Star Gas Partners L.P. (SGU, Financial) filed Annual Report for the period ended 2012-09-30.
Star Gas Partners, L.p. has a market cap of $0.2 million; its shares were traded at around $4.08 with and P/S ratio of 7.8. Star Gas Partners, L.p. had an annual average earning growth of 31.7% over the past 5 years.
Installation costs increased by $4.0 million to $59.8 million, or 85.0% of installation sales, during fiscal 2011, versus $55.8 million, or 85.4% of installation sales during fiscal 2010, due to acquisitions ($4.6 million). Service expenses increased by $6.1 million to $119.8 million, or 93.5% of service sales, during fiscal 2011, from $113.7 million in fiscal 2010, or 95.5% of sales, due to acquisitions ($7.8 million). For fiscal 2011, we achieved a combined profit from service and installation of $18.9 million, compared to a combined profit of $14.9 million for fiscal 2010. This improvement of $4.0 million can be attributed to acquisitions ($1.8 million) and an increase in service and installation profit of $2.2 million in the base business. Management views the service and installation department on a combined basis because many overhead functions and direct expenses such as service technician time cannot be separated or precisely allocated to either service or installation billings.
For fiscal 2011, delivery and branch expenses increased $32.1 million, or 14.7%, to $250.8 million, compared to $218.6 million for fiscal 2010. Acquisitions accounted for $20.0 million of the higher delivery and branch expenses. In the base business, delivery and branch expenses increased by $12.0 million due to higher delivery expenses of $3.2 million associated with the increase in volume and the numerous snow storms experienced during fiscal 2011 along with an increase in bad debt expense and credit card fees of $5.3 million associated with the rise in sales. The Partnership increased its reserve rate for doubtful accounts for fiscal 2011, compared to fiscal 2010, in response to an 11 day increase in the days sales outstanding, increased volume due to colder temperatures and higher selling prices. Insurance claims expense also rose by $3.3 million due to an increase in reserves for prior year claims and higher current year claim expense resulting from the extreme winter weather.
For fiscal 2012, cash provided by operating activities was $105.8 million or $66.4 million greater than cash provided by operating activities for fiscal 2011 of $39.4 million. While cash generated from operations declined by $20.7 million largely due to the impact of 21.4% warmer weather, cash used to finance accounts receivable declined by $37.4 million, as the impact of lower volume sold due to the warmer weather more than offset the effects of higher selling prices. As a result, days sales outstanding declined to 50 days as of September 30, 2012, compared to 61 days at September 30, 2011. Cash collected from our budget payment plan customers also favorably impacted the year to year comparison by $13.7 million, as sales for fiscal 2012 were less than expected due to the warm weather and when compared to fiscal 2011. Changes in per gallon inventory values and quantities drove a favorable change in cash needs of $47.5 million. In fiscal 2012, the Partnership reduced inventory quantities to a greater extent than fiscal 2011, which provided $34.1 million in cash and more than offset a $0.07 per gallon increase in inventory cost. In fiscal 2011, the ending inventory cost increased by $1.36 per gallon which led to a $13.2 million use of cash. However, the timing of payments for insurance, interest and amounts due under the Partnerships profit sharing plan resulted in a $11.5 million greater use of cash for fiscal 2012 compared to fiscal 2011.
During fiscal 2011, cash provided by operating activities decreased by $5.0 million to $39.4 million, when compared to $44.4 million of cash provided by operating activities during fiscal 2010, as a favorable change in cash generated from operations of $14.3 million, the timing of cash receipts from budget customers of $7.5 million, increases in accruals for insurance, interest, profit sharing and accounts payable totaling $11.2 million and lower contributions to the Partnerships frozen pension plan of $9.9 million were reduced by a decline of $11.9 million in the cash benefit relating to the payment for hedging options, an increase in inventory of $11.2 million (largely due to an increase in price) and an increase in cash needs to fund accounts receivable of $27.0 million. In fiscal 2010, the Partnership structured its option purchases such that the cost of the option was paid as it expired rather than at the time the hedge is entered into. The increase in accounts receivable can be attributed to an increase in volume due to acquisitions and colder temperatures, as well as an increase in selling prices. Days sales outstanding as of September 30, 2011 were 61 days compared to 50 days at both September 30, 2010 and September 30, 2009. The impact of a colder third fiscal quarter coupled with an increase in wholesale product costs resulted in both budget and non-budget customers owing more at September 30, 2011 than at September 30, 2010.
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Star Gas Partners, L.p. has a market cap of $0.2 million; its shares were traded at around $4.08 with and P/S ratio of 7.8. Star Gas Partners, L.p. had an annual average earning growth of 31.7% over the past 5 years.
Highlight of Business Operations:
Installation costs for fiscal 2012 increased by $1.0 million, or 1.7%, to $60.8 million, compared to $59.8 million in installation costs for fiscal 2011. Installation costs as a percentage of installation sales for fiscal 2012 and fiscal 2011 were 84.6% and 85.0%, respectively. Service expenses declined to $115.0 million for fiscal 2012, or 88.2%, of service sales, versus $119.8 million, or 93.5% of service sales for fiscal 2011. We achieved a combined profit from service and installation of $26.5 million for fiscal 2012, compared to a combined profit of $18.9 million for fiscal 2011 primarily due to a reduction in service expenses in the base business. Management views the service and installation department on a combined basis because many overhead functions and direct expenses such as service technician time cannot be separated or precisely allocated to either service or installation billings.Installation costs increased by $4.0 million to $59.8 million, or 85.0% of installation sales, during fiscal 2011, versus $55.8 million, or 85.4% of installation sales during fiscal 2010, due to acquisitions ($4.6 million). Service expenses increased by $6.1 million to $119.8 million, or 93.5% of service sales, during fiscal 2011, from $113.7 million in fiscal 2010, or 95.5% of sales, due to acquisitions ($7.8 million). For fiscal 2011, we achieved a combined profit from service and installation of $18.9 million, compared to a combined profit of $14.9 million for fiscal 2010. This improvement of $4.0 million can be attributed to acquisitions ($1.8 million) and an increase in service and installation profit of $2.2 million in the base business. Management views the service and installation department on a combined basis because many overhead functions and direct expenses such as service technician time cannot be separated or precisely allocated to either service or installation billings.
For fiscal 2011, delivery and branch expenses increased $32.1 million, or 14.7%, to $250.8 million, compared to $218.6 million for fiscal 2010. Acquisitions accounted for $20.0 million of the higher delivery and branch expenses. In the base business, delivery and branch expenses increased by $12.0 million due to higher delivery expenses of $3.2 million associated with the increase in volume and the numerous snow storms experienced during fiscal 2011 along with an increase in bad debt expense and credit card fees of $5.3 million associated with the rise in sales. The Partnership increased its reserve rate for doubtful accounts for fiscal 2011, compared to fiscal 2010, in response to an 11 day increase in the days sales outstanding, increased volume due to colder temperatures and higher selling prices. Insurance claims expense also rose by $3.3 million due to an increase in reserves for prior year claims and higher current year claim expense resulting from the extreme winter weather.
For fiscal 2012, cash provided by operating activities was $105.8 million or $66.4 million greater than cash provided by operating activities for fiscal 2011 of $39.4 million. While cash generated from operations declined by $20.7 million largely due to the impact of 21.4% warmer weather, cash used to finance accounts receivable declined by $37.4 million, as the impact of lower volume sold due to the warmer weather more than offset the effects of higher selling prices. As a result, days sales outstanding declined to 50 days as of September 30, 2012, compared to 61 days at September 30, 2011. Cash collected from our budget payment plan customers also favorably impacted the year to year comparison by $13.7 million, as sales for fiscal 2012 were less than expected due to the warm weather and when compared to fiscal 2011. Changes in per gallon inventory values and quantities drove a favorable change in cash needs of $47.5 million. In fiscal 2012, the Partnership reduced inventory quantities to a greater extent than fiscal 2011, which provided $34.1 million in cash and more than offset a $0.07 per gallon increase in inventory cost. In fiscal 2011, the ending inventory cost increased by $1.36 per gallon which led to a $13.2 million use of cash. However, the timing of payments for insurance, interest and amounts due under the Partnerships profit sharing plan resulted in a $11.5 million greater use of cash for fiscal 2012 compared to fiscal 2011.
During fiscal 2011, cash provided by operating activities decreased by $5.0 million to $39.4 million, when compared to $44.4 million of cash provided by operating activities during fiscal 2010, as a favorable change in cash generated from operations of $14.3 million, the timing of cash receipts from budget customers of $7.5 million, increases in accruals for insurance, interest, profit sharing and accounts payable totaling $11.2 million and lower contributions to the Partnerships frozen pension plan of $9.9 million were reduced by a decline of $11.9 million in the cash benefit relating to the payment for hedging options, an increase in inventory of $11.2 million (largely due to an increase in price) and an increase in cash needs to fund accounts receivable of $27.0 million. In fiscal 2010, the Partnership structured its option purchases such that the cost of the option was paid as it expired rather than at the time the hedge is entered into. The increase in accounts receivable can be attributed to an increase in volume due to acquisitions and colder temperatures, as well as an increase in selling prices. Days sales outstanding as of September 30, 2011 were 61 days compared to 50 days at both September 30, 2010 and September 30, 2009. The impact of a colder third fiscal quarter coupled with an increase in wholesale product costs resulted in both budget and non-budget customers owing more at September 30, 2011 than at September 30, 2010.
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