EX-99.1 2 c82246exv99w1.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

FERRELLGAS PARTNERS REPORTS RECORD SECOND-QUARTER RESULTS;
ADJUSTED EBITDA UP 18 PERCENT; NET INCOME UP 36 PERCENT

OVERLAND PARK, KAN., MARCH 10, 2009/PR Newswire-First Call — Ferrellgas Partners, L.P. (NYSE:FGP), one of the largest distributors of propane, today reported continuation of fiscal 2009’s favorable first-quarter momentum for the fiscal second quarter ended January 31.

Adjusted EBITDA increased nearly 18 percent to $121.6 million from $103.2 million in the year-ago quarter. The partnership’s net income surged 36 percent to $69.7 million, or $1.10 per common unit, versus $51.2 million, or $0.81 per common unit, the year before. The profit gains were primarily attributable to sharply improved gross margins and volume increases.

Revenues declined to $715.6 million from $764.0 million in the year-earlier period, reflecting lower consumer pricing. However, gross profit rose to a record $243.5 million from $211.0 million, as the cost of propane and other gas liquids sales decreased 15 percent. Total propane gallon sales were up nearly 8 percent to 314.0 million compared with 290.7 million the year before.

Chairman and Chief Executive Officer James E. Ferrell pointed out, “We are pleased to have achieved impressive results in an extremely difficult environment, exceeding analysts’ mean estimate of $1.06.” He noted further, “With these results, our 12-month Adjusted EBITDA performance has reached $252 million nearing our prior guidance of $255 million for the fiscal year.” The partnership reported Adjusted EBITDA of $222 million for fiscal 2008 and a record $237 million for fiscal 2007.

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President and Chief Operating Officer Steve Wambold explained, “We were pleased by the increase in propane gallon sales, just as in the first quarter. Our organic growth initiatives are attracting longer-term, profitable customers. In addition, we are reaping the benefits of tightening up our customer service metrics with ongoing focus on operating efficiencies.”

Wambold concluded, “Our Blue Rhino brand also had an encouraging quarter, registering positive comparative store sales. More importantly, Blue Rhino is well positioned for the selling season later in the year, with more than 43,000 locations, while mining new account opportunities across all classes of trade.”

Commenting on the partnership’s recent performance, Chief Financial Officer Ryan VanWinkle observed, “Not only have we posted record Adjusted EBITDA for the 12-month period ended January 31, but our distributable cash flow coverage now exceeds 1.1x representing the best coverage since fiscal 2001.” VanWinkle also noted, “In early February we successfully completed an offering of common units that, along with materially improved earnings, have significantly reduced our financial leverage providing us with desirable financial flexibility.”

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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.

Contact:
Tom Colvin, Investor Relations, (913) 661-1530
Scott Brockelmeyer, Media Relations, (913) 661-1830

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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
                 
ASSETS   January 31, 2009     July 31, 2008  
Current Assets:
                
Cash and cash equivalents
   $ 17,206     $ 16,614  
Accounts and notes receivable, net
     164,329       145,081  
Inventories
     116,411       152,301  
Price risk management assets
     —       26,086  
Prepaid expenses and other current assets
     26,173       10,924  
 
            
Total Current Assets
     324,119       351,006  
 
                
Property, plant and equipment, net
     675,281       685,328  
Goodwill
     248,939       248,939  
Intangible assets, net
     219,196       225,273  
Other assets, net
     22,428       18,685  
 
            
Total Assets
   $ 1,489,963     $ 1,529,231  
 
            
 
                
LIABILITIES AND PARTNERS’ CAPITAL
                
 
                
Current Liabilities:
                
Accounts payable
   $ 132,866     $ 71,348  
Short term borrowings
     27,444       125,729  
Price risk management liabilities
     90,157       7,337  
Other current liabilities (a)
     101,482       100,517  
 
            
Total Current Liabilities
     351,949       304,931  
 
                
Long-term debt (a)
     1,057,642       1,034,719  
Other liabilities
     23,358       23,237  
Contingencies and commitments
     —       —  
Minority interest
     4,219       4,220  
 
                
Partners’ Capital:
                
Common unitholders (63,192,503 and 62,961,674 units outstanding at January 2009 and July 2008, respectively)
     201,204       201,618  
General partner unitholder (638,308 and 635,977 units outstanding at January 2009 and July 2008, respectively)
     (58,040 )     (58,036 )
Accumulated other comprehensive income (loss)
     (90,369 )     18,542  
 
            
Total Partners’ Capital
     52,795       162,124  
 
            
Total Liabilities and Partners’ Capital
   $ 1,489,963     $ 1,529,231  
 
            
     
(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, SIX AND TWELVE MONTHS ENDED JANUARY 31, 2009 AND 2008
(in thousands, except per unit data)
(unaudited)
                                                 
    Three months ended January 31,     Six months ended January 31,     Twelve months ended January 31,  
    2009     2008     2009     2008     2009     2008  
Revenues:
                                                
Propane and other gas liquids sales
   $ 647,536     $ 684,456     $ 1,084,424     $ 1,043,391     $ 2,096,314     $ 1,873,898  
Other
     68,089       79,512       111,275       115,493       231,190       238,240  
 
                                    
Total revenues
     715,625       763,968       1,195,699       1,158,884       2,327,504       2,112,138  
 
                                                
Cost of product sold:
                                                
Propane and other gas liquids sales
     428,527       504,524       746,272       757,043       1,481,147       1,289,517  
Other
     43,625       48,422       60,439       59,382       137,535       146,684  
 
                                    
 
                                                
Gross profit
     243,473       211,022       388,988       342,459       708,822       675,937  
 
                                                
Operating expense
     105,710       91,020       201,927       181,479       392,526       372,462  
Depreciation and amortization expense
     20,219       21,075       41,535       42,440       84,616       86,132  
General and administrative expense
     11,761       11,115       20,847       22,908       43,551       46,730  
Equipment lease expense
     4,781       6,143       10,136       12,494       22,120       25,538  
Employee stock ownership plan compensation charge
     1,656       3,072       3,405       6,246       9,572       11,891  
Loss on disposal of assets and other
     4,019       3,680       6,601       6,067       11,784       10,394  
 
                                    
 
                                                
Operating income
     95,327       74,917       104,537       70,825       144,653       122,790  
 
                                                
Interest expense
     (23,393 )     (22,851 )     (47,063 )     (45,137 )     (88,638 )     (88,381 )
Other income (expense), net
     (343 )     181       (1,161 )     998       (1,120 )     2,253  
 
                                    
 
                                                
Earnings before income taxes and minority interest
     71,591       52,247       56,313       26,686       54,895       36,662  
 
                                                
Income tax expense (benefit) — current
     1,006       670       737       357       2,112       2,532  
Income tax expense (benefit) — deferred
     161       (206 )     129       (2,381 )     860       122  
Minority interest (a)
     772       585       682       412       767       587  
 
                                    
 
                                                
Net earnings
     69,652       51,198       54,765       28,298       51,156       33,421  
 
                                                
Net earnings available to general partner
     11,633       3,657       548       283       512       334  
 
                                    
 
                                                
Net earnings available to common unitholders
   $ 58,019     $ 47,541     $ 54,217     $ 28,015     $ 50,644     $ 33,087  
 
                                    
 
                                                
Earnings Per Unit
                                                
Basic and diluted net earnings available per common unit
   $ 0.92     $ 0.76     $ 0.86     $ 0.44     $ 0.80     $ 0.53  
Dilutive effect of EITF 03-6 (b)
     0.18       0.05       —       —       —       —  
 
                                    
Adjusted net earnings per unit available to common unitholders
   $ 1.10     $ 0.81     $ 0.86     $ 0.44     $ 0.80     $ 0.53  
 
                                    
 
                                                
Weighted average common units outstanding
     63,192.5       62,958.7       63,122.3       62,958.7       63,041.7       62,956.1  

 

 

 

Supplemental Data and Reconciliation of Non-GAAP Items:
                                                 
    Three months ended January 31,     Six months ended January 31,     Twelve months ended January 31,  
    2009     2008     2009     2008     2009     2008  
 
                                                
Net earnings
   $ 69,652     $ 51,198     $ 54,765     $ 28,298     $ 51,156     $ 33,421  
Income tax expense (benefit)
     1,167       464       866       (2,024 )     2,972       2,654  
Interest expense
     23,393       22,851       47,063       45,137       88,638       88,381  
Depreciation and amortization expense
     20,219       21,075       41,535       42,440       84,616       86,132  
Other income (expense), net
     343       (181 )     1,161       (998 )     1,120       (2,253 )
 
                                    
EBITDA
     114,774       95,407       145,390       112,853       228,502       208,335  
Employee stock ownership plan compensation charge
     1,656       3,072       3,405       6,246       9,572       11,891  
Unit and stock-based compensation charge (c)
     329       450       657       900       1,573       1,123  
Loss on disposal of assets and other
     4,019       3,680       6,601       6,067       11,784       10,394  
Minority interest
     772       585       682       412       767       587  
 
                                    
Adjusted EBITDA (d)
     121,550       103,194       156,735       126,478       252,198       232,330  
Net cash interest expense (e)
     (23,170 )     (24,115 )     (46,929 )     (46,098 )     (90,612 )     (90,704 )
Maintenance capital expenditures (f)
     (7,516 )     (6,344 )     (12,542 )     (9,468 )     (23,668 )     (16,684 )
Cash paid for taxes
     (324 )     (68 )     (332 )     (1,279 )     (2,894 )     (3,256 )
Proceeds from asset sales
     2,587       3,312       4,905       6,250       9,529       10,574  
 
                                    
Distributable cash flow to equity investors (g)
   $ 93,127     $ 75,979     $ 101,837     $ 75,883     $ 144,553     $ 132,260  
 
                                    
 
                                                
Propane gallons sales
                                                
Retail — Sales to End Users
     245,862       243,389       372,395       362,564       666,663       674,778  
Wholesale — Sales to Resellers
     68,094       47,277       113,770       83,985       211,800       179,691  
 
                                    
Total propane gallons sales
     313,956       290,666       486,165       446,549       878,463       854,469  
 
                                    
     
(a)   Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
 
(b)   Emerging Issues Task Force (“EITF”) 03-6 “Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share,” requires the calculation of net earnings per limited partner unit for each period presented according to distributions declared and participation rights in undistributed earnings, as if all of the earnings for the period had to be distributed. In periods with undistributed earnings above certain levels, the calculation according to the two-class method results in an increased allocation of undistributed earnings to the general partner and a dilution of earnings to the limited partners. Due to the seasonality of the propane business, the dilution effect of EITF 03-6 on net earnings per limited partner unit will typically only impact the three months ending January 31. EITF 03-6 did not have a dilutive effect on the six and twelve months ended January 31, 2009 and 2008.
 
(c)   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. Share-based payment transactions resulted in a non-cash compensation charge of $0.1 million and $0.1 million to operating expense for the three months ended January 31, 2009 and 2008, respectively, $0.2 million and $0.3 million for the six months ending January 31, 2009 and 2008, respectively, and $0.5 million and $0.4 million for the twelve months ending January 31, 2009 and 2008, respectively. A non-cash compensation charge of $0.2 million and $0.3 million was recorded to general and administrative expense for the three months ended January 31, 2009 and 2008, respectively, $0.5 million and $0.6 million for the six months ended January 31, 2009 and 2008, respectively, and $1.1 million and $0.7 million for the twelve months ended January 31, 2009 and 2008, respectively,
 
(d)   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.
 
(e)   Net cash interest expense is the sum of interest expense less non-cash interest expense and other income (expense), net. This amount also includes interest expense related to the accounts receivable securitization facility.
 
(f)   Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.
 
(g)   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.