OVERLAND PARK, Kan., Dec. 10, 2014 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE: FGP ) today reported results for fiscal 2015's first quarter ended October 31, 2014.
Gross profit grew 8% to a record $154.7 million on improved retail propane margins and contributions from recently acquired midstream operations. Adjusted EBITDA climbed nearly 30% to $34.4 million reflecting the aforementioned gross profit contributions. These results produced trailing 12-month distributable cash flow coverage to equity investors of 1.18x, providing the partnership $30 million of excess cash flow to fund organic and acquired growth.
President and Chief Executive Officer Steve Wambold commented, "Fiscal 2015 is off to an excellent start with operations delivering first-quarter results in line with our expectations. November, the start of our second quarter, also looks to be in line with our expectations as seasonably cold temperatures boosted the demand for propane consumption. We remain comfortable with our previous guidance of Adjusted EBITDA in the range of $300 million to $320 million for fiscal 2015."
The partnership previously reported record Adjusted EBITDA for fiscal 2014 of $288.1 million. For the trailing 12 months ended October 31, the partnership produced Adjusted EBITDA of $296.1 million.
Propane sales for the quarter were 186.1 million gallons compared to 191.0 million gallons sold in the year-earlier quarter. Retail sales volumes nearly matched prior-year levels despite nationwide temperatures that were 20% warmer than normal.
"During the first quarter, we remained focused on operational efficiency and were very pleased with the results," Wambold pointed out. "Both operating expense and general and administrative expense were practically unchanged at $102.9 million and $10.8 million, respectively, despite acquired midstream and retail propane operations in 2014."
Interest expense increased to $23.9 million from $22.1 million primarily reflecting debt attributable to merger and acquisition activity.
"Our focus remains on the profitable growth of the partnership, both through acquisition and organic means," Wambold explained. "We have identified a range of possibilities that would further our diversification initiative and we continue to selectively expand our propane footprint. Further, Blue Rhino's sales volumes continue to grow through same-store sales and increased selling locations that now exceed 46,500 nationwide."
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia and Puerto Rico, and provides midstream services to major energy companies in the United States. Ferrellgas employees indirectly own more than 22 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, 2014 and in other documents filed from time to time by these entities with the Securities and Exchange Commission.
| FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF EARNINGS | ||||
| FOR THE THREE AND TWELVE MONTHS ENDED OCTOBER 31, 2014 AND 2013 | ||||
| (in thousands, except per unit data) | ||||
| (unaudited) | ||||
| Three months ended | Twelve months ended | |||
| October 31 | October 31 | |||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues: | ||||
| Propane and other gas liquids sales | $ 394,361 | $ 382,223 | $ 2,159,481 | $ 1,786,209 |
| Other | 48,994 | 32,807 | 274,704 | 241,379 |
| Total revenues | 443,355 | 415,030 | 2,434,185 | 2,027,588 |
| Cost of product sold: | ||||
| Propane and other gas liquids sales | 264,814 | 258,754 | 1,462,448 | 1,137,358 |
| Other | 23,860 | 13,346 | 168,666 | 148,605 |
| Gross profit | 154,681 | 142,930 | 803,071 | 741,625 |
| Operating expense (including $(1,800) and $3,300 of change in fair value of contingent consideration for the three and twelve month period ended October 31, 2014) | 102,883 | 102,966 | 446,110 | 416,591 |
| Depreciation and amortization expense | 23,309 | 20,215 | 87,296 | 82,684 |
| General and administrative expense | 10,828 | 10,781 | 46,030 | 44,034 |
| Equipment lease expense | 5,532 | 4,066 | 19,211 | 16,126 |
| Non-cash employee stock ownership plan compensation charge | 4,374 | 3,043 | 23,120 | 16,410 |
| Non-cash stock-based compensation charge (a) | 16,112 | 4,431 | 36,189 | 14,884 |
| Loss on disposal of assets | 961 | 357 | 7,090 | 10,507 |
| Operating income (loss) | (9,318) | (2,929) | 138,025 | 140,389 |
| Interest expense | (23,912) | (22,093) | (88,321) | (88,803) |
| Loss on extinguishment of debt | -- | (301) | (20,901) | (301) |
| Other income (expense), net | (449) | 216 | (1,144) | 690 |
| Earnings (loss) before income taxes | (33,679) | (25,107) | 27,659 | 51,975 |
| Income tax expense (benefit) | (510) | (50) | 2,056 | 2,069 |
| Net earnings (loss) | (33,169) | (25,057) | 25,603 | 49,906 |
| Net earnings (loss) attributable to noncontrolling interest (b) | (294) | (214) | 424 | 665 |
| Net earnings (loss) attributable to Ferrellgas Partners, L.P. | (32,875) | (24,843) | 25,179 | 49,241 |
| Less: General partner's interest in net earnings (loss) | (329) | (248) | 252 | 492 |
| Common unitholders' interest in net earnings (loss) | $ (32,546) | $ (24,595) | $ 24,927 | $ 48,749 |
| Earnings (loss) Per Unit | ||||
| Basic and diluted net earnings (loss) per common unitholders' interest | $ (0.40) | $ (0.31) | $ 0.31 | $ 0.62 |
| Weighted average common units outstanding | 82,179.7 | 79,075.8 | 80,433.5 | 78,338.3 |
| Supplemental Data and Reconciliation of Non-GAAP Items: | ||||
| Three months ended | Twelve months ended | |||
| October 31 | October 31 | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net earnings (loss) attributable to Ferrellgas Partners, L.P. | $ (32,875) | $ (24,843) | $ 25,179 | $ 49,241 |
| Income tax expense (benefit) | (510) | (50) | 2,056 | 2,069 |
| Interest expense | 23,912 | 22,093 | 88,321 | 88,803 |
| Depreciation and amortization expense | 23,309 | 20,215 | 87,296 | 82,684 |
| EBITDA | 13,836 | 17,415 | 202,852 | 222,797 |
| Loss on extinguishment of debt | -- | 301 | 20,901 | 301 |
| Non-cash employee stock ownership plan compensation charge | 4,374 | 3,043 | 23,120 | 16,410 |
| Non-cash stock based compensation charge (a) | 16,112 | 4,431 | 36,189 | 14,884 |
| Loss on disposal of assets | 961 | 357 | 7,090 | 10,507 |
| Other income (expense), net | 449 | (216) | 1,144 | (690) |
| Change in fair value of contingent consideration | (1,800) | -- | 3,200 | -- |
| Litigation accrual and related legal fees associated with a class action lawsuit | 723 | 1,325 | 1,147 | 2,205 |
| Net earnings (loss) attributable to noncontrolling interest (b) | (294) | (214) | 424 | 665 |
| Adjusted EBITDA (c) | 34,361 | 26,442 | 296,067 | 267,079 |
| Net cash interest expense (d) | (22,890) | (20,586) | (85,990) | (83,006) |
| Maintenance capital expenditures (e) | (5,088) | (4,137) | (18,624) | (14,932) |
| Cash paid for taxes | (260) | -- | (1,076) | (532) |
| Proceeds from asset sales | 1,417 | 1,317 | 4,624 | 6,526 |
| Distributable cash flow to equity investors (f) | 7,540 | 3,036 | 195,001 | 175,135 |
| Distributable cash flow attributable to general partner and non-controlling interest | 151 | 61 | 3,900 | 3,503 |
| Distributable cash flow attributable to common unitholders | 7,389 | 2,975 | 191,101 | 171,632 |
| Less: Distributions paid to common unitholders | 41,356 | 39,536 | 161,136 | 158,115 |
| Distributable cash flow excess/(shortage) | $ (33,967) | $ (36,561) | $ 29,965 | $ 13,517 |
| Propane gallons sales | ||||
| Retail - Sales to End Users | 124,147 | 125,252 | 650,253 | 638,292 |
| Wholesale - Sales to Resellers | 61,935 | 65,779 | 291,368 | 274,671 |
| Total propane gallons sales | 186,082 | 191,031 | 941,621 | 912,963 |
| Midstream operations (barrels processed) | 3,997 | -- | 6,497 | -- |
| (a) Non-cash stock-based compensation charges consist of the following: | ||||
| Three months ended | Twelve months ended | |||
| October 31 | October 31 | |||
| 2014 | 2013 | 2014 | 2013 | |
| Operating expense | $ 3,545 | $ 798 | $ 8,082 | $ 2,478 |
| General and administrative expense | 12,567 | 3,633 | 28,107 | 12,406 |
| Total | $ 16,112 | $ 4,431 | $ 36,189 | $ 14,884 |
| (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 net earnings (loss) attributable to Ferrellgas Partners, L.P., 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-based compensation charge, loss on disposal of assets, other income (expense), net, change in fair value of contingent consideration, litigation accrual and related legal fees associated with a class action lawsuit 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 equity investors. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP. | ||||
| FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, except unit data) | ||
| (unaudited) | ||
| ASSETS | October 31, 2014 | July 31, 2014 |
| Current Assets: | ||
| Cash and cash equivalents | $ 9,869 | $ 8,289 |
| Accounts and notes receivable, net (including $161,715 and $159,003 of accounts receivable pledged as collateral at October 31, 2014 and July 31, 2014, respectively) | 180,556 | 178,602 |
| Inventories | 177,558 | 145,969 |
| Prepaid expenses and other current assets | 44,602 | 32,071 |
| Total Current Assets | 412,585 | 364,931 |
| Property, plant and equipment, net | 618,302 | 611,787 |
| Goodwill | 285,658 | 273,210 |
| Intangible assets, net | 316,634 | 276,171 |
| Other assets, net | 47,256 | 46,171 |
| Total Assets | $ 1,680,435 | $ 1,572,270 |
| LIABILITIES AND PARTNERS' DEFICIT | ||
| Current Liabilities: | ||
| Accounts payable | $ 74,847 | $ 69,360 |
| Short-term borrowings | 122,230 | 69,519 |
| Collateralized note payable | 105,000 | 91,000 |
| Other current liabilities | 147,649 | 125,161 |
| Total Current Liabilities | 449,726 | 355,040 |
| Long-term debt (a) | 1,332,089 | 1,292,214 |
| Other liabilities | 37,373 | 36,662 |
| Contingencies and commitments | ||
| Partners' Deficit: | ||
| Common unitholders (82,711,820 and 81,228,237 units outstanding at October 31, 2014 and July 31, 2014, respectively) | (69,770) | (57,893) |
| General partner unitholder (835,473 and 820,487 units outstanding at October 31, 2014 and July 31, 2014, respectively) | (60,775) | (60,654) |
| Accumulated other comprehensive income (loss) | (8,692) | 6,181 |
| Total Ferrellgas Partners, L.P. Partners' Deficit | (139,237) | (112,366) |
| Noncontrolling Interest | 484 | 720 |
| Total Partners' Deficit | (138,753) | (111,646) |
| Total Liabilities and Partners' Deficit | $ 1,680,435 | $ 1,572,270 |
| (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. | ||
Alan Heitmann, Investor Relations or (816) 792-6879 Scott Brockelmeyer, Media Relations or (913) 661-1830
