Ferrellgas Partners Reports Record Fourth-Quarter Results; Balanced Gross Profit Improvement With Significant Expense Savings Driving Performance

01 Oct, 2012, 07:00 ET from Ferrellgas Partners, L.P.

OVERLAND PARK, Kan., Oct. 1, 2012 /PRNewswire/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest distributors of propane, today reported record fiscal fourth quarter results for the period ended July 31, 2012.  The partnership's Adjusted EBITDA rose 78% to a record $18.1 million from $10.1 million in the year-earlier quarter.

Propane sales increased modestly to 150.9 million gallons from 150.5 million gallons while gross profit increased 3% to a near record $130.0 million, as compared to $126.3 million achieved in the year ago period.  The results were achieved despite temperatures in the fiscal quarter that were 38% warmer than experienced in the prior year period.

President and Chief Executive Officer Steve Wambold explained, "Our fourth-quarter results highlight our ongoing efforts to both drive profitable growth and manage expenses in this highly competitive operating environment.  We remain committed to driving significant cost savings throughout our operations providing both the opportunity to be more competitive for new business and provide immediate financial returns for investors."  Wambold indicated that the previously announced cost savings goal of $20 million would likely be surpassed by the end of fiscal 2013.

As expected, fourth-quarter revenues declined to $341.8 million from $449.7 million the year before attributable primarily to sharply lower wholesale propane costs. General and administrative expense declined nearly 35% to $8.4 million from $12.9 million the year before while operating expense was practically unchanged at $100.0 million on modestly increased sales volumes. Equipment lease expense rose slightly to $3.8 million from $3.6 million while interest expense improved nearly 6% to $22.4 million from $23.7 million.  The fourth-quarter seasonal net loss improved to $35.9 million, or $0.45 per common unit from $41.3 million, or $0.53 per common unit in the prior year quarter. 

Commenting further on the outlook for fiscal 2013, Wambold noted, "We expect a continuation of our organic gallon growth. In addition, the opportunities for acquisitions seem to be heating up after a lull." Last month Ferrellgas strengthened its presence in California with the acquisition of Capitol City Propane in Sacramento.

For the fiscal year, propane sales volumes declined 2% to 878 million gallons sold despite temperatures that were 18% warmer than experienced in fiscal 2011.  Revenues totaled $2.3 billion, compared with $2.4 billion in fiscal 2011 while gross profit declined 7% to $641.9 million on lesser sales volumes and margins.  General and administrative decreased 29% to $37.1 million (including a $10.0 million litigation reserve recorded in the prior year quarter)  while operating expenses decreased 2% to $399.0 million, matching prior year distribution costs on a cent per gallon sold basis.  Equipment lease expense of $14.6 million was materially unchanged from year-ago levels. Interest expense declined more than 8% to $93.3 million. The net loss for the fiscal year improved to $10.9 million, or $0.14 per unit, versus $43.8 million, or $0.60 per unit.

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 21.7 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, 2012, 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 STATEMENTS OF EARNINGS

FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2012 AND 2011

(in thousands, except per unit data)

(unaudited)

Three months ended 

Twelve months ended

July 31

July 31

2012

2011

2012

2011

Revenues:

  Propane and other gas liquids sales

$ 310,515

$ 421,746

$ 2,160,945

$ 2,212,257

  Other

31,260

27,912

178,147

210,958

    Total revenues

341,775

449,658

2,339,092

2,423,215

Cost of product sold:

  Propane and other gas liquids sales

196,643

310,341

1,601,886

1,609,344

  Other

15,112

13,038

95,323

124,470

Gross profit 

130,020

126,279

641,883

689,401

Operating expense (including $126 and $626 of non-recurring severance 

  charges for the three and twelve month periods ended July 31, 2012, respectively)

100,006

100,646

398,980

407,281

Depreciation and amortization expense

21,002

22,091

83,841

82,486

General and administrative expense (including $166 and $429 of non-recurring

  severance charges for the three and twelve month periods ended July 31, 2012, respectively)

8,445

12,889

37,116

52,160

Equipment lease expense

3,802

3,593

14,648

14,435

Non-cash employee stock ownership plan compensation charge

2,721

2,190

9,440

10,157

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

3,976

(221)

8,843

13,488

Loss on disposal of assets and other

3,983

2,799

6,035

3,633

Operating income (loss)

(13,915)

(17,708)

82,980

105,761

Interest expense

(22,350)

(23,680)

(93,254)

(101,885)

Loss on extinguishment of debt

-

-

-

(46,962)

Other income, net

258

58

506

567

Loss before income taxes

(36,007)

(41,330)

(9,768)

(42,519)

Income tax expense (benefit)

(157)

(47)

1,128

1,241

Net loss

(35,850)

(41,283)

(10,896)

(43,760)

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

(321)

(376)

56

(112)

Net loss attributable to Ferrellgas Partners, L.P.

(35,529)

(40,907)

(10,952)

(43,648)

Less: General partner's interest in net loss

(356)

(409)

(110)

(436)

Common unitholders' interest in net loss

$  (35,173)

$  (40,498)

$     (10,842)

$     (43,212)

Loss Per Unit

Basic and diluted net loss per common unitholders' interest

$      (0.45)

$      (0.53)

$         (0.14)

$         (0.60)

Weighted average common units outstanding

78,992.0

75,907.6

77,572.4

72,313.6

Supplemental Data and Reconciliation of Non-GAAP Items:

Three months ended 

Twelve months ended

July 31

July 31

2012

2011

2012

2011

Net loss attributable to Ferrellgas Partners, L.P.

$  (35,529)

$  (40,907)

$     (10,952)

$     (43,648)

  Income tax expense (benefit)

(157)

(47)

1,128

1,241

  Interest expense

22,350

23,680

93,254

101,885

  Depreciation and amortization expense

21,002

22,091

83,841

82,486

EBITDA

7,666

4,817

167,271

141,964

  Loss on extinguishment of debt

-

-

-

46,962

  Non-cash employee stock ownership plan compensation charge

2,721

2,190

9,440

10,157

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

3,976

(221)

8,843

13,488

  Loss on disposal of assets and other

3,983

2,799

6,035

3,633

  Other income, net

(258)

(58)

(506)

(567)

  Nonrecurring severance costs

292

-

1,055

-

  Nonrecurring litigation reserve and related legal fees

-

987

892

12,120

  Net earnings (loss) attributable to noncontrolling interest

(321)

(376)

56

(112)

Adjusted EBITDA (c)

18,059

10,138

193,086

227,645

  Net cash interest expense (d)

(20,827)

(21,960)

(87,600)

(93,353)

  Maintenance capital expenditures (e)

(4,526)

(3,516)

(16,044)

(15,437)

  Cash paid for taxes

(664)

(557)

(764)

(591)

  Proceeds from asset sales

1,428

1,721

5,742

5,994

Distributable cash flow to equity investors (f)

$    (6,530)

$  (14,174)

$      94,420

$    124,258

Propane gallons sales

  Retail - Sales to End Users

95,031

95,611

619,318

655,408

  Wholesale - Sales to Resellers

55,841

54,902

258,812

244,275

  Total propane gallons sales

150,872

150,513

878,130

899,683

(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

2012

2011

2012

2011

      Operating expense

$         795

$          (75)

$          2,747

$          3,757

      General and administrative expense

3,181

(146)

6,096

9,731

      Total

$       3,976

$        (221)

$          8,843

$        13,488

(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 on disposal of assets and other, other income, net, nonrecurring severance costs, nonrecurring 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, 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 BALANCE SHEETS

(in thousands, except unit data)

(unaudited)

ASSETS

July 31, 2012

July 31, 2011

Current Assets:

  Cash and cash equivalents

$          8,429

$          7,437

  Accounts and notes receivable, net (including $121,812 and $112,509 of

    accounts receivable pledged as collateral at July 31, 2012

    and July 31, 2011, respectively)

124,004

159,532

  Inventories

127,598

136,139

  Prepaid expenses and other current assets

29,315

23,885

    Total Current Assets

289,346

326,993

Property, plant and equipment, net

626,551

642,205

Goodwill

248,944

248,944

Intangible assets, net

189,118

204,136

Other assets, net

43,320

38,308

    Total Assets

$   1,397,279

$   1,460,586

LIABILITIES AND PARTNERS' CAPITAL(DEFICIT)

Current Liabilities:

  Accounts payable

$        47,824

$        67,541

  Short-term borrowings

95,730

64,927

  Collateralized note payable

74,000

61,000

  Other current liabilities

122,667

104,813

    Total Current Liabilities

340,221

298,281

Long-term debt (a)

1,059,085

1,050,920

Other liabilities

25,499

23,068

Contingencies and commitments

-

-

Partners' Capital(Deficit): 

 Common unitholders (79,006,619 and 75,966,353 units outstanding at

   July 31, 2012 and July 31, 2011, respectively)

43,701

139,614

 General partner unitholder (798,047 and 767,337 units outstanding at

   July 31, 2012 and July 31, 2011, respectively)

(59,630)

(58,660)

 Accumulated other comprehensive income (loss)

(13,159)

4,633

    Total Ferrellgas Partners, L.P. Partners' Capital(Deficit)

(29,088)

85,587

    Noncontrolling Interest

1,562

2,730

    Total Partners' Capital(Deficit)

(27,526)

88,317

    Total Liabilities and Partners' Capital(Deficit)

$   1,397,279

$   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.

 

 

SOURCE Ferrellgas Partners, L.P.



RELATED LINKS

http://www.ferrellgas.com