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

June, 04 2020 05:15 PM Ferrellgas Partners L.P - Unit

Gross Profit increased by $6.2 million, or almost three 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, Kan., June 04, 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 temperatures 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

$
318,847


$
11,054

at April 30, 2020 and July 31, 2019, respectively)








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 (b)


(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 refund from (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

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

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