OVERLAND PARK, Kan., June 9, 2010 /PRNewswire via COMTEX/ --Ferrellgas Partners, L.P. (NYSE: FGP), one of the largest distributors of propane, today reported third-quarter Adjusted EBITDA of $88.2 million, an increase of 7.2% over $82.2 million the year before. Contributing to the improved performance was higher gross profit on continued strength of propane gallon sales and margins.
Propane gallon sales rose 3.5% to 247.5 million, which marks the fourth consecutive quarter of year-over-year volume gains. Retail and wholesale sales both were up, 2.7% and 6.1%, respectively.
Third-quarter revenues totaled $615.3 million, compared with $561.1 million the year before. Gross profit increased 10.2% to $208.8 million from $189.5 million, while operating income improved to $60.9 million from $57.3 million. Third-quarter net earnings declined to $28.6 million, or $0.41 per unit, from $32.5 million, or $0.48 per unit the year before reflecting the one-time impact of debt prepayment premiums paid in the quarter associated with the refinancing of Ferrellgas Partners' long-term debt due 2020.
Distributable cash flow was up nearly 2% over year-earlier levels, continuing fiscal 2010's positive momentum. For the nine months, distributable cash flow increased nearly 5%.
President and Chief Executive Officer Steve Wambold commented, "We are quite pleased with our third-quarter results, which reflect strong, underlying fundamentals. Despite the ongoing impact of a sluggish economy and customer conservation, we have continued to gain market share. We have also had to contend with unfavorable weather, as temperatures in the quarter were 3% warmer than the prior year in the markets we serve."
Wambold continued, "We are maintaining a tight rein on costs. While general & administrative expense increased this quarter, it is solely due to the timing of performance-based incentive accruals which will be materially offset in the upcoming fourth quarter. Lastly, we remain quite encouraged by the continuing reduction in equipment leasing expense, which declined nearly 24%."
Turning to the fourth-quarter outlook, Wambold noted, "It's important to point out that last year's fourth quarter was exceptionally strong. Even so, we continue to forecast record Adjusted EBITDA for the full year, exceeding fiscal 2009's record $251.1 million." He added, "Our market-leading Blue Rhino brand is off to a solid start for the all-important grilling season, posting record unit sales in April."
Wambold concluded, "Our entire management team remains committed to profitable growth, both organically and through acquisitions. Our organic growth strategy has demonstrated its effectiveness. And, we continue to be alert for attractive acquisition opportunities, but we will not alter our disciplined approach that demands candidates 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, 2009, the Form 10-Q of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal quarter ended April 30, 2010, and other documents filed from time to time by these entities with the Securities and Exchange Commission.
On September 28, 2009 Ferrellgas Partners, L.P. filed its annual report for the fiscal year ended July 31, 2009 on Form 10-K with the SEC. This annual report is available to security holders and other interested parties at no charge on our website at www.ferrellgas.com and is also available in print to any security holder or other interested parties who requests it from our investor relations department free of charge.
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)
April 30, July 31,
ASSETS 2010 2009
------ ---------- ---------
Current Assets:
Cash and cash equivalents $10,591 $7,066
Accounts and notes receivable, net 135,872 106,910
Inventories 139,540 129,808
Prepaid expenses and other current assets 18,689 15,031
Total Current Assets 304,692 258,815
Property, plant and equipment, net 665,068 666,535
Goodwill 248,939 248,939
Intangible assets, net 226,400 212,037
Other assets, net 37,817 18,651
Total Assets $1,482,916 $1,404,977
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities:
Accounts payable $70,540 $49,337
Short term borrowings 32,847 66,159
Other current liabilities (a) 93,033 108,763
Total Current Liabilities 196,420 224,259
Long-term debt (a) 1,104,059 1,010,073
Other liabilities 21,098 19,300
Contingencies and commitments - -
Partners' Capital:
Common unitholders (69,521,818 and
68,236,755 units
outstanding at 2010 and 2009,
respectively) 210,254 206,255
General partner unitholder (702,241 and
689,260 units
outstanding at 2010 and 2009,
respectively) (57,948) (57,988)
Accumulated other comprehensive income
(loss) 4,252 (1,194)
----- ------
Total Ferrellgas Partners, L.P. Partners'
Capital 156,558 147,073
Noncontrolling Interest 4,781 4,272
Total Partners' Capital 161,339 151,345
Total Liabilities and Partners' Capital $1,482,916 $1,404,977
========== ==========
(a) The principal difference between the Ferrellgas Partners, L.P.
balance sheet and that of Ferrellgas, L.P., is $34.2 million of 8
3/4% notes and $280 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
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE, NINE AND TWELVE MONTHS ENDED APRIL 30, 2010 AND 2009
(in thousands, except per unit data)
(unaudited)
Three months ended Nine months ended
April 30, April 30,
--------- ---------
2010 2009 2010 2009
Revenues:
Propane and other
gas liquids sales $536,024 $461,850 $1,588,038 $1,546,274
Other 79,266 99,283 157,174 210,558
Total revenues 615,290 561,133 1,745,212 1,756,832
Cost of product
sold:
Propane and other
gas liquids sales 355,316 295,881 1,060,216 1,042,153
Other 51,132 75,714 82,520 136,153
Gross profit 208,842 189,538 602,476 578,526
Operating expense 106,560 94,993 308,000 296,920
Depreciation and
amortization
expense 20,848 20,635 62,022 62,170
General and
administrative
expense 11,893 8,520 37,017 29,367
Equipment lease
expense 3,259 4,282 10,160 14,418
Employee stock
ownership plan
compensation charge 2,698 1,460 6,961 4,865
Loss on disposal of
assets and other 2,696 2,323 5,480 8,924
Operating income 60,888 57,325 172,836 161,862
Interest expense (25,933) (22,027) (74,844) (69,090)
Debt prepayment
premiums (3,408) - (20,716) -
Other income
(expense), net (529) (190) (1,085) (1,351)
Earnings before
income taxes 31,018 35,108 76,191 91,421
Income tax expense 1,754 1,847 2,006 2,713
Net earnings 29,264 33,261 74,185 88,708
Net earnings
attributable to
noncontrolling
interest (a) 401 397 976 1,079
Net earnings
attributable to
Ferrellgas
Partners, L.P. 28,863 32,864 73,209 87,629
Less: General
partner's interest
in net earnings 289 329 732 876
Common unitholders'
interest in net
earnings $28,574 $32,535 $72,477 $86,753
Earnings Per Unit
-----------------
Basic and diluted
net earnings per
common unitholders'
interest $0.41 $0.48 $1.05 $1.34
Weighted average
common units
outstanding 69,495.2 67,809.3 69,147.4 64,650.2
Twelve months ended
April 30,
---------
2010 2009
Revenues:
Propane and other gas liquids sales $1,871,417 $1,936,821
Other 186,485 239,726
Total revenues 2,057,902 2,176,547
Cost of product sold:
Propane and other gas liquids sales 1,225,431 1,321,653
Other 99,220 151,399
Gross profit 733,251 703,495
Operating expense 411,815 394,170
Depreciation and amortization expense 82,346 83,808
General and administrative expense 49,032 41,124
Equipment lease expense 14,148 20,412
Employee stock ownership plan compensation
charge 8,851 7,585
Loss on disposal of assets and other 9,598 11,445
Operating income 157,461 144,951
Interest expense (95,273) (89,451)
Debt prepayment premiums (20,716) -
Other income (expense), net (1,055) (1,660)
Earnings before income taxes 40,417 53,840
Income tax expense 1,585 4,247
Net earnings 38,832 49,593
Net earnings attributable to noncontrolling
interest (a) 680 744
Net earnings attributable to Ferrellgas
Partners, L.P. 38,152 48,849
Less: General partner's interest in net
earnings 382 488
Common unitholders' interest in net earnings $37,770 $48,361
Earnings Per Unit
-----------------
Basic and diluted net earnings per common
unitholders' interest $0.55 $0.75
Weighted average common units outstanding 68,904.3 64,224.6
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended Nine months ended
April 30, April 30,
--------- ---------
2010 2009 2010 2009
---- ---- ---- ----
Net earnings
attributable to
Ferrellgas
Partners, L.P. $28,863 $32,864 $73,209 $87,629
Income tax expense 1,754 1,847 2,006 2,713
Interest expense 25,933 22,027 74,844 69,090
Debt prepayment
premiums 3,408 - 20,716 -
Depreciation and
amortization
expense 20,848 20,635 62,022 62,170
Other income
(expense), net 529 190 1,085 1,351
--- --- ----- -----
EBITDA 81,335 77,563 233,882 222,953
Employee stock
ownership plan
compensation charge 2,698 1,460 6,961 4,865
Unit and stock-
based compensation
charge (b) 1,024 452 4,188 1,109
Loss on disposal of
assets and other 2,696 2,323 5,480 8,924
Net earnings
attributable to
noncontrolling
interest 401 397 976 1,079
Adjusted EBITDA (c) 88,154 82,195 251,487 238,930
Net cash interest
expense (d) (26,422) (21,547) (73,101) (68,476)
Maintenance capital
expenditures (e) (4,174) (4,785) (15,583) (17,327)
Cash paid for taxes (610) (537) (942) (869)
Proceeds from asset
sales 1,436 1,973 4,597 6,878
Distributable cash
flow to equity
investors (f) $58,384 $57,299 $166,458 $159,136
======= ======= ======== ========
Propane gallons
sales
Retail -Sales to
End Users 188,630 183,683 590,905 556,078
Wholesale -Sales to
Resellers 58,916 55,523 189,872 169,293
Total propane
gallons sales 247,546 239,206 780,777 725,371
======= ======= ======= =======
Twelve months ended
April 30,
---------
2010 2009
---- ----
Net earnings attributable to Ferrellgas
Partners, L.P. $38,152 $48,849
Income tax expense 1,585 4,247
Interest expense 95,273 89,451
Debt prepayment premiums 20,716 -
Depreciation and amortization expense 82,346 83,808
Other income (expense), net 1,055 1,660
----- -----
EBITDA 239,127 228,015
Employee stock ownership plan compensation
charge 8,851 7,585
Unit and stock-based compensation charge (b) 5,391 1,542
Loss on disposal of assets and other 9,598 11,445
Net earnings attributable to noncontrolling
interest 680 744
Adjusted EBITDA (c) 263,647 249,331
Net cash interest expense (d) (93,540) (90,061)
Maintenance capital expenditures (e) (20,022) (22,863)
Cash paid for taxes (1,585) (3,383)
Proceeds from asset sales 5,918 9,087
Distributable cash flow to equity investors (f) $154,418 $142,111
======== ========
Propane gallons sales
Retail - Sales to End Users 687,615 645,663
Wholesale - Sales to Resellers 242,617 219,896
Total propane gallons sales 930,232 865,559
======= =======
(a) Amounts allocated to the general partner for its 1.0101%
interest in the operating partnership, Ferrellgas, L.P.
(b) FASB guidance relating to stock compensation 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 $0.3
million and $0.2 million to operating expense for the three months
ended April 30, 2010 and 2009, respectively, $1.2 million and $0.4
million to operating expense for the nine months ended April 30,
2010 and 2009, respectively, and $1.6 million and $0.5 million to
operating expense for the twelve months ended April 30, 2010 and
2009, respectively. A non-cash compensation charge of $0.7 million
and $0.3 million was recorded to general and administrative expense
for the three months ended April 30, 2010 and 2009, respectively,
$3.0 million and $0.7 million to general and administrative expense
for the nine months ended April 30, 2010 and 2009, respectively, and
$3.8 million and $1.0 million to general and administrative expense
for the twelve months ended April 30, 2010 and 2009, 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 expense, income tax expense, depreciation and amortization
expense, employee stock ownership plan compensation charge, unit and
stock-based compensation charge, loss on disposal of assets and
other, net earnings attributable to noncontrolling interest, and
other income (expense), net. 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. In addition, management
believes this measure is consistent with the manner in which the
partnership's lenders and investors measure its overall performance
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 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 entities.
SOURCE Ferrellgas Partners, L.P.
