OVERLAND PARK, Kan., June 8, 2009 /PRNewswire-FirstCall via COMTEX/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the largest distributors of propane, today reported Adjusted EBITDA of $82.2 million for the third fiscal quarter ended April 30, compared with $85.1 million the year before for the same fiscal quarter, with the decrease primarily attributable to warmer weather. The partnership pointed out that despite warmer temperatures in the quarter, Adjusted EBITDA approached planned levels.
For the nine months, Adjusted EBITDA increased 13% to $238.9 million from $211.5 million a year ago. "Looking ahead, we anticipate improvement in the fourth fiscal quarter over the year-earlier Adjusted EBITDA of $10.4 million," noted Chairman and Chief Executive Officer James Ferrell. "Consequently, our Adjusted EBITDA target for the full fiscal year, ending July 31, is in the range of $250 million." Adjusted EBITDA last fiscal year was $222 million and was a record $237 million in fiscal 2007.
Mr. Ferrell explained, "In light of the third quarter's weather, which was four percent warmer than normal and five percent warmer than last year, our results were certainly gratifying. Moreover, temperatures in February, the most important month in the quarter, were seven percent warmer than normal and a year ago."
Third quarter revenues decreased 21 percent to $561.1 million from $712.1 million, reflecting the 35 percent decrease in the cost of propane and other gas liquids to $295.9 million from $455.4 million. As such, margins expanded in the quarter significantly, addressing weather impacted propane sales volumes that were off 5 percent to 239.2 million gallons, versus 252.1 million gallons in the prior-year quarter.
President and Chief Operating Officer Steve Wambold pointed out, "Further offsetting the impact of warm weather was our continued tight rein on costs." For instance, during the third fiscal quarter, general and administrative expense and equipment lease expense declined 22 percent and 29 percent, respectively. "In fact, operating income for the quarter was up modestly, to $57.3 million from $57.0 million the year before." Net income for the quarter decreased to $32.9 million or $0.48 per unit, from $35.2 million, or $0.55 per unit.
Commenting on the fourth-quarter outlook, Mr. Wambold emphasized, "Our Blue Rhino brand is expected to be the key driver toward higher earnings. With the grilling season well under way, its initial results have been very encouraging. Blue Rhino's units increased at a double-digit clip during May and is well positioned for further growth, with more than 43,000 locations." He added, "We also expect to continue to benefit from our deeply ingrained cost-control initiatives."
Mr. Wambold concluded, "We are also encouraged by the execution of our commitment to profitable growth, both organically and through acquisitions. Organic growth continues to be fueled by our opening more offices and providing first-class customer service. As far as acquisitions, we are seeing more opportunities, but we will maintain a disciplined approach that demands that those opportunities meet strict criteria."
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
Jim Saladin, Media Relations, (913) 661-1833
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS April 30, 2009 July 31, 2008
------ -------------- -------------
Current Assets:
Cash and cash equivalents $12,691 $16,614
Accounts and notes receivable, net 168,934 145,081
Inventories 109,998 152,301
Price risk management assets 57 26,086
Prepaid expenses and other current assets 14,626 10,924
------ ------
Total Current Assets 306,306 351,006
Property, plant and equipment, net 673,353 685,328
Goodwill 248,939 248,939
Intangible assets, net 214,243 225,273
Other assets, net 18,612 18,685
------ ------
Total Assets $1,461,453 $1,529,231
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities:
Accounts payable $81,991 $71,348
Short term borrowings 41,580 125,729
Price risk management liabilities 33,835 7,337
Other current liabilities (a) 252,086 100,517
------- -------
Total Current Liabilities 409,492 304,931
Long-term debt (a) 848,295 1,034,719
Other liabilities 19,019 23,237
Contingencies and commitments -
Minority interest 5,000 4,220
Partners' Capital:
Common unitholders (68,178,103 and
62,961,674 units outstanding at
April 2009 and July 2008, respectively) 270,972 201,618
General partner unitholder (688,668
and 635,977 units outstanding at
April 2009 and July 2008, respectively) (57,335) (58,036)
Accumulated other comprehensive
income (loss) (33,990) 18,542
------- ------
Total Partners' Capital 179,647 162,124
------- -------
Total Liabilities and Partners' Capital $1,461,453 $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, NINE AND TWELVE MONTHS ENDED APRIL 30, 2009 AND 2008
(in thousands, except per unit data)
(unaudited)
Three months Nine months Twelve months
ended April 30, ended April 30, ended April 30,
---- ---- ---- ---- ---- ----
2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ----
Revenues:
Propane
and other
gas
liquids
sales $461,850 $621,343 $1,546,274 $1,664,734 $1,936,821 $1,963,425
Other 99,283 90,747 210,558 206,240 239,726 236,641
------ ------ ------- ------- ------- -------
Total
revenues 561,133 712,090 1,756,832 1,870,974 2,176,547 2,200,066
Cost of
product sold:
Propane
and other
gas
liquids
sales 295,881 455,375 1,042,153 1,212,418 1,321,653 1,403,299
Other 75,714 61,850 136,153 121,232 151,399 136,416
------ ------ ------- ------- ------- -------
Gross
profit 189,538 194,865 578,526 537,324 703,495 660,351
Operating
expense 94,993 93,349 296,920 274,828 394,170 368,442
Depreci-
ation
and
amortiz-
ation
expense 20,635 21,443 62,170 63,883 83,808 85,330
General
and
admini-
strative
expense 8,520 10,947 29,367 33,855 41,124 45,848
Equipment
lease
expense 4,282 5,990 14,418 18,484 20,412 24,853
Employee
stock
ownership
plan
compen-
sation
charge 1,460 3,447 4,865 9,693 7,585 12,617
Loss on
disposal
of assets
and other 2,323 2,662 8,924 8,729 11,445 9,959
----- ----- ----- ----- ------ -----
Operating
income 57,325 57,027 161,862 127,852 144,951 113,302
Interest
expense (22,027) (21,214) (69,090) (66,351) (89,451) (88,061)
Other
income
(expense),
net (190) 350 (1,351) 1,348 (1,660) 1,622
---- --- ------ ----- ------ -----
Earnings
before
income
taxes and
minority
interest 35,108 36,163 91,421 62,849 53,840 26,863
Income tax
expense -
current 1,572 243 2,309 600 3,441 575
Income tax
expense
(benefit)
- deferred 275 329 404 (2,052) 806 899
Minority
interest (a) 397 420 1,079 832 744 499
--- --- ----- --- --- ---
Net earnings 32,864 35,171 87,629 63,469 48,849 24,890
Net earnings
available
to general
partner 329 352 876 635 488 249
--- --- --- --- --- ---
Net earnings
available
to common
unit-
holders $32,535 $34,819 $86,753 $62,834 $48,361 $24,641
======= ======= ======= ======= ======= =======
Earnings
Per Unit
---------
Basic and
diluted
net earnings
available
per common
unit $0.48 $0.55 $1.34 $1.00 $0.75 $0.39
Weighted
average
common
units
out-
standing 67,809.3 62,958.9 64,650.2 62,958.7 64,224.6 62,958.1
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months Nine months Twelve months
ended April 30, ended April 30, ended April 30,
---- ---- ---- ---- ---- ----
2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ----
Net earnings $32,864 $35,171 $87,629 $63,469 $48,849 $24,890
Income tax
expense
(benefit) 1,847 572 2,713 (1,452) 4,247 1,474
Interest
expense 22,027 21,214 69,090 66,351 89,451 88,061
Depreciation
and
amortization
expense 20,635 21,443 62,170 63,883 83,808 85,330
Other
income
(expense),
net 190 (350) 1,351 (1,348) 1,660 (1,622)
--- ---- ----- ------ ----- ------
EBITDA 77,563 78,050 222,953 190,903 228,015 198,133
Employee
stock
ownership
plan
compensation
charge 1,460 3,447 4,865 9,693 7,585 12,617
Unit and
stock-based
compensation
charge (b) 452 483 1,109 1,383 1,542 1,107
Loss on
disposal of
assets and
other 2,323 2,662 8,924 8,729 11,445 9,959
Minority
interest 397 420 1,079 832 744 499
--- --- ----- --- --- ---
Adjusted
EBITDA (c) 82,195 85,062 238,930 211,540 249,331 222,315
Net cash
interest
expense (d) (21,547) (22,098) (68,476) (68,196) (90,061) (90,351)
Maintenance
capital
expenditures
(e) (4,785) (5,590) (17,327) (15,058) (22,863) (18,248)
Cash paid
for taxes (537) (48) (869) (1,327) (3,383) (2,192)
Proceeds
from asset
sales 1,973 2,415 6,878 8,665 9,087 11,426
----- ----- ----- ----- ----- ------
Distributable
cash flow to
equity
investors (f) $57,299 $59,741 $159,136 $135,624 $142,111 $122,950
======= ======= ======== ======== ======== ========
Propane gallons
sales
Retail -
Sales to
End Users 183,683 204,683 556,078 567,247 645,663 658,808
Wholesale -
Sales to
Resellers 55,523 47,427 169,293 131,412 219,896 176,350
------ ------ ------- ------- ------- -------
Total propane
gallons
sales 239,206 252,110 725,371 698,659 865,559 835,158
======= ======= ======= ======= ======= =======
(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 April 30, 2009 and 2008,
respectively, $0.4 million and $0.4 million for the nine months
ending April 30, 2009 and 2008, respectively, and $0.5 million and
$0.4 million for the twelve months ending April 30, 2009 and 2008,
respectively. A non-cash compensation charge of $0.3 million and $0.3
million was recorded to general and administrative expense for the
three months ended April 30, 2009 and 2008, respectively, $0.7
million and $1.0 million for the nine months ended April 30, 2009 and
2008, respectively, and $1.0 million and $0.7 million
for the twelve months ended April 30, 2009 and 2008, 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 other income (expense), net. 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.
SOURCE Ferrellgas Partners, L.P.
