LIBERTY, Mo., May 27 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), one of the nation's largest retail marketers of propane, today
reported earnings for the third quarter of fiscal year 2004. The third
quarter covers the three-month period ended April 30, 2004.
During the quarter, the partnership announced the acquisition of
substantially all of the assets of Blue Rhino. Blue Rhino is the nation's
leading provider of branded propane tank exchange service as well as leading
supplier of complimentary propane and non-propane products. Its tank exchange
service is offered at more than 30,000 retail locations in 49 states, Puerto
Rico and the U.S. Virgin Islands through leading home improvement centers,
mass merchants, hardware, grocery and convenience stores. The partnership
completed the transaction on April 21, 2004, near the beginning of the propane
grilling and tank exchange season.
Retail propane sales for the third quarter were 249 million gallons,
compared to near-record retail propane sales of 251 million gallons in the
previous fiscal year's quarter, as retail gallon growth from acquisitions was
offset by the impact from warmer than normal winter heating season
temperatures and customer conservation that resulted from historically high
wholesale propane costs. For the third quarter, national temperatures were
7 percent warmer than normal and 9 percent warmer than the prior fiscal year's
quarter, according to the National Oceanic and Atmospheric Administration.
Gross profit for the quarter was $155.8 million, compared to record gross
profit results of $161.4 million reported in the third quarter of fiscal 2003.
This quarter's gross profit results reflect a smaller contribution from risk
management activities and a slight reduction in the record-setting margins
achieved during the same quarter last fiscal year when wholesale propane costs
declined during the quarter.
Operating and general and administrative expenses for the quarter were
$80.9 million and $7.9 million, respectively, compared to $79.1 million and
$7.2 million in the prior year's quarter. Reductions in operating expense
this quarter were offset by increases related to acquisitions made during the
fiscal year. Equipment lease expense for the third quarter was $5.0 million,
essentially unchanged compared to the prior fiscal year's quarter.
Adjusted EBITDA and net earnings for the third quarter were $62.0 million
and $27.9 million, respectively, compared to a record-setting $70.1 million
and $39.4 million achieved during the prior fiscal year's quarter.
"We have been able to effectively manage our business through a
challenging environment this fiscal year, remaining focused on the long-term
growth of the company and the security in distributions to our common
unitholders, yet aware of the impact that high energy costs have on our
customer base," said James E. Ferrell, Chairman and Chief Executive Officer.
"As we move into the summer months, we are excited about the positive cash
flow contribution we anticipate coming from the recently acquired Blue Rhino
tank exchange operations, as these operations have historically produced more
than half of their annual cash flow during our fiscal fourth quarter."
For the nine-months ended April 30, 2004, retail propane sales volumes and
gross profit were 744 million gallons and $446.9 million, respectively, and
operating and general and administrative expenses were $233.1 million and
$23.8 million, respectively. Equipment lease expense for the nine-month
period was $14.3 million. Adjusted EBITDA and net earnings for the nine-month
period were $175.7 million and $76.3 million, respectively.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 49 states.
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.
CONTACT: Ryan VanWinkle, Investor Relations, 816-792-7998, or 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 April 30, 2004 July 31, 2003
Current Assets:
Cash and cash equivalents $21,027 $11,154
Accounts and notes receivable, net 147,211 56,742
Inventories 78,871 69,077
Prepaid expenses and other current assets 12,942 8,306
Total Current Assets 260,051 145,279
Property, plant and equipment, net 784,800 684,917
Goodwill 212,341 124,190
Intangible assets, net 317,210 98,157
Other assets 14,608 8,853
Total Assets $1,589,010 $1,061,396
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $94,314 $59,454
Other current liabilities 82,572 89,687
Total Current Liabilities 176,886 149,141
Long-term debt (a) 1,113,762 888,226
Other liabilities 21,216 18,747
Contingencies and commitments - -
Minority interest 5,051 2,363
Partners' Capital:
Senior unitholder (1,994,146 units
outstanding at both April 2004
and July 2003 -- liquidation
preference $79,766 at both
April 2004 and July 2003) 79,766 79,766
Common unitholders (48,771,875 and
37,673,455 units outstanding
at April 2004 and July 2003,
respectively) 250,767 (15,602)
General partner unitholder (512,788
and 400,683 units outstanding
at April 2004 and July 2003, respectively) (56,647) (59,277)
Accumulated other comprehensive loss (1,791) (1,968)
Total Partners' Capital 272,095 2,919
Total Liabilities and Partners'
Capital $1,589,010 $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 NINE MONTHS ENDED APRIL 30, 2004 AND 2003
(in thousands, except per unit data)
(Unaudited)
Three months ended April 30 Nine months ended April 30
2004 2003 2004 2003
Revenues:
Propane and other
gas liquids
sales $368,264 $351,338 $1,057,751 $985,539
Other 21,883 18,027 69,591 64,606
Total revenues 390,147 369,365 1,127,342 1,050,145
Cost of product
sold 234,331 207,934 680,479 586,324
Gross profit 155,816 161,431 446,863 463,821
Operating expense 80,858 79,121 233,141 227,226
Depreciation and
amortization
expense 13,270 10,563 37,130 30,719
General and
administrative
expense 7,888 7,202 23,761 21,863
Equipment lease
expense 5,029 4,990 14,272 16,510
Employee stock
ownership plan
compensation charge 2,042 1,619 5,990 4,653
Loss on disposal of
assets and other 925 1,985 4,477 3,781
Operating income 45,804 55,951 128,092 159,069
Interest expense (17,998) (16,548) (52,083) (47,328)
Interest income 459 424 1,260 850
Early extinguishment
of debt expense (a) - - - (7,052)
Earnings before income
taxes, minority interest,
and cumulative effect
of a change in
accounting
principle 28,265 39,827 77,269 105,539
Income taxes 17 - 17 -
Minority interest (b) 336 454 931 1,276
Earnings before
cumulative effect
of a change in
accounting
principle 27,912 39,373 76,321 104,263
Cumulative effect
of a change in
accounting principle,
net of minority
interest of $28 (c) - - - (2,754)
Net earnings 27,912 39,373 76,321 101,509
Distribution to
senior unitholder 1,994 2,775 5,982 8,300
Net earnings available
to general partner 259 366 703 932
Net earnings
available to
common unitholders $25,659 $36,232 $69,636 $92,277
Basic earnings per
common unit:
Earnings before
cumulative effect
of change in
accounting
principle (d) $0.63 $1.00 $1.78 $2.62
Net earnings
available to
common unitholders $0.63 $1.00 $1.78 $2.55
Weighted average
common units
outstanding 40,664.1 36,197.3 39,128.4 36,142.5
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended April 30 Nine months ended April 30
2004 2003 2004 2003
Retail gallons 249,424 250,620 743,763 783,034
Net earnings $27,912 $39,373 $76,321 $101,509
Income taxes 17 - 17 -
Interest expense 17,998 16,548 52,083 47,328
Depreciation and
amortization
expense 13,270 10,563 37,130 30,719
Interest income (459) (424) (1,260) (850)
EBITDA $58,738 $66,060 $164,291 $178,706
Employee stock
ownership plan
compensation
charge 2,042 1,619 5,990 4,653
Loss on disposal
of assets and other 925 1,985 4,477 3,781
Minority interest (b) 336 454 931 1,276
Early extinguishment
of debt expense (a) - - - 7,052
Cumulative effect of
change in
accounting
principle (c) - - - 2,754
Adjusted EBITDA (e) $62,041 $70,118 $175,689 $198,222
(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.
CONTACT: Ryan VanWinkle, Investor Relations, +1-816-792-7998, or Scott
Brockelmeyer, Media Relations, +1-816-792-7837, both of Ferrellgas Partners,
L.P.
