In a recent move, Star Group, L.P. (SGU), a retail company with annual revenues of $1.77 billion specializing in various store offerings, has amended its credit agreement with a consortium of ten banks. According to InvestingPro data, the company maintains a solid financial health score of "GOOD" despite its current ratio of 0.75.
This amendment, effective as of today, extends the deadlines related to a specific acquisition considered crucial for the company's expansion strategy.
The specifics of the acquisition, including the target company and the financial terms, were not disclosed in the filing. However, the adjustment in the credit agreement suggests that Star Group is seeking to maintain flexibility in its financial operations to support its growth and strategic initiatives. With a total debt of $304.56 million and EBITDA of $88.02 million, the company appears well-positioned to manage its expansion plans.
This development follows the original credit agreement dated September 27, 2024, and continues to demonstrate the company's proactive approach to managing its capital structure. The extended terms are likely to provide Star Group with additional time to finalize the acquisition and integrate it into its existing operations.
In other recent news, Star Gas Partners LP reported its fourth-quarter financial results for fiscal 2024, indicating a slight decrease in total revenue but a significant increase in adjusted EBITDA. The company's net income rose by $3 million, amounting to $35 million. Star Gas Partners also completed five acquisitions during the fiscal year, adding 20,000 customers to its base. However, warmer than usual weather conditions impacted the volume of heating oil and propane.
In terms of financial highlights, the company's total revenue saw a minor decline year-over-year. However, adjusted EBITDA increased by $14.7 million compared to fiscal 2023. The product gross profit for Q4 rose by $4 million (10%) to $42 million, while the full-year product gross profit increased by $21 million (5%) to $468 million.
Looking ahead, Star Gas Partners is preparing for the upcoming heating season, expecting normal weather conditions. The company is focusing on acquisitions and customer retention, backed by a strong acquisition pipeline. Despite the mild start to fiscal 2025, management remains optimistic about future growth opportunities.
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