FGP
$3.41
Ferrellgas Partners LP
($.11)
(3.13%)
Earnings Details
3rd Quarter April 2018
Thursday, June 07, 2018 7:00:00 AM
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Summary

Ferrellgas Partners LP Misses

Ferrellgas Partners LP (FGP) reported 3rd Quarter April 2018 earnings of $0.18 per share on revenue of $515.8 million. The consensus earnings estimate was $0.26 per share on revenue of $621.3 million. The Earnings Whisper number was $0.22 per share. Revenue fell 4.1% compared to the same quarter a year ago.

Ferrellgas Partners LP is engaged in the retail distribution of propane and related equipment and midstream operations.

Results
Reported Earnings
$0.18
Earnings Whisper
$0.22
Consensus Estimate
$0.26
Reported Revenue
$515.8 Mil
Revenue Estimate
$621.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Ferrellgas Partners, L.P. Reports Third Quarter Results

  • Net earnings attributable to Ferrellgas Partners, L.P. of $10.9 million, or $0.11 per common unit, an increase of 66.2 percent as compared to $6.5 million, or $0.07 per common unit in the prior year period.
    • Net of non-cash charges due in part to asset sales supporting deleveraging efforts net earnings were $17.1 million, or $0.18 per common unit as compared to $8.9 million, or $0.09 in the prior year period.
  • Adjusted EBITDA of $86.9 million, up 13.0 percent over the prior year period.
    • Trailing twelve-month EBITDA of $253.0 million, up from $230.0 million at the end of fiscal 2017.
  • Total propane sales volume for the nine months ended April 30, 2018 increased approximately 16.1 percent over the prior year period.
  • Tank Exchange volume for the nine months ended April 30, 2018 increased approximately 7.0 percent over the comparable prior year period.
    • Tank Exchange sale locations now exceed 52,000, up 9.5 percent compared to the start of the fiscal year.
  • Customer growth of 11,500, or 1.7 percent over the prior year.
  • Announced recent completion of new $575.0 million secured five-year credit facility and upsized $250.0 million accounts receivable securitization facility.
  • Midstream operations stabilized, focused on growth.
  • Full exits from Bridger Energy and Bridger Rail now completed. Sale process of Global Sourcing business progressing.

LIBERTY, Mo., June 07, 2018 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its third fiscal quarter ended April 30, 2018. The Company reported net earnings attributable to Ferrellgas Partners, L.P. of $10.9 million, or $0.11 per common unit, compared to prior year period net earnings of $6.5 million, or $0.07 per common unit. Adjusted EBITDA increased to $86.9 million, compared to $76.8 million in the prior year period, a 13.0 percent increase.

The Company’s propane operations reported that total gallons sold in the third quarter increased 34.1 million gallons, or 16.1 percent, over prior year. Margins were slightly lower as the Company aggressively competes for and wins new customers. This strategic focus resulted in approximately 11,500 new customers, or approximately 1.7 percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased 9.5 percent from the start of the fiscal year. Overall, the increase in gross margin from sales volume growth was partially offset by slightly lower margins per gallon and higher operating expenses which were largely the result of increased sales and marketing activity. However, on a per gallon basis operating expenses were 1.7 cents lower than prior year reflecting in part benefits from higher operating efficiency, sales volumes and customer density.

The Company’s midstream business has stabilized and is positioning itself for potential growth opportunities stemming from activity associated with recent increases in the price of oil. Stronger results for the quarter compared to prior year reflect primarily the successful exit earlier this year from low-margin barge operations. Results for the quarter also reflect completion of the sale of the Bridger Energy and Bridger Rail businesses for approximately $60.0 million.  These sales also reduced outstanding letters of credit by approximately $80.0 million.

The Company has solidified its liquidity and working capital access requirements with the recent announcements of the closing of two credit facilities:

  • A $575.0 million secured credit facility was completed on May 4, 2018. This facility included a $275.0 million term loan and a $300.0 million cash revolver. Proceeds from the term loan were used to pay off the Company’s previous credit facility and resulted in approximately $75.0 million of additional cash on the balance sheet. The revolver has no outstanding balance and supports approximately $100.0 million of letters of credit that were issued to replace those outstanding under the old facility.
  • The Company also amended its accounts receivable securitization facility on May 14, 2018, resulting in a three-year extension of the facility as well as increasing the size of the facility from $225.0 million to $250.0 million.

In addition, the Company continues to evaluate various options related to its outstanding unsecured bonds due June 2020. This may include refinancing, or an exchange transaction for some or all of its bonds due June 2020.

“Our Company continues to build momentum and this quarter’s results are another example of how our strategy is working,” said James E. Ferrell, Interim Chief Executive Officer and President of Ferrellgas. “We are focused on customer growth and density, and we are seeing results in both. We are committed to winning new business, and as we enter the summer grilling season we’ll benefit from the rapid expansion in the number of Blue Rhino tank exchange sale locations, up nearly 9.5 percent from the start of this fiscal year.”

The Company continues its strategic focus on key operating initiatives to reduce costs and grow EBITDA.  Of significance are two new tank exchange production plants expected to come on line in fiscal fourth quarter. “These plants move us closer to our customers, lower our operating expenses per tank, lower costs and mileage on our vehicle fleet, and add capacity to the system to position us to service the growth we are seeing in this business,” added Ferrell. “We have also executed on sales of non-core assets that have streamlined our business, reduced our debt, and positively enhanced our key credit metrics. Our liquidity and access to working capital is significant with recent announcements of our credit facility extensions. We now have a multi-year runway to continue to focus on growing our business and delivering the world class service our customers deserve.”

“Our management team is strong and experienced. I am excited about the recent announcement of our promotion of Trent Hampton to Chief Operating Officer. He has long tenure with the Company, understands all aspects of our business and is working well with our distribution, supply, and administrative teams throughout the Company,” said Ferrell. “We are working together better than ever to grow the business and serve our customers. We are well positioned for a strong finish to fiscal 2018 and we are 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 April 30, 2018 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
Bill Ruisinger, Investor Relations – billruisinger@ferrellgas.com, 816-792-7914

 

 
FERRELLGAS PARTNERS, L.P.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
     
ASSETS April 30, 2018 July 31, 2017
     
Current Assets:    
Cash and cash equivalents $  9,499  $  5,760 
Accounts and notes receivable, net (including $182,486 and $109,407 of accounts receivable pledged as collateral at April 30, 2018 and July 31, 2017, respectively)  202,727   165,084 
Inventories  85,062   92,552 
Prepaid expenses and other current assets  44,090   33,388 
Total Current Assets  341,378   296,784 
     
Property, plant and equipment, net  637,688   731,923 
Goodwill, net  246,098   256,103 
Intangible assets, net  235,318   251,102 
Other assets, net  72,094   74,057 
Total Assets $  1,532,576  $  1,609,969 
     
LIABILITIES AND PARTNERS' DEFICIT    
     
Current Liabilities:    
Accounts payable $  52,472  $  85,561 
Short-term borrowings    -     59,781 
Collateralized note payable  104,000   69,000 
Other current liabilities  158,875   126,224 
Total Current Liabilities  315,347   340,566 
     
Long-term debt (a)  1,995,608   1,995,795 
Other liabilities  34,225   31,118 
Contingencies and commitments    
     
Partners Deficit:     
Common unitholders (97,152,665 units outstanding at  April 30, 2018 and July 31, 2017)  (758,325)  (701,188)
General partner unitholder (989,926 units outstanding at April 30, 2018 and July 31, 2017)  (67,568)  (66,991)
Accumulated other comprehensive income  17,672   14,601 
Total Ferrellgas Partners, L.P. Partners' Deficit  (808,221)  (753,578)
Noncontrolling interest  (4,383)  (3,932)
Total Partners' Deficit  (812,604)  (757,510)
Total Liabilities and Partners' Deficit $  1,532,576  $  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  Nine months ended  Twelve months ended 
  April 30 April 30 April 30
  2018 2017  2018 2017 2018 2017
Revenues:            
Propane and other gas liquids sales $ 451,302  $ 369,437  $ 1,346,299  $ 1,049,211  $ 1,615,500  $ 1,290,493 
Midstream operations    22,595    126,676     260,631     331,507     395,827     469,318 
Other  41,913   41,996   118,691   116,183   147,670   146,601 
Total revenues  515,810   538,109   1,725,621   1,496,901   2,158,997   1,906,412 
             
Cost of sales:            
Propane and other gas liquids sales  260,419   197,487   802,852   551,728   945,279   667,320 
Midstream operations  14,518   118,767   229,710   300,433   358,716   397,768 
Other  19,850   20,810   54,339   53,213   68,393   68,025 
             
Gross profit   221,023   201,045   638,720   591,527   786,609   773,299 
             
Operating expense  116,579   104,773   350,757   322,274   460,234   433,600 
Depreciation and amortization expense  25,348   25,737   76,565   77,546   102,370   115,361 
General and administrative expense  11,678   9,978   39,733   33,889   52,824   45,812 
Equipment lease expense  7,133   7,270   20,828   22,035   27,917   29,314 
Non-cash employee stock ownership plan compensation charge  2,738   4,697   10,731   11,396   14,423   20,616 
Non-cash stock-based compensation charge (a)    -     -     -   3,298     -   5,865 
Asset impairments    -     -   10,005     -   10,005     628,802 
Loss on asset sales and disposal  6,270   2,393   46,414   8,861   52,010   16,476 
             
Operating income (loss)  57,547   48,590   83,687   112,228   66,826   (522,547)
             
Interest expense  (40,375)  (39,860)  (123,855)  (112,107)  (164,233)  (147,155)
Other income, net  227   162   1,422   1,433   1,463   1,632 
             
Earnings (loss) before income taxes  17,399   8,892   (38,746)  1,554   (95,944)  (668,070)
             
Income tax expense (benefit)  67   (192)    282     (194)    (667)    (1,676)
             
Net earnings (loss)  17,332   9,084   (39,028)  1,748   (95,277)  (666,394)
             
Net earnings (loss) attributable to noncontrolling interest (b)  201   155   (131)  187   (612)  (6,521)
             
Net earnings (loss) attributable to Ferrellgas Partners, L.P.    17,131     8,929     (38,897)    1,561     (94,665)  (659,873)
             
Less: General partner's interest in net earnings (loss)  109   66     (389)    16     (947)    (6,599)
             
Common unitholders' interest in net earnings (loss) $  17,022  $  8,863  $  (38,508) $  1,545  $  (93,718) $  (653,274)
             
Earnings (loss) Per Common Unit            
Basic and diluted net earnings (loss) per common unitholders' interest $  0.18  $  0.09  $  (0.40) $  0.02  $  (0.96) $  (6.70)
             
Weighted average common units outstanding - basic  97,152.7   97,152.7   97,152.7   97,255.4   97,152.7   97,443.7 
             
             
Supplemental Data and Reconciliation of Non-GAAP Items:
             
  Three months ended  Nine months ended  Twelve months ended 
  April 30 April 30 April 30
   2018   2017   2018   2017   2018   2017 
             
             
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $  17,131  $  8,929  $  (38,897) $  1,561  $  (94,665) $ (659,873)
Income tax expense (benefit)    67     (192)    282     (194)    (667)    (1,676)
Interest expense  40,375   39,860   123,855   112,107   164,233   147,155 
Depreciation and amortization expense  25,348   25,737   76,565   77,546   102,370   115,361 
EBITDA    82,921     74,334     161,805     191,020     171,271    (399,033)
Non-cash employee stock ownership plan compensation charge    2,738   4,697     10,731   11,396   14,423   20,616 
Non-cash stock based compensation charge (a)    -     -     -   3,298     -   5,865 
Asset impairments    -     -     10,005     -   10,005   628,802 
Loss on asset sales and disposal    -   0     46,414   8,861   52,010   16,476 
Other income, net    (227)  (162)    (1,422)  (1,433)  (1,463)  (1,632)
Severance costs $358 included in operating costs for the nine and twelve months ended period April 30, 2018 and $1,305 included in general and administrative costs for the nine and twelve months ended April 30, 2018. Also includes $414 and $542 in operating costs for the nine and twelve months ended April 30, 2017 and $1,545 included in general and administrative costs for the nine and twelve months ended April 30, 2017.    -     -     1,663     1,959     1,663     2,087 
Professional fees    1,289     -     3,407     -     3,407     - 
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $(759) included in operating expense for the twelve months ended April 30, 2018 and $(227), $(3,238) and $(3,245) for the three, nine and twelve months ended April 30, 2017. Also includes $1,293 and $3,044 included in midstream operations cost of sales for the nine and twelve months ended April 30, 2018, respectively and $(2,007), $(1,211) and $(3,060) for the three, nine and twelve months ended April 30, 2017.    -     (2,234)  1,293     (4,449)    2,285     (6,305)
Net earnings (loss) attributable to noncontrolling interest (b)  201   155   (131)  187   (612)  (6,521)
Adjusted EBITDA (c)    86,922     76,790     233,765     210,839     252,989     260,355 
Net cash interest expense (d)   (37,873)   (37,140)    (115,664)   (105,470)   (153,782)  (139,074)
Maintenance capital expenditures (e)    (5,741)    (3,442)    (19,085)    (10,518)    (25,502)  (14,067)
Cash paid for taxes    470     (2)    458     (28)    176   (373)
Proceeds from asset sales    148     130     4,355     4,163     8,144     4,214 
Distributable cash flow attributable to equity investors (f)    43,926     36,336     103,829     98,986     82,025     111,055 
Distributable cash flow attributable to general partner and non-controlling interest    879     727     2,077     1,980     1,641     2,222 
Distributable cash flow attributable to common unitholders    43,047     35,609     101,752     97,006     80,384     108,833 
Less: Distributions paid to common unitholders    9,715     9,715     29,146     69,221     38,861     119,407 
Distributable cash flow excess/(shortage) $  33,332  $  25,894  $  72,606  $  27,785  $  41,523  $  (10,574)
             
Propane gallons sales            
Retail - Sales to End Users  189,183   160,326   543,548   473,094   635,326   560,719 
Wholesale - Sales to Resellers  57,121   51,891   185,492   170,033   241,710   226,162 
Total propane gallons sales  246,304   212,217   729,040   643,127   877,036   786,881 
             
Midstream operations barrels            
Salt water volume processed    4,761     4,635   14,552     12,340   19,727     15,903 
Crude oil hauled    11,640     12,280   34,855     36,549   47,555     51,136 
Crude oil sold    27     2,110   3,412     5,228   5,654     7,119 
             
(a)  Non-cash stock-based compensation charges consist of the following:            
             
  Three months ended  Nine months ended  Twelve months ended 
  April 30 April 30 April 30
   2018   2017   2018   2017   2018   2017 
Operating expense $  -   $  -   $  -   $  661  $  -   $  1,046 
General and administrative expense    -      -      -      2,637     -      4,819 
Total $  -   $  -   $  -   $  3,298  $  -   $  5,865 
           
           
(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,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 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 . 
           


Source: Ferrellgas Partners, L.P.