Attached files

file filename
8-K - 8-K - FERRELLGAS PARTNERS L Pa12-21987_18k.htm

Exhibit 99.1

 

FERRELLGAS PARTNERS REPORTS RECORD FOURTH-QUARTER RESULTS;

BALANCED GROSS PROFIT IMPROVEMENT WITH SIGNIFICANT EXPENSE SAVINGS DRIVING PERFORMANCE

 

OVERLAND PARK, KAN., October 1, 2012/PR Newswire/ — Ferrellgas Partners, L.P. (NYSE:FGP), one of the nation’s largest distributors of propane, today reported record fiscal fourth quarter results for the period ended July 31, 2012.  The partnership’s Adjusted EBITDA rose 78% to a record $18.1 million from $10.1 million in the year-earlier quarter.

 

Propane sales increased modestly to 150.9 million gallons from 150.5 million gallons while gross profit increased 3% to a near record $130.0 million, as compared to $126.3 million achieved in the year ago period.  The results were achieved despite temperatures in the fiscal quarter that were 38% warmer than experienced in the prior year period.

 

President and Chief Executive Officer Steve Wambold explained, “Our fourth-quarter results highlight our ongoing efforts to both drive profitable growth and manage expenses in this highly competitive operating environment.  We remain committed to driving significant cost savings throughout our operations providing both the opportunity to be more competitive for new business and provide immediate financial returns for investors.”  Wambold indicated that the previously announced cost savings goal of $20 million would likely be surpassed by the end of fiscal 2013.

 

As expected, fourth-quarter revenues declined to $341.8 million from $449.7 million the year before attributable primarily to sharply lower wholesale propane costs. General and administrative expense declined nearly 35% to $8.4 million from $12.9 million the year before while operating expense was practically unchanged at $100.0 million on modestly increased sales volumes. Equipment lease expense rose slightly to $3.8 million from $3.6 million while

 

-more-

 



 

interest expense improved nearly 6% to $22.4 million from $23.7 million.  The fourth-quarter seasonal net loss improved to $35.9 million, or $0.45 per common unit from $41.3 million, or $0.53 per common unit in the prior year quarter.

 

Commenting further on the outlook for fiscal 2013, Wambold noted, “We expect a continuation of our organic gallon growth. In addition, the opportunities for acquisitions seem to be heating up after a lull. Last month Ferrellgas strengthened its presence in California with the acquisition of Capitol City Propane in Sacramento.

 

For the fiscal year, propane sales volumes declined 2% to 878 million gallons sold despite temperatures that were 18% warmer than experienced in fiscal 2011.  Revenues totaled $2.3 billion, compared with $2.4 billion in fiscal 2011 while gross profit declined 7% to $641.9 million on lesser sales volumes and margins.  General and administrative decreased 29% to $37.1 million (including a $10.0 million litigation reserve recorded in the prior year quarter)  while operating expenses decreased 2% to $399.0 million, matching prior year distribution costs on a cent per gallon sold basis.  Equipment lease expense of $14.6 million was materially unchanged from year-ago levels. Interest expense declined more than 8% to $93.3 million. The net loss for the fiscal year improved to $10.9 million, or $0.14 per unit, versus $43.8 million, or $0.60 per unit.

 

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 21.7 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

 

-more-

 



 

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, 2012, 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)

 

 

 

July 31, 2012

 

July 31, 2011

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

8,429

 

$

7,437

 

Accounts and notes receivable, net (including $121,812 and $112,509 of accounts receivable pledged as collateral at July 31, 2012 and July 31, 2011, respectively)

 

124,004

 

159,532

 

Inventories

 

127,598

 

136,139

 

Prepaid expenses and other current assets

 

29,315

 

23,885

 

Total Current Assets

 

289,346

 

326,993

 

 

 

 

 

 

 

Property, plant and equipment, net

 

626,551

 

642,205

 

Goodwill

 

248,944

 

248,944

 

Intangible assets, net

 

189,118

 

204,136

 

Other assets, net

 

43,320

 

38,308

 

Total Assets

 

$

1,397,279

 

$

1,460,586

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL(DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

47,824

 

$

67,541

 

Short-term borrowings

 

95,730

 

64,927

 

Collateralized note payable

 

74,000

 

61,000

 

Other current liabilities

 

122,667

 

104,813

 

Total Current Liabilities

 

340,221

 

298,281

 

 

 

 

 

 

 

Long-term debt (a)

 

1,059,085

 

1,050,920

 

Other liabilities

 

25,499

 

23,068

 

Contingencies and commitments

 

 

 

 

 

 

 

 

 

Partners’ Capital(Deficit):

 

 

 

 

 

Common unitholders (79,006,619 and 75,966,353 units outstanding at July 31, 2012 and July 31, 2011, respectively)

 

43,701

 

139,614

 

General partner unitholder (798,047 and 767,337 units outstanding at July 31, 2012 and July 31, 2011, respectively)

 

(59,630

)

(58,660

)

Accumulated other comprehensive income (loss)

 

(13,159

)

4,633

 

Total Ferrellgas Partners, L.P. Partners’ Capital(Deficit)

 

(29,088

)

85,587

 

Noncontrolling Interest

 

1,562

 

2,730

 

Total Partners’ Capital(Deficit)

 

(27,526

)

88,317

 

Total Liabilities and Partners’ Capital(Deficit)

 

$

1,397,279

 

$

1,460,586

 

 


(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, 2012 AND 2011

(in thousands, except per unit data)

(unaudited)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

July 31

 

July 31

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenues:

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

$

310,515

 

$

421,746

 

$

2,160,945

 

$

2,212,257

 

Other

 

31,260

 

27,912

 

178,147

 

210,958

 

Total revenues

 

341,775

 

449,658

 

2,339,092

 

2,423,215

 

 

 

 

 

 

 

 

 

 

 

Cost of product sold:

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

196,643

 

310,341

 

1,601,886

 

1,609,344

 

Other

 

15,112

 

13,038

 

95,323

 

124,470

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

130,020

 

126,279

 

641,883

 

689,401

 

 

 

 

 

 

 

 

 

 

 

Operating expense (including $126 and $626 of non-recurring severance charges for the three and twelve month periods ended July 31, 2012, respectively)

 

100,006

 

100,646

 

398,980

 

407,281

 

Depreciation and amortization expense

 

21,002

 

22,091

 

83,841

 

82,486

 

General and administrative expense (including $166 and $429 of non-recurring severance charges for the three and twelve month periods ended July 31, 2012, respectively)

 

8,445

 

12,889

 

37,116

 

52,160

 

Equipment lease expense

 

3,802

 

3,593

 

14,648

 

14,435

 

Non-cash employee stock ownership plan compensation charge

 

2,721

 

2,190

 

9,440

 

10,157

 

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

 

3,976

 

(221

)

8,843

 

13,488

 

Loss on disposal of assets and other

 

3,983

 

2,799

 

6,035

 

3,633

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(13,915

)

(17,708

)

82,980

 

105,761

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(22,350

)

(23,680

)

(93,254

)

(101,885

)

Loss on extinguishment of debt

 

 

 

 

(46,962

)

Other income, net

 

258

 

58

 

506

 

567

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(36,007

)

(41,330

)

(9,768

)

(42,519

)

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

(157

)

(47

)

1,128

 

1,241

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(35,850

)

(41,283

)

(10,896

)

(43,760

)

 

 

 

 

 

 

 

 

 

 

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

 

(321

)

(376

)

56

 

(112

)

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Ferrellgas Partners, L.P.

 

(35,529

)

(40,907

)

(10,952

)

(43,648

)

 

 

 

 

 

 

 

 

 

 

Less: General partner’s interest in net loss

 

(356

)

(409

)

(110

)

(436

)

 

 

 

 

 

 

 

 

 

 

Common unitholders’ interest in net loss

 

$

(35,173

)

$

(40,498

)

$

(10,842

)

$

(43,212

)

 

 

 

 

 

 

 

 

 

 

Loss Per Unit

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common unitholders’ interest

 

$

(0.45

)

$

(0.53

)

$

(0.14

)

$

(0.60

)

 

 

 

 

 

 

 

 

 

 

Weighted average common units outstanding

 

78,992.0

 

75,907.6

 

77,572.4

 

72,313.6

 

 



 

Supplemental Data and Reconciliation of Non-GAAP Items:

 

 

 

Three months ended

 

Twelve months ended

 

 

 

July 31

 

July 31

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Ferrellgas Partners, L.P.

 

$

(35,529

)

$

(40,907

)

$

(10,952

)

$

(43,648

)

Income tax expense (benefit)

 

(157

)

(47

)

1,128

 

1,241

 

Interest expense

 

22,350

 

23,680

 

93,254

 

101,885

 

Depreciation and amortization expense

 

21,002

 

22,091

 

83,841

 

82,486

 

EBITDA

 

7,666

 

4,817

 

167,271

 

141,964

 

Loss on extinguishment of debt

 

 

 

 

46,962

 

Non-cash employee stock ownership plan compensation charge

 

2,721

 

2,190

 

9,440

 

10,157

 

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

 

3,976

 

(221

)

8,843

 

13,488

 

Loss on disposal of assets and other

 

3,983

 

2,799

 

6,035

 

3,633

 

Other income, net

 

(258

)

(58

)

(506

)

(567

)

Nonrecurring severance costs

 

292

 

 

1,055

 

 

Nonrecurring litigation reserve and related legal fees

 

 

987

 

892

 

12,120

 

Net earnings (loss) attributable to noncontrolling interest

 

(321

)

(376

)

56

 

(112

)

Adjusted EBITDA (c)

 

18,059

 

10,138

 

193,086

 

227,645

 

Net cash interest expense (d)

 

(20,827

)

(21,960

)

(87,600

)

(93,353

)

Maintenance capital expenditures (e)

 

(4,526

)

(3,516

)

(16,044

)

(15,437

)

Cash paid for taxes

 

(664

)

(557

)

(764

)

(591

)

Proceeds from asset sales

 

1,428

 

1,721

 

5,742

 

5,994

 

Distributable cash flow to equity investors (f)

 

$

(6,530

)

$

(14,174

)

$

94,420

 

$

124,258

 

 

 

 

 

 

 

 

 

 

 

Propane gallons sales

 

 

 

 

 

 

 

 

 

Retail - Sales to End Users

 

95,031

 

95,611

 

619,318

 

655,408

 

Wholesale - Sales to Resellers

 

55,841

 

54,902

 

258,812

 

244,275

 

Total propane gallons sales

 

150,872

 

150,513

 

878,130

 

899,683

 

 


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

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

 

 

 

Three months ended

 

Twelve months ended

 

 

 

July 31

 

July 31

 

 

 

2012

 

2011

 

2012

 

2011

 

Operating expense

 

$

795

 

$

(75

)

$

2,747

 

$

3,757

 

General and administrative expense

 

3,181

 

(146

)

6,096

 

9,731

 

Total

 

$

3,976

 

$

(221

)

$

8,843

 

$

13,488

 

 

(c)        Adjusted EBITDA is calculated as earnings (loss) before income tax expense(benefit), interest expense, depreciation and amortization expense, loss on extinguishment of debt, non-cash employee stock ownership plan compensation charge, non-cash stock and unit-based compensation charge, loss on disposal of assets and other, other income, net, nonrecurring 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.