OVERLAND PARK, Kan., Dec. 07, 2017 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its first fiscal quarter ended October 31, 2017. The Company reported a net loss attributable to Ferrellgas Partners, L.P. of $47.9 million, or $0.49 per common unit, compared to a net loss attributable to Ferrellgas Partners, L.P. of $43.1 million, or $0.44 per common unit, for the prior year period.
The Company reported that total gallons sold in the first quarter increased more than 9.5 million gallons over the same period in the prior year, which partially offset the effects of lower margins as the Company aggressively competes for new customers. The Company reported adjusted EBITDA of $26.2 million, compared to $29.0 million in the prior year period.
At the end of this first quarter of the Company’s fiscal year, its leverage ratio was 7.57x reflecting peak working capital requirements. This level was lower than the 7.75x limit allowed under its secured credit facility and accounts receivable securitization facilities, as amended in April 2017. Based on the Company’s current forecast, the leverage ratio is expected to continue to strengthen and decrease throughout the fiscal year.
“Ferrellgas has entered the winter heating season with renewed vigor, and while we are optimistic about temperatures nearer to the norm we are focusing on several initiatives that will increase EBITDA regardless of weather,” said James E. Ferrell, the Company’s interim President and Chief Executive Officer. “Our Retail propane operations continue to add customers in significant numbers across all segments positioning the Company for potential future volume and cash flow growth. Further, we’ve closed on a number of accretive, bolt-on acquisitions that complement our strategic footprint. In our Blue Rhino business, we are reconfiguring our production facilities footprint in order to reduce freight costs and streamline production initiatives that are particularly important as we added more than 2,300 new Blue Rhino locations in Q1 with more added since quarter end. Blue Rhino growth is also important to us because is it less weather dependent. As for Midstream operations, the business has stabilized and is now focused on growth particularly in its trucking operations. The business exited a barge lease that was a significant headwind for EBITDA, and we are evaluating certain underperforming assets to find the best way to move forward with them.”
Mr. Ferrell continued, “These initiatives are the product of a leaner, more agile organization with a flatter management structure. I like our management team including the recent addition of Doran Schwartz as our Chief Financial Officer complementing an already strong and seasoned leadership team. All of our employees are focused and working hard to generate more cash flow. We are well positioned for fiscal 2018 and building a foundation for the long-term success of our Company.”
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, and provides midstream services to major energy companies in the United States. 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 September 28, 2017. 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, 2017, the Form 10-Q of these entities for the fiscal quarter ended October 31, 2017, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.
Contacts
Jim Saladin, Media Relations – jimsaladin@ferrellgas.com, 913-661-1833
Tom Colvin, Investor Relations – tomcolvin@ferrellgas.com, 816-792-6908
| FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except unit data) | ||||||||
| (unaudited) | ||||||||
| ASSETS | October 31, 2017 | July 31, 2017 | ||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 7,100 | $ | 5,760 | ||||
| Accounts and notes receivable, net (including $137,244 and $109,407 of accounts receivable pledged as collateral at October 31, 2017 and July 31, 2017, respectively) | 191,428 | 165,084 | ||||||
| Inventories | 112,338 | 92,552 | ||||||
| Prepaid expenses and other current assets | 68,068 | 33,388 | ||||||
| Total Current Assets | 378,934 | 296,784 | ||||||
| Property, plant and equipment, net | 738,729 | 731,923 | ||||||
| Goodwill, net | 256,103 | 256,103 | ||||||
| Intangible assets, net | 250,629 | 251,102 | ||||||
| Other assets, net | 80,559 | 74,057 | ||||||
| Total Assets | $ | 1,704,954 | $ | 1,609,969 | ||||
| LIABILITIES AND PARTNERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 99,198 | $ | 85,561 | ||||
| Short-term borrowings | 263,200 | 59,781 | ||||||
| Collateralized note payable | 88,000 | 69,000 | ||||||
| Other current liabilities | 200,879 | 126,224 | ||||||
| Total Current Liabilities | 651,277 | 340,566 | ||||||
| Long-term debt (a) | 1,812,155 | 1,995,795 | ||||||
| Other liabilities | 34,799 | 31,118 | ||||||
| Contingencies and commitments | ||||||||
| Partners Deficit: | ||||||||
| Common unitholders (97,152,665 units outstanding at | ||||||||
| October 31, 2017 and July 31, 2017) | (754,456 | ) | (701,188 | ) | ||||
| General partner unitholder (989,926 units outstanding at | ||||||||
| October 31, 2017 and July 31, 2017) | (67,528 | ) | (66,991 | ) | ||||
| Accumulated other comprehensive income | 32,915 | 14,601 | ||||||
| Total Ferrellgas Partners, L.P. Partners' Deficit | (789,069 | ) | (753,578 | ) | ||||
| Noncontrolling Interest | (4,208 | ) | (3,932 | ) | ||||
| Total Partners' Deficit | (793,277 | ) | (757,510 | ) | ||||
| Total Liabilities and Partners' Deficit | $ | 1,704,954 | $ | 1,609,969 | ||||
| (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 | Twelve months ended | |||||||||||||||
| October 31 | October 31 | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Propane and other gas liquids sales | $ | 302,758 | $ | 242,399 | $ | 1,378,771 | $ | 1,199,466 | ||||||||
| Midstream operations | 120,760 | 108,044 | 479,419 | 539,612 | ||||||||||||
| Other | 31,137 | 29,099 | 147,200 | 208,685 | ||||||||||||
| Total revenues | 454,655 | 379,542 | 2,005,390 | 1,947,763 | ||||||||||||
| Cost of sales: | ||||||||||||||||
| Propane and other gas liquids sales | 179,515 | 119,212 | 754,458 | 561,894 | ||||||||||||
| Midstream operations | 108,125 | 94,642 | 442,922 | 412,272 | ||||||||||||
| Other | 13,702 | 11,746 | 69,223 | 123,535 | ||||||||||||
| Gross profit | 153,313 | 153,942 | 738,787 | 850,062 | ||||||||||||
| Operating expense | 110,462 | 104,992 | 437,221 | 447,921 | ||||||||||||
| Depreciation and amortization expense | 25,732 | 26,202 | 102,881 | 139,736 | ||||||||||||
| General and administrative expense | 13,164 | 12,482 | 47,662 | 48,821 | ||||||||||||
| Equipment lease expense | 6,741 | 7,349 | 28,516 | 29,150 | ||||||||||||
| Non-cash employee stock ownership plan compensation charge | 3,962 | 3,754 | 15,296 | 26,093 | ||||||||||||
| Non-cash stock-based compensation charge (a) | - | 1,881 | 1,417 | 3,083 | ||||||||||||
| Asset impairments | - | - | - | 628,802 | ||||||||||||
| Loss on asset sales and disposal | 895 | 6,423 | 8,929 | 22,341 | ||||||||||||
| Operating income (loss) | (7,643 | ) | (9,141 | ) | 96,865 | (495,885 | ) | |||||||||
| Interest expense | (40,807 | ) | (35,428 | ) | (157,864 | ) | (139,577 | ) | ||||||||
| Other income, net | 511 | 508 | 1,477 | 740 | ||||||||||||
| Loss before income taxes | (47,939 | ) | (44,061 | ) | (59,522 | ) | (634,722 | ) | ||||||||
| Income tax expense (benefit) | 377 | (590 | ) | (176 | ) | 218 | ||||||||||
| Net loss | (48,316 | ) | (43,471 | ) | (59,346 | ) | (634,940 | ) | ||||||||
| Net loss attributable to noncontrolling interest (b) | (401 | ) | (398 | ) | (297 | ) | (6,245 | ) | ||||||||
| Net loss attributable to Ferrellgas Partners, L.P. | (47,915 | ) | (43,073 | ) | (59,049 | ) | (628,695 | ) | ||||||||
| Less: General partner's interest in net loss | (479 | ) | (431 | ) | (590 | ) | (6,287 | ) | ||||||||
| Common unitholders' interest in net loss | $ | (47,436 | ) | $ | (42,642 | ) | $ | (58,459 | ) | $ | (622,408 | ) | ||||
| Loss Per Common Unit | ||||||||||||||||
| Basic and diluted net loss per common unitholders' interest | $ | (0.49 | ) | $ | (0.44 | ) | $ | (0.60 | ) | $ | (6.35 | ) | ||||
| Weighted average common units outstanding - basic | 97,152.7 | 97,457.6 | 97,443.7 | 97,949.0 | ||||||||||||
| Supplemental Data and Reconciliation of Non-GAAP Items: | ||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| October 31 | October 31 | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net loss attributable to Ferrellgas Partners, L.P. | $ | (47,915 | ) | $ | (43,073 | ) | $ | (59,049 | ) | $ | (628,695 | ) | ||||
| Income tax expense (benefit) | 377 | (590 | ) | (176 | ) | 218 | ||||||||||
| Interest expense | 40,807 | 35,428 | 157,864 | 139,577 | ||||||||||||
| Depreciation and amortization expense | 25,732 | 26,202 | 102,881 | 139,736 | ||||||||||||
| EBITDA | 19,001 | 17,967 | 201,520 | (349,164 | ) | |||||||||||
| Non-cash employee stock ownership plan compensation charge | 3,962 | 3,754 | 15,296 | 26,093 | ||||||||||||
| Non-cash stock based compensation charge (a) | - | 1,881 | 1,417 | 3,083 | ||||||||||||
| Asset impairments | - | - | - | 628,802 | ||||||||||||
| Loss on asset sales and disposal | 895 | 6,423 | 8,929 | 22,341 | ||||||||||||
| Other income, net | (511 | ) | (508 | ) | (1,477 | ) | (740 | ) | ||||||||
| Severance expense $358 and $414 included in operating expense for the three months ended period October 31, 2017 and 2016, respectively. Also includes $1,305 and $1,055 included in general and administrative expense for the three months ended October 31, 2017 and 2016, respectively. Includes $358 and $938 in operating expense for the twelve months ended October 31, 2017 and 2016, respectively. Also includes $1,795 and $1,128 in general and administrative expense for the twelve months ended October 31, 2017 and 2016, respectively. | 1,663 | 1,469 | 2,153 | 2,066 | ||||||||||||
| Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $1,607 and $1,839 included in cost of sales for the three and twelve months ended October 31, 2017, respectively, and $308 and $(140) for the three and twelve months ended October 31, 2016, respectively. Also includes $(2,120) included in operating expense for the twelve months ended October 31, 2017, and (1,877) and (1,330) for the three and twelve months ended October 31, 2016, respectively. | 1,607 | (1,569 | ) | (281 | ) | (1,470 | ) | |||||||||
| Acquisition and transition expenses (included in general and administrative expense) | - | - | - | 84 | ||||||||||||
| Net loss attributable to noncontrolling interest (b) | (401 | ) | (398 | ) | (297 | ) | (6,245 | ) | ||||||||
| Adjusted EBITDA (c) | 26,216 | 29,019 | 227,260 | 324,850 | ||||||||||||
| Net cash interest expense (d) | (38,057 | ) | (33,618 | ) | (148,027 | ) | (133,976 | ) | ||||||||
| Maintenance capital expenditures (e) | (8,704 | ) | (3,322 | ) | (22,317 | ) | (14,244 | ) | ||||||||
| Cash paid for taxes | (6 | ) | (1 | ) | (315 | ) | (778 | ) | ||||||||
| Proceeds from asset sales | 1,208 | 1,720 | 7,440 | 6,730 | ||||||||||||
| Distributable cash flow attributable to equity investors (f) | (19,343 | ) | (6,202 | ) | 64,041 | 182,582 | ||||||||||
| Distributable cash flow attributable to general partner and non-controlling interest | (387 | ) | (124 | ) | 1,281 | 3,652 | ||||||||||
| Distributable cash flow attributable to common unitholders | (18,956 | ) | (6,078 | ) | 62,760 | 178,930 | ||||||||||
| Less: Distributions paid to common unitholders | 9,715 | 49,791 | 38,860 | 200,467 | ||||||||||||
| Distributable cash flow excess/(shortage) | $ | (28,671 | ) | $ | (55,869 | ) | $ | 23,900 | $ | (21,537 | ) | |||||
| Propane gallons sales | ||||||||||||||||
| Retail - Sales to End Users | 119,294 | 111,188 | 572,978 | 552,986 | ||||||||||||
| Wholesale - Sales to Resellers | 53,429 | 51,990 | 227,690 | 227,545 | ||||||||||||
| Total propane gallons sales | 172,723 | 163,178 | 800,668 | 780,531 | ||||||||||||
| Midstream operations barrels | ||||||||||||||||
| Salt water volume processed | 4,940 | 3,703 | 18,752 | 15,512 | ||||||||||||
| Crude oil hauled | 12,150 | 11,264 | 50,135 | 66,411 | ||||||||||||
| Crude oil sold | 1,829 | 1,792 | 7,507 | 7,117 | ||||||||||||
| (a) | Non-cash stock-based compensation charges consist of the following: | |
| Three months ended | Twelve months ended | |||||||||||
| October 31 | October 31 | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Operating expense | $ | - | $ | 94 | 567 | $ | 144 | |||||
| General and administrative expense | - | 1,787 | 850 | 2,939 | ||||||||
| Total | $ | - | $ | 1,881 | $ | 1,417 | $ | 3,083 | ||||
| (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 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, non-cash stock-based compensation charge, asset impairments, loss on asset sales and disposal, other income, net, severance expense, unrealized (non-cash) losses (gains) on changes in fair value of derivatives, acquisition and transition expenses and net 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 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. | |