PRESS RELEASES
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Ferrellgas Partners Reports Record Fourth Quarter And Fiscal 2013 Results

OVERLAND PARK, Kan., Sept. 26, 2013 /PRNewswire/ -- Ferrellgas Partners, L.P. (NYSE:FGP), one of the nation's largest distributors of propane, today reported record Gross Profit, Adjusted EBITDA and Distributable Cash Flow to equity investors for fiscal 2013, as well as for the fiscal fourth quarter.  For both periods, gains were primarily driven by improved margins, increased propane sales volumes and operating efficiencies.

Adjusted EBITDA climbed 41% for the year to a record $272.2 million from $193.1 million the year before.  Distributable Cash Flow to equity investors nearly doubled to a record $183.1 million from $94.4 million, representing cash distribution coverage of 1.13x on all outstanding common units.

Gross profit for the year was up 15% to a record $738.8 million, with margins improving to $0.82 per gallon from $0.73 per gallon in fiscal 2012.  Propane gallon sales increased to 901.4 million from 878.1 million.  Net earnings totaled $55.9 million, or $0.71 per unit, versus a loss of $10.8 million, or $0.14 per unit, in fiscal 2012.

Fourth-quarter results basically mirrored the full year's trends, as Adjusted EBITDA increased 44% to a record $26.0 million; Distributable Cash Flow was a record $2.8 million, versus a loss of $6.5 million in fiscal 2012; gross profit rose 8% to a record $140.4 million; and gross profit margins improved to $0.90 per gallon from $0.86 per gallon. Propane gallon sales rose 3.6% to 156.3 million.  The seasonal net loss was trimmed to $28.5 million, or $0.36 per unit, from $35.2 million, or $0.45 per unit, the year before.

Operating expense for the year rose 2.8% to $410.1 million on increased sales volumes.  Excluding performance-based incentives, on a cost-per-gallon basis, operations were slightly more efficient improving to $0.44 per gallon from $0.45 per gallon, in fiscal 2012.

General and administrative expense for the year rose to $42.0 million from $37.1 million, but excluding performance-based incentives was down $2.4 million.  Equipment lease expense rose to $16.0 million from $14.6 million, in line with expectations.  Interest expense for the year decreased to $89.1 million from $93.3 million, reflecting lower rates.

President and CEO Steve Wambold pointed out, "We are proud to deliver these much improved, yet anticipated results to our investors with our fourth quarter performance marking our third record quarter in the last five.  While it is too early to provide specific guidance for the new fiscal year, we believe that fiscal 2013 demonstrated the impact that executing our strategy can make in a near-normal weather and commodity price environment.  Under similar conditions, we would expect to sustain a similar financial performance. Moreover, we hope that our growth strategy will allow us to build upon these results in the years to come."

Wambold continued, "We will continue to stick to our game plan focusing on profitable growth through organic sales, marketing and acquisitions, while remaining diligent with regard to expense control.  We remain focused on propane acquisitions as well as diversified assets that make sense within our operations.  For example, our acquisition of Mr. Bar-B-Q this year provided measurable financial returns while opening new opportunities for our outdoor living and tank exchange operations."

"Also contributing to our optimism are the steps Blue Rhino has taken to significantly improve its market-leading position with more than 46,000 selling locations," Wambold added.  "Consolidating our Blue Rhino and traditional retail operations has resulted in cost savings and allowed for further cross-marketing of products to consumers.  Further, Blue Rhino mitigates the seasonality of our traditional retail propane business."

Ferrellgas Partners, L.P., through its operating partnership Ferrellgas L.P., serves customers in all 50 states, the District of Columbia and Puerto Rico.  Ferrellgas employees indirectly own more than 21 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, 2013, 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


July 31, 2013


July 31, 2012






Current Assets:





  Cash and cash equivalents


$         6,464


$         8,429

  Accounts and notes receivable, net (including $130,025 and $121,812 of accounts receivable pledged as collateral at July 31, 2013 and July 31, 2012, respectively.





  Inventories


131,791


124,004

  Prepaid expenses and other current assets


117,116


127,598

    Total Current Assets


25,608


29,315



280,979


289,346

Property, plant and equipment, net





Goodwill


589,727


626,551

Intangible assets, net


253,362


248,944

Other assets, net


189,516


189,118

    Total Assets


42,444


43,320



$  1,356,028


$  1,397,279






LIABILITIES AND PARTNERS' DEFICIT










Current Liabilities:





  Accounts payable





  Short-term borrowings


$       49,128


$       47,824

  Collateralized note payable


50,054


95,730

  Other current liabilities


82,000


74,000

    Total Current Liabilities


121,102


122,667



302,284


340,221

Long-term debt (a)





Other liabilities


1,106,940


1,059,085

Contingencies and commitments


33,431


25,499



-


-

Partners' Deficit: 





 Common unitholders (79,072,819 and 79,006,619 units outstanding at July 31, 2013 and July 31, 2012, respectively)





 General partner unitholder (798,715 and 798,047 units outstanding at July 31, 2013 and July 31, 2012, respectively)


(28,931)


43,701

 Accumulated other comprehensive income (loss)


(60,362)


(59,630)

    Total Ferrellgas Partners, L.P. Partners' Deficit


1,697


(13,159)

    Noncontrolling Interest


(87,596)


(29,088)

    Total Partners' Deficit


969


1,562

    Total Liabilities and Partners' Deficit


(86,627)


(27,526)



$  1,356,028


$  1,397,279











(a)

The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $182 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 AND TWELVE MONTHS ENDED JULY 31, 2013 AND 2012

(in thousands, except per unit data)

(unaudited)




Three months ended 


Twelve months ended



July 31


July 31



2013


2012


2013


2012

Revenues:









  Propane and other gas liquids sales


$ 312,504


$ 310,515


$ 1,739,267


$ 2,160,945

  Other


38,169


31,260


236,200


178,147

    Total revenues


350,673


341,775


1,975,467


2,339,092










Cost of product sold:









  Propane and other gas liquids sales


189,161


196,643


1,092,261


1,601,886

  Other


21,108


15,112


144,456


95,323










Gross profit 


140,404


130,020


738,750


641,883



















Operating expense (including $126 and $626 of severance charges for the three and twelve months ended July 31, 2012, respectively)


100,838


100,006


410,059


398,980

Depreciation and amortization expense


20,822


21,002


83,344


83,841

General and administrative expense (including $166 and $429 of serverance charges for the three and twelve months ended July 31, 2012, respectively)


9,631


8,445


42,027


37,116

Equipment lease expense


4,135


3,802


15,983


14,648

Non-cash employee stock ownership plan compensation charge


3,096


2,721


15,769


9,440

Non-cash stock and unit-based compensation charge (a)


5,111


3,976


13,545


8,843

Loss on disposal of assets


4,693


3,983


10,421


6,035










Operating income (loss)


(7,922)


(13,915)


147,602


82,980










Interest expense


(22,007)


(22,350)


(89,145)


(93,254)

Other income, net


48


258


565


506










Earnings (loss) before income taxes


(29,881)


(36,007)


59,022


(9,768)










Income tax expense (benefit)


(821)


(157)


1,855


1,128










Net earnings (loss)


(29,060)


(35,850)


57,167


(10,896)










Net earnings (loss) attributable to noncontrolling interest (b)


(256)


(321)


741


56










Net earnings (loss) attributable to Ferrellgas Partners, L.P.


(28,804)


(35,529)


56,426


(10,952)










Less: General partner's interest in net earnings (loss)


(288)


(356)


564


(110)










Common unitholders' interest in net earnings (loss)


$  (28,516)


$  (35,173)


$      55,862


$     (10,842)










Earnings (loss) Per Unit









Basic and diluted net earnings (loss) per common unitholders' interest


$      (0.36)


$      (0.45)


$          0.71


$         (0.14)










Weighted average common units outstanding


79,071.8


78,992.0


79,038.6


77,572.4



















Supplemental Data and Reconciliation of Non-GAAP Items:












Three months ended 


Twelve months ended



July 31


July 31



2013


2012


2013


2012



















Net earnings (loss) attributable to Ferrellgas Partners, L.P.


$  (28,804)


$  (35,529)


$      56,426


$     (10,952)

  Income tax expense (benefit)


(821)


(157)


1,855


1,128

  Interest expense


22,007


22,350


89,145


93,254

  Depreciation and amortization expense


20,822


21,002


83,344


83,841

EBITDA


13,204


7,666


230,770


167,271

  Non-cash employee stock ownership plan compensation charge


3,096


2,721


15,769


9,440

  Non-cash stock and unit-based compensation charge (a)


5,111


3,976


13,545


8,843

  Loss on disposal of assets


4,693


3,983


10,421


6,035

  Other income, net


(48)


(258)


(565)


(506)

  Severance costs


-


292


-


1,055

  Nonrecurring litigation reserve and related legal fees


230


-


1,568


892

  Net earnings (loss) attributable to noncontrolling interest


(256)


(321)


741


56

Adjusted EBITDA (c)


26,030


18,059


272,249


193,086

  Net cash interest expense (d)


(20,666)


(20,827)


(83,495)


(87,600)

  Maintenance capital expenditures (e)


(4,074)


(4,526)


(15,070)


(16,044)

  Cash paid for taxes


(462)


(664)


(550)


(764)

  Proceeds from asset sales


1,967


1,428


9,980


5,742

Distributable cash flow to equity investors (f)


$     2,795


$    (6,530)


$    183,114


$      94,420





`





Propane gallons sales









  Retail - Sales to End Users


95,235


95,031


637,923


619,318

  Wholesale - Sales to Resellers


61,051


55,841


263,447


258,812

  Total propane gallons sales


156,286


150,872


901,370


878,130




























(a)  Non-cash stock and unit-based compensation charges consist of the following:





Three months ended 


Twelve months ended



July 31


July 31



2013


2012


2013


2012

      Operating expense


$         665


$         795


$          2,391


$          2,747

      General and administrative expense


4,446


3,181


11,154


6,096

      Total


$       5,111


$       3,976


$        13,545


$          8,843

(b)

Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.

(c)

Adjusted EBITDA is calculated as earnings (loss) attributable to Ferrellgas Partners, L.P.  before income tax expense (benefit), interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, non-cash stock and unit-based compensation charge, loss on disposal of assets, other income, net, severance costs, nonrecurring litigation reserve and related legal fees 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, 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.



SOURCE Ferrellgas Partners, L.P.