FGPR - Ferrellgas Partners L.P. Reports Second Quarter Fiscal 2020 Results

March, 11 2020 07:00 AM Ferrellgas Partners L.P - Unit

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, Kan., 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.

Contact

Investor Relations – InvestorRelations@ferrellgas.com

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)





ASSETS

January 31, 2020

July 31, 2019





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 .

Company Name:	Ferrellgas Partners L.P - Unit
Stock Symbol:	FGPR
Market:	OTC
Website:	ferrellgas.com

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