LIBERTY, Mo., Feb. 25 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), one of the nation's largest retail marketers of propane, today
reported earnings for the second quarter of fiscal year 2004. The second
quarter covers the three-month period ended January 31, 2004.
Significantly warmer than normal winter heating season temperatures
resulted in retail sales for the quarter of 319 million gallons, compared to
the prior year's near-record sales volume of 360 million gallons sold in the
quarter. Gross profit for the quarter was $194.9 million, compared to
$209.7 million reported in the second quarter of fiscal 2003, primarily the
result of the lower retail gallon sales and contributions from risk management
activities, partially offset by increased margins from retail locations.
Operating expense for the second quarter was $79.8 million, essentially
unchanged compared to the prior year's quarter and general and administrative
expense for the quarter was $9.0 million, compared to $7.8 million reported in
the second quarter of fiscal 2003. Equipment lease expense for the quarter
was $4.7 million, down $0.8 million from the prior year's quarter.
Adjusted EBITDA and net earnings for the second quarter were
$101.4 million and $67.1 million, respectively, compared to $116.8 million and
$87.1 million reported in the prior year period.
"This winter has presented our industry many challenges, as winter heating
season temperatures in our operating areas have been significantly warmer than
normal," said James E. Ferrell, Chairman and Chief Executive Officer. "As we
have demonstrated in the past, we will meet these challenges through effective
margin and cost management, providing a secure distribution to our common
unitholders, while looking for opportunities to expand our operations."
On February 9, 2004, the partnership announced it will acquire
substantially all of the assets of Blue Rhino Corporation from a subsidiary of
Ferrell Companies, Inc., the parent of the partnership's general partner.
Blue Rhino is the nation's leading provider of branded propane tank exchange
service and complimentary products with 29,000 retail locations in 49 states
and Puerto Rico. Terms of the agreement call for the partnership to assume
the requirement to pay $17 in cash for each share of Blue Rhino stock
outstanding on the date of the acquisition by the subsidiary, anticipated to
be approximately $340 million.
"Blue Rhino is a great compliment to our existing base business and will
provide us a large presence in the tank exchange market, the fastest growing
portion of the retail propane industry," added Mr. Ferrell. "Blue Rhino's
counter-cyclical operations and cash flow will further enhance our ability to
provide stable, consistent earnings to investors, while providing us the
opportunity to achieve year-over-year organic growth."
For the six-months ended January 31, 2004, retail propane sales volumes
and gross profit were 494 million gallons and $291.0 million, respectively,
and operating and general and administrative expenses were $152.3 million and
$15.9 million, respectively. Equipment lease expense for the six-month period
was $9.2 million. As is typically the case, year-to-date results were
primarily impacted by the seasonal performance experienced in the second
quarter. Adjusted EBITDA and net earnings for the six-month period were
$113.6 million and $48.4 million, respectively, compared to $128.1 million and
$62.1 million for the same period last year.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 45 states.
Ferrellgas employees indirectly own more than 17 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.
CONTACT: Ryan VanWinkle, Investor Relations, 816-792-7998, Scott
Brockelmeyer, Media Relations, 816-792-7837, both of Ferrellgas Partners, L.P.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS January 31, 2004 July 31, 2003
Current Assets:
Cash and cash equivalents $23,072 $11,154
Accounts and notes receivable, net 157,581 56,742
Inventories 83,976 69,077
Prepaid expenses and other current
assets 8,819 8,306
Total Current Assets 273,448 145,279
Property, plant and equipment, net 698,457 684,917
Goodwill 124,190 124,190
Intangible assets, net 110,067 98,157
Other assets 8,609 8,853
Total Assets $1,214,771 $1,061,396
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $116,813 $59,454
Other current liabilities 71,185 89,687
Short-term borrowings 42,700 -
Total Current Liabilities 230,698 149,141
Long-term debt (a) 900,396 888,226
Other liabilities 19,728 18,747
Contingencies and commitments - -
Minority interest 2,853 2,363
Partners' Capital:
Senior unitholder (1,994,146 units
outstanding at both January 2004
and July 2003 - liquidation
preference $79,766 at both
January 2004 and July 2003) 79,766 79,766
Common unitholders (39,727,834 and
37,673,455 units outstanding
at January 2004 and July 2003,
respectively) 41,879 (15,602)
General partner unitholder (421,434
and 400,683 units outstanding
at January 2004 and July 2003,
respectively) (58,736) (59,277)
Accumulated other comprehensive loss (1,813) (1,968)
Total Partners' Capital 61,096 2,919
Total Liabilities and Partners' Capital $1,214,771 $1,061,396
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., is $218 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 SIX MONTHS ENDED JANUARY 31, 2004 AND 2003
(in thousands, except per unit data)
(Unaudited)
Three months ended Six months ended
January 31 January 31
2004 2003 2004 2003
Revenues:
Propane and other
gas liquids sales $457,433 $439,301 $689,487 $634,201
Other 24,348 25,165 47,708 46,579
Total revenues 481,781 464,466 737,195 680,780
Cost of product sold 286,899 254,718 446,148 378,390
Gross profit 194,882 209,748 291,047 302,390
Operating expense 79,804 79,677 152,283 148,105
Depreciation and
amortization expense 12,665 10,261 23,860 20,156
General and
administrative expense 8,982 7,759 15,873 14,661
Equipment lease expense 4,732 5,528 9,243 11,520
Employee stock ownership
plan compensation
charge 2,164 1,639 3,948 3,034
Loss on disposal of
assets and other 1,926 1,125 3,552 1,796
Operating income 84,609 103,759 82,288 103,118
Interest expense (17,291) (16,084) (34,085) (30,780)
Interest income 470 364 801 426
Early extinguishment
of debt expense (a) - - - (7,052)
Earnings before
minority interest
and cumulative effect
of change in
accounting principle 67,788 88,039 49,004 65,712
Minority interest (b) 733 937 595 822
Earnings before
cumulative effect of
change in accounting
principle 67,055 87,102 48,409 64,890
Cumulative effect of
change in accounting
principle, net of
minority interest
of $28 (c) - - - (2,754)
Net earnings 67,055 87,102 48,409 62,136
Distribution to senior
unitholder 1,994 2,743 3,988 5,525
Net earnings available
to general partner 650 843 444 566
Net earnings available
to common unitholders $64,411 $83,516 $43,977 $56,045
Basic earnings per common unit:
Earnings before
cumulative effect of
change in accounting
principle (d) $1.65 $2.31 $1.15 $1.62
Net earnings available
to common unitholders $1.65 $2.31 $1.15 $1.55
Weighted average
common units
outstanding 39,048.2 36,144.0 38,377.2 36,116.0
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended Six months ended
January 31 January 31
2004 2003 2004 2003
Retail gallons 318,767 360,388 494,339 532,414
Net earnings $67,055 $87,102 $48,409 $62,136
Interest expense 17,291 16,084 34,085 30,780
Depreciation and
amortization expense 12,665 10,261 23,860 20,156
Interest income (470) (364) (801) (426)
EBITDA $96,541 $113,083 $105,553 $112,646
Employee stock
ownership plan
compensation charge 2,164 1,639 3,948 3,034
Loss on disposal of
assets and other 1,926 1,125 3,552 1,796
Minority interest (b) 733 937 595 822
Early extinguishment
of debt expense (a) - - - 7,052
Cumulative effect of
change in accounting
principle (c) - - - 2,754
Adjusted EBITDA (e) $101,364 $116,784 $113,648 $128,104
(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.
