Ferrellgas Partners Reports Fourth-Quarter Results

Sep 26, 2011, 07:00 ET from Ferrellgas Partners, L.P.

OVERLAND PARK, Kan., Sept. 26, 2011 /PRNewswire/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest distributors of propane, today reported operating results for the fiscal fourth quarter ended July 31.

Revenues for the quarter rose 27% to $449.7 million from $353.8 million the year before while gross profit declined slightly to $126.3 million reflecting the impact of sharply higher commodity prices on margins and customer demand. Despite continued customer conservation caused by a 46% increase in the wholesale cost of propane, fourth-quarter propane sales volumes grew by more than 6%.

President and Chief Executive Officer Steve Wambold commented, "Despite the continued impact of rising wholesale propane prices, we remain focused on both retaining and growing our customer base as evidenced by our fourth quarter sales volumes." Wambold further commented, "We were very pleased to announce the acquisition of Economy Propane last week furthering our efforts to expand our operations both organically as well as through acquisition."

Common unitholders' interest in net loss for the quarter was in-line at $40.5 million, or $0.53 per common unit, compared to the prior year net loss of $40.1 million, or $0.58 per common unit reflecting the seasonality in operations.

Wambold noted, "In addition to profitable growth, we remain focused on expense control driving shareholder value.  We were again successful this quarter in controlling our operating expenses in the face of increased volume sales."

Operating expense for the quarter of $100.6 million reflected a 5% reduction in expense per gallon sold while general and administrative and equipment lease expense, as expected increased slightly to $12.9 million and $3.6 million, respectively. Interest expense was reduced by more than 10% to $23.7 million, primarily reflecting the positive impact of recent debt re-financings. For the quarter, Adjusted EBITDA was $10.1 million compared with $15.0 million achieved the year before.

Wambold concluded, "We continue to be pro-active in the financial markets, announcing this morning the re-financing of our $400 million working capital facility.  The renewed facility both extends our working capital line of credit until September 2016 and reflects favorable market borrowing rates which will continue to reduce our annual interest expense."

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

July 31, 2011

July 31, 2010

Current Assets:

 Cash and cash equivalents

$                           7,437

$                         11,401

 Accounts and notes receivable, net (including $112,509 and $0 of

   accounts receivable pledged as collateral at July 31, 2011

   and July 31, 2010, respectively)

159,532

89,234

 Inventories

136,139

166,911

 Prepaid expenses and other current assets

23,885

13,842

   Total Current Assets

326,993

281,388

Property, plant and equipment, net

642,205

652,768

Goodwill

248,944

248,939

Intangible assets, net

204,136

221,057

Other assets, net

38,308

38,199

   Total Assets

$                    1,460,586

$                    1,442,351

LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities:

 Accounts payable

$                         67,541

$                         48,658

 Short term borrowings

64,927

67,203

 Collateralized note payable

61,000

-

 Other current liabilities (a)

104,813

108,054

   Total Current Liabilities

298,281

223,915

Long-term debt (a)

1,050,920

1,111,088

Other liabilities

23,068

21,446

Contingencies and commitments

-

-

Partners' Capital:

Common unitholders (75,966,353 and 69,521,818 units

  outstanding at July 31, 2011 and July 31, 2010, respectively)

139,614

141,281

General partner unitholder (767,337 and 702,241 units

  outstanding at July 31, 2011 and July 31, 2010, respectively)

(58,660)

(58,644)

Accumulated other comprehensive income (loss)

4,633

(415)

   Total Ferrellgas Partners, L.P. Partners' Capital

85,587

82,222

   Noncontrolling Interest

2,730

3,680

   Total Partners' Capital

88,317

85,902

   Total Liabilities and Partners' Capital

$                    1,460,586

$                    1,442,351

(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 JULY 31, 2011 AND 2010

(in thousands, except per unit data)

(unaudited)

Three months ended

Twelve months ended

July 31

July 31

2011

2010

2011

2010

Revenues:

 Propane and other gas liquids sales

$                    421,746

$             312,280

$          2,212,257

$          1,900,318

 Other

27,912

41,568

210,958

198,742

   Total revenues

449,658

353,848

2,423,215

2,099,060

Cost of product sold:

 Propane and other gas liquids sales

310,341

197,318

1,609,344

1,257,534

 Other

13,038

26,118

124,470

108,638

Gross profit

126,279

130,412

689,401

732,888

Operating expense

100,646

100,012

407,281

406,860

Depreciation and amortization expense

22,091

20,469

82,486

82,491

General and administrative expense

12,889

12,114

52,160

46,095

Equipment lease expense

3,593

3,281

14,435

13,441

Non-cash employee stock ownership plan compensation charge

2,190

2,361

10,157

9,322

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

(221)

3,643

13,488

7,831

Loss on disposal of assets and other

2,799

3,005

3,633

8,485

Operating income (loss)

(17,708)

(14,473)

105,761

158,363

Interest expense

(23,680)

(26,440)

(101,885)

(101,284)

Loss on extinguishment of debt

-

-

(46,962)

(20,716)

Other income (expense), net

58

(23)

567

(1,108)

Earnings (loss) before income taxes

(41,330)

(40,936)

(42,519)

35,255

Income tax expense (benefit)

(47)

(90)

1,241

1,916

Net earnings (loss)

(41,283)

(40,846)

(43,760)

33,339

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

(376)

(346)

(112)

630

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

(40,907)

(40,500)

(43,648)

32,709

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

(409)

(405)

(436)

327

Common unitholders' interest in net earnings (loss)

$                    (40,498)

$             (40,095)

$             (43,212)

$               32,382

Earnings (loss) Per Unit

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

$                        (0.53)

$                 (0.58)

$                 (0.60)

$                   0.47

Weighted average common units outstanding

75,907.6

69,521.8

72,313.6

69,241.7

Supplemental Data and Reconciliation of Non-GAAP Items:

Three months ended

Twelve months ended

July 31

July 31

2011

2010

2011

2010

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

$                    (40,907)

$             (40,500)

$             (43,648)

$               32,709

 Income tax expense (benefit)

(47)

(90)

1,241

1,916

 Interest expense

23,680

26,440

101,885

101,284

 Depreciation and amortization expense

22,091

20,469

82,486

82,491

EBITDA

4,817

6,319

141,964

218,400

 Loss on extinguishment of debt

-

-

46,962

20,716

 Non-cash employee stock ownership plan compensation charge

2,190

2,361

10,157

9,322

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

(221)

3,643

13,488

7,831

 Loss on disposal of assets and other

2,799

3,005

3,633

8,485

 Other income (expense), net

(58)

23

(567)

1,108

 Litigation reserve and related legal fees

987

-

12,120

-

 Net earnings (loss) attributable to noncontrolling interest

(376)

(346)

(112)

630

Adjusted EBITDA (c)

10,138

15,005

227,645

266,492

 Net cash interest expense (d)

(21,960)

(21,813)

(93,353)

(94,914)

 Maintenance capital expenditures (e)

(3,516)

(4,385)

(15,437)

(19,968)

 Cash paid for taxes

(557)

(608)

(591)

(1,550)

 Proceeds from asset sales

1,721

4,623

5,994

9,220

Distributable cash flow to equity investors (f)

$                    (14,174)

$               (7,178)

$             124,258

$             159,280

Propane gallons sales

 Retail - Sales to End Users

95,611

90,058

655,408

680,963

 Wholesale - Sales to Resellers

54,902

51,689

244,275

241,561

 Total propane gallons sales

150,513

141,747

899,683

922,524

(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

July 31

July 31

2011

2010

2011

2010

     Operating expense

$                           (75)

$                 1,002

$                 3,757

$                 2,154

     General and administrative expense

(146)

2,641

9,731

5,677

     Total

$                         (221)

$                 3,643

$               13,488

$                 7,831

(c)  Adjusted EBITDA is calculated as earnings (loss) before income tax expense, 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 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.

SOURCE Ferrellgas Partners, L.P.



RELATED LINKS

http://www.ferrellgas.com