OVERLAND PARK, Kan., March 10 /PRNewswire-FirstCall/ -- Ferrellgas
Partners, L.P. (NYSE: FGP), one of the largest distributors of propane, today
reported continuation of fiscal 2009's favorable first-quarter momentum for
the fiscal second quarter ended January 31.
Adjusted EBITDA increased nearly 18 percent to $121.6 million from $103.2
million in the year-ago quarter. The partnership's net income surged 36
percent to $69.7 million, or $1.10 per common unit, versus $51.2 million, or
$0.81 per common unit, the year before. The profit gains were primarily
attributable to sharply improved gross margins and volume increases.
Revenues declined to $715.6 million from $764.0 million in the
year-earlier period, reflecting lower consumer pricing. However, gross profit
rose to a record $243.5 million from $211.0 million, as the cost of propane
and other gas liquids sales decreased 15 percent. Total propane gallon sales
were up nearly 8 percent to 314.0 million compared with 290.7 million the year
before.
Chairman and Chief Executive Officer James E. Ferrell pointed out, "We are
pleased to have achieved impressive results in an extremely difficult
environment, exceeding analysts' mean estimate of $1.06." He noted further,
"With these results, our 12-month Adjusted EBITDA performance has reached $252
million nearing our prior guidance of $255 million for the fiscal year." The
partnership reported Adjusted EBITDA of $222 million for fiscal 2008 and a
record $237 million for fiscal 2007.
President and Chief Operating Officer Steve Wambold explained, "We were
pleased by the increase in propane gallon sales, just as in the first quarter.
Our organic growth initiatives are attracting longer-term, profitable
customers. In addition, we are reaping the benefits of tightening up our
customer service metrics with ongoing focus on operating efficiencies."
Wambold concluded, "Our Blue Rhino brand also had an encouraging quarter,
registering positive comparative store sales. More importantly, Blue Rhino is
well positioned for the selling season later in the year, with more than
43,000 locations, while mining new account opportunities across all classes of
trade."
Commenting on the partnership's recent performance, Chief Financial
Officer Ryan VanWinkle observed, "Not only have we posted record Adjusted
EBITDA for the 12-month period ended January 31, but our distributable cash
flow coverage now exceeds 1.1x representing the best coverage since fiscal
2001." VanWinkle also noted, "In early February we successfully completed an
offering of common units that, along with materially improved earnings, have
significantly reduced our financial leverage providing us with desirable
financial flexibility."
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., serves approximately 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. More information about the partnership can be found online at
www.ferrellgas.com.
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, 2008, and other documents filed from time to time by these entities with
the Securities and Exchange Commission.
Contact:
Tom Colvin, Investor Relations, (913) 661-1530
Scott Brockelmeyer, Media Relations, (913) 661-1830
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS January 31, 2009 July 31, 2008
------ ---------------- -------------
Current Assets:
Cash and cash equivalents $17,206 $16,614
Accounts and notes receivable, net 164,329 145,081
Inventories 116,411 152,301
Price risk management assets - 26,086
Prepaid expenses and other current
assets 26,173 10,924
------ ------
Total Current Assets 324,119 351,006
Property, plant and equipment, net 675,281 685,328
Goodwill 248,939 248,939
Intangible assets, net 219,196 225,273
Other assets, net 22,428 18,685
------ ------
Total Assets $1,489,963 $1,529,231
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities:
Accounts payable $132,866 $71,348
Short term borrowings 27,444 125,729
Price risk management liabilities 90,157 7,337
Other current liabilities (a) 101,482 100,517
------- -------
Total Current Liabilities 351,949 304,931
Long-term debt (a) 1,057,642 1,034,719
Other liabilities 23,358 23,237
Contingencies and commitments -
Minority interest 4,219 4,220
Partners' Capital:
Common unitholders (63,192,503 and
62,961,674 units
outstanding at January 2009 and July
2008, respectively) 201,204 201,618
General partner unitholder
(638,308 and 635,977 units
outstanding at January 2009 and July
2008, respectively) (58,040) (58,036)
Accumulated other comprehensive income
(loss) (90,369) 18,542
------- ------
Total Partners' Capital 52,795 162,124
------ -------
Total Liabilities and Partners'
Capital $1,489,963 $1,529,231
========== ==========
(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, SIX AND TWELVE MONTHS ENDED JANUARY 31, 2009 AND 2008
(in thousands, except per unit data)
(unaudited)
Three months ended Six months ended Twelve months ended
January 31, January 31, January 31,
---- ---- ---- ---- ---- ----
2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ----
Revenues:
Propane
and
other
gas
liquids
sales $647,536 $684,456 $1,084,424 $1,043,391 $2,096,314 $1,873,898
Other 68,089 79,512 111,275 115,493 231,190 238,240
------ ------ ------- ------- ------- -------
Total
revenues 715,625 763,968 1,195,699 1,158,884 2,327,504 2,112,138
Cost of
product
sold:
Propane
and
other
gas
liquids
sales 428,527 504,524 746,272 757,043 1,481,147 1,289,517
Other 43,625 48,422 60,439 59,382 137,535 146,684
------ ------ ------ ------ ------- -------
Gross
profit 243,473 211,022 388,988 342,459 708,822 675,937
Operating
expense 105,710 91,020 201,927 181,479 392,526 372,462
Depreciation
and
amortization
expense 20,219 21,075 41,535 42,440 84,616 86,132
General and
administrative
expense 11,761 11,115 20,847 22,908 43,551 46,730
Equipment
lease
expense 4,781 6,143 10,136 12,494 22,120 25,538
Employee stock
ownership plan
compensation
charge 1,656 3,072 3,405 6,246 9,572 11,891
Loss on
disposal
of assets
and other 4,019 3,680 6,601 6,067 11,784 10,394
----- ----- ----- ----- ------ ------
Operating
income 95,327 74,917 104,537 70,825 144,653 122,790
Interest
expense (23,393) (22,851) (47,063) (45,137) (88,638) (88,381)
Other
income
(expense),
net (343) 181 (1,161) 998 (1,120) 2,253
---- --- ------ --- ------ -----
Earnings
before
income
taxes and
minority
interest 71,591 52,247 56,313 26,686 54,895 36,662
Income tax
expense
(benefit)
- current 1,006 670 737 357 2,112 2,532
Income tax
expense
(benefit)
- deferred 161 (206) 129 (2,381) 860 122
Minority
interest
(a) 772 585 682 412 767 587
--- --- --- --- --- ---
Net
earnings 69,652 51,198 54,765 28,298 51,156 33,421
Net
earnings
available
to general
partner 11,633 3,657 548 283 512 334
------ ----- --- --- --- ---
Net earnings
available to
common
unitholders $58,019 $47,541 $54,217 $28,015 $50,644 $33,087
======= ======= ======= ======= ======= =======
Earnings
Per Unit
---------
Basic and
diluted
net
earnings
available
per
common
unit $0.92 $0.76 $0.86 $0.44 $0.80 $0.53
Dilutive
effect
of EITF
03-6 (b) 0.18 0.05 - - - -
---- ---- -- -- -- --
Adjusted net
earnings per
unit available
to common
unitholders $1.10 $0.81 $0.86 $0.44 $0.80 $0.53
===== ===== ===== ===== ===== =====
Weighted
average
common
units
outstand-
ing 63,192.5 62,958.7 63,122.3 62,958.7 63,041.7 62,956.1
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended Six months ended Twelve months ended
January 31, January 31, January 31,
---- ---- ---- ---- ---- ----
2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ----
Net earnings $69,652 $51,198 $54,765 $28,298 $51,156 $33,421
Income tax
expense
(benefit) 1,167 464 866 (2,024) 2,972 2,654
Interest
expense 23,393 22,851 47,063 45,137 88,638 88,381
Depreciation and
amortization
expense 20,219 21,075 41,535 42,440 84,616 86,132
Other
income
(expense),
net 343 (181) 1,161 (998) 1,120 (2,253)
--- ---- ----- ---- ----- ------
EBITDA 114,774 95,407 145,390 112,853 228,502 208,335
Employee stock
ownership plan
compensation
charge 1,656 3,072 3,405 6,246 9,572 11,891
Unit and stock-
based
compensation
charge (c) 329 450 657 900 1,573 1,123
Loss on
disposal
of
assets
and other 4,019 3,680 6,601 6,067 11,784 10,394
Minority
interest 772 585 682 412 767 587
--- --- --- --- --- ---
Adjusted
EBITDA (d) 121,550 103,194 156,735 126,478 252,198 232,330
Net cash
interest
expense (e) (23,170) (24,115) (46,929) (46,098) (90,612) (90,704)
Maintenance
capital
expenditures
(f) (7,516) (6,344) (12,542) (9,468) (23,668) (16,684)
Cash paid
for taxes (324) (68) (332) (1,279) (2,894) (3,256)
Proceeds
from
asset
sales 2,587 3,312 4,905 6,250 9,529 10,574
----- ----- ----- ----- ----- ------
Distributable
cash flow to
equity
investors (g) $93,127 $75,979 $101,837 $75,883 $144,553 $132,260
======= ======= ======== ======= ======== ========
Propane
gallons
sales
Retail -
Sales to
End Users 245,862 243,389 372,395 362,564 666,663 674,778
Wholesale -
Sales to
Resellers 68,094 47,277 113,770 83,985 211,800 179,691
------ ------ ------- ------ ------- -------
Total
propane
gallons
sales 313,956 290,666 486,165 446,549 878,463 854,469
======= ======= ======= ======= ======= =======
(a) Amounts allocated to the general partner for its 1.0101%
interest in the operating partnership, Ferrellgas, L.P.
(b) Emerging Issues Task Force ("EITF") 03-6 "Participating Securities
and the Two-Class Method under FASB Statement No. 128, Earnings
per Share," requires the calculation of net earnings per limited
partner unit for each period presented according to distributions
declared and participation rights in undistributed earnings,
as if all of the earnings for the period had to be 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 earnings to the limited partners.
Due to the seasonality of the propane business, the dilution
effect of EITF 03-6 on net earnings per limited partner unit
will typically only impact the three months ending January 31.
EITF 03-6 did not have a dilutive effect on the six and twelve
months ended January 31, 2009 and 2008.
(c) 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 $0.1 million and $0.1 million
to operating expense for the three months ended January 31, 2009
and 2008, respectively, $0.2 million and $0.3 million for
the six months ending January 31, 2009 and 2008, respectively,
and $0.5 million and $0.4 million for the twelve months ending
January 31, 2009 and 2008, respectively. A non-cash compensation
charge of $0.2 million and $0.3 million was recorded to general
and administrative expense for the three months ended January 31,
2009 and 2008, respectively, $0.5 million and $0.6 million for the
six months ended January 31, 2009 and 2008, respectively, and
$1.1 million and $0.7 million for the twelve months ended
January 31, 2009 and 2008, respectively,
(d) 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.
(e) Net cash interest expense is the sum of interest expense less
non-cash interest expense and other income (expense), net.
This amount also 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 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.
SOURCE Ferrellgas Partners, L.P.
CONTACT: Investor Relations, Tom Colvin, +1-913-661-1530, or Media
Relations, Scott Brockelmeyer, +1-913-661-1830, both of Ferrellgas Partners,
L.P.
