Ferrellgas Partners, L.P. Reports Second Quarter Fiscal 2023 Results

Rhea-AI Summary

Ferrellgas Partners, L.P. (OTC: FGPR) reported financial results for its second fiscal quarter ending January 31, 2023. Revenues decreased slightly by $1.0 million year-over-year, while gross profit increased by $34.0 million, or 11%. Net earnings dropped by $10.3 million, or 10%, totaling $98.1 million. Adjusted EBITDA rose by $4.5 million, or 3%, amounting to $155.9 million. Gallons sold decreased by 1%, attributed to higher fuel costs and maintenance expenses. The company acquired Rez-Bear Propane, enhancing its logistics infrastructure. Blue Rhino became the official propane sponsor of the Steak Cookoff Association for 2023.

Positive

• Gross profit increased by $34.0 million, or 11%.
• Adjusted EBITDA rose by $4.5 million, or 3%.

Negative

• Net earnings decreased by $10.3 million, or 10%.
• Revenues decreased slightly by $1.0 million compared to the prior year.
• Gallons sold decreased by 1%, or 2.6 million gallons.

• Financial Highlights
  • Revenues for the second fiscal quarter were flat with a slight decrease of $1.0 million compared to the prior year period.
  • Gross Profit for the second fiscal quarter increased $34.0 million, or 11%, compared to the prior year period.
  • Margin per gallon for the second fiscal quarter increased $0.13, or 12%, compared to the prior year period.
  • Net earnings attributable to Ferrellgas Partners, L.P. decreased $10.3 million, or 10%, compared to the prior year period.
  • Adjusted EBITDA increased by $4.5 million, or 3%, compared to the prior year period.
• Company Highlights
  • Ferrellgas welcomed Rez-Bear Propane, located in Harris, New York, as its newest acquisition to the Ferrellgas Family during the second fiscal quarter.
  • Blue Rhino became the official propane sponsor of the Steak Cookoff Association for 2023.
  • In the second fiscal quarter, 113 employees received Ferrellgas Flame Awards for exemplary performance in the areas of Safety, Customer Service, Innovation, and Leadership.

LIBERTY, Mo., March 10, 2023 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second fiscal quarter ended January 31, 2023.

“The people of Ferrellgas work together each day to build on more than 80-year-old history of innovation to grow via one of the best logistics infrastructures in the business,” said James E. Ferrell, Chief Executive Officer and President. “There is nothing better than the footsteps of an owner to grow a business, and our almost 4,500 employee-owners are unmatched at finding opportunities to grow demand for clean, portable, and affordable propane.”

Revenues were flat with a slight decrease of $1.0 million for the second fiscal quarter compared to the prior year period. Gallons sold decreased 1%, or 2.6 million gallons, compared to the prior year second fiscal quarter.

Gross profit increased $34.0 million, or 11%, for the second fiscal quarter. Cost of sales was favorable with a decrease of $35.0 million, or 9%, for the second fiscal quarter. Margin per gallon increased by $0.13, or 12%, compared to the prior year period. The Company continues to realize cost savings through its asset utilization management and redeployment of tanks to locations with higher usage statistics.

Operating income per gallon decreased $0.05, or 10%, compared to the prior year period. Operating income for the second fiscal quarter decreased $12.9 million, or 10%, compared to the prior year period. Results were impacted by higher fuel costs and fleet charges related to maintenance and repairs.

For the second fiscal quarter 2023 and 2022, the Company reported net earnings attributable to Ferrellgas Partners, L.P. of $98.1 million and $108.4 million, respectively. Adjusted EBITDA, a non-GAAP financial measure, increased by $4.5 million, or 3%, to $155.9 million in the second fiscal quarter 2023 compared to $151.4 million in the prior year period. The change was primarily due to EBITDA adjustments related to a decrease of $9.6 million in gain on assets sales and disposals and a $6.3 million increase in legal fees related to non-core businesses in addition to a $1.9 million decrease in interest expense.

“Our Company shows its appreciation to its most valuable resource, our employee-owners, in many ways throughout the year. Our employees also choose to appreciate each other. They do this by way of our Ferrellgas Flame award in the categories of Safety, Customer Service, Innovation, and Leadership. Over 113 employees were celebrated this quarter,” Ferrell added. “Additionally, hundreds of our hard working, dedicated employees gathered to celebrate via a facilitated zoom event this holiday season. I could not be more proud of our company and our willingness to come together in work and in appreciation.”

The Company announced Blue Rhino’s propane sponsorship of the Steak Cookoff Association (“SCA”) for 2023. The SCA is the world’s largest grilling competition for backyard chefs with 650 events scheduled this year in 46 states and 15 countries. Partnering with the SCA is a natural fit for Blue Rhino, the tank exchange brand of the Company.

On Friday, March 10, 2023, the Company will conduct a teleconference on the Internet at https://edge.media-server.com/mmc/p/38jfbo7w to discuss the results of operations for the second fiscal quarter ended January 31, 2023. The 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. Its Blue Rhino propane exchange brand is sold at more than 60,000 locations nationwide. 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 September 30, 2022. 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, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2022, 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, 2023				July 31, 2022
Current assets:
Cash and cash equivalents (including $11,130 and $11,208 of restricted cash at January 31, 2023 and July 31, 2022, respectively)		$	123,777			$	158,737
Accounts and notes receivable, net			233,625				150,395
Inventories			113,382				115,187
Price risk management asset			18,276				43,015
Prepaid expenses and other current assets			47,980				30,764
Total current assets			537,040				498,098
Property, plant and equipment, net			608,340				603,148
Goodwill, net			257,006				257,099
Intangible assets (net of accumulated amortization of $345,261 and $440,121 at January 31, 2023 and July 31, 2022, respectively)			108,407				97,638
Operating lease right-of-use assets			63,438				72,888
Other assets, net			66,762				79,244
Total assets		$	1,640,993			$	1,608,115
LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	87,354			$	57,586
Broker margin deposit liability			11,450				32,805
Current portion of long-term debt			2,152				1,792
Current operating lease liabilities			24,559				25,824
Other current liabilities			210,397				185,805
Total current liabilities			335,912				303,812
Long-term debt			1,453,716				1,450,016
Operating lease liabilities			39,567				47,231
Other liabilities			33,605				43,518
Contingencies and commitments
Mezzanine equity:
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at January 31, 2023 and July 31, 2022)			651,349				651,349
Equity (Deficit):
Limited partner unitholders
Class A (4,857,605 units outstanding at January 31, 2023 and July 31, 2022)			(1,167,936	)			(1,229,823	)
Class B (1,300,000 units outstanding at January 31, 2023 and July 31, 2022)			383,012				383,012
General partner unitholder (49,496 units outstanding at January 31, 2023 and July 31, 2022)			(70,695	)			(71,320	)
Accumulated other comprehensive (loss) income			(10,098	)			37,907
Total Ferrellgas Partners, L.P. deficit			(865,717	)			(880,224	)
Noncontrolling interest			(7,439	)			(7,587	)
Total deficit			(873,156	)			(887,811	)
Total liabilities, mezzanine and deficit		$	1,640,993			$	1,608,115

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,
		2023				2022				2023				2022				2023				2022
Revenues:
Propane and other gas liquids sales		$	651,886			$	657,504			$	1,037,730			$	1,030,208			$	2,025,401			$	1,889,577
Other			32,057				27,434				59,502				49,236				106,927				89,723
Total revenues			683,943				684,938				1,097,232				1,079,444				2,132,328				1,979,300
Cost of sales:
Propane and other gas liquids sales			347,492				383,213				560,573				603,751				1,130,826				1,077,283
Other			4,243				3,557				9,019				7,167				14,361				12,724
Gross profit			332,208				298,168				527,640				468,526				987,141				889,293
Operating expense - personnel, vehicle, plant & other			157,355				128,013				287,095				245,125				562,573				486,667
Operating expense - equipment lease expense			5,586				6,022				11,610				11,712				22,992				25,082
Depreciation and amortization expense			23,069				21,944				45,700				42,239				93,358				84,982
General and administrative expense			23,115				15,784				37,948				28,359				62,369				54,869
Non-cash employee stock ownership plan compensation charge			722				751				1,445				1,660				2,955				3,405
Loss (gain) on asset sales and disposals			290				(9,275	)			1,970				(7,865	)			3,217				(6,927	)
Operating income			122,071				134,929				141,872				147,296				239,677				241,215
Interest expense			(23,177	)			(25,139	)			(48,186	)			(50,534	)			(97,745	)			(117,329	)
Loss on extinguishment of debt			—				—				—				—				—				(104,834	)
Other income, net			544				43				1,013				4,307				1,539				4,937
Reorganization expense - professional fees			—				—				—				—				—				(9,243	)
Earnings before income tax expense			99,438				109,833				94,699				101,069				143,471				14,746
Income tax expense			503				481				521				577				925				905
Net earnings			98,935				109,352				94,178				100,492				142,546				13,841
Net earnings (loss) attributable to noncontrolling interest (a)			835				947				623				693				797				(342	)
Net earnings attributable to Ferrellgas Partners, L.P.		$	98,100			$	108,405			$	93,555			$	99,799			$	141,749			$	14,183
Class A unitholders' interest in net earnings (loss)		$	11,557			$	13,001			$	8,592			$	9,354			$	(19,532	)		$	(99,430	)
Net earnings (loss) per unitholders' interest
Basic and diluted net earnings (loss) per Class A Unit		$	2.38			$	2.68			$	1.77			$	1.93			$	(4.02	)		$	(20.47	)
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,
		2023				2022				2023				2022				2023				2022
Net earnings attributable to Ferrellgas Partners, L.P.		$	98,100			$	108,405			$	93,555			$	99,799			$	141,749			$	14,183
Income tax expense			503				481				521				577				925				905
Interest expense			23,177				25,139				48,186				50,534				97,745				117,329
Depreciation and amortization expense			23,069				21,944				45,700				42,239				93,358				84,982
EBITDA			144,849				155,969				187,962				193,149				333,777				217,399
Non-cash employee stock ownership plan compensation charge			722				751				1,445				1,660				2,955				3,405
Loss (gain) loss on asset sales and disposal			290				(9,275	)			1,970				(7,865	)			3,217				(6,927	)
Loss on extinguishment of debt			—				—				—				—				—				104,834
Other income, net			(544	)			(43	)			(1,013	)			(4,307	)			(1,539	)			(4,937	)
Reorganization expense - professional fees			—				—				—				—				—				9,243
Severance costs include $49, $51 and $115 in operating expense for the three, six and twelve months ended January 31, 2023, respectively. Also includes $585, $593 and $610 in general and administrative expense for the three, six and twelve months ended January 31, 2023, respectively.			634				281				644				497				725				497
Legal fees and settlements related to non-core businesses			9,107				2,807				13,979				4,938				16,979				8,931
Net earnings (loss) attributable to noncontrolling interest (a)			835				947				623				693				797				(342	)
Adjusted EBITDA (b)			155,893				151,437				205,610				188,765				356,911				332,103
Net cash interest expense (c)			(20,265	)			(27,620	)			(42,871	)			(46,739	)			(95,498	)			(106,933	)
Maintenance capital expenditures (d)			(4,375	)			(4,060	)			(10,207	)			(7,639	)			(19,587	)			(23,348	)
Cash paid for income taxes			(447	)			(407	)			(496	)			(407	)			(1,107	)			(808	)
Proceeds from certain asset sales			736				2,085				1,488				2,726				2,875				4,877
Distributable cash flow attributable to equity investors (e)			131,542				121,435				153,524				136,706				243,594				205,891
Less: Distributions accrued or paid to preferred unitholders			16,222				17,989				32,473				33,322				64,438				57,346
Distributable cash flow attributable to general partner and non-controlling interest			(2,631	)			(2,437	)			(3,070	)			(2,742	)			(4,872	)			(4,126	)
Distributable cash flow attributable to Class A and B Unitholders (f)			112,689				101,009				117,981				100,642				174,284				144,419
Less: Distributions paid to Class A and B Unitholders (g)			—				—				—				49,998				49,998				49,998
Distributable cash flow excess (h)		$	112,689			$	101,009			$	117,981			$	50,644			$	124,286			$	94,421
Propane gallons sales
Retail - Sales to End Users			213,662				215,276				332,058				331,101				625,273				627,062
Wholesale - Sales to Resellers			60,945				61,957				104,814				106,012				205,318				217,195
Total propane gallons sales			274,607				277,233				436,872				437,113				830,591				844,257

(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 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 (gain) on asset sales and disposals, loss on extinguishment of debt, other income, net, reorganization expense – professional fees, severance costs, legal fees and settlements related to non-core businesses, 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)			The Company did not pay any distributions to Class A Unitholders during any of the periods in fiscal 2023 or fiscal 2022.
(h)			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' earnings results for the second fiscal quarter of 2023?

Ferrellgas Partners reported net earnings of $98.1 million for the second fiscal quarter of 2023, a decrease of $10.3 million, or 10%, compared to the prior year.

How did revenues perform for Ferrellgas Partners in Q2 2023?

Revenues for Ferrellgas Partners were flat, with a slight decrease of $1.0 million compared to the prior year period.

What is the adjusted EBITDA for Ferrellgas Partners in Q2 2023?

The adjusted EBITDA for Q2 2023 was $155.9 million, an increase of $4.5 million, or 3%, compared to the prior year period.

What acquisition did Ferrellgas Partners announce in Q2 2023?

Ferrellgas Partners announced the acquisition of Rez-Bear Propane, located in Harris, New York.

What sponsorship deal did Blue Rhino enter in 2023?

Blue Rhino became the official propane sponsor of the Steak Cookoff Association for 2023.