Ferrellgas Partners, L.P. Reports First Quarter Fiscal 2022 Results

Rhea-AI Summary

Ferrellgas Partners, L.P. (OTC: FGPR) reported robust financial results for the first fiscal quarter ended October 31, 2021. Gross profit rose by $10.8 million, or 6.7%, year-over-year, while operating income surged by 60%, reaching an increase of $4.6 million. Despite an $8.6 million net loss, improved adjusted EBITDA of $37.3 million was noted. Operating expenses decreased by 7.4% compared to the last year. The company also expanded its community efforts through a partnership with Operation Warm, providing winter coats to children in need.

Positive

• Gross profit increased by $10.8 million, a 6.7% rise year-over-year.
• Operating income rose by 60% compared to the prior year.
• Adjusted EBITDA improved by $3.4 million to $37.3 million.

Negative

• Net loss of $8.6 million compared to a loss of $46.1 million in the prior year.

• Financial Highlights
  • Gross Profit for the first fiscal quarter increased by $10.8 million compared to the prior year period.
  • Operating Income for the first fiscal quarter increased by 60% compared to the prior year period.
• Company Highlights
  • Ferrellgas began its partnership with Operation Warm bringing warmth through winter coats to families in need across the United States.
  • Ferrellgas welcomed its newest acquisitions to the Ferrellgas Family: Starlite, located on Long Island, New York, and Northern Cascades, in Washington state.
  • Ferrellgas Management Development Program began its second year and continues to contribute to our performance. This leadership initiative provides an opportunity for excellence in leadership, logistics, and operations management.
  • Ferrellgas acquired a new service mark, Fuel Life Simply.

OVERLAND PARK, Kan., Dec. 15, 2021 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its first fiscal quarter ended October 31, 2021.

"At Ferrellgas, we believe in being easy to do business with. It starts with our people. Our proud employee owners are passionately committed to the highest standards of professionalism and safety, and truly believe in helping customers have a wonderful experience. We call that Fuel Life Simply,” said James E. Ferrell, Chief Executive Officer and President.

The Company delivered $4.6 million higher operating income in the first fiscal quarter versus the same period last year. Contributing to the increase is cost management, which led to continued margin performance.

Overall gallon performance contributed to an increase in the first fiscal quarter gross profit of $10.8 million, or 6.7%, higher than the prior year period. Operating expenses as a percentage of total revenue were approximately 7.4% lower than the prior year period. Margin per gallon for the quarter increased by $0.11, or 12% higher than the prior year period. The Company demonstrated continued operational excellence on its strategic initiative of delivering gallons more efficiently, which led to significant containment of operating expenses during the quarter. These tighter controls meant less fleet required and fewer miles driven resulting in less fuel consumed by trucks.

The first fiscal quarter continues to demonstrate Ferrellgas’ strength as a technology enabled, logistics company providing a clean, desirable fuel to a tenured customer base. A favorable credit position over the prior year period continues to position Ferrellgas well with suppliers. The Company’s continued emphasis on leadership development, excellence in operational expense management, and implementation of logistics fundamentals continues to increase efficiency and profitability. We are focused on continuous improvement by dedicated distribution managers, safety-minded delivery professionals and a committed customer service organization that continues to provide the foundation for the Company to build on.

For the first fiscal quarter, the Company reported net loss attributable to Ferrellgas Partners, L.P. of $8.6 million, or $5.25 per Class A Unit, compared to prior year period net loss of $46.1 million, or $9.39 per Class A Unit. Adjusted EBITDA, a non-GAAP measure, increased by $3.4 million to $37.3 million in the first fiscal quarter compared to $33.9 million in the prior year period.

“Our performance is made possible through our over 2,700 delivery and customer service professionals. Their commitment to our customers and Company enable our continued high performance,” Ferrell added. “Our success is further strengthened by the incredibly dedicated employees of Ferrellgas, across our corporate operations and the field. Our management teams have demonstrated excellence in the areas of growth all while managing a challenging supply chain environment. I could not be more proud of our people and how they have succeeded.”

Commitment by Ferrellgas employees to communities they work and live in took on a new meaning this quarter as Ferrellgas began a partnership with Operation Warm. Ferrellgas supports communities in two ways: with great service and by giving back. The partnership with Operation Warm will provide new winter coats to underserved children in Ferrellgas-serviced communities across the country.

As previously announced, on October 8, 2021, we paid a $49.9 million distribution to holders of record of the Class B Units as of September 24, 2021 – an activity made possible by the continued strong performance of the Company.

On Friday, December 17, 2021, James E. Ferrell, Chief Executive Officer and President, and Tamria Zertuche, Chief Operating Officer, will conduct a live teleconference on the Internet at https://edge.media-server.com/mmc/p/cvhpm3d9 to discuss the results of operations for the first fiscal quarter. The live webcast of the teleconference will begin at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at InvestorRelations@ferrellgas.com.

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 1.1 million Class A 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, 2021. 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, 2021, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contacts

Investor Relations – InvestorRelations@ferrellgas.com

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)

(unaudited)

ASSETS		October 31, 2021				July 31, 2021
Current Assets:
Cash and cash equivalents (including $11,500 of restricted cash at October 31, 2021 and July 31, 2021)		$	168,851			$	281,952
Accounts and notes receivable, net			163,473				131,574
Inventories			131,280				88,379
Price risk management asset			129,389				78,001
Prepaid expenses and other current assets			59,600				39,092
Total Current Assets			652,593				618,998
Property, plant and equipment, net			585,993				582,118
Goodwill, net			251,065				246,946
Intangible assets (net of accumulated amortization of $434,166 and $432,032 at October 31, 2021 and July 31, 2021, respectively)			103,277				100,743
Operating lease right-of-use asset			87,379				87,611
Other assets, net			96,318				93,228
Total Assets		$	1,776,625			$	1,729,644
LIABILITIES, MEZZANINE AND EQUITY
Current Liabilities:
Accounts payable		$	80,233			$	47,913
Broker margin deposit liability			126,325				79,178
Current portion of long-term debt			2,079				1,670
Current operating lease liabilities			27,207				25,363
Other current liabilities			154,309				166,822
Total Current Liabilities			390,153				320,946
Long-term debt			1,446,895				1,444,890
Operating lease liabilities			72,117				74,349
Other liabilities			63,822				61,189
Contingencies and commitments
Mezzanine Equity:
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at October 31, 2021 and July 31, 2021)			651,349				651,349
Equity:
Limited partner Unitholders
Class A (4,857,605 Units outstanding at October 31, 2021 and July 31, 2021)			(1,239,276	)			(1,214,813	)
Class B (1,300,000 Units outstanding at October 31, 2021 and July 31, 2021)			333,014				383,012
General partner Unitholder (49,496 Units outstanding at October 31, 2021 and July 31, 2021)			(72,426	)			(72,178	)
Accumulated other comprehensive income			138,679				88,866
Total Ferrellgas Partners, L.P. Equity			(840,009	)			(815,113	)
Noncontrolling interest			(7,702	)			(7,966	)
Total Equity			(847,711	)			(823,079	)
Total Liabilities, Mezzanine and Equity		$	1,776,625			$	1,729,644

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
		2021				2020				2021				2020
Revenues:
Propane and other gas liquids sales		$	372,704			$	281,049			$	1,760,507			$	1,423,455
Other			21,802				19,845				87,415				82,051
Total revenues			394,506				300,894				1,847,922				1,505,506
Cost of sales:
Propane and other gas liquids sales			220,538				137,627				964,847				676,652
Other			3,610				3,667				12,671				12,989
Gross profit			170,358				159,600				870,404				815,865
Operating expense - personnel, vehicle, plant & other			117,112				109,027				473,902				487,539
Operating expense - equipment lease expense			5,690				6,830				25,922				31,459
Depreciation and amortization expense			20,295				21,390				84,286				82,652
General and administrative expense			12,575				13,080				59,560				49,137
Non-cash employee stock ownership plan compensation charge			909				708				3,416				2,784
Loss on asset sales and disposals			1,410				813				2,428				6,502
Operating income			12,367				7,752				220,890				155,792
Interest expense			(25,395	)			(54,226	)			(144,785	)			(201,491	)
Loss on extinguishment of debt			—				—				(104,834	)			(37,399	)
Other income (expense), net			4,264				108				8,426				(220	)
Reorganization items, net			—				—				(10,467	)			—
Loss before income tax expense			(8,764	)			(46,366	)			(30,770	)			(83,318	)
Income tax expense			96				87				750				420
Net loss			(8,860	)			(46,453	)			(31,520	)			(83,738	)
Net loss attributable to noncontrolling interest (a)			(254	)			(391	)			(565	)			(535	)
Net loss attributable to Ferrellgas Partners, L.P.			(8,606	)			(46,062	)			(30,955	)			(83,203	)
Distribution to preferred unitholders			17,005				—				41,029				—
Less: General partner's interest in net loss			(86	)			(461	)			(309	)			(832	)
Class A Unitholders' interest in net loss		$	(25,525	)		$	(45,601	)		$	(71,675	)		$	(82,371	)
Loss Per Class A Unit
Basic and diluted net loss per Class A Unit		$	(5.25	)		$	(9.39	)		$	(14.76	)		$	(16.96	)
Weighted average Class A Units outstanding - basic			4,858				4,858				4,858				4,858

Supplemental Data and Reconciliation of Non-GAAP Items:

		Three months ended								Twelve months ended
		October 31								October 31
		2021				2020				2021				2020
Net loss attributable to Ferrellgas Partners, L.P.		$	(8,606	)		$	(46,062	)		$	(30,955	)		$	(83,203	)
Income tax expense			96				87				750				420
Interest expense			25,395				54,226				144,785				201,491
Depreciation and amortization expense			20,295				21,390				84,286				82,652
EBITDA			37,180				29,641				198,866				201,360
Non-cash employee stock ownership plan compensation charge			909				708				3,416				2,784
Loss on asset sales and disposal			1,410				813				2,428				6,502
Loss on extinguishment of debt			—				—				104,834				37,399
Other (income) expense, net			(4,264	)			(108	)			(8,426	)			220
Reorganization expense - professional fees			—				—				10,467				—
Severance expense includes $60 and $449 in operating expense for the three and twelve months ended October 31, 2021, respectively. Also includes $156 and $844 in general and administrative expense for the three and twelve months ended October 31, 2021, respectively.			216				684				1,293				1,424
Legal fees and settlements related to non-core businesses			2,131				2,508				9,806				6,871
Provision for doubtful accounts related to non-core businesses			—				—				(500	)			17,325
Lease accounting standard adjustment and other			—				—				—				161
Net loss attributable to noncontrolling interest (a)			(254	)			(391	)			(565	)			(535	)
Adjusted EBITDA (b)			37,328				33,855				321,619				273,511
Net cash interest expense (c)			(19,119	)			(51,716	)			(127,556	)			(191,379	)
Maintenance capital expenditures (d)			(3,579	)			(5,177	)			(24,570	)			(21,950	)
Cash paid for income taxes			—				(35	)			(671	)			(324	)
Proceeds from certain asset sales			641				700				4,529				3,862
Distributable cash flow attributable to equity investors (e)			15,271				(22,373	)			173,351				63,720
Less: Distributions accrued or paid to preferred unitholders			17,345				—				41,369				—
Distributable cash flow attributable to general partner and non-controlling interest			(340	)			575				(1,395	)			(1,289	)
Distributable cash flow attributable to Class A and B Unitholders (f)			(2,414	)			(21,798	)			130,587				62,431
Less: Distributions paid to Class A and B Unitholders			—				—				—				—
Distributable cash flow excess (g)		$	(2,414	)		$	(21,798	)		$	130,587			$	62,431
Propane gallons sales
Retail - Sales to End Users			115,825				118,018				629,864				626,134
Wholesale - Sales to Resellers			44,055				49,590				222,490				235,080
Total propane gallons sales			159,880				167,608				852,354				861,214

(a)  Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.
(b)  Adjusted EBITDA is calculated as net loss attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, loss on asset sales and disposals, loss on extinguishment of debt, other (income) expense, net, reorganization expense – professional fees, severance expense, legal fees and settlements related to non-core businesses, provision for doubtful accounts related to non-core businesses, lease accounting standard adjustment and other 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 make it easier to compare its results with other companies that have different financing and capital structures.
Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(c)  Net cash interest expense is the sum of interest expense less non-cash interest expense and other income (expense), net. This amount includes interest expense related to the terminated accounts receivable securitization facility.
(d)  Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment, and may from time to time include the purchase of assets that are typically leased.
(e)  Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for income 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, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to similarly titled measurements used by other companies. 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 should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(f)  Distributable cash flow attributable to Class A and B Unitholders is calculated as Distributable cash flow attributable to equity investors minus distributions accrued or paid on the Preferred Units and distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to Class A and B Unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to Class A and B Unitholders. Distributable cash flow attributable to Class A and B Unitholders, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added to our calculation of distributable cash flow attributable to Class A and B Unitholders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to Class A and B Unitholders should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(g)  Distributable cash flow excess is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility or, previously, under our terminated accounts receivable securitization facility. Management considers Distributable cash flow excess a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess should be viewed in conjunction with measurements that are computed in accordance with GAAP.

FAQ

What were Ferrellgas' Q1 financial results for 2021?

Ferrellgas reported a gross profit increase of $10.8 million and an operating income surge of 60% for the first fiscal quarter.

What is the adjusted EBITDA for Ferrellgas in Q1 2021?

Ferrellgas' adjusted EBITDA increased by $3.4 million to $37.3 million in Q1 2021.

Did Ferrellgas report any net losses in Q1 2021?

Yes, Ferrellgas reported a net loss of $8.6 million for the first fiscal quarter.

What community initiative did Ferrellgas launch recently?

Ferrellgas began a partnership with Operation Warm to provide winter coats for underserved children.