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): June 4, 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 June 4, 2020, Ferrellgas Partners, L.P. issued a press release regarding its financial results for the third fiscal quarter ended April 30, 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 June 4, 2020, reporting its financial results for the third fiscal quarter ended April 30, 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 June 4, 2020, reporting its financial results for the third fiscal quarter ended April 30, 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:	June 4, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer
		FERRELLGAS PARTNERS FINANCE CORP.
Date:	June 4, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer and Sole Director
		FERRELLGAS, L.P.
		By Ferrellgas, Inc. (General Partner)
Date:	June 4, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer
		FERRELLGAS FINANCE CORP.
Date:	June 4, 2020	By	/s/ William E. Ruisinger
			Chief Financial Officer and Sole Director

 

 

 

Exhibit 99.1

 

Ferrellgas Partners, L.P. Reports THIRD

Quarter Fiscal 2020 Results

 

	·	Gross Profit increased by $6.2 million, or almost 3 percent, compared to the prior year period as a result of an 8 cent increase in gross margin per gallon combined with a 24 percent increase in tank exchange volumes.
	·	Propane sales volume for the quarter decreased by 17.2 million gallons due to weather that was 10 percent warmer than the prior year and to the widespread slowdown of the economy due to COVID-19 primarily impacting the Industrial/Commercial customer base.
	·	Successfully issued $700M of Senior Secured Notes due 2025

 

OVERLAND PARK, KS., June 4, 2020 (GLOBE NEWSWIRE) – Ferrellgas Partners, L.P. (OTC Pink: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its third quarter ended April 30, 2020.

 

For the quarter, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $15.4 million, or $0.16 per common unit, compared to prior year period net earnings of $20.5 million, or $0.21 per common unit. The $15.4 million net loss attributable to Ferrellgas Partners, L.P. includes $37.4 million loss from early extinguishment of debt. Adjusted EBITDA, a non-GAAP measure, for the quarter was $92.3 million compared to $88.6 million in the prior year’s third quarter, a 4 percent increase.

 

The Company’s propane operations reported that total gallons sold for the quarter were 246.8 million, down from 264.1 million gallons in the prior year due to warmer termperatures than prior year and the widespread slowdown of the economy due to COVID-19, partially offset by customer growth. Gross margin cents per gallon were 8 cents, or 10 percent higher than the prior year due to wholesale propane prices that were approximately 50 percent lower than the prior year. The Company continues its aggressive operating strategies in gaining market share. This strategic focus resulted in over 22,000 new customers and over 3,900 new tank exchange selling locations, or approximately three and seven percent more than prior year, respectively. Additionally, the Company successfully issued $700M of senior first lien notes due 2025. Proceeds were used to repay the senior secured credit facility, to collateralize letters of credit and for general corporate purposes.

 

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)

 

ASSETS			April 30, 2020				July 31, 2019
Current Assets:
Cash and cash equivalents (including $141,318 and $0 of restricted cash at April 30, 2020 and July 31, 2019, repspectively)		$	318,847			$	11,054
Accounts and notes receivable, net (including $134,443 and $106,145 of accounts receivable pledged as collateral at April 30, 2020 and July 31, 2019, respectively)			142,952				107,596
Inventories			65,209				80,454
Prepaid expenses and other current assets			47,223				42,275
Total Current Assets			574,231				241,379
Property, plant and equipment, net			596,978				596,723
Goodwill, net			247,195				247,195
Intangible assets, net			103,966				108,557
Operating lease right-of-use asset			110,497				-
Other assets, net			87,472				69,105
Total Assets		$	1,720,339			$	1,262,959
LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Accounts payable		$	37,025			$	33,364
Short-term borrowings			-				43,000
Collateralized note payable			-				62,000
Current portion of long-term debt (a)			359,050				631,756
Current operating lease liabilities			31,914				-
Other current liabilities			174,823				138,237
Total Current Liabilities			602,812				908,357
Long-term debt			2,146,044				1,457,004
Operating lease liabilities			76,133				-
Other liabilities			52,167				36,536
Contingencies and commitments
Partners Deficit:
Common unitholders (97,152,665 units outstanding at April 30, 2020 and July 31, 2019)			(1,057,859	)			(1,046,245	)
General partner unitholder (989,926 units outstanding at April 30, 2020 and July 31, 2019)			(70,593	)			(70,476	)
Accumulated other comprehensive loss			(20,580	)			(14,512	)
Total Ferrellgas Partners, L.P. Partners' Deficit			(1,149,032	)			(1,131,233	)
Noncontrolling interest			(7,785	)			(7,705	)
Total Partners' Deficit			(1,156,817	)			(1,138,938	)
Total Liabilities and Partners' Deficit		$	1,720,339			$	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								Nine months ended								Twelve months ended
		April 30								April 30								April 30
		2020				2019				2020				2019				2020				2019
Revenues:
Propane and other gas liquids sales		$	391,745			$	459,556			$	1,150,377			$	1,344,634			$	1,414,601			$	1,641,311
Midstream operations							-				-				-				-				21,688
Other			20,385				20,069				65,800				60,677				80,657				89,833
Total revenues			412,130				479,625				1,216,177				1,405,311				1,495,258				1,752,832
Cost of sales:
Propane and other gas liquids sales			176,265				250,389				548,136				766,056				684,596				936,618
Midstream operations			-				-				-				-				-				25,849
Other			2,740				2,320				9,774				8,789				12,391				23,104
Gross profit			233,125				226,916				658,267				630,466				798,271				767,261
Operating expense - personnel, vehicle, plant & other			121,558				119,991				364,334				351,541				481,661				472,532
Depreciation and amortization expense			20,366				20,617				59,380				59,214				79,012				84,444
General and administrative expense			12,560				11,516				36,447				42,037				54,404				56,705
Operating expense - equipment lease expense			8,075				8,319				24,724				24,597				33,200				32,041
Non-cash employee stock ownership plan compensation charge			757				(4	)			2,182				4,688				3,187				7,816
Loss on asset sales and disposals			1,859				1,683				6,242				8,403				8,807				149,388
Operating income (loss)			67,950				64,794				164,958				139,986				138,000				(35,665	)
Interest expense			(45,703	)			(44,162	)			(138,948	)			(132,931	)			(183,636	)			(177,543	)
Loss on extinguishment of debt			(37,399	)			-				(37,399	)			-				(37,399	)			-
Other income (expense), net			(158	)			251				(214	)			356				(201	)			(138	)
Earnings (loss) before income tax expense (benefit)			(15,310	)			20,883				(11,603	)			7,411				(83,236	)			(213,346	)
Income tax expense (benefit)			161				123				794				284				833				(2,676	)
Net earnings (loss)			(15,471	)			20,760				(12,397	)			7,127				(84,069	)			(210,670	)
Net earnings (loss) attributable to noncontrolling interest (a)			(78	)			299				133				337				(502	)			(1,776	)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.			(15,393	)			20,461				(12,530	)			6,790				(83,567	)			(208,894	)
Less: General partner's interest in net earnings (loss)			(154	)			205				(125	)			68				(835	)			(2,089	)
Common unitholders' interest in net earnings (loss)		$	(15,239	)		$	20,256			$	(12,405	)		$	6,722			$	(82,732	)		$	(206,805	)
Earnings (loss) Per Common Unit
Basic and diluted net earnings loss per common unitholders' interest		$	(0.16	)		$	0.21			$	(0.13	)		$	0.07			$	(0.85	)		$	(2.13	)
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								Nine months ended								Twelve months ended
		April 30								April 30								April 30
		2020				2019				2020				2019				2020				2019
Net earnings (loss) attributable to Ferrellgas Partners, L.P.		$	(15,393	)		$	20,461			$	(12,530	)		$	6,790			$	(83,567	)		$	(208,894	)
Income tax expense (benefit)			161				123				794				284				833				(2,676	)
Interest expense			45,703				44,162				138,948				132,931				183,636				177,543
Depreciation and amortization expense			20,366				20,617				59,380				59,214				79,012				84,444
EBITDA			50,837				85,363				186,592				199,219				179,914				50,417
Non-cash employee stock ownership plan compensation charge			757				(4	)			2,182				4,688				3,187				7,816
Loss on asset sales and disposal			1,859				1,683				6,242				8,403				8,807				149,388
Loss on extinguishment of debt			37,399				-				37,399				-				37,399				-
Other income (expense), net			158				(251	)			214				(356	)			201				138
Severance expense includes $690 in operating expense and $910 in general and administrative expense for the nine and twelve months ended period ending April 30, 2019.			-				-				-				1,600				-				1,600
Legal fees and settlements related to non-core businesses			1,325				1,471				5,887				10,643				13,608				13,301
Multi-employer pension plan withdrawal settlement			-				-				-				1,524				-				1,524
Exit costs associated with contracts - Midstream dispositions			-				-				-				-				-				11,804
Lease accounting standard adjustment and other			80				-				134				-				134				-
Net earnings (loss) attributable to noncontrolling interest (a)			(78	)			299				133				337				(502	)			(1,776	)
Adjusted EBITDA (b)			92,337				88,561				238,783				226,058				242,748				234,212
Net cash interest expense (c)			(43,442	)			(40,747	)			(129,341	)			(123,325	)			(170,806	)			(168,553	)
Maintenance capital expenditures (d)			(6,803	)			(13,506	)			(18,700	)			(45,038	)			(20,436	)			(53,570	)
Cash paid for taxes			(49	)			(23	)			(50	)			(21	)			(170	)			(188	)
Proceeds from certain asset sales			851				456				2,510				2,416				4,343				7,264
Distributable cash flow attributable to equity investors (e)			42,894				34,741				93,202				60,090				55,679				19,165
Distributable cash flow attributable to general partner and non-controlling interest			858				695				1,864				1,202				1,113				383
Distributable cash flow attributable to common unitholders (f)			42,036				34,046				91,338				58,888				54,566				18,782
Less: Distributions paid to common unitholders			-				-				-				9,715				-				19,430
Distributable cash flow excess/(shortage)		$	42,036			$	34,046			$	91,338			$	49,173			$	54,566			$	(648	)
Propane gallons sales
Retail - Sales to End Users			186,175				204,441				552,340				573,152				651,454				666,572
Wholesale - Sales to Resellers			60,660				59,641				179,695				179,256				233,005				233,974
Total propane gallons sales			246,835				264,082				732,035				752,408				884,459				900,546

 

(a)	Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(b)	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, loss on extinguishment of debt, 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 other 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.
(c)	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.
(d)	Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.
(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 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.
(f)	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 .