Ferrellgas Partners Posts Record Second Quarter Adjusted EBITDA, in Spite of Warmer-Than-Normal Temperatures; Reaffirms Guida...
March 11 2015 - 7:00AM
Ferrellgas Partners, L.P. (NYSE:FGP) today reported strong results
for fiscal 2015's second quarter ended January 31, 2015, despite
temperatures being 9% warmer than a year ago and 4% warmer than
normal.
For the second year in a row, the company posted record-setting
adjusted EBITDA in its second quarter, with this year's figure
reaching $136.9 million. Distributable cash flow (DCF) to equity
investors in the quarter was $110.3 million, producing DCF coverage
of 1.16 x. During the last 12 months, the partnership generated $27
million of excess cash flow to fund organic and acquisitive growth.
Net earnings for the second quarter climbed 41% to $86.4 million,
or $1.02 per common unit, from $61.1 million, or $0.76 per common
unit primarily due to a loss of $20.9 million for extinguishment of
debt in the prior year period that was not repeated.
"We're quite pleased with our second-quarter results," commented
President and Chief Executive Officer Steve Wambold. "Improved
propane margins and lower expenses in our retail operations more
than offset the negative effects of Mother Nature and the effect
lower commodity costs had on our midstream operations. We're seeing
the strategic initiatives we've undertaken over the last three
years targeting operational discipline and flexibility having their
desired effect in our propane operations. We were also buoyed by
Blue Rhino's continued positive momentum."
Further, the partnership reiterated its full-year adjusted
EBITDA guidance of $300 million to $320 million. Driven by
widespread cold temperatures in February and early March and
ongoing cost discipline, Ferrellgas posted strong February results.
"We're off to a strong start to our third quarter," continued
Wambold, "and we are optimistic about an extended heating season
and its impact on demand."
While retail propane sales, adversely affected by warmer
weather, declined to 216 million gallons from 247 million gallons
the year before, margins significantly improved as the cost of
propane decreased dramatically from prior year.
Blue Rhino's performance exceeded expectations in the second
quarter with record volume, up 3% over year-ago levels, and solid
same-store gains registered across convenience, drug, grocery and
hardware stores.
Operating expense of $107.1 million was down more than 8% from
the year-ago level, benefiting from both the lower cost of fuel and
the operational ability to flex our expenses down in warmer
periods. General and administrative expense declined 12% to $10.6
million. Interest expense was up 10% to $24.4 million, primarily
attributable to merger and acquisition activity.
"The acquisition environment remains attractive," Wambold said.
"and our pipeline has grown significantly in recent weeks. We
remain committed to achieving our diversification strategy through
accretive, complementary acquisitions, and we are aggressively but
deliberately pursuing some excellent opportunities that fit our
model."
For the first half of fiscal 2015, Adjusted EBITDA improved 5%
to $171.3 million. Operating expense declined 4% to $210 million,
while general and administrative expense decreased 6% to $21.5
million. Net earnings climbed to $53.2 million, or $0.63 per unit,
from $36.1 million, or $0.45 per unit, the year before.
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, or 27.5% of the
outstanding 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 29, 2014.
Investors can request a hard copy of this filling free of charge
and obtain more information about the partnership online at
www.ferrellgas.com.
This press release contains certain forward-looking statements
that management believes to be reasonable as of today's date
only. Actual results may differ significantly because of risks
and uncertainties that are difficult to predict and many of which
are beyond management's control. You should read the
Partnership's Annual Report on Form 10-K for a more extensive list
of factors that could affect results. Among them are adverse
weather conditions, cost volatility and availability of propane,
increased customer conservation measures, the capacity to transport
propane to our market areas, and the impact of pending and future
legal proceedings, political, economic and regulatory conditions in
the U.S. and abroad. The Partnership undertakes no obligation
to release revisions to its forward-looking statements to reflect
events or circumstances occurring after today.
FERRELLGAS PARTNERS,
L.P. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF EARNINGS |
FOR THE THREE, SIX AND
TWELVE MONTHS ENDED JANUARY 31, 2015 AND 2014 |
(in thousands, except
per unit data) |
(unaudited) |
|
Three months
ended |
Six months
ended |
Twelve months
ended |
|
January
31 |
January
31 |
January
31 |
|
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
Revenues: |
|
|
|
|
|
|
Propane and other gas liquids sales |
$ 560,867 |
$ 789,446 |
$ 955,228 |
$ 1,171,669 |
$ 1,930,902 |
$ 1,992,581 |
Other |
105,106 |
80,237 |
154,100 |
113,044 |
299,573 |
245,825 |
Total revenues |
665,973 |
869,683 |
1,109,328 |
1,284,713 |
2,230,475 |
2,238,406 |
|
|
|
|
|
|
|
Cost of product sold: |
|
|
|
|
|
|
Propane and other gas liquids sales |
330,692 |
551,506 |
595,506 |
810,260 |
1,241,634 |
1,312,628 |
Other |
70,290 |
48,709 |
94,150 |
62,055 |
190,247 |
149,877 |
|
|
|
|
|
|
|
Gross profit |
264,991 |
269,468 |
419,672 |
412,398 |
798,594 |
775,901 |
|
|
|
|
|
|
|
Operating expense (including $(4,500),
$(6,300) and $(1,300) of change in fair value of contingent
consideration for the three, six and twelve month period ended
January 31, 2015) |
107,147 |
116,743 |
210,030 |
219,709 |
436,514 |
427,735 |
Depreciation and amortization expense |
23,943 |
20,643 |
47,252 |
40,858 |
90,596 |
82,576 |
General and administrative expense |
10,621 |
12,095 |
21,449 |
22,876 |
44,556 |
45,939 |
Equipment lease expense |
5,795 |
4,274 |
11,327 |
8,340 |
20,732 |
16,573 |
Non-cash employee stock ownership plan
compensation charge |
3,788 |
3,636 |
8,162 |
6,679 |
23,272 |
12,599 |
Non-cash stock-based compensation charge
(a) |
318 |
5,919 |
16,430 |
10,350 |
30,588 |
17,683 |
Loss on disposal of assets |
1,414 |
1,337 |
2,375 |
1,694 |
7,167 |
9,724 |
|
|
|
|
|
|
|
Operating income |
111,965 |
104,821 |
102,647 |
101,892 |
145,169 |
163,072 |
|
|
|
|
|
|
|
Interest expense |
(24,375) |
(22,090) |
(48,287) |
(44,183) |
(90,606) |
(88,274) |
Loss on extinguishment of debt |
-- |
(20,901) |
-- |
(21,202) |
-- |
(21,202) |
Other income (expense), net |
(178) |
57 |
(627) |
273 |
(1,379) |
506 |
|
|
|
|
|
|
|
Earnings before income
taxes |
87,412 |
61,887 |
53,733 |
36,780 |
53,184 |
54,102 |
|
|
|
|
|
|
|
Income tax expense |
1,041 |
764 |
531 |
714 |
2,333 |
1,916 |
|
|
|
|
|
|
|
Net earnings |
86,371 |
61,123 |
53,202 |
36,066 |
50,851 |
52,186 |
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling
interest (b) |
913 |
659 |
619 |
445 |
678 |
688 |
|
|
|
|
|
|
|
Net earnings attributable to Ferrellgas
Partners, L.P. |
85,458 |
60,464 |
52,583 |
35,621 |
50,173 |
51,498 |
|
|
|
|
|
|
|
Less: General partner's interest in net
earnings |
11,955 |
3,663 |
526 |
356 |
502 |
515 |
|
|
|
|
|
|
|
Common unitholders' interest in net
earnings |
$ 73,503 |
$ 56,801 |
$ 52,057 |
$ 35,265 |
$ 49,671 |
$ 50,983 |
|
|
|
|
|
|
|
Earnings Per Unit |
|
|
|
|
|
|
Basic and diluted net earnings per common
unitholders' interest |
$ 0.89 |
$ 0.72 |
$ 0.63 |
$ 0.45 |
$ 0.61 |
$ 0.64 |
Dilutive effect of two-class method (c) |
0.13 |
0.04 |
-- |
-- |
-- |
-- |
Adjusted net earnings per unit available to
common unitholders |
$ 1.02 |
$ 0.76 |
$ 0.63 |
$ 0.45 |
$ 0.61 |
$ 0.64 |
|
|
|
|
|
|
|
Weighted average common units
outstanding |
82,716.9 |
79,129.4 |
82,448.3 |
79,102.6 |
81,337.7 |
79,083.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data and
Reconciliation of Non-GAAP Items: |
|
|
|
|
|
|
|
|
Three months
ended |
Six months
ended |
Twelve months
ended |
|
January
31 |
January
31 |
January
31 |
|
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to
Ferrellgas Partners, L.P. |
$ 85,458 |
$ 60,464 |
$ 52,583 |
$ 35,621 |
$ 50,173 |
$ 51,498 |
Income tax expense |
1,041 |
764 |
531 |
714 |
2,333 |
1,916 |
Interest expense |
24,375 |
22,090 |
48,287 |
44,183 |
90,606 |
88,274 |
Depreciation and amortization
expense |
23,943 |
20,643 |
47,252 |
40,858 |
90,596 |
82,576 |
EBITDA |
134,817 |
103,961 |
148,653 |
121,376 |
233,708 |
224,264 |
Loss on extinguishment of debt |
-- |
20,901 |
-- |
21,202 |
-- |
21,202 |
Non-cash employee stock ownership plan
compensation charge |
3,788 |
3,636 |
8,162 |
6,679 |
23,272 |
12,599 |
Non-cash stock based compensation charge
(a) |
318 |
5,919 |
16,430 |
10,350 |
30,588 |
17,683 |
Loss on disposal of assets |
1,414 |
1,337 |
2,375 |
1,694 |
7,167 |
9,724 |
Other income (expense), net |
178 |
(57) |
627 |
(273) |
1,379 |
(506) |
Change in fair value of contingent
consideration |
(4,500) |
-- |
(6,300) |
-- |
(1,300) |
-- |
Litigation accrual and related legal fees
associated with a class action lawsuit |
-- |
-- |
723 |
1,325 |
1,147 |
1,668 |
Net earnings attributable to
noncontrolling interest (b) |
913 |
659 |
619 |
445 |
678 |
688 |
Adjusted EBITDA (d) |
136,928 |
136,356 |
171,289 |
162,798 |
296,639 |
287,322 |
Net cash interest expense (e) |
(23,287) |
(20,980) |
(46,177) |
(41,566) |
(88,297) |
(82,863) |
Maintenance capital expenditures (f) |
(4,624) |
(4,446) |
(9,712) |
(8,583) |
(18,802) |
(16,123) |
Cash paid for taxes |
(6) |
(178) |
(266) |
(178) |
(904) |
(683) |
Proceeds from asset sales |
1,312 |
1,165 |
2,729 |
2,482 |
4,771 |
6,299 |
Distributable cash flow to equity
investors (g) |
110,323 |
111,917 |
117,863 |
114,953 |
193,407 |
193,952 |
Distributable cash flow attributable to
general partner and non-controlling interest |
2,206 |
2,238 |
2,357 |
2,299 |
3,868 |
3,879 |
Distributable cash flow attributable to
common unitholders |
108,117 |
109,679 |
115,506 |
112,654 |
189,539 |
190,073 |
Less: Distributions paid to common
unitholders |
41,359 |
39,573 |
82,715 |
79,109 |
162,922 |
158,179 |
Distributable cash flow
excess/(shortage) |
$ 66,758 |
$ 70,106 |
$ 32,791 |
$ 33,545 |
$ 26,617 |
$ 31,894 |
|
|
|
|
|
|
|
Propane gallons sales |
|
|
|
|
|
|
Retail - Sales to End Users |
215,996 |
246,929 |
340,143 |
372,181 |
619,320 |
663,425 |
Wholesale - Sales to Resellers |
81,310 |
95,922 |
143,245 |
161,701 |
276,756 |
293,865 |
Total propane gallons sales |
297,306 |
342,851 |
483,388 |
533,882 |
896,076 |
957,290 |
|
|
|
|
|
|
|
Midstream operations (barrels
processed) |
4,722 |
-- |
8,719 |
|
11,219 |
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Non-cash
stock-based compensation charges consist of the following: |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Six months ended |
Twelve months ended |
|
January 31 |
January 31 |
January 31 |
|
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
Operating expense |
$ 67 |
$ 1,539 |
$ 3,612 |
$ 2,337 |
$ 6,610 |
$ 3,424 |
General and administrative expense |
251 |
4,380 |
12,818 |
8,013 |
23,978 |
14,259 |
Total |
$ 318 |
$ 5,919 |
$ 16,430 |
$ 10,350 |
$ 30,588 |
$ 17,683 |
|
|
|
|
|
|
|
(b) Amounts allocated to the
general partner for its 1.0101% interest in the operating
partnership, Ferrellgas, L.P. |
(c) FASB guidance regarding
participating securities and the two-class method requires the
calculation of net earnings per common unitholders' interest for
each period presented according to distributions declared and
participation rights in undistributed earnings, as if all of the
earnings or loss for the period had been distributed. In
periods with undistributed earnings above certain levels, the
calculation according to the two-class method results in an
increased allocation of undistributed earnings to the general
partner and a dilution of the earnings to the limited partners. Due
to the seasonality of the propane business, the dilution effect of
the guidance on the two-class method typically impacts only the
three months ending January 31. This guidance did not result
in a dilutive effect for the six and twelve months ended January
31, 2015 and 2014. |
(d) Adjusted EBITDA is
calculated as net earnings attributable to Ferrellgas Partners,
L.P., income tax expense, interest expense, depreciation and
amortization expense, loss on extinguishment of debt, non-cash
employee stock ownership plan compensation charge, non-cash
stock-based compensation charge, loss on disposal of assets, other
income (expense), net, change in fair value of contingent
consideration, litigation accrual and related legal fees associated
with a class action lawsuit and net earnings 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. |
(e) 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 accounts receivable securitization
facility. |
(f) Maintenance capital
expenditures include capitalized expenditures for betterment and
replacement of property, plant and equipment. |
(g) Management considers
distributable cash flow to equity investors a meaningful non-GAAP
measure of the partnership's ability to declare and pay quarterly
distributions to equity investors. Distributable cash flow to
equity investors, as management defines it, may not be comparable
to distributable cash flow to equity investors or similarly titled
measurements used by other corporations and partnerships. Items
added into our calculation of distributable cash flow to equity
investors that will not occur on a continuing basis may have
associated cash payments. Distributable cash flow 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. |
|
|
|
|
|
|
|
FERRELLGAS PARTNERS,
L.P. AND SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS |
(in thousands, except
unit data) |
(unaudited) |
|
|
|
|
|
|
ASSETS |
January 31,
2015 |
July 31, 2014 |
|
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 12,356 |
$ 8,289 |
Accounts and notes receivable, net
(including $256,112 and $159,003 of accounts receivable pledged as
collateral at January 31, 2015 and July 31, 2014,
respectively) |
273,645 |
178,602 |
Inventories |
132,273 |
145,969 |
Prepaid expenses and other current
assets |
66,615 |
32,071 |
Total Current
Assets |
484,889 |
364,931 |
|
|
|
Property, plant and equipment, net |
611,008 |
611,787 |
Goodwill |
285,617 |
273,210 |
Intangible assets, net |
308,132 |
276,171 |
Other assets, net |
57,391 |
46,171 |
Total Assets |
$ 1,747,037 |
$ 1,572,270 |
|
|
|
|
|
|
LIABILITIES AND PARTNERS'
DEFICIT |
|
|
|
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 101,191 |
$ 69,360 |
Short-term borrowings |
67,431 |
69,519 |
Collateralized note payable |
175,000 |
91,000 |
Other current liabilities |
147,627 |
125,161 |
Total Current
Liabilities |
491,249 |
355,040 |
|
|
|
Long-term debt (a) |
1,343,463 |
1,292,214 |
Other liabilities |
40,360 |
36,662 |
Contingencies and commitments |
|
|
|
|
|
Partners' Deficit: |
|
|
Common unitholders (82,717,620 and 81,228,237
units outstanding at January 31, 2015 and July 31, 2014,
respectively) |
(22,412) |
(57,893) |
General partner unitholder (835,532 and
820,487 units outstanding at January 31, 2015 and July 31, 2014,
respectively) |
(60,295) |
(60,654) |
Accumulated other comprehensive income
(loss) |
(45,883) |
6,181 |
Total Ferrellgas Partners, L.P.
Partners' Deficit |
(128,590) |
(112,366) |
Noncontrolling Interest |
555 |
720 |
Total Partners'
Deficit |
(128,035) |
(111,646) |
Total Liabilities and Partners'
Deficit |
$ 1,747,037 |
$ 1,572,270 |
|
|
|
(a) The principal difference
between the Ferrellgas Partners, L.P. balance sheet and that of
Ferrellgas, L.P., is $182 million of 8.625% notes which are
liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas,
L.P. |
|
|
|
CONTACT: Jack Herrold, Investor Relations
jackherrold@ferrellgas.com or (913) 661-1851
Scott Brockelmeyer, Media Relations
scottbrockelmeyer@ferrelllgas.com or (913) 661-1830
Jim Saladin, Media Relations
jimsaladin@ferrellgas.com or (913) 661-1833
Ferrellgas Partners (NYSE:FGP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ferrellgas Partners (NYSE:FGP)
Historical Stock Chart
From Apr 2023 to Apr 2024