Good morning, and welcome to the Star Group Third Quarter 2021 Results Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Chris Witty, 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 that 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, 2020, 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 in the cautionary statements. Unless otherwise required by law, the company undertakes no obligations 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. Jeff?

Thanks, Chris, and good morning, everyone, and thank you for joining us to discuss our third quarter and fiscal year-to-date results. While summer is typically a less active time for Star than the heating season, a mix of factors, both positive and negative, impacted results versus the prior year period. The volume of home heating oil and propane fell 26% as a result of significantly warmer temperatures compared to the third quarter of fiscal 2020, which was the second coldest on record over the last 50 years within the New York Metropolitan area. However, as areas previously impacted by the pandemic have begun to normalize, we benefited from increased HVAC equipment installation revenue and related gross profit along with higher sales of other petroleum products. Our service revenues also increased year-over-year, but this positive development was more than offset by the additional expense associated with returning to a more traditional off-season workload as well as a more normal level of heating system maintenance. We also took the opportunity to invest in additional technical training for our field staff, all of which had been somewhat paused in the third quarter of fiscal 2020. Given all of these factors, our performance came in largely as anticipated and more in line with historical levels. Although we did not complete any new acquisitions in the quarter, the businesses we acquired earlier in the year are performing well in aggregate, and we are currently working on several additional attractive tuck-in opportunities. Our acquisition program remains an important part of our growth strategy. Through the first 9 months of the fiscal year, adjusted EBITDA decreased by $2.4 million versus the same period in 2020. As fiscal 2021 winds down, we are pleased with our overall performance as a business, particularly in the face of slightly warmer temperatures, certain rising inflationary costs and a $6.7 million reduction in weather insurance proceeds due to the seasonal timing of degree days. I remain confident that the steps we are taking through the third and fourth quarters while Star well positioned and prepared for next heating season and whatever challenges and opportunities are presented. With that, I'll turn the call over to Rich for additional comments on the quarter. Rich?

Thanks, Jeff, and good morning, everyone. For the fiscal 2021 third quarter, our home heating oil and propane volume decreased by 13 million gallons or 26% to 38 million gallons as the impact of significantly warmer temperatures and net customer attrition more than offset the additional volume provided by acquisitions. Temperatures for the quarter were 24% warmer than last year. As Jeff mentioned, the third quarter of fiscal 2020 was the second coldest on record over the last 50 years. The volume of other petroleum products sold increased by 7 million gallons to 41 million gallons as certain sectors rebounded from COVID-19's impact on economic activity. Our product gross profit decreased as we expected, $13 million or 18% to $72 million due largely due to the lower home heating oil and propane volumes sold. Delivery in branches rose by $2 million to $75 million due to the additional costs from acquisitions and a slight increase in expense within the base business. Our net loss increased by $12 million, primarily due to a decrease in adjusted EBITDA. Adjusted EBITDA declined by $15.6 million to a loss of $10 million as lower home heating oil and propane volumes more than offset the impact from improved home heating oil and propane per gallon margins. The adjusted EBITDA loss for the third quarter of 2021 was more in line with historic levels. For the 9 months of fiscal 2021, our home heating oil and propane volume decreased by 10 million gallons or 3% to 285 million gallons at slightly warmer temperatures, net customer attrition and other factors more than offset the impact from acquisitions. Temperatures for the first 9 months of fiscal 2021 were 1% warmer than the prior year comparable period but still 11% warmer than normal. The volume of other petroleum products sold increased by 2 million gallons or 2% to 112 million gallons as the decline in motor fuel sales experienced during the first half of 2021 was more than offset by a rebound experienced in the third quarter. Our product gross profit was $413 million, unchanged from last year as lower home heating oil and propane volume was offset by an increase in home heating oil and propane per gallon margins. Delivery and branch expenses rose just by $1.6 million as additional costs from acquisitions of $2 million and a $6.6 million decline in the benefit recorded under our weather hedge program was partially offset by a $7 million or 3% decline in operating expenses in the base business. Net income rose by $25 million to $111 million due largely to a favorable change in the fair value of derivative instruments. Adjusted EBITDA did decline by $2.4 million to $155 million. Lower total operating expenses in the base business, higher home heating oil and propane margins and $2.4 million of adjusted EBITDA provided from acquisitions were more than offset by the decline in the weather hedge benefit and the impact from lower home heating oil and propane volume. 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. Emily, please open the phone lines for questions.

[Operator Instructions] Our first question comes from Mark Savino [ph] from private investor.

Yes. Guys, I was wondering about your receivables. Any problems there? It seems that they're creeping some.

Absolutely not. When you look at our days sales outstanding, our days outstanding of receivables are -- were 48 days as of the June of last year. And this year, they are 41 days. Now there is a significant increase in the cost of home heating oil. So you will see an increase point-to-point if you look at this year versus last year.

No. That's great. One other thing...

We're actually in better shape this year than we were last year.

No. That's great. One other question and that is labor. In your statements, I can -- I just feel that there's some stress on your labor to get good people and train them. And is that -- how is that going?

There's no question that the labor market has certainly tightened up. We've put a number of programs in place, both to improve retention of our existing workforce and just really to make the positions that we're recruiting for, more attractive. And so like many businesses, we continue to try to find creative ways to reduce employee turnover and to keep the valuable employees and associates that we have and also to attract new ones. So I think we're not the only business that is challenged in that regard right now. But I think it is work in progress.

It's all over for sure. I was a manager at UPS for 20 years, and I was an employee for 30 years total. And I now see a lot of issues, a lot of new people. And I know they're having a hard time training. But I'll give you an example. I see these young guys now. They like -- they'll come up our street, and they have this big truck. And we always had a program that said you always keep moving forward. You never back up. And they'll pull into a driveway and back this 30-foot vehicle up into the street. And so I get concerned that -- it's crazy. I get concerned that with new people that you could have a big issue with accidents and just problems. So...

Well, frankly, I would say that our field training and retention has been fairly constant. It's really more contained at this point to customer contact employees, a lot of our inside contact center employees and those things where we've gone partially like really in a hybrid remote environment as a result of the pandemic. And so ongoing training -- I don't say it's become more difficult, but we've had to pivot a little bit to continue to keep our training programs in place for those folks.

Okay. I've been an investor since 2006, since the reorganization. And you guys have hit home run, for sure. I made a lot of money. So I appreciate it. Keep up the good work, and maybe we'll talk next quarter.

Thank you very much.

Our next speaker is Michael Prouting from 10K Capital.

Just a couple of questions this morning. My recollection is that CapEx ticked up in the quarter. And I was just curious to what might be driving that. And then on the capital allocation side, 2 questions. First, I'm wondering, Jeff, what you're seeing as far as the acquisition pipeline is concerned? And whether you see the potential for any like really large needle-moving acquisitions? And then on the stock repurchase side, as I kind of previewed last quarter, I was expecting that without changes in the formula just given the higher stock price you would probably buy back a lot fewer shares, and that seems to have occurred in the second quarter. So Rich, Jeff, I'm just wondering what your thoughts are in terms of adjusting that formula.

Yes. In terms of -- I think the acquisition question. In terms of acquisitions, I'd say that the activity level right now is pretty much typical what we see for this time of the year. We've been fortunate enough to close on 5 acquisitions so far in fiscal '21. On a trailing 12-month basis, we've closed on a total of 7. So the activity has been there. And we continue to look -- as I mentioned in my opening comments, we continue to work on several attractive tuck-in opportunities. And as far as the larger opportunities are concerned, you just never know when you're going to get them. I can tell you today that we may not have seen one. And then tomorrow, there's a more significant opportunity in front of us. So that's where we are with that. But I would say in terms of our pipeline right now, it's pretty typical of what we are used to seeing in mid-summer.

Yes. With regards to the CapEx, we did have some additional investment in fleet and some of the other -- our plant, if you will. Nothing too out of the ordinary, but we're up about $2 million to $3 million in the investment in the fleet. And with regard to capital allocation, we'll have to possibly revisit the formula or we just might stay pat as to where we are with the unit repurchases.

[Operator Instructions] This concludes our question-and-answer session. I would now like to turn the conference back over to Jeff Woosnam for closing remarks. Please go ahead.

Well, thank you for taking the time to join us today and your ongoing interest in Star Group. We look forward to sharing our 2021 fiscal fourth quarter results with you in December. Thanks, everybody.

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