LIBERTY, Mo., Sept. 30 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), one of the nation's largest propane distributors, today reported
earnings for its fiscal fourth quarter and year ended July 31, 2004.
"Fiscal 2004 was an active year for the partnership as we completed
several strategic acquisitions, the most notable of which was the Blue Rhino
contribution this spring," said James E. Ferrell, Chairman and Chief Executive
Officer. "With the opportunity to continue the expansion of the Blue Rhino
footprint, we believe Blue Rhino will be a significant catalyst for growth in
the coming years." Blue Rhino is the leading name in propane delivery by
portable tank exchange, servicing more than 32,000 locations in the United
States, Puerto Rico, the U.S. Virgin Islands and Canada.
"We are also making significant progress implementing our new, technology-
based operating platform and are on our way to having approximately half of
our retail distribution outlets on this platform prior to the coming winter
heating season," said Mr. Ferrell. "We believe the benefits from the new
operating platform give Ferrellgas an additional catalyst for growth in the
future."
Propane sales for the fiscal year were 874 million gallons, compared to
near-record propane sales volumes of 899 million gallons sold in fiscal year
2003, as gallon growth from acquisitions in fiscal year 2004 was offset by the
impact from warmer than normal winter heating season temperatures and customer
conservation resulting from historically high wholesale propane costs. In
fiscal year 2004, national temperatures were 5 percent warmer than normal,
according to the National Oceanic and Atmospheric Administration.
Gross profit for the fiscal year was a record $553.5 million, compared to
gross profit results of $530.7 million reported in fiscal year 2003. This
fiscal year's gross profit results reflect contributions from acquisitions
completed during the fiscal year, partially offset by reduced propane sales
volumes and an anticipated lesser contribution from risk management
activities.
Operating and general and administrative expenses for the fiscal year were
$325.6 million and $34.5 million, respectively, compared to $298.0 million and
$28.0 million in the prior fiscal year. Interest expense and depreciation and
amortization expense were $74.5 million and $57.1 million, respectively,
compared to $63.7 million and $40.8 million in the prior fiscal year.
Increases in these expenses in fiscal year 2004 primarily reflect the impact
of acquisitions completed in the fiscal year. Equipment lease expense for the
fiscal year was $19.7 million, down slightly from $20.6 million in the prior
fiscal year.
Adjusted EBITDA and net earnings for fiscal year 2004 were $173.7 million
and $28.6 million, respectively, compared to a near record-setting
$184.0 million and $56.7 million achieved during fiscal year 2003.
"Fiscal 2004 marked our company's 65th anniversary and 10th anniversary as
a publicly traded master limited partnership on the New York Stock Exchange,"
said Mr. Ferrell. "Since going public in 1994, investors have benefited from
our continued focus on long-term growth and security in distributions as we
just recently paid our 40th consecutive quarterly distribution to all common
unitholders."
The partnership historically experiences losses during its fourth fiscal
quarter, as propane sales volumes typically represent less than 15 percent of
annual propane sales volumes, causing fixed costs to historically exceed off-
season cash flow. Propane sales volumes and gross profit for the fourth
quarter were 130 million gallons and $106.7 million, respectively. Operating
and general and administrative expenses were $92.5 million and $10.8 million,
respectively. Interest expense and depreciation and amortization expense were
$22.4 million and $20.0 million, respectively, while equipment lease expense
was $5.4 million. These seasonal results produced an expected adjusted EBITDA
loss of $2.0 million and net loss of $47.8 million for the fourth fiscal
quarter.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in all 50 states,
Puerto Rico, the U.S. Virgin Islands and Canada. Ferrellgas employees
indirectly own approximately 18 million common units of the partnership
through an employee stock ownership plan.
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 partnership's Form 10-K for the fiscal year ended July 31, 2003 and other
documents filed from time to time by the partnership with the Securities and
Exchange Commission.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS July 31, 2004 July 31, 2003
Current Assets:
Cash and cash equivalents $15,428 $11,154
Accounts and notes receivable, net 114,211 56,742
Inventories 103,578 69,077
Prepaid expenses and other current assets 10,022 8,306
Total Current Assets 243,239 145,279
Property, plant and equipment, net 792,436 684,917
Goodwill 263,362 124,190
Intangible assets, net 265,125 98,157
Other assets, net 15,571 8,853
Total Assets $1,579,733 $1,061,396
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $104,309 $59,454
Other current liabilities (a) 92,793 89,687
Total Current Liabilities 197,102 149,141
Long-term debt (a) 1,153,652 888,226
Other liabilities 22,089 18,747
Contingencies and commitments - -
Minority interest 4,791 2,363
Partners' Capital:
Senior unitholder (1,994,146 units
outstanding at both July 2004
and July 2003 - liquidation
preference $79,766 at both
July 2004 and July 2003) 79,766 79,766
Common unitholders (48,772,875 and
37,673,455 units outstanding
at July 2004 and July 2003, respectively) 178,994 (15,602)
General partner unitholder (512,798
and 400,683 units outstanding
at July 2004 and July 2003, respectively) (57,391) (59,277)
Accumulated other comprehensive
income (loss) 730 (1,968)
Total Partners' Capital 202,099 2,919
Total Liabilities and Partners'
Capital $1,579,733 $1,061,396
(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 AND TWELVE MONTHS ENDED JULY 31, 2004 AND 2003
(in thousands, except per unit data)
(unaudited)
Three months ended Twelve months ended
July 31 July 31
2004 2003 2004 2003
Revenues:
Propane and other gas
liquids sales $215,595 $150,819 $1,273,346 $1,136,358
Other 36,444 20,675 106,035 85,281
Total revenues 252,039 171,494 1,379,381 1,221,639
Cost of product sold 145,366 104,645 825,845 690,969
Gross profit 106,673 66,849 553,536 530,670
Operating expense 92,481 70,744 325,622 297,970
Depreciation and amortization
expense 19,985 10,060 57,115 40,779
General and administrative
expense 10,771 6,161 34,532 28,024
Equipment lease expense 5,402 4,130 19,674 20,640
Employee stock ownership plan
compensation charge 1,902 2,125 7,892 6,778
Loss on disposal of assets and
other 2,691 2,898 7,168 6,679
Operating income (loss) (26,559) (29,269) 101,533 129,800
Interest expense (22,384) (16,337) (74,467) (63,665)
Interest income 322 441 1,582 1,291
Early extinguishment of debt
expense (a) - - - (7,052)
Earnings (loss) before income
tax benefit, minority
interest, and cumulative effect
of a change in accounting
principle (48,621) (45,165) 28,648 60,374
Income tax benefit (419) - (402) -
Minority interest (b) (431) (405) 500 871
Earnings (loss) before
cumulative effect of a change
in accounting principle (47,771) (44,760) 28,550 59,503
Cumulative effect of a change
in accounting principle, net of
minority interest of $28 (c) - - - (2,754)
Net earnings (loss) (47,771) (44,760) 28,550 56,749
Distribution to senior
unitholder 1,995 2,471 7,977 10,771
Net earnings (loss) available
to general partner (497) (472) 206 460
Net earnings (loss) available
to common unitholders $(49,269) $(46,759) $20,367 $45,518
Basic earnings (loss) per
common unit:
Earnings (loss) before
cumulative effect of change
in accounting principle (d) $(1.01) $(1.27) $0.49 $1.33
Net earnings (loss) available
to common unitholders $(1.01) $(1.27) $0.49 $1.25
Weighted average common units
outstanding 48,772.0 36,769.3 41,419.2 36,300.5
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended Twelve months ended
July 31 July 31
2004 2003 2004 2003
Propane gallons 129,948 115,588 873,711 898,622
Net earnings (loss) $(47,771) $(44,760) $28,550 $56,749
Income taxes (419) - (402) -
Interest expense 22,384 16,337 74,467 63,665
Depreciation and amortization
expense 19,985 10,060 57,115 40,779
Interest income (322) (441) (1,582) (1,291)
EBITDA $(6,143) $(18,804) $158,148 $159,902
Employee stock ownership
plan compensation charge 1,902 2,125 7,892 6,778
Loss on disposal of assets
and other 2,691 2,898 7,168 6,679
Minority interest (b) (431) (405) 500 871
Early extinguishment of
debt expense (a) - - - 7,052
Cumulative effect of change in
accounting principle (c) - - - 2,754
Adjusted EBITDA (e) $(1,981) $(14,186) $173,708 $184,036
(a) Expenses related to the refinancing of the $160 million Ferrellgas
Partners, L.P. senior secured debt in September 2002.
(b) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(c) Amount related to recognition of liabilities for future retirements
of underground storage facilities, as required by SFAS No. 143.
(d) Amount calculated as 99% of the earnings (loss) before cumulative
effect of change in accounting principle less distribution to senior
unitholder; the result then divided by the weighted average common
units outstanding.
(e) 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, loss on disposal of assets and other,
minority interest, early extinguishment of debt expense, cumulative
effect of change in accounting principle 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 to 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.
SOURCE Ferrellgas Partners, L.P.
-0- 09/30/2004
/CONTACT: Investor Relations, Ryan VanWinkle, +1-816-792-7998, or Media
Relations, Scott Brockelmeyer, +1-816-792-7837, both of Ferrellgas Partners/
/Web site: http://www.ferrellgas.com /
(FGP)
CO: Ferrellgas Partners, L.P.
ST: Missouri
IN: OIL
SU: ERN
CM-AM
-- CGTH008 --
6895 09/30/2004 08:00 EDT http://www.prnewswire.com
