OVERLAND PARK, Kan., Dec. 10, 2010 /PRNewswire via COMTEX/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the largest distributors of propane, today reported that the seasonal net loss for the fiscal first quarter ended October 31 decreased to $28.3 million, or $0.40 per common unit, from $32.9 million, or $0.47 per common unit, the year before.
President and Chief Executive Officer Steve Wambold explained, "Our first quarter is traditionally slow due to the seasonality of our business; however, a warm start to the heating season delayed sales in the period. Propane sales for the quarter were 168.3 million gallons on temperatures that were 27% warmer than the prior-year period." First-quarter fiscal 2010 propane sales were 179.5 million gallons.
Wambold continued, "We are poised to capitalize on the return of more normal winter weather as our operating metrics remained positive. We have maintained healthy retail margins awaiting seasonal demand, while reducing both operating and general & administrative expenses to $95.4million and $11.3million, respectively. Equipment lease expense also decreased to $3.6 million in the quarter."
Revenues rose 14% to $400.2 million from $352.1 million reflecting increases in wholesale cost of propane, while Adjusted EBITDA declined to $21.6 million from $33.3 million a year ago, the result of warmer temperatures on propane sales.
In the quarter, the partnership announced the issuance of $500 million of 6.5% senior notes due 2021 and the issuance of $30 million in public equity. Proceeds from the transactions are being used to redeem senior debt that was issued at a blended interest rate of 7.3% and to fund both prior-year and ongoing growth initiatives.
Wambold pointed out, "Over the last several years we have been very proactive toward strengthening our balance sheet and improving our liquidity. With these most recent transactions we now have no public debt maturities until 2017 and have ample liquidity to continue our strategic growth initiatives while maintaining our financial leverage."
The partnership previously announced two acquisitions of retail propane operations in the quarter with customers in both Pennsylvania and California.
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, 2010, and other documents filed from time to time by these entities with the Securities and Exchange Commission.
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Contact:
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Tom Colvin, Investor Relations, (913) 661-1530
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Jim Saladin, Media Relations, (913) 661-1833
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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(in thousands, except unit data)
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(unaudited)
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ASSETS
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October 31, 2010
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July 31, 2010
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Current Assets:
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Cash and cash equivalents
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$ 9,633
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$ 11,401
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Accounts and notes receivable, net (including $122,092 and $0 of
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accounts receivable pledged as collateral at October 31, 2010
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and July 31, 2010, respectively)
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167,607
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89,234
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Inventories
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169,818
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166,911
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Prepaid expenses and other current assets
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30,121
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13,842
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Total Current Assets
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377,179
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281,388
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Property, plant and equipment, net
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648,986
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652,768
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Goodwill
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248,939
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248,939
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Intangible assets, net
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218,078
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221,057
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Other assets, net
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37,724
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38,199
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Total Assets
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$ 1,530,906
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$ 1,442,351
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LIABILITIES AND PARTNERS' CAPITAL
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Current Liabilities:
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Accounts payable
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$ 71,358
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$ 48,658
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Short term borrowings
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90,482
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67,203
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Collateralized note payable
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66,000
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-
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Other current liabilities (a)
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126,483
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108,054
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Total Current Liabilities
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354,323
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223,915
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Long-term debt (a)
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1,121,904
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1,111,088
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Other liabilities
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21,421
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21,446
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Contingencies and commitments
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-
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-
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Partners' Capital:
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Common unitholders (69,611,843 and 69,521,818 units
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outstanding at October 31, 2010 and July 31, 2010, respectively)
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85,295
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141,281
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General partner unitholder (703,150 and 702,241 units
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outstanding at October 31, 2010 and July 31, 2010, respectively)
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(59,210)
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(58,644)
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Accumulated other comprehensive income (loss)
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3,961
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(415)
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Total Ferrellgas Partners, L.P. Partners' Capital
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30,046
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82,222
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Noncontrolling Interest
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3,212
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3,680
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Total Partners' Capital
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33,258
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85,902
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Total Liabilities and Partners' Capital
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$ 1,530,906
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$ 1,442,351
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(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $280 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.
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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF EARNINGS
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FOR THE THREE AND TWELVE MONTHS ENDED OCTOBER 31, 2010 AND 2009
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(in thousands, except per unit data)
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(unaudited)
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Three months ended
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Twelve months ended
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October 31
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October 31
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2010
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2009
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2010
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2009
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Revenues:
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Propane and other gas liquids sales
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$ 368,623
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$ 327,666
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$ 1,941,275
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$ 1,720,431
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Other
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31,569
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24,404
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205,907
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220,242
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Total revenues
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400,192
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352,070
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2,147,182
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1,940,673
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Cost of product sold:
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Propane and other gas liquids sales
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256,486
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200,920
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1,313,100
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1,089,698
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Other
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12,858
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6,180
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115,316
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142,219
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Gross profit
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130,848
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144,970
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718,766
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708,756
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Operating expense
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95,396
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96,890
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407,520
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401,408
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Depreciation and amortization expense
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20,375
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20,527
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82,339
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81,705
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General and administrative expense
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11,264
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13,778
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49,258
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46,074
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Equipment lease expense
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3,649
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3,774
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13,316
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16,825
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Employee stock ownership plan compensation charge
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2,444
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2,002
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9,764
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7,008
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Loss (gain) on disposal of assets and other
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(232)
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1,662
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6,591
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12,122
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Operating income (loss)
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(2,048)
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6,337
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149,978
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143,614
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Interest expense
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(26,877)
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(22,695)
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(105,466)
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(88,544)
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Loss on extinguishment of debt
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-
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(17,308)
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(3,408)
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(17,308)
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Other income (expense), net
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178
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307
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(1,237)
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(196)
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Earnings (loss) before income taxes
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(28,747)
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(33,359)
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39,867
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37,566
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Income tax expense (benefit)
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(482)
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(422)
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1,856
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2,171
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Net earnings (loss)
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(28,265)
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(32,937)
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38,011
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35,395
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Net earnings (loss) attributable to noncontrolling interest (a)
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(222)
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(272)
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680
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601
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Net earnings (loss) attributable to Ferrellgas Partners, L.P.
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(28,043)
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(32,665)
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37,331
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34,794
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Less: General partner's interest in net earnings (loss)
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(280)
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(327)
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373
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348
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Common unitholders' interest in net earnings (loss)
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$ (27,763)
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$ (32,338)
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$ 36,958
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$ 34,446
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Earnings (loss) Per Unit
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Basic and diluted net earnings (loss) per common unitholders' interest
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$ (0.40)
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$ (0.47)
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$ 0.53
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$ 0.51
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Weighted average common units outstanding
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69,559.6
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68,507.9
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69,506.8
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66,915.9
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Supplemental Data and Reconciliation of Non-GAAP Items:
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Three months ended
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Twelve months ended
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October 31
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October 31
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2010
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2009
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2010
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2009
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Net earnings (loss) attributable to Ferrellgas Partners, L.P.
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$ (28,043)
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$ (32,665)
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$ 37,331
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$ 34,794
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Income tax expense (benefit)
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(482)
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(422)
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1,856
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2,171
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Interest expense
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26,877
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22,695
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105,466
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88,544
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Depreciation and amortization expense
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20,375
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20,527
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82,339
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81,705
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EBITDA
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18,727
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10,135
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226,992
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207,214
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Loss on extinguishment of debt
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-
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17,308
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3,408
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17,308
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Employee stock ownership plan compensation charge
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2,444
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2,002
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9,764
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7,008
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Unit and stock-based compensation charge (b)
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1,013
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2,751
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6,093
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4,735
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Loss (gain) on disposal of assets and other
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(232)
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1,662
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6,591
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12,122
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Other income (expense), net
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(178)
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(307)
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1,237
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196
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Net earnings (loss) attributable to noncontrolling interest
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(222)
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(272)
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680
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601
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Adjusted EBITDA (c)
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21,552
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33,279
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254,765
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249,184
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Net cash interest expense (d)
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(23,722)
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(21,324)
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(97,312)
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(86,480)
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Maintenance capital expenditures (e)
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(4,412)
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(10,113)
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(14,267)
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(26,853)
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Cash paid for taxes
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(83)
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-
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(1,633)
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(1,504)
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Proceeds from asset sales
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2,078
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1,933
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9,365
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7,814
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Distributable cash flow to equity investors (f)
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$ (4,587)
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$ 3,775
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$ 150,918
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$ 142,161
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Propane gallons sales
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Retail - Sales to End Users
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120,561
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132,474
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669,050
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658,729
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Wholesale - Sales to Resellers
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47,776
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47,074
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242,263
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223,436
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Total propane gallons sales
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168,337
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179,548
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911,313
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882,165
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(a) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
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(b) Unit and stock-based non-cash compensation charges consist of the following:
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Three months ended
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Twelve months ended
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October 31
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October 31
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2010
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2009
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2010
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2009
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Operating expense
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$ 136
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$ 756
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$ 1,533
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$ 1,490
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General and administrative expense
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877
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1,995
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4,560
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3,245
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Total
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$ 1,013
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$ 2,751
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$ 6,093
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$ 4,735
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(c) Management considers Adjusted EBITDA to be a chief measurement of the partnership's overall economic performance. Adjusted EBITDA is calculated as earnings (loss) before income tax expense (benefit), interest expense, depreciation and amortization expense, loss on extinguishment of debt, employee stock ownership plan compensation charge, unit and stock-based compensation charge, loss (gain) on disposal of assets and other, other income (expense), net and net earnings (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 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 corporations and partnerships.
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SOURCE Ferrellgas Partners, L.P.
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