Ferrellgas Partners, L.P. Reports Second Quarter Fiscal

Financial Highlights
- Revenues for the second fiscal quarter were flat with a slight decrease of $1.0 million compared to the prior year period.
- Gross Profit for the second fiscal quarter increased $34.0 million, or 11%, compared to the prior year period.
- Margin per gallon for the second fiscal quarter increased $0.13, or 12%, compared to the prior year period.
- Net earnings attributable to Ferrellgas Partners, L.P. decreased $10.3 million, or 10%, compared to the prior year period.
- Adjusted EBITDA increased by $4.5 million, or 3%, compared to the prior year period.
Company Highlights
- Ferrellgas welcomed Rez-Bear Propane, located in Harris, New York, as its newest acquisition to the Ferrellgas Family during the second fiscal quarter.
- Blue Rhino became the official propane sponsor of the Steak Cookoff Association for 2023.
- In the second fiscal quarter, 113 employees received Ferrellgas Flame Awards for exemplary performance in the areas of Safety, Customer Service, Innovation, and Leadership.

LIBERTY, Mo., March 10, 2023 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second fiscal quarter ended January 31, 2023.

“The people of Ferrellgas work together each day to build on more than 80-year-old history of innovation to grow via one of the best logistics infrastructures in the business,” said James E. Ferrell, Chief Executive Officer and President. “There is nothing better than the footsteps of an owner to grow a business, and our almost 4,500 employee-owners are unmatched at finding opportunities to grow demand for clean, portable, and affordable propane.”

Revenues were flat with a slight decrease of $1.0 million for the second fiscal quarter compared to the prior year period. Gallons sold decreased 1%, or 2.6 million gallons, compared to the prior year second fiscal quarter.

Gross profit increased $34.0 million, or 11%, for the second fiscal quarter. Cost of sales was favorable with a decrease of $35.0 million, or 9%, for the second fiscal quarter. Margin per gallon increased by $0.13, or 12%, compared to the prior year period. The Company continues to realize cost savings through its asset utilization management and redeployment of tanks to locations with higher usage statistics.

Operating income per gallon decreased $0.05, or 10%, compared to the prior year period. Operating income for the second fiscal quarter decreased $12.9 million, or 10%, compared to the prior year period. Results were impacted by higher fuel costs and fleet charges related to maintenance and repairs.

For the second fiscal quarter 2023 and 2022, the Company reported net earnings attributable to Ferrellgas Partners, L.P. of $98.1 million and $108.4 million, respectively. Adjusted EBITDA, a non-GAAP financial measure, increased by $4.5 million, or 3%, to $155.9 million in the second fiscal quarter 2023 compared to $151.4 million in the prior year period. The change was primarily due to EBITDA adjustments related to a decrease of $9.6 million in gain on assets sales and disposals and a $6.3 million increase in legal fees related to non-core businesses in addition to a $1.9 million decrease in interest expense.

“Our Company shows its appreciation to its most valuable resource, our employee-owners, in many ways throughout the year. Our employees also choose to appreciate each other. They do this by way of our Ferrellgas Flame award in the categories of Safety, Customer Service, Innovation, and Leadership. Over 113 employees were celebrated this quarter,” Ferrell added. “Additionally, hundreds of our hard working, dedicated employees gathered to celebrate via a facilitated zoom event this holiday season. I could not be more proud of our company and our willingness to come together in work and in appreciation.”

The Company announced Blue Rhino’s propane sponsorship of the Steak Cookoff Association (“SCA”) for 2023. The SCA is the world’s largest grilling competition for backyard chefs with 650 events scheduled this year in 46 states and 15 countries. Partnering with the SCA is a natural fit for Blue Rhino, the tank exchange brand of the Company.

On Friday, March 10, 2023, the Company will conduct a teleconference on the Internet at https://edge.media-server.com/mmc/p/38jfbo7w to discuss the results of operations for the second fiscal quarter ended January 31, 2023. The webcast of the teleconference will begin at 8:30 a.m. Central Time (9:30 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at InvestorRelations@ferrellgas.com.

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. Its Blue Rhino propane exchange brand is sold at more than 60,000 locations nationwide. Ferrellgas employees indirectly own 1.1 million Class A 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 30, 2022. 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, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2022, 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	January 31, 2023			July 31, 2022

Current assets:
Cash and cash equivalents (including $11,130 and $11,208 of restricted cash at January 31, 2023 and July 31, 2022, respectively)	$	123,777		$	158,737
Accounts and notes receivable, net		233,625			150,395
Inventories		113,382			115,187
Price risk management asset		18,276			43,015
Prepaid expenses and other current assets		47,980			30,764
Total current assets		537,040			498,098

Property, plant and equipment, net		608,340			603,148
Goodwill, net		257,006			257,099
Intangible assets (net of accumulated amortization of $345,261 and $440,121 at January 31, 2023 and July 31, 2022, respectively)		108,407			97,638
Operating lease right-of-use assets		63,438			72,888
Other assets, net		66,762			79,244
Total assets	$	1,640,993		$	1,608,115


LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	87,354		$	57,586
Broker margin deposit liability		11,450			32,805
Current portion of long-term debt		2,152			1,792
Current operating lease liabilities		24,559			25,824
Other current liabilities		210,397			185,805
Total current liabilities		335,912			303,812

Long-term debt		1,453,716			1,450,016
Operating lease liabilities		39,567			47,231
Other liabilities		33,605			43,518

Contingencies and commitments

Mezzanine equity:
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at January 31, 2023 and July 31, 2022)		651,349			651,349

Equity (Deficit):
Limited partner unitholders
Class A (4,857,605 units outstanding at January 31, 2023 and July 31, 2022)		(1,167,936	)		(1,229,823	)
Class B (1,300,000 units outstanding at January 31, 2023 and July 31, 2022)		383,012			383,012
General partner unitholder (49,496 units outstanding at January 31, 2023 and July 31, 2022)		(70,695	)		(71,320	)
Accumulated other comprehensive (loss) income		(10,098	)		37,907
Total Ferrellgas Partners, L.P. deficit		(865,717	)		(880,224	)
Noncontrolling interest		(7,439	)		(7,587	)
Total deficit		(873,156	)		(887,811	)
Total liabilities, mezzanine and deficit	$	1,640,993		$	1,608,115

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,
	2023			2022			2023			2022			2023			2022
Revenues:
Propane and other gas liquids sales	$	651,886		$	657,504		$	1,037,730		$	1,030,208		$	2,025,401		$	1,889,577
Other		32,057			27,434			59,502			49,236			106,927			89,723
Total revenues		683,943			684,938			1,097,232			1,079,444			2,132,328			1,979,300

Cost of sales:
Propane and other gas liquids sales		347,492			383,213			560,573			603,751			1,130,826			1,077,283
Other		4,243			3,557			9,019			7,167			14,361			12,724

Gross profit		332,208			298,168			527,640			468,526			987,141			889,293

Operating expense - personnel, vehicle, plant & other		157,355			128,013			287,095			245,125			562,573			486,667
Operating expense - equipment lease expense		5,586			6,022			11,610			11,712			22,992			25,082
Depreciation and amortization expense		23,069			21,944			45,700			42,239			93,358			84,982
General and administrative expense		23,115			15,784			37,948			28,359			62,369			54,869
Non-cash employee stock ownership plan compensation charge		722			751			1,445			1,660			2,955			3,405
Loss (gain) on asset sales and disposals		290			(9,275	)		1,970			(7,865	)		3,217			(6,927	)

Operating income		122,071			134,929			141,872			147,296			239,677			241,215

Interest expense		(23,177	)		(25,139	)		(48,186	)		(50,534	)		(97,745	)		(117,329	)
Loss on extinguishment of debt		—			—			—			—			—			(104,834	)
Other income, net		544			43			1,013			4,307			1,539			4,937
Reorganization expense - professional fees		—			—			—			—			—			(9,243	)

Earnings before income tax expense		99,438			109,833			94,699			101,069			143,471			14,746

Income tax expense		503			481			521			577			925			905

Net earnings		98,935			109,352			94,178			100,492			142,546			13,841

Net earnings (loss) attributable to noncontrolling interest^(a)		835			947			623			693			797			(342	)

Net earnings attributable to Ferrellgas Partners, L.P.	$	98,100		$	108,405		$	93,555		$	99,799		$	141,749		$	14,183

Class A unitholders' interest in net earnings (loss)	$	11,557		$	13,001		$	8,592		$	9,354		$	(19,532	)	$	(99,430	)

Net earnings (loss) per unitholders' interest
Basic and diluted net earnings (loss) per Class A Unit	$	2.38		$	2.68		$	1.77		$	1.93		$	(4.02	)	$	(20.47	)
Weighted average Class A Units outstanding - basic and diluted		4,858			4,858			4,858			4,858			4,858			4,858

Supplemental Data and Reconciliation of Non-GAAP Items:

	Three months ended						Six Months ended						Twelve months ended
	January 31,						January 31,						January 31,
	2023			2022			2023			2022			2023			2022
Net earnings attributable to Ferrellgas Partners, L.P.	$	98,100		$	108,405		$	93,555		$	99,799		$	141,749		$	14,183
Income tax expense		503			481			521			577			925			905
Interest expense		23,177			25,139			48,186			50,534			97,745			117,329
Depreciation and amortization expense		23,069			21,944			45,700			42,239			93,358			84,982
EBITDA		144,849			155,969			187,962			193,149			333,777			217,399
Non-cash employee stock ownership plan compensation charge		722			751			1,445			1,660			2,955			3,405
Loss (gain) loss on asset sales and disposal		290			(9,275	)		1,970			(7,865	)		3,217			(6,927	)
Loss on extinguishment of debt		—			—			—			—			—			104,834
Other income, net		(544	)		(43	)		(1,013	)		(4,307	)		(1,539	)		(4,937	)
Reorganization expense - professional fees		—			—			—			—			—			9,243
Severance costs include $49, $51 and $115 in operating expense for the three, six and twelve months ended January 31, 2023, respectively. Also includes $585, $593 and $610 in general and administrative expense for the three, six and twelve months ended January 31, 2023, respectively.		634			281			644			497			725			497
Legal fees and settlements related to non-core businesses		9,107			2,807			13,979			4,938			16,979			8,931
Net earnings (loss) attributable to noncontrolling interest ^(a)		835			947			623			693			797			(342	)
Adjusted EBITDA ^(b)		155,893			151,437			205,610			188,765			356,911			332,103
Net cash interest expense^(c)		(20,265	)		(27,620	)		(42,871	)		(46,739	)		(95,498	)		(106,933	)
Maintenance capital expenditures^(d)		(4,375	)		(4,060	)		(10,207	)		(7,639	)		(19,587	)		(23,348	)
Cash paid for income taxes		(447	)		(407	)		(496	)		(407	)		(1,107	)		(808	)
Proceeds from certain asset sales		736			2,085			1,488			2,726			2,875			4,877
Distributable cash flow attributable to equity investors^(e)		131,542			121,435			153,524			136,706			243,594			205,891
Less: Distributions accrued or paid to preferred unitholders		16,222			17,989			32,473			33,322			64,438			57,346
Distributable cash flow attributable to general partner and non-controlling interest		(2,631	)		(2,437	)		(3,070	)		(2,742	)		(4,872	)		(4,126	)
Distributable cash flow attributable to Class A and B Unitholders ^(f)		112,689			101,009			117,981			100,642			174,284			144,419
Less: Distributions paid to Class A and B Unitholders ^(g)		—			—			—			49,998			49,998			49,998
Distributable cash flow excess ^(h)	$	112,689		$	101,009		$	117,981		$	50,644		$	124,286		$	94,421

Propane gallons sales
Retail - Sales to End Users		213,662			215,276			332,058			331,101			625,273			627,062
Wholesale - Sales to Resellers		60,945			61,957			104,814			106,012			205,318			217,195
Total propane gallons sales		274,607			277,233			436,872			437,113			830,591			844,257

(a)			Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.
(b)			Adjusted EBITDA is calculated as net earnings attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, loss (gain) on asset sales and disposals, loss on extinguishment of debt, other income, net, reorganization expense – professional fees, severance costs, legal fees and settlements related to non-core businesses, 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 make it easier to compare its results with other companies that have different financing and capital structures.
			Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. Adjusted EBITDA 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 income, net. This amount includes interest expense related to the terminated accounts receivable securitization facility.
(d)			Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment, and may from time to time include the purchase of assets that are typically leased.
(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 income 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, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to similarly titled measurements used by other companies. 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 should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(f)			Distributable cash flow attributable to Class A and B Unitholders is calculated as Distributable cash flow attributable to equity investors minus distributions accrued or paid on the Preferred Units and distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to Class A and B Unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to Class A and B Unitholders. Distributable cash flow attributable to Class A and B Unitholders, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added to our calculation of distributable cash flow attributable to Class A and B Unitholders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to Class A and B Unitholders should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(g)			The Company did not pay any distributions to Class A Unitholders during any of the periods in fiscal 2023 or fiscal 2022.
(h)			Distributable cash flow excess is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility or, previously, under our terminated accounts receivable securitization facility. Management considers Distributable cash flow excess a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess should be viewed in conjunction with measurements that are computed in accordance with GAAP.

Ferrellgas Partners, L.P. Reports Second Quarter Fiscal 2023 Results

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