OVERLAND PARK, Kan., Oct. 14 /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,
2005.
"Fiscal 2005 will be remembered as a turning point in the history of
Ferrellgas as we have successfully completed the nationwide rollout of our new
technology platform," said James E. Ferrell, Chairman, President and Chief
Executive Officer. "Today, all of our more than 850 retail propane
distribution locations are servicing over 1 million customers on our new
operating platform and we have begun to realize the anticipated operating
expense savings and improved customer profitability associated with this new
operating platform. We continue to believe that our new business model will
contribute more than $30 million annually to our Adjusted EBITDA performance
beginning in fiscal 2006."
Propane sales for the fiscal year were a near-record 898 million gallons,
compared to propane sales volumes of 874 million gallons sold in fiscal 2004,
primarily reflecting the full-year contribution from the Blue Rhino propane by
portable tank exchange operations partially offset by warmer than normal
heating season temperatures and the effects of continued customer conservation
resulting from significantly higher wholesale commodity prices. In fiscal
2005, national temperatures were 6 percent warmer than normal and 2 percent
warmer than the prior fiscal year, according to the National Oceanic &
Atmospheric Administration.
Gross profit for the fiscal year was a record $613.8 million, compared to
a gross profit of $542.0 million reported in fiscal 2004. This fiscal year's
record gross profit results reflect the full-year contribution from our Blue
Rhino operations, which experienced a more than 20-percent increase in
year-over-year sales volumes, contributions from recent retail propane
acquisitions and improved margins from retail locations. These increases in
gross profit were partially offset by reduced sales volumes resulting from
continued customer conservation related to the high commodity prices and
warmer temperatures and a lesser contribution from risk management activities.
Operating and general and administrative expenses for the fiscal year were
$366.2 million and $42.3 million, respectively, compared to $323.3 million and
$34.5 million in the prior fiscal year. Increases in these expenses primarily
reflect the full-year contribution from the Blue Rhino operations and recent
retail propane acquisitions and, to a lesser extent, anticipated costs
associated with the ongoing rollout of the partnership's new technology
initiative to its retail distribution locations.
Interest expense and depreciation and amortization expense were
$91.5 million and $83.1 million, respectively, compared to $74.5 million and
$56.1 million in the prior fiscal year. Increases in these expenses primarily
reflect the impact of recent acquisitions, including the Blue Rhino
contribution in April 2004. Equipment lease expense for the fiscal year was
$25.5 million, compared to $19.7 million in the prior fiscal year primarily
reflecting the addition of leased equipment related to the partnership's
technology initiative.
Adjusted EBITDA, including results from discontinued operations, and net
earnings for fiscal 2005 were $189.2 million and $88.8 million, respectively,
compared to $173.7 million and $28.6 million achieved in fiscal 2004. Fiscal
2005 net earnings were favorably impacted by the partnership's July 2005
divestiture of certain non-strategic storage and terminal assets, which
generated a $97.0 million gain on the sale of these discontinued operations.
"With the rollout of our technology platform behind us and our recent
significant debt reduction, we are now operationally and financially
positioned in fiscal 2006 to be more flexible to changes in customer demand,
commodity prices and other factors impacting our industry," said Mr. Ferrell.
"We are excited to share with investors what our enhanced capabilities can
produce and expect to show a significant improvement in our financial results
beginning with our upcoming fiscal first quarter."
For the fourth quarter, propane sales volumes and gross profit were
130 million gallons and $106.3 million, respectively. Operating and general
and administrative expenses were $86.9 million and $10.7 million,
respectively. Interest expense and depreciation and amortization expense were
$22.8 million and $21.5 million, respectively, while equipment lease expense
was $6.8 million. These seasonal results produced an expected Adjusted
EBITDA, including results from discontinued operations, of $3.2 million and
net earnings of $46.6 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, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands and Canada.
Ferrellgas employees indirectly own more than 18 million common units of
Ferrellgas Partners 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 Annual Report on 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, 2005 and other documents filed from time to time by
these entities with the Securities and Exchange Commission.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS July 31, 2005 July 31, 2004
Current Assets:
Cash and cash equivalents $20,505 $15,428
Accounts and notes receivable, net 107,778 110,389
Inventories 97,743 96,359
Prepaid expenses and other current
assets 12,861 9,715
Current assets of discontinued
operations - 11,348
Total Current Assets 238,887 243,239
Property, plant and equipment, net 766,765 776,507
Goodwill 234,142 230,604
Intangible assets, net 255,277 264,427
Other assets, net 13,902 15,330
Non-current assets of discontinued
operations - 48,068
Total Assets $1,508,973 $1,578,175
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $108,667 $101,737
Short term borrowings 19,800 -
Other current liabilities (a) 71,535 88,313
Current liabilities of discontinued
operations - 7,052
Total Current Liabilities 200,002 197,102
Long-term debt (a) 948,977 1,153,652
Other liabilities 20,165 17,052
Non-current liabilities of
discontinued operations - 3,479
Contingencies and commitments - -
Minority interest 6,151 4,791
Partners' Capital:
Senior unitholder (0 and 1,994,146
units outstanding and liquidation
preference $0 and $79,766 at 2005
and 2004 respectively) - 79,766
Common unitholders (60,134,054 and
48,772,875 units outstanding
at 2005 and 2004, respectively) 390,422 178,994
General partner unitholder (607,415
and 512,798 units outstanding
at 2005 and 2004, respectively) (56,132) (57,391)
Accumulated other comprehensive
income (loss) (612) 730
Total Partners' Capital 333,678 202,099
Total Liabilities and Partners'
Capital $1,508,973 $1,578,175
(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, 2005 AND 2004
(in thousands, except per unit data)
(unaudited)
Three months ended July 31 Twelve months ended July 31
2005 2004 2005 2004
Revenues:
Propane and
other gas
liquids sales $261,908 $209,139 $1,592,325 $1,210,564
Other 34,442 34,413 161,789 97,822
Total
revenues 296,350 243,552 1,754,114 1,308,386
Cost of product
sold 190,091 139,296 1,140,298 766,404
Gross profit 106,259 104,256 613,816 541,982
Operating
expense 86,864 91,849 366,192 323,260
Depreciation and
amortization
expense 21,509 19,673 83,060 56,111
General and
administrative
expense 10,664 10,771 42,342 34,532
Equipment lease
expense 6,821 5,396 25,495 19,652
Employee stock
ownership plan
compensation
charge 3,814 1,902 12,266 7,892
Loss on sale of
assets and
other 4,070 2,652 8,673 7,133
Operating income
(loss) (27,483) (27,987) 75,788 93,402
Interest expense (22,848) (22,384) (91,518) (74,467)
Interest income 368 322 1,894 1,582
Earnings (loss)
before income
taxes, minority
interest, and
discontinued
operations (49,963) (50,049) (13,836) 20,517
Income tax
expense
(benefit) 879 (419) 1,447 (402)
Minority
interest (b) (452) (444) 92 418
Earnings (loss)
before
discontinued
operations (50,390) (49,186) (15,375) 20,501
Earnings from
discontinued
operations
(including gain
on sale in 2005
of $97,001),
net of minority
interest 97,027 1,415 104,189 8,049
Net earnings
(loss) 46,637 (47,771) 88,814 28,550
Distributions to
senior unitholder 1,323 1,995 7,305 7,977
Net earnings (loss)
available to
general partner 3,146 (497) 815 206
Net earnings (loss)
available to
common
unitholders $42,168 $(49,269) $80,694 $20,367
Basic earnings
(loss) per
common unit:
Net earnings
available to
common unitholders
before discontinued
operations(c) $(0.91) $(1.04) $(0.41) $0.30
Earnings from
discontinued
operations $1.66 $0.03 $1.91 $0.19
Net earnings
available to
common
unitholders (e) $0.75 $(1.01) $1.50 $0.49
Weighted average
common units
outstanding 56,460.5 48,772.0 53,945.4 41,419.2
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended July 31 Twelve months ended July 31
2005 2004 2005 2004
Propane gallons 897,606 129,948 897,606 873,711
Net earnings
(loss) $46,637 $(47,771) $88,814 $28,550
Income taxes 879 (419) 1,447 (402)
Interest
expense 22,848 22,384 91,518 74,467
Depreciation
and amortization
expense 21,509 19,673 83,060 56,111
Interest
income (368) (322) (1,894) (1,582)
EBITDA $91,505 $(6,455) $262,945 $157,144
Employee stock
ownership plan
compensation
charge 3,814 1,902 12,266 7,892
Earnings from
discontinued
operations(a) (95,751) 364 (94,785) 1,121
Loss on disposal
of assets and
other 4,070 2,652 8,673 7,133
Minority
interest (b) (452) (444) 92 418
Adjusted
EBITDA (d) $3,186 $(1,981) $189,191 $173,708
(a) Gain on sale of storage and distribution business sold during July
2005 and other non-cash items related to the discontinued operations.
(b) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(c) Amount calculated as 99% of the earnings (loss) before discontinued
operations less distribution to senior unit holder; the result then
divided by the weighted average common units outstanding.
(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, loss on disposal of assets and other,
minority 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 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.
(e) Emerging Issues Task Force ("EITF") 03-6 "Participating Securities
and the Two-Class Method under FASB Statement No. 128, Earnings per
Share," 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 to be 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. The dilutive effect of EITF 03-6
on basic net earnings per common unit was $0.04 for the three months
ended July 31, 2005.
Contact:
Ryan VanWinkle, Investor Relations, 913-661-1528
Scott Brockelmeyer, Media Relations, 913-661-1830
SOURCE Ferrellgas Partners, L.P.
/CONTACT: Ryan VanWinkle, Investor Relations, +1-913-661-1528, or Scott
Brockelmeyer, Media Relations, +1-913-661-1830, both of Ferrellgas Partners,
L.P./
/Web site: http://www.ferrellgas.com /
(FGP)
