Ferrellgas Partners, L.P. Reports First Quarter Fiscal 2023 Results

  • Financial Highlights

    • Revenues for the first fiscal quarter increased $18.8 million, or 5% higher, compared to the prior year period.

    • Gross Profit for the first fiscal quarter increased $25.1 million, or 15% higher, compared to the prior year period.

    • Margin per gallon for the first fiscal quarter increased $0.14, or 13% higher, compared to the prior year period.

    • In the first fiscal quarter, operating income increased $7.4 million, or 60% higher, compared to the prior year period with a corresponding 58% favorable increase of $0.04 in operating income per gallon.

    • Net loss attributable to Ferrellgas Partners, L.P. was $4.5 million for the first fiscal quarter compared to a net loss attributable to Ferrellgas Partners, L.P. of $8.6 million in the prior year period.

  • Company Highlights

    • Ferrellgas welcomed its newest acquisitions to the Ferrellgas Family during the first fiscal quarter: Brown’s Gas in Marysville, California and Dubben Gas Service in Delhi, New York.

    • The Company announced its continued partnership with Operation Warm, a national nonprofit organization providing winter coats to children in need across the United States and Canada.

    • The Company supported Operation BBQ Relief in response to Hurricane Ian.

    • Over 150 employees received Ferrellgas Flame Awards in the first fiscal quarter for exemplary performance in the areas of Safety, Customer Service, Innovation, and Leadership.

LIBERTY, Mo., Dec. 09, 2022 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its first fiscal quarter ended October 31, 2022.

"Our employees are the key to our growth. It’s their ideas, innovations and relationships that are key to our continued success and the growth of this company,” said James E. Ferrell, Chief Executive Officer and President. “Our almost 4,500 full-time, seasonal and part-time employees and contractors work each day to find opportunities to grow demand for clean, portable, affordable propane.”

The Company’s growth strategy drove an increase of 1% in gallons sold in the first fiscal quarter. The growth was additionally aided by weather that was favorable compared to the prior year period. The Company’s inventory position management helps to mitigate its risk from price fluctuations tied to customers’ fixed price purchases of propane. Additionally, as a technology enabled logistics company, Ferrellgas continues to benefit from its nationwide footprint and focus on continuous improvement.

Revenues increased $18.8 million, or 5% higher, for the first fiscal quarter. Cost of sales was favorable with a decrease of $6.3 million, or 3% lower, for the first fiscal quarter. Gross profit increased $25.1 million, or 15% higher, for the first fiscal quarter. Margin per gallon increased by $0.14, or 13% higher, compared to the prior year period. Operating income per gallon increased $0.04, or 58% higher, compared to the prior year period. Likewise, operating income for the first fiscal quarter increased $7.4 million, or 60% higher, compared to the prior year period.

For the first fiscal quarter, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $4.5 million compared to a net loss of $8.6 million in the prior year period. Adjusted EBITDA, a non-GAAP financial measure, increased by $12.4 million, or 33% higher, to $49.7 million in the first fiscal quarter compared to $37.3 million in the prior year period.

“In these times of high inflation and other challenges, the Company chose to show its commitment to its most valuable resource, its employee-owners, through an extensive employee benefit package in which no increase in cost was passed on, but instead was absorbed by the Company,” Ferrell added. “We take care of our hard working, dedicated employee-owners so they in turn can take care of our customers. I could not be more proud.”

In conjunction with the Company’s Ferrellgas Century Project, its commitment to various Environmental, Social and Governance (ESG) initiatives leading up to its 100th year in business in 2039, the Company announced the continuation of its partnership with Operation Warm, a national nonprofit providing winter coats to families facing hardship. The organization has served more than 4.6 million children in the United States and Canada since its founding in 1998. The collaboration is a perfect fit as Ferrellgas seeks to support the families it serves in communities across the country, providing warmth and comfort to those in need.

As a category 4 hurricane tracked toward Florida, the Company brought its national logistics capabilities to bear. Blue Rhino production facilities staged extra Blue Rhino tanks. The Ferrellgas supply team ensured an ample supply of propane was on hand. Drivers for both Blue Rhino and Ferrellgas came in from other parts of the Company. As a result, once Hurricane Ian passed, our operations teams were able to serve the heavy demand of our customers without missing a beat. Meanwhile, using propane donated and delivered by both Blue Rhino and Ferrellgas, the nonprofit organization Operation BBQ Relief cooked over 865,000 meals for people affected by Hurricane Ian. At 38 days, it was their largest and longest deployment to date and our Company was proud to partner with them.

On Friday, December 9, 2022, the Company will conduct a teleconference on the Internet at https://edge.media-server.com/mmc/p/uduw53nd to discuss the results of operations for the first fiscal quarter ended October 31, 2022. The webcast of the teleconference will begin at 8:30 a.m. Central Time (9:30 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at InvestorRelations@ferrellgas.com.

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. Its Blue Rhino propane exchange brand is sold at more than 60,000 locations nationwide. Ferrellgas employees indirectly own 1.1 million Class A 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 30, 2022. 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, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2022, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contacts

Investor Relations – InvestorRelations@ferrellgas.com



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

(unaudited)

 

 

 

 

 

 

 

ASSETS

 

October 31, 2022

 

July 31, 2022

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents (including $11,132 and $11,208 of restricted cash at October 31, 2022 and July 31, 2022, respectively)

 

$

55,305

 

 

$

158,737

 

Accounts and notes receivable, net

 

 

158,674

 

 

 

150,395

 

Inventories

 

 

120,145

 

 

 

115,187

 

Price risk management asset

 

 

24,944

 

 

 

43,015

 

Prepaid expenses and other current assets

 

 

68,530

 

 

 

30,764

 

Total current assets

 

 

427,598

 

 

 

498,098

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

608,101

 

 

 

603,148

 

Goodwill, net

 

 

257,006

 

 

 

257,099

 

Intangible assets (net of accumulated amortization of $343,110 and $440,121 at October 31, 2022 and July 31, 2022, respectively)

 

 

105,924

 

 

 

97,638

 

Operating lease right-of-use assets

 

 

67,814

 

 

 

72,888

 

Other assets, net

 

 

71,151

 

 

 

79,244

 

Total assets

 

$

1,537,594

 

 

$

1,608,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

60,787

 

 

$

57,586

 

Broker margin deposit liability

 

 

20,108

 

 

 

32,805

 

Short-term borrowing

 

 

15,000

 

 

 

 

Current portion of long-term debt

 

 

2,442

 

 

 

1,792

 

Current operating lease liabilities

 

 

25,334

 

 

 

25,824

 

Other current liabilities

 

 

187,696

 

 

 

185,805

 

Total current liabilities

 

 

311,367

 

 

 

303,812

 

 

 

 

 

 

 

 

Long-term debt

 

 

1,451,659

 

 

 

1,450,016

 

Operating lease liabilities

 

 

43,009

 

 

 

47,231

 

Other liabilities

 

 

37,279

 

 

 

43,518

 

 

 

 

 

 

 

 

Contingencies and commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

Mezzanine equity:

 

 

 

 

 

 

Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at October 31, 2022 and July 31, 2022)

 

 

651,349

 

 

 

651,349

 

 

 

 

 

 

 

 

Equity (Deficit):

 

 

 

 

 

 

Limited partner unitholders

 

 

 

 

 

 

Class A (4,857,605 units outstanding at October 31, 2022 and July 31, 2022)

 

 

(1,249,702

)

 

 

(1,229,823

)

Class B (1,300,000 units outstanding at October 31, 2022 and July 31, 2022)

 

 

383,012

 

 

 

383,012

 

General partner unitholder (49,496 units outstanding at October 31, 2022 and July 31, 2022)

 

 

(71,521

)

 

 

(71,320

)

Accumulated other comprehensive (loss) income

 

 

(10,571

)

 

 

37,907

 

Total Ferrellgas Partners, L.P. deficit

 

 

(948,782

)

 

 

(880,224

)

Noncontrolling interest

 

 

(8,287

)

 

 

(7,587

)

Total deficit

 

 

(957,069

)

 

 

(887,811

)

Total liabilities, mezzanine and deficit

 

$

1,537,594

 

 

$

1,608,115

 



FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

October 31,

 

October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

$

385,844

 

 

$

372,704

 

 

$

2,031,019

 

 

$

1,760,507

 

Other

 

27,445

 

 

 

21,802

 

 

 

102,304

 

 

 

87,415

 

Total revenues

 

413,289

 

 

 

394,506

 

 

 

2,133,323

 

 

 

1,847,922

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

213,081

 

 

 

220,538

 

 

 

1,166,547

 

 

 

964,847

 

Other

 

4,776

 

 

 

3,610

 

 

 

13,675

 

 

 

12,671

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

195,432

 

 

 

170,358

 

 

 

953,101

 

 

 

870,404

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense - personnel, vehicle, plant & other

 

129,740

 

 

 

117,112

 

 

 

533,231

 

 

 

473,902

 

Operating expense - equipment lease expense

 

6,024

 

 

 

5,690

 

 

 

23,428

 

 

 

25,922

 

Depreciation and amortization expense

 

22,631

 

 

 

20,295

 

 

 

92,233

 

 

 

84,286

 

General and administrative expense

 

14,833

 

 

 

12,575

 

 

 

55,038

 

 

 

59,560

 

Non-cash employee stock ownership plan compensation charge

 

723

 

 

 

909

 

 

 

2,984

 

 

 

3,416

 

(Gain) loss on asset sales and disposals

 

1,680

 

 

 

1,410

 

 

 

(6,348

)

 

 

2,428

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

19,801

 

 

 

12,367

 

 

 

252,535

 

 

 

220,890

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(25,009

)

 

 

(25,395

)

 

 

(99,707

)

 

 

(144,785

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

(104,834

)

Other income, net

 

469

 

 

 

4,264

 

 

 

1,038

 

 

 

8,426

 

Reorganization expense - professional fees

 

 

 

 

 

 

 

 

 

 

(10,467

)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income tax expense

 

(4,739

)

 

 

(8,764

)

 

 

153,866

 

 

 

(30,770

)

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

18

 

 

 

96

 

 

 

903

 

 

 

750

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

(4,757

)

 

 

(8,860

)

 

 

152,963

 

 

 

(31,520

)

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to noncontrolling interest(a)

 

(212

)

 

 

(254

)

 

 

909

 

 

 

(565

)

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Ferrellgas Partners, L.P.

$

(4,545

)

 

$

(8,606

)

 

$

152,054

 

 

$

(30,955

)

 

 

 

 

 

 

 

 

 

 

 

 

Class A unitholders' interest in net loss

$

(20,751

)

 

$

(25,525

)

 

$

(13,996

)

 

$

(71,675

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per unitholders' interest

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per Class A Unit

$

(4.27

)

 

$

(5.25

)

 

$

(2.88

)

 

$

(14.76

)

Weighted average Class A Units outstanding - basic and diluted

 

4,858

 

 

 

4,858

 

 

 

4,858

 

 

 

4,858

 



Supplemental Data and Reconciliation of Non-GAAP Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

October 31,

 

October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net earnings (loss) attributable to Ferrellgas Partners, L.P.

$

(4,545

)

 

$

(8,606

)

 

$

152,054

 

 

$

(30,955

)

Income tax expense

 

18

 

 

 

96

 

 

 

903

 

 

 

750

 

Interest expense

 

25,009

 

 

 

25,395

 

 

 

99,707

 

 

 

144,785

 

Depreciation and amortization expense

 

22,631

 

 

 

20,295

 

 

 

92,233

 

 

 

84,286

 

EBITDA

 

43,113

 

 

 

37,180

 

 

 

344,897

 

 

 

198,866

 

Non-cash employee stock ownership plan compensation charge

 

723

 

 

 

909

 

 

 

2,984

 

 

 

3,416

 

(Gain) loss on asset sales and disposal

 

1,680

 

 

 

1,410

 

 

 

(6,348

)

 

 

2,428

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

104,834

 

Other income, net

 

(469

)

 

 

(4,264

)

 

 

(1,038

)

 

 

(8,426

)

Reorganization expense - professional fees

 

 

 

 

 

 

 

 

 

 

10,467

 

Severance costs include $2 and $90 in operating expense for the three and twelve months ended October 31, 2022, respectively. Also includes $8 and $282 in general and administrative expense for the three and twelve months ended October 31, 2022, respectively.

 

10

 

 

 

216

 

 

 

372

 

 

 

1,293

 

Legal fees and settlements related to non-core businesses

 

4,872

 

 

 

2,131

 

 

 

10,679

 

 

 

9,806

 

Provision for doubtful accounts related to non-core businesses

 

 

 

 

 

 

 

 

 

 

(500

)

Net earnings (loss) attributable to noncontrolling interest(a)

 

(212

)

 

 

(254

)

 

 

909

 

 

 

(565

)

Adjusted EBITDA(b)

 

49,717

 

 

 

37,328

 

 

 

352,455

 

 

 

321,619

 

Net cash interest expense(c)

 

(22,606

)

 

 

(19,119

)

 

 

(102,853

)

 

 

(127,556

)

Maintenance capital expenditures(d)

 

(5,832

)

 

 

(3,579

)

 

 

(19,272

)

 

 

(24,570

)

Cash paid for income taxes

 

(49

)

 

 

 

 

 

(1,067

)

 

 

(671

)

Proceeds from certain asset sales

 

752

 

 

 

641

 

 

 

4,224

 

 

 

4,529

 

Distributable cash flow attributable to equity investors(e)

 

21,982

 

 

 

15,271

 

 

 

233,487

 

 

 

173,351

 

Less: Distributions accrued or paid to preferred unitholders

 

17,966

 

 

 

17,345

 

 

 

65,908

 

 

 

41,369

 

Distributable cash flow attributable to general partner and non-controlling interest

 

(440

)

 

 

(305

)

 

 

(4,671

)

 

 

(3,467

)

Distributable cash flow attributable to Class A and B Unitholders(f)

 

3,576

 

 

 

(2,379

)

 

 

162,908

 

 

 

128,515

 

Less: Distributions paid to Class A and B Unitholders(g)

 

 

 

 

 

 

 

99,996

 

 

 

 

Distributable cash flow excess (shortage)(h)

$

3,576

 

 

$

(2,379

)

 

$

62,912

 

 

$

128,515

 

 

 

 

 

 

 

 

 

 

 

 

 

Propane gallons sales

 

 

 

 

 

 

 

 

 

 

 

Retail - Sales to End Users

 

118,396

 

 

 

115,825

 

 

 

626,887

 

 

 

629,864

 

Wholesale - Sales to Resellers

 

43,869

 

 

 

44,055

 

 

 

206,330

 

 

 

222,490

 

Total propane gallons sales

 

162,265

 

 

 

159,880

 

 

 

833,217

 

 

 

852,354

 

 

 

 

 

 

 

 

 

 

 

 

 


(a)

Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.

 

 

(b)

Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, (gain) loss on asset sales and disposals, loss on extinguishment of debt, other income, net, reorganization expense – professional fees, severance costs, legal fees and settlements related to non-core businesses, provision for doubtful accounts related to non-core businesses, 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 make it easier to compare its results with other companies that have different financing and capital structures.

 

 

 

Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.

 

 

(c)

Net cash interest expense is the sum of interest expense less non-cash interest expense and other income, net. This amount includes interest expense related to the terminated accounts receivable securitization facility.

 

 

(d)

Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment, and may from time to time include the purchase of assets that are typically leased.

 

 

(e)

Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for income 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, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to similarly titled measurements used by other companies. 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 should be viewed in conjunction with measurements that are computed in accordance with GAAP.

 

 

(f)

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

 

 

(g)

The Company did not pay any distributions to Class A Unitholders during any of the periods in fiscal 2023 or fiscal 2022.

 

 

(h)

Distributable cash flow excess (shortage) is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility or, previously, under our terminated accounts receivable securitization facility. Management considers Distributable cash flow excess (shortage) a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess (shortage), as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess (shortage) that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess (shortage) should be viewed in conjunction with measurements that are computed in accordance with GAAP.