UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 6, 2019
Ferrellgas Partners, L.P.
(Exact name of registrant as specified in its charter)
| Delaware | 001-11331 | 43-1698480 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 7500 College Blvd., Suite 1000, Overland Park, Kansas |
66210 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Ferrellgas Partners Finance Corp.
(Exact name of registrant as specified in its charter)
| Delaware | 333-06693 | 43-1742520 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 7500 College Blvd., Suite 1000, Overland Park, Kansas |
66210 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Ferrellgas, L.P.
(Exact name of registrant as specified in its charter)
| Delaware | 000-50182 | 43-1698481 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 7500 College Blvd., Suite 1000, Overland Park, Kansas |
66210 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Ferrellgas Finance Corp.
(Exact name of registrant as specified in its charter)
| Delaware | 000-50183 | 14-1866671 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 7500 College Blvd., Suite 1000, Overland Park, Kansas |
66210 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
| Common Units | FGP | New York Stock Exchange |
Item 2.02 Results of Operations and Financial Condition.
The information included in Item 7.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.02 of this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
On December 6, 2019, Ferrellgas Partners, L.P. issued a press release regarding its financial results for the first fiscal quarter ended October 31, 2019. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 — Press release of Ferrellgas Partners, L.P.
dated December 6, 2019, reporting its financial results for the first fiscal quarter ended October 31, 2019.
Limitation on Materiality and Incorporation by Reference
The information in this Current Report on Form 8-K related to Items 2.02 and 7.01, including Exhibit 99.1 furnished herewith, is
being furnished to the SEC pursuant to Item 2.02 and Item 7.01 of Form 8-K and is not deemed to be "filed" with the SEC
for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18. In addition, such information
is not to be incorporated by reference into any registration statement of Ferrellgas Partners, L.P., Ferrellgas Partners Finance
Corp., Ferrellgas, L.P. or Ferrellgas Finance Corp. or other filings of such entities made pursuant to the Exchange Act or the
Securities Act, unless specifically identified as being incorporated therein by reference.
The furnishing of particular information in this Current Report, including Exhibit 99.1 furnished herewith, pursuant to Item 7.01
of Form 8-K is not intended to, and does not, constitute a determination or admission by Ferrellgas Partners, L.P., Ferrellgas
Partners Finance Corp., Ferrellgas, L.P. or Ferrellgas Finance Corp. as to the materiality or completeness of any such information
that is required to be disclosed solely by Regulation FD of the Exchange Act.
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Press release of Ferrellgas Partners, L.P. dated December 6, 2019, reporting its financial results for the first fiscal quarter ended October 31, 2019. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FERRELLGAS PARTNERS, L.P. | |||
| By Ferrellgas, Inc. (General Partner) | |||
| Date: | December 6, 2019 | By | /s/ William E. Ruisinger |
| Chief Financial Officer | |||
| FERRELLGAS PARTNERS FINANCE CORP. | |||
| Date: | December 6, 2019 | By | /s/ William E. Ruisinger |
| Chief Financial Officer and Sole Director | |||
| FERRELLGAS, L.P. | |||
| By Ferrellgas, Inc. (General Partner) | |||
| Date: | December 6, 2019 | By | /s/ William E. Ruisinger |
| Chief Financial Officer | |||
| FERRELLGAS FINANCE CORP. | |||
| Date: | December 6, 2019 | By | /s/ William E. Ruisinger |
| Chief Financial Officer and Sole Director | |||
Exhibit 99.1
Ferrellgas Partners, L.P. Reports First Quarter Fiscal 2020 Results
| · | Gross Profit increased by $10.4 million, or 7.2 percent, compared to the prior year period as a result of a 3 percent increase in retail customers and a 4 percent increase in tank exchange selling locations combined with a 4.2¢ increase in margin cpg. | |
| · | Propane sales volume for the quarter increased 1.3 million gallons despite weather that was 4 percent warmer than the prior year as a result of the growth in customer count. | |
| · | Successfully completed two accretive retail acquisitions during the quarter. |
OVERLAND PARK, KS., December 6, 2019 (GLOBE NEWSWIRE) – Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its first quarter ended October 31, 2019.
For the quarter, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $45.3 million, or $0.46 per common unit, compared to prior year period net loss of $57.0 million, or $0.58 per common unit. Adjusted EBITDA, a non-GAAP measure, for the quarter was $25.1 million compared to $17.8 million in the prior year’s first quarter, a 41 percent increase.
The Company’s propane operations reported that total gallons sold for the quarter were 179.9 million, up from 178.6 million gallons in the prior year. Margin cents per gallon were 4.2¢, or 5.7 percent higher than the prior year despite increased competitive pressures in the tank exchange business. 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 4 percent from prior year to over 55,900 locations. Continued commitment to operating expense control during this growth period resulted in a $14.1 million increase in Operating Income despite a mere $4.2 million increase, or 3.8 percent, in operating expenses during the quarter.
The Company also successfully completed two accretive retail acquisitions in Colorado and New York during the 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 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)
| October 31, 2019 | July 31, 2019 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 29,805 | $ | 11,054 | ||||
| Accounts and notes receivable, net (including $118,164 and $106,145 of accounts receivable pledged as collateral at October 31, 2019 and July 31, 2019, respectively) | 123,841 | 107,596 | ||||||
| Inventories | 84,995 | 80,454 | ||||||
| Prepaid expenses and other current assets | 50,582 | 42,275 | ||||||
| Total Current Assets | 289,223 | 241,379 | ||||||
| Property, plant and equipment, net | 598,887 | 596,723 | ||||||
| Goodwill, net | 247,195 | 247,195 | ||||||
| Intangible assets, net | 108,493 | 108,557 | ||||||
| Operating lease right-of-use asset | 124,047 | - | ||||||
| Other assets, net | 75,443 | 69,105 | ||||||
| Total Assets | $ | 1,443,288 | $ | 1,262,959 | ||||
| LIABILITIES AND PARTNERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 44,421 | $ | 33,364 | ||||
| Short-term borrowings | 80,000 | 43,000 | ||||||
| Collateralized note payable | 73,000 | 62,000 | ||||||
| Current portion of long-term debt (a) | 358,080 | 631,756 | ||||||
| Current operating lease liabilities | 33,832 | - | ||||||
| Other current liabilities | 187,731 | 138,237 | ||||||
| Total Current Liabilities | 777,064 | 908,357 | ||||||
| Long-term debt | 1,731,920 | 1,457,004 | ||||||
| Operating lease liabilities | 88,773 | - | ||||||
| Other liabilities | 36,915 | 36,536 | ||||||
| Contingencies and commitments | ||||||||
| Partners' Deficit: | ||||||||
| Common unitholders (97,152,665 units outstanding at October 31, 2019 and July 31, 2019) | (1,091,704 | ) | (1,046,245 | ) | ||||
| General partner unitholder (989,926 units outstanding at October 31, 2019 and July 31, 2019) | (70,935 | ) | (70,476 | ) | ||||
| Accumulated other comprehensive loss | (20,598 | ) | (14,512 | ) | ||||
| Total Ferrellgas Partners, L.P. Partners' Deficit | (1,183,237 | ) | (1,131,233 | ) | ||||
| Noncontrolling interest | (8,147 | ) | (7,705 | ) | ||||
| Total Partners' Deficit | (1,191,384 | ) | (1,138,938 | ) | ||||
| Total Liabilities and Partners' Deficit | $ | 1,443,288 | $ | 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 | Twelve months ended | |||||||||||||||
| October 31 | October 31 | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues: | ||||||||||||||||
| Propane and other gas liquids sales | $ | 273,385 | $ | 334,966 | $ | 1,547,277 | $ | 1,675,184 | ||||||||
| Midstream operations | - | - | - | 161,559 | ||||||||||||
| Other | 19,829 | 17,343 | 78,020 | 134,053 | ||||||||||||
| Total revenues | 293,214 | 352,309 | 1,625,297 | 1,970,796 | ||||||||||||
| Cost of sales: | ||||||||||||||||
| Propane and other gas liquids sales | 134,028 | 204,136 | 832,408 | 998,035 | ||||||||||||
| Midstream operations | - | - | - | 147,434 | ||||||||||||
| Other | 3,681 | 3,047 | 12,040 | 57,999 | ||||||||||||
| Gross profit | 155,505 | 145,126 | 780,849 | 767,328 | ||||||||||||
| Operating expense - personnel, vehicle, plant & other | 114,543 | 110,331 | 473,080 | 471,617 | ||||||||||||
| Depreciation and amortization expense | 19,219 | 18,992 | 79,073 | 95,055 | ||||||||||||
| General and administrative expense | 9,695 | 14,179 | 55,510 | 55,416 | ||||||||||||
| Operating expense - equipment lease expense | 8,388 | 7,863 | 33,598 | 29,394 | ||||||||||||
| Non-cash employee stock ownership plan compensation charge | 795 | 2,748 | 3,740 | 12,645 | ||||||||||||
| Asset impairments | - | - | - | 10,005 | ||||||||||||
| Loss on asset sales and disposals | 2,235 | 4,504 | 8,699 | 191,008 | ||||||||||||
| Operating income (loss) | 630 | (13,491 | ) | 127,149 | (97,812 | ) | ||||||||||
| Interest expense | (45,697 | ) | (43,878 | ) | (179,438 | ) | (171,538 | ) | ||||||||
| Other income (expense), net | (132 | ) | 19 | 218 | 436 | |||||||||||
| Loss before income taxes | (45,199 | ) | (57,350 | ) | (52,071 | ) | (268,914 | ) | ||||||||
| Income tax expense (benefit) | 518 | 158 | 683 | (2,897 | ) | |||||||||||
| Net loss | (45,717 | ) | (57,508 | ) | (52,754 | ) | (266,017 | ) | ||||||||
| Net loss attributable to noncontrolling interest (b) | (373 | ) | (493 | ) | (178 | ) | (2,336 | ) | ||||||||
| Net loss attributable to Ferrellgas Partners, L.P. | (45,344 | ) | (57,015 | ) | (52,576 | ) | (263,681 | ) | ||||||||
| Less: General partner's interest in net loss | (453 | ) | (570 | ) | (525 | ) | (2,637 | ) | ||||||||
| Common unitholders' interest in net loss | $ | (44,891 | ) | $ | (56,445 | ) | $ | (52,051 | ) | $ | (261,044 | ) | ||||
| Loss Per Common Unit | ||||||||||||||||
| Basic and diluted net earnings loss per common unitholders' interest | $ | (0.46 | ) | $ | (0.58 | ) | $ | (0.54 | ) | $ | (2.69 | ) | ||||
| Weighted average common units outstanding - basic | 97,152.7 | 97,152.7 | 97,152.7 | 97,152.7 | ||||||||||||
Supplemental Data and Reconciliation of Non-GAAP Items:
| Three months ended | Twelve months ended | |||||||||||||||
| October 31 | October 31 | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Net loss attributable to Ferrellgas Partners, L.P. | $ | (45,344 | ) | $ | (57,015 | ) | $ | (52,576 | ) | $ | (263,681 | ) | ||||
| Income tax expense (benefit) | 518 | 158 | 683 | (2,897 | ) | |||||||||||
| Interest expense | 45,697 | 43,878 | 179,438 | 171,538 | ||||||||||||
| Depreciation and amortization expense | 19,219 | 18,992 | 79,073 | 95,055 | ||||||||||||
| EBITDA | 20,090 | 6,013 | 206,618 | 15 | ||||||||||||
| Non-cash employee stock ownership plan compensation charge | 795 | 2,748 | 3,740 | 12,645 | ||||||||||||
| Asset impairments | - | - | - | 10,005 | ||||||||||||
| Loss on asset sales and disposal | 2,235 | 4,504 | 8,699 | 191,008 | ||||||||||||
| Other income (expense), net | 132 | (19 | ) | (218 | ) | (436 | ) | |||||||||
| Severance expense includes $690 in operating expense and $910 in general and administrative expense for the twelve months ended period ending October 31, 2018. | - | - | 1,600 | - | ||||||||||||
| Legal fees and settlements related to non-core businesses | 2,043 | 3,564 | 16,843 | 9,629 | ||||||||||||
| Multi-employer pension plan withdrawal settlement | - | 1,524 | - | 1,524 | ||||||||||||
| Exit costs associated with contracts - Midstream dispositions | - | - | - | 11,804 | ||||||||||||
| Unrealized (non-cash) gains on changes in fair value of derivatives $(314) included in midstream operations cost of sales for the twelve months ended October 31, 2018. | - | - | - | (314 | ) | |||||||||||
| Lease accounting standard adjustment | 170 | 170 | ||||||||||||||
| Net loss attributable to noncontrolling interest (b) | (373 | ) | (493 | ) | (178 | ) | (2,336 | ) | ||||||||
| Adjusted EBITDA (c) | 25,092 | 17,841 | 237,274 | 233,544 | ||||||||||||
| Net cash interest expense (d) | (42,583 | ) | (40,899 | ) | (166,474 | ) | (163,734 | ) | ||||||||
| Maintenance capital expenditures (e) | (6,467 | ) | (5,385 | ) | (47,856 | ) | (24,298 | ) | ||||||||
| Cash refund from (paid for) taxes | - | (2 | ) | (139 | ) | 295 | ||||||||||
| Proceeds from certain asset sales | 835 | 1,061 | 4,023 | 9,056 | ||||||||||||
| Distributable cash flow attributable to equity investors (f) | (23,123 | ) | (27,384 | ) | 26,828 | 54,863 | ||||||||||
| Distributable cash flow attributable to general partner and non-controlling interest | (462 | ) | (548 | ) | 537 | 1,097 | ||||||||||
| Distributable cash flow attributable to common unitholders (g) | (22,661 | ) | (26,836 | ) | 26,291 | 53,766 | ||||||||||
| Less: Distributions paid to common unitholders | - | 9,715 | - | 38,861 | ||||||||||||
| Distributable cash flow excess/(shortage) | $ | (22,661 | ) | $ | (36,551 | ) | $ | 26,291 | $ | 14,905 | ||||||
| Propane gallons sales | ||||||||||||||||
| Retail - Sales to End Users | 129,901 | 129,667 | 672,500 | 647,341 | ||||||||||||
| Wholesale - Sales to Resellers | 50,039 | 48,960 | 233,645 | 235,741 | ||||||||||||
| Total propane gallons sales | 179,940 | 178,627 | 906,145 | 883,082 | ||||||||||||
| (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 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 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, unrealized (non-cash) gains on changes in fair value of derivatives, lease accounting standard adjustment and net 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 . |