Good day, and welcome to the Star Group Fiscal 2024 First Quarter Results Conference Call and Webcast. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Chris Witty, Investor Relations Adviser. Please go ahead, sir.

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, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations are disclosed in this conference call, the company's annual report on Form 10-K for the fiscal year ended September 30, 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'd now like to turn the call over to Jeff Woosnam. Please go ahead, Jeff.

Thanks, Chris, and good morning, everyone. The beginning of fiscal 2024 has provided both challenges and opportunities, which we believe we have navigated well. While product cost decline providing relief to customers, warmer temperatures resulted in lower demand and therefore, reduced overall volumes. However, due to cost discipline, weather hedges benefit and higher per gallon margins, adjusted EBITDA was nearly equivalent to the prior year period. New customer additions were down from the extraordinary levels we experienced in the first quarter of fiscal 2023. This was due in part to the mild weather, but also reflected much different market conditions, resulting in lower lead activity. Customer losses, however, remained in check for the quarter. And more recently, we were encouraged by improved net customer attrition results in January versus the same period a year ago. We'll have to see how the remainder of the heating season progresses, but we remain 100% dedicated to providing the best customer service and responsiveness possible. We're pleased to see continued improvement in our internal customer satisfaction indicators, most notably, our Net Promoter Score, a well-known metric that measures customer loyalty and specifically the willingness to recommend our brands. As previously reported, we completed two small heating oil acquisitions during the quarter in November, and I'm pleased to announce that we closed two more businesses just this week. One is a heating oil provider and another propane dealer. Both are located on Long Island and serves to further strengthen our presence in that market. Our acquisition program continues to be an important part of our growth strategy, and we have been very busy working on a few other attractive opportunities that we feel would be great additions to the organization. While it's too early to say how fiscal 2024 will play out, we remain focused on operational efficiency, controlling expenses and solid margin management and believe, we are well positioned to address whatever challenges or opportunity might present themselves going forward. With that, I'll turn the call over to Rich to provide additional comments on the quarter's financial results. Rich?

Thanks, Jeff, and good morning, everyone. For the quarter, our home heating oil and propane volume decreased by nine million gallons or 10% to approximately 80 million gallons as the additional volume provided from acquisitions was more than offset by the impact of warmer weather, net customer attrition and other factors. Temperatures in Star's geographic areas of operations for the three months ending December 31, 2023, were 9.6% warmer than the three months ending December 31, 2022, and 13.8% warmer than normal. Our product gross profit fell by $5.6 million or 4% to approximately $145 million as the impact of an increase in per gallon margins was more than offset by the decline in volume sales. We did realize a combined gross profit from service and installation of $4.4 million for the three months ending December 31, 2023, compared to a gross profit of $1.7 million for the three months ending December 31, 2022, a $2.7 million increase in profitability. Branch, delivery and G&A expenses decreased by $3 million or 3% to $101 million. During the first quarter of fiscal 2024, the company recorded a benefit under its weather hedge of $1 million compared to a charge of $400,000 in the prior year's comparable period, accounting for a $1.4 million favorable change in expense year-over-year. Delivery expense declined by $2.9 million or 9% due to the 10% decline in home heating oil and propane volume. Sales and marketing costs also declined by $1 million, reflecting a lower level of customer gains and related expenses. However, insurance expense rose by $2.3 million, largely due to higher premiums and expected claim costs. During the first quarter of fiscal 2024, we recorded $19 million noncash charge related to the fair -- change in the fair value of our derivative instruments. By comparison, in the first quarter of fiscal 2023, we recorded a $17.6 million charge. Net income decreased by $600,000 in the quarter to $13 million as the aforementioned unfavorable change in the fair market value of derivative instruments of $1.4 million and higher depreciation and amortization expense of $600,000 was only partially offset by lower interest expense of $1.1 million. Adjusted EBITDA was unchanged at approximately $49 million as an increase in home heating oil and propane per gallon margins, higher service and installation profitability and lower operating costs were offset by the decline in home heating oil and propane volume of 10%. And with that, I'd like to turn the call back over to Jeff.

Thanks, Chris. At this time, we're pleased to address any questions you may have. Chris, can you please open the phone lines for questions.

[Operator Instructions] Today's first question comes from Tim Mullen with Laurelton Management. Please go ahead, sir.

Hey, thanks for taking my questions. Two quick questions. First is just in terms of creditworthiness of customers. Have you seen anything change kind of over the past few quarters? Obviously, prices have come down, which I assume has been helpful on the margin, but anything -- any kind of color or commentary on that front would be appreciated. And then the second question just revolves around the buyback activity. Obviously, slowing quite a bit without any activity in November and December looks like -- obviously, that program is -- the buyback is somewhat problematic, but do you anticipate any changes kind of based where the stock price is now, and if so, when would those be announced?

Well, I'll answer the second question first. We don't expect any changes to the unit repurchase plan. I believe it does expire in the next couple of months. So I imagine we're going to roll it over like we always have in the past. And again, that's a program that we're not really directing on a day-to-day basis, it's automatic, depending on where the share price is. And we buy as many units in as we can under the calculations. With regards to customer credit, I think we're in a little bit better shape this year than last year. The receivables are down on a comparable basis. December, December. Customer credit balances are up. So I don't believe we're going to see any further, not that it was a whole heck of a lot of deterioration in the customer base, but a significant increase in charge-offs for delinquent accounts. But it is -- the economy is a little tight when it comes to credit as we will do kind of know.

Our next question comes from Michael Prouting with 10K Capital. Please go ahead, sir.

Yes. Morning, guys. So Jeff, I'll surprise you by starting off with a question on churn or customer attrition. So normally, I believe you guys see customer gains in the first fiscal quarter, whereas you had, albeit very small, but you had some customer losses in the past quarter. So just wanted to get your commentary around that and also your expectations for attrition for the current fiscal year? And then the other question I had was on the acquisition front. By the way, congratulations on the recent acquisitions. I guess three questions around acquisitions. First, if you could just characterize the pipeline right now. Second, as always, curious to know if there's any larger deals that might be on the horizon? And then thirdly, I'm wondering if you can just give us some thoughts around pricing of acquisitions, particularly given the history we've seen of warmer weather the last few years, how you factor that into your acquisition pricing?

So in terms of attrition, I think we were in a very good position to take advantage of a lot of market activity in the first quarter of 2023. And I think we've commented on this before, but we believe the factors that contributed to that certainly were a combination of tremendous price volatility. There were some isolated supply concern in the marketplace. And of course, we had colder weather. This year, those conditions just simply did not exist. And weather was 14% warmer than normal, I think, 9.5% warmer than the prior year. And we've seen some receding in the cost of product and some stability in the cost. So those conditions overall just didn't exist, and that certainly affected the lead activity and opportunity in the marketplace this quarter. As I mentioned in my comments, we were able to hold losses in check. And even on a percentage of account basis, I think they were slightly lower. So from that standpoint, I think it kind of explains the quarter-to-quarter difference. And going forward, we were encouraged by improved net customer attrition this January as compared to January a year ago, and we're just going to have to see how the rest of the year progresses. And on the acquisition front, I would just tell you that we're very pleased that we closed two strategic deals in November, two more this week. And we do have a number of attractive opportunities in the pipeline. We've probably -- or the theme is probably as busy as it's been in a few years, and that's very encouraging to us. As you know, it's a long and detailed process, and we'll have to see how -- which of those opportunities come to fruition.

Okay, fair enough. And then how do you factor in the warmer weather trends when you look at pricing on an acquisition?

We just look at each opportunity in individual, Michael, and -- on an individual basis. And we certainly weather adjust and make considerations in our valuation. And again, we'll just look at each opportunity on its own merit.

Okay, fair enough. And just curious then, have you seen -- or what trends you might be seeing around pricing on acquisitions? And I'll leave it at that.

I don't know that I've seen any significant change in valuations recently.

[Operator Instructions] At this time, we are showing no further questioners in the queue, and this does conclude our question-and-answer session. I would now like to turn the call 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 second quarter results in April. Thanks, everybody.

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