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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.

/EIN News/ -- 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.


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