be more than 3.0 as calculated as of the quarters ending June or September, and no more than 5.5 as calculated as of the quarters ending December or March.
Certain restrictions are also imposed by the credit agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, repurchase units, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.
At March 31, 2026, $178.5 million of the Term Loan was outstanding, $87.4 million were outstanding under the revolving credit facility, $0.3 million hedge positions were secured under the credit agreement, and $5.1 million of letters of credit were issued and outstanding. At September 30, 2025, $189.0 million of the term loan was outstanding, no borrowings were outstanding under the revolving credit facility, $1.3 million hedge positions were secured under the credit agreement and $5.1 million of letters of credit were issued and outstanding.
At March 31, 2026, availability was $241.8 million, and the Company was in compliance with the financial covenants. At September 30, 2025, availability was $165.0 million, and the Company was in compliance with the financial covenants. The amount of availability is impacted by several factors, including: outstanding debt, the valuation of our customer list, and accounts receivable and inventory balances. Each year, during the third quarter, the valuation of our customer list is re-evaluated based on the Company's performance.
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12) Income Taxes
On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains several changes to corporate taxation including changes to depreciation deductions, deductions for interest expense and reinstating 100% bonus depreciation on fixed assets acquired and placed in service after January 19, 2025.
The accompanying financial statements are reported on a fiscal year, however, the Company and its corporate subsidiaries file Federal and State income tax returns on a calendar year.
The current and deferred income tax expense for the three and six months ended March 31, 2026, and March 31, 2025, are as follows:
Three Months Ended
Six Months Ended
Current income tax expense
31,469
26,030
44,694
36,387
Deferred income tax expense
13,021
8,737
Total income tax expense
At March 31, 2026, we did not have unrecognized income tax benefits.
Our continuing practice is to recognize interest and penalties related to income tax matters as a component of income tax expense. We file U.S. Federal income tax returns and various state and local returns. A number of years may elapse before an uncertain tax position is audited and finally resolved. For our Federal income tax returns we have four tax years subject to examination. In our major state tax jurisdictions of New York, Connecticut and Pennsylvania, we have four years that are subject to examination. In the state tax jurisdiction of New Jersey we have five tax years that are subject to examination. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, based on our assessment of many factors, including past experience and interpretation of tax law, we believe that our provision for income taxes reflect the most probable outcome. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.
13) Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes, net
12,130
6,245
Interest
9,259
10,402
14) Commitments and Contingencies
The Company’s operations are subject to the operating hazards and risks normally incidental to handling, storing and transporting and otherwise providing for use by consumers hazardous liquids such as home heating oil and propane. In the ordinary course of business, the Company is a defendant in various legal proceedings and litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We do not believe these matters, when considered individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.
The Company maintains insurance policies with insurers in amounts and with coverages and deductibles we believe are reasonable and prudent. However, the Company cannot assure that this insurance will be adequate to protect it from all material expenses related to current and potential future claims, legal proceedings and litigation, as certain types of claims may be excluded from our insurance coverage. If we incur substantial liability and the damages are not covered by insurance, or are in excess of policy limits, or if we incur liability at a time when we are not able to obtain liability insurance, then our business, results of operations and financial condition could be materially adversely affected.
15) Earnings Per Limited Partner Unit
The following table presents the net income allocation and per unit data:
Basic and Diluted Earnings Per Limited Partner:
(in thousands, except per unit data)
Less General Partner’s interest in net income
Net income available to limited partners
Less dilutive impact of theoretical distribution of earnings *
19,702
15,482
25,611
20,853
Limited Partner’s interest in net income
87,518
69,627
117,050
96,833
Per unit data:
Basic and diluted net income available to limited partners
3.26
2.46
4.32
3.40
0.60
0.45
0.77
Weighted average number of Limited Partner units outstanding
*In any accounting period where the Company’s aggregate net income exceeds its aggregate distribution for such period, the Company is required to present net income per Limited Partner unit as if all of the earnings for the period were distributed, based on the terms of the Partnership agreement, regardless of whether those earnings would actually be distributed during a particular period from an economic or practical perspective. This allocation does not impact the Company’s overall net income or other financial results.
16) Segment Reporting
The Company operates as a single operating and reportable segment, which is managed on a consolidated basis. Revenues are primarily derived from the sale of petroleum products, heating and air conditioning equipment, and related repair, maintenance, and other services. See Note 3 – Revenue Recognition for additional information.
The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer (“CEO”). The CODM makes key operating decisions and primarily evaluates financial performance based on Adjusted EBITDA, defined as earnings from continuing operations before net interest expense, income taxes, depreciation and amortization, (increase) decrease in the fair value of derivatives, other income (loss), net, multiemployer pension plan withdrawal charge, gain or loss on debt redemption, goodwill impairment, and other non-cash and non-operating charges). The CODM reviews net income and Adjusted EBITDA on a monthly basis to monitor performance, compare actual results to budgets and forecasts, and assess overall operating effectiveness. The CODM also monitors significant expenses, including: cost of product, cost of installations and service, general and administrative expenses as well as components of delivery and branch expenses.
Because the Company has only one reportable segment, the amounts reported in the consolidated financial statements also represent the segment information, including total assets.
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The following table sets forth our segment financial information:
Petroleum products sales:
Motor fuel and other petroleum products
Installations and service sales:
Services
48,595
49,058
100,254
99,779
Cost of installations
23,560
24,309
54,211
54,572
Cost of service
54,849
51,901
109,876
103,303
Delivery expenses
44,611
42,433
78,305
72,338
Operations expenses
21,741
21,108
40,154
39,308
Garage and plant expenses
12,962
12,331
24,014
22,752
Sales and marketing expenses
14,216
14,247
28,869
28,920
Customer service and credit expenses
15,279
14,951
26,597
26,733
Insurance related expenses
16,840
12,843
28,894
23,387
Information technology expenses
4,125
3,906
7,878
7,708
Weather hedge contracts loss
Adjusted EBITDA
138,654
128,183
207,042
180,047
Operating Income
17) Subsequent Events
Quarterly Distribution Declared
In April 2026, we declared a quarterly distribution of $0.1975 per unit, or $0.79 per unit on an annualized basis, on all Common Units with respect to the second quarter of fiscal 2026, paid on May 6, 2026, to holders of record on April 27, 2026. The amount of distributions in excess of the minimum quarterly distribution of $0.0675 are distributed in accordance with our Partnership Agreement, subject to the management incentive compensation plan. As a result, $6.5 million was paid to the Common Unit holders, $0.5 million to the General Partner unit holders (including $0.4 million of incentive distribution as provided in our Partnership Agreement) and $0.4 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner.
Common Units Repurchased and Retired
In April 2026, in accordance with the Repurchase Plan, the Company repurchased and retired less than 0.1 million Common Units at an average price paid of $12.49 per unit.
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ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Statement Regarding Forward-Looking Disclosure
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 of new information, future events or otherwise after the date of this Report.
Liquid Product Price Volatility
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. Our customers are sensitive to wholesale product cost increases, and this often leads to customer conservation and increased gross customer losses. As a commodity, the price of the products that we sell 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):
Fiscal 2026 (a)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Fiscal 2022
Quarter Ended
Low
High
December 31
2.11
2.70
2.13
2.40
2.51
3.22
2.78
4.55
2.06
2.59
March 31
4.61
2.16
2.62
2.53
2.96
2.61
2.36
4.44
June 30
1.97
2.54
2.29
2.77
2.23
2.73
3.27
5.14
September 30
2.63
2.38
3.48
3.13
4.01
(a) On April 30, 2026, the NYMEX ultra low sulfur diesel contract closed at $4.14 per gallon.
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.
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
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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.
Income Taxes
New Federal Income Tax Legislation
On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains several changes to corporate taxation including changes to depreciation deductions, deductions for interest expense and reinstated 100% bonus depreciation on fixed assets acquired and placed in service after January 19, 2025.
Book versus Tax Deductions
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.
Estimated Depreciation and Amortization Expense
(In thousands) Fiscal Year
Book
Tax
34,487
36,130
2027
31,566
30,591
2028
28,050
28,689
2029
25,556
25,533
2030
21,773
22,430
2031
18,823
20,241
Weather Hedge Contracts
Weather conditions have a significant impact on the demand for home heating oil and propane because certain customers depend on these products principally for space heating purposes. Actual weather conditions may vary substantially from year to year, significantly affecting the Company’s financial performance. To partially mitigate the adverse effect of warm weather on cash flow, we have used weather hedging contracts for a number of years with several providers.
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 the Company is additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.
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.
Tariffs
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
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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.
Per Gallon Gross Profit Margins
We believe home heating oil and propane margins should be evaluated on a cents per gallon basis before the effects of increases or decreases in the fair value of derivative instruments, as we believe that such per gallon margins are best at showing profit trends in the underlying business without the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction.
A significant portion of our home heating oil volume is sold to individual customers under an arrangement pre-establishing a ceiling price or fixed price for home heating oil over a set period of time, generally twelve to twenty-four months (“price-protected” customers). When these price-protected customers agree to purchase home heating oil from us for the next heating season, we purchase option contracts, swaps and futures contracts for a substantial majority of the heating oil that we expect to sell to these customers. The amount of home heating oil volume that we hedge per price-protected customer is based upon the estimated fuel consumption per average customer per month. In the event that the actual usage exceeds the amount of the hedged volume on a monthly basis, we may be required to obtain additional volume at unfavorable costs. In addition, should actual usage in any month be less than the hedged volume, our hedging costs and losses could be greater, thus reducing expected margins.
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.
Derivatives
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; 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. We have opted out of, and do not follow hedge accounting for our commodity derivative instruments as hedging instruments, 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.
Customer Attrition
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 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.
Customer gains and losses of home heating oil and propane customers
Fiscal Year Ended
2024
Gross Customer
Gains /
Gains
Losses
(Attrition)
First Quarter
15,800
17,300
(1,500)
15,300
16,700
(1,400)
17,100
17,800
(700)
Second Quarter
11,200
13,800
(2,600)
9,900
14,500
(4,600)
9,300
14,400
(5,100)
Third Quarter
4,600
11,600
(7,000)
4,700
11,000
(6,300)
Fourth Quarter
7,000
13,600
(6,600)
7,900
12,400
(4,500)
27,000
31,100
(4,100)
36,800
56,400
(19,600)
39,000
55,600
(16,600)
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Customer gains (attrition) as a percentage of home heating oil and propane customer base
3.9%
4.3%
(0.4%)
3.8%
4.1%
(0.3%)
4.5%
(0.2%)
2.8%
3.4%
(0.6%)
2.5%
3.7%
(1.2%)
2.3%
3.6%
(1.3%)
0.9%
(1.6%)
1.2%
1.6%
3.2%
2.0%
3.1%
(1.1%)
6.7%
7.7%
(1.0%)
8.8%
13.5%
(4.7%)
9.8%
14.0%
(4.2%)
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.
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.
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.
(in thousands of gallons)
Fiscal 2026 Acquisitions
Acquisition Number
Month of Acquisition
Home Heating Oil and Propane
Other Petroleum Products
February
862
892
1,754
Fiscal 2025 Acquisitions
October
709
1,126
1,835
January
7,209
758
7,967
March
3,078
1,810
4,888
April
722
11,718
3,694
15,412
Protected Price Account Renewals
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.
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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.
Seasonality
The Company’s fiscal year ends on September 30. All references to quarters and years, respectively, in this document are to the fiscal quarters and fiscal years unless otherwise noted. The seasonal nature of our business has resulted, on average, during the last five years, in the sale of approximately 30% of the volume of home heating oil and propane in the first fiscal quarter and 50% of the volume in the second fiscal quarter, the peak heating season. Approximately 25% of the volume of motor fuel and other petroleum products is sold in each of the four fiscal quarters. We generally realize net income during the quarters ending December and March and net losses during the quarters ending June and September. In addition, sales volume typically fluctuates from year to year in response to variations in weather, wholesale energy prices and other factors.
Degree Day
A “degree day” is an industry measurement of temperature designed to evaluate energy demand and consumption. Degree days are based on how far the average daily temperature departs from 65°F. Each degree of temperature above 65°F is counted as one cooling degree day, and each degree of temperature below 65°F is counted as one heating degree day. Degree days are accumulated each day over the course of a year and can be compared to a monthly or a long-term (multi-year) average to see if a month or a year was warmer or cooler than usual. Degree days are officially observed by the National Weather Service.
Every ten years, the National Oceanic and Atmospheric Administration (“NOAA”) computes and publishes average meteorological statistics, including the average temperature for the last 30 years by geographical location, and the corresponding degree days. The latest and most widely used data covers the years from 1991 to 2020. Our calculations of “normal” weather are based on these published 30 year averages for heating degree days, weighted by volume for the locations where we have existing operations.
Consolidated Results of Operations
The following is a discussion of the consolidated results of operations of the Company and its subsidiaries and should be read in conjunction with the historical financial and operating data and Notes thereto included elsewhere in this Quarterly Report.
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Compared to the Three Months Ended March 31, 2025
Volume
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:
(in millions of gallons)
Volume - Three months ended March 31, 2025
143.9
Impact of colder temperatures
9.0
Net customer attrition
(7.0
2.2
Other (a)
(3.6
Change
0.6
Volume - Three months ended March 31, 2026
144.5
(a) This amount includes a 2.2 million gallon decline attributable to lower margin COD and commercial home heating oil volume.
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 March 31, 2026, compared to the three months ended March 31, 2025:
Home heating oil and propane volume sold
March 31,2025
Residential Variable
51.9
%
47.8
Residential Price-Protected (Ceiling and Fixed Price)
33.5
35.7
Commercial/Industrial/Other
14.6
16.5
100.0
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.
Product Sales
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.
Installations and Service
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.
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Cost of Product
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.
Gross Profit — Product
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.
March 31, 2025
Amount(in millions)
PerGallon
Sales
608.7
4.2116
587.9
4.0846
Cost
342.1
2.3670
340.4
2.3651
Gross Profit
266.6
1.8446
247.5
1.7195
Motor Fuel and Other Petroleum Products
26.8
28.9
81.1
3.0324
77.2
2.6747
70.3
2.6297
66.5
2.3048
10.8
0.4027
10.7
0.3699
Total Product
689.8
665.1
412.4
406.9
277.4
258.2
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).
Cost of Installations and Service
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.
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.
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.
(Increase) Decrease in the Fair Value of Derivative Instruments
During the three months ended March 31, 2026, the change in the fair value of derivative instruments resulted in a $26.8 million credit due to a $22.2 million increase in the market value for unexpired hedges and a $4.6 million credit due to the expiration of certain hedged positions.
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.
Delivery and Branch Expenses
For the three months ended March 31, 2026, delivery and branch expense increased $4.9 million, or 3.9%, to $129.8 million, compared to $124.9 million for the three months ended March 31, 2025. The increase was largely driven by temperatures that were 6.4% colder than last year and were approximately 25% colder than expected for a three week period. The Company experienced a significant increase in the number of snowstorms as well as an much higher snowfall levels across our operating areas with some areas experiencing over 60 inches of snow, negatively impacting business productivity. While home heating oil and propane volume rose by just 0.4% during this period, the extreme weather conditions significantly negatively impacted our direct operating costs which increased by $4.0 million, or 5.9%. Insurance expense also rose by $4.0 million largely due to higher claims expense attributable to the extreme weather conditions in addition to normal premium increases. These increases were partially offset by $3.1 million less expense recognized under the Company's weather hedge contracts compared to the prior year. During the three months ended March 31, 2026, the Company did not recognize any expense or benefit under its weather hedge contracts versus a $3.1 million expense recorded for the three months ended March 31, 2025. Due to the cold weather experienced in the first quarter of the current fiscal year, the Company already recognized the cap of $5.0 million expense under our weather hedge contracts, therefore, did not recognize any further expense in the fiscal second quarter.
Depreciation and Amortization Expenses
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.
General and Administrative Expenses
For the three months ended March 31, 2026, general and administrative expenses increased by $0.5 million or 6.5%, to $8.7 million, from $8.2 million for the three months ended March 31, 2025, due primarily to a $0.4 million increase in profit sharing expense and a $0.3 million increase in salaries and benefits, that was partially offset by a $0.2 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.
Finance Charge Income
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.
Interest Expense, Net
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
30
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.
Amortization of Debt Issuance Costs
For the three months ended March 31, 2026, amortization of debt issuance cost was $0.3 million, essentially unchanged from the three months ended March 31, 2025.
Income Tax Expense
For the three months ended March 31, 2026, the Company’s income tax expense increased by $9.7 million to $44.5 million, from $34.8 million for the three months ended March 31, 2025. The increase in the income tax expense was driven by a $32.1 million increase in income before income taxes.
Net Income
For the three months ended March 31, 2026, Star’s net income increased $22.4 million, to $108.3 million, compared to the three months ended March 31, 2025, primarily due to a favorable change in the fair value of derivative instruments of $20.7 million, a $10.5 million increase in the Adjusted EBITDA, a $0.6 million decrease in depreciation and amortization expenses and a $0.4 million decrease in net interest expense, that was partially offset by a $9.7 million increase in income tax expense.
For the three months ended March 31, 2026, Adjusted EBITDA increased $10.5 million, to $138.7 million, compared to the three months ended March 31, 2025, primarily due to a $5.3 million increase in Adjusted EBITDA in the base business, a $2.1 million increase in Adjusted EBITDA from recent acquisitions and a $3.1 million decrease 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 installation profitability partially reduced by an increase in delivery, branch and service related expenses due to the extremely cold weather conditions.
EBITDA and Adjusted EBITDA should not be considered as an alternative to net income, as an indicator of operating performance, or as an alternative to cash flow, as a measure of liquidity or ability to service debt obligations, but provides additional information for evaluating the Company’s ability to make the minimum quarterly distribution. EBITDA and Adjusted EBITDA are calculated as follows:
Plus:
265
230
4,143
4,464
EBITDA (a)
165,466
134,284
(Increase) / decrease in the fair value of derivative instruments
Adjusted EBITDA (a)
Add / (subtract)
(44,490
(34,767
3,071
2,987
Increase in accounts receivables
(67,041
(43,246
(Increase) decrease in inventories
(11,240
4,520
(29,757
(45,201
Change in other operating assets and liabilities
(3,970
31,856
Net cash (used in) provided by operating activities
(5,895
48,605
(4,860
(81,755
3,088
2,860
31
• our compliance with certain financial covenants included in our debt agreements;
• our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;
• our operating performance and return on invested capital compared to those of other companies in the retail distribution of refined petroleum products, without regard to financing methods and capital structure;
• our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners; and
• the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.
The method of calculating Adjusted EBITDA may not be consistent with that of other companies, and EBITDA and Adjusted EBITDA both have limitations as analytical tools and so should not be viewed in isolation but in conjunction with measurements that are computed in accordance with GAAP. Some of the limitations of EBITDA and Adjusted EBITDA are:
• EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures.
• Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;
• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;
• EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.
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Compared to the Six Months Ended March 31, 2025
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:
Volume - Six months ended March 31, 2025
226.3
(11.0
24.0
6.0
(6.9
12.1
Volume - Six months ended March 31, 2026
238.4
(a) This amount includes a 3.5 million gallon decline attributable to lower margin COD and commercial home heating oil volume.
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:
51.1
46.9
36.3
15.4
16.8
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.
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%.
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.
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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.
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.
981.2
4.1161
910.7
4.0239
545.6
2.2887
522.8
2.3101
435.6
1.8274
387.9
1.7138
56.6
59.6
156.6
2.7645
153.8
2.5830
135.4
2.3908
132.8
2.2299
21.2
0.3737
21.0
0.3531
1,137.8
1,064.5
681.0
655.6
456.8
408.9
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).
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.
Service expense increased by $6.6 million, or 6.4%, to $109.9 million for the six months ended March 31, 2026, representing 109.6% of service sales, versus $103.3 million, or 103.5% of service sales, for the six 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 11.0% 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
34
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 $6.1 million compared to the six months ended March 31, 2025.
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.
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.
During the six months ended March 31, 2025, the change in the fair value of derivative instruments resulted in an $11.4 million credit as a $2.0 million decrease in the market value for unexpired hedges was more than offset by a $13.4 million credit due to the expiration of certain hedged positions.
For the six months ended March 31, 2026, delivery and branch expense increased $15.4 million, or 6.9%, to $239.7 million, compared to $224.3 million for the six months ended March 31, 2025. During the six months ended March 31, 2026, the Company's weather hedge contracts accounted for a $1.9 million increase in expense. The temperatures experienced from November 2025 through March 2026 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 $3.1 million for the six months ended March 31, 2025. The increase was also driven by a $10.4 million increase in net base business expenses and $3.1 million of expenses from recent acquisitions. The increase in the base business expense was largely driven by temperatures that were 11.0% colder than last year and were approximately 25% colder than planned for a three week period. The Company experienced a significant increase in the number of snowstorms as well as an much higher snowfall levels across our operating areas with some areas experiencing over 60 inches of snow, negatively impacting our business productivity. While home heating oil and propane volume rose by 2.7%, the extreme weather conditions impacted direct operating costs which increased by $6.2 million, or 4.3%. Insurance expense was higher by $5.1 million largely due to higher claims expense attributable to the extreme weather conditions in addition to normal premium increases, and partially offset by $0.9 million of other net expense decreases in the base business.
For the six months ended March 31, 2026, depreciation and amortization expenses increased $0.2 million, or 1.3%, to $17.0 million, compared to $16.8 million for the six months ended March 31, 2025, primarily due to acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.
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.
For the six months ended March 31, 2026, finance charge income increased $0.1 million or 3.1%, to $2.2 million, from $2.1 million for the six months ended March 31, 2025, due to slightly higher late customer payment charges on aged receivables.
35
For the six months ended March 31, 2026, interest expense, net increased by $0.5 million, or 6.5%, to $8.0 million compared to $7.5 million for the six months ended March 31, 2025. The year-over-year change was attributable to a reduction in interest income of $1.1 million due to lower invested cash balances of $78 million. In September 2024, the company increased its term loan and prefunded an acquisition that closed in January 2025 for $66.9 million. This was partially offset by a $0.6 million decrease in gross interest expense as average borrowings decreased by $0.3 million from $235.5 million for the six months ended March 31, 2025, to $235.2 million for the six months ended March 31, 2026, and the weighted average interest rate declined from 7.0% for the six months ended March 31, 2025, to 6.6% for the six 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.
For the six months ended March 31, 2026, amortization of debt issuance cost was $0.5 million, essentially unchanged from the six months ended March 31, 2025.
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.
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.
For the six months ended March 31, 2026, Adjusted EBITDA increased $27.0 million, to $207.0 million, compared to the six months ended March 31, 2025, primarily due to a $22.1 million increase in Adjusted EBITDA in the base business and a $6.8 million increase in Adjusted EBITDA from recent acquisitions that was partially offset by a $1.9 million increase in expense related to the Company's weather hedge contracts due to the colder temperatures. 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 delivery, branch and service related expenses due to the extreme weather conditions.
36
527
530
7,962
7,475
228,459
191,406
(58,857
(47,791
35,682
52,959
37
DISCUSSION OF CASH FLOWS
We use the indirect method to prepare our Consolidated Statements of Cash Flows. Under this method, we reconcile net income to cash flows provided by operating activities by adjusting net income for those items that impact net income but do not result in actual cash receipts or payment during the period.
Operating Activities
Due to the seasonal nature of our business, cash is generally used in operations during the winter (our first and second fiscal quarters) as we require additional working capital to support the high volume of sales during this period, and cash is generally provided by operating activities during the spring and summer (our third and fourth fiscal quarters) when customer payments exceed the cost of deliveries.
During the six months ended March 31, 2026, cash used in operating activities increased $45.1 million, to $61.1 million, compared to $16.0 million during the six months ended March 31, 2025, primarily due to a $34.1 million increase in accounts receivable due from customers on a comparable basis (including accounts receivable and customer credit balance accounts) of which $23.3 million represents an increase in receivables from customers on budget payment plans due to the increased volume sold and higher selling prices compared to the prior year. In addition, wholesale product costs increased during the month of March 2026, which resulted in an increase of $20.4 million, on a comparable basis, amounts due from our hedging counterparties. We were also required to post additional cash collateral for our inventory hedges of $12.0 million and cash used for inventory purchases increased $11.6 million. These increases in cash uses were partially offset by a $19.7 million increase in cash flows from operations, a $6.0 million increase in insurance related accruals on a comparative basis, a $2.4 million increase in taxes payable on a comparative basis and $4.9 million of other changes in working capital.
Investing Activities
During the six months ended March 31, 2026 the Company acquired one heating oil business for approximately $1.0 million in cash. The gross purchase price was allocated $1.2 million to intangible assets, $0.6 million to goodwill, $0.3 million to fixed assets and reduced by $1.1 million of negative working capital.
For the six months ended March 31, 2026, our capital expenditures totaled $7.7 million, as we invested in computer hardware and software ($1.5 million), refurbished certain physical plants ($2.8 million), expanded our propane operations ($0.4 million) and made additions to our fleet and other equipment ($3.0 million).
During the six months ended March 31, 2026, $1.6 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.
During the six months ended March 31, 2025, the Company acquired one heating oil and two propane businesses for approximately $79.6 million in cash. The gross purchase price was allocated $37.5 million to intangible assets, $16.8 million to goodwill, $25.2 million to fixed assets and $0.1 million of working capital. The Company also sold certain assets for cash proceeds of $0.3 million.
Our capital expenditures for the six months ended March 31, 2025 totaled $6.5 million, as we invested in computer hardware and software ($0.5 million), refurbished certain physical plants ($0.9 million), expanded our propane operations ($0.8 million) and made additions to our fleet and other equipment ($4.3 million).
During the six months ended March 31, 2025, $1.0 million of earnings were reinvested into the irrevocable trust.
Financing Activities
During the six months ended March 31, 2026, we repaid $10.5 million of our term loan, borrowed $93.6 million under our revolving credit facility and subsequently repaid $6.1 million, repurchased 0.4 million Common Units, at an average price paid of $11.93 per unit, for $5.2 million, in connection with our unit repurchase plan, and paid distributions of $12.2 million to our Common Unit holders and $0.8 million to our General Partner unit holders (including $0.8 million of incentive distributions as provided in our Partnership Agreement).
During the six months ended March 31, 2025, we repaid $5.3 million of our term loan, borrowed $75.4 million under our revolving credit facility and subsequently repaid $53.0 million, repurchased fewer than 0.1 million Common Units, at an average price paid of $11.24 per unit, for $0.2 million, in connection with our unit repurchase plan, and paid distributions of $12.0 million to our Common Unit holders and $0.7 million to our General Partner unit holders (including $0.7 million of incentive distributions as provided in our Partnership Agreement).
38
FINANCING AND SOURCES OF LIQUIDITY
Liquidity and Capital Resources Comparatives
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. At the end of the second quarter of fiscal 2026, our liquidity (net working capital) was negatively impacted by the volatility in the wholesale prices of home heating oil and by a significant increase in the product costs for our heating oil. The significant increase in our heating oil product costs led to higher hedging costs. Our seasonal working capital needs increased to fund these higher heating oil product costs and the cash required to finance our operating activities increased. We believe that we may experience a slowing of collection of our accounts receivable over the next few months as our customers respond to higher product prices.
Capital requirements, at least in the near term, are expected to be provided by cash flows from operating activities (including amounts due on our hedges for our protected price customers), cash on hand as of March 31, 2026, of $12.2 million, and amounts due from our hedging counterparties, 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 receivables. Also, as of March 31, 2026, we had accounts receivable of $262.2 million of which $210.2 million is due from residential customers (reflecting a $27.6 million increase in amounts due from customers on budget plans compared to March 31, 2025 due to increased volumes sold resulting from the colder than expected weather) and $52.0 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 March 31, 2026, we had $87.4 million of borrowings under the revolving credit facility, $178.5 million outstanding under our term loan, $5.1 million in letters of credit outstanding and $0.3 million hedge positions were secured under the credit agreement. In April 2026, we collected $19.3 million from our hedging counterparties for product purchases in March 2026 for our protected price customers as there is a lag between purchasing the liquid product and collecting on the hedges. In addition, at March 31, 2026, our remaining commodity hedges that will settle in fiscal 2026 were valued at $22.0 million. These hedges will mitigate exposure to market risk in the second half of fiscal 2026 associated with the purchase of home heating oil for price-protected customers, physical inventory on hand, inventory in transit, priced purchase commitments and internal fuel usage.
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 $41.8 million as of March 31, 2026 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 March 31, 2026, Availability, as defined in the credit agreement, as amended, was $241.8 million and we were in compliance with the financial covenants.
Maintenance capital expenditures for the remainder of fiscal 2026 are estimated to be approximately $6.0 million to $7.0 million, excluding the capital requirements for leased fleet. In addition, we plan to invest $0.2 million to $0.3 million in our propane operations. If, and only to the extent that, cash distributions to our unitholders remain at the current quarterly level of $0.1975 per unit for the balance of fiscal 2026, the Company would make aggregate payments of approximately $13.0 million to Common Unit holders, $0.9 million to our General Partner (including $0.9 million of incentive distribution as provided for in our Partnership Agreement) and $0.9 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner. The amount of cash distributions payable to our unitholders, if any, depends on the amount of cash flow generated by the Company and our compliance with certain financial covenants under our credit agreement. Under the terms of our credit agreement, our term loan is repayable in quarterly payments of $5.3 million and we expect to pay $10.5 million for the remainder of fiscal 2026. Further, subject to any additional liquidity issues or concerns resulting from wholesale price volatility, we intend to continue to repurchase Common Units pursuant to our unit repurchase plan, as amended from time to time, and seek attractive acquisition opportunities within the Availability constraints of our revolving credit facility and funding resources.
Contractual Obligations and Off-Balance Sheet Arrangements
There has been no material change to Contractual Obligations and Off-Balance Sheet Arrangements since our September 30, 2025 Form 10-K disclosure and therefore, the table has not been included in this Form 10-Q.
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Recent Accounting Pronouncements
Refer to Note 2 – Summary of Significant Accounting Policies for discussion regarding the impact of accounting standards that were recently adopted and issued but not yet effective, on our consolidated financial statements.
Critical Accounting Policy and Critical Accounting Estimates
We believe that there have been no significant changes to our critical accounting policy and critical accounting estimates during the six months ended March 31, 2026, as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the fiscal year ended September 30, 2025. While our critical accounting policies and estimates have not changed in any significant way during the six months ended March 31, 2026, the following provides disclosures about our critical accounting policy and critical accounting estimates.
Critical Accounting Policy
Fair Values of Derivatives
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. The Company has elected not to designate its commodity derivative instruments as hedging instruments under this guidance, and therefore the change in fair value of those derivative instruments are recognized in our statement of operations.
We have established the fair value of our derivative instruments using estimates determined by our counterparties and subsequently evaluated them internally using established index prices and other sources. These values are based upon, among other things, futures prices, volatility, time-to-maturity value and credit risk. The estimate of fair value we report in our financial statements changes as these estimates are revised to reflect actual results, changes in market conditions, or other factors, many of which are beyond our control.
Critical Accounting Estimates
Self-Insurance Liabilities
We currently self-insure a portion of workers’ compensation, auto, general liability and medical claims. We establish and periodically evaluate self-insurance liabilities based upon expectations as to what our ultimate liability may be for outstanding claims using developmental factors based upon historical claim experience, including frequency, severity, demographic factors and other actuarial assumptions, supplemented with the support of a qualified third-party actuary. As of September 30, 2025, we had approximately $78.8 million of self-insurance liabilities. The ultimate resolution of these claims could differ materially from the assumptions used to calculate the self-insurance liabilities, which could have a material adverse effect on results of operations.
40
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We are exposed to interest rate risk primarily through our bank credit facilities. We utilize these borrowings to meet our working capital needs.
At March 31, 2026, we had outstanding borrowings totaling $265.9 million that are subject to variable interest rates under our credit agreement, and $72.8 million of interest rate swaps to mitigate exposure to interest rate risk associated with variable interest rates. In the event that interest rates associated with this facility were to increase 100 basis points, the after tax impact on annual future cash flows would be a decrease of $1.4 million.
Commodity Price Risk
We regularly use derivative financial instruments to manage our exposure to commodity price risk related to changes in the current and future market price of home heating oil and vehicle fuels. The value of market sensitive derivative instruments is subject to change as a result of movements in market prices. Sensitivity analysis is a technique used to evaluate the impact of hypothetical market value changes. Based on a hypothetical ten percent increase in the cost of product at March 31, 2026, the potential impact on our hedging activity would be to increase the fair market value of these outstanding derivatives by $6.4 million from $31.4 million to a fair market value of $37.8 million; and conversely a hypothetical ten percent decrease in the cost of product would decrease the fair market value of these outstanding derivatives by $5.9 million to a fair market value of $25.5 million.
For a broader discussion of risks, including those related to market conditions, please refer to Part I Item 1A "Risk Factors in our Fiscal 2025 Form 10-K.
Item 4.
Controls and Procedures
a) Evaluation of disclosure controls and procedures
The General Partner’s chief executive officer and chief financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of March 31, 2026. Based on that evaluation, such chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026, at the reasonable level of assurance. For purposes of Rule 13a-15(e), the term disclosure controls and procedures means the controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
b) Change in internal control over financial reporting
No changes in the Company’s internal control over financial reporting occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.
c) Other
The General Partner and the Company believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a Company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and the chief executive officer and chief financial officer of the General Partner have concluded, as of March 31, 2026, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.
PART II OTHER INFORMATION
Item 1.
Legal Proceedings
In the opinion of management, we are not a party to any litigation, which individually or in the aggregate could reasonably be expected to have a material adverse effect on our results of operations, financial position or liquidity.
Item 1A.
Risk Factors
In addition to the other information set forth in this Report, investors should carefully review and consider the information regarding certain factors, which could materially affect our business, results of operations, financial condition and cash flows set forth in Part I Item 1A. “Risk Factors” in our Fiscal 2025 Form 10-K report. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item 2.
Unregistered Sale of Equity Securities and Use of Proceeds
Purchase of equity securities by the issuer. Note 4 to the Condensed Consolidated Financial Statements concerning the Company’s repurchase of Common Units during the six months ended March 31, 2026 is incorporated into this Item 2 by reference.
Defaults Upon Senior Securities
None.
Mine Safety Disclosures
Item 5.
Other Information
(a) N/A
(b) N/A
(c) Trading Plans. During the quarter ended March 31, 2026, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading plans and arrangements or non-Rule 10b5-1 trading plans and arrangements.
Item 6.
Exhibits
3.1
Amended and Restated Certificate of Limited Partnership (Incorporated by reference to an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on May 9, 2006.)
3.2
Certificate of Amendment to Amended and Restated Certificate of Limited Partnership (Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K with the Commission on October 27, 2017.)
3.3
Third Amended and Restated Agreement of Limited Partnership (Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K with the Commission on November 6, 2017.)
3.4
Amendment No. 1 to Third Amended and Restated Agreement of Limited Partnership of Star Group, L.P. (Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K filed with the Commission on March 24, 2023.)
4.1
Unit Purchase Rights Agreement dated as of March 24, 2023 by and between the Registrant and Computershare Trust Company, N.A., as rights agent (which includes the form of Rights Certificate as Exhibit A thereto) (Incorporated by reference as an exhibit to the Registrant's Form 8-A filed with the Commission on March 24, 2023.)
31.1*
Certification of Chief Executive Officer, Star Group, L.P., pursuant to Rule 13a-14(a)/15d-14(a).
31.2*
Certification of Chief Financial Officer, Star Group, L.P., pursuant to Rule 13a-14(a)/15d-14(a).
32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
The following materials from the Star Group, L.P. Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Partners’ Capital, (v) the Condensed Consolidated Statements of Cash Flows and (vi) related notes.
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Filed herewith.
** The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized:
Star Group, L.P.
(Registrant)
By:
Kestrel Heat LLC AS GENERAL PARTNER
Signature
Title
Date
/s/ Richard F. Ambury
Richard F. Ambury
Executive Vice President, Chief Financial Officer,
Treasurer and Secretary of Kestrel Heat LLC
(Principal Financial Officer)
May 6, 2026
/s/ Cory A. Czekanski
Cory A. Czekanski
Vice President – Controller of Kestrel Heat LLC
(Principal Accounting Officer)