Ferrellgas Partners, L.P. Reports Results for First Quarter

New Post Public Reply Private Reply Replies (0) Message Board

News Desk 2018

Dec 9, 2015 at 6:15 AM

Ferrellgas Partners, L.P. Reports Results for First Quarter Fiscal 2016

Strong Performance From Bridger With Meaningful Progress on Acquisition Integration Ferrellgas Continues Successful Ongoing Transformation Into a Diversified Midstream MLP

OVERLAND PARK, Kan., Dec. 09, 2015 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE: FGP ) today announced Adjusted EBITDA of $48.9 million for the first quarter of fiscal 2016 ended October 31, up 42% from $34.4 million in the same quarter of last year, due to strong results from the Bridger acquisition, which the partnership completed in June 2015. Distributable Cash Flow (DCF) to equity investors for the quarter was $11.2 million, producing DCF coverage of 1.08x for the trailing twelve month period.

President and Chief Executive Officer Stephen L. Wambold commented, “We are excited to report a solid first quarter that represents our first full quarter of combined results following the completed acquisition of Bridger and officially welcoming the organization into the Ferrellgas family. We continue to integrate Bridger, which will serve as a platform for continued midstream growth and diversification. We are also encouraged by the continued solid financial and operational performance of our Propane segment. While persisting warmer nationwide temperatures during our first fiscal quarter put pressure on our Propane segment’s results, our flexibility, focus on maintaining strong margins and commitment to containing retail expenses allowed us to offset the unfavorable operating environment.”

Mr. Wambold concluded, “We are more excited than ever about the future of Ferrellgas and the strong pipeline of acquisition and organic development opportunities. With our acquisition of Bridger we have established a firm foundation for a powerful midstream growth platform and we expect to continue developing our already diverse footprint and extensive customer base in high-growth regions over the course of fiscal 2016 and beyond.”

Propane margin cents per gallon continued to benefit from lower wholesale commodity prices, and during the first fiscal quarter, prices were 57% lower than those of the same quarter in fiscal 2015. Strong margin cents per gallon and lower operating expenses in the Propane and related equipment sales segment helped minimize the effect of warmer temperatures in the more highly concentrated geographic areas Ferrellgas serves. Temperatures were 31% warmer than normal and 13% warmer than prior year for the first fiscal quarter.

Adjusted EBITDA from the Midstream - Crude Oil Logistics segment was $24.8 million during the first fiscal quarter, driven exclusively by the Bridger acquisition which exceeded management’s expectations for the first full fiscal quarter subsequent to the closing of the acquisition. These results reflect management’s focus on expense controls as well as Bridger’s strong customer relationships and contractual agreements which helped navigate a volatile commodity price environment. The partnership is on pace to generate $100 million of adjusted EBITDA in this segment for full-year fiscal 2016.

Operating expense for the first quarter increased to $115.0 million from $102.9 million in the first fiscal quarter of 2015, primarily due to the additional operating expenses associated with the Bridger acquisition. General and administrative expense rose to $12.2 million from $10.8 million in the fiscal first quarter of 2015, also as a result of the acquisition.

Interest expense increased to $33.8 million for the first fiscal quarter from $23.9 million a year ago, reflecting increased borrowings to fund acquisition and growth capital expenditures. The seasonal Net loss for the quarter was $80.6 million, or $0.79 per common unit, compared to $33.2 million, or $0.40 per common unit in the prior year quarter. The increase in seasonal Net loss is due in part to a one-time, non-cash goodwill write-off related to the partnership’s midstream water solutions operations and a one-time loss on trucks held for sale.

Ferrellgas today also reaffirmed its previously provided estimates for full-year fiscal 2016 Adjusted EBITDA of $400 million to $420 million based on continued confidence in the partnership’s traditional retail operations and expected strong contributions from Bridger.

About Ferrellgas

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 22.8 million common units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on September 29, 2015. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership 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, 2015, in the Form 10-Q of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the quarter ended October 31, 2015 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 BALANCE SHEETS
(in thousands, except unit data)
(unaudited)

ASSETS	October 31, 2015			July 31, 2015

Current Assets:
Cash and cash equivalents	$	8,892		$	7,652
Accounts and notes receivable, net (including $113,792 and 123,791 of
accounts receivable pledged as collateral at October 31, 2015
and July 31, 2015, respectively)		178,678			196,918
Inventories		96,079			96,754
Prepaid expenses and other current assets		57,556			64,285
Total Current Assets		341,205			365,609

Property, plant and equipment, net		941,283			965,217
Goodwill		459,615			478,747
Intangible assets, net		562,326			580,043
Other assets, net		72,917			74,440
Assets held for sale		8,840			-
Total Assets	$	2,386,186		$	2,464,056


LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities:
Accounts payable	$	63,553		$	83,974
Short-term borrowings		95,391			75,319
Collateralized note payable		68,000			70,000
Other current liabilities		200,964			180,687
Total Current Liabilities		427,908			409,980

Long-term debt (a)		1,823,182			1,804,392
Other liabilities		38,458			41,975
Contingencies and commitments

Partners' Capital:
Common unitholders (100,376,789 units outstanding at both
October 31, 2015 and July 31, 2015)		182,403			299,730
General partner unitholder (1,013,907 units outstanding at both
October 31, 2015 and July 31, 2015)		(58,228	)		(57,042	)
Accumulated other comprehensive loss		(30,411	)		(38,934	)
Total Ferrellgas Partners, L.P. Partners' Capital		93,764			203,754
Noncontrolling Interest		2,874			3,955
Total Partners' Capital		96,638			207,709
Total Liabilities and Partners' Capital	$	2,386,186		$	2,464,056

(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 OCTOBER 31, 2015 AND 2014
(in thousands, except per unit data)
(unaudited)
	Three months ended						Twelve months ended
	October 31						October 31
		2015			2014			2015			2014
Revenues:
Propane and other gas liquids sales	$	245,301		$	394,361		$	1,507,956		$	2,159,481
Midstream operations		193,670			7,916			292,943			15,351
Other		32,175			41,078			251,282			259,353
Total revenues		471,146			443,355			2,052,181			2,434,185

Cost of product sold:
Propane and other gas liquids sales		121,751			264,814			834,161			1,462,448
Midstream operations		153,604			1,968			228,226			3,938
Other		14,448			21,892			163,253			164,728

Gross profit		181,343			154,681			826,541			803,071

Operating expense		114,981			102,883			444,380			446,110
Depreciation and amortization expense		36,979			23,309			112,249			87,296
General and administrative expense		12,240			10,828			57,843			46,030
Equipment lease expense		7,032			5,532			25,773			19,211
Non-cash employee stock ownership plan compensation charge		5,256			4,374			25,595			23,120
Non-cash stock-based compensation charge (a)		8,122			16,112			17,992			36,189
Goodwill impairment charge		29,316			-			29,316			-
Loss on disposal of assets		14,917			961			21,055			7,090

Operating income (loss)		(47,500	)		(9,318	)		92,338			138,025

Interest expense		(33,788	)		(23,912	)		(110,272	)		(88,321	)
Loss on extinguishment of debt		-			-			-			(20,901	)
Other income (expense), net		(122	)		(449	)		(23	)		(1,144	)

Earnings (loss) before income taxes		(81,410	)		(33,679	)		(17,957	)		27,659

Income tax expense (benefit)		(844	)		(510	)		(649	)		2,056

Net earnings (loss)		(80,566	)		(33,169	)		(17,308	)		25,603

Net earnings (loss) attributable to noncontrolling interest (b)		(773	)		(294	)		(10	)		424

Net earnings (loss) attributable to Ferrellgas Partners, L.P.		(79,793	)		(32,875	)		(17,298	)		25,179

Less: General partner's interest in net earnings (loss)		(798	)		(329	)		(173	)		252

Common unitholders' interest in net earnings (loss)	$	(78,995	)	$	(32,546	)	$	(17,125	)	$	24,927

Earnings (loss) Per Unit
Basic and diluted net earnings (loss) per common unitholders' interest	$	(0.79	)	$	(0.40	)	$	(0.19	)	$	0.31

Weighted average common units outstanding		100,376.8			82,179.7			89,232.9			80,433.5


Supplemental Data and Reconciliation of Non-GAAP Items:

	Three months ended						Twelve months ended
	October 31						October 31
		2015			2014			2015			2014


Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	(79,793	)	$	(32,875	)	$	(17,298	)	$	25,179
Income tax expense (benefit)		(844	)		(510	)		(649	)		2,056
Interest expense		33,788			23,912			110,272			88,321
Depreciation and amortization expense		36,979			23,309			112,249			87,296
EBITDA		(9,870	)		13,836			204,574			202,852
Loss on extinguishment of debt		-			-			-			20,901
Non-cash employee stock ownership plan compensation charge		5,256			4,374			25,595			23,120
Non-cash stock based compensation charge (a)		8,122			16,112			17,992			36,189
Goodwill impairment charge		29,316			-			29,316			-
Loss on disposal of assets		14,917			961			21,055			7,090
Other income (expense), net		122			449			23			1,144
Change in fair value of contingent consideration (included in operating expense)		(100	)		(1,800	)		(4,600	)		3,200
Severance costs ($805 included in operating costs and $51 included in general and administrative costs)		856			-			856			-
Litigation accrual and related legal fees associated with a
class action lawsuit (included in general and administrative expense)		-			723			83			1,147
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives		1,038			-			3,450			-
Acquisition and transition expenses (included in general and administrative expense)		15			-			16,388			-
Net earnings (loss) attributable to noncontrolling interest (b)		(773	)		(294	)		(10	)		424
Adjusted EBITDA (c)		48,899			34,361			314,722			296,067
Net cash interest expense (d)		(32,502	)		(22,890	)		(105,762	)		(85,990	)
Maintenance capital expenditures (e)		(6,215	)		(5,088	)		(20,739	)		(18,624	)
Cash paid for taxes		-			(260	)		(452	)		(1,076	)
Proceeds from asset sales		1,013			1,417			5,501			4,624
Distributable cash flow to equity investors (f)		11,195			7,540			193,270			195,001
Distributable cash flow attributable to general partner and non-controlling interest		224			151			3,865			3,900
Distributable cash flow attributable to common unitholders		10,971			7,389			189,405			191,101
Less: Distributions paid to common unitholders		51,443			41,356			175,520			161,136
Distributable cash flow excess/(shortage)	$	(40,472	)	$	(33,967	)	$	13,885		$	29,965

Propane gallons sales
Retail - Sales to End Users		110,973			124,147			595,607			650,253
Wholesale - Sales to Resellers		50,566			61,935			258,696			291,368
Total propane gallons sales		161,539			186,082			854,303			941,621

Salt water volume - Midstream operations (barrels processed)		4,734			3,997			17,766			6,497
Crude oil hauled - Midstream operations (barrels)		24,264			0			34,711			0
Crude oil sold - Midstream operations (barrels)		1,510						2,006

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

	Three months ended						Twelve months ended
	October 31						October 31
		2015			2014			2015			2014
Operating expense	$	1,218		$	3,545		$	2,848		$	8,082
General and administrative expense		6,904			12,567			15,144			28,107
Total	$	8,122		$	16,112		$	17,992		$	36,189


(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 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, goodwill impairment charge, loss on disposal of assets, other income, net, change in fair value of contingent consideration, litigation accrual and related legal fees associated with a class action lawsuit, unrealized (non-cash) losses on changes in fair value of derivatives, acquisition and transition expenses 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.

The following table includes a reconciliation of forecasted net earnings atttributable to Ferrellgas Partners, L.P. to forecasted Adjusted EBITDA for the fiscal year ending July 31, 2016.

										Forecast
										Fiscal Year
										Ending
										July 31,
											2016
Net earnings attributable to Ferrellgas Partners, L.P. (estimate) (g)											20,000
Interest expense (estimate)											134,000
Income tax expense (estimate)											1,000
Depreciation and amortization expense (estimate)											150,000
Non-cash employee stock ownership plan compensation charge (estimate)											28,000
Non-cash stock based compensation charge (estimate)											27,000
Loss on disposal of assets (estimate)											19,900
Change in fair value of contingent consideration (included in operating expense)											(100	)
Severance costs											900
Goodwill impairment charge											29,300
Adjusted EBITDA (h)											410,000

(g) Represents estimated net earnings attributable to Ferrellgas Partners, L.P. after adjusting for change in fair value of gains and losses on commodity and interest rate derivative instruments not associated with current-period transactions. It is impracticable to determine actual gains and losses on these instruments not associated with current-period transactions that will be reported in GAAP net income as such gains and losses will depend upon future changes in commodity prices and interest rates which cannot be forecasted.

(h) Represents the midpoint of Adjusted EBITDA guidance range for fiscal 2016.

Contacts Jack Herrold, Investor Relations – jackherrold@ferrellgas.com or (913) 661-1851 Jim Saladin, Media Relations – jimsaladin@ferrellgas.com or (913) 661-1833 Scott Brockelmeyer, Media Relations – scottbrockelmeyer@ferrellgas.com or (913) 661-1830

Newer

Older