SGU 10-K & 10-Q changes, risk factors and insider trading

customer attrition due to customers converting to lower cost heating products or moving to lower cost suppliers;

reduced liquidity as a result of higher net receivables including customer credit balances, and/or inventory balances as we must fund a significant portion of any increase in receivables,receivables and inventory and all hedging costs from our own cash resources and thereby reduce or eliminate funds that would otherwise be available for distributions and other purposes;

Our business is a “margin-based” business in which gross profit depends on the excess of sales prices per gallon over supply costs per gallon. Consequently, our profitability is sensitive to increases in the wholesale product cost caused by changes in supply, geopolitical forces and other market conditions. Although our wholesale product costs are closely linked to the price of diesel fuel, diesel fuel prices do not always correspond to increases or decreases in consumer demand for our products. Consequently, our wholesale product prices may rise even though demand for our heating oil products is down due to, among other things, warm winter temperatures. Significant increases in product and energy costs result in higher operating expenses, such as credit card fees, bad debt expense, and vehicle fuels, and also lead to higher working capital requirements, including higher premiums and cash requirements for some of our hedging instruments. In certain cases, we cannot pass on to our customers immediately or in full all cost increases by increasing our retail sales prices. This, in turn, negatively affects our profit margins. We cannot predict with any certainty the impact of periods of high wholesale product costs on future profit margins.

During periods of high wholesale product costs, the prices we charge our customers generally increase. High prices can lead to customer conservation and attrition, resulting in reduced demand for our products. Additionally, in an effort to retain existing accounts and attract new customers we may offer discounts, which will impact the net per gallon gross margin realized. Increases in wholesale product prices may also slow our customer collections as customers are more likely to delay the payment of their bills, leading to higher accounts receivable.

If service at our third-party terminals, the common carrier pipelines used orused, the barge companies or third-party haulers we hire to move product is interrupted, our operations would be adversely affected.

The products that we sell are transported in either barge, pipeline or in truckload quantities to third-party terminals where we have contracts to temporarily store our products. Any significant interruption in the service of these third-party terminals, the common carrier pipelines used orused, the barge companies and third-party haulers that we hire to move product would adversely affect our ability to obtain product.

We purchase derivatives, futures contracts and swaps of diesel fuel primarily from members of our lending group and Cargill Inc. in order to mitigate exposure to market risk associated with our inventory and the purchase of home heating oil for price-protected customers. Future positions require an initial cash margin deposit and daily mark-to-market maintenance margin, whereas options are generally paid either upfront or when they expire. Any cash payment reduces our liquidity, as we must pay for the option before any sales are made to the customer. Mark-to-market exposure with our bank group reduces our borrowing base and as such can reduce the amount available to us under our credit agreement.

A significant portion of our home heating oil volume is sold to individual customers under arrangements pre-establishing the ceiling sales price or a fixed price of home heating oil over a fixed period. When the customer makes a purchase commitment for the next period, we concurrently purchase option contracts, swaps and futures contracts for diesel fuel covering a substantial majority of the heating oil that we expect to sell to these price-protected customers. The price of heating oil is closely linked to the price of diesel fuel. The amount of home heating oil volume that we hedge per price-protected customer with diesel fuel derivatives is based upon the estimated fuel consumption per average customer, per month by location. If the actual usage exceeds the amount of the hedged volume on a monthly basis, we could be required to obtain additional volume at an unfavorable cost, which may reduce per gallon margins. In addition, should actual usage in any month be less than the hedged volume (including, for example, as a result of warm winters and early terminations by price protected customers), we may incur additional hedging costs which reduce our gross profit margins. Currently, we have elected not to designate our derivative instruments as hedging instruments under FASB ASC 815-10-05 Derivatives and Hedging, and the change in fair value of the derivative instruments is recognized in our statement of operations. Therefore, we experience volatility in earnings as these currently outstanding derivative contracts are marked-to-market and non-cash gains or losses are recorded in the statement of operations.

We rely on the continued solvency of our wholesale product and equipment suppliers and derivatives, insurance and weather hedge counterparties.

If one of our wholesale product and equipment suppliers were to fail, our liquidity, results of operations and financial condition could be materially adversely impacted, as we may be required to purchase product from other sources which may be at higher prices than we were prepared to pay. If counterparties to the derivative instruments that we use to hedge the cost of home heating oil sold to price-protected customers, physical inventory and our vehicle fuel costs were to fail, our liquidity, operating results and financial condition could be materially adversely impacted, as we would be obligated to fulfill our operational requirement of purchasing, storing and selling home heating oil and vehicle fuel, while losing the mitigating benefits of economic hedges with a failed counterparty. If one of our insurance carriers were to fail, our liquidity, results of operations and financial condition could be materially adversely impacted, as we would have to fund any catastrophic loss. If our weather hedge counterparties were to fail, we would lose the protection of our weather hedge contract.

Generally, home heating oil and propane are secondary energy choices for new housing construction, because natural gas is usually selected when the infrastructure exists. In certain areas in our operating footprint, state and local legislatures are mandating using electricity in new building construction, thus displacing heating systems using fossil fuels, such as heating oil and propane. As such, our industry is declining. Accordingly, our ability to maintain or grow our customer base will depend on our ability to make acquisitions on economically acceptable terms. We cannot assureassume that we will be able to identify attractive acquisition candidates in the future or that we will be able to acquire businesses on economically acceptable terms. Adverse operating and financial results may limit our access to capital and adversely affect our ability to make acquisitions.

Any acquisition may involve potential risks to us and ultimately to our unitholders, including an increase in our indebtedness, an increase in our working capital requirements, an inability to integrate the operations of the acquired business, an excess of customer loss from the acquired business, loss of key employees from the acquired business and the assumptionexposure to post-closing liabilities of additionalthe liabilities,seller includingor environmentalotherwise liabilities.associated with the acquired business.

To partially mitigate the adverse effect of warm weather on cash flows, we have used weather hedge contracts for a number of years. In general, such weather hedge contracts provide that we are entitled to receive a specific payment per heating degree-day shortfall, when the total number of heating degree-days in the hedge period is less than the ten year average. The “payment thresholds,” or "strikes," are set at various levels. The hedge period runs from November 1, through March 31, of a fiscal year taken as a whole. Although we have entered into weather hedges for fiscal 20252026 and in prior years' periods, there can be no assurance that weather hedge contracts on historical terms and prices will continue to be available past fiscal 2025.2026. There can be no assurance that our weather hedge contracts, if any, will fully or substantially offset the adverse effects of warmer weather on our business and operating results or that colder weather will result in enough profit to offset our hedging costs.

ThereIn isthe increasingrecent attentionyears, there has been increased governmental regulation in theresponse United States and worldwide concerning the issue ofto climate change and concerning the effect of greenhouse gas (“GHG”) emissions, from the combustion of carbon-based fossil fuels. Our heating oil and propane products are widely considered to be fossil fuels that produce GHG emissions. To combat the cause of global warming domestically, President Biden identified climate change as one of his administration’s top priorities and pledged to seek measures that would pave the path for the U.S. to achieve net zero GHG emissions by 2050. On August 16, 2022, President Biden signed the Inflation Reduction Act which aims to reduce GHG emissions by offering tax and other incentives desired to encourage homeowners to switch to alternative sources of energy than the ones we sell. In addition, theThe State of New York, where a majority of our operations are located, Massachusetts, Rhode Island and Connecticut and certain municipalities in our operating footprint have adopted laws, regulations and policies addressing climate change and restricting GHG emissions from fossil fuel burning systems. Commencing July 1, 2025, we are subject to an increase from the current level of 5% to now a level of 10% in the minimum percentage of biodiesel that is required to be blended with home heating oil sold for heating purposes in buildings located in the States of New York and Connecticut (where a significant portion of our customers are located), and an increase from the current level of 10% to now a level of 20% in the minimum percentage of biodiesel that is required to be blended with home heating oil sold for heating purposes in buildings in Rhode Island. Depending upon the relationship of home heating oil and biodiesel, these regulations may decrease or increase our wholesale product costs in New York, Connecticut or Rhode Island. For additional information about climate change regulations affecting us, See Item 1 “Business – Government Regulations” for a summary of certain laws, regulations and policies adopted by states and municipalities in our operating footprint addressing climate change and/or restricting GHG emissions from fossil-fuel burning systems. The federal, state and local climate change regulatory landscape is highly complex and rapidly and continuously evolving. At this time, we cannot predict whether, when, which, or in what form climate change legislation provisions and GHG emission restrictions may be enacted and what the impact of any such legislation or standards may have on our business, financial conditions or operations in the future. These measures could have a negative impact on our business over time or in the future.

In March 2023, we adopted a unitholder rights plan, which provides, among other things, that when specified events occur, our unitholders will be entitled to purchase additional common units. The unitholders rights plan will expire on March 24, 2028, unless further extended. The common unit purchase rights are triggered ten days after the date of a public announcement that a person or group acting in concert has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of our outstanding common units. The common unit purchase rights would cause significant dilution to a person or group that attempts to acquire the Company on terms that are not approved by the board of directors of the general partner. These provisions, either alone or in combination with each other, give our general partner a substantial ability to influence the outcome of a proposed acquisition of the Company. These provisions would apply even if an acquisition or other significant corporate transaction was considered beneficial by some of our unitholders.

At September 30, 2024,2025, we had outstanding under our seventh amended and restated revolving credit facility agreement a $210.0$189.0 million term loan, lessno thanborrowings $0.1 millionoutstanding under the revolver portion of the agreement, $5.2$5.1 million of letters of credit, $14.2$1.3 million hedge positions were secured under the credit agreement and our availability was $166.5$165.0 million. (See the credit agreement at Note 13 of the Notes to the Consolidated Financial Statements—Long-Term Debt and Bank Facility Borrowings). Our debt is often substantially higher during the heating season as we access our revolving credit facilities to finance accounts receivable and inventory balances. For example, our borrowings under the revolver peaked at $79.6$75.4 million during the fiscal 20242025 heating season. Our substantial indebtedness and other financial obligations could:

expose us to interest rate risk because a significant portion of our borrowings are at variable rates of interest; and limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and If we are unable to meet our debt service obligations and other financial obligations, we could be forced to restructure or refinance our indebtedness and other financial transactions, seek additional equity capital or sell our assets. We might then be unable to obtain such financing or capital or sell our assets on satisfactory terms, if at all.

This Annual Report on Form 10-K (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, tariff regimes, including newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, 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, pandemic and 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 climatefederal, change,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. 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,” “Business Strategy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation.” Important factors that could cause actual results to differ materially from our expectations (“Cautionary Statements”) are disclosed in this Report. 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.

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 required, which will increase as depreciation and amortization decreases.taxes. The amount of depreciation and amortization that we deduct for book (i.e., financial reporting) purposes will differdiffers 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.purchased and placed in service. However, this table only includes assets purchased to date, and does not include any forecast offor future annual capital purchases.

The Company entered into weather hedge contracts for fiscal yearsyear 20232025 and 2024. 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 contractscontracts, the maximum amount the Company cancould receivehave isreceived was $15.0 million for fiscal 2025 and $12.5 million annually.for fiscal 2024. For the contracts applicable to fiscal 2023,2025, we were additionally obligated to make an annual payment capped at $5.0 million if degree days exceeded the Payment Threshold. This obligation doesdid not exist under the contract applicable tofor fiscal year 2024.

For fiscal 2025,2026, the Company entered into weather hedge contracts with the similar hedge period described above. The maximum that the Company can receive is $15.0 million annually and we are additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold. If we had this same amount of coverage in place during fiscal 2024 we would have received $7.5 million more in April 2024.

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, conversions to natural gas 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. TheCustomers 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 ofgross certaincustomer geopoliticalgains forces on liquid product prices could increase future attrition due to higherand losses fromgoing credit related issues.forward.

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. SubsequentDuring tofiscal September 30, 20242025, the Company acquired aone heating oil business and three propane businesses for approximately $0.7$80.5 million. During fiscal 2024, the Company acquired one propane business and four heating oil businesses for approximately $49.4 million. During fiscal 2023, the Company acquired two heating oil businesses and one propane business for approximately $19.8 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.

For fiscal 2024,2025, the retail volume of home heating oil and propane sold decreasedincreased by 5.829.2 million gallons, or 2.2%,11.5%, to 253.4282.6 million gallons, compared to 259.2253.4 million gallons for fiscal 2023.2024. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for fiscal 20242025 were less8.2% than 0.1% warmercolder than fiscal 20232024 andbut 15.1%8.3% warmer than normal, as reported by NOAA. For fiscal 2024,2025, net customer attrition for the base business was 4.2%.4.7%. 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:

The following chart 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 fiscal 20242025 compared to fiscal 20232024:

For fiscal 2024,2025, product sales decreased $201.9$11.2 million, or 12.2%,0.8%, to $1,448.8$1,437.6 million, compared to $1,650.7$1,448.8 million in fiscal 2023,2024, due to a decrease in average selling prices andthat awas decreaseslightly offset by an increase in total volume sold of 3.9%.6.3%. Selling prices decreased largely due to a decrease in wholesale product cost of $0.4602$0.3199 per gallon, or 15.2%.12.5%, compared to fiscal 2024. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

For fiscal 2024,2025, installation and service sales increased $15.2$29.5 million, or 5.0%,9.3%, to $317.3$346.8 million, compared to $302.1$317.3 million for fiscal 2023.2024. Installation sales increased by $8.8$11.7 million, or 7.6%,9.5%, and service sales increased by $6.4$17.8 million, or 3.4%.9.2%. The increase was partially driven by $5.2$22.6 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 annual price increases.

For fiscal 2024,2025, cost of product decreased $223.4$68.4 million, or 18.5%,7.0%, to $980.8$912.4 million, compared to $1,204.2$980.8 million for fiscal 2023,2024, due to a decrease in wholesale product cost of $0.4602$0.3199 per gallon, or 15.2%12.5%, andslightly aoffset decreaseby an increase in total volume sold of 3.9%.6.3%. 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 transaction. On that basis, home heating oil and propane margins for fiscal 20242025 increased by $0.1304$0.0222 per gallon, or 8.4%,1.3%, to $1.6800$1.7022 per gallon, from $1.5496$1.6800 per gallon during fiscal 2023.2024. In the base business, home heating and propane margins for fiscal 2025 increased by $0.0512 per gallon, or 3.1% to $1.7312 per gallon. We cannot assume that the per gallon margins realized during fiscal 20242025 are sustainable for future periods. Product sales and cost of product include home heating oil, propane, motor fuel, other petroleum products and liquidated damages billings.

For fiscal 2024,2025, total product gross profit was $468.0$525.2 million, which was $21.5$57.2 million, or 4.8%,12.2%, higher than fiscal 2023,2024, due to an increase in home heating oil and propane marginsvolume sold ($33.2$49.0 million), thatan was partially offset by a decreaseincrease in home heating oil and propane volume soldmargins ($9.0$6.3 million) and decreasean increase in gross profit from other petroleum products ($2.7$1.9 million).

Total installation costs for fiscal 20242025 increased by $5.7$10.0 million or 6.0%,9.9%, to $100.9$110.9 million, compared to $95.2$100.9 million of installation costs for fiscal 2023,2024. primarilyThis increase was largely due to the higher installation revenuessales offrom $8.8recent million.acquisitions. Installation costs as a percentage of installation sales were 82.1% for fiscal 2025 and 81.7% for fiscal 20242024. andThe 83.0% for fiscal 2023. Grossgross profit from installations increased by $3.0$1.7 million due to an increase in sales dollars and an improvement in the gross profit margin realized on installation sales.million.

Service expense decreasedincreased by $0.2$15.7 million, or 0.1%,8.6%, to $182.5$198.2 million for fiscal 2024,2025, representing 94.2%93.7% of service sales, versus $182.7$182.5 million, or 97.5%94.2% of service sales, for fiscal 2023.2024. WhileThe increase was largely due to higher service revenues increased by $6.4 million, service costs decreased by $0.3 million which led to an increase in gross profitsales from servicerecent of $6.7 million. In fiscal 2024, the company undertook certain steps to improve service performance which favorably impacted service costs when compared to fiscal 2023.acquisitions. In addition, 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 revenuesrevenues. especially given the warmer than normal weather conditions inIn fiscal 2024 and fiscal 2023. In both fiscal 2024 and 2023,2025, the demand for service was lessgreater than expectedfiscal 2024 due to the warmer than normalcolder weather conditions. The gross profit from service increased by $2.1 million.

For fiscal 2024,2025, delivery and branch expenses increased $12.8$34.4 million to $366.4$400.8 million, compared to $353.6$366.4 million for fiscal 2023.2024. DuringThe fiscaltemperatures 2024,experienced from November 2024 through March 2025 (the weather hedge period) were colder than the companystrike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $3.1 million. This compares to the prior-year period which, due to warmer weather, the Company recorded a benefit under the weather hedgecredit of $7.5 million comparedunder toits aweather benefithedge of $12.5 million during fiscal 2023 that accounts for a $5.0 million increase in expense.contract. The increase was also driven by $6.4$23.1 million of expenses from recent acquisitions and a $1.4$0.7 million,million or 0.4% increasesincrease in net base business expenses. InThe increase in the base business,business a $6.0 million increase in insurance claim costs and premiums and $0.9 million of other net expense increasesexpenses was partially offsetdriven by a $5.5$2.3 million, or 5.1%2.2%, decreaseincrease in delivery expenses drivendue byto thea 4.2%4.1 declinemillion gallon, or 1.6%, increase in home heating oil and propane volume sold in the base business.business compared to the prior year and $2.6 million of other net expense increases that were partially offset by a $4.2 million decrease in insurance related costs.

For fiscal 2024,2025, depreciation and amortization expense decreasedincreased $0.9$3.9 million, or 2.6%,12.2%, to $31.5$35.4 million, compared to $32.4$31.5 million for fiscal 2023,2024, primarily due to intangible assets that fully amortized in the prior fiscal year.acquisitions.

For fiscal 2024,2025, general and administrative expenses increased $2.6$2.1 million, or 10.2%,7.4%, to $28.4$30.5 million, compared to $25.8$28.4 million for fiscal 2023,2024, due to a $0.9$1.5 million increase in profit sharing expense,expense and a $0.9$0.6 million increase in salaries and benefits expenses and a $0.8 million reduction in the gain on the sale of fixed assets.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 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 fiscal 2024,2025, finance charge income decreasedincreased by $0.9$0.3 million, or 17.0%,7.4%, to $4.9 million compared to $4.6 million compared to $5.5 million for fiscal 2023,2024, primarily due to lesshigher customer late customer payment charges on reduced aged receivables that was partially driven by the reduction in sales.charges.

For fiscal 2024,2025, net interest expense decreasedincreased by $3.9$2.7 million, or 25.6%,23.9%, to $14.3 million compared to $11.6 million compared to $15.5 million for fiscal 2023.2024. The year-over-year change was driven by aan decreaseincrease in average borrowings of $52.8$58.2 million from $211.7$158.9 million for the fiscal 20232024 to $158.9$217.1 million for fiscal 20242025 that was partially offset by ana increasedecrease in the weighted average interest rate from 6.5% for fiscal 2023 to 7.3% for fiscal 2024.2024 to 7.1% for fiscal 2025. To hedge against rising interest rates, the Company utilizes interest rate swaps. At September 30, 2024,2025, approximately 25%39% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

For fiscal 2024,2025, amortization of debt issuance costs decreasedincreased to $1.0$1.1 million from $1.1$1.0 million for fiscal 2023.2024.

For fiscal 2024,2025, the Company’s income tax expense decreasedincreased by $0.7$16.1 million to $13.3$29.4 million, from $14.0$13.3 million for fiscal 2023.2024. The decreaseincrease was driven by a decrease$54.3 million increase in income before income taxes and an increase in the effective income tax rate from 30.4% for fiscal 2023 to 27.5% for fiscal 2024 to 28.6% for fiscal 2025 due primarily to aan reductionincrease in state taxes and a decrease in valuation allowance that was partially offset by a $2.6 million increase in income before income taxes.

During fiscal 2023,2024, we$1.7 depositedmillion $1.6of million,earnings andwere invested another $0.9 million,reinvested into an irrevocable trust to secure certain liabilities for our captive insurance company.

During fiscal 2023,2024, the Company acquired one propane business and twofour heating oil businesses for approximately $19.8$49.4 million in cash. The gross purchase price was allocated $10.4$40.4 million to intangible assets, $8.0$13.7 million to goodwill, $2.3$4.9 million to fixed assets, and reduced by $0.9$9.6 million in negative working capital.

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.

Funding for capital requirements, at least in the near term, are expected to be funded by cash flows from operating activities, cash on hand as of September 30, 20242025 ($117.3$24.7 million) 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 accounts receivable. As of September 30, 2024,2025, we had accounts receivable of $95.0$102.1 million of which $63.5$67.6 million is due from residential customers and $31.5$34.5 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivable. 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 September 30, 2024,2025, we had less than $0.1 millionno borrowings under our revolving credit facility, $210.0$189.0 million outstanding under our term loan, $5.2$5.1 million in letters of credit outstanding and $14.2$1.3 million hedge positions were secured under the credit agreement.

As of September 30 2025 Availability as defined in the seventh amended and restated revolving credit facility agreement was $165.0 million and we were in compliance with the financial covenants. Under the terms of the credit agreement, if we permit Availability (as defined in the credit agreement) to beis less than the greater of (a) 12.5% of the Line Cap (lesser of the aggregate revolving credit facility borrowingscommitment and the borrowing base) which was $21.4 million at September 30, 2025 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 September 30 2024 Availability as defined in the seventh amended and restated revolving credit facility agreement was $166.5 million and we were in compliance with the financial covenants.

Maintenance capital expenditures for fiscal 20252026 are estimated to be approximately $12.8$12.9 million, excluding the capital requirements for leased fleet which we currently estimate to be $13.3$13.4 million. In addition, we plan to invest approximately $1.7$1.5 million in our propane operations. Distributions for fiscal 2025,2026, at the current quarterly level of $0.1725$0.1850 per unit, would result in aggregate payments of approximately $23.9$24.4 million to Common Unit holders, $1.5$1.6 million to our General Partner (including $1.4$1.5 million of incentive distribution as provided for in our Partnership Agreement) and $1.4$1.5 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. Under the terms of our seventh amended and restated revolving credit facility agreement, our term loan is repayable in quarterly payments of $5.3 million. We are not required to make an additional term loan repayments dueas towe did not generate any Excess Cash Flow in fiscal 20242025 due to amounts being reinvested back into the business (see Note 13 - Long-Term Debt and Bank Facility Borrowings). 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.

Reflects payments due of debt existing as of September 30, 2024,2025, considering the terms of our credit agreement. (See Note 13 - Long-Term Debt and Bank Facility Borrowings) Represents various operating leases for office space, trucks, vans and other equipment with third parties. Maturities of operating leases are presented undiscounted. (See Note 16 - Leases) (c) Represents non-cancelable commitments as of September 30, 20242025 for operations such as customer related invoice and statement processing, voice and data phone/computer services, real estate taxes on leased property and our undiscounted future payment obligations to the New England Teamsters and Trucking Industry Pension Fund.

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 sixnine months ended MarchJune 31,30, 2026 is incorporated into this Item 2 by reference.

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 eventsevents, such as the ongoing military conflicts in the Middle East, 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.

(a) On AprilJuly 30,31, 2026, the NYMEX ultra low sulfur diesel contract closed at $4.14$4.12 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 MarchJune 31,30, 2026, and continuing into AprilJuly 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 economically unattractive. As of MarchJune 31,30, 2026, we had 18.410.0 million gallongallons of heating oil inventory.inventory on-hand. 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.

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.

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. These tariffs terminated on February 24, 2026 following the U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump holding these tariffs to be unlawful. In the aftermath of the Supreme Court’s decision, the Trump administration imposed a temporary 10% global tariff on worldwide imported goods, which temporary tariffs automatically expired on July 24, 2026. The Trump administration replaced the expired temporary tariffs with a new tariff regime in reliance upon Section 301 of the Trade Act of 1976 which authorizes the president to issue tariffs if the U.S. government finds evidence that other countries engaged in unfair trade practices. 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 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.

At MarchJuly 31, 2026, weover 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%92% 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.

For the sixnine months ended MarchJune 31,30, 2026, the Company lost 4,10011,000 accounts (net), or 1.0%2.7% of its home heating oil and propane customer base, compared to 6,00013,000 accounts lost (net), or 1.5%3.1% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 1,8001,300 accounts higher and gross customer losses were 100700 accounts lower than the prior year's comparable period.

During the sixnine months ended MarchJune 31,30, 2026, we estimate that we lost 0.7%1.0% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 0.7%1.0% and 1.1% lost for the sixnine months ended MarchJune 31,30, 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 sixnine months ended MarchJune 31,30, 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.

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 AprilJuly 30,31, 2026, the wholesale cost of home heating oil as measured by the New York Mercantile Exchange was $4.14$4.12 per gallon, approximately $2.10$1.72 per gallon higher than at AprilJuly 30,31, 2025.

Based on these recent prices, our price-protected customers will be offered renewal contracts at significantly higher prices than last yearyear, which, mayhas adversely impactimpacted the acceptance rate of these renewals.

Three Months Ended MarchJune 31,30, 2026

Compared to the Three Months Ended MarchJune 31,30, 2025

For the three months ended MarchJune 31,30, 2026, retail volume of home heating oil and propane sold increaseddecreased by 0.63.4 million gallons, or 0.4%,9.4%, to 144.532.8 million gallons, compared to 143.936.2 million gallons for the three months ended MarchJune 31,30, 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 MarchJune 31,30, 2026, were 6.4%15.9% colder than the three months ended MarchJune 31,30, 2025, and 2.8%5.9% colderwarmer than normal, as reported by NOAA. For the twelve months ended MarchJune 31,30, 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:

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 MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025:

Volume of motor fuel and other petroleum products sold decreased by 2.12.9 million gallons, or 7.3%,9.2%, to 26.829.1 million gallons for the three months ended MarchJune 31,30, 2026, compared to 28.932.0 million gallons for the three months ended MarchJune 31,30, 2025.

For the three months ended MarchJune 31,30, 2026, product sales increased by $24.7$50.8 million, or 3.7%,23.5%, to $689.8$267.0 million, compared to $665.1$216.2 million for the three months ended MarchJune 31,30, 2025, due to an increase in average selling prices that was driven by an increase in combined wholesale product cost of $0.0530$1.0359 per gallon, or 2.3%48.9% calculated on a weighted average.average, partially offset by a decrease in total volume sold of 9.3%.

For the three months ended MarchJune 31,30, 2026, installation and service revenue decreasedincreased by $1.0$1.6 million, or 1.3%,1.8%, to $76.9$91.1 million, compared to $77.9$89.5 million for the three months ended MarchJune 31,30, 2025.

For the three months ended MarchJune 31,30, 2026, cost of product increased $5.5$50.7 million, or 1.3%,35.1%, to $412.4$195.2 million, compared to $406.9$144.5 million for the three months ended MarchJune 31,30, 2025, due to an increase in combined wholesale product cost of $0.0530$1.0359 per gallon, or 2.3%48.9% calculated on a weighted average basis, partially offset by a decrease in total volume sold of 0.9%.9.3%. 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 three months ended MarchJune 31,30, 2026, increased by $0.1251$0.1368 per gallon, or 7.3%,8.3%, to $1.8446$1.7915 per gallon, from $1.7195$1.6547 per gallon during the three months ended MarchJune 31,30, 2025. Going forward, we cannot assume that per gallon margins realized during the three months ended MarchJune 31,30, 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.

For the three months ended MarchJune 31,30, 2026, total product gross profit was $277.4$71.8 million, which was $19.2$0.1 million, or 7.4%,0.2%, higher than the three months ended MarchJune 31,30, 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$4.5 million) and an increase in gross profit from other petroleum products ($0.1$1.3 million), partially offset by a decrease in home heating oil and propane volume sold ($5.7 million).

Total installation costs, for the three months ended MarchJune 31,30, 2026, decreased by $0.7$1.5 million or 3.1%,5.5%, to $23.6$25.8 million, compared to $24.3$27.3 million of installation costs for the three months ended MarchJune 31,30, 2025. Installation costs as a percentage of installation sales were 83.2%78.8% for the three months ended MarchJune 31,30, 2026, and 84.2%82.0% for the three months ended MarchJune 31,30, 2025. The gross profit from installation increased by $0.2$1.0 million, compared to the three months ended MarchJune 31,30, 2025.

Service expense increased by $2.9$1.8 million, or 5.7%,3.7%, to $54.8$49.7 million for the three months ended MarchJune 31,30, 2026, representing 112.9%85.2% of service sales, versus $51.9$47.9 million, or 105.8%85.4% of service sales, for the three months ended MarchJune 31,30, 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 lossgross profit from service increased by $3.4$0.4 million compared to the three months ended MarchJune 31,30, 2025.

We realized a combined lossgross profit from service and installation of $1.5$15.6 million for the three months ended MarchJune 31,30, 2026 compared to a gross profit of $1.7$14.2 million for the three months ended MarchJune 31,30, 2025, a $3.2$1.4 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.

During the three months ended MarchJune 31,30, 2026, the change in the fair value of derivative instruments resulted in aan $26.8$8.0 million creditcharge due to a $22.2$7.7 million increase in the market value for unexpired hedges and a $4.6 million creditcharge due to the expiration of certain hedged positions.positions and a $0.3 million decrease in the market value for unexpired hedges.

During the three months ended MarchJune 31,30, 2025, the change in the fair value of derivative instruments resulted in a $6.1$0.6 million credit as a $2.1 million decrease in the market value for unexpired hedges (a $2.2 million charge) was more than offset by ana $8.2$2.8 million credit due to the expiration of certain hedged positions.

For the three months ended MarchJune 31,30, 2026, depreciation and amortization expenses decreased $0.6$0.9 million, or 7.0%,9.4%, to $8.3 million, compared to $8.9$9.2 million for the three months ended MarchJune 31,30, 2025, primarily due to intangible assets that fully amortized in the prior fiscal year.

For the three months ended MarchJune 31,30, 2026, general and administrative expenses increased by $0.5$0.4 million or 6.5%,6.3%, to $8.7$8.0 million, from $8.2$7.6 million for the three months ended MarchJune 31,30, 2025, due primarily to a $0.4$0.3 million increase in profit sharing expense and a $0.3$0.1 million increase in salaries and benefits, that was partially offset by a $0.2 million decrease in legal, professional and otherbenefits 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 three months ended MarchJune 31,30, 2026, finance charge income decreasedincreased $0.1 million or 9.7%,5.9%, to $1.3$1.9 million, from $1.4$1.8 million for the three months ended MarchJune 31,30, 2025, due to less late customer payment charges received on aged receivables.2025.

For the three months ended MarchJune 31,30, 2026, interest expense,expense netwas decreased$3.6 million, essentially unchanged from the three months ended June 30, 2025. Average borrowings increased by $0.4 million, or 7.2%, to $4.1$4.9 million comparedfrom to $4.5$203.5 million for the three months ended MarchJune 31,30, 20252025, asto average borrowings decreased by $5.2 million from $260.9$208.4 million for the three months ended MarchJune 31,30, 2025,2026, toand $255.7were millionoffset by the weighted average interest rate decline from 7.0% for the three months ended MarchJune 31,30, 2026,2025, andto the weighted average interest rate declined from 6.8%6.6% for the three months ended MarchJune 31, 2025, to 6.3% for the three months ended March 31,30, 2026. To hedge against rising interest rates, the Company utilizes interest rate swaps. At MarchJune 31,30, 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 three months ended MarchJune 31,30, 2026, amortization of debt issuance cost was $0.3 million, essentially unchanged from the three months ended MarchJune 31,30, 2025.

Income Tax ExpenseBenefit

For the three months ended MarchJune 31,30, 2026, the Company’s income tax expensebenefit increased by $9.7$3.4 million to $44.5$9.9 million, from $34.8$6.5 million for the three months ended MarchJune 31,30, 2025. The increase in the income tax expensebenefit was driven by a $32.1$14.8 million increase in incomethe loss before income taxes.

Net IncomeLoss

For the three months ended MarchJune 31,30, 2026, Star’s net incomeloss increased $22.4$11.4 million, to $108.3$28.0 million, compared to the three months ended MarchJune 31,30, 2025, primarily due to aan favorableunfavorable change in the fair value of derivative instruments of $20.7$8.6 million,million and a $10.5$7.1 million increase in the Adjusted EBITDA,EBITDA loss that was partially offset by a $0.6$3.4 million increase in income tax benefit and a $0.9 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.expenses.

Adjusted EBITDA Loss

SixNine Months Ended MarchJune 31,30, 2026

Compared to the SixNine Months Ended MarchJune 31,30, 2025

For the sixnine months ended MarchJune 31,30, 2026, retail volume of home heating oil and propane sold increased by 12.18.6 million gallons, or 5.3%,3.3%, to 238.4271.2 million gallons, compared to 226.3262.6 million gallons for the sixnine months ended MarchJune 31,30, 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 sixnine months ended MarchJune 31,30, 2026, were 11.0%11.5% colder than the sixnine months ended MarchJune 31,30, 2025, and 4.1%2.9% colder than normal, as reported by NOAA. For the twelve months ended MarchJune 31,30, 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:

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 sixnine months ended MarchJune 31,30, 2026, compared to the sixnine months ended MarchJune 31,30, 2025:

Volume of motor fuel and other petroleum products sold decreased by 3.05.9 million gallons, or 4.9%,6.4%, to 56.685.7 million gallons for the sixnine months ended MarchJune 31,30, 2026, compared to 59.691.6 million gallons for the sixnine months ended MarchJune 31,30, 2025.

For the sixnine months ended MarchJune 31,30, 2026, product sales increased by $73.2$124.1 million, or 6.9%,9.7%, to $1,137.8$1,404.8 million, compared to $1,064.6$1,280.7 million for the sixnine months ended MarchJune 31,30, 2025, due to an increase in average selling prices and an increase in total volume sold of 3.2%.0.8%.

For the sixnine months ended MarchJune 31,30, 2026, installation and service revenue increased by $1.7$3.3 million, or 1.0%,1.3%, to $168.2$259.3 million, compared to $166.5$256.0 million for the sixnine months ended MarchJune 31,30, 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.increases and $1.0 million of sales generated from recent acquisitions.

For the sixnine months ended MarchJune 31,30, 2026, cost of product increased $25.4$76.0 million, or 3.9%,9.5%, to $681.0$876.2 million, compared to $655.6$800.2 million for the sixnine months ended MarchJune 31,30, 2025, due to an increase in the combined wholesale product cost of $0.1954 per gallon, or 8.6% calculated on a weighted average and 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.0.8%. 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 sixnine months ended MarchJune 31,30, 2026, increased by $0.1136$0.1174 per gallon, or 6.6%,6.9%, to $1.8274$1.8230 per gallon, from $1.7138$1.7056 per gallon during the sixnine months ended MarchJune 31,30, 2025. Going forward, we cannot assume that per gallon margins realized during the sixnine months ended MarchJune 31,30, 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.

For the sixnine months ended MarchJune 31,30, 2026, total product gross profit was $456.8$528.6 million, which was $47.9$48.1 million, or 11.7%,10.0%, higher than the sixnine months ended MarchJune 31,30, 2025, due to an increase in home heating oil and propane margins ($27.1$31.9 million), an increase in home heating oil and propane volume sold ($20.6$14.7 million), and an increase in gross profit from other petroleum products ($0.2$1.5 million).

Total installation costs, for the sixnine months ended MarchJune 31,30, 2026, decreased by $0.4$1.9 million or 0.7%,2.3%, to $54.2$80.0 million, compared to $54.6$81.9 million of installation costs for the sixnine months ended MarchJune 31,30, 2025. Installation costs as a percentage of installation sales were 79.8%79.5% for the sixnine months ended MarchJune 31,30, 2026, and 81.7%81.8% for the sixnine months ended MarchJune 31,30, 2025. The gross profit from installation increased by $1.5$2.5 million, compared to the sixnine months ended MarchJune 31,30, 2025.

Service expense increased by $6.6$8.4 million, or 6.4%,5.5%, to $109.9$159.6 million for the sixnine months ended MarchJune 31,30, 2026, representing 109.6%100.6% of service sales, versus $103.3$151.2 million, or 103.5%97.0% of service sales, for the sixnine months ended MarchJune 31,30, 2025. The increase in service expense was driven by higher service call volume due to the extreme weather conditions that were 11.0%11.5% 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 $6.1$5.7 million compared to the sixnine months ended MarchJune 31,30, 2025.

We realized a combined gross profit from service and installation of $4.1$19.7 million for the sixnine months ended MarchJune 31,30, 2026 compared to a gross profit of $8.7$22.9 million for the sixnine months ended MarchJune 31,30, 2025, a $4.6$3.2 million decrease. While installation gross profit increased by $1.5$2.5 million, the service gross profit loss increased by $6.1$5.7 million due to higher expenses due tofrom increased demand for service and an increase in propane tank installations.

During the sixnine months ended MarchJune 31,30, 2026, the change in the fair value of derivative instruments resulted in a $21.4$13.4 million credit due to a $20.2$12.1 million increase in the market value for unexpired hedges and an $1.2$1.3 million credit due to the expiration of certain hedged positions.

During the sixnine months ended MarchJune 31,30, 2025, the change in the fair value of derivative instruments resulted in ana $11.4$12.0 million credit as a $2.0$2.3 million charge due to decrease in the market value for unexpired hedges was more than offset by a $13.4$14.3 million credit due to the expiration of certain hedged positions.

For the sixnine months ended MarchJune 31,30, 2026, delivery and branch expense increased $15.4$23.8 million, or 6.9%,7.5%, to $239.7$338.7 million, compared to $224.3$314.9 million for the sixnine months ended MarchJune 31,30, 2025. DuringThe theincrease sixwas monthsdriven endedby Marchan 31,$18.5 2026,million theincrease Company'sin weathernet hedgebase contractsbusiness accountedexpenses, for$3.4 million of expenses from recent acquisitions, and a $1.9 million increase in expense.expenses Therelated temperaturesto experiencedthe Company's weather hedge contracts. Temperatures from November 2025 through March 2026 were colder than the weather hedge contract strike pricesprices, and, therefore,and the Company recorded an expense under those weather hedge contracts of $5.0 million, as compared to $3.1 million for the sixnine months ended MarchJune 31,30, 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 temperaturesan that$11.3 million increase in insurance related expenses due to adverse claims development and, to a lesser extent, higher claims activity associated with the colder temperatures. Temperatures were 11.0%11.5% colder than last year and were approximately 25% colder than planned for a three weekthree-week period. The Company experienced a significant increase in the number of snowstormssnowstorms, as well as an much higher snowfall levels across ourits operating areasareas, with some areas experiencingreceiving over 60 inches of snow, negatively impacting ourits business productivity. While home heating oil and propane volume in the base business rose by 2.7%,1.0%, the extreme weather conditions impacted direct operating costscosts, which increased by $6.2$7.7 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,3.9%, and were partially offset by $0.9$0.5 million of other net expense decreases in the base business.