OVERLAND PARK, Kan., June 8, 2005 /PRNewswire-FirstCall via COMTEX/ -- Ferrellgas Partners,
L.P. (NYSE: FGP), one of the nation's largest propane distributors, today
reported earnings for its fiscal third quarter ended April 30, 2005.
Propane sales for the fiscal third quarter were 251 million gallons, up
slightly from fiscal third quarter 2004 sales volumes of 249 million gallons,
primarily reflecting the contribution from the Blue Rhino portable propane
tank exchange operations offset by warmer than normal heating season
temperatures and the effects of continued customer conservation that resulted
from significantly higher wholesale commodity prices. For the quarter, winter
heating season temperatures were approximately 2% warmer than in the prior
year period and 7% warmer than normal.
"Now that we have completed the 2005 winter heating season, we welcome the
start of the summer grilling/tank exchange season, as we build upon the strong
momentum in the Blue Rhino tank exchange unit sales, with over 20% growth seen
so far this fiscal year," said James E. Ferrell, Chairman, President and Chief
Executive Officer of Ferrellgas Partners. "In addition, with the nationwide
rollout of our new technology initiative now more than 50% complete, we remain
confident that we will enjoy significant cost savings and other benefits from
the new platform that will help to contribute more than $30 million to our
adjusted EBITDA performance in fiscal 2006."
Gross profit for the fiscal third quarter increased 16 percent to a record
$180.6 million, compared to $155.8 million reported in the third quarter of
fiscal 2004. This increase in gross profit was primarily due to the off-
season contribution from the Blue Rhino operations and improved margins from
retail locations, partially offset by reduced sales volumes resulting from
continued customer conservation related to the high commodity prices and from
warmer temperatures.
Operating and general and administrative expenses for the fiscal third
quarter were $94.1 million and $9.8 million, respectively, compared to
$80.9 million and $7.9 million in the third quarter of fiscal 2004. Increases
in these expenses primarily reflect the contribution from the Blue Rhino
operations and, to a lesser extent, anticipated costs associated with the
on-going roll-out of the partnership's new technology initiative to its retail
distribution outlets.
Interest and depreciation and amortization expenses were $22.6 million and
$21.3 million, respectively, for the fiscal quarter compared to $18.0 million
and $13.3 million in the third quarter of fiscal 2004. Increases in these
expenses primarily reflect the impact of acquisitions completed in the last
twelve-month period, including the Blue Rhino transaction. Equipment lease
expense for the fiscal quarter was $6.8 million, compared to $5.0 million in
the prior year's quarter primarily reflecting costs associated with the
implementation of the partnership's new technology initiative.
Adjusted EBITDA for the fiscal third quarter increased 13% to a
near-record $69.8 million, as compared to $62.0 million in the third quarter
of fiscal 2004. Net earnings for the fiscal third quarter were $20.0 million,
as compared to $27.9 million reported in the prior year period. The reduction
in net earnings for the fiscal quarter compared to last year related primarily
to the increase in interest and depreciation and amortization associated with
the Blue Rhino transaction completed in April 2004.
During the fiscal third quarter, the partnership announced that its
operating partnership, Ferrellgas, L.P., had refinanced its existing bank
credit facility, extending its maturity until April 2010. The new
$330 million credit facility replaced the previous $307.5 million bank credit
facility entered into in December 2002. The new five-year facility is
supported by a 12-bank syndicate comprised of the 10 lenders to the previous
credit facility together with two new financial institutions. Borrowings
under the new credit facility are available for working capital needs, capital
expenditures and other general partnership purposes.
For the nine-months ended April 30, 2005, propane sales volumes and gross
profit were 767 million gallons and $517.5 million, respectively, and
operating and general and administrative expenses were $281.2 million and
$31.7 million, respectively. Interest and depreciation and amortization
expenses for the nine-month period were $68.7 million and $62.5 million,
respectively, and equipment lease expense for the period was $18.7 million.
Adjusted EBITDA and net earnings for the period were $186.0 million and
$42.2 million, respectively.
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 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, 2004, the Quarterly Report on Form 10-Q of these
entities for the fiscal quarter ended January 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 April 30, 2005 July 31, 2004
Current assets:
Cash and cash equivalents $19,717 $15,428
Accounts and notes receivable, net 163,252 114,211
Inventories 88,653 103,578
Prepaid expenses and other current
assets 13,228 10,022
Total current assets 284,850 243,239
Property, plant and equipment, net 789,442 792,436
Goodwill 265,786 261,768
Intangible assets, net 262,458 265,125
Other assets 15,986 15,607
Total assets $1,618,522 $1,578,175
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $89,597 $104,309
Other current liabilities (a) 87,281 92,793
Short-term borrowings 86,199 -
Total current liabilities 263,077 197,102
Long-term debt (a) 1,059,139 1,153,652
Other liabilities 23,169 20,531
Contingencies and commitments - -
Minority interest 5,539 4,791
Partners' capital:
Senior unitholder (1,994,146 units
outstanding and liquidation preference
$79,766 at both April 2005 and July 2004) 79,766 79,766
Common unitholders (54,113,205 and
48,772,875 units outstanding
at April 2005 and July 2004,
respectively) 245,434 178,994
General partner unitholder (566,741
and 512,798 units outstanding
at April 2005 and July 2004, respectively) (56,777) (57,391)
Accumulated other comprehensive
income (loss) (825) 730
Total partners' capital 267,598 202,099
Total liabilities and partners'
capital $1,618,522 $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 NINE MONTHS ENDED APRIL 30, 2005 AND 2004
(in thousands, except per unit data)
(Unaudited)
Three months ended Nine months ended
April 30 April 30
2005 2004 2005 2004
Revenues:
Gas liquids and
related sales $467,664 $368,264 $1,400,519 $1,057,751
Other 52,252 21,883 135,393 69,591
Total revenues 519,916 390,147 1,535,912 1,127,342
Cost of product sold 339,351 234,331 1,018,385 680,479
Gross profit 180,565 155,816 517,527 446,863
Operating expense 94,142 80,858 281,153 233,141
Depreciation and
amortization expense 21,300 13,270 62,480 37,130
General and
administrative expense 9,839 7,888 31,678 23,761
Equipment lease expense 6,772 5,029 18,691 14,272
Employee stock
ownership plan
compensation charge 4,007 2,042 8,452 5,990
Loss on disposal of
assets and other 1,494 925 4,567 4,477
Operating income 43,011 45,804 110,506 128,092
Interest expense (22,611) (17,998) (68,670) (52,083)
Interest income 550 459 1,526 1,260
Earnings before
income taxes and
minority interest 20,950 28,265 43,362 77,269
Income tax expense 635 17 568 17
Minority interest (a) 267 336 617 931
Net earnings 20,048 27,912 42,177 76,321
Distributions to
senior unitholder 1,994 1,994 5,982 5,982
Net earnings available
to general partner 181 259 362 703
Net earnings available
to common unitholders $17,873 $25,659 $35,833 $69,636
Basic earnings per
common unit:
Net earnings per
common unitholder (b) $0.33 $0.63 $0.67 $1.78
Weighted average
common units
outstanding 54,110.3 40,664.1 53,097.8 39,128.4
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended Nine months ended
April 30 April 30
2005 2004 2005 2004
Propane sales volumes
(in thousands of
gallons) 251,393 249,424 767,553 743,763
Net earnings $20,048 $27,912 $42,177 $76,321
Income tax expense 635 17 568 17
Interest expense 22,611 17,998 68,670 52,083
Depreciation and
amortization expense 21,300 13,270 62,480 37,130
Interest income (550) (459) (1,526) (1,260)
EBITDA $64,044 $58,738 $172,369 $164,291
Employee stock
ownership plan
compensation charge 4,007 2,042 8,452 5,990
Loss on disposal of
assets and other 1,494 925 4,567 4,477
Minority interest (a) 267 336 617 931
Adjusted EBITDA (c) $69,812 $62,041 $186,005 $175,689
(a) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(b) Ferrellgas implemented Emerging Issues Task Force ("EITF") 03-6
"Participating Securities and the Two-Class Method under FASB
Statement No. 128, Earnings per Share" in the quarter ended January
31, 2005, which was the first quarter affected by this consensus.
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 the earnings to the limited partners. Due
to the seasonality of the propane business, the dilution effect of
EITF 03-6 on net earnings per limited partner unit will typically
impact the three months and six months ending January 31. EITF 03-6
did not have a dilutive effect on the three months and nine months
ended April 30, 2005.
(c) 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.
Contact:
Ryan VanWinkle, Investor Relations, 913-661-1528
Scott Brockelmeyer, Media Relations, 913-661-1830
SOURCE Ferrellgas Partners, L.P.
Ryan VanWinkle, Investor Relations, +1-913-661-1528, or Scott Brockelmeyer, Media
Relations, +1-913-661-1830, both of Ferrellgas Partners, L.P.
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