EX-99.1 2 tm2011616d2_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1 

 

Ferrellgas Partners, L.P. Reports Second

Quarter Fiscal 2020 Results

 

  ·  Gross Profit increased by $11.2 million, or 4.3 percent, compared to the prior year period as a result of a 3 percent increase in retail customers and a 7 percent increase in tank exchange selling locations combined with a 4.0¢ increase in margin cpg.

 

  ·  Propane sales volume for the quarter decreased slightly by 4.4 million gallons, or 1.4 percent, despite weather that was 7.4 percent warmer than the prior year. 

 

OVERLAND PARK, KS., March 11, 2020 (GLOBE NEWSWIRE) – Ferrellgas Partners, L.P. (OTC Pink: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second quarter ended January 31, 2020.

 

For the quarter, the Company reported a net earnings attributable to Ferrellgas Partners, L.P. of $48.2 million, or $0.49 per common unit, compared to prior year period net earnings of $43.3 million, or $0.44 per common unit. Adjusted EBITDA, a non-GAAP measure, for the quarter was $121.4 million compared to $119.7 million in the prior year’s second quarter, a 1.4 percent increase.

 

The Company’s propane operations reported that total gallons sold for the quarter were 305.3 million, down slightly from 309.7 million gallons in the prior year. Margin cents per gallon were 4.0¢, or 5.2 percent, higher than the prior year in part due to wholesale propane prices that were approximately 30 percent lower than the prior year. The Company continues its aggressive operating strategies in gaining market share. This strategic focus resulted in over 18,000 new customers, or approximately 3 percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased over 7 percent from prior year to over 57,500 locations. Operating expense increased $7.0 million despite the reduced volumes which resulted primarily from weather in the month of January that was 15.3 percent warmer than prior year.

 

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 June of 2020. Additionally, Ferrellgas has engaged Moelis & Company LLC as its financial advisor and the law firm of Squire Patton Boggs LLP to assist in our ongoing process to address our upcoming debt maturities. The Company does not intend to comment further on its progress in this regard or on potential options until further disclosure is appropriate or required by law.  For that reason, and in view of the information the Company otherwise makes available in earnings releases and quarterly and annual reports, the Company has suspended the practice of holding conference calls with investors, analysts and other interested parties in connection with periodic reporting of financial results for completed periods.

 

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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 October 15, 2019. 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, 2019, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

 

Contacts

 

Investor Relations – InvestorRelations@ferrellgas.com

 

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FERRELLGAS PARTNERS, L.P.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
         
   January 31, 2020    July 31, 2019 
ASSETS          
Current Assets:          
Cash and cash equivalents  $13,706   $11,054 
Accounts and notes receivable, net (including $175,386 and $106,145 of accounts receivable pledged as collateral at January 31, 2020 and July 31, 2019, respectively)   182,444    107,596 
Inventories   78,474    80,454 
Prepaid expenses and other current assets   47,751    42,275 
Total Current Assets   322,375    241,379 
           
Property, plant and equipment, net   594,007    596,723 
Goodwill, net   247,195    247,195 
Intangible assets, net   106,214    108,557 
Operating lease right-of-use asset   120,423    - 
Other assets, net   80,998    69,105 
Total Assets  $1,471,212   $1,262,959 
           
LIABILITIES AND PARTNERS' DEFICIT          
Current Liabilities:          
Accounts payable  $46,125   $33,364 
Short-term borrowings   40,000    43,000 
Collateralized note payable   121,000    62,000 
Current portion of long-term debt (a)   359,157    631,756 
Current operating lease liabilities   33,263    - 
Other current liabilities   155,340    138,237 
Total Current Liabilities   754,885    908,357 
           
Long-term debt   1,731,197    1,457,004 
Operating lease liabilities   84,546    - 
Other liabilities   45,259    36,536 
Contingencies and commitments          
           
Partners Deficit:          
Common unitholders (97,152,665 units outstanding at January 31, 2020 and July 31, 2019)   (1,043,361)   (1,046,245)
General partner unitholder (989,926 units outstanding at January 31, 2020 and July 31, 2019)   (70,447)   (70,476)
Accumulated other comprehensive loss   (23,126)   (14,512)
Total Ferrellgas Partners, L.P. Partners' Deficit   (1,136,934)   (1,131,233)
Noncontrolling interest   (7,741)   (7,705)
Total Partners' Deficit   (1,144,675)   (1,138,938)
Total Liabilities and Partners' Deficit  $1,471,212   $1,262,959 
   $-      

 

(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 
   2020   2019   2020   2019   2020   2019 
Revenues:                        
Propane and other gas liquids sales  $485,247   $550,112   $758,632   $885,078   $1,482,412   $1,633,057 
Midstream operations        -    -    -    -    44,283 
Other   25,586    23,265    45,415    40,608    80,341    111,677 
Total revenues   510,833    573,377    804,047    925,686    1,562,753    1,789,017 
                               
Cost of sales:                              
Propane and other gas liquids sales   237,843    311,531    371,871    515,667    758,720    946,648 
Midstream operations   -    -         -    -    40,367 
Other   3,353    3,422    7,034    6,469    11,971    40,634 
                               
Gross profit   269,637    258,424    425,142    403,550    792,062    761,368 
                               
Operating expense - personnel, vehicle, plant & other   128,233    121,219    242,776    231,550    480,094    469,120 
Depreciation and amortization expense   19,795    19,605    39,014    38,597    79,263    89,175 
General and administrative expense   14,192    16,342    23,887    30,521    53,360    56,867 
Operating expense - equipment lease expense   8,261    8,415    16,649    16,278    33,444    30,855 
Non-cash employee stock ownership plan compensation charge   630    1,944    1,425    4,692    2,426    10,558 
Loss on asset sales and disposals   2,148    2,216    4,383    6,720    8,631    153,975 
                               
Operating income (loss)   96,378    88,683    97,008    75,192    134,844    (49,182)
                               
Interest expense   (47,548)   (44,891)   (93,245)   (88,769)   (182,095)   (173,756)
Other income (expense), net   76    86    (56)   105    208    (162)
                               
Earnings (loss) before income tax expense (benefit)   48,906    43,878    3,707    (13,472)   (47,043)   (223,100)
                               
Income tax expense (benefit)   115    3    633    161    795    (2,732)
                               
Net earnings (loss)   48,791    43,875    3,074    (13,633)   (47,838)   (220,368)
                               
Net earnings (loss) attributable to noncontrolling interest (b)   584    531    211    38    (125)   (1,874)
                               
Net earnings (loss) attributable to Ferrellgas Partners, L.P.   48,207    43,344    2,863    (13,671)   (47,713)   (218,494)
                               
Less: General partner's interest in net earnings (loss)   482    433    29    (137)   (476)   (2,185)
                               
Common unitholders' interest in net earnings (loss)  $47,725   $42,911   $2,834   $(13,534)  $(47,237)  $(216,309)
                               
Earnings (loss) Per Common Unit                              
Basic and diluted net earnings (loss) per common unitholders' interest  $0.49   $0.44   $0.03   $(0.14)  $(0.49)  $(2.23)
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 
   2020   2019   2020   2019   2020   2019 
Net earnings (loss) attributable to Ferrellgas Partners, L.P.  $48,207   $43,344   $2,863   $(13,671)  $(47,713)  $(218,494)
Income tax expense (benefit)   115    3    633    161    795    (2,732)
Interest expense   47,548    44,891    93,245    88,769    182,095    173,756 
Depreciation and amortization expense   19,795    19,605    39,014    38,597    79,263    89,175 
EBITDA   115,665    107,843    135,755    113,856    214,440    41,705 
Non-cash employee stock ownership plan compensation charge   630    1,944    1,425    4,692    2,426    10,558 
Loss on asset sales and disposal   2,148    2,216    4,383    6,720    8,631    153,975 
Other income (expense), net   (76)   (86)   56    (105)   (208)   162 
Severance expense includes $690 in operating expense and $910 in general and administrative expense for the three, six and twelve months ended period ending January 31, 2019.   -     1,600     -     1,600     -     1,600  
Legal fees and settlements related to non-core businesses   2,519    5,608    4,562    9,172    13,754    13,119 
Multi-employer pension plan withdrawal settlement   -    -    -    1,524    -    1,524 
Exit costs associated with contracts - Midstream dispositions   -    -    -    -    -    11,804 
Lease accounting standard adjustment   (116)   -    54    -    54    - 
Net earnings (loss) attributable to noncontrolling interest (b)   584    531    211    38    (125)   (1,874)
Adjusted EBITDA (c)   121,354    119,656    146,446    137,497    238,972    232,573 
Net cash interest expense (d)   (43,316)   (41,679)   (85,899)   (82,578)   (168,111)   (165,679)
Maintenance capital expenditures (e)   (5,430)   (26,147)   (11,897)   (31,532)   (27,139)   (45,805)
Cash refund from (paid for) taxes   (1)   4    (1)   2    (144)   305 
Proceeds from certain asset sales   824    899    1,659    1,960    3,948    6,956 
Distributable cash flow attributable to equity investors (f)   73,431    52,733    50,308    25,349    47,526    28,350 
Distributable cash flow attributable to general partner and non-controlling interest   1,468    1,055    1,006    507    950    567 
Distributable cash flow attributable to common unitholders (g)   71,963    51,678    49,302    24,842    46,576    27,783 
Less: Distributions paid to common unitholders   -    -    -    9,715    -    29,145 
Distributable cash flow excess/(shortage)  $71,963   $51,678   $49,302   $15,127   $46,576   $(1,362)
                               
Propane gallons sales                              
Retail - Sales to End Users   236,264    239,044    366,165    368,711    669,720    651,314 
Wholesale - Sales to Resellers   68,996    70,655    119,035    119,615    231,986    231,454 
Total propane gallons sales   305,260    309,699    485,200    488,326    901,706    882,768 

 

(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, loss on asset sales and disposals, other income (expense), net, severance expense, legal fees and settlements related to non-core businesses, multi-employer pension plan withdrawal settlement, exit costs associated with contracts - Midstream dispositions, lease accounting standard adjustment 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 .