Ferrellgas Partners' Third-Quarter Adjusted EBITDA Up 39%; Distributable Cash Flow Climbs 59%; Fiscal 2013 Adjusted EBITDA Range Raised To $270-$275 Million

OVERLAND PARK, Kan., June 6, 2013 /PRNewswire/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest distributors of propane, today reported record Adjusted EBITDA, distributable cash flow and gross profit for its fiscal third quarter ended April 30, primarily attributable to increased propane sales volumes, margins and improved operating efficiencies.

Adjusted EBITDA increased 39% to $98.5 million from $70.8 million in the prior year quarter. Distributable cash flow to equity investors rose 59% to $76.2 million from $48.0 million a year ago. Through April, the partnership's trailing 12 month distributable cash flow coverage stands at a healthy 1.08x.

President and CEO Steve Wambold pointed out, "We are extremely proud of our operational and financial performance this year as it is indicative of what our operations are capable of producing for investors in a more normal operating environment."  Wambold further remarked, "Our positive momentum has continued into our fiscal fourth quarter.  As a result, we are raising our Adjusted EBITDA guidance for fiscal 2013 to a range of $270 million to $275 million, producing a distributable cash flow coverage to equity investors of greater than 1.1x."  Adjusted EBITDA for the trailing 12-months was $264.3 million. Adjusted EBITDA in fiscal 2012 was $193.1 million.

Wambold continued, "Especially encouraging this quarter was that our propane sales volumes grew 18% over the prior year quarter to 267.1 million gallons. These sales volumes not only reflect temperatures that were 6 % colder than normal, but also our organic growth efforts of recent years."

Third-quarter revenues decreased modestly to $603.0 million from $629.6 million on lower sales prices to consumers, while the partnership's gross profit climbed 25% to $223.1 million on increased sales and improved margins.  Fiscal third quarter gross profit margins improved $0.05 cents per gallon sold, from $0.79 to $0.84.

Third-quarter operating expense increased to $107.2 million, or $0.40 per gallon sold, from $95.8 million, or $0.42 per gallon sold, on increased propane sales volumes and performance based incentive accruals. Excluding performance based incentives, operating expenses improved by 12% from $0.42 per gallon sold to $0.37 per gallon sold, which was made possible by the partnership's efficiency initiatives.  Similarly, general and administrative expense increased to $13.4 million from $9.0 million as a result of performance based incentives.  Excluding these incentives, G&A expense decreased to $8.6 million from $8.9 million.

Equipment lease expense was $4.1 million, compared with $3.8 million the year before. Interest expense again declined to $22.1 million from $23.5 million a year ago, reflecting lower borrowing rates.

Net earnings more than doubled to $45.2 million, or $0.56 per unit, from $21.l million, or $0.26 per unit. Wambold noted, "Our Blue Rhino operations are well positioned to capitalize on the all-important grilling season, adding more than 950 selling locations since this time last year.  The acquisition environment continues to be quite attractive, and we remain interested in complementary acquisitions, including some diversification, as indicated by the purchase of Mr. Bar-B-Q during the third quarter." He added, "We focus on deals that are immediately accretive to earnings, and all our recent acquisitions have handily exceeded their proformas."

For the nine months, gross profit was up 17%, primarily attributable to margin improvement and increased sales volumes.  Propane sales volumes grew 2% to 745.1 million on nationwide temperatures that were 4% warmer than normal.  Adjusted EBITDA rose 41% and distributable cash flow climbed 79%. Consistent with the quarter, operating expense was impacted by both increased sales volumes and performance based incentives.  After adjusting for the impact of performance based incentives, operating expense was practically unchanged, $297.8 million versus $298.7 million, as our operating efficiencies offset the incremental cost associated with increased sales volumes.  General and administrative expense, excluding the impact of performance based incentives declined to $25.5 million from $28.4 million. Net earnings surged to $86.2 million, or $1.07 per unit, from $25.0 million, or $0.32 per unit.

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves customers in all 50 states, the District of Columbia and Puerto Rico. Ferrellgas employees indirectly own more than 21 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 BALANCE SHEETS

(in thousands, except unit data)

(unaudited)
















ASSETS


April 30, 2013


July 31, 2012






Current Assets:





  Cash and cash equivalents


$               12,260


$                 8,429

  Accounts and notes receivable, net (including $183,957 and $121,812 of accounts receivable pledged as collateral at April 30, 2013 and July 31, 2012, respectively)


198,188


 

124,004

  Inventories


107,210


127,598

  Prepaid expenses and other current assets


23,384


29,315

    Total Current Assets


341,042


289,346






Property, plant and equipment, net


604,716


626,551

Goodwill


253,286


248,944

Intangible assets, net


195,191


189,118

Other assets, net


46,391


43,320

    Total Assets


$          1,440,626


$          1,397,279











LIABILITIES AND PARTNERS' DEFICIT










Current Liabilities:





  Accounts payable


$               70,285


$               47,824

  Short-term borrowings


21,450


95,730

  Collateralized note payable


116,000


74,000

  Other current liabilities


123,456


122,667

    Total Current Liabilities


331,191


340,221






Long-term debt (a)


1,106,669


1,059,085

Other liabilities


31,727


25,499

Contingencies and commitments


-


-






Partners' Deficit: 





 Common unitholders (79,070,819 and 79,006,619 units outstanding at April 30, 2013 and July 31, 2012, respectively)


31,047


 

43,701

 General partner unitholder (798,695 and 798,047 units outstanding at April 30, 2013 and July 31, 2012, respectively)


(59,757)


 

(59,630)

 Accumulated other comprehensive loss


(1,841)


(13,159)

    Total Ferrellgas Partners, L.P. Partners' Deficit


(30,551)


(29,088)

    Noncontrolling Interest


1,590


1,562

    Total Partners' Deficit


(28,961)


(27,526)

    Total Liabilities and Partners' Deficit


$          1,440,626


$          1,397,279







(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, NINE AND TWELVE MONTHS ENDED APRIL 30, 2013 AND 2012

(in thousands, except per unit data)

(unaudited)










































Three months ended 


Nine months ended


Twelve months ended



April 30


April 30


April 30



2013


2012


2013


2012


2013


2012

Revenues:













  Propane and other gas liquids sales


$           508,408


$     556,644


$  1,426,763


$  1,850,430


$  1,737,278


$  2,272,176

  Other


94,612


72,975


198,031


146,887


229,291


174,799

    Total revenues


603,020


629,619


1,624,794


1,997,317


1,966,569


2,446,975














Cost of product sold:













  Propane and other gas liquids sales


313,207


401,521


903,100


1,405,243


1,099,743


1,715,584

  Other


66,714


49,117


123,348


80,211


138,460


93,249














Gross profit 


223,099


178,981


598,346


511,863


728,366


638,142



























Operating expense (including $126 of severance charges for the twelve months ended April 30, 2013, and $277, $500 and $500 for the three, nine and twelve months ended April 30, 2012, respectively)


107,188


95,822


309,221


298,974


409,227


399,620

Depreciation and amortization expense


20,896


21,123


62,522


62,839


83,524


84,930

General and administrative expense (including $166 of severance charges for the twelve months ended April 30, 2013, and $113, $263 and $263 for the three, nine and twelve months ended April 30, 2012, respectively)


13,432


8,963


32,396


28,671


40,841


41,560

Equipment lease expense


4,098


3,789


11,848


10,846


15,650


14,439

Non-cash employee stock ownership plan compensation charge


2,824


2,203


12,673


6,719


15,394


8,909

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


2,222


385


8,434


4,867


12,410


4,646

Loss on disposal of assets and other


3,337


1,220


5,728


2,052


9,711


4,851














Operating income


69,102


45,476


155,524


96,895


141,609


79,187














Interest expense


(22,084)


(23,471)


(67,138)


(70,904)


(89,488)


(94,584)

Other income, net


185


201


517


248


775


306














Earnings (loss) before income taxes


47,203


22,206


88,903


26,239


52,896


(15,091)














Income tax expense


2,023


1,144


2,676


1,285


2,519


1,238














Net earnings (loss)


45,180


21,062


86,227


24,954


50,377


(16,329)














Net earnings attributable to noncontrolling interest (a)


499


255


997


377


676


1














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


44,681


20,807


85,230


24,577


49,701


(16,330)














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


447


208


852


246


497


(163)














Common unitholders' interest in net earnings (loss)


$             44,234


$       20,599


$       84,378


$       24,331


$       49,204


$     (16,167)














Earnings (loss) Per Unit













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


$                 0.56


$           0.26


$           1.07


$           0.32


$           0.62


$         (0.21)














Weighted average common units outstanding


79,054.4


78,960.0


79,027.5


77,095.8


79,018.5


76,797.1

 




Supplemental Data and Reconciliation of Non-GAAP Items:
















Three months ended 


Nine months ended


Twelve months ended



April 30


April 30


April 30



2013


2012


2013


2012


2013


2012



























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


$             44,681


$       20,807


$       85,230


$       24,577


$       49,701


$     (16,330)

  Income tax expense


2,023


1,144


2,676


1,285


2,519


1,238

  Interest expense


22,084


23,471


67,138


70,904


89,488


94,584

  Depreciation and amortization expense


20,896


21,123


62,522


62,839


83,524


84,930

EBITDA


89,684


66,545


217,566


159,605


225,232


164,422

  Non-cash employee stock ownership plan compensation charge


2,824


2,203


12,673


6,719


15,394


8,909

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


2,222


385


8,434


4,867


12,410


4,646

  Loss on disposal of assets and other


3,337


1,220


5,728


2,052


9,711


4,851

  Other income, net


(185)


(201)


(517)


(248)


(775)


(306)

  Severance costs


-


390


-


763


292


763

  Nonrecurring litigation reserve and related legal fees


113


-


1,338


892


1,338


1,879

  Net earnings attributable to noncontrolling interest


499


255


997


377


676


1

Adjusted EBITDA (c)


98,494


70,797


246,219


175,027


264,278


185,165

  Net cash interest expense (d)


(20,631)


(22,018)


(62,829)


(66,773)


(83,656)


(88,733)

  Maintenance capital expenditures (e)


(3,466)


(2,680)


(10,996)


(11,518)


(15,522)


(15,034)

  Cash paid for taxes


(43)


(10)


(88)


(100)


(752)


(657)

  Proceeds from asset sales


1,850


1,940


8,013


4,314


9,441


6,035

Distributable cash flow to equity investors (f)


$             76,204


$       48,029


$     180,319


$     100,950


$     173,789


$       86,776














Propane gallons sales













  Retail - Sales to End Users


196,009


167,462


542,688


524,287


637,719


619,898

  Wholesale - Sales to Resellers


71,113


58,421


202,396


202,971


258,237


257,873

  Total propane gallons sales


267,122


225,883


745,084


727,258


895,956


877,771





(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 


Nine months ended


Twelve months ended



April 30


April 30


April 30



2013


2012


2013


2012


2013


2012

      Operating expense


$                   422


$             112


$          1,726


$          1,952


$          2,521


$          1,877

      General and administrative expense


1,800


273


6,708


2,915


9,889


2,769

      Total


$                2,222


$             385


$          8,434


$          4,867


$        12,410


$          4,646


(c) 

Adjusted EBITDA is calculated as earnings (loss) before income tax expense, interest expense, depreciation and amortization expense, 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, serverance costs, nonrecurring litigation reserve and related legal fees and net earnings 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 inaccordance 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.


 

SOURCE Ferrellgas Partners, L.P.



RELATED LINKS
http://www.ferrellgas.com

Best of Content We Love 2014 


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.