FGP
$5.95
Ferrellgas Partners LP
$.07
1.19%
Earnings Details
2nd Quarter January 2017
Thursday, March 09, 2017 7:00:21 AM
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Summary

Ferrellgas Partners LP (FGP) Recent Earnings

Ferrellgas Partners LP (FGP) reported 2nd Quarter January 2017 earnings of $0.39 per share on revenue of $579.3 million. The consensus earnings estimate was $0.68 per share on revenue of $591.8 million. Revenue fell 10.8% 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
$0.39
Earnings Whisper
-
Consensus Estimate
$0.68
Reported Revenue
$579.3 Mil
Revenue Estimate
$591.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Ferrellgas Partners, L.P. Reports Results for Second Quarter Fiscal 2017

Ferrellgas Partners, L.P. (FGP) ("Ferrellgas" or the "Company") today announced financial results for its second fiscal quarter ended January 31, 2017. The Company reported net earnings attributable to Ferrellgas Partners, L.P. of $38.1 million, compared to net earnings of $57.1 million for the same period in 2016.

Adjusted EBITDA was $105.0 million, compared to $138.3 million in the prior year period primarily due to decreased contributions from the midstream crude oil logistics segment. Propane gallons sold were up 7% to 267.7 million gallons, compared to 250.2 million gallons in the prior year period. Operating income generated by the propane and related equipment sales segment was $95.3 million, compared to $97.8 million in the prior year period.

"Weather for the second fiscal quarter was 4% colder than last year but a stunning 14% warmer than normal," said James E. Ferrell, the Company’s interim President and Chief Executive Officer. "Our efforts to increase market share resulted in gallons increasing approximately 7%, but resulted in overall margins lower than the prior year period, due to customer mix and location."

Mr. Ferrell continued, "The leadership changes we announced earlier this year are going to reap significant benefits. Dan Giannini at Bridger and Geoff Berger at Blue Rhino are going to drive growth and improved results. In addition, Randy Schott, a 28-year veteran of Ferrellgas and Sr. Vice President in charge of our large Retail propane business has also instilled a growth mindset in his people. Morale in the company could not be higher."

At the end of the second fiscal quarter, the Company’s leverage ratio was 5.81x, which was lower than the limit allowed under its secured credit facility and accounts receivable securitization facility, as amended in September 2016.

Mr. Ferrell added, "We were pleased to be able to upsize the Company’s recent note issuance to $175 million. Our goal is to return to a leverage ratio of 4.5x or a level we deem appropriate for our business."

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, 2016. 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. These statements often use words such as "anticipate," "believe," "intend," "plan," "projection," "forecast," "strategy," "position," "continue," "estimate," "expect," "may," "will," or the negative of those terms or other variations of them or comparable terminology. Forward-looking statements, include, but are not limited to: Ferrellgas’ debt reduction plans, Ferrellgas’ leverage ratio reduction plans, statements regarding future unitholder returns, growth and improved results, plans to increase the utilization of certain assets, the anticipated impact of Ferrellgas’ actions on its balance sheet and liquidity position, and the anticipated impact of Ferrellgas’ leadership changes. While Ferrellgas believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: risks related to Ferrellgas’ ability to generate sufficient cash flow to pay distributions, to make payments on its debt obligations and to execute its business plan; Ferrellgas’ ability to access funds on acceptable terms, if at all, because of the terms and conditions governing its indebtedness or otherwise; local, regional and national economic conditions and the impact they may have on Ferrellgas and its customers; the effect of weather conditions on the demand for propane; the prices of wholesale propane, motor fuel and crude oil; disruptions to the supply of propane; the termination or non-renewal of certain arrangements or agreements; adverse changes in our relationships with our national propane customers; significant delays in the collection of, or uncollectibility of, accounts or notes receivable; the financial condition of Ferrellgas’ customers; and the failure of any customer to perform its contractual obligations. 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 are 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, 2016, the Form 10-Q of these entities for the fiscal quarter ended January 31, 2017, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements in this press release are qualified in their entirety by these cautionary statements. Except as required by law, Ferrellgas undertakes no obligation and does not intend to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE, SIX AND TWELVE MONTHS ENDED JANUARY 31, 2017 AND 2016
(in thousands, except per unit data)
(unaudited)
Three months ended
Six months ended
Twelve months ended
January 31
January 31
January 31
2017
2016
2017
2016
2017
2016
Revenues:
Propane and other gas liquids sales
$
437,375
$
376,856
$
679,774
$
622,157
$
1,259,985
$
1,323,945
Midstream operations
96,787
188,333
204,831
382,003
448,066
474,123
Other
45,088
84,049
74,187
116,224
169,724
237,378
Total revenues
579,250
649,238
958,792
1,120,384
1,877,775
2,035,446
Cost of sales:
Propane and other gas liquids sales
235,029
174,829
354,241
296,580
622,094
678,298
Midstream operations
87,024
148,443
181,666
302,047
350,853
374,450
Other
20,657
55,774
32,403
70,222
88,418
150,956
Gross profit
236,540
270,192
390,482
451,535
816,410
831,742
Operating expense
112,509
116,463
217,501
231,444
443,967
453,696
Depreciation and amortization expense
25,607
37,367
51,809
74,346
127,976
125,673
General and administrative expense
11,429
12,062
23,911
24,302
48,188
59,284
Equipment lease expense
7,416
7,278
14,765
14,310
29,288
27,256
Non-cash employee stock ownership plan compensation charge
2,945
3,141
6,699
8,397
25,897
24,948
Non-cash stock-based compensation charge (a)
1,417
(2,456
)
3,298
5,666
6,956
15,218
Asset impairments
-
-
-
29,316
628,802
29,316
Loss on asset sales and disposal
45
2,524
6,468
17,441
19,862
22,165
Operating income (loss)
75,172
93,813
66,031
46,313
(514,526
)
74,186
Interest expense
(36,819
)
(34,730
)
(72,247
)
(68,518
)
(141,666
)
(120,627
)
Other income (expense), net
763
(298
)
1,271
(420
)
1,801
(143
)
Earnings (loss) before income taxes
39,116
58,785
(4,945
)
(22,625
)
(654,391
)
(46,584
)
Income tax expense (benefit)
588
1,030
(2
)
186
(224
)
(660
)
Net earnings (loss)
38,528
57,755
(4,943
)
(22,811
)
(654,167
)
(45,924
)
Net earnings (loss) attributable to noncontrolling interest (b)
430
628
32
(145
)
(6,443
)
(295
)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.
38,098
57,127
(4,975
)
(22,666
)
(647,724
)
(45,629
)
Less: General partner’s interest in net earnings (loss)
381
571
(50
)
(227
)
(6,477
)
(456
)
Common unitholders’ interest in net earnings (loss)
$
37,717
$
56,556
$
(4,925
)
$
(22,439
)
$
(641,247
)
$
(45,173
)
Earnings (loss) Per Unit
Basic and diluted net earnings (loss) per common unitholders’ interest
$
0.39
$
0.58
$
(0.05
)
$
(0.23
)
$
(6.57
)
$
(0.48
)
Weighted average common units outstanding
97,152.7
98,334.4
97,305.1
99,355.6
97,652.0
93,169.4
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended
Six months ended
Twelve months ended
January 31
January 31
January 31
2017
2016
2017
2016
2017
2016
Net earnings (loss) attributable to Ferrellgas Partners, L.P.
$
38,098
$
57,127
$
(4,975
)
$
(22,666
)
$
(647,724
)
$
(45,629
)
Income tax expense (benefit)
588
1,030
(2
)
186
(224
)
(660
)
Interest expense
36,819
34,730
72,247
68,518
141,666
120,627
Depreciation and amortization expense
25,607
37,367
51,809
74,346
127,976
125,673
EBITDA
101,112
130,254
119,079
120,384
(378,306
)
200,011
Non-cash employee stock ownership plan compensation charge
2,945
3,141
6,699
8,397
25,897
24,948
Non-cash stock based compensation charge (a)
1,417
(2,456
)
3,298
5,666
6,956
15,218
Asset impairments
-
-
-
29,316
628,802
29,316
Loss on asset sales and disposal
45
2,524
6,468
17,441
19,862
22,165
Other (income) expense, net
(763
)
298
(1,271
)
420
(1,801
)
143
Change in fair value of contingent consideration (included in operating expense)
-
-
-
(100
)
-
(100
)
Severance costs $414 and $938 included in operating costs for the six and twelve months ended period January 31, 2017 and $490, $1,545 and $1,618 included in general and administrative costs for the three, six and twelve months ended January 31, 2017. Also includes $805 in operating costs for the six and twelve months ended January 31, 2016 and $51 in general and administrative costs for the six and twelve months ended January 31, 2016.
490
-
1,959
856
2,556
856
Litigation accrual and related legal fees associated with a class action lawsuit (included in general and administrative expense)
-
-
-
-
-
83
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $(1,134), $(3,011) and $(6,160) included in operating expense for the three, six and twelve months ended January 31, 2017 and $3,696, $4,734 and $7,146 for the three, six and twelve months ended January 31, 2016. Also includes $488, $796 and $174 included in midstream operations cost of sales for the three, six and twelve months ended January 31, 2017, respectively and $174 for each of the three, six and twelve months ended January 31, 2016.
(646
)
3,870
(2,215
)
4,908
(5,986
)
7,320
Acquisition and transition expenses (included in general and administrative expense)
-
70
-
85
14
16,458
Net earnings (loss) attributable to noncontrolling interest (b)
430
628
32
(145
)
(6,443
)
(295
)
Adjusted EBITDA (c)
105,030
138,329
134,049
187,228
291,551
316,123
Net cash interest expense (d)
(34,712
)
(33,905
)
(68,330
)
(66,407
)
(134,783
)
(116,380
)
Maintenance capital expenditures (e)
(3,754
)
(3,214
)
(7,076
)
(9,429
)
(14,784
)
(19,329
)
Cash paid for taxes
(25
)
(5
)
(26
)
(5
)
(798
)
(451
)
Proceeds from asset sales
2,313
1,863
4,033
2,876
7,180
6,052
Distributable cash flow to equity investors (f)
68,852
103,068
62,650
114,263
148,366
186,015
Distributable cash flow attributable to general partner and non-controlling interest
1,377
2,061
1,253
2,285
2,968
3,720
Distributable cash flow attributable to common unitholders
67,475
101,007
61,397
111,978
145,398
182,295
Less: Distributions paid to common unitholders
9,715
50,223
59,506
101,666
159,959
184,384
Distributable cash flow excess/(shortage)
$
57,760
$
50,784
$
1,891
$
10,312
$
(14,561
)
$
(2,089
)
Propane gallons sales
Retail - Sales to End Users
201,580
189,460
312,768
300,433
565,106
569,071
Wholesale - Sales to Resellers
66,152
60,781
118,142
111,347
232,916
238,167
Total propane gallons sales
267,732
250,241
430,910
411,780
798,022
807,238
Midstream operations barrels
Salt water volume processed
4,002
4,222
7,705
8,956
15,292
17,272
Crude oil hauled
13,005
24,345
24,269
48,609
55,071
59,056
FERRELLGAS PARTNERS, L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS
January 31, 2017
July 31, 2016
Current Assets:
Cash and cash equivalents
$
14,710
$
4,965
Accounts and notes receivable, net (including $181,851 and $106,464 of
accounts receivable pledged as collateral at January 31, 2017 and
July 31, 2016, respectively)
223,978
149,583
Inventories
114,862
90,594
Prepaid expenses and other current assets
37,729
39,973
Total Current Assets
391,279
285,115
Property, plant and equipment, net
747,045
774,680
Goodwill, net
256,103
256,103
Intangible assets, net
264,165
280,185
Other assets, net
87,028
87,223
Total Assets
$
1,745,620
$
1,683,306
LIABILITIES AND PARTNERS’ DEFICIT
Current Liabilities:
Accounts payable
$
108,271
$
67,928
Short-term borrowings
65,599
101,291
Collateralized note payable
133,000
64,000
Other current liabilities
134,945
128,958
Total Current Liabilities
441,815
362,177
Long-term debt (a)
1,966,909
1,941,335
Other liabilities
33,428
31,574
Contingencies and commitments
Partners’ Capital (Deficit):
Common unitholders (97,152,665 and 98,002,665 units outstanding at
January 31, 2017 and July 31, 2016)
(641,239
)
(570,754
)
General partner unitholder (989,926 and 989,926 units outstanding at
January 31, 2017 and July 31, 2016)
(66,387
)
(65,835
)
Accumulated other comprehensive income (loss)
14,430
(10,468
)
Total Ferrellgas Partners, L.P. Partners’ Deficit
(693,196
)
(647,057
)
Noncontrolling Interest
(3,336
)
(4,723
)
Total Partners’ Deficit
(696,532
)
(651,780
)
Total Liabilities and Partners’ Deficit
$
1,745,620
$
1,683,306
(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.
Contacts
Jack Herrold, Investor Relations - jackherrold@ferrellgas.com, 913-661-1851
Jim Saladin, Media Relations - jimsaladin@ferrellgas.com, 913-661-1833

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