Ferrellgas Partners Reports First-Quarter Results

OVERLAND PARK, Kan., Dec. 9, 2011 /PRNewswire/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest distributors of propane, today reported operating results for the fiscal first quarter ended October 31, 2011.

Propane sales for the quarter rose 17% to 196.3 million gallons despite temperatures during the period that were 17% warmer than normal and customer conservation resulting from wholesale propane costs that rose more than 33%. Revenues grew 35% to $538.4 million from $400.2 million, reflecting both the increased gallon sales and the sales price to consumers resulting from the higher wholesale cost of propane.

"Our first quarter is traditionally slow due to the seasonality of the retail propane business, and that was certainly the case again this year," President and Chief Executive Officer Steve Wambold said. "We were extremely pleased, however by our growth efforts which lead the industry helping to offset the continued impact of customer conservation on sales volumes and lesser retail margins resulting from sharply higher propane costs."

Gross profit was $128.7 million, down $2.1 million while operating expenses were $99.4 million, improving $0.06 per gallon delivered.  General and administrative expenses were reduced 10% to $9.4 million primarily reflecting prior year reductions in back office expenses.  Equipment lease expense was materially unchanged at $3.5 million.

"Our focus remains on gaining market share through organic sales and marketing, supplemented by strategic acquisitions in retail propane" said Wambold.  "In the quarter, these efforts along with a continued focus on driving operational efficiencies allowed us to better utilize our fixed overhead while positioning us well for the upcoming winter heating season."  Wambold concluded by saying, "As our Blue Rhino operations move into their offseason, we have continued to see growth in propane tank exchange as over the last 12 months we have increased our nation-wide footprint by adding 1,400 retail locations, growing sales by more than 4%."

Adjusted EBITDA and the seasonal Net Loss for the quarter were $16.4 million and $32.9 million, respectively compared to $21.9 million and $28.3 million, respectively in the prior year's quarter.

The partnership recently announced the extension of its $400 million secured credit facility to September 2016, in addition to two acquisitions of retail propane operations with customers in California and Texas.

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves approximately one million customers in all 50 states, the District of Columbia and Puerto Rico.  Ferrellgas employees indirectly own more than 20 million common units of the partnership through an employee stock ownership plan.  More information about the partnership can be found online at www.ferrellgas.com.

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 are 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, 2011, and other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contact:
Tom Colvin, Investor Relations, 913-661-1530
Scott Brockelmeyer, Media Relations, 913-661-1830

FERRELLGAS PARTNERS, L.P.  AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

October 31, 2011

 

July 31, 2011

 

 

 

 

 

Current Assets:

 

 

 

 

  Cash and cash equivalents

 

$               13,134

 

$                 7,437

  Accounts and notes receivable, net (including $139,451 and $112,509 of

 

 

 

 

    accounts receivable pledged as collateral at October 31, 2011

 

 

 

 

    and July 31, 2011, respectively)

 

205,608

 

159,532

  Inventories

 

184,530

 

136,139

  Prepaid expenses and other current assets

 

30,488

 

23,885

    Total Current Assets

 

433,760

 

326,993

 

 

 

 

 

Property, plant and equipment, net

 

642,711

 

642,205

Goodwill

 

248,944

 

248,944

Intangible assets, net

 

202,778

 

204,136

Other assets, net

 

40,043

 

38,308

    Total Assets

 

$          1,568,236

 

$          1,460,586

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS' CAPITAL

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

  Accounts payable

 

$             115,408

 

$               67,541

  Short-term borrowings

 

126,071

 

64,927

  Collateralized note payable

 

81,000

 

61,000

  Other current liabilities (a)

 

135,317

 

104,813

    Total Current Liabilities

 

457,796

 

298,281

 

 

 

 

 

Long-term debt (a)

 

1,069,430

 

1,050,920

Other liabilities

 

23,255

 

23,068

Contingencies and commitments

 

-

 

-

 

 

 

 

 

Partners' Capital: 

 

 

 

 

 Common unitholders (75,966,353 units outstanding at both

 

 

 

 

   October 31, 2011 and July 31, 2011)

 

74,739

 

139,614

 General partner unitholder (767,337 units outstanding at both

 

 

 

 

   October 31, 2011 and July 31, 2011)

 

(59,315)

 

(58,660)

 Accumulated other comprehensive income

 

273

 

4,633

    Total Ferrellgas Partners, L.P. Partners' Capital

 

15,697

 

85,587

    Noncontrolling Interest

 

2,058

 

2,730

    Total Partners' Capital

 

17,755

 

88,317

    Total Liabilities and Partners' Capital

 

$          1,568,236

 

$          1,460,586

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $182 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

CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE THREE AND TWELVE MONTHS ENDED OCTOBER 31, 2011 AND 2010

(in thousands, except per unit data)

(unaudited)

 

 

Three months ended 

 

Twelve months ended

 

 

October 31

 

October 31

 

 

2011

 

2010

 

2011

 

2010

Revenues:

 

 

 

 

 

 

 

 

  Propane and other gas liquids sales

 

$          514,219

 

$    368,623

 

$ 2,357,853

 

$ 1,941,275

  Other

 

24,207

 

31,569

 

203,596

 

205,907

    Total revenues

 

538,426

 

400,192

 

2,561,449

 

2,147,182

 

 

 

 

 

 

 

 

 

Cost of product sold:

 

 

 

 

 

 

 

 

  Propane and other gas liquids sales

 

403,122

 

256,486

 

1,755,980

 

1,313,100

  Other

 

6,626

 

12,858

 

118,238

 

115,316

 

 

 

 

 

 

 

 

 

Gross profit 

 

128,678

 

130,848

 

687,231

 

718,766

 

 

 

 

 

 

 

 

 

Operating expense

 

99,411

 

95,260

 

411,432

 

405,986

Depreciation and amortization expense

 

20,674

 

20,375

 

82,785

 

82,339

General and administrative expense 

 

9,364

 

10,387

 

51,137

 

44,699

Equipment lease expense

 

3,529

 

3,649

 

14,315

 

13,316

Non-cash employee stock ownership plan compensation charge

 

2,579

 

2,444

 

10,292

 

9,764

Non-cash stock and unit-based compensation charge (b)

 

2,917

 

1,013

 

15,392

 

6,093

Loss (gain) on disposal of assets and other

 

309

 

(232)

 

4,174

 

6,591

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(10,105)

 

(2,048)

 

97,704

 

149,978

 

 

 

 

 

 

 

 

 

Interest expense

 

(23,387)

 

(26,877)

 

(98,395)

 

(105,466)

Loss on extinguishment of debt

 

-

 

-

 

(46,962)

 

(3,408)

Other income (expense), net

 

(33)

 

178

 

356

 

(1,237)

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

(33,525)

 

(28,747)

 

(47,297)

 

39,867

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

(630)

 

(482)

 

1,093

 

1,856

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

(32,895)

 

(28,265)

 

(48,390)

 

38,011

 

 

 

 

 

 

 

 

 

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

 

(291)

 

(222)

 

(181)

 

680

 

 

 

 

 

 

 

 

 

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

 

(32,604)

 

(28,043)

 

(48,209)

 

37,331

 

 

 

 

 

 

 

 

 

Less: General partner's interest in net earnings (loss)

 

(326)

 

(280)

 

(482)

 

373

 

 

 

 

 

 

 

 

 

Common unitholders' interest in net earnings (loss)

 

$          (32,278)

 

$     (27,763)

 

$     (47,727)

 

$      36,958

 

 

 

 

 

 

 

 

 

Earnings (loss) Per Unit

 

 

 

 

 

 

 

 

Basic and diluted net earnings (loss) per common unitholders' interest

 

$              (0.42)

 

$         (0.40)

 

$         (0.65)

 

$          0.53

 

 

 

 

 

 

 

 

 

Weighted average common units outstanding

 

75,966.4

 

69,559.6

 

73,928.5

 

69,506.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data and Reconciliation of Non-GAAP Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Twelve months ended

 

 

October 31

 

October 31

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$          (32,604)

 

$     (28,043)

 

$     (48,209)

 

$      37,331

  Income tax expense (benefit)

 

(630)

 

(482)

 

1,093

 

1,856

  Interest expense

 

23,387

 

26,877

 

98,395

 

105,466

  Depreciation and amortization expense

 

20,674

 

20,375

 

82,785

 

82,339

EBITDA

 

10,827

 

18,727

 

134,064

 

226,992

  Loss on extinguishment of debt

 

-

 

-

 

46,962

 

3,408

  Non-cash employee stock ownership plan compensation charge

 

2,579

 

2,444

 

10,292

 

9,764

  Non-cash stock and unit-based compensation charge (b)

 

2,917

 

1,013

 

15,392

 

6,093

  Loss (gain) on disposal of assets and other

 

309

 

(232)

 

4,174

 

6,591

  Other income (expense), net

 

33

 

(178)

 

(356)

 

1,237

  Litigation reserve and related legal fees

 

-

 

332

 

11,788

 

332

  Net earnings (loss) attributable to noncontrolling interest

 

(291)

 

(222)

 

(181)

 

680

Adjusted EBITDA (c)

 

16,374

 

21,884

 

222,135

 

255,097

  Net cash interest expense (d)

 

(22,031)

 

(23,722)

 

(91,662)

 

(97,312)

  Maintenance capital expenditures (e)

 

(5,327)

 

(4,412)

 

(16,352)

 

(14,267)

  Cash paid for taxes

 

(3)

 

(83)

 

(511)

 

(1,633)

  Proceeds from asset sales

 

1,363

 

2,078

 

5,279

 

9,365

Distributable cash flow to equity investors (f)

 

$            (9,624)

 

$       (4,255)

 

$    118,889

 

$    151,250

 

 

 

 

 

 

 

 

 

Propane gallons sales

 

 

 

 

 

 

 

 

  Retail - Sales to End Users

 

132,848

 

120,561

 

667,695

 

669,050

  Wholesale - Sales to Resellers

 

63,421

 

47,776

 

259,920

 

242,263

  Total propane gallons sales

 

196,269

 

168,337

 

927,615

 

911,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)  Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.

 

 

 

 

(b)  Non-cash stock and unit-based compensation charges consist of the following:

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Twelve months ended

 

 

October 31

 

October 31

 

 

2011

 

2010

 

2011

 

2010

      Operating expense

 

$              1,167

 

$           136

 

$        4,788

 

$        1,533

      General and administrative expense

 

1,750

 

877

 

10,604

 

4,560

      Total

 

$              2,917

 

$         1,013

 

$      15,392

 

$        6,093

 

 

 

 

 

 

 

 

 


(c) 

Adjusted EBITDA is calculated as earnings (loss) before income tax expense (benefit), interest expense, depreciation and amortization expense, loss on extinguishment of debt, non-cash employee stock ownership plan compensation charge, non-cash stock and unit-based compensation charge, loss (gain) on disposal of assets and other, other income (expense), net, a litigation reserve and related legal fees 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 income (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) 

Management considers Distributable cash flow to equity investors a meaningful non-GAAP measure of the partnership's ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow or similarly titled measures used by other corporations and partnerships.

 

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

 

 

 

CONSOLIDATED STATEMENTS OF EARNINGS

 

 

 

FOR THE THREE AND TWELVE MONTHS ENDED OCTOBER 31, 2011 AND 2010

 

 

 

(in thousands, except per unit data)

 

 

 

(unaudited)

 

 

 

 

 

Three months ended Oct 31,

 

 

 

 

 

Twelve months ended Oct 31,

 

 

 

 

 

 

$ Change

%

 

 

 

$ Change

%

 

 

2011

 

2010

 

F (U)

Change

 

 

2011

 

2010

 

F (U)

Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Propane and other gas liquids sales

 

$        514,219

 

$368,623

 

$145,596

39%

 

 

$   2,357,853

 

$    1,941,275

 

$416,578

21%

  Other

 

24,207

 

31,569

 

(7,362)

(23%)

 

 

203,596

 

205,907

 

(2,311)

(1%)

    Total revenues

 

538,426

 

400,192

 

138,234

35%

 

 

2,561,449

 

2,147,182

 

414,267

19%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product sold:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Propane and other gas liquids sales

 

403,122

 

256,486

 

(146,636)

(57%)

 

 

1,755,980

 

1,313,100

 

(442,880)

(34%)

  Other

 

6,626

 

12,858

 

6,232

48%

 

 

118,238

 

115,316

 

(2,922)

(3%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit 

 

128,678

 

130,848

 

(2,170)

(2%)

 

 

687,231

 

718,766

 

(31,535)

(4%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense

 

99,411

 

95,260

 

(4,151)

(4.4%)

 

 

411,432

 

405,986

 

(5,446)

(1%)

Depreciation and amortization expense

 

20,674

 

20,375

 

(299)

(1%)

 

 

82,785

 

82,339

 

(446)

(1%)

General and administrative expense 

 

9,364

 

10,387

 

1,023

10%

 

 

51,137

 

44,699

 

(6,438)

(14%)

Equipment lease expense

 

3,529

 

3,649

 

120

3%

 

 

14,315

 

13,316

 

(999)

(8%)

Employee stock ownership plan compensation charge

 

2,579

 

2,444

 

(135)

(6%)

 

 

10,292

 

9,764

 

(528)

(5%)

Unit and stock based non-cash compensation charge

 

2,917

 

1,013

 

(1,904)

(188%)

 

 

15,392

 

6,093

 

(9,299)

(153%)

Loss on disposal of assets and other

 

309

 

(232)

 

(541)

233%

 

 

4,174

 

6,591

 

2,417

37%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(10,105)

 

(2,048)

 

(8,057)

(393%)

 

 

97,704

 

149,978

 

(52,274)

(35%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(23,387)

 

(26,877)

 

3,490

13%

 

 

(98,395)

 

(105,466)

 

7,071

7%

  Loss on extinguishment of debt

 

0

 

0

 

0

-

 

 

(46,962)

 

(3,408)

 

(43,554)

(1278%)

Other income (expense), net

 

(33)

 

178

 

(211)

(119%)

 

 

356

 

(1,237)

 

1,593

(129%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

(33,525)

 

(28,747)

 

(4,778)

(17%)

 

 

(47,297)

 

39,867

 

(87,164)

(219%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

(630)

 

(482)

 

(148)

31%

 

 

1,093

 

1,856

 

(763)

41%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(32,895)

 

(28,265)

 

(4,630)

(16%)

 

 

(48,390)

 

38,011

 

(86,401)

(227%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interest

 

(291)

 

(222)

 

(69)

(31%)

 

 

(181)

 

680

 

(861)

(127%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(32,604)

 

(28,043)

 

(4,561)

(16%)

 

 

(48,209)

 

37,331

 

(85,540)

(229%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: General partner's interest in net income (loss)

 

(326)

 

(280)

 

(46)

(16%)

 

 

(482)

 

373

 

(855)

229%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders' interest in net income (loss)

 

$         (32,278)

 

$ (27,763)

 

$     (4,515)

(16%)

 

 

$       (47,727)

 

$         36,958

 

$    (84,685)

(229%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common unit available to common unitholders 

 

$              (0.42)

 

$     (0.40)

 

$        (0.02)

5%

 

 

$            (0.66)

 

$             0.53

 

$        (1.19)

(225%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common units outstanding

 

75,966.4

 

69,559.6

 

 

 

 

 

72,313.6

 

69,241.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data and Reconciliation of Non-GAAP Items:

 

 

 

 

 

Three months ended Oct 31,

 

 

 

 

 

Twelve months ended Oct 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2010

 

Change

% Change

 

 

2011

 

2010

 

Change

% Change

Propane gallons sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Retail - Sales to End Users

 

132,848

 

120,561

 

12,287

10%

 

 

667,695

 

669,050

 

(1,355)

(0%)

  Wholesale - Sales to Resellers

 

63,421

 

47,776

 

15,645

33%

 

 

259,920

 

242,263

 

17,657

7%

Propane gallons 

 

196,269

 

168,337

 

27,932

17%

 

 

927,615

 

911,313

 

16,302

2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$          (32,604)

 

$ (28,043)

 

$      (4,561)

(16%)

 

 

$        (48,209)

 

$         37,331

 

$    (85,540)

229%

  Income tax expense (benefit)

 

(630)

 

(482)

 

(148)

31%

 

 

1,093

 

1,856

 

(763)

(41%)

  Interest expense

 

23,387

 

26,877

 

(3,490)

13%

 

 

98,395

 

105,466

 

(7,071)

7%

  Depreciation and amortization expense

 

20,674

 

20,375

 

299

(1%)

 

 

82,785

 

82,339

 

446

(1%)

EBITDA

 

10,827

 

18,727

 

(7,900)

(42%)

 

 

134,064

 

226,992

 

(92,928)

(41%)

  Loss on extinguishment of debt

 

0

 

0

 

0

-

 

 

46,962

 

3,408

 

43,554

(1278%)

  Non-cash employee stock ownership plan compensation charge

 

2,579

 

2,444

 

135

(6%)

 

 

11,788

 

332

 

11,456

(3451%)

  Non-cash stock and unit-based compensation charge (b)

 

2,917

 

1,013

 

1,904

(188%)

 

 

(181)

 

680

 

(861)

127%

  Loss on disposal of assets and other

 

309

 

(232)

 

541

(233%)

 

 

4,174

 

6,591

 

(2,417)

(37%)

  Other income (expense), net

 

33

 

(178)

 

211

119%

 

 

(356)

 

1,237

 

(1,593)

129%

  Litigation reserve and related legal fees

 

0

 

332

 

(332)

(100%)

 

 

10,292

 

9,764

 

528

5%

  Net loss attributable to noncontrolling interest

 

(291)

 

(222)

 

(69)

31%

 

 

(181)

 

680

 

(861)

(127%)

Adjusted EBITDA (c)

 

16,374

 

21,884

 

(5,510)

(25%)

 

 

206,562

 

249,684

 

(43,122)

(17%)

  Net cash interest expense (d)

 

(22,031)

 

(23,722)

 

1,691

7%

 

 

(91,662)

 

(97,312)

 

5,650

6%

 Maintenance capital expenditures (e)

 

(5,327)

 

(4,412)

 

(915)

(21%)

 

 

(16,352)

 

(14,267)

 

(2,085)

(15%)

 Cash paid for taxes

 

(3)

 

(83)

 

80

96%

 

 

(511)

 

(1,633)

 

1,122

69%

  Proceeds from asset sales

 

1,363

 

2,078

 

(715)

(34%)

 

 

5,279

 

9,365

 

(4,086)

(44%)

Distributable cash flow to equity investors (f)

 

$            (9,624)

 

$   (4,255)

 

$      (5,369)

(126%)

 

 

$       103,316

 

$       145,837

 

$    (42,521)

29%

 

 

 

 

 

SOURCE Ferrellgas Partners, L.P.



RELATED LINKS
http://www.ferrellgas.com

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