Good morning, and welcome to the Star Group Fiscal 2023 Fourth Quarter Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Chris Witty, the Investor Relations Advisor. Please go ahead. .

Thank you, and good morning. With me on the call today are Jeff Woosnam, President and Chief Executive Officer; and Rich Ambury, Chief Financial Officer. I would now like to provide a brief safe harbor statement.

This conference call may include forward-looking statements that represent the company's expectations and beliefs concerning future events that involve risks and uncertainties and may cause the company's actual performance to be materially different from the performance indicated or implied by such statements.

All statements other than statements of historical facts included in this conference call are forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct.

Important factors that could cause actual results to differ materially from the company's expectations are disclosed in this conference call, the company's annual report on Form 10-K for the fiscal year ended September 30, 2023, and the company's other filings with the SEC.

All subsequent written and oral forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements.

Unless otherwise required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this conference call. I would now like to turn the call over to Jeff Woosnam.

Jeff?.

Thanks, Chris, and good morning, everyone. Thank you for joining our fourth quarter conference call. It's an exciting time for us as we conclude another fiscal year and begin a new heating season.

As we turn the corner on fiscal 2023, I would say the year was, in many respects, similar to the one before, as we experienced elevated oil prices and continued market volatility and thus, rather high revenue, but largely due to warmer weather, lower overall product demand.

Notably, temperatures for the period were 7.7% more than the prior year and 16.3% warmer than normal. To give that some context, fiscal 2023 was the third warmest in 123 years in the New York City metropolitan area.

Despite these significant headwinds, we were able to effectively manage costs and further strengthen our margins, delivering $97 million in adjusted EBITDA as well as slightly improved net customer attrition versus the prior fiscal year. In addition, our acquisition program remained active.

And in total, we completed 3 separate transactions during the past 12 months, while recently closing on 2 small heating oil dealers in November after the end of the fiscal year. Each of these companies complement our existing businesses in key geographic areas.

While we cannot control the weather, I'm very proud of the way our team has continued to persevere and navigate through the multitude of challenges we faced during the year. As we head into fiscal 2024, we remain focused on effectively managing working capital, controlling overall operating expenses and providing the best customer service possible.

All of these things will enhance long-term unitholder value. Given the strength of our operating platform, we believe Star is prepared and well positioned to capitalize on what we hope will be more normal weather and overall product demand in the heating season to come.

With that, I'll turn the call over to Rich to provide additional comments on the quarter and year-end results.

Rich?.

Thanks, Jeff, and good morning, everyone. For the fiscal 2023 fourth quarter our home heating oil and propane volume decreased by 600,000 gallons or 3% to 18.8 million gallons as the additional volume provided from acquisitions were more than offset by the net impact of net customer attrition and other factors.

However, our product gross profit did increase by $3 million or roughly 10% to $38 million, due largely to higher home heating oil and propane per gallon margins. Delivery, branch and G&A expenses increased by $3.6 million or 4.6% to $83 million.

Our net loss decreased by $30 million during the quarter to $19.7 million due to a favorable change in the fair value of derivative instruments of $47 million, somewhat offset by an increase in depreciation and amortization expense of $1 million and a decrease in the company's income tax benefit of $15 million.

The adjusted EBITDA loss increased by $700,000 to approximately $31 million, reflecting the lower sales volume and an increase in operating costs largely offset by an increase in home heating oil and per gallon margins. Now switching to the 2023 full fiscal year.

Our home heating oil and propane volume decreased by 37 million gallons or 12.5% to 259 million gallons with the additional volume provided from acquisitions more than offset by the impact of warmer weather, net customer attrition and other factors.

Again, temperatures in our geographic areas of operations were 7.7%, warmer than the prior fiscal year and 13.6% warmer than normal. Our product gross profit decreased by $12 million or just 2.6% as an increase in home heating oil and per gallon propane margins was more than offset by a decline in liquid products sold.

Delivery branch and G&A expenses rose by just $1 million year-over-year, inclusive of $11.4 million benefit attributable to our weather hedging program. As a reminder, in fiscal 2023, we recorded a benefit of $12.5 million under our weather hedge compared to a benefit of $1.1 million recorded in fiscal 2022.

Recent acquisitions accounted for an increase of $2 million in operating expenses, while expenses in the base business rose by $11.5 million.

Bad debt and credit card fees rose by $4.5 million and vehicle fuel costs were higher by $2 million due largely to an increase in product costs with remaining expenses in the base business were up $4 million or just 1%.

Net income declined by approximately $3 million to $32 million, primarily due to a $13.5 million decrease in adjusted EBITDA and a $5 million increase in net interest expense, partially offset by a $15 million favorable change in the fair value of derivative instruments.

Adjusted EBITDA for the year declined by $13.5 million to approximately $97 million as the decrease in home heating oil and propane volume was more than offset by an increase in per gallon margins and $11 million higher benefit recorded on the company's weather hedge. And with that, I'd like to turn the call back over to Jeff. .

Thanks, Rich. At this time, we're pleased to address any questions you may have.

Gary, any phone lines for questions?.

[Operator Instructions] Our first question is from Tim Mullen with Laurelton Management. .

Just have a question regarding the credit quality of customers.

Have you seen any changes either this quarter or over the past few quarters with regards to bad debt or customers' ability to pay?.

Well, our bad debt is up a little bit year-over-year and quarter-over-quarter. And we have seen with some customers, the credit quality is deteriorating a little bit as compared to where we were 2 or 3 years ago when the economy was being -- was actually being flooded with money.

Having said that, 2 or 3 years ago, we were buying product at $0.61 a gallon in April of 2020, and now we're in the $2.70, $2.75 range for the underlying cost of product. I guess the answer to your question is, yes, we are seeing a little bit. .

[Operator Instructions] Showing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Jeff Woosnam for any closing remarks. .

Well, thank you for taking the time to join us today and your ongoing interest in Star Group. We look forward to sharing our 2024 fiscal first quarter results in February. In the meantime, have a wonderful holiday season. Thank you. .

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..