Ferrellgas Partners, L.P. (FGP)

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Ferrellgas Partners L.P (FGP)

Q4 2017 Earnings Conference Call

September 28, 2017, 10:00 AM ET


Alan Heitmann - Chief Financial Officer & Executive Vice President

James Ferrell - Chairman, Interim Chief Executive Officer & President


Mirek Zak - Citigroup

Michael Gyure - Janney Montgomery Scott LLC



Good morning. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter Fiscal Year 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Al Heitmann, Chief Financial Officer, you may begin your conference.

Alan Heitmann

Thank you, Tiffany, and good morning, everybody. I’m joined on the call this morning by Jim Ferrell, Chairman of the Board and Interim President and CEO. Before we start, I’d like to remind you that some of the statements we make today during the call may be considered forward-looking, and that various risk, uncertainties and other factors could cause actual performance to differ materially from anticipated performance. These factors are discussed in our Form 10-K and other documents we file from time to time with the SEC.

Now with that, I’d like to turn the call over to Jim for his opening remarks. Jim?

James Ferrell

Thanks, Al, and good morning. We’ve already disclosed that Al will begin to enjoy his retirement as of January 31, 2018. It is possible that this could be his last earnings call, since we have his replacement coming on board soon. He will be here for the transition and as long as needed. He reminds me and we’re all very pleased about that.

Despite his impending retirement, Al has continued to be engaged. I can’t say enough about his commitment and dedication. So thank you, Al. Thank you for the 23 years of loyal service. Thank you for giving us plenty of time to find your replacement. You stuck by my side for the last year even though you and Kelly were looking forward to your retirement. You will be missed.

It is rare that a CEO hears from other than disgruntled investors. But after the June earnings call, I got a nice letter in the mail that was very encouraging. A retired army colonel, who lives in Ohio took the time to write to say, he knew I had wanted to report better earnings. And to remind me that wars last longer than a few battles or in this case a few quarters.

He knew that I had chosen the long road to success and wanted me to know that patience would pay off. He could also tell that I’m here for the people, for the investors and employees, and not just for myself, but for the long jeopardy of the business, which in the end will benefit everyone. My bet is that, he was an infantry officer who attended the same schools I went through, because even without a background in business, he understood what I’m trying to do. So thanks, Colonel Curt [ph] for the encouragement.

People who’ve listen in on these calls and try to parse the numbers are doing this all without being inside. As I tell everyone here, success eventually has to show up in financial results. My hot air lets me go so far. But for all of you on this call, I will try to describe what we’re doing here in an event to restore – in an effort to restore your trust.

We know we are clawing back from a tough period, including consecutive record warm winters and the termination of the Jamex arrangements in Bridger that collectively have not only clipped the value of our public equity, but also that of our Employee Stock Ownership Plan. The ESOP owns some 25% of the company’s equity, I own another 5%. So 30% of the company is owned by this team. People who are totally aligned with the public’s equity and have everything to gain from restoring value.

For technical reasons, the word interim is tacked on to the front of my CEO title, but I want you to know that I’m present and accounted for every day, and I’m not shying away from making the tough decisions that are required. I will be here until we are back on top. Beyond that, we have worked hard over the last year to change the company’s culture.

Silo management, where no one was allowed to talk to anyone outside of their discipline is gone. Accountability and merit have been restored. Blue Rhino has finally been integrated. Retail propane has been restructured and refocused. Bridger midstream is fighting hard to gain ground in a very difficult market.

We have made sweeping changes at the top of the company and are now concentrating on nothing, but execution with the right people, seasoned people who have been freed up to grow the business and to make changes to whatever is in their way.

They can talk with others without having the permission of officers, or having officers present. Titles have been changed to reflect actual jobs. We emphasize teamwork and respect for everyone of our people regardless of their position in the company. We’re building several new Blue Rhino production plants to make ourselves more competitive and are aggressively gaining customers.

Our traditional retail propane business is growing. I want you to know that I chose the growth method, the growth mode of getting us back on top and not short-term bandaids of cutting expenses or selling the assets. Morale could not be higher despite the paper loss in the value of the ESOP.

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