OVERLAND PARK, Kan., Dec. 6 /PRNewswire-FirstCall/ -- Ferrellgas Partners,
L.P. (NYSE: FGP), one of the nation's largest propane distributors, today
reported record Adjusted EBITDA and gross profit, as well as a 22% improvement
in the seasonal net loss for the first fiscal quarter of 2008 ended October
31.
Adjusted EBITDA rose 18% to a record $23.3 million versus $19.7 million in
the year-earlier quarter. Gross profit was also a record, increasing to
$131.4 million from $127.1 million in the prior year's quarter.
The seasonal net loss for the fiscal quarter improved to $22.9 million
from $29.5 million in fiscal first quarter of 2007. Due to the seasonal
nature of the propane industry, the partnership has historically experienced a
net loss during its fiscal first quarter as fixed costs exceed off-season cash
flow.
This improved performance reflects the partnership's continued margin
improvement, which offset the impact from unseasonably warm temperatures and
customer reaction to historically high wholesale propane costs on propane
sales volumes. Fiscal first quarter propane sales were 141 million gallons,
compared to 161 million gallons sold in the fiscal first quarter of 2007, with
October temperatures 24% warmer than normal and 33% warmer than experienced in
October 2006.
"Despite the warm start to the winter heating season, we are very pleased
by our strong fiscal first quarter performance, building nicely upon our
record fiscal 2007 results," said Steve Wambold, President and Chief Operating
Officer. "We have remained focused on improving both our customer service
offering and profitability and believe we are well positioned for this winter
heating season."
Operating expense for the fiscal first quarter was $90.5 million, as
compared to $90.0 million and general and administrative expense was $11.8
million, as compared to $11.1 million, each as compared to the first fiscal
quarter of 2007. Equipment lease expense for the fiscal first quarter was
$6.4 million, down from $6.6 million in the fiscal first quarter of 2007.
The net loss for the fiscal first quarter was positively impacted with the
passage in September of an amendment to the newly implemented Michigan
Business Tax. The financial impact of this change in state tax law was a
reversal of a $2.8 million non-cash charge to earnings previously recognized
in the partnership's fiscal fourth quarter 2007 results.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., serves more than one million customers in all 50 states, the District of
Columbia and Puerto Rico. Ferrellgas employees indirectly own more than 20
million common units of the partnership through an employee stock ownership
plan.
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 are 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, 2007, and other documents filed from time to time by these entities with
the Securities and Exchange Commission.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS October 31, 2007 July 31, 2007
Current Assets:
Cash and cash equivalents $17,091 $20,685
Accounts and notes receivable, net 124,302 118,320
Inventories 176,571 113,807
Prepaid expenses and other current assets 24,967 16,772
Total Current Assets 342,931 269,584
Property, plant and equipment, net 705,261 720,190
Goodwill 249,212 249,481
Intangible assets, net 240,941 246,283
Other assets, net 20,362 17,865
Total Assets $1,558,707 $1,503,403
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $75,421 $62,103
Short term borrowings 136,613 57,779
Other current liabilities (a) 122,143 107,199
Total Current Liabilities 334,177 227,081
Long-term debt (a) 1,012,941 1,011,751
Other liabilities 23,184 22,795
Contingencies and commitments - -
Minority interest 4,658 5,119
Partners' Capital:
Common unitholders (62,958,674 and
62,957,674 units outstanding at
October 2007 and July 2007, respectively) 238,495 289,075
General partner unitholder (635,946
and 635,936 units outstanding at
October 2007 and July 2007, respectively) (57,665) (57,154)
Accumulated other comprehensive income 2,917 4,736
Total Partners' Capital 183,747 236,657
Total Liabilities and Partners'
Capital $1,558,707 $1,503,403
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., is $268 million of 8 3/4% notes
which are liabilities of Ferrellgas Partners, L.P. and not of
Ferrellgas, L.P.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2007 AND 2006
(in thousands, except per unit data)
(unaudited)
Three months ended October 31,
2007 2006
Revenues:
Propane and other gas liquids sales $358,935 $344,919
Other 35,981 31,494
Total revenues 394,916 376,413
Cost of product sold:
Propane and other gas liquids sales 252,519 234,686
Other 10,960 14,620
Gross profit 131,437 127,107
Operating expense 90,459 90,011
Depreciation and amortization expense 21,365 21,656
General and administrative expense 11,793 11,085
Equipment lease expense 6,351 6,644
Employee stock ownership plan compensation
charge 3,174 2,841
Loss on disposal of assets and other 2,387 3,003
Operating loss (4,092) (8,133)
Interest expense (22,286) (22,380)
Interest income 817 970
Loss before income taxes and minority
interest (25,561) (29,543)
Income tax benefit - current (311) (19)
Income tax expense (benefit) - deferred (g) (2,177) 229
Minority interest (a) (173) (240)
Net loss (22,900) (29,513)
Net loss available to general partner (229) (295)
Net loss available to common
unitholders $(22,671) $(29,218)
Earnings Per Unit
Basic and diluted net loss available
per common unit $(0.36) $(0.47)
Weighted average common units
outstanding 62,958.7 62,238.5
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended October 31,
2007 2006
Propane gallons 141,145 161,245
Net loss $(22,900) $(29,513)
Income tax expense (benefit) (2,488) 210
Interest expense 22,286 22,380
Depreciation and amortization
expense 21,365 21,656
Interest income (817) (970)
EBITDA 17,446 13,763
Employee stock ownership plan
compensation charge 3,174 2,841
Unit and stock-based compensation
charge (b) 450 333
Loss on disposal of assets and
other 2,387 3,003
Minority interest (173) (240)
Adjusted EBITDA (c) 23,284 19,700
Net cash interest expense (d) (21,983) (21,920)
Maintenance capital expenditures
(e) (3,124) (3,984)
Cash paid for taxes (1,211) (1,765)
Distributable cash flow to equity
investors (f) $(3,034) $(7,969)
(a) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(b) Statement of Financial Accounting Standards ("SFAS") No. 123(R),
"Share-Based Payment" requires that the cost resulting from all
share- based payment transactions be recognized in the financial
statements. Share-based payment transactions resulted in a non-cash
compensation charge of $0.2 million and $0.1 million to operating
expense for the three months ended October 31, 2007 and 2006,
respectively. A non-cash compensation charge of $0.3 million and $0.2
million was recorded to general and administrative expense for the
three months ended October 31, 2007 and 2006, respectively.
(c) Management considers Adjusted EBITDA to be a chief measurement of the
partnership's overall economic performance and return on invested
capital. Adjusted EBITDA is calculated as earnings before interest,
income taxes, depreciation and amortization, employee stock ownership
plan compensation charge, unit and stock-based compensation charge,
loss on disposal of assets and other, minority interest, and other
non-cash and non- operating charges. 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
are unusual or non-recurring, and makes it easier to compare its
results with other companies that have different financing and
capital structures. In addition, management believes this measure is
consistent with the manner in which the partnership's lenders and
investors measure its overall performance and liquidity, including
its ability to pay quarterly equity distributions, service its
long-term debt and other fixed obligations and fund its capital
expenditures and working capital requirements. 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 interest income. This amount also
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) 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 common unitholders. Distributable
cash flow to equity investors, as management defines it, may not be
comparable to distributable cash flow or similarly titled measures
used by other corporations and partnerships.
(g) During the fourth quarter of fiscal 2007 the governor of the state of
Michigan signed into law a new Michigan Business Tax. The passing of
this new tax law caused Ferrellgas to recognize a one time deferred
tax expense of $2.8 million during fiscal 2007. During the first
quarter of fiscal 2008 a credit for this deferred tax expense was
created by a new Michigan tax law. The passing of this new tax law
caused Ferrellgas to recognize a one time deferred tax credit during
fiscal 2008.
SOURCE Ferrellgas Partners, L.P.
CONTACT: Ryan VanWinkle, Investor Relations, +1-913-661-1528, or Scott
Brockelmeyer, Media Relations, +1-913-661-1830, both of Ferrellgas Partners,
L.P.
