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Ferrellgas Partners, L.P. Reports Second Quarter Fiscal 2023 Results
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  • Financial Highlights
    • Revenues for the second fiscal quarter were flat with a slight decrease of $1.0 million compared to the prior year period.
    • Gross Profit for the second fiscal quarter increased $34.0 million, or 11%, compared to the prior year period.
    • Margin per gallon for the second fiscal quarter increased $0.13, or 12%, compared to the prior year period.
    • Net earnings attributable to Ferrellgas Partners, L.P. decreased $10.3 million, or 10%, compared to the prior year period.
    • Adjusted EBITDA increased by $4.5 million, or 3%, compared to the prior year period.
  • Company Highlights
    • Ferrellgas welcomed Rez-Bear Propane, located in Harris, New York, as its newest acquisition to the Ferrellgas Family during the second fiscal quarter.
    • Blue Rhino became the official propane sponsor of the Steak Cookoff Association for 2023.
    • In the second fiscal quarter, 113 employees received Ferrellgas Flame Awards for exemplary performance in the areas of Safety, Customer Service, Innovation, and Leadership.

LIBERTY, Mo., March 10, 2023 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second fiscal quarter ended January 31, 2023.

“The people of Ferrellgas work together each day to build on more than 80-year-old history of innovation to grow via one of the best logistics infrastructures in the business,” said James E. Ferrell, Chief Executive Officer and President. “There is nothing better than the footsteps of an owner to grow a business, and our almost 4,500 employee-owners are unmatched at finding opportunities to grow demand for clean, portable, and affordable propane.”

Revenues were flat with a slight decrease of $1.0 million for the second fiscal quarter compared to the prior year period. Gallons sold decreased 1%, or 2.6 million gallons, compared to the prior year second fiscal quarter.

Gross profit increased $34.0 million, or 11%, for the second fiscal quarter. Cost of sales was favorable with a decrease of $35.0 million, or 9%, for the second fiscal quarter. Margin per gallon increased by $0.13, or 12%, compared to the prior year period. The Company continues to realize cost savings through its asset utilization management and redeployment of tanks to locations with higher usage statistics.

Operating income per gallon decreased $0.05, or 10%, compared to the prior year period. Operating income for the second fiscal quarter decreased $12.9 million, or 10%, compared to the prior year period. Results were impacted by higher fuel costs and fleet charges related to maintenance and repairs.

For the second fiscal quarter 2023 and 2022, the Company reported net earnings attributable to Ferrellgas Partners, L.P. of $98.1 million and $108.4 million, respectively. Adjusted EBITDA, a non-GAAP financial measure, increased by $4.5 million, or 3%, to $155.9 million in the second fiscal quarter 2023 compared to $151.4 million in the prior year period. The change was primarily due to EBITDA adjustments related to a decrease of $9.6 million in gain on assets sales and disposals and a $6.3 million increase in legal fees related to non-core businesses in addition to a $1.9 million decrease in interest expense.

“Our Company shows its appreciation to its most valuable resource, our employee-owners, in many ways throughout the year. Our employees also choose to appreciate each other. They do this by way of our Ferrellgas Flame award in the categories of Safety, Customer Service, Innovation, and Leadership. Over 113 employees were celebrated this quarter,” Ferrell added. “Additionally, hundreds of our hard working, dedicated employees gathered to celebrate via a facilitated zoom event this holiday season. I could not be more proud of our company and our willingness to come together in work and in appreciation.”

The Company announced Blue Rhino’s propane sponsorship of the Steak Cookoff Association (“SCA”) for 2023. The SCA is the world’s largest grilling competition for backyard chefs with 650 events scheduled this year in 46 states and 15 countries. Partnering with the SCA is a natural fit for Blue Rhino, the tank exchange brand of the Company.

On Friday, March 10, 2023, the Company will conduct a teleconference on the Internet at https://edge.media-server.com/mmc/p/38jfbo7w to discuss the results of operations for the second fiscal quarter ended January 31, 2023. The webcast of the teleconference will begin at 8:30 a.m. Central Time (9:30 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at InvestorRelations@ferrellgas.com.

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. Its Blue Rhino propane exchange brand is sold at more than 60,000 locations nationwide. Ferrellgas employees indirectly own 1.1 million Class A 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 30, 2022. 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, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2022, 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      January 31, 2023   July 31, 2022
             
Current assets:            
Cash and cash equivalents (including $11,130 and $11,208 of restricted cash at January 31, 2023 and July 31, 2022, respectively)   $ 123,777     $ 158,737  
Accounts and notes receivable, net     233,625       150,395  
Inventories     113,382       115,187  
Price risk management asset     18,276       43,015  
Prepaid expenses and other current assets     47,980       30,764  
Total current assets     537,040       498,098  
             
Property, plant and equipment, net     608,340       603,148  
Goodwill, net     257,006       257,099  
Intangible assets (net of accumulated amortization of $345,261 and $440,121 at January 31, 2023 and July 31, 2022, respectively)     108,407       97,638  
Operating lease right-of-use assets     63,438       72,888  
Other assets, net     66,762       79,244  
Total assets   $ 1,640,993     $ 1,608,115  
             
             
LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)            
             
Current liabilities:            
Accounts payable   $ 87,354     $ 57,586  
Broker margin deposit liability     11,450       32,805  
Current portion of long-term debt     2,152       1,792  
Current operating lease liabilities     24,559       25,824  
Other current liabilities     210,397       185,805  
Total current liabilities     335,912       303,812  
             
Long-term debt     1,453,716       1,450,016  
Operating lease liabilities     39,567       47,231  
Other liabilities     33,605       43,518  
             
Contingencies and commitments            
             
Mezzanine equity:            
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at January 31, 2023 and July 31, 2022)     651,349       651,349  
             
Equity (Deficit):            
Limited partner unitholders            
Class A (4,857,605 units outstanding at January 31, 2023 and July 31, 2022)     (1,167,936 )     (1,229,823 )
Class B (1,300,000 units outstanding at January 31, 2023 and July 31, 2022)     383,012       383,012  
General partner unitholder (49,496 units outstanding at January 31, 2023 and July 31, 2022)     (70,695 )     (71,320 )
Accumulated other comprehensive (loss) income     (10,098 )     37,907  
Total Ferrellgas Partners, L.P. deficit     (865,717 )     (880,224 )
Noncontrolling interest     (7,439 )     (7,587 )
Total deficit     (873,156 )     (887,811 )
Total liabilities, mezzanine and deficit   $ 1,640,993     $ 1,608,115  


FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)
(unaudited)
                                     
    Three months ended   Six Months ended   Twelve months ended
    January 31,    January 31,    January 31, 
     2023      2022      2023      2022      2023      2022  
Revenues:                                    
Propane and other gas liquids sales   $ 651,886     $ 657,504     $ 1,037,730     $ 1,030,208     $ 2,025,401     $ 1,889,577  
Other     32,057       27,434       59,502       49,236       106,927       89,723  
Total revenues     683,943       684,938       1,097,232       1,079,444       2,132,328       1,979,300  
                                     
Cost of sales:                                    
Propane and other gas liquids sales     347,492       383,213       560,573       603,751       1,130,826       1,077,283  
Other     4,243       3,557       9,019       7,167       14,361       12,724  
                                     
Gross profit     332,208       298,168       527,640       468,526       987,141       889,293  
                                     
Operating expense - personnel, vehicle, plant & other     157,355       128,013       287,095       245,125       562,573       486,667  
Operating expense - equipment lease expense     5,586       6,022       11,610       11,712       22,992       25,082  
Depreciation and amortization expense     23,069       21,944       45,700       42,239       93,358       84,982  
General and administrative expense     23,115       15,784       37,948       28,359       62,369       54,869  
Non-cash employee stock ownership plan compensation charge     722       751       1,445       1,660       2,955       3,405  
Loss (gain) on asset sales and disposals     290       (9,275 )     1,970       (7,865 )     3,217       (6,927 )
                                     
Operating income     122,071       134,929       141,872       147,296       239,677       241,215  
                                     
Interest expense     (23,177 )     (25,139 )     (48,186 )     (50,534 )     (97,745 )     (117,329 )
Loss on extinguishment of debt     —       —       —       —       —       (104,834 )
Other income, net     544       43       1,013       4,307       1,539       4,937  
Reorganization expense - professional fees     —       —       —       —       —       (9,243 )
                                     
Earnings before income tax expense     99,438       109,833       94,699       101,069       143,471       14,746  
                                     
Income tax expense     503       481       521       577       925       905  
                                     
Net earnings     98,935       109,352       94,178       100,492       142,546       13,841  
                                     
Net earnings (loss) attributable to noncontrolling interest (a)     835       947       623       693       797       (342 )
                                     
Net earnings attributable to Ferrellgas Partners, L.P.   $ 98,100     $ 108,405     $ 93,555     $ 99,799     $ 141,749     $ 14,183  
                                     
Class A unitholders' interest in net earnings (loss)   $ 11,557     $ 13,001     $ 8,592     $ 9,354     $ (19,532 )   $ (99,430 )
                                     
Net earnings (loss) per unitholders' interest                                    
Basic and diluted net earnings (loss) per Class A Unit   $ 2.38     $ 2.68     $ 1.77     $ 1.93     $ (4.02 )   $ (20.47 )
Weighted average Class A Units outstanding - basic and diluted     4,858       4,858       4,858       4,858       4,858       4,858  


Supplemental Data and Reconciliation of Non-GAAP Items:
                                     
    Three months ended   Six Months ended   Twelve months ended
    January 31,    January 31,    January 31, 
     2023      2022      2023      2022      2023      2022  
Net earnings attributable to Ferrellgas Partners, L.P.   $ 98,100     $ 108,405     $ 93,555     $ 99,799     $ 141,749     $ 14,183  
Income tax expense     503       481       521       577       925       905  
Interest expense     23,177       25,139       48,186       50,534       97,745       117,329  
Depreciation and amortization expense     23,069       21,944       45,700       42,239       93,358       84,982  
EBITDA     144,849       155,969       187,962       193,149       333,777       217,399  
Non-cash employee stock ownership plan compensation charge     722       751       1,445       1,660       2,955       3,405  
Loss (gain) loss on asset sales and disposal     290       (9,275 )     1,970       (7,865 )     3,217       (6,927 )
Loss on extinguishment of debt     —       —       —       —       —       104,834  
Other income, net     (544 )     (43 )     (1,013 )     (4,307 )     (1,539 )     (4,937 )
Reorganization expense - professional fees     —       —       —       —       —       9,243  
Severance costs include $49, $51 and $115 in operating expense for the three, six and twelve months ended January 31, 2023, respectively. Also includes $585, $593 and $610 in general and administrative expense for the three, six and twelve months ended January 31, 2023, respectively.     634       281       644       497       725       497  
Legal fees and settlements related to non-core businesses     9,107       2,807       13,979       4,938       16,979       8,931  
Net earnings (loss) attributable to noncontrolling interest (a)     835       947       623       693       797       (342 )
Adjusted EBITDA (b)     155,893       151,437       205,610       188,765       356,911       332,103  
Net cash interest expense (c)     (20,265 )     (27,620 )     (42,871 )     (46,739 )     (95,498 )     (106,933 )
Maintenance capital expenditures (d)     (4,375 )     (4,060 )     (10,207 )     (7,639 )     (19,587 )     (23,348 )
Cash paid for income taxes     (447 )     (407 )     (496 )     (407 )     (1,107 )     (808 )
Proceeds from certain asset sales     736       2,085       1,488       2,726       2,875       4,877  
Distributable cash flow attributable to equity investors (e)     131,542       121,435       153,524       136,706       243,594       205,891  
Less: Distributions accrued or paid to preferred unitholders     16,222       17,989       32,473       33,322       64,438       57,346  
Distributable cash flow attributable to general partner and non-controlling interest     (2,631 )     (2,437 )     (3,070 )     (2,742 )     (4,872 )     (4,126 )
Distributable cash flow attributable to Class A and B Unitholders (f)     112,689       101,009       117,981       100,642       174,284       144,419  
Less: Distributions paid to Class A and B Unitholders (g)     —       —       —       49,998       49,998       49,998  
Distributable cash flow excess (h)   $ 112,689     $ 101,009     $ 117,981     $ 50,644     $ 124,286     $ 94,421  
                                     
Propane gallons sales                                    
Retail - Sales to End Users     213,662       215,276       332,058       331,101       625,273       627,062  
Wholesale - Sales to Resellers     60,945       61,957       104,814       106,012       205,318       217,195  
Total propane gallons sales     274,607       277,233       436,872       437,113       830,591       844,257  
                                     


(a)


     Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.
(b)

     Adjusted EBITDA is calculated as net earnings attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, loss (gain) on asset sales and disposals, loss on extinguishment of debt, other income, net, reorganization expense – professional fees, severance costs, legal fees and settlements related to non-core businesses, 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 make it easier to compare its results with other companies that have different financing and capital structures.
      Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(c)

     Net cash interest expense is the sum of interest expense less non-cash interest expense and other income, net. This amount includes interest expense related to the terminated accounts receivable securitization facility.
(d)

     Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment, and may from time to time include the purchase of assets that are typically leased.
(e)     Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for income 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, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to similarly titled measurements used by other companies. 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 should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(f)     Distributable cash flow attributable to Class A and B Unitholders is calculated as Distributable cash flow attributable to equity investors minus distributions accrued or paid on the Preferred Units and distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to Class A and B Unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to Class A and B Unitholders. Distributable cash flow attributable to Class A and B Unitholders, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added to our calculation of distributable cash flow attributable to Class A and B Unitholders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to Class A and B Unitholders should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(g)

     The Company did not pay any distributions to Class A Unitholders during any of the periods in fiscal 2023 or fiscal 2022.
(h)     Distributable cash flow excess is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility or, previously, under our terminated accounts receivable securitization facility. Management considers Distributable cash flow excess a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess should be viewed in conjunction with measurements that are computed in accordance with GAAP.


Ferrellgas Partners, L.P.