Ferrellgas Partners Reports Record Second-Quarter Adjusted EBITDA, Gross Profit and Distributable Cash Flow; Sales Volumes Grow Nearly 13%
OVERLAND PARK, Kan., March 10 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the largest distributors of propane, today reported record results for several key metrics for the fiscal second quarter ended January 31.
Adjusted EBITDA was up 7% to $130.1 million over the year-ago record $121.6 million. Gross profit totaled $248.7 million compared with $243.5 million the year before, while distributable cash flow increased 12% to $104.3 million from $93.1 million. Second-quarter net earnings rose 11% to $77.9 million from $70.4 million a year earlier.
President and Chief Executive Officer Steve Wambold explained, "We are quite pleased with our second-quarter results, especially in light of the ongoing challenging economic environment and weather that was warmer than a year ago. Particularly encouraging was the strong propane volume, which continued to outpace the industry's performance. Retail propane gallon sales increased 9.7%, while wholesale volume climbed more than 23%, resulting in a total volume gain of nearly 13% on temperatures in our service locations that were 5% warmer than in the prior year."
"We also benefited from our discipline of keeping a tight rein on costs. We're especially gratified by a slight decline in operating expenses though sales volumes were up, both in absolute dollars and cents per gallon delivered." He noted that general and administrative expense also decreased modestly, while equipment lease expense was down sharply, nearly 35%.
Looking ahead, Wambold commented, "We expect the second-quarter's positive momentum to carry over into the second half of the fiscal year, as we remain focused on our strategy of profitable growth. Therefore, we expect improved performance that should lead to record Adjusted EBITDA for fiscal 2010." Ferrellgas reported record Adjusted EDITDA of $251.1 million for fiscal 2009.
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, 2009, and other documents filed from time to time by these entities with the Securities and Exchange Commission.
Contact: |
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Tom Colvin, Investor Relations, (913) 661-1530 |
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Jim Saladin, Media Relations, (913) 661-1833 |
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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
January 31, July 31,
ASSETS 2010 2009
------ ------------ ---------
Current Assets:
Cash and cash equivalents $25,904 $7,066
Accounts and notes receivable, net 213,428 106,910
Inventories 143,976 129,808
Prepaid expenses and other
current assets 26,426 15,031
------ ------
Total Current Assets 409,734 258,815
Property, plant and equipment, net 671,125 666,535
Goodwill 248,939 248,939
Intangible assets, net 231,757 212,037
Other assets, net 33,990 18,651
------ ------
Total Assets $1,595,545 $1,404,977
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities:
Accounts payable $124,211 $49,337
Short term borrowings 97,150 66,159
Other current liabilities (a) 108,479 108,763
------- -------
Total Current Liabilities 329,840 224,259
Long-term debt (a) 1,080,074 1,010,073
Other liabilities 19,803 19,300
Contingencies and commitments - -
Partners' Capital:
Common unitholders (69,450,318 and
68,236,755 units outstanding at
2010 and 2009, respectively) 211,604 206,255
General partner unitholder (701,518
and 689,260 units outstanding at
2010 and 2009, respectively) (57,935) (57,988)
Accumulated other comprehensive
income (loss) 7,739 (1,194)
----- ------
Total Ferrellgas Partners, L.P.
Partners' Capital 161,408 147,073
Noncontrolling Interest 4,420 4,272
----- -----
Total Partners' Capital 165,828 151,345
------- -------
Total Liabilities and
Partners' Capital $1,595,545 $1,404,977
========== ==========
(a) The principal difference between the Ferrellgas Partners, L.P.
balance sheet and that of Ferrellgas, L.P., is $268 million of
8 3/4% 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, SIX AND TWELVE MONTHS ENDED
JANUARY 31, 2010 AND 2009
(in thousands, except per unit data)
(unaudited)
Three Six Twelve
months months months
ended ended ended
January 31 January 31 January 31
-------------- --------------- ----------------
2010 2009 2010 2009 2010 2009
---- ---- ---- ---- ---- ----
Revenues:
Propane
and
other
gas
liquids
sales $724,348 $647,536 $1,052,014 $1,084,424 $1,797,243 $2,096,314
Other 53,504 68,089 77,908 111,275 206,502 231,190
------ ------ ------ ------- ------- -------
Total
revenues 777,852 715,625 1,129,922 1,195,699 2,003,745 2,327,504
Cost of
product
sold:
Propane
and
other
gas
liquids
sales 503,980 428,527 704,900 746,272 1,165,996 1,481,147
Other 25,208 43,625 31,388 60,439 123,802 137,535
------ ------ ------ ------ ------- -------
Gross
profit 248,664 243,473 393,634 388,988 713,947 708,822
Operating
expense 104,550 105,710 201,440 201,927 400,248 392,526
Depreciation
and
amortization
expense 20,647 20,219 41,174 41,535 82,133 84,616
General and
administrative
expense 11,346 11,761 25,124 20,847 45,659 43,551
Equipment
lease
expense 3,127 4,781 6,901 10,136 15,171 22,120
Employee
stock
ownership
plan
compensation
charge 2,261 1,656 4,263 3,405 7,613 9,572
Loss on
disposal
of assets
and other 1,122 4,019 2,784 6,601 9,225 11,784
----- ----- ----- ----- ----- ------
Operating
income 105,611 95,327 111,948 104,537 153,898 144,653
Interest
expense (26,216) (23,393) (48,911) (47,063) (91,367) (88,638)
Debt
prepayment
premiums - - (17,308) - (17,308) -
Other income
(expense),
net (863) (343) (556) (1,161) (716) (1,120)
--- --- --- ----- --- -----
Earnings
before
income
taxes 78,532 71,591 45,173 56,313 44,507 54,895
Income tax
expense 674 1,167 252 866 1,678 2,972
--- ----- --- --- ----- -----
Net earnings 77,858 70,424 44,921 55,447 42,829 51,923
Net earnings
attributable
to
noncontrolling
interest (a) 847 772 575 682 676 767
--- --- --- --- --- ---
Net earnings
attributable
to
Ferrellgas
Partners,
L.P. 77,011 69,652 44,346 54,765 42,153 51,156
Less:
General
partner's
interest
in net
earnings 12,614 11,633 443 548 421 512
------ ------ --- --- --- ---
Common
unitholders'
interest
in net
earnings $64,397 $58,019 $43,903 $54,217 $41,732 $50,644
======= ======= ======= ======= ======= =======
Earnings
Per Unit
---------
Basic and
diluted
net
earnings
available
per common
unit $0.93 $0.92 $0.64 $0.86 $0.64 $0.80
Dilutive
effect of
two-class
method (b) 0.17 0.18 - - - -
---- ---- --- --- --- ---
Adjusted net
earnings per
unit
available
to
unitholders $1.10 $1.10 $0.64 $0.86 $0.64 $0.80
===== ===== ===== ===== ===== =====
Weighted
average
common
units
out-
standing 69,450.3 63,192.5 68,979.1 63,122.3 65,540.7 63,041.7
Supplemental Data and Reconciliation of Non-GAAP Items:
Three Six Twelve
months months months
ended ended ended
January 31 January 31 January 31
-------------- --------------- ----------------
2010 2009 2010 2009 2010 2009
---- ---- ---- ---- ---- ----
Net earnings
attributable
to
Ferrellgas
Partners,
L.P. $77,011 $69,652 $44,346 $54,765 $42,153 $51,156
Income
tax
expense 674 1,167 252 866 1,678 2,972
Interest
expense 26,216 23,393 48,911 47,063 91,367 88,638
Debt
prepayment
premiums - - 17,308 - 17,308 -
Depreciation
and
amortiza-
tion
expense 20,647 20,219 41,174 41,535 82,133 84,616
Other
income
(expense),
net 863 343 556 1,161 716 1,120
--- --- --- ----- --- -----
EBITDA 125,411 114,774 152,547 145,390 235,355 228,502
Employee
stock
ownership
plan
compensa-
tion
charge 2,261 1,656 4,263 3,405 7,613 9,572
Unit and
stock-
based
compensation
charge (c) 413 329 3,164 657 4,819 1,573
Loss on
disposal
of
assets
and other 1,122 4,019 2,784 6,601 9,225 11,784
Net earnings
attributable
to
noncontrolling
interest 847 772 575 682 676 767
--- --- --- --- --- ---
Adjusted
EBITDA (d) 130,054 121,550 163,333 156,735 257,688 252,198
Net cash
interest
expense
(e) (25,355) (23,170) (46,679) (46,929) (88,665) (90,612)
Maintenance
capital
expenditures
(f) (1,296) (7,516) (11,409) (12,542) (20,633) (23,668)
Cash paid
for taxes (332) (324) (332) (332) (1,512) (2,894)
Proceeds
from
asset
sales 1,228 2,587 3,161 4,905 6,455 9,529
----- ----- ----- ----- ----- -----
Distributable
cash flow
to equity
investors
(g) $104,299 $93,127 $108,074 $101,837 $153,333 $144,553
======== ======= ======== ======== ======== ========
Propane
gallons
sales
Retail -
Sales
to End
Users 269,801 245,862 402,275 372,395 682,668 666,663
Wholesale -
Sales to
Resellers 83,882 68,094 130,956 113,770 239,224 211,800
------ ------ ------- ------- ------- -------
Total
propane
gallons
sales 353,683 313,956 533,231 486,165 921,892 878,463
======= ======= ======= ======= ======= =======
(a) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(b) FASB guidance regarding participating securities and the two-class
method requires the calculation of net earnings per limited partner
unit for each period presented according to distributions declared
and participation rights in undistributed earnings, as if all of the
earnings for the period had been distributed. In periods with
undistributed earnings above certain levels, the calculation
according to the two-class method results in an increased allocation
of undistributed earnings to the general partner and a dilution of
earnings to the limited partners. Due to the seasonality of the
propane business, the dilution effect of the guidance on net earnings
per limited partner unit will typically only impact the three months
ending January 31. There was not a dilutive effect resulting from
this guidance on the six and twelve months ended January 31, 2010 and
2009.
(c) FASB guidance relating to stock compensation requires that the cost
resulting from all share-based payment transactions be recognized in
the financial statements. Share-based payment transactions resulted
in a non-cash compensation charge of $0.1 million and $0.1 million to
operating expense for the three months ended January 31, 2010
and 2009, respectively, $0.9 million and $0.2 million to operating
expense for the six months ended January 31, 2010 and 2009,
respectively, and $1.5 million and $0.5 million to operating expense
for the twelve months ended January 31, 2010 and 2009, respectively.
A non-cash compensation charge of $0.3 million and $0.2 million was
recorded to general and administrative expense for the three months
ended January 31, 2010 and 2009, respectively, $2.3 million and
$0.5 million to general and administrative expense for the six months
ended January 31, 2010 and 2009, respectively, and $3.3 million and
$1.1 million to general and administrative expense for the twelve
months ended January 31, 2010 and 2009, respectively.
(d) Management considers Adjusted EBITDA to be a chief measurement of the
partnership's overall economic performance and return on invested
capital. Adjusted EBITDA is calculated as earnings before interest,
income taxes, depreciation and amortization, employee stock ownership
plan compensation charge, unit and stock-based compensation charge,
loss on disposal of assets and other, noncontrolling interest, and
other non-cash and non-operating charges. 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 are unusual or non-recurring, and makes it easier to compare
its results with other companies that have different financing and
capital structures. In addition, management believes this measure is
consistent with the manner in which the partnership's lenders and
investors measure its overall performance and liquidity, including
its ability to pay quarterly equity distributions, service its
long-term debt and other fixed obligations and fund its capital
expenditures and working capital requirements. 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.
(e) 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.
(f) Maintenance capital expenditures include capitalized expenditures
for betterment and replacement of property, plant and equipment.
(g) 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 entities.
SOURCE Ferrellgas Partners, L.P.
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