FGP
$1.45
Ferrellgas Partners LP
($.04)
(2.68%)
Earnings Details
2nd Quarter January 2019
Friday, March 8, 2019 7:00:00 AM
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Summary

Ferrellgas Partners LP (FGP) Recent Earnings

Ferrellgas Partners LP (FGP) reported 2nd Quarter January 2019 earnings of $0.44 per share on revenue of $573.4 million. The consensus earnings estimate was $0.57 per share on revenue of $605.3 million. Revenue fell 24.1% 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
$0.44
Earnings Whisper
-
Consensus Estimate
$0.57
Reported Revenue
$573.4 Mil
Revenue Estimate
$605.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Ferrellgas Partners, L.P. Reports Fiscal Second Quarter 2019 Results

  • Total Retail propane sales volume for the quarter increased approximately 2 percent leading to a 4 percent increase in gross margin dollars over the prior year on weather that was 0.7 percent colder than the prior year.
  • Retail customer growth of approximately 25,000, or 4 percent over prior year.
  • Tank Exchange sale locations now exceed 53,700, up 10 percent compared to prior year.
  • 5 accretive acquisitions of Blue Rhino independent distributors completed this fiscal year.

LIBERTY, Mo., March 08, 2019 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its fiscal second quarter ended January 31, 2019.

For the quarter, the Company reported a net earnings attributable to Ferrellgas Partners, L.P. of $43.3 million, or $.44 per common unit, compared to prior year period net loss of $1.8 million, or $(.02) per common unit.

Adjusted EBITDA, a non-GAAP measure, was $119.7 million compared to $120.6 million in the prior year. The following table represents the contribution to adjusted EBITDA from ongoing propane operations as well as from assets that were sold during 2018.

(in millions) Q2 2019 Q2 2018
Propane Operations and Corporate Support $119.7 $116.7
Results from Assets Sold in 2018 - $3.9
Consolidated Adjusted EBITDA $119.7 $120.6

On a trailing twelve month basis, adjusted EBITDA from ongoing propane operations and corporate support as of January 31, 2019 is $229.4 million compared to $226.5 million as of October 31, 2018.

The Company’s propane operations reported that total gallons sold of 309.7 million were consistent with the prior year. Margins were 3.1¢, or 4.2 percent higher than the prior year despite increased competitive pressure in the tank exchange business. The Company continues its aggressive approach to gaining market share. This strategic focus resulted in approximately 25,000 new customers, or approximately 4 percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased over 10 percent from prior year to over 53,700 locations. Overall, the increase in sales volume growth and margins per gallon resulted in an increase in gross margin dollars of $9.3 million. The Company’s ongoing commitment to investing in the business led to higher operating expenses during the quarter which were largely associated with serving over 25,000 new customers, 5,000 new tank exchange locations and additional non-transport gallons sold. As a result of this investment and the growth in sales volumes, operating, general and administrative expenses in our Propane segment were $5.6 million higher than the prior year.

Liquidity of $236.8 million at January 31, 2019 resulted from $196.2 million of available borrowing capacity on the Company’s secured credit facility and $40.6 million of cash.

“We continue to pursue our strategy to invest in the growth of the business and are achieving success faster than anticipated,” said James E. Ferrell, Interim Chief Executive Officer and President of Ferrellgas. “We are committed to growing market share organically and through acquisitions. We continue the successful integration of Blue Rhino independent distributors as we capture more EBITDA from this business. We continue to invest in our best-in-class fleet. Additionally, continued favorable weather led to extremely strong performance in February that we expect to continue through the midpoint of our third quarter.”

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 2020.

In addition to solidifying the Company’s liquidity with the fourth quarter 2018 closing of the $575 million secured credit facility and extension of its accounts receivable securitization facility and cash from 2018 announced asset sales, the Company continues to make progress in evaluating options to address its leverage. 

“Our Company is focused on growth and operational excellence,” said Ferrell. “We have the liquidity to be flexible and continue this focused effort and I expect to resolve our leverage situation to the benefit of our Company for continued success.”

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 September 27, 2018. 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, 2018, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contacts

William Ruisinger, Interim Chief Financial Officer – billruisinger@ferrellgas.com 816-792-7914

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

ASSETS
 January 31, 2019 July 31, 2018 
       
Current Assets:     
Cash and cash equivalents $  40,647  $  119,311  
Accounts and notes receivable, net (including $201,717 and $120,079 of accounts receivable pledged as collateral at January 31, 2019 and July 31, 2018, respectively)  203,164   126,054  
Inventories  89,784   83,694  
Prepaid expenses and other current assets  36,616   34,862  
Total Current Assets  370,211   363,921  
       
Property, plant and equipment, net  584,334   557,723  
Goodwill, net  247,478   246,098  
Intangible assets, net  113,558   120,951  
Other assets, net  72,539   74,588  
Total Assets $ 1,388,120  $ 1,363,281  
       
       
LIABILITIES AND PARTNERS' DEFICIT     
       
Current Liabilities:     
Accounts payable $  63,639  $  46,820  
Short-term borrowings    -     32,800  
Collateralized note payable  140,000   58,000  
Other current liabilities  147,253   142,025  
Total Current Liabilities  350,892   279,645  
       
Long-term debt (a)  2,083,031   2,078,637  
Other liabilities  37,547   39,476  
Contingencies and commitments     
       
Partners Deficit:      
Common unitholders (97,152,665 units outstanding at January 31, 2019 and July 31, 2018)  (997,154)  (978,503) 
General partner unitholder (989,926 units outstanding at January 31, 2019 and July 31, 2018)  (69,981)  (69,792) 
Accumulated other comprehensive income (loss)  (9,049)  20,510  
Total Ferrellgas Partners, L.P. Partners' Deficit  (1,076,184)  (1,027,785) 
Noncontrolling interest  (7,166)  (6,692) 
Total Partners' Deficit  (1,083,350)  (1,034,477) 
Total Liabilities and Partners' Deficit $ 1,388,120  $ 1,363,281  
       
(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 
    2019   2018   2019   2018   2019   2018  
Revenues:             
Propane and other gas liquids sales $ 550,112  $ 592,239  $ 885,078  $  894,997  $ 1,633,057  $ 1,533,635  
Midstream operations    -     117,276     -      238,036     44,283     499,908  
Other  23,265   45,641   40,608   76,778   111,677   147,753  
Total revenues  573,377   755,156   925,686   1,209,811   1,789,017   2,181,296  
               
Cost of sales:             
Propane and other gas liquids sales  311,531   362,918   515,667   542,433   946,648   882,347  
Midstream operations    -    107,067     -    215,192   40,367   462,965  
Other  3,422   20,787   6,469   34,489   40,634   69,353  
               
Gross profit   258,424   264,384   403,550   417,697   761,368   766,631  
               
Operating expense  121,219   123,716   231,550   234,178   469,120   448,428  
Depreciation and amortization expense  19,605   25,485   38,597   51,217   89,175   102,759  
General and administrative expense  16,342   14,891   30,521   28,055   56,867   51,124  
Equipment lease expense  8,415   6,954   16,278   13,695   30,855   28,054  
Non-cash employee stock ownership plan compensation charge  1,944   4,031   4,692   7,993   10,558   16,382  
Asset impairments    -     10,005     -     10,005     -     10,005  
Loss on asset sales and disposals  2,216   39,249   6,720   40,144   153,975   48,133  
               
Operating income (loss)  88,683   40,053   75,192   32,410   (49,182)  61,746  
               
Interest expense  (44,891)  (42,673)  (88,769)  (83,480)  (173,756)  (163,718) 
Other income, net  86   684   105   1,195   (162)  1,398  
               
Earnings (loss) before income tax benefit  43,878   (1,936)  (13,472)  (49,875)  (223,100)  (100,574) 
               
Income tax expense (benefit)  3   (162)    161     215     (2,732)    (926) 
               
Net earnings (loss)  43,875   (1,774)  (13,633)  (50,090)  (220,368)  (99,648) 
               
Net earnings (loss) attributable to noncontrolling interest (b)  531   69   38   (332)  (1,874)  (658) 
                          
               
Net earnings (loss) attributable to Ferrellgas Partners, L.P.    43,344     (1,843)    (13,671)    (49,758)    (218,494)    (98,990) 
               
Less: General partner's interest in net earnings (loss)  433   (19)    (137)    (498)    (2,185)    (990) 
               
Common unitholders' interest in net earnings (loss) $  42,911  $  (1,824) $  (13,534) $  (49,260) $  (216,309) $  (98,000) 
               
Earnings (loss) Per Common Unit             
Basic and diluted net earnings (loss) per common unitholders' interest $  0.44  $  (0.02) $  (0.14) $  (0.51) $  (2.23) $  (1.01) 
               
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 
    2019   2018   2019   2018   2019   2018  
               
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $  43,344  $  (1,843) $  (13,671) $  (49,758) $  (218,494) $  (98,990) 
Income tax expense (benefit)    3     (162)    161     215     (2,732)    (926) 
Interest expense  44,891   42,673   88,769   83,480   173,756   163,718  
Depreciation and amortization expense  19,605   25,485   38,597   51,217   89,175   102,759  
EBITDA   107,843     66,153    113,856     85,154     41,705     166,561  
Non-cash employee stock ownership plan compensation charge    1,944   4,031     4,692     7,993   10,558   16,382  
Asset impairments    -     10,005     -     10,005     -     10,005  
Loss on asset sales and disposal    2,216   39,249     6,720     40,144   153,975   48,133  
Other income, net    (86)  (684)    (105)    (1,195)  162   (1,398) 
Severance costs $690 included in operating costs for the three, six and twelve months ended period January 31, 2019 and $910 included in general and administrative costs for the three, six and twelve months ended January 31, 2019. Also includes $358 in operating costs for the six and twelve months ended period January 31, 2018 and $1,305 included in general and administrative costs for the six and twelve months ended January 31, 2018.    1,600     -     1,600     1,663     1,600     1,663  
Legal fees and settlements    5,608     2,118     9,172     2,118     13,119     2,118  
Multi-employer pension plan withdrawal settlement    -     -     1,524     -     1,524     -  
Exit costs associated with contracts - Midstream dispositions    -     -     -     -     11,804     -  
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $(986) included in operating expense for the twelve months ended January 31, 2018. Also includes $(314), $1,293 and $1,037 included in midstream operations cost of sales for the three, six and twelve months ended January 31, 2018, respectively.     -     (314)    -     1,293     -     51  
Net earnings (loss) attributable to noncontrolling interest (b)  531   69   38   (332)  (1,874)  (658) 
Adjusted EBITDA (c)  119,656   120,627   137,497   146,843   232,573   242,857  
Net cash interest expense (d)  (41,679)  (39,734)  (82,578)  (77,791)  (165,679)  (153,049) 
Maintenance capital expenditures (e)  (26,147)  (4,640)  (31,532)  (13,344)  (45,805)  (23,203) 
Cash refund from (paid for) taxes  4   (6)  2   (12)  305   (296) 
Proceeds from certain asset sales  899   2,999   1,960   4,207   6,956   8,126  
Distributable cash flow attributable to equity investors (f)  52,733   79,246   25,349   59,903   28,350   74,435  
Distributable cash flow attributable to general partner and non-controlling interest  1,055   1,585   507   1,198   567   1,489  
Distributable cash flow attributable to common unitholders (g)  51,678   77,661   24,842   58,705   27,783   72,946  
Less: Distributions paid to common unitholders     9,716   9,715   19,431   29,145   38,861  
Distributable cash flow excess/(shortage) $51,678  $67,945  $15,127  $39,274  $(1,362) $34,085  
               
Propane gallons sales             
Retail - Sales to End Users  239,044   235,071   368,711   354,365   651,314   606,469  
Wholesale - Sales to Resellers  70,655   74,942   119,615   128,371   231,454   236,480  
Total propane gallons sales  309,699   310,013   488,326   482,736   882,768   842,949  
                          
             
             
(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, asset impairments, loss on asset sales and disposal, other income, net, severance expense, legal fees and settlements, multi-employer pension plan withdrawal settlement, exit costs associated with contracts - Midstream dispositions, unrealized (non-cash) loss (gain) 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 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. 


Source: Ferrellgas Partners, L.P.