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

Rhea-AI Summary

Ferrellgas Partners, L.P. (OTC: FGPR) reported financial results for the second fiscal quarter ended January 31, 2022, showcasing a 24% increase in revenues to $684.9 million from $553.5 million year-over-year. Gross profit rose 7% to $298.2 million, while operating income surged 18% to $134.9 million. Net earnings attributed to Ferrellgas increased by 71% to $108.4 million. Despite a 3% decline in gallons sold due to warmer weather, strategic initiatives and operational efficiencies bolstered overall performance. The company remains committed to improving technology and logistics for enhanced profitability.

Positive

• Revenues increased by 24% to $684.9 million.
• Gross profit rose by 7% to $298.2 million.
• Operating income increased by 18% to $134.9 million.
• Net earnings attributed to Ferrellgas rose by 71% to $108.4 million.
• Adjusted EBITDA increased by 7% to $151.4 million.
• Operating expenses as a percentage of revenue decreased by 2%.

Negative

• Gallons sold declined by 3% due to warmer December weather.

• Financial Highlights
  • Revenues for the second fiscal quarter increased $131.4 million or 24% to $684.9 million, compared to $553.5 million in the prior year period.
  • Gross Profit increased $18.9 million or 7% to $298.2 million, compared to $279.3 million in the prior year period.
  • Operating Income increased by $20.3 million or 18% to $134.9 million, compared to $114.6 million in the prior year period.
• Company Highlights
  • Ferrellgas announced the expansion of its partnership with Operation BBQ Relief.
  • Blue Rhino teamed up with International Rhino Foundation to raise awareness of rhino conservation efforts.
  • Blue Rhino home delivery entered Long Island market.
  • The Company celebrated 280 Ferrellgas employees recognized in the areas of: Customer Service, Safety, Innovation and Leadership via the Ferrellgas Flame Awards.
    

LIBERTY, Mo., March 11, 2022 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second fiscal quarter ended January 31, 2022.

"At Ferrellgas, we believe in our people. The company continues to perform because of the almost 4,500 outstanding professionals who work so hard each day on behalf of the Ferrellgas customer. We believe it is important to recognize and invest in our people,” said James E. Ferrell, Chief Executive Officer and President. “Our mission is to Fuel Life Simply for our customers, we know that begins with great employees.”

The Company delivered $20.3 million higher operating income in the second fiscal quarter versus the same period last year. Overall gallon performance and the Company’s strategic initiatives contributed to an increase in the second fiscal quarter gross profit of $18.9 million, or 7% higher than the prior year period. Operating expenses as a percentage of total revenue were approximately 2% lower than the prior year period. Margin per gallon for the quarter increased by $0.10, or 10% higher than the prior year period. The Company realized cost savings through better utilization of assets as it redeployed existing tanks to locations with higher usage statistics, which also alleviated the need to purchase additional tanks at higher market prices. The savings on providing more propane at each delivery was partially offset by overtime costs.

The Company’s strong performance in the second quarter of fiscal 2022 directly correlates with its strategic initiatives to achieve efficiencies in the right-timed delivery of gallons. This includes using new monitoring technology that allows the Company to provide more gallons at each stop thereby optimizing the use of its labor force and vehicle fleet and its fuel efficiency. While a warmer December 2021 factored into the 3% decline in gallons sold during the second fiscal quarter compared to the prior year period, the recent winter weather favorably impacted the remainder of its quarterly results when coupled with the Company’s strategic initiatives.

Ferrellgas continues to benefit from its position as a technology enabled logistics company with a nationwide footprint. 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. 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.

For the second fiscal quarter, the Company reported net earnings attributable to Ferrellgas Partners, L.P. of $108.4 million compared to $63.3 million in the prior year period, an increase of $45.1 million or 71%. Adjusted EBITDA, a non-GAAP measure, increased by $10.5 million or 7% to $151.4 million in the second fiscal quarter compared to $140.9 million in the prior year period.

“Our highly tenured supply and operations teams leveraged relationships with valued vendors and supply partners to enable our continued high performance,” Ferrell added. “Our management teams have demonstrated excellence in key areas all while managing a challenging environment. Our success is further strengthened by the incredibly dedicated employees of Ferrellgas. All across our company, I witnessed innovation and collaboration by our hard working distribution managers, delivery professionals, and customer service specialists. I could not be more proud.”  

The Company recently announced an expansion of its partnership with Operation BBQ Relief, an organization which has served nearly 10 million meals in the United States and internationally to communities impacted by natural disasters. The Company’s nationwide footprint allows it to help victims and first responders throughout the United States by supplying the necessary propane to fuel industrial-sized smokers in addition to Blue Rhino tanks.

The Company’s tank exchange brand Blue Rhino announced a partnership with the International Rhino Foundation, a global wildlife conservation organization, to raise awareness of rhino conservation efforts around the world. As part of the initiative, Blue Rhino will draw attention to conservation efforts through both marketing campaigns and on tanks sold at retail exchange locations throughout the country.

On Friday, March 11, 2022, the Company will conduct a live teleconference on the Internet at https://edge.media-server.com/mmc/p/bghesqvg to discuss the results of operations for the second fiscal quarter. The live webcast of the teleconference will begin at 8:30 a.m. Central Time (9:30 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		January 31, 2022				July 31, 2021
Current assets:
Cash and cash equivalents (including $11,267 and $11,500 of restricted cash at January 31, 2022 and July 31, 2021, respectively)		$	199,635			$	281,952
Accounts and notes receivable, net			253,885				131,574
Inventories			118,143				88,379
Price risk management asset			93,827				78,001
Prepaid expenses and other current assets			47,526				39,092
Total current assets			713,016				618,998
Property, plant and equipment, net			586,819				582,118
Goodwill, net			251,065				246,946
Intangible assets (net of accumulated amortization of $436,177 and $432,032 at January 31, 2022 and July 31, 2021, respectively)			101,267				100,743
Operating lease right-of-use asset			82,046				87,611
Other assets, net			85,862				93,228
Total assets		$	1,820,075			$	1,729,644
LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	113,337			$	47,913
Broker margin deposit liability			86,596				79,178
Current portion of long-term debt			1,979				1,670
Current operating lease liabilities			26,048				25,363
Other current liabilities			183,315				166,822
Total current liabilities			411,275				320,946
Long-term debt			1,447,926				1,444,890
Operating lease liabilities			55,708				74,349
Other liabilities			55,812				61,189
Contingencies and commitments
Mezzanine equity:
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at January 31, 2022 and July 31, 2021)			651,349				651,349
Equity (Deficit):
Limited partner unitholders
Class A (4,857,605 units outstanding at January 31, 2022 and July 31, 2021)			(1,197,371	)			(1,214,813	)
Class B (1,300,000 units outstanding at January 31, 2022 and July 31, 2021)			383,012				383,012
General partner unitholder (49,496 units outstanding at January 31, 2022 and July 31, 2021)			(71,498	)			(72,178	)
Accumulated other comprehensive income			91,096				88,866
Total Ferrellgas Partners, L.P. deficit			(794,761	)			(815,113	)
Noncontrolling interest			(7,234	)			(7,966	)
Total deficit			(801,995	)			(823,079	)
Total liabilities, mezzanine and deficit		$	1,820,075			$	1,729,644

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

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

		Three months ended								Six Months Ended								Twelve months ended
		January 31,								January 31,								January 31,
		2022				2021				2022				2021				2022				2021
Revenues:
Propane and other gas liquids sales		$	657,504			$	528,434			$	1,030,208			$	809,483			$	1,889,577			$	1,466,642
Other			27,434				25,126				49,236				44,971				89,723				81,591
Total revenues			684,938				553,560				1,079,444				854,454				1,979,300				1,548,233
Cost of sales:
Propane and other gas liquids sales			383,213				270,777				603,751				408,404				1,077,283				709,586
Other			3,557				3,504				7,167				7,171				12,724				13,140
Gross profit			298,168				279,279				468,526				438,879				889,293				825,507
Operating expense - personnel, vehicle, plant & other			128,013				115,247				245,125				224,274				486,667				474,553
Operating expense - equipment lease expense			6,022				6,862				11,712				13,692				25,082				30,060
Depreciation and amortization expense			21,944				21,249				42,239				42,639				84,982				84,106
General and administrative expense			15,784				20,475				28,359				33,555				54,869				55,420
Non-cash employee stock ownership plan compensation charge			751				762				1,660				1,470				3,405				2,916
(Gain) loss on asset sales and disposals			(9,275	)			80				(7,865	)			893				(6,927	)			4,434
Operating income			134,929				114,604				147,296				122,356				241,215				174,018
Interest expense			(25,139	)			(52,595	)			(50,534	)			(106,821	)			(117,329	)			(206,538	)
Loss on extinguishment of debt			—				—				—				—				(104,834	)			(37,399	)
Other income, net			43				3,508				4,307				3,616				4,937				3,212
Reorganization expense - professional fees			—				(1,200	)			—				(1,200	)			(9,243	)			(1,200	)
Earnings (loss) before income tax expense			109,833				64,317				101,069				17,951				14,746				(67,907	)
Income tax expense			481				326				577				413				905				631
Net earnings (loss)			109,352				63,991				100,492				17,538				13,841				(68,538	)
Net earnings (loss) attributable to noncontrolling interest (a)			947				724				693				333				(342	)			(381	)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.		$	108,405			$	63,267			$	99,799			$	17,205			$	14,183			$	(68,157	)
Class A unitholders' interest in net earnings (loss)		$	13,001			$	62,634			$	9,354			$	17,033			$	(99,430	)		$	(67,475	)
Net earnings per unitholders' interest
Basic and diluted net earnings (loss) per Class A Unit		$	2.68			$	12.89			$	1.93			$	3.51			$	(20.47	)		$	(13.89	)
Weighted average Class A Units outstanding - basic and diluted			4,858				4,858				4,858				4,858				4,858				4,858

Supplemental Data and Reconciliation of Non-GAAP Items:

		Three months ended								Six Months Ended								Twelve months ended
		January 31,								January 31,								January 31,
		2022				2021				2022				2021				2022				2021
Net earnings (loss) attributable to Ferrellgas Partners, L.P.		$	108,405			$	63,267			$	99,799			$	17,205			$	14,183			$	(68,157	)
Income tax expense			481				326				577				413				905				631
Interest expense			25,139				52,595				50,534				106,821				117,329				206,538
Depreciation and amortization expense			21,944				21,249				42,239				42,639				84,982				84,106
EBITDA			155,969				137,437				193,149				167,078				217,399				223,118
Non-cash employee stock ownership plan compensation charge			751				762				1,660				1,470				3,405				2,916
(Gain) loss on asset sales and disposal			(9,275	)			80				(7,865	)			893				(6,927	)			4,434
Loss on extinguishment of debt			—				—				—				—				104,834				37,399
Other income, net			(43	)			(3,508	)			(4,307	)			(3,616	)			(4,937	)			(3,212	)
Reorganization expense - professional fees			—				1,200				—				1,200				9,243				1,200
Severance expense includes $24, $60 and $84 in operating expense for the three, six and twelve months ended January 31, 2022, respectively. Also includes $257, $156 and $413 in general and administrative expense for the three, six and twelve months ended January 31, 2022, respectively.			281				1,077				497				1,761				497				2,501
Legal fees and settlements related to non-core businesses			2,807				3,628				4,938				6,136				8,931				8,882
Provision for doubtful accounts related to non-core businesses			—				(500	)			—				(500	)			—				16,825
Lease accounting standard adjustment and other			—				—				—				—				—				107
Net (earnings) loss attributable to noncontrolling interest (a)			947				724				693				333				(342	)			(381	)
Adjusted EBITDA (b)			151,437				140,900				188,765				174,755				332,103				293,789
Net cash interest expense (c)			(27,620	)			(48,243	)			(46,739	)			(99,959	)			(106,933	)			(196,306	)
Maintenance capital expenditures (d)			(4,060	)			(5,282	)			(7,639	)			(10,459	)			(23,348	)			(21,802	)
Cash paid for income taxes			(407	)			(270	)			(407	)			(305	)			(808	)			(593	)
Proceeds from certain asset sales			2,085				1,737				2,726				2,437				4,877				4,775
Distributable cash flow attributable to equity investors (e)			121,435				88,842				136,706				66,469				205,891				79,863
Less: Distributions accrued or paid to preferred unitholders			17,989				—				33,322				—				57,346				—
Distributable cash flow attributable to general partner and non-controlling interest			(2,437	)			(1,904	)			(2,742	)			(1,329	)			(4,126	)			(1,597	)
Distributable cash flow attributable to Class A and B Unitholders (f)			101,009				86,938				100,642				65,140				144,419				78,266
Less: Distributions paid to Class A and B Unitholders			—				—				49,998				—				49,998				—
Distributable cash flow excess (g)		$	101,009			$	86,938			$	50,644			$	65,140			$	94,421			$	78,266
Propane gallons sales
Retail - Sales to End Users			215,276				218,078				331,101				336,096				627,062				607,948
Wholesale - Sales to Resellers			61,957				67,252				106,012				116,842				217,195				233,336
Total propane gallons sales			277,233				285,330				437,113				452,938				844,257				841,284

(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 earnings (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, (gain) loss on asset sales and disposals, loss on extinguishment of debt, other income, 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 (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 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, 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' revenues for Q2 2022?

Ferrellgas reported revenues of $684.9 million for the second fiscal quarter of 2022.

How much did the net earnings of Ferrellgas increase?

Net earnings attributable to Ferrellgas increased by 71% to $108.4 million.

What was the gross profit for Ferrellgas in Q2 2022?

Gross profit for Ferrellgas in the second fiscal quarter of 2022 was $298.2 million.

What is the operating income for Ferrellgas in Q2 2022?

Operating income for Ferrellgas increased to $134.9 million in the second fiscal quarter of 2022.

How can I access the Ferrellgas Q2 2022 teleconference?

The live teleconference discussing the results can be accessed at https://edge.media-server.com/mmc/p/bghesqvg.