EX-99.1 2 h60521exv99w1.htm PRESS RELEASE exv99w1
Exhibit 99.1
For Immediate Release
Contact:
Tom Colvin, Investor Relations, (913) 661-1530
Scott Brockelmeyer, Media Relations, (913) 661-1830
FERRELLGAS PARTNERS REPORTS IN-LINE FOURTH-QUARTER RESULTS;
EXPECTS RECORD ADJUSTED EBITDA FOR FISCAL 2009
          OVERLAND PARK, KS, September 29, 2008/PR Newswire-First Call/ — Ferrellgas Partners, L.P. (NYSE:FGP), one of the nation’s largest propane distributors, reported for the fiscal fourth quarter ended July 31 Adjusted EBITDA of $10.4 million, in line with prior year results. For full-year fiscal 2008, Adjusted EBITDA totaled $221.9 million compared to fiscal 2007 record Adjusted EBITDA performance of $237.1 million.
          The traditional fourth-quarter loss was $38.8 million, or $0.61 per unit, materially unchanged from a year ago. For the full-year fiscal 2008 and 2007, respectively, Ferrellgas earned $24.7 million, or $0.39 per unit, and $34.8 million, or $0.55 per unit, respectively.
          Fourth-quarter revenues climbed more than 27 percent to $419.7 million from $329.1 million the year before, as propane sales rose to 140.2 million gallons from 136.5 million gallons. Gross profit increased to $125.0 million from $123.0 million. For the full year, revenues rose to $2.29 billion from $1.99 billion the year before, while propane sales decreased to 838.8 million gallons from 891.9 million gallons. Gross profit declined to $662.3 million from $688.0 million.
          Operating expense for the fiscal 2008 fourth quarter and year was $97.3 million and $372.1 million, respectively, compared with $93.6 million and $380.8 million in the year-earlier periods. On a comparable basis, general & administrative expense was $11.8 million and $45.6 million, respectively, and $12.0 million and $44.9 million, respectively, in fiscal 2007. Equipment lease expense declined to $6.0 million from $6.4 million in the quarter and to $24.5 million from $26.1 million for the year.
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          The Blue Rhino brand continued to contribute in fiscal 2008 closing the year with 43,200 locations, an increase of 2,300 over year-ago levels. Included were more than 500 additional 7-Eleven stores and more than 200 new RaceTrac convenience locations.
          “In light of the challenging operating environment, we are quite pleased with our fourth-quarter and full-year results,” noted James E. Ferrell, Chairman and Chief Executive Officer. “While these results fell just short of our full-year Adjusted EBITDA target of $225 million, they exclude more than $3 million of anticipated earnings from certain higher margin sales that were realized and incrementally benefited our earnings in the first month of fiscal 2009. With the wholesale price of propane increasing 47% over the past year, approaching fiscal 2007’s record financial results reflects a performance that’s a tribute to our employees.”
          Looking to the current fiscal year, President and Chief Operating Officer Steve Wambold emphasized, “We’re better positioned now than we’ve ever been. Our platform continues to operate more efficiently, and we remain confident more cost savings can be realized. We’re particularly encouraged by the fourth-quarter increase in gallons sold, a trend that we believe will carry over into the first quarter of our new fiscal year, despite conservation’s ongoing impact.”
          Wambold emphasized, “We’re especially focused on improving margins. Moreover, we believe we have good reason to be optimistic about the outlook for fiscal 2009 and are projecting Adjusted EBITDA in excess of our fiscal 2007 record performance.”
          Chief Financial Officer Ryan VanWinkle pointed out, “During the fourth quarter, we took a major step in addressing our near-term capital needs.” At the end of July the partnership announced a private placement of $200 million in notes.
          Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves approximately one million customers in all 50 states, the District of Columbia, and Puerto Rico. Ferrellgas employees indirectly own more than 20 million common units of the partnership through an employee stock ownership plan. More information about the partnership can be found online at www.ferrellgas.com.
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 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, 2008, and other documents filed from time to time by these entities with the Securities and Exchange Commission.
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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
                 
    July 31, 2008     July 31, 2007  
ASSETS
                
Current Assets:
                
Cash and cash equivalents
   $ 16,614     $ 20,685  
Accounts and notes receivable, net
     145,081       118,320  
Inventories
     152,301       113,807  
Price risk management assets
     26,086       5,097  
Prepaid expenses and other current assets
     10,924       11,675  
 
            
Total Current Assets
     351,006       269,584  
 
                
Property, plant and equipment, net
     685,328       720,190  
Goodwill
     248,939       249,481  
Intangible assets, net
     225,273       246,283  
Other assets, net
     18,685       17,865  
 
            
Total Assets
   $ 1,529,231     $ 1,503,403  
 
            
 
                
LIABILITIES AND PARTNERS’ CAPITAL
                
 
                
Current Liabilities:
                
Accounts payable
   $ 71,348     $ 62,103  
Short term borrowings
     125,729       57,779  
Other current liabilities (a)
     107,854       107,199  
 
            
Total Current Liabilities
     304,931       227,081  
 
                
Long-term debt (a)
     1,034,719       1,011,751  
Other liabilities
     23,237       22,795  
Contingencies and commitments
     —       —  
Minority interest
     4,220       5,119  
 
                
Partners’ Capital:
                
Common unitholders (62,961,674 and 62,957,674 units outstanding at July 2008 and 2007, respectively)
     201,618       289,075  
General partner unitholder (635,977 and 635,936 units outstanding at July 2008 and 2007, respectively)
     (58,036 )     (57,154 )
Accumulated other comprehensive income
     18,542       4,736  
 
            
Total Partners’ Capital
     162,124       236,657  
 
            
Total Liabilities and Partners’ Capital
   $ 1,529,231     $ 1,503,403  
 
            
(a)   The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $268 million of 8 3/4% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

 

 

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2008 AND 2007
(in thousands, except per unit data)
(unaudited)
                                 
    Three months ended July     Twelve months ended July  
    31,     31,  
    2008     2007     2008     2007  
Revenues:
                                
Propane and other gas liquids sales
   $ 390,547     $ 298,691     $ 2,055,281     $ 1,757,423  
Other
     29,168       30,401       235,408       235,017  
 
                        
Total revenues
     419,715       329,092       2,290,689       1,992,440  
 
                                
Cost of product sold:
                                
Propane and other gas liquids sales
     279,500       190,881       1,491,918       1,147,169  
Other
     15,246       15,184       136,478       157,223  
 
                        
 
                                
Gross profit
     124,969       123,027       662,293       688,048  
 
                                
Operating expense
     97,250       93,614       372,078       380,838  
Depreciation and amortization expense
     21,638       21,447       85,521       87,383  
General and administrative expense
     11,757       11,993       45,612       44,870  
Equipment lease expense
     5,994       6,369       24,478       26,142  
Employee stock ownership plan compensation charge
     2,720       2,924       12,413       11,225  
Loss on disposal of assets and other
     2,521       1,230       11,250       10,822  
 
                        
 
                                
Operating income (loss)
     (16,911 )     (14,550 )     110,941       126,768  
 
                                
Interest expense
     (20,361 )     (21,710 )     (86,712 )     (87,953 )
Other interest income (expense)
     (309 )     274       1,039       3,145  
 
                        
 
                                
Earnings (loss) before income taxes and minority interest
     (37,581 )     (35,986 )     25,268       41,960  
 
                                
Income tax expense (benefit) — current
     1,132       (25 )     1,732       3,461  
Income tax expense (benefit) — deferred (g)
     402       2,951       (1,650 )     3,099  
Minority interest (a)
     (335 )     (333 )     497       600  
 
                        
 
                                
Net earnings (loss)
     (38,780 )     (38,579 )     24,689       34,800  
 
                                
Net earnings (loss) available to general partner
     (388 )     (386 )     247       348  
 
                        
 
                                
Net earnings (loss) available to common unitholders
   $ (38,392 )   $ (38,193 )   $ 24,442     $ 34,452  
 
                        
 
                                
Earnings Per Unit
                                
Basic earnings (loss) per common unit available to common unitholders
   $ (0.61 )   $ (0.61 )   $ 0.39     $ 0.55  
 
                                
Weighted average common units outstanding
     62,961.7       62,956.4       62,959.5       62,755.8  

 

Supplemental Data and Reconciliation of Non-GAAP Items:
                                 
    Three months ended July     Twelve months ended July  
    31,     31,  
    2008     2007     2008     2007  
Net earnings (loss)
   $ (38,780 )   $ (38,579 )   $ 24,689     $ 34,800  
Income tax expense (benefit)
     1,534       2,926       82       6,560  
Interest expense
     20,361       21,710       86,712       87,953  
Depreciation and amortization expense
     21,638       21,447       85,521       87,383  
Interest income
     309       (274 )     (1,039 )     (3,145 )
 
                        
EBITDA
     5,062       7,230       195,965       213,551  
Employee stock ownership plan compensation charge
     2,720       2,924       12,413       11,225  
Unit and stock-based compensation charge (b)
     433       (276 )     1,816       889  
Loss on disposal of assets and other
     2,521       1,230       11,250       10,822  
Minority interest
     (335 )     (333 )     497       600  
 
                        
Adjusted EBITDA (c)
     10,401       10,775       221,941       237,087  
Net cash interest expense (d)
     (21,585 )     (22,297 )     (89,781 )     (88,878 )
Maintenance capital expenditures (e)
     (5,536 )     (3,190 )     (20,594 )     (16,935 )
Cash paid for taxes
     (2,514 )     (865 )     (3,841 )     (3,742 )
Proceeds from asset sales
     2,209       2,761       10,874       9,830  
 
                        
Distributable cash flow to equity investors (f)
   $ (17,025 )   $ (12,816 )   $ 118,599     $ 137,362  
 
                        
 
                                
Propane gallons sales
                                
Retail — Sales to End Users
     89,585       91,560       656,832       702,716  
Wholesale — Sales to Resellers
     50,603       44,938       182,015       189,172  
 
                        
Total propane gallons sales
     140,188       136,498       838,847       891,888  
 
                        
 
(a)   Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
 
(b)   Statement of Financial Accounting Standards (“SFAS”) No. 123( R), “Share-Based Payment” requires that the cost resulting from all share-based payment transactions be recognized in the financial statements.
 
(c)   Management considers Adjusted EBITDA to be a chief measurement of the partnership’s overall economic performance and return on invested capital. Adjusted EBITDA is calculated as earnings before interest, income taxes, depreciation and amortization, employee stock ownership plan compensation charge, unit and stock-based compensation charge, loss on disposal of assets and other, minority interest, and other non-cash and non-operating charges. 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 are unusual or non-recurring, and makes it easier to compare its results with other companies that have different financing and capital structures. In addition, management believes this measure is consistent with the manner in which the partnership’s lenders and investors measure its overall performance and liquidity, including its ability to pay quarterly equity distributions, service its long-term debt and other fixed obligations and fund its capital expenditures and working capital requirements. 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 interest income. This amount also 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)   Management considers Distributable cash flow to equity investors a meaningful non-GAAP measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow or similarly titled measures used by other corporations and partnerships.
 
(g)   During the fourth quarter of fiscal 2007 the governor of the state of Michigan signed into law a new Michigan Business Tax. The passing of this new tax law caused Ferrellgas to recognize a one time deferred tax expense of $2.8 million during fiscal 2007. During fiscal 2008 a credit for this deferred tax expense was created by a new Michigan tax law. The passing of this new tax law caused Ferrellgas to recognize a one time deferred tax credit during fiscal 2008.