Ferrellgas Partners, L.P. Reports Third Quarter Results
Net earnings attributable to Ferrellgas Partners, L.P. of $10.9 million, or $0.11 per common unit, an increase of 66.2 percent as compared to $6.5 million, or $0.07 per common unit in the prior year period.
Net of non-cash charges due in part to asset sales supporting deleveraging efforts net earnings were $17.1 million, or $0.18 per common unit as compared to $8.9 million, or $0.09 in the prior year period.
Adjusted EBITDA of $86.9 million, up 13.0 percent over the prior year period.
Trailing twelve-month EBITDA of $253.0 million, up from $230.0 million at the end of fiscal 2017.
Total propane sales volume for the nine months ended April 30, 2018 increased approximately 16.1 percent over the prior year period.
Tank Exchange volume for the nine months ended April 30, 2018 increased approximately 7.0 percent over the comparable prior year period.
Tank Exchange sale locations now exceed 52,000, up 9.5 percent compared to the start of the fiscal year.
Customer growth of 11,500, or 1.7 percent over the prior year.
Announced recent completion of new $575.0 million secured five-year credit facility and upsized $250.0 million accounts receivable securitization facility.
Midstream operations stabilized, focused on growth.
Full exits from Bridger Energy and Bridger Rail now completed. Sale process of Global Sourcing business progressing.
LIBERTY, Mo., June 07, 2018 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its third fiscal quarter ended April 30, 2018. The Company reported net earnings attributable to Ferrellgas Partners, L.P. of $10.9 million, or $0.11 per common unit, compared to prior year period net earnings of $6.5 million, or $0.07 per common unit. Adjusted EBITDA increased to $86.9 million, compared to $76.8 million in the prior year period, a 13.0 percent increase.
The Company’s propane operations reported that total gallons sold in the third quarter increased 34.1 million gallons, or 16.1 percent, over prior year. Margins were slightly lower as the Company aggressively competes for and wins new customers. This strategic focus resulted in approximately 11,500 new customers, or approximately 1.7 percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased 9.5 percent from the start of the fiscal year. Overall, the increase in gross margin from sales volume growth was partially offset by slightly lower margins per gallon and higher operating expenses which were largely the result of increased sales and marketing activity. However, on a per gallon basis operating expenses were 1.7 cents lower than prior year reflecting in part benefits from higher operating efficiency, sales volumes and customer density.
The Company’s midstream business has stabilized and is positioning itself for potential growth opportunities stemming from activity associated with recent increases in the price of oil. Stronger results for the quarter compared to prior year reflect primarily the successful exit earlier this year from low-margin barge operations. Results for the quarter also reflect completion of the sale of the Bridger Energy and Bridger Rail businesses for approximately $60.0 million. These sales also reduced outstanding letters of credit by approximately $80.0 million.
The Company has solidified its liquidity and working capital access requirements with the recent announcements of the closing of two credit facilities:
A $575.0 million secured credit facility was completed on May 4, 2018. This facility included a $275.0 million term loan and a $300.0 million cash revolver. Proceeds from the term loan were used to pay off the Company’s previous credit facility and resulted in approximately $75.0 million of additional cash on the balance sheet. The revolver has no outstanding balance and supports approximately $100.0 million of letters of credit that were issued to replace those outstanding under the old facility.
The Company also amended its accounts receivable securitization facility on May 14, 2018, resulting in a three-year extension of the facility as well as increasing the size of the facility from $225.0 million to $250.0 million.
In addition, the Company continues to evaluate various options related to its outstanding unsecured bonds due June 2020. This may include refinancing, or an exchange transaction for some or all of its bonds due June 2020.
“Our Company continues to build momentum and this quarter’s results are another example of how our strategy is working,” said James E. Ferrell, Interim Chief Executive Officer and President of Ferrellgas. “We are focused on customer growth and density, and we are seeing results in both. We are committed to winning new business, and as we enter the summer grilling season we’ll benefit from the rapid expansion in the number of Blue Rhino tank exchange sale locations, up nearly 9.5 percent from the start of this fiscal year.”
The Company continues its strategic focus on key operating initiatives to reduce costs and grow EBITDA. Of significance are two new tank exchange production plants expected to come on line in fiscal fourth quarter. “These plants move us closer to our customers, lower our operating expenses per tank, lower costs and mileage on our vehicle fleet, and add capacity to the system to position us to service the growth we are seeing in this business,” added Ferrell. “We have also executed on sales of non-core assets that have streamlined our business, reduced our debt, and positively enhanced our key credit metrics. Our liquidity and access to working capital is significant with recent announcements of our credit facility extensions. We now have a multi-year runway to continue to focus on growing our business and delivering the world class service our customers deserve.”
“Our management team is strong and experienced. I am excited about the recent announcement of our promotion of Trent Hampton to Chief Operating Officer. He has long tenure with the Company, understands all aspects of our business and is working well with our distribution, supply, and administrative teams throughout the Company,” said Ferrell. “We are working together better than ever to grow the business and serve our customers. We are well positioned for a strong finish to fiscal 2018 and we are building a foundation for the long-term success of our Company.”
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, and provides midstream services to major energy companies in the United States. 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 28, 2017. 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, 2017, the Form 10-Q of these entities for the fiscal quarter ended April 30, 2018 and in other documents filed from time to time by these entities with the Securities and Exchange Commission.
Accounts and notes receivable, net (including $182,486 and $109,407 of accounts receivable pledged as collateral at April 30, 2018 and July 31, 2017, respectively)
202,727
165,084
Inventories
85,062
92,552
Prepaid expenses and other current assets
44,090
33,388
Total Current Assets
341,378
296,784
Property, plant and equipment, net
637,688
731,923
Goodwill, net
246,098
256,103
Intangible assets, net
235,318
251,102
Other assets, net
72,094
74,057
Total Assets
$
1,532,576
$
1,609,969
LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Accounts payable
$
52,472
$
85,561
Short-term borrowings
-
59,781
Collateralized note payable
104,000
69,000
Other current liabilities
158,875
126,224
Total Current Liabilities
315,347
340,566
Long-term debt (a)
1,995,608
1,995,795
Other liabilities
34,225
31,118
Contingencies and commitments
Partners Deficit:
Common unitholders (97,152,665 units outstanding at April 30, 2018 and July 31, 2017)
(758,325
)
(701,188
)
General partner unitholder (989,926 units outstanding at April 30, 2018 and July 31, 2017)
(67,568
)
(66,991
)
Accumulated other comprehensive income
17,672
14,601
Total Ferrellgas Partners, L.P. Partners' Deficit
(808,221
)
(753,578
)
Noncontrolling interest
(4,383
)
(3,932
)
Total Partners' Deficit
(812,604
)
(757,510
)
Total Liabilities and Partners' Deficit
$
1,532,576
$
1,609,969
(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
Nine months ended
Twelve months ended
April 30
April 30
April 30
2018
2017
2018
2017
2018
2017
Revenues:
Propane and other gas liquids sales
$
451,302
$
369,437
$
1,346,299
$
1,049,211
$
1,615,500
$
1,290,493
Midstream operations
22,595
126,676
260,631
331,507
395,827
469,318
Other
41,913
41,996
118,691
116,183
147,670
146,601
Total revenues
515,810
538,109
1,725,621
1,496,901
2,158,997
1,906,412
Cost of sales:
Propane and other gas liquids sales
260,419
197,487
802,852
551,728
945,279
667,320
Midstream operations
14,518
118,767
229,710
300,433
358,716
397,768
Other
19,850
20,810
54,339
53,213
68,393
68,025
Gross profit
221,023
201,045
638,720
591,527
786,609
773,299
Operating expense
116,579
104,773
350,757
322,274
460,234
433,600
Depreciation and amortization expense
25,348
25,737
76,565
77,546
102,370
115,361
General and administrative expense
11,678
9,978
39,733
33,889
52,824
45,812
Equipment lease expense
7,133
7,270
20,828
22,035
27,917
29,314
Non-cash employee stock ownership plan compensation charge
2,738
4,697
10,731
11,396
14,423
20,616
Non-cash stock-based compensation charge (a)
-
-
-
3,298
-
5,865
Asset impairments
-
-
10,005
-
10,005
628,802
Loss on asset sales and disposal
6,270
2,393
46,414
8,861
52,010
16,476
Operating income (loss)
57,547
48,590
83,687
112,228
66,826
(522,547
)
Interest expense
(40,375
)
(39,860
)
(123,855
)
(112,107
)
(164,233
)
(147,155
)
Other income, net
227
162
1,422
1,433
1,463
1,632
Earnings (loss) before income taxes
17,399
8,892
(38,746
)
1,554
(95,944
)
(668,070
)
Income tax expense (benefit)
67
(192
)
282
(194
)
(667
)
(1,676
)
Net earnings (loss)
17,332
9,084
(39,028
)
1,748
(95,277
)
(666,394
)
Net earnings (loss) attributable to noncontrolling interest (b)
201
155
(131
)
187
(612
)
(6,521
)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.
17,131
8,929
(38,897
)
1,561
(94,665
)
(659,873
)
Less: General partner's interest in net earnings (loss)
109
66
(389
)
16
(947
)
(6,599
)
Common unitholders' interest in net earnings (loss)
$
17,022
$
8,863
$
(38,508
)
$
1,545
$
(93,718
)
$
(653,274
)
Earnings (loss) Per Common Unit
Basic and diluted net earnings (loss) per common unitholders' interest
$
0.18
$
0.09
$
(0.40
)
$
0.02
$
(0.96
)
$
(6.70
)
Weighted average common units outstanding - basic
97,152.7
97,152.7
97,152.7
97,255.4
97,152.7
97,443.7
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended
Nine months ended
Twelve months ended
April 30
April 30
April 30
2018
2017
2018
2017
2018
2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P.
$
17,131
$
8,929
$
(38,897
)
$
1,561
$
(94,665
)
$
(659,873
)
Income tax expense (benefit)
67
(192
)
282
(194
)
(667
)
(1,676
)
Interest expense
40,375
39,860
123,855
112,107
164,233
147,155
Depreciation and amortization expense
25,348
25,737
76,565
77,546
102,370
115,361
EBITDA
82,921
74,334
161,805
191,020
171,271
(399,033
)
Non-cash employee stock ownership plan compensation charge
2,738
4,697
10,731
11,396
14,423
20,616
Non-cash stock based compensation charge (a)
-
-
-
3,298
-
5,865
Asset impairments
-
-
10,005
-
10,005
628,802
Loss on asset sales and disposal
-
0
46,414
8,861
52,010
16,476
Other income, net
(227
)
(162
)
(1,422
)
(1,433
)
(1,463
)
(1,632
)
Severance costs $358 included in operating costs for the nine and twelve months ended period April 30, 2018 and $1,305 included in general and administrative costs for the nine and twelve months ended April 30, 2018. Also includes $414 and $542 in operating costs for the nine and twelve months ended April 30, 2017 and $1,545 included in general and administrative costs for the nine and twelve months ended April 30, 2017.
-
-
1,663
1,959
1,663
2,087
Professional fees
1,289
-
3,407
-
3,407
-
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $(759) included in operating expense for the twelve months ended April 30, 2018 and $(227), $(3,238) and $(3,245) for the three, nine and twelve months ended April 30, 2017. Also includes $1,293 and $3,044 included in midstream operations cost of sales for the nine and twelve months ended April 30, 2018, respectively and $(2,007), $(1,211) and $(3,060) for the three, nine and twelve months ended April 30, 2017.
-
(2,234
)
1,293
(4,449
)
2,285
(6,305
)
Net earnings (loss) attributable to noncontrolling interest (b)
201
155
(131
)
187
(612
)
(6,521
)
Adjusted EBITDA (c)
86,922
76,790
233,765
210,839
252,989
260,355
Net cash interest expense (d)
(37,873
)
(37,140
)
(115,664
)
(105,470
)
(153,782
)
(139,074
)
Maintenance capital expenditures (e)
(5,741
)
(3,442
)
(19,085
)
(10,518
)
(25,502
)
(14,067
)
Cash paid for taxes
470
(2
)
458
(28
)
176
(373
)
Proceeds from asset sales
148
130
4,355
4,163
8,144
4,214
Distributable cash flow attributable to equity investors (f)
43,926
36,336
103,829
98,986
82,025
111,055
Distributable cash flow attributable to general partner and non-controlling interest
879
727
2,077
1,980
1,641
2,222
Distributable cash flow attributable to common unitholders
43,047
35,609
101,752
97,006
80,384
108,833
Less: Distributions paid to common unitholders
9,715
9,715
29,146
69,221
38,861
119,407
Distributable cash flow excess/(shortage)
$
33,332
$
25,894
$
72,606
$
27,785
$
41,523
$
(10,574
)
Propane gallons sales
Retail - Sales to End Users
189,183
160,326
543,548
473,094
635,326
560,719
Wholesale - Sales to Resellers
57,121
51,891
185,492
170,033
241,710
226,162
Total propane gallons sales
246,304
212,217
729,040
643,127
877,036
786,881
Midstream operations barrels
Salt water volume processed
4,761
4,635
14,552
12,340
19,727
15,903
Crude oil hauled
11,640
12,280
34,855
36,549
47,555
51,136
Crude oil sold
27
2,110
3,412
5,228
5,654
7,119
(a) Non-cash stock-based compensation charges consist of the following:
Three months ended
Nine months ended
Twelve months ended
April 30
April 30
April 30
2018
2017
2018
2017
2018
2017
Operating expense
$
-
$
-
$
-
$
661
$
-
$
1,046
General and administrative expense
-
-
-
2,637
-
4,819
Total
$
-
$
-
$
-
$
3,298
$
-
$
5,865
(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, non-cash stock-based compensation charge, asset impairments, loss on asset
sales and disposal, other income, net, severance expense, unrealized (non-cash) losses (gains) 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 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: GlobeNewswire
(June 7, 2018 - 7:00 AM EDT)