UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported): March 11, 2020

 

Ferrellgas Partners, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware		001-11331		43-1698480
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)

 

7500 College Blvd., Suite 1000, Overland Park, Kansas		66210
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code:  913-661-1500

 

n/a

Former name or former address, if changed since last report

 

Ferrellgas Partners Finance Corp.

(Exact name of registrant as specified in its charter)

 

Delaware		333-06693-02		43-1742520
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)

 

7500 College Blvd., Suite 1000, Overland Park, Kansas		66210
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code:  913-661-1500

 

n/a

Former name or former address, if changed since last report

 

Ferrellgas, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware		000-50182		43-1698481
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)

 

7500 College Blvd., Suite 1000, Overland Park, Kansas		66210
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code:  913-661-1500

 

n/a

Former name or former address, if changed since last report

 

Ferrellgas Finance Corp.

(Exact name of registrant as specified in its charter)

 

Delaware		000-50183		14-1866671
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)

 

7500 College Blvd., Suite 1000, Overland Park, Kansas		66210
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code:  913-661-1500

 

n/a

Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered:
N/A		N/A		N/A

 

 

Item 2.02 Results of Operations and Financial Condition.

 

The information included in Item 7.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.02 of this Current Report on Form 8-K.

 

Item 7.01 Regulation FD Disclosure.

 

On March 11, 2020, Ferrellgas Partners, L.P. issued a press release regarding its financial results for the second fiscal quarter ended January 31, 2020. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit 99.1 — Press release of Ferrellgas Partners, L.P. dated March 11, 2020, reporting its financial results for the second fiscal quarter ended January 31, 2020.

Limitation on Materiality and Incorporation by Reference
The information in this Current Report on Form 8-K related to Items 2.02 and 7.01, including Exhibit 99.1 furnished herewith, is being furnished to the SEC pursuant to Item 2.02 and Item 7.01 of Form 8-K and is not deemed to be "filed" with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18. In addition, such information is not to be incorporated by reference into any registration statement of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P. or Ferrellgas Finance Corp. or other filings of such entities made pursuant to the Exchange Act or the Securities Act, unless specifically identified as being incorporated therein by reference.

 

The furnishing of particular information in this Current Report, including Exhibit 99.1 furnished herewith, pursuant to Item 7.01 of Form 8-K is not intended to, and does not, constitute a determination or admission by Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P. or Ferrellgas Finance Corp. as to the materiality or completeness of any such information that is required to be disclosed solely by Regulation FD of the Exchange Act.

 

 

Exhibit Index

 

Exhibit No.		Description
99.1		Press release of Ferrellgas Partners, L.P. dated March 11, 2020, reporting its financial results for the second fiscal quarter ended January 31, 2020.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		FERRELLGAS PARTNERS, L.P.
		By Ferrellgas, Inc. (General Partner)
Date:	March 11, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer
		FERRELLGAS PARTNERS FINANCE CORP.
Date:	March 11, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer and Sole Director
		FERRELLGAS, L.P.
		By Ferrellgas, Inc. (General Partner)
Date:	March 11, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer
		FERRELLGAS FINANCE CORP.
Date:	March 11, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer and Sole Director

 

 

 

Exhibit 99.1 

 

Ferrellgas Partners, L.P. Reports Second

Quarter Fiscal 2020 Results

 

·

Gross Profit increased by $11.2 million, or 4.3 percent, compared to the prior year period as a result of a 3 percent increase in retail customers and a 7 percent increase in tank exchange selling locations combined with a 4.0¢ increase in margin cpg.

 

·

Propane sales volume for the quarter decreased slightly by 4.4 million gallons, or 1.4 percent, despite weather that was 7.4 percent warmer than the prior year.

 

OVERLAND PARK, KS., March 11, 2020 (GLOBE NEWSWIRE) – Ferrellgas Partners, L.P. (OTC Pink: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second quarter ended January 31, 2020.

 

For the quarter, the Company reported a net earnings attributable to Ferrellgas Partners, L.P. of $48.2 million, or $0.49 per common unit, compared to prior year period net earnings of $43.3 million, or $0.44 per common unit. Adjusted EBITDA, a non-GAAP measure, for the quarter was $121.4 million compared to $119.7 million in the prior year’s second quarter, a 1.4 percent increase.

 

The Company’s propane operations reported that total gallons sold for the quarter were 305.3 million, down slightly from 309.7 million gallons in the prior year. Margin cents per gallon were 4.0¢, or 5.2 percent, higher than the prior year in part due to wholesale propane prices that were approximately 30 percent lower than the prior year. The Company continues its aggressive operating strategies in gaining market share. This strategic focus resulted in over 18,000 new customers, or approximately 3 percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased over 7 percent from prior year to over 57,500 locations. Operating expense increased $7.0 million despite the reduced volumes which resulted primarily from weather in the month of January that was 15.3 percent warmer than prior year.

 

As previously announced, the Company indefinitely suspended its quarterly cash distribution as a result of not meeting the required fixed charge coverage ratio contained in the senior unsecured notes due June of 2020. Additionally, Ferrellgas has engaged Moelis & Company LLC as its financial advisor and the law firm of Squire Patton Boggs LLP to assist in our ongoing process to address our upcoming debt maturities. The Company does not intend to comment further on its progress in this regard or on potential options until further disclosure is appropriate or required by law.  For that reason, and in view of the information the Company otherwise makes available in earnings releases and quarterly and annual reports, the Company has suspended the practice of holding conference calls with investors, analysts and other interested parties in connection with periodic reporting of financial results for completed periods.

 

 

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. Ferrellgas employees indirectly own 22.8 million common 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 October 15, 2019. 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 Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2019, 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)
			January 31, 2020				July 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents		$	13,706			$	11,054
Accounts and notes receivable, net (including $175,386 and $106,145 of accounts receivable pledged as collateral at January 31, 2020 and July 31, 2019, respectively)			182,444				107,596
Inventories			78,474				80,454
Prepaid expenses and other current assets			47,751				42,275
Total Current Assets			322,375				241,379
Property, plant and equipment, net			594,007				596,723
Goodwill, net			247,195				247,195
Intangible assets, net			106,214				108,557
Operating lease right-of-use asset			120,423				-
Other assets, net			80,998				69,105
Total Assets		$	1,471,212			$	1,262,959
LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Accounts payable		$	46,125			$	33,364
Short-term borrowings			40,000				43,000
Collateralized note payable			121,000				62,000
Current portion of long-term debt (a)			359,157				631,756
Current operating lease liabilities			33,263				-
Other current liabilities			155,340				138,237
Total Current Liabilities			754,885				908,357
Long-term debt			1,731,197				1,457,004
Operating lease liabilities			84,546				-
Other liabilities			45,259				36,536
Contingencies and commitments
Partners Deficit:
Common unitholders (97,152,665 units outstanding at January 31, 2020 and July 31, 2019)			(1,043,361	)			(1,046,245	)
General partner unitholder (989,926 units outstanding at January 31, 2020 and July 31, 2019)			(70,447	)			(70,476	)
Accumulated other comprehensive loss			(23,126	)			(14,512	)
Total Ferrellgas Partners, L.P. Partners' Deficit			(1,136,934	)			(1,131,233	)
Noncontrolling interest			(7,741	)			(7,705	)
Total Partners' Deficit			(1,144,675	)			(1,138,938	)
Total Liabilities and Partners' Deficit		$	1,471,212			$	1,262,959
		$	-

 

(a)

The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $357 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

 

 

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
		2020				2019				2020				2019				2020				2019
Revenues:
Propane and other gas liquids sales		$	485,247			$	550,112			$	758,632			$	885,078			$	1,482,412			$	1,633,057
Midstream operations							-				-				-				-				44,283
Other			25,586				23,265				45,415				40,608				80,341				111,677
Total revenues			510,833				573,377				804,047				925,686				1,562,753				1,789,017
Cost of sales:
Propane and other gas liquids sales			237,843				311,531				371,871				515,667				758,720				946,648
Midstream operations			-				-								-				-				40,367
Other			3,353				3,422				7,034				6,469				11,971				40,634
Gross profit			269,637				258,424				425,142				403,550				792,062				761,368
Operating expense - personnel, vehicle, plant & other			128,233				121,219				242,776				231,550				480,094				469,120
Depreciation and amortization expense			19,795				19,605				39,014				38,597				79,263				89,175
General and administrative expense			14,192				16,342				23,887				30,521				53,360				56,867
Operating expense - equipment lease expense			8,261				8,415				16,649				16,278				33,444				30,855
Non-cash employee stock ownership plan compensation charge			630				1,944				1,425				4,692				2,426				10,558
Loss on asset sales and disposals			2,148				2,216				4,383				6,720				8,631				153,975
Operating income (loss)			96,378				88,683				97,008				75,192				134,844				(49,182	)
Interest expense			(47,548	)			(44,891	)			(93,245	)			(88,769	)			(182,095	)			(173,756	)
Other income (expense), net			76				86				(56	)			105				208				(162	)
Earnings (loss) before income tax expense (benefit)			48,906				43,878				3,707				(13,472	)			(47,043	)			(223,100	)
Income tax expense (benefit)			115				3				633				161				795				(2,732	)
Net earnings (loss)			48,791				43,875				3,074				(13,633	)			(47,838	)			(220,368	)
Net earnings (loss) attributable to noncontrolling interest (b)			584				531				211				38				(125	)			(1,874	)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.			48,207				43,344				2,863				(13,671	)			(47,713	)			(218,494	)
Less: General partner's interest in net earnings (loss)			482				433				29				(137	)			(476	)			(2,185	)
Common unitholders' interest in net earnings (loss)		$	47,725			$	42,911			$	2,834			$	(13,534	)		$	(47,237	)		$	(216,309	)
Earnings (loss) Per Common Unit
Basic and diluted net earnings (loss) per common unitholders' interest		$	0.49			$	0.44			$	0.03			$	(0.14	)		$	(0.49	)		$	(2.23	)
Weighted average common units outstanding - basic			97,152.7				97,152.7				97,152.7				97,152.7				97,152.7				97,152.7

 

 

Supplemental Data and Reconciliation of Non-GAAP Items:
		Three months ended								Six months ended								Twelve months ended
		January 31								January 31								January 31
		2020				2019				2020				2019				2020				2019
Net earnings (loss) attributable to Ferrellgas Partners, L.P.		$	48,207			$	43,344			$	2,863			$	(13,671	)		$	(47,713	)		$	(218,494	)
Income tax expense (benefit)			115				3				633				161				795				(2,732	)
Interest expense			47,548				44,891				93,245				88,769				182,095				173,756
Depreciation and amortization expense			19,795				19,605				39,014				38,597				79,263				89,175
EBITDA			115,665				107,843				135,755				113,856				214,440				41,705
Non-cash employee stock ownership plan compensation charge			630				1,944				1,425				4,692				2,426				10,558
Loss on asset sales and disposal			2,148				2,216				4,383				6,720				8,631				153,975
Other income (expense), net			(76	)			(86	)			56				(105	)			(208	)			162
Severance expense includes $690 in operating expense and $910 in general and administrative expense for the three, six and twelve months ended period ending January 31, 2019.			-				1,600				-				1,600				-				1,600
Legal fees and settlements related to non-core businesses			2,519				5,608				4,562				9,172				13,754				13,119
Multi-employer pension plan withdrawal settlement			-				-				-				1,524				-				1,524
Exit costs associated with contracts - Midstream dispositions			-				-				-				-				-				11,804
Lease accounting standard adjustment			(116	)			-				54				-				54				-
Net earnings (loss) attributable to noncontrolling interest (b)			584				531				211				38				(125	)			(1,874	)
Adjusted EBITDA (c)			121,354				119,656				146,446				137,497				238,972				232,573
Net cash interest expense (d)			(43,316	)			(41,679	)			(85,899	)			(82,578	)			(168,111	)			(165,679	)
Maintenance capital expenditures (e)			(5,430	)			(26,147	)			(11,897	)			(31,532	)			(27,139	)			(45,805	)
Cash refund from (paid for) taxes			(1	)			4				(1	)			2				(144	)			305
Proceeds from certain asset sales			824				899				1,659				1,960				3,948				6,956
Distributable cash flow attributable to equity investors (f)			73,431				52,733				50,308				25,349				47,526				28,350
Distributable cash flow attributable to general partner and non-controlling interest			1,468				1,055				1,006				507				950				567
Distributable cash flow attributable to common unitholders (g)			71,963				51,678				49,302				24,842				46,576				27,783
Less: Distributions paid to common unitholders			-				-				-				9,715				-				29,145
Distributable cash flow excess/(shortage)		$	71,963			$	51,678			$	49,302			$	15,127			$	46,576			$	(1,362	)
Propane gallons sales
Retail - Sales to End Users			236,264				239,044				366,165				368,711				669,720				651,314
Wholesale - Sales to Resellers			68,996				70,655				119,035				119,615				231,986				231,454
Total propane gallons sales			305,260				309,699				485,200				488,326				901,706				882,768

 

(b)

Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.

 

(c)

Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., less the sum of the following: income tax expense (benefit), interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, loss on asset sales and disposals, other income (expense), net, severance expense, legal fees and settlements related to non-core businesses, multi-employer pension plan withdrawal settlement, exit costs associated with contracts - Midstream dispositions, lease accounting standard adjustment 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 makes it easier to compare its results with other companies that have different financing and capital structures. 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.

 

(d)

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

 

(e)

Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.

 

(f)

Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for 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. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to distributable cash flow attributable to equity investors or similarly titled measurements used by other corporations and partnerships. 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 may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.

 

(g)

Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to common unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow attributable to common unitholders, as management defines it, may not be comparable to distributable cash flow attributable to common unitholders or similarly titled measurements used by other corporations and partnerships. Items added to our calculation of distributable cash flow attributable to common unit holders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to common unitholders may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP .