Ferrellgas Partners, L.P. Reports Results for First Quarter Fiscal 2018
December 07 2017 - 7:00AM
Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the
“Company”) today reported financial results for its first fiscal
quarter ended October 31, 2017. The Company reported a net loss
attributable to Ferrellgas Partners, L.P. of $47.9 million, or
$0.49 per common unit, compared to a net loss attributable to
Ferrellgas Partners, L.P. of $43.1 million, or $0.44 per common
unit, for the prior year period.
The Company reported that total gallons sold in the first
quarter increased more than 9.5 million gallons over the same
period in the prior year, which partially offset the effects of
lower margins as the Company aggressively competes for new
customers. The Company reported adjusted EBITDA of $26.2
million, compared to $29.0 million in the prior year
period.
At the end of this first quarter of the Company’s fiscal year,
its leverage ratio was 7.57x reflecting peak working capital
requirements. This level was lower than the 7.75x limit allowed
under its secured credit facility and accounts receivable
securitization facilities, as amended in April 2017. Based on the
Company’s current forecast, the leverage ratio is expected to
continue to strengthen and decrease throughout the fiscal year.
“Ferrellgas has entered the winter heating season with renewed
vigor, and while we are optimistic about temperatures nearer to the
norm we are focusing on several initiatives that will increase
EBITDA regardless of weather,” said James E. Ferrell, the Company’s
interim President and Chief Executive Officer. “Our Retail propane
operations continue to add customers in significant numbers across
all segments positioning the Company for potential future volume
and cash flow growth. Further, we’ve closed on a number of
accretive, bolt-on acquisitions that complement our strategic
footprint. In our Blue Rhino business, we are reconfiguring our
production facilities footprint in order to reduce freight costs
and streamline production initiatives that are particularly
important as we added more than 2,300 new Blue Rhino locations in
Q1 with more added since quarter end. Blue Rhino growth is
also important to us because is it less weather dependent. As for
Midstream operations, the business has stabilized and is now
focused on growth particularly in its trucking operations. The
business exited a barge lease that was a significant headwind for
EBITDA, and we are evaluating certain underperforming assets to
find the best way to move forward with them.”
Mr. Ferrell continued, “These initiatives are the product of a
leaner, more agile organization with a flatter management
structure. I like our management team including the recent addition
of Doran Schwartz as our Chief Financial Officer complementing an
already strong and seasoned leadership team. All of our
employees are focused and working hard to generate more cash
flow. We are well positioned for fiscal 2018 and building a
foundation for the long-term success of our Company.”
About FerrellgasFerrellgas 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 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 28, 2017. 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, 2017, the
Form 10-Q of these entities for the fiscal quarter ended
October 31, 2017, and in other documents filed from time to
time by these entities with the Securities and Exchange
Commission.
ContactsJim Saladin, Media Relations –
jimsaladin@ferrellgas.com, 913-661-1833Tom Colvin, Investor
Relations – tomcolvin@ferrellgas.com, 816-792-6908
|
FERRELLGAS PARTNERS, L.P. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands, except unit data) |
(unaudited) |
|
|
|
|
|
ASSETS |
|
October 31, 2017 |
|
July 31, 2017 |
|
|
|
|
|
Current
Assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
7,100 |
|
|
$ |
5,760 |
|
Accounts and
notes receivable, net (including $137,244 and $109,407 of
accounts receivable pledged as collateral at October 31,
2017 and July 31, 2017, respectively) |
|
|
191,428 |
|
|
|
165,084 |
|
Inventories |
|
|
112,338 |
|
|
|
92,552 |
|
Prepaid expenses
and other current assets |
|
|
68,068 |
|
|
|
33,388 |
|
Total Current Assets |
|
|
378,934 |
|
|
|
296,784 |
|
|
|
|
|
|
Property, plant and
equipment, net |
|
|
738,729 |
|
|
|
731,923 |
|
Goodwill, net |
|
|
256,103 |
|
|
|
256,103 |
|
Intangible assets,
net |
|
|
250,629 |
|
|
|
251,102 |
|
Other assets, net |
|
|
80,559 |
|
|
|
74,057 |
|
Total Assets |
|
$ |
1,704,954 |
|
|
$ |
1,609,969 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND PARTNERS' DEFICIT |
|
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
99,198 |
|
|
$ |
85,561 |
|
Short-term
borrowings |
|
|
263,200 |
|
|
|
59,781 |
|
Collateralized
note payable |
|
|
88,000 |
|
|
|
69,000 |
|
Other current
liabilities |
|
|
200,879 |
|
|
|
126,224 |
|
Total Current Liabilities |
|
|
651,277 |
|
|
|
340,566 |
|
|
|
|
|
|
Long-term debt (a) |
|
|
1,812,155 |
|
|
|
1,995,795 |
|
Other liabilities |
|
|
34,799 |
|
|
|
31,118 |
|
Contingencies and
commitments |
|
|
|
|
|
|
|
|
|
Partners
Deficit: |
|
|
|
|
Common
unitholders (97,152,665 units outstanding at |
|
|
|
|
October 31, 2017
and July 31, 2017) |
|
|
(754,456 |
) |
|
|
(701,188 |
) |
General partner
unitholder (989,926 units outstanding at |
|
|
|
|
October 31, 2017
and July 31, 2017) |
|
|
(67,528 |
) |
|
|
(66,991 |
) |
Accumulated other
comprehensive income |
|
|
32,915 |
|
|
|
14,601 |
|
Total
Ferrellgas Partners, L.P. Partners' Deficit |
|
|
(789,069 |
) |
|
|
(753,578 |
) |
Noncontrolling
Interest |
|
|
(4,208 |
) |
|
|
(3,932 |
) |
Total
Partners' Deficit |
|
|
(793,277 |
) |
|
|
(757,510 |
) |
Total
Liabilities and Partners' Deficit |
|
$ |
1,704,954 |
|
|
$ |
1,609,969 |
|
(a) |
|
The
principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., is $357 million of 8.625%
notes which are liabilities of Ferrellgas Partners, L.P. and
not of Ferrellgas, L.P. |
|
|
|
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 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
Propane and
other gas liquids sales |
|
$ |
302,758 |
|
|
$ |
242,399 |
|
|
$ |
1,378,771 |
|
|
$ |
1,199,466 |
|
Midstream
operations |
|
|
120,760 |
|
|
|
108,044 |
|
|
|
479,419 |
|
|
|
539,612 |
|
Other |
|
|
31,137 |
|
|
|
29,099 |
|
|
|
147,200 |
|
|
|
208,685 |
|
Total revenues |
|
|
454,655 |
|
|
|
379,542 |
|
|
|
2,005,390 |
|
|
|
1,947,763 |
|
|
|
|
|
|
|
|
|
|
Cost of
sales: |
|
|
|
|
|
|
|
|
Propane and
other gas liquids sales |
|
|
179,515 |
|
|
|
119,212 |
|
|
|
754,458 |
|
|
|
561,894 |
|
Midstream
operations |
|
|
108,125 |
|
|
|
94,642 |
|
|
|
442,922 |
|
|
|
412,272 |
|
Other |
|
|
13,702 |
|
|
|
11,746 |
|
|
|
69,223 |
|
|
|
123,535 |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
153,313 |
|
|
|
153,942 |
|
|
|
738,787 |
|
|
|
850,062 |
|
|
|
|
|
|
|
|
|
|
Operating expense |
|
|
110,462 |
|
|
|
104,992 |
|
|
|
437,221 |
|
|
|
447,921 |
|
Depreciation and
amortization expense |
|
|
25,732 |
|
|
|
26,202 |
|
|
|
102,881 |
|
|
|
139,736 |
|
General and
administrative expense |
|
|
13,164 |
|
|
|
12,482 |
|
|
|
47,662 |
|
|
|
48,821 |
|
Equipment lease
expense |
|
|
6,741 |
|
|
|
7,349 |
|
|
|
28,516 |
|
|
|
29,150 |
|
Non-cash employee stock
ownership plan compensation charge |
|
|
3,962 |
|
|
|
3,754 |
|
|
|
15,296 |
|
|
|
26,093 |
|
Non-cash stock-based
compensation charge (a) |
|
|
- |
|
|
|
1,881 |
|
|
|
1,417 |
|
|
|
3,083 |
|
Asset impairments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
628,802 |
|
Loss on asset sales and
disposal |
|
|
895 |
|
|
|
6,423 |
|
|
|
8,929 |
|
|
|
22,341 |
|
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
|
(7,643 |
) |
|
|
(9,141 |
) |
|
|
96,865 |
|
|
|
(495,885 |
) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(40,807 |
) |
|
|
(35,428 |
) |
|
|
(157,864 |
) |
|
|
(139,577 |
) |
Other income, net |
|
|
511 |
|
|
|
508 |
|
|
|
1,477 |
|
|
|
740 |
|
|
|
|
|
|
|
|
|
|
Loss before
income taxes |
|
|
(47,939 |
) |
|
|
(44,061 |
) |
|
|
(59,522 |
) |
|
|
(634,722 |
) |
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
|
377 |
|
|
|
(590 |
) |
|
|
(176 |
) |
|
|
218 |
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
(48,316 |
) |
|
|
(43,471 |
) |
|
|
(59,346 |
) |
|
|
(634,940 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interest (b) |
|
|
(401 |
) |
|
|
(398 |
) |
|
|
(297 |
) |
|
|
(6,245 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable
to Ferrellgas Partners, L.P. |
|
|
(47,915 |
) |
|
|
(43,073 |
) |
|
|
(59,049 |
) |
|
|
(628,695 |
) |
|
|
|
|
|
|
|
|
|
Less: General partner's
interest in net loss |
|
|
(479 |
) |
|
|
(431 |
) |
|
|
(590 |
) |
|
|
(6,287 |
) |
|
|
|
|
|
|
|
|
|
Common
unitholders' interest in net loss |
|
$ |
(47,436 |
) |
|
$ |
(42,642 |
) |
|
$ |
(58,459 |
) |
|
$ |
(622,408 |
) |
|
|
|
|
|
|
|
|
|
Loss Per Common
Unit |
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common unitholders' interest |
|
$ |
(0.49 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.60 |
) |
|
$ |
(6.35 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common
units outstanding - basic |
|
|
97,152.7 |
|
|
|
97,457.6 |
|
|
|
97,443.7 |
|
|
|
97,949.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data and Reconciliation of
Non-GAAP Items: |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
October 31 |
|
October 31 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to Ferrellgas Partners, L.P. |
|
$ |
(47,915 |
) |
|
$ |
(43,073 |
) |
|
$ |
(59,049 |
) |
|
$ |
(628,695 |
) |
Income tax
expense (benefit) |
|
|
377 |
|
|
|
(590 |
) |
|
|
(176 |
) |
|
|
218 |
|
Interest
expense |
|
|
40,807 |
|
|
|
35,428 |
|
|
|
157,864 |
|
|
|
139,577 |
|
Depreciation and
amortization expense |
|
|
25,732 |
|
|
|
26,202 |
|
|
|
102,881 |
|
|
|
139,736 |
|
EBITDA |
|
|
19,001 |
|
|
|
17,967 |
|
|
|
201,520 |
|
|
|
(349,164 |
) |
Non-cash
employee stock ownership plan compensation charge |
|
|
3,962 |
|
|
|
3,754 |
|
|
|
15,296 |
|
|
|
26,093 |
|
Non-cash stock
based compensation charge (a) |
|
|
- |
|
|
|
1,881 |
|
|
|
1,417 |
|
|
|
3,083 |
|
Asset
impairments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
628,802 |
|
Loss on asset
sales and disposal |
|
|
895 |
|
|
|
6,423 |
|
|
|
8,929 |
|
|
|
22,341 |
|
Other income,
net |
|
|
(511 |
) |
|
|
(508 |
) |
|
|
(1,477 |
) |
|
|
(740 |
) |
Severance
expense $358 and $414 included in operating expense for the three
months ended period October 31, 2017 and 2016,
respectively. Also includes $1,305 and $1,055 included in general
and administrative expense for the three months ended
October 31, 2017 and 2016, respectively. Includes $358 and $938 in
operating expense for the twelve months ended October
31, 2017 and 2016, respectively. Also includes $1,795 and $1,128 in
general and administrative expense for the twelve
months ended October 31, 2017 and 2016, respectively. |
|
|
1,663 |
|
|
|
1,469 |
|
|
|
2,153 |
|
|
|
2,066 |
|
Unrealized
(non-cash) losses (gains) on changes in fair value of derivatives
$1,607 and $1,839 included in cost of sales for the
three and twelve months ended October 31, 2017, respectively, and
$308 and $(140) for the three and twelve months ended
October 31, 2016, respectively. Also includes $(2,120) included in
operating expense for the twelve months ended October
31, 2017, and (1,877) and (1,330) for the three and twelve months
ended October 31, 2016, respectively. |
|
|
1,607 |
|
|
|
(1,569 |
) |
|
|
(281 |
) |
|
|
(1,470 |
) |
Acquisition and
transition expenses (included in general and administrative
expense) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
84 |
|
Net loss
attributable to noncontrolling interest (b) |
|
|
(401 |
) |
|
|
(398 |
) |
|
|
(297 |
) |
|
|
(6,245 |
) |
Adjusted EBITDA
(c) |
|
|
26,216 |
|
|
|
29,019 |
|
|
|
227,260 |
|
|
|
324,850 |
|
Net cash
interest expense (d) |
|
|
(38,057 |
) |
|
|
(33,618 |
) |
|
|
(148,027 |
) |
|
|
(133,976 |
) |
Maintenance capital expenditures (e) |
|
|
(8,704 |
) |
|
|
(3,322 |
) |
|
|
(22,317 |
) |
|
|
(14,244 |
) |
Cash paid for taxes |
|
|
(6 |
) |
|
|
(1 |
) |
|
|
(315 |
) |
|
|
(778 |
) |
Proceeds from
asset sales |
|
|
1,208 |
|
|
|
1,720 |
|
|
|
7,440 |
|
|
|
6,730 |
|
Distributable
cash flow attributable to equity investors (f) |
|
|
(19,343 |
) |
|
|
(6,202 |
) |
|
|
64,041 |
|
|
|
182,582 |
|
Distributable cash flow
attributable to general partner and non-controlling interest |
|
|
(387 |
) |
|
|
(124 |
) |
|
|
1,281 |
|
|
|
3,652 |
|
Distributable cash flow
attributable to common unitholders |
|
|
(18,956 |
) |
|
|
(6,078 |
) |
|
|
62,760 |
|
|
|
178,930 |
|
Less: Distributions
paid to common unitholders |
|
|
9,715 |
|
|
|
49,791 |
|
|
|
38,860 |
|
|
|
200,467 |
|
Distributable
cash flow excess/(shortage) |
|
$ |
(28,671 |
) |
|
$ |
(55,869 |
) |
|
$ |
23,900 |
|
|
$ |
(21,537 |
) |
|
|
|
|
|
|
|
|
|
Propane gallons
sales |
|
|
|
|
|
|
|
|
Retail - Sales
to End Users |
|
|
119,294 |
|
|
|
111,188 |
|
|
|
572,978 |
|
|
|
552,986 |
|
Wholesale -
Sales to Resellers |
|
|
53,429 |
|
|
|
51,990 |
|
|
|
227,690 |
|
|
|
227,545 |
|
Total propane
gallons sales |
|
|
172,723 |
|
|
|
163,178 |
|
|
|
800,668 |
|
|
|
780,531 |
|
|
|
|
|
|
|
|
|
|
Midstream
operations barrels |
|
|
|
|
|
|
|
|
Salt water volume
processed |
|
|
4,940 |
|
|
|
3,703 |
|
|
|
18,752 |
|
|
|
15,512 |
|
Crude oil hauled |
|
|
12,150 |
|
|
|
11,264 |
|
|
|
50,135 |
|
|
|
66,411 |
|
Crude oil sold |
|
|
1,829 |
|
|
|
1,792 |
|
|
|
7,507 |
|
|
|
7,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Non-cash
stock-based compensation charges consist of the following: |
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
October 31 |
|
October 31 |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
Operating
expense |
|
$ |
- |
|
$ |
94 |
|
|
567 |
|
$ |
144 |
General and
administrative expense |
|
|
- |
|
|
1,787 |
|
|
850 |
|
|
2,939 |
Total |
|
$ |
- |
|
$ |
1,881 |
|
$ |
1,417 |
|
$ |
3,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
|
Amounts
allocated to the general partner for its 1.0101% interest in the
operating partnership, Ferrellgas, L.P. |
|
|
|
(c) |
|
Adjusted
EBITDA is calculated as net loss attributable to Ferrellgas
Partners, L.P., less the sum of the following: income tax expense
(benefit), interest expense, depreciationand amortization expense,
non-cash employee stock ownership plan compensation charge,
non-cash stock-based compensation charge, asset impairments, loss
on asset sales and disposal, other income, net, severance expense,
unrealized (non-cash) losses (gains) on changes in fair value of
derivatives, acquisition and transition expenses 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 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. |
|
|
|
(d) |
|
Net cash
interest expense is the sum of interest expense less non-cash
interest expense and other expense, net. This amount includes
interest expense related to the accounts receivable securitization
facility. |
|
|
|
(e) |
|
Maintenance
capital expenditures include capitalized expenditures for
betterment and replacement of property, plant and equipment. |
|
|
|
(f) |
|
Distributable cash flow attributable to equity investors is
calculated as Adjusted EBITDA minus net cash interest expense,
maintenance capital expenditures and cash paid for taxes plus
proceeds from 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. 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 corporations and
partnerships. 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. |
|
|
|
(g) |
|
Distributable cash flow attributable to common unitholders is
calculated as Distributable cash flow attributable to equity
investors minus distributable cash flow attributable to general
partner and noncontrolling interest. Management considers
distributable cash flow attributable to common unitholders a
meaningful measure of the partnership’s ability to declare and pay
quarterly distributions to common unitholders. Distributable cash
flow attributable to common unitholders, as management defines it,
may not be comparable to distributable cash flow attributable to
common unitholders or similarly titled measurements used by other
corporations and partnerships. Items added to our calculation of
distributable cash flow attributable to common unit holders that
will not occur on a continuing basis may have associated cash
payments. Distributable cash flow attributable to common
unitholders may not be consistent with that of other companies and
should be viewed in conjunction with measurements that are computed
in accordance with GAAP. |
|
|
|
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