FGP
$4.83
Ferrellgas Partners LP
Earnings Details
3rd Quarter April 2017
Friday, June 09, 2017 7:00:08 AM
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Summary

Ferrellgas Partners LP (FGP) Recent Earnings

Ferrellgas Partners LP (FGP) reported 3rd Quarter April 2017 earnings of $0.07 per share on revenue of $538.1 million. The consensus earnings estimate was $0.10 per share on revenue of $573.4 million. Revenue grew 5.6% on a year-over-year basis.

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

Results
Reported Earnings
$0.07
Earnings Whisper
-
Consensus Estimate
$0.10
Reported Revenue
$538.1 Mil
Revenue Estimate
$573.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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

Ferrellgas Partners, L.P. (FGP) ("Ferrellgas" or the "Company") today announced financial results for its third fiscal quarter ended April 30, 2017. The Company reported net earnings attributable to Ferrellgas Partners, L.P. of $6.5 million, compared to net earnings of $18.7 million for the same period in 2016.

Adjusted EBITDA was $76.8 million compared to $108.0 million in the prior year period primarily due to decreased contributions from the midstream operations segment.

"Weather for the third fiscal quarter was 2.7% warmer than last year, but more importantly 19.5% warmer than normal," said James E. Ferrell, the Company’s interim President and Chief Executive Officer. "Our retail gallons were consistent with those of the prior year on a weather adjusted basis, but overall margins were lower than the prior year period due to customer mix."

Mr. Ferrell continued, "Further, we continue to move forward with plans to drive growth and improve results at Blue Rhino and are analyzing ways to become more operationally efficient."

Propane gallons sold were 212.2 million gallons, compared to 223.4 million gallons in the prior year quarter. Operating income generated by the propane operations and related equipment sales segment was $67.1 million, compared to $78.7 million in the prior year period.

During the third fiscal quarter the Company executed an amendment to its secured credit facility to address leverage and interest coverage ratios and to right size the facility. Mr. Ferrell added, "We were pleased to be able to adjust our leverage ratio to 7.75x and our interest coverage ratio to 1.75x through the quarter ending April 2018 and to right size the facility from $700 million to $575 million. With this amendment behind us we can concentrate our efforts on reducing our debt with the goal of returning to a leverage ratio of 4.5x or lower." At the end of the third fiscal quarter, the Company’s leverage ratio was 6.45x, which was significantly lower than the 7.75x limit allowed under its secured credit facility and accounts receivable securitization facility, both as amended in April 2017.

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 April 30, 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
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
2017
2016
2017
2016
2017
2016
Revenues:
Propane and other gas liquids sales
$
369,437
$
338,929
$
1,049,211
$
961,086
$
1,290,493
$
1,217,207
Midstream operations
126,676
105,424
331,507
487,427
469,318
574,254
Other
41,996
65,119
116,183
181,343
146,601
220,906
Total revenues
538,109
509,472
1,496,901
1,629,856
1,906,412
2,012,367
Cost of sales:
Propane and other gas liquids sales
197,487
152,261
551,728
448,841
667,320
576,875
Midstream operations
118,767
71,852
300,433
373,899
397,768
444,425
Other
20,810
41,203
53,213
111,425
68,025
134,450
Gross profit
201,045
244,156
591,527
695,691
773,299
856,617
Operating expense
104,773
115,140
322,274
346,584
433,600
461,953
Depreciation and amortization expense
25,737
38,352
77,546
112,698
115,361
140,701
General and administrative expense
9,978
12,354
33,889
36,656
45,812
63,386
Equipment lease expense
7,270
7,244
22,035
21,554
29,314
28,153
Non-cash employee stock ownership plan compensation charge
4,697
9,978
11,396
18,375
20,616
26,360
Non-cash stock-based compensation charge (a)
-
1,091
3,298
6,757
5,865
13,038
Asset impairments
-
-
-
29,316
628,802
29,316
Loss on asset sales and disposal
2,393
5,779
8,861
23,220
16,476
25,741
Operating income (loss)
46,197
54,218
112,228
100,531
(522,547
)
67,969
Interest expense
(39,860
)
(34,371
)
(112,107
)
(102,889
)
(147,155
)
(131,488
)
Other income (expense), net
162
331
1,433
(89
)
1,632
(24
)
Earnings (loss) before income taxes
6,499
20,178
1,554
(2,447
)
(668,070
)
(63,543
)
Income tax expense (benefit)
(192
)
1,260
(194
)
1,446
(1,676
)
(317
)
Net earnings (loss)
6,691
18,918
1,748
(3,893
)
(666,394
)
(63,226
)
Net earnings (loss) attributable to noncontrolling interest (b)
155
233
187
88
(6,521
)
(470
)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.
6,536
18,685
1,561
(3,981
)
(659,873
)
(62,756
)
Less: General partner’s interest in net earnings (loss)
66
187
16
(40
)
(6,599
)
(628
)
Common unitholders’ interest in net earnings (loss)
$
6,470
$
18,498
$
1,545
$
(3,941
)
$
(653,274
)
$
(62,128
)
Earnings (loss) Per Common Unit
Basic and diluted net loss per common unitholders’ interest
$
0.07
$
0.19
$
0.02
$
(0.04
)
$
(6.70
)
$
(0.64
)
Weighted average common units outstanding - basic
97,152.7
98,002.7
97,255.4
98,911.2
97,443.7
96,899.5
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended
Nine months ended
Twelve months ended
April 30
April 30
April 30
2017
2016
2017
2016
2017
2016
Net earnings (loss) attributable to Ferrellgas Partners, L.P.
$
6,536
$
18,685
$
1,561
$
(3,981
)
$
(659,873
)
$
(62,756
)
Income tax expense (benefit)
(192
)
1,260
(194
)
1,446
(1,676
)
(317
)
Interest expense
39,860
34,371
112,107
102,889
147,155
131,488
Depreciation and amortization expense
25,737
38,352
77,546
112,698
115,361
140,701
EBITDA
71,941
92,668
191,020
213,052
(399,033
)
209,116
Non-cash employee stock ownership plan compensation charge
4,697
9,978
11,396
18,375
20,616
26,360
Non-cash stock-based compensation charge (a)
-
1,091
3,298
6,757
5,865
13,038
Asset impairments
-
-
-
29,316
628,802
29,316
Loss on asset sales and disposal
2,393
5,779
8,861
23,220
16,476
25,741
Other (income) expense, net
(162
)
(331
)
(1,433
)
89
(1,632
)
24
Change in fair value of contingent consideration (included in operating expense)
-
-
-
(100
)
-
(100
)
Severance expense $414 and $542 included in operating expense for the nine and twelve months ended
period April 30, 2017 and $1,545 included in general and administrative expense for both the nine and
twelve months ended April 30, 2017. Also includes $396, $1,201 and $1,201 in operating expense for the
three, nine and twelve months ended April 30, 2016 and $73, $124 and $124 in general and administrative
expense for the three, nine and twelve months ended April 31, 2016.
-
469
1,959
1,325
2,087
1,325
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives not designated as hedging instruments $(227), $(3,238) and $(3,245) included in operating expense for the three, nine and twelve
months ended April 30, 2017 and $(3,142), $1,592 and $5,613 for the three, nine and twelve months
ended April 30, 2016. Also includes $(2,007), $(1,211) and $(3,060) included in cost of sales for the three,
nine and twelve months ended April 30, 2017, respectively, and $1,227, $1,401 and
$1,401 for each of
the three, nine and twelve months ended April 30, 2016.
(2,234
)
(1,915
)
(4,449
)
2,993
(6,305
)
7,014
Acquisition and transition expenses (included in general and administrative expense)
-
14
-
99
-
16,472
Net earnings (loss) attributable to noncontrolling interest (b)
155
233
187
88
(6,521
)
(470
)
Adjusted EBITDA (c)
76,790
107,986
210,839
295,214
260,355
327,836
Net cash interest expense (d)
(37,140
)
(32,849
)
(105,470
)
(99,256
)
(139,074
)
(126,807
)
Maintenance capital expenditures (e)
(3,442
)
(4,159
)
(10,518
)
(13,588
)
(14,067
)
(18,337
)
Cash paid for taxes
(2
)
(427
)
(28
)
(432
)
(373
)
(811
)
Proceeds from asset sales
130
3,096
4,163
5,972
4,214
7,817
Distributable cash flow attributable to equity investors (f)
36,336
73,647
98,986
187,910
111,055
189,698
Distributable cash flow attributable to general partner and non-controlling interest
727
1,473
1,980
3,758
2,222
3,793
Distributable cash flow attributable to common unitholders
35,609
72,174
97,006
184,152
108,833
185,905
Less: Distributions paid to common unitholders
9,715
50,267
69,221
151,933
119,407
193,292
Distributable cash flow excess/(shortage)
$
25,894
$
21,907
$
27,785
$
32,219
$
(10,574
)
$
(7,387
)
Propane gallons sales
Retail - Sales to End Users
160,326
164,713
473,094
465,146
560,719
555,201
Wholesale - Sales to Resellers
51,891
58,645
170,033
169,992
226,162
228,989
Total propane gallons sales
212,217
223,358
643,127
635,138
786,881
784,190
Midstream operations barrels
Salt water volume processed
4,635
4,024
12,340
12,980
15,903
16,781
Crude oil hauled
12,280
16,215
36,549
64,824
51,136
75,271
Crude oil sold
2,110
1,810
5,228
4,969
7,119
5,496
(a)
Non-cash stock-based compensation charges consist of the following:
FERRELLGAS PARTNERS, L.P.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS
April 30, 2017
July 31, 2016
Current Assets:
Cash and cash equivalents
$
9,506
$
4,965
Accounts and notes receivable, net (including $143,337 and $106,464 of
accounts receivable pledged as collateral at April 30, 2017 and
July 31, 2016, respectively)
208,529
149,583
Inventories
92,757
90,594
Prepaid expenses and other current assets
30,563
39,973
Total Current Assets
341,355
285,115
Property, plant and equipment, net
743,508
774,680
Goodwill, net
256,103
256,103
Intangible assets, net
259,286
280,185
Other assets, net
79,017
87,223
Total Assets
$
1,679,269
$
1,683,306
LIABILITIES AND PARTNERS’ DEFICIT
Current Liabilities:
Accounts payable
$
86,646
$
67,928
Short-term borrowings
38,389
101,291
Collateralized note payable
91,000
64,000
Other current liabilities
151,473
128,958
Total Current Liabilities
367,508
362,177
Long-term debt (a)
1,984,218
1,941,335
Other liabilities
31,029
31,574
Contingencies and commitments
Partners Deficit:
Common unitholders (97,152,665 and 98,002,665 units outstanding at
April 30, 2017 and July 31, 2016)
(639,881
)
(570,754
)
General partner unitholder (989,926 and 989,926 units outstanding at
April 30, 2017 and July 31, 2016)
(66,372
)
(65,835
)
Accumulated other comprehensive income (loss)
6,086
(10,468
)
Total Ferrellgas Partners, L.P. Partners’ Deficit
(700,167
)
(647,057
)
Noncontrolling Interest
(3,319
)
(4,723
)
Total Partners’ Deficit
(703,486
)
(651,780
)
Total Liabilities and Partners’ Deficit
$
1,679,269
$
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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