Ferrellgas Partners, L.P. Reports Full Fiscal Year and Fourth Quarter 2019 Results
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Propane sales volume for the year increased 3 percent leading to almost 3 percent increase in gross margin dollars over the prior year on weather that was 2 percent colder than the prior year
- Retail customer growth of 4 percent over prior year
- Tank Exchange sale locations now exceed 55,000, up over 1,800 locations from prior year.
/EIN News/ -- LIBERTY, Mo., Oct. 15, 2019 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its fiscal year and fourth quarter ended July 31, 2019.
For the fiscal year, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $64.2 million, or $0.65 per common unit, compared to prior year period net loss of $254.6 million, or $2.59 per common unit. For the quarter, the net loss attributable to Ferrellgas Partners, L.P. was $71.0 million, or $0.72 per common unit, compared to the prior year's fourth quarter net loss of $215.7 million, or $2.20 per common unit.
Adjusted EBITDA, a non-GAAP measure, was $230.0 million compared to $241.9 million in the prior year. The following table represents the contribution to adjusted EBITDA from ongoing propane operations as well as from assets that were sold during 2018.
| (in millions) | Fiscal 2019 | Fiscal 2018 | |||
| Propane Operations and Corporate Support | $230.0 | $227.7 | |||
| Results from Assets Sold in 2018 | - | $14.2 | |||
| Consolidated Adjusted EBITDA | $230.0 | $241.9 | |||
The Company’s propane operations reported that total gallons sold of 904.8 million were 3 percent higher than prior year. Margin cents per gallon were 1.8¢, or 2.4 percent, higher than the prior year despite increased competitive pressures in the tank exchange business. The Company continues its aggressive approach to gaining market share. This strategic focus resulted in over 25,000 new customers, or approximately 4 percent, more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased over 3 percent from prior year to over 55,000 locations. Overall, the increase in sales volume growth and margins per gallon resulted in an increase in gross margin dollars of $21.7 million. The Company’s ongoing commitment to investing in the business led to higher operating expenses during the quarter which were largely associated with serving nearly 25,000 new customers and 1,800 new tank exchange locations.
For the fourth quarter ended July 31, 2019, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $71.0 million, or $0.72 per common unit, reflecting the usual fourth quarter seasonal net loss, compared to prior year period net loss of $215.7 million, or $2.20 per common unit, which included non-cash losses stemming from strategic asset sales. Adjusted EBITDA for the fourth quarter was $4.0 million compared to $8.2 million in the prior year on propane volumes that were 2.9 percent higher than the prior year period. This decrease stemmed from higher legal fees and settlements related to non-core businesses.
As previously announced, the Company indefinitely suspended its quarterly cash distribution as a result of not meeting the required fixed charge coverage ratio contained in the senior unsecured notes due 2020. Additionally, as the Company continues to evaluate options to address leverage, the Company does not intend to comment further on its progress in this regard or on potential options until further disclosure is appropriate or required by law. For that reason, and in view of the information the Company otherwise makes available in earnings releases and quarterly and annual reports, the Company is suspending the practice of holding conference calls with investors, analysts and other interested parties in connection with periodic reporting of financial results for completed periods.
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 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 October 15, 2019. 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, 2019, 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, 2019 | July 31, 2018 | ||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 11,054 | $ | 119,311 | ||||
| Accounts and notes receivable, net (including $160,145 and $120,079 of accounts | ||||||||
| receivable pledged as collateral at July 31, 2019 and July 31, 2018, respectively) | 107,596 | 126,054 | ||||||
| Inventories | 80,454 | 83,694 | ||||||
| Prepaid expenses and other current assets | 42,275 | 34,862 | ||||||
| Total Current Assets | 241,379 | 363,921 | ||||||
| Property, plant and equipment, net | 596,723 | 557,723 | ||||||
| Goodwill, net | 247,195 | 246,098 | ||||||
| Intangible assets, net | 108,557 | 120,951 | ||||||
| Other assets, net | 69,105 | 74,588 | ||||||
| Total Assets | $ | 1,262,959 | $ | 1,363,281 | ||||
| LIABILITIES AND PARTNERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 33,364 | $ | 46,820 | ||||
| Short-term borrowings | 43,000 | 32,800 | ||||||
| Collateralized note payable | 62,000 | 58,000 | ||||||
| Current portion of long-term debt (a) | 631,756 | 2,402 | ||||||
| Other current liabilities | 138,237 | 139,623 | ||||||
| Total Current Liabilities | 908,357 | 279,645 | ||||||
| Long-term debt | 1,457,004 | 2,078,637 | ||||||
| Other liabilities | 36,536 | 39,476 | ||||||
| Contingencies and commitments | ||||||||
| Partners Deficit: | ||||||||
| Common unitholders (97,152,665 units outstanding at July 31, 2019 and July 31, 2018) | (1,046,245 | ) | (978,503 | ) | ||||
| General partner unitholder (989,926 units outstanding at July 31, 2019 and July 31, 2018) | (70,476 | ) | (69,792 | ) | ||||
| Accumulated other comprehensive income (loss) | (14,512 | ) | 20,510 | |||||
| Total Ferrellgas Partners, L.P. Partners' Deficit | (1,131,233 | ) | (1,027,785 | ) | ||||
| Noncontrolling interest | (7,705 | ) | (6,692 | ) | ||||
| Total Partners' Deficit | (1,138,938 | ) | (1,034,477 | ) | ||||
| Total Liabilities and Partners' Deficit | $ | 1,262,959 | $ | 1,363,281 | ||||
| (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 | |||||||||||||||
| July 31 | July 31 | |||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
|||||||||||||
| Revenues: | ||||||||||||||||
| Propane and other gas liquids sales | $ | 264,224 | $ | 296,677 | $ | 1,608,858 | $ | 1,642,976 | ||||||||
| Midstream operations | - | 21,688 | - | 282,319 | ||||||||||||
| Other | 14,857 | 29,156 | 75,534 | 147,847 | ||||||||||||
| Total revenues | 279,081 | 347,521 | 1,684,392 | 2,073,142 | ||||||||||||
| Cost of sales: | ||||||||||||||||
| Propane and other gas liquids sales | 136,460 | 170,562 | 902,516 | 973,414 | ||||||||||||
| Midstream operations | - | 25,849 | - | 255,559 | ||||||||||||
| Other | 2,617 | 14,315 | 11,406 | 68,654 | ||||||||||||
| Gross profit | 140,004 | 136,795 | 770,470 | 775,515 | ||||||||||||
| Operating expense | 117,327 | 120,991 | 468,868 | 471,748 | ||||||||||||
| Depreciation and amortization expense | 19,632 | 25,230 | 78,846 | 101,795 | ||||||||||||
| General and administrative expense | 17,957 | 14,668 | 59,994 | 54,401 | ||||||||||||
| Equipment lease expense | 8,476 | 7,444 | 33,073 | 28,272 | ||||||||||||
| Non-cash employee stock ownership plan compensation charge | 1,005 | 3,128 | 5,693 | 13,859 | ||||||||||||
| Asset impairments | - | - | - | 10,005 | ||||||||||||
| Loss on asset sales and disposals | 2,565 | 140,985 | 10,968 | 187,399 | ||||||||||||
| Operating income (loss) | (26,958 | ) | (175,651 | ) | 113,028 | (91,964 | ) | |||||||||
| Interest expense | (44,688 | ) | (44,612 | ) | (177,619 | ) | (168,467 | ) | ||||||||
| Other income (expense), net | 13 | (494 | ) | 369 | 928 | |||||||||||
| Loss before income tax benefit | (71,633 | ) | (220,757 | ) | (64,222 | ) | (259,503 | ) | ||||||||
| Income tax expense (benefit) | 39 | (2,960 | ) | 323 | (2,678 | ) | ||||||||||
| Net loss | (71,672 | ) | (217,797 | ) | (64,545 | ) | (256,825 | ) | ||||||||
| Net loss attributable to noncontrolling interest (b) | (635 | ) | (2,113 | ) | (298 | ) | (2,244 | ) | ||||||||
| Net loss attributable to Ferrellgas Partners, L.P. | (71,037 | ) | (215,684 | ) | (64,247 | ) | (254,581 | ) | ||||||||
| Less: General partner's interest in net loss | (710 | ) | (2,157 | ) | (642 | ) | (2,546 | ) | ||||||||
| Common unitholders' interest in net loss | $ | (70,327 | ) | $ | (213,527 | ) | $ | (63,605 | ) | $ | (252,035 | ) | ||||
| Loss Per Common Unit | ||||||||||||||||
| Basic and diluted net earnings loss per common unitholders' interest | $ | (0.72 | ) | $ | (2.20 | ) | $ | (0.65 | ) | $ | (2.59 | ) | ||||
| Weighted average common units outstanding - basic | 97,152.7 | 97,152.7 | 97,152.7 | 97,152.7 | ||||||||||||
| Supplemental Data and Reconciliation of Non-GAAP Items: | ||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| July 31 | July 31 | |||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
|||||||||||||
| Net loss attributable to Ferrellgas Partners, L.P. | $ | (71,037 | ) | $ | (215,684 | ) | $ | (64,247 | ) | $ | (254,581 | ) | ||||
| Income tax expense (benefit) | 39 | (2,960 | ) | 323 | (2,678 | ) | ||||||||||
| Interest expense | 44,688 | 44,612 | 177,619 | 168,467 | ||||||||||||
| Depreciation and amortization expense | 19,632 | 25,230 | 78,846 | 101,795 | ||||||||||||
| EBITDA | (6,678 | ) | (148,802 | ) | 192,541 | 13,003 | ||||||||||
| Non-cash employee stock ownership plan compensation charge | 1,005 | 3,128 | 5,693 | 13,859 | ||||||||||||
| Asset impairments | - | - | - | 10,005 | ||||||||||||
| Loss on asset sales and disposal | 2,565 | 140,985 | 10,968 | 187,399 | ||||||||||||
| Other income (expense), net | (13 | ) | 494 | (369 | ) | (928 | ) | |||||||||
| Severance costs $690 included in operating costs for the twelve months ended period July 31, 2019 | ||||||||||||||||
| and $910 included in general and administrative costs for the twelve months ended July 31, 2019. | ||||||||||||||||
| Also includes $358 in operating costs for the twelve months ended period July 31, 2018 | ||||||||||||||||
| and $1,305 included in general and administrative costs for the twelve months ended July 31, 2018. | - | - | 1,600 | 1,663 | ||||||||||||
| Legal fees and settlements related to non-core businesses | 7,721 | 2,658 | 18,364 | 6,065 | ||||||||||||
| Multi-employer pension plan withdrawal settlement | - | - | 1,524 | - | ||||||||||||
| Exit costs associated with contracts - Midstream dispositions | - | 11,804 | - | 11,804 | ||||||||||||
| Unrealized (non-cash) losses on changes in fair value of derivatives $1,293 included in | ||||||||||||||||
| midstream operations cost of sales for the twelve months ended July 31, 2018. | - | - | - | 1,293 | ||||||||||||
| Net loss attributable to noncontrolling interest (b) | (635 | ) | (2,113 | ) | (298 | ) | (2,244 | ) | ||||||||
| Adjusted EBITDA (c) | 3,965 | 8,154 | 230,023 | 241,919 | ||||||||||||
| Net cash interest expense (d) | (41,465 | ) | (45,228 | ) | (164,790 | ) | (160,892 | ) | ||||||||
| Maintenance capital expenditures (e) | (1,736 | ) | (8,532 | ) | (46,774 | ) | (27,617 | ) | ||||||||
| Cash refund from (paid for) taxes | (120 | ) | (167 | ) | (141 | ) | 291 | |||||||||
| Proceeds from certain asset sales | 1,833 | 4,848 | 4,249 | 9,203 | ||||||||||||
| Distributable cash flow attributable to equity investors (f) | (37,523 | ) | (40,925 | ) | 22,567 | 62,904 | ||||||||||
| Distributable cash flow attributable to general partner and non-controlling interest | (751 | ) | (819 | ) | 451 | 1,258 | ||||||||||
| Distributable cash flow attributable to common unitholders (g) | (36,772 | ) | (40,106 | ) | 22,116 | 61,646 | ||||||||||
| Less: Distributions paid to common unitholders | - | 9,715 | 9,715 | 38,861 | ||||||||||||
| Distributable cash flow excess/(shortage) | $ | (36,772 | ) | $ | (49,821 | ) | $ | 12,401 | $ | 22,785 | ||||||
| Propane gallons sales | ||||||||||||||||
| Retail - Sales to End Users | 99,114 | 93,420 | 672,266 | 636,968 | ||||||||||||
| Wholesale - Sales to Resellers | 53,310 | 54,718 | 232,566 | 240,210 | ||||||||||||
| Total propane gallons sales | 152,424 | 148,138 | 904,832 | 877,178 | ||||||||||||
| (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, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, asset impairments, loss on asset sales and disposal, other income (expense), net, severance expense, legal fees and settlements related to non-core businesses, multi-employer pension plan withdrawal settlement, exit costs associated with contracts - Midstream dispositions, unrealized (non-cash) loss on changes in fair value of derivatives, 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 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. 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. |
