Ferrellgas Partners, L.P. Reports Full Fiscal Year and Fourth Quarter 2021 Results

Rhea-AI Summary

Ferrellgas Partners, L.P. (OTC: FGPR) announced strong financial results for fiscal year 2021, reporting a $67.6 million increase in operating income, a 45% year-over-year growth. The gross profit rose by $47.9 million, supported by a 6% increase in overall gallons sold, with fourth-quarter gross profit up $3.9 million. Adjusted EBITDA grew by $52.6 million to $318.1 million for the year. The company successfully emerged from bankruptcy in March 2021 and paid a $49.9 million distribution to Class B unit holders in October 2021.

Positive

• Operating income increased by $67.6 million, or 45%, year-over-year.
• Gross profit rose by $47.9 million, marking a 6% increase.
• Adjusted EBITDA improved by $52.6 million, reaching $318.1 million for fiscal 2021.
• Fourth-quarter operating income surged by 104%.
• Successful emergence from bankruptcy in March 2021.

Negative

• Net loss of $18.8 million in the fourth fiscal quarter.
• Adjusted EBITDA decreased by $2.6 million in the fourth quarter compared to the prior year.

• Financial Highlights
  • Gross Profit for the year increased by $47.9 million as compared to the prior year.
  • Gross Profit increased by $3.9 million in the fourth fiscal quarter compared to the prior year fourth fiscal quarter. Approximately 5.5 million more gallons were sold in the fourth fiscal quarter than in the prior year fourth fiscal quarter.
  • Operating Income for the year increased by $67.6 million or 45% as compared to prior year.
  • Operating Income for the fourth fiscal quarter increased by 104%.
• Company Highlights
  • Ferrellgas Corporate Internship Experience, a program offered to current undergraduates in the areas of Supply Chain, Finance, Marketing, and Technology, successfully fostered 5 interns through the 12-week program.
  • The Ferrellgas Management Development Program, a diverse leadership, management and mentorship program, welcomed 22 new operations management candidates to its program from across the country.
  • Home Delivery for Tank Exchange is now found in 12 markets across the United States.
  • Ferrellgas continues its partnership with Operation BBQ Relief to provide relief to disaster areas in the United States.
  • Ferrellgas welcomes its newest acquisition, Proflame, to the Ferrellgas Family.
    

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

"At Ferrellgas, our employees are at the center of our growth strategy. We invest in our employees and in turn they have delivered a strong financial performance. Technology, which allows us to be easy to do business with, is the perfect complement to our dedicated, customer service focused employees,” said James E. Ferrell, Chief Executive Officer and President. “We are very proud of our people and of the consistent results they produced all throughout the year.”

The Company’s strong performance continued during the fourth quarter of fiscal 2021, leading to a $67.6 million increase in operating income for the fiscal year. Also contributing to a strong performance are marketing initiatives, consumer centric buying programs, and improved use of consumer analytics. Additionally, the reseller segment grew 12% in fiscal 2021. Performance was also aided by growth of Blue Rhino tank exchange sales, which grew due to further market share penetration and consistent growth in backyard and outdoor appliance usage.

Overall gallon performance contributed to an increase in gross margin of $47.9 million, or 6% higher than prior year. Highlighting the Company’s delivery efficiency strategies, operating expenses decreased a nominal 5.5% while decreasing by 4.1% per unit. 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 by management demonstrated less fleet needed to deliver those gallons, fewer miles driven to deliver more gallons, and less fuel consumed by trucks. Also contributing to expense management was a 36% increase in gallons per stop, as measured in fiscal 2021.

The fourth fiscal quarter continues to demonstrate Ferrellgas’ strength as a technology enabled, logistics company providing a clean fuel to a tenured customer base. Following the debt restructuring, the Company’s performance was aided by a favorable credit position with suppliers. A sustained emphasis on leadership development, excellence in operational expense management, and implementation of logistics fundamentals continue to increase efficiency and profitability. Strong execution by safety-focused and dedicated delivery professionals, recognized as essential workers, is driving high performance throughout the Company.

For the fourth fiscal quarter, the Company reported net loss attributable to Ferrellgas Partners, L.P. of $18.8 million, or $7.13 per Class A Unit, compared to prior year period net loss of $70.0 million, or $14.26 per Class A Unit. Adjusted EBITDA, a non-GAAP measure, decreased by $2.6 million to $24.1 million in the fourth fiscal quarter compared to $26.7 million in the prior year quarter. However, Adjusted EBITDA increased by $52.6 million to $318.1 million in fiscal 2021 compared to $265.5 million in the prior year.

“Our performance is made possible through our focus on performance and dependability,” Ferrell added. “Performance is further strengthened by the incredibly dedicated employees of Ferrellgas, in particular the over 2,300 delivery professionals and their unwavering commitment to our customers and company. Our valuable employees, across our corporate operations and the field, continue to generate strong results while managing the balance of growth and expense management. I could not be more proud of our people and what they accomplished this year.”

As previously announced,  Ferrellgas Partners, L.P. and Ferrellgas Partners Finance Corp., entities with no operations or employees, emerged from bankruptcy on March 30, 2021 and we completed our financial restructuring, greatly improving the health of our balance sheet and paving the way for future prosperity.  Also 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 Wednesday October 22, 2021, James E. Ferrell, Chief Executive Officer and President, Tamria Zertuche, Chief Operating Officer, and Dhiraj Cherian, Chief Financial Officer and Treasurer, will conduct a live teleconference on the Internet at https://edge.media-server.com/mmc/p/mqbzp2wt to discuss the results of operations for the fiscal year ended July 31, 2021. The live webcast of the teleconference will begin at 10:00 a.m. Central Time (11:00 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		July 31, 2021				July 31, 2020
Current Assets:
Cash and cash equivalents (including $11,500 and $95,759 of restricted cash at July 31, 2021 and July 31, 2020, respectively)		$	281,952			$	333,761
Accounts and notes receivable, net (including $103,703 of accounts receivable pledged as collateral at July 31, 2020)			131,574				101,438
Inventories			88,379				72,664
Price risk management asset			78,001				2,846
Prepaid expenses and other current assets			39,092				33,098
Total Current Assets			618,998				543,807
Property, plant and equipment, net			582,118				591,042
Goodwill, net			246,946				247,195
Intangible assets (net of accumulated amortization of $432,032 and $423,290 at July 31, 2021 and July 31, 2020, respectively)			100,743				104,049
Operating lease right-of-use asset			87,611				107,349
Other assets, net			93,228				74,748
Total Assets		$	1,729,644			$	1,668,190
LIABILITIES, MEZZANINE AND EQUITY
Current Liabilities:
Accounts payable		$	47,913			$	33,944
Current portion of long-term debt			1,670				859,095
Current operating lease liabilities			25,363				29,345
Other current liabilities			246,000				167,466
Total Current Liabilities			320,946				1,089,850
Long-term debt			1,444,890				1,646,396
Operating lease liabilities			74,349				89,022
Other liabilities			61,189				51,190
Contingencies and commitments
Mezzanine Equity:
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at July 31, 2021)			651,349				—
Equity:
Limited partner Unitholders
Class A (4,857,605 Units outstanding at July 31, 2021 and July 31, 2020)			(1,214,813	)			(1,126,452	)
Class B (1,300,000 Units outstanding at July 31, 2021)			383,012				—
General partner Unitholder (49,496 Units outstanding at July 31, 2021 and July 31, 2020)			(72,178	)			(71,287	)
Accumulated other comprehensive income (loss)			88,866				(2,303	)
Total Ferrellgas Partners, L.P. Equity			(815,113	)			(1,200,042	)
Noncontrolling interest			(7,966	)			(8,226	)
Total Equity			(823,079	)			(1,208,268	)
Total Liabilities, Mezzanine and Equity		$	1,729,644			$	1,668,190

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)
(unaudited)

		Three months ended								Twelve months ended
		July 31								July 31
		2021				2020				2021				2020
Revenues:
Propane and other gas liquids sales		$	317,333			$	265,414			$	1,668,852			$	1,415,791
Other			17,793				16,235				85,458				82,035
Total revenues			335,126				281,649				1,754,310				1,497,826
Cost of sales:
Propane and other gas liquids sales			175,146				124,917				881,936				673,053
Other			2,572				3,229				12,728				13,003
Gross profit			157,408				153,503				859,646				811,770
Operating expense - personnel, vehicle, plant & other			116,918				128,721				465,816				493,055
Operating expense - equipment lease expense			6,600				8,293				27,062				33,017
Depreciation and amortization expense			21,462				21,101				85,382				80,481
General and administrative expense			11,305				9,305				60,065				45,752
Non-cash employee stock ownership plan compensation charge			934				689				3,215				2,871
Loss on asset sales and disposals			(407	)			1,682				1,831				7,924
Operating income			596				(16,288	)			216,275				148,670
Interest expense			(24,606	)			(54,014	)			(173,616	)			(192,962	)
Gain (loss) on extinguishment of debt			5,088				—				(104,834	)			(37,399	)
Other income (expense), net			77				(246	)			4,246				(460	)
Reorganization items, net			(236	)			—				(10,443	)			—
Loss before income tax expense			(19,081	)			(70,548	)			(68,372	)			(82,151	)
Income tax expense			135				57				741				851
Net loss			(19,216	)			(70,605	)			(69,113	)			(83,002	)
Net loss attributable to noncontrolling interest (a)			(394	)			(636	)			(702	)			(503	)
Net loss attributable to Ferrellgas Partners, L.P.			(18,822	)			(69,969	)			(68,411	)			(82,499	)
Distribution to preferred unitholders			16,013				—				24,024				—
Less: General partner's interest in net loss			(108	)			(700	)			(684	)			(825	)
Class A Unitholders' interest in net loss		$	(34,727	)		$	(69,269	)		$	(91,751	)		$	(81,674	)
Loss Per Class A Unit
Basic and diluted net loss per Class A Unit		$	(7.15	)		$	(14.26	)		$	(18.89	)		$	(16.81	)
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
		July 31								July 31
		2021				2020				2021				2020
Net loss attributable to Ferrellgas Partners, L.P.		$	(18,822	)		$	(69,969	)		$	(68,411	)		$	(82,499	)
Income tax expense			135				57				741				851
Interest expense			24,606				54,014				173,616				192,962
Depreciation and amortization expense			21,462				21,101				85,382				80,481
EBITDA			27,381				5,203				191,328				191,795
Non-cash employee stock ownership plan compensation charge			934				689				3,215				2,871
Loss on asset sales and disposal			(407	)			1,682				1,831				7,924
Loss on extinguishment of debt			(5,088	)			—				104,834				37,399
Other (income) expense, net			(77	)			246				(4,246	)			460
Reorganization expense - professional fees			236				—				10,443				—
Severance expense includes $0 and $927 in operating expense for the three and twelve months ended July 31, 2021. Also includes $0 and $834 in general and administrative expense for the three and twelve months ended July 31, 2021.			—				740				1,761				740
Legal fees and settlements related to non-core businesses			1,557				1,421				10,129				7,308
Provision for doubtful accounts related to non-core businesses			—				17,325				(500	)			17,325
Lease accounting standard adjustment and other			—				27				—				161
Net loss attributable to noncontrolling interest (a)			(394	)			(636	)			(702	)			(503	)
Adjusted EBITDA (b)			24,142				26,697				318,093				265,480
Net cash interest expense (c)			(22,437	)			(52,905	)			(160,153	)			(182,246	)
Maintenance capital expenditures (d)			(11,651	)			(4,540	)			(26,168	)			(23,240	)
Cash paid for income taxes			(268	)			(239	)			(706	)			(289	)
Proceeds from certain asset sales			881				1,487				4,588				3,997
Distributable cash flow attributable to equity investors (e)			(9,333	)			(29,500	)			135,654				63,702
Less: Distributions accrued or paid to preferred unitholders			16,013				—				24,024				—
Distributable cash flow attributable to general partner and non-controlling interest			(2,420	)			(590	)			(480	)			(1,274	)
Distributable cash flow attributable to Class A and B Unitholders (f)			(22,926	)			(28,910	)			111,150				62,428
Less: Distributions paid to Class A and B Unitholders			—				—				—				—
Distributable cash flow excess (g)		$	(22,926	)		$	(28,910	)		$	111,150			$	62,428
Propane gallons sales
Retail - Sales to End Users			95,933				85,677				632,057				638,017
Wholesale - Sales to Resellers			51,055				55,834				228,025				235,529
Total propane gallons sales			146,988				141,511				860,082				873,546

^(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.
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.
^(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.
^(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 distributable cash flow attributable to equity investors or 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 may not be consistent with that of other companies and 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 Partners' key financial results for fiscal 2021?

Ferrellgas reported a $67.6 million increase in operating income and a $47.9 million rise in gross profit for fiscal 2021.

How did Ferrellgas perform in the fourth fiscal quarter of 2021?

In the fourth fiscal quarter, Ferrellgas saw a 104% increase in operating income but reported a net loss of $18.8 million.

What is the current status of Ferrellgas following its bankruptcy?

Ferrellgas emerged from bankruptcy on March 30, 2021, completing financial restructuring and improving its balance sheet.

What distribution did Ferrellgas pay to Class B unit holders?

Ferrellgas paid a $49.9 million distribution to Class B unit holders on October 8, 2021.