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Ferrellgas Partners, L.P. Reports Fiscal Third Quarter 2019 Results

By GlobeNewswire,  June 10, 2019, 07:00:00 AM EDT


  • Total Retail propane sales volume for the quarter increased approximately 8 percent leading to almost 7 percent increase in gross margin dollars over the prior year on weather that was approximately 1 percent colder than the prior year
  • Retail customer growth of nearly 26,000, or 4 percent over prior year
  • Tank Exchange sale locations now exceed 54,300, up 600 locations from last quarter and 6 percent compared to prior year.

LIBERTY, Mo., June 10, 2019 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) ("Ferrellgas" or the "Company") today reported financial results for its fiscal third quarter ended April 30, 2019.

For the quarter, the Company reported a net earnings attributable to Ferrellgas Partners, L.P. of $20.5 million, or $.21 per common unit, compared to prior year period net loss of $10.9 million, or $.11 per common unit.

Adjusted EBITDA, a non-GAAP measure, was $88.6 million compared to $86.9 million in the prior year. The following table represents the contribution to adjusted EBITDA from ongoing propane operations as well as from assets that were sold during 2018.

(in millions) Q3 2019   Q3 2018
Propane Operations and Corporate Support $88.6   $84.6
Results from Assets Sold in 2018 -   $2.3
Consolidated Adjusted EBITDA $88.6   $86.9

On a trailing twelve month basis, adjusted EBITDA from ongoing propane operations and corporate support as of April 30, 2019 is $234.2 million compared to $229.4 million as of January 31, 2019.

The Company's propane operations reported that total gallons sold of 264.1 million were 7% higher than prior year. Margin cents per gallon were 1.7¢, or 2.2 percent higher than the prior year despite increased competitive pressure in the tank exchange business. The Company continues its aggressive approach to gaining market share.  This strategic focus resulted in nearly 26,000 new customers, or approximately 4 percent more than prior year. Additionally, the Company's current Blue Rhino tank exchange sales locations have increased over 6 percent from prior year to over 54,300 locations. Overall, the increase in sales volume growth and margins per gallon resulted in an increase in gross margin dollars of $18.3 million.  The Company's ongoing commitment to investing in the business led to higher operating expenses during the quarter which were largely associated with serving nearly 26,000 new customers and 3,000 new tank exchange locations.  As a result of this investment and the growth in sales volumes, operating, general and administrative expenses in our Propane segment were $9.3 million higher than the prior year.

Liquidity of $292.3 million at April 30, 2019 resulted from $246.9 million of available borrowing capacity on the Company's secured credit facility and accounts receivable securitization facility as well as $45.4 million of cash.

As previously announced, the Company indefinitely suspended its quarterly cash distribution as a result of not meeting the required fixed charge coverage ratio contained in the senior unsecured notes due 2020.  Additionally, as the Company continues to evaluate options to address leverage, the Company does not intend to comment further on its progress in this regard or on potential options until further disclosure is appropriate or required by law.  For that reason, and in view of the information the Company otherwise makes available in earnings releases and quarterly and annual reports, the Company is suspending the practice of holding conference calls with investors, analysts and other interested parties in connection with periodic reporting of financial results for completed periods.

About Ferrellgas

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico. Ferrellgas employees indirectly own 22.8 million common units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on September 27, 2018. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.

Forward Looking Statements

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 include those 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, 2018, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contacts

Investor Relations - InvestorRelations@ferrellgas.com



 
FERRELLGAS PARTNERS, L.P.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
         
         
         
         
         
ASSETS   April 30, 2019   July 31, 2018
         
Current Assets:        
Cash and cash equivalents   $ 45,434     $ 119,311  
Accounts and notes receivable, net (including $160,959 and $120,079 of accounts        
receivable pledged as collateral at April 30, 2019 and July 31, 2018, respectively)     157,229       126,054  
Inventories     78,449       83,694  
Prepaid expenses and other current assets     25,489       34,862  
Total Current Assets     306,601       363,921  
         
Property, plant and equipment, net     603,923       557,723  
Goodwill, net     247,508       246,098  
Intangible assets, net     109,634       120,951  
Other assets, net     62,326       74,588  
Total Assets   $ 1,329,992     $ 1,363,281  
         
         
LIABILITIES AND PARTNERS' DEFICIT        
         
Current Liabilities:        
Accounts payable   $ 41,408     $ 46,820  
Short-term borrowings     -       32,800  
Collateralized note payable     62,000       58,000  
Other current liabilities     160,507       142,025  
Total Current Liabilities     263,915       279,645  
         
Long-term debt (a)     2,084,506       2,078,637  
Other liabilities     35,879       39,476  
Contingencies and commitments        
         
Partners Deficit:         
Common unitholders (97,152,665 units outstanding at April 30, 2019 and July 31, 2018)     (976,902 )     (978,503 )
General partner unitholder (989,926 units outstanding at April 30, 2019 and July 31, 2018)     (69,776 )     (69,792 )
Accumulated other comprehensive income (loss)     (846 )     20,510  
Total Ferrellgas Partners, L.P. Partners' Deficit     (1,047,524 )     (1,027,785 )
Noncontrolling interest     (6,784 )     (6,692 )
Total Partners' Deficit     (1,054,308 )     (1,034,477 )
Total Liabilities and Partners' Deficit   $ 1,329,992     $ 1,363,281  
         
         
         
(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $357 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(in thousands, except per unit data)
(unaudited)
  Three months ended    Nine months ended    Twelve months ended 
  April 30   April 30   April 30
  2019   2018   2019   2018   2019   2018
Revenues:                      
Propane and other gas liquids sales $ 459,556     $ 451,302     $ 1,344,634     $ 1,346,299     $ 1,641,311     $ 1,615,500  
Midstream operations   -       22,595       -       260,631       21,688       395,827  
Other   20,069       41,913       60,677       118,691       89,833       147,670  
Total revenues   479,625       515,810       1,405,311       1,725,621       1,752,832       2,158,997  
                       
Cost of sales:                      
Propane and other gas liquids sales   250,389       260,419       766,056       802,852       936,618       945,279  
Midstream operations   -       14,518       -       229,710       25,849       358,716  
Other   2,320       19,850       8,789       54,339       23,104       68,393  
                       
Gross profit    226,916       221,023       630,466       638,720       767,261       786,609  
                       
Operating expense   119,991       116,579       351,541       350,757       472,532       460,234  
Depreciation and amortization expense   20,617       25,348       59,214       76,565       84,444       102,370  
General and administrative expense   11,516       11,678       42,037       39,733       56,705       52,824  
Equipment lease expense   8,319       7,133       24,597       20,828       32,041       27,917  
Non-cash employee stock ownership plan compensation charge   (4 )     2,738       4,688       10,731       7,816       14,423  
Asset impairments   -       -       -       10,005       -       10,005  
Loss on asset sales and disposals   1,683       6,270       8,403       46,414       149,388       52,010  
                       
Operating income (loss)   64,794       51,277       139,986       83,687       (35,665 )     66,826  
                       
Interest expense   (44,162 )     (40,375 )     (132,931 )     (123,855 )     (177,543 )     (164,233 )
Other income (expense), net   251       227       356       1,422       (138 )     1,463  
                       
Earnings (loss) before income tax benefit   20,883       11,129       7,411       (38,746 )     (213,346 )     (95,944 )
                       
Income tax expense (benefit)   123       67       284       282       (2,676 )     (667 )
                       
Net earnings (loss)   20,760       11,062       7,127       (39,028 )     (210,670 )     (95,277 )
                       
Net earnings (loss) attributable to noncontrolling interest (b)   299       201       337       (131 )     (1,776 )     (612 )
                       
Net earnings (loss) attributable to Ferrellgas Partners, L.P.   20,461       10,861       6,790       (38,897 )     (208,894 )     (94,665 )
                       
Less: General partner's interest in net earnings (loss)   205       109       68       (389 )     (2,089 )     (947 )
                       
Common unitholders' interest in net earnings (loss) $ 20,256     $ 10,752     $ 6,722     $ (38,508 )   $ (206,805 )   $ (93,718 )
                       
Earnings (loss) Per Common Unit                      
Basic and diluted net earnings (loss) per common unitholders' interest $ 0.21     $ 0.11     $ 0.07     $ (0.40 )   $ (2.13 )   $ (0.96 )
                   
Weighted average common units outstanding - basic   97,152.7       97,152.7       97,152.7       97,152.7       97,152.7       97,152.7  
                       
                   
Supplemental Data and Reconciliation of Non-GAAP Items:
                       
  Three months ended    Nine months ended    Twelve months ended 
  April 30   April 30   April 30
  2019   2018   2019   2018   2019   2018
                       
                       
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $ 20,461     $ 10,861     $ 6,790     $ (38,897 )   $ (208,894 )   $ (94,665 )
Income tax expense (benefit)   123       67       284       282       (2,676 )     (667 )
Interest expense   44,162       40,375       132,931       123,855       177,543       164,233  
Depreciation and amortization expense   20,617       25,348       59,214       76,565       84,444       102,370  
EBITDA   85,363       76,651       199,219       161,805       50,417       171,271  
Non-cash employee stock ownership plan compensation charge   (4 )     2,738       4,688       10,731       7,816       14,423  
Asset impairments   -       -       -       10,005       -       10,005  
Loss on asset sales and disposal   1,683       6,270       8,403       46,414       149,388       52,010  
Other income (expense), net   (251 )     (227 )     (356 )     (1,422 )     138       (1,463 )
Severance costs $690 included in operating costs for the nine and twelve months ended period April 30, 2019 and $910 included in general and administrative costs for the nine and twelve months ended April 30, 2019. Also includes $358 in operating costs for the nine and twelve months ended period April 30, 2018 and $1,305 included in general and administrative costs for the nine and twelve months ended April 30, 2018.   -       -       1,600       1,663       1,600       1,663  
Legal fees and settlements   1,471       1,289       10,643       3,407       13,301       3,407  
Multi-employer pension plan withdrawal settlement   -       -       1,524       -       1,524       -  
Exit costs associated with contracts - Midstream dispositions   -       -       -       -       11,804       -  
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $(759) included in operating expense for the twelve months ended April 30, 2018. Also includes $1,293 and $3,044 included in midstream operations cost of sales for the nine and twelve months ended April 30, 2018, respectively.   -       -       -       1,293       -       2,285  
Net earnings (loss) attributable to noncontrolling interest (b)   299       201       337       (131 )     (1,776 )     (612 )
Adjusted EBITDA (c)   88,561       86,922       226,058       233,765       234,212       252,989  
Net cash interest expense (d)   (40,747 )     (37,873 )     (123,325 )     (115,664 )     (168,553 )     (153,782 )
Maintenance capital expenditures (e)   (13,506 )     (5,741 )     (45,038 )     (19,085 )     (53,570 )     (25,502 )
Cash refund from (paid for) taxes   (23 )     470       (21 )     458       (188 )     176  
Proceeds from certain asset sales   456       148       2,416       4,355       7,264       8,144  
Distributable cash flow attributable to equity investors (f)   34,741       43,926       60,090       103,829       19,165       82,025  
Distributable cash flow attributable to general partner and non-controlling interest   695       879       1,202       2,077       383       1,641  
Distributable cash flow attributable to common unitholders (g)   34,046       43,047       58,888       101,752       18,782       80,384  
Less: Distributions paid to common unitholders   -       9,715       9,715       29,146       19,430       38,861  
Distributable cash flow excess/(shortage) $ 34,046     $ 33,332     $ 49,173     $ 72,606     $ (648 )   $ 41,523  
                       
Propane gallons sales                      
Retail - Sales to End Users   204,441       189,183       573,152       543,548       666,572       635,326  
Wholesale - Sales to Resellers   59,641       57,121       179,256       185,492       233,974       241,710  
Total propane gallons sales   264,082       246,304       752,408       729,040       900,546       877,036  
                       



(b) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(c) Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., less the sum of the following: income tax expense (benefit), interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, asset impairments, loss on asset sales and disposal, other income (expense), net, severance costs, legal fees and settlements, multi-employer pension plan withdrawal settlement, exit costs associated with contracts - Midstream dispositions, unrealized (non-cash) losses (gains) on changes in fair value of derivatives, 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 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) Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for taxes plus proceeds from certain asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership's ability to declare and pay quarterly distributions to equity investors. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to distributable cash flow attributable to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(g) Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to common unitholders a meaningful measure of the partnership's ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow attributable to common unitholders, as management defines it, may not be comparable to distributable cash flow attributable to common unitholders or similarly titled measurements used by other corporations and partnerships. Items added to our calculation of distributable cash flow attributable to common unit holders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to common unitholders may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.

Source: Ferrellgas Partners, L.P.

This article appears in: News Headlines

Referenced Stocks: FGP










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