Loading, Please Wait...

CST: 11/12/2019 12:50:23   

Ferrellgas Partners, L.P. Reports Fiscal Second Quarter 2019 Results

278 Days ago

  • Total Retail propane sales volume for the quarter increased approximately 2 percent leading to a 4 percent increase in gross margin dollars over the prior year on weather that was 0.7 percent colder than the prior year.
  • Retail customer growth of approximately 25,000, or 4 percent over prior year.
  • Tank Exchange sale locations now exceed 53,700, up 10 percent compared to prior year.
  • 5 accretive acquisitions of Blue Rhino independent distributors completed this fiscal year.

LIBERTY, Mo., March 08, 2019 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its fiscal second quarter ended January 31, 2019.

For the quarter, the Company reported a net earnings attributable to Ferrellgas Partners, L.P. of $43.3 million, or $.44 per common unit, compared to prior year period net loss of $1.8 million, or $(.02) per common unit.

Adjusted EBITDA, a non-GAAP measure, was $119.7 million compared to $120.6 million in the prior year. The following table represents the contribution to adjusted EBITDA from ongoing propane operations as well as from assets that were sold during 2018.

(in millions)   Q2 2019   Q2 2018
Propane Operations and Corporate Support   $119.7   $116.7
Results from Assets Sold in 2018   -   $3.9
Consolidated Adjusted EBITDA   $119.7   $120.6

On a trailing twelve month basis, adjusted EBITDA from ongoing propane operations and corporate support as of January 31, 2019 is $229.4 million compared to $226.5 million as of October 31, 2018.

The Company’s propane operations reported that total gallons sold of 309.7 million were consistent with the prior year. Margins were 3.1¢, or 4.2 percent higher than the prior year despite increased competitive pressure in the tank exchange business. The Company continues its aggressive approach to gaining market share. This strategic focus resulted in approximately 25,000 new customers, or approximately 4 percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased over 10 percent from prior year to over 53,700 locations. Overall, the increase in sales volume growth and margins per gallon resulted in an increase in gross margin dollars of $9.3 million. The Company’s ongoing commitment to investing in the business led to higher operating expenses during the quarter which were largely associated with serving over 25,000 new customers, 5,000 new tank exchange locations and additional non-transport gallons sold. As a result of this investment and the growth in sales volumes, operating, general and administrative expenses in our Propane segment were $5.6 million higher than the prior year.

Liquidity of $236.8 million at January 31, 2019 resulted from $196.2 million of available borrowing capacity on the Company’s secured credit facility and $40.6 million of cash.

“We continue to pursue our strategy to invest in the growth of the business and are achieving success faster than anticipated,” said James E. Ferrell, Interim Chief Executive Officer and President of Ferrellgas. “We are committed to growing market share organically and through acquisitions. We continue the successful integration of Blue Rhino independent distributors as we capture more EBITDA from this business. We continue to invest in our best-in-class fleet. Additionally, continued favorable weather led to extremely strong performance in February that we expect to continue through the midpoint of our third quarter.”

As previously announced, the Company indefinitely suspended its quarterly cash distribution as a result of not meeting the required fixed charge coverage ratio contained in the senior unsecured notes due 2020.

In addition to solidifying the Company’s liquidity with the fourth quarter 2018 closing of the $575 million secured credit facility and extension of its accounts receivable securitization facility and cash from 2018 announced asset sales, the Company continues to make progress in evaluating options to address its leverage. 

“Our Company is focused on growth and operational excellence,” said Ferrell. “We have the liquidity to be flexible and continue this focused effort and I expect to resolve our leverage situation to the benefit of our Company for continued success.”

About Ferrellgas
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico. Ferrellgas employees indirectly own 22.8 million common units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on September 27, 2018. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.

Forward Looking Statements
Statements in this release concerning expectations for the future are forward-looking statements. A variety of known and unknown risks, uncertainties and other factors could cause results, performance, and expectations to differ materially from anticipated results, performance, and expectations. These risks, uncertainties, and other factors include those discussed in the Form 10-K of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2018, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contacts

William Ruisinger, Interim Chief Financial Officer – billruisinger@ferrellgas.com 816-792-7914

FERRELLGAS PARTNERS, L.P.   AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands, except unit data)  
(unaudited)  
             

ASSETS
  January 31, 2019   July 31, 2018  
             
Current Assets:          
Cash and cash equivalents   $   40,647     $   119,311    
Accounts and notes receivable, net (including $201,717 and $120,079 of accounts receivable pledged as collateral at January 31, 2019 and July 31, 2018, respectively)     203,164       126,054    
Inventories     89,784       83,694    
Prepaid expenses and other current assets     36,616       34,862    
Total Current Assets     370,211       363,921    
             
Property, plant and equipment, net     584,334       557,723    
Goodwill, net     247,478       246,098    
Intangible assets, net     113,558       120,951    
Other assets, net     72,539       74,588    
Total Assets   $  1,388,120     $  1,363,281    
             
             
LIABILITIES AND PARTNERS' DEFICIT          
             
Current Liabilities:          
Accounts payable   $   63,639     $   46,820    
Short-term borrowings       -         32,800    
Collateralized note payable     140,000       58,000    
Other current liabilities     147,253       142,025    
Total Current Liabilities     350,892       279,645    
             
Long-term debt (a)     2,083,031       2,078,637    
Other liabilities     37,547       39,476    
Contingencies and commitments          
             
Partners Deficit:            
Common unitholders (97,152,665 units outstanding at January 31, 2019 and July 31, 2018)     (997,154 )     (978,503 )  
General partner unitholder (989,926 units outstanding at January 31, 2019 and July 31, 2018)     (69,981 )     (69,792 )  
Accumulated other comprehensive income (loss)     (9,049 )     20,510    
Total Ferrellgas Partners, L.P. Partners' Deficit     (1,076,184 )     (1,027,785 )  
Noncontrolling interest     (7,166 )     (6,692 )  
Total Partners' Deficit     (1,083,350 )     (1,034,477 )  
Total Liabilities and Partners' Deficit   $  1,388,120     $  1,363,281    
             
(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $357 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.  


FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
   
(in thousands, except per unit data)  
(unaudited)  
      Three months ended     Six months ended     Twelve months ended    
      January 31   January 31   January 31  
        2019       2018       2019       2018       2019       2018    
Revenues:                          
Propane and other gas liquids sales   $  550,112     $  592,239     $  885,078     $   894,997     $  1,633,057     $  1,533,635    
Midstream operations       -         117,276         -          238,036         44,283         499,908    
Other     23,265       45,641       40,608       76,778       111,677       147,753    
Total revenues     573,377       755,156       925,686       1,209,811       1,789,017       2,181,296    
                             
Cost of sales:                          
Propane and other gas liquids sales     311,531       362,918       515,667       542,433       946,648       882,347    
Midstream operations       -        107,067         -        215,192       40,367       462,965    
Other     3,422       20,787       6,469       34,489       40,634       69,353    
                             
Gross profit       258,424       264,384       403,550       417,697       761,368       766,631    
                             
Operating expense     121,219       123,716       231,550       234,178       469,120       448,428    
Depreciation and amortization expense     19,605       25,485       38,597       51,217       89,175       102,759    
General and administrative expense     16,342       14,891       30,521       28,055       56,867       51,124    
Equipment lease expense     8,415       6,954       16,278       13,695       30,855       28,054    
Non-cash employee stock ownership plan compensation charge     1,944       4,031       4,692       7,993       10,558       16,382    
Asset impairments       -         10,005         -         10,005         -         10,005    
Loss on asset sales and disposals     2,216       39,249       6,720       40,144       153,975       48,133    
                             
Operating income (loss)     88,683       40,053       75,192       32,410       (49,182 )     61,746    
                             
Interest expense     (44,891 )     (42,673 )     (88,769 )     (83,480 )     (173,756 )     (163,718 )  
Other income, net     86       684       105       1,195       (162 )     1,398    
                             
Earnings (loss) before income tax benefit     43,878       (1,936 )     (13,472 )     (49,875 )     (223,100 )     (100,574 )  
                             
Income tax expense (benefit)     3       (162 )       161         215         (2,732 )       (926 )  
                             
Net earnings (loss)     43,875       (1,774 )     (13,633 )     (50,090 )     (220,368 )     (99,648 )  
                             
Net earnings (loss) attributable to noncontrolling interest (b)     531       69       38       (332 )     (1,874 )     (658 )  
                                                   
                             
Net earnings (loss) attributable to Ferrellgas Partners, L.P.       43,344         (1,843 )       (13,671 )       (49,758 )       (218,494 )       (98,990 )  
                             
Less: General partner's interest in net earnings (loss)     433       (19 )       (137 )       (498 )       (2,185 )       (990 )  
                             
Common unitholders' interest in net earnings (loss)   $   42,911     $   (1,824 )   $   (13,534 )   $   (49,260 )   $   (216,309 )   $   (98,000 )  
                             
Earnings (loss) Per Common Unit                          
Basic and diluted net earnings (loss) per common unitholders' interest   $   0.44     $   (0.02 )   $   (0.14 )   $   (0.51 )   $   (2.23 )   $   (1.01 )  
                             
Weighted average common units outstanding - basic     97,152.7       97,152.7       97,152.7       97,152.7       97,152.7       97,152.7    
                             
                             
Supplemental Data and Reconciliation of Non-GAAP Items:  
                             
      Three months ended     Six months ended     Twelve months ended    
      January 31   January 31   January 31  
        2019       2018       2019       2018       2019       2018    
                             
Net earnings (loss) attributable to Ferrellgas Partners, L.P.   $   43,344     $   (1,843 )   $   (13,671 )   $   (49,758 )   $   (218,494 )   $   (98,990 )  
Income tax expense (benefit)       3         (162 )       161         215         (2,732 )       (926 )  
Interest expense     44,891       42,673       88,769       83,480       173,756       163,718    
Depreciation and amortization expense     19,605       25,485       38,597       51,217       89,175       102,759    
EBITDA      107,843         66,153        113,856         85,154         41,705         166,561    
Non-cash employee stock ownership plan compensation charge       1,944       4,031         4,692         7,993       10,558       16,382    
Asset impairments       -         10,005         -         10,005         -         10,005    
Loss on asset sales and disposal       2,216       39,249         6,720         40,144       153,975       48,133    
Other income, net       (86 )     (684 )       (105 )       (1,195 )     162       (1,398 )  
Severance costs $690 included in operating costs for the three, six and twelve months ended period January 31, 2019 and $910 included in general and administrative costs for the three, six and twelve months ended January 31, 2019. Also includes $358 in operating costs for the six and twelve months ended period January 31, 2018 and $1,305 included in general and administrative costs for the six and twelve months ended January 31, 2018.       1,600         -         1,600         1,663         1,600         1,663    
Legal fees and settlements       5,608         2,118         9,172         2,118         13,119         2,118    
Multi-employer pension plan withdrawal settlement       -         -         1,524         -         1,524         -    
Exit costs associated with contracts - Midstream dispositions       -         -         -         -         11,804         -    
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $(986) included in operating expense for the twelve months ended January 31, 2018. Also includes $(314), $1,293 and $1,037 included in midstream operations cost of sales for the three, six and twelve months ended January 31, 2018, respectively.        -         (314 )       -         1,293         -         51    
Net earnings (loss) attributable to noncontrolling interest (b)     531       69       38       (332 )     (1,874 )     (658 )  
Adjusted EBITDA (c)     119,656       120,627       137,497       146,843       232,573       242,857    
Net cash interest expense (d)     (41,679 )     (39,734 )     (82,578 )     (77,791 )     (165,679 )     (153,049 )  
Maintenance capital expenditures (e)     (26,147 )     (4,640 )     (31,532 )     (13,344 )     (45,805 )     (23,203 )  
Cash refund from (paid for) taxes     4       (6 )     2       (12 )     305       (296 )  
Proceeds from certain asset sales     899       2,999       1,960       4,207       6,956       8,126    
Distributable cash flow attributable to equity investors (f)     52,733       79,246       25,349       59,903       28,350       74,435    
Distributable cash flow attributable to general partner and non-controlling interest     1,055       1,585       507       1,198       567       1,489    
Distributable cash flow attributable to common unitholders (g)     51,678       77,661       24,842       58,705       27,783       72,946    
Less: Distributions paid to common unitholders           9,716       9,715       19,431       29,145       38,861    
Distributable cash flow excess/(shortage)   $ 51,678     $ 67,945     $ 15,127     $ 39,274     $ (1,362 )   $ 34,085    
                             
Propane gallons sales                          
Retail - Sales to End Users     239,044       235,071       368,711       354,365       651,314       606,469    
Wholesale - Sales to Resellers     70,655       74,942       119,615       128,371       231,454       236,480    
Total propane gallons sales     309,699       310,013       488,326       482,736       882,768       842,949    
                                                   
                         
                         
(b) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.                                              
(c)





Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., less the sum of the following: income tax expense (benefit), interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, asset impairments, loss on asset sales and disposal, other income, net, severance expense, legal fees and settlements, multi-employer pension plan withdrawal settlement, exit costs associated with contracts - Midstream dispositions, unrealized (non-cash) loss (gain) on changes in fair value of derivatives, and net earnings (loss) attributable to noncontrolling interest.  Management believes the presentation of this measure is relevant and useful, because it allows investors to view the partnership's performance in a manner similar to the method management uses, adjusted for items management believes makes it easier to compare its results with other companies that have different financing and capital structures. This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.   
(d) Net cash interest expense is the sum of interest expense less non-cash interest expense and other expense, net. This amount includes interest expense related to the accounts receivable securitization facility.  
(e) Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.  
(f)




Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for taxes plus proceeds from certain asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to equity investors. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to distributable cash flow attributable to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.  
(g)





Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to common unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow attributable to common unitholders, as management defines it, may not be comparable to distributable cash flow attributable to common unitholders or similarly titled measurements used by other corporations and partnerships. Items added to our calculation of distributable cash flow attributable to common unit holders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to common unitholders may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.  


Is your business listed correctly on America’s largest city directory network of 1,000 portals?