Ferrellgas Partners, L.P. Reports Full Fiscal Year and Fourth Quarter Fiscal 2022 Results


  • Financial Highlights
    • Revenues for the fourth fiscal quarter and fiscal 2022 increased $52.4 million or 16% and $360.2 million or 21%, respectively, compared to the prior year periods.
    • Gross Profit for the fourth fiscal quarter and fiscal 2022 increased $20.7 million or 13% and $68.4 million or 8%, respectively, compared to the prior year periods.
    • Margin per gallon for the fourth fiscal quarter and fiscal 2022 increased 17% and 12%, respectively, compared to the prior year periods.
    • Net loss attributable to Ferrellgas Partners, L.P. was $19.4 million for the fourth fiscal quarter compared to a net loss attributable to Ferrellgas Partners, L.P. of $18.8 million in the prior year period. Net earnings attributable to Ferrellgas Partners, L.P. was $148.0 million for fiscal 2022 compared to a net loss attributable to Ferrellgas Partners, L.P. of $68.4 million in fiscal 2021.
  • Company Highlights
    • The Company joined the National Propane Gas Association in June 2022. Ferrellgas’ officers now serve on both the Executive Committee and the Board of Directors of the NPGA.
    • Blue Rhino home delivery expansion continued to the Phoenix, AZ area in the fourth fiscal quarter. Additionally, limited edition Blue Rhino tank packages debuted in honor of the Company’s partnership with Operation BBQ Relief.
    • Over 900 employees received Ferrellgas Flame Awards in fiscal 2022 for exemplary performance in the areas of Safety, Customer Service, Innovation, and Leadership.
    • Over 270 employees were promoted in fiscal 2022 for key roles in field operations and corporate departments.

LIBERTY, Mo., Sept. 30, 2022 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its fiscal year (“fiscal 2022”) and fourth fiscal quarter ended July 31, 2022.

"When you encounter a Ferrellgas employee as they live and work across the United States, you notice how driven they are, how professional they are, and how passionate they are about their families and our customers,” said James E. Ferrell, Chief Executive Officer and President. “Our almost 4,500 full-time, seasonal and part-time employees and contractors work each day to find ways to improve and grow, they do this to benefit themselves, their team members and our customers.”

Operating expense as a percentage of total revenue decreased 2% for both periods primarily due to a focus on cost containment and strategic purchasing. As a technology enabled logistics company, Ferrellgas continues to benefit from its nationwide footprint and focus on continuous improvement. A favorable credit position over the prior year period continues to position Ferrellgas well with suppliers. The Company’s continued emphasis on leadership development, excellence in operational expense management, and implementation of logistics fundamentals continues to increase efficiency and profitability. The Company’s inventory position management also assists in mitigating the risk from price fluctuations tied to fixed price purchases of propane. Warmer weather trends of 6.7% and 5.1% for the fourth fiscal quarter and fiscal 2022, respectively, drove the 3% decline in gallons sold for both periods. The Company’s initiatives, including efficiencies in delivery of gallons and logistics management, helped offset these negative trends as margin per gallon increased by $0.18, or 17% higher, for the fourth fiscal quarter and by $0.12, or 12% higher, for fiscal 2022.

Revenues increased $52.4 million or 16% for the fourth fiscal quarter while fiscal 2022 revenues increased $360.2 million or 21%. Cost of sales had unfavorable increases of $31.7 million or 18% for the fourth fiscal quarter and $291.8 million or 33% for fiscal 2022, primarily as a result of inflationary costs for material and other commodities, such as steel used in tanks. Despite these increases, gross profit was favorable with increases of $20.7 million and $68.4 million, or 13% and 8% higher, for the fourth fiscal quarter and fiscal 2022, respectively. Operating income per gallon was $0.04 higher for both periods compared to prior year periods.

For the fourth fiscal quarter, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $19.4 million compared to a net loss of $18.8 million in the prior year period. For fiscal 2022, the Company reported net earnings attributable to Ferrellgas Partners, L.P. of $148.0 million compared to a net loss of $68.4 million in the prior year period. Adjusted EBITDA, a non-GAAP measure, increased by $10.0 million or 42% to $34.2 million in the fourth fiscal quarter compared to $24.1 million in the prior year period. Adjusted EBITDA increased by $22.0 million or 7% to $340.1 million in fiscal 2022 compared to $318.1 million in the prior year period. Adjusted EBITDA was favorably impacted by increases of $5.0 million and $28.8 million in operating income during the fourth fiscal quarter and fiscal 2022, respectively.

As previously announced on July 8, 2022, we paid a $49.9 million distribution to holders of record of the Class B Units as of June 23, 2022. The Company also made a distribution in the first fiscal quarter of $49.9 million, which was paid on October 8, 2021. The aggregate distribution of approximately $100.0 million for fiscal 2022 was made possible by the continued strong performance of the Company.

“Our success for the fourth fiscal quarter and fiscal 2022 is due to our smart, engaged, and empowered employees executing all the important roles necessary in a company like ours,” Ferrell added. “Our people have continued to invest in the development of themselves, their teams, and in the vision of our company. Across the country our hard working, dedicated employee-owners continue to win. I could not be more proud.”

Ferrellgas joined the National Propane Gas Association (“NPGA”), a trade organization representing approximately 2,400 companies in the U.S. propane industry, in June 2022. Ferrellgas’ officers now serve on both the Executive Committee and the Board of Directors of the NPGA. As one of the nation’s leading propane retailers, the Company plans to partner with the NPGA at the National and State levels, promoting the awareness of green, accessible, affordable, and efficient propane.

Ferrellgas’ employees completed over 4,300 hours of professional development training via the Ferrellgas University Program. This program allows access to thousands of courses aimed at career and professional development. This platform created over 270 opportunities for internal career advancement in field operations and corporate support areas.

In addition to previously announced home delivery services in 17 other locations, Blue Rhino expanded its home delivery services in the fourth fiscal quarter to include the Phoenix area. In conjunction with our mission to Fuel Life Simply, the home delivery program allows our customers to avoid an extra trip to the store and choose to have a fresh, cleaned, and leak-tested Blue Rhino tank or two delivered to their doorstep. In its continued collaboration with Operation BBQ Relief, a charitable organization providing hot meals to first responders and communities impacted by natural disasters, Blue Rhino introduced limited edition Operation BBQ Relief-themed tank sleeves to highlight and honor the work done by this organization throughout the country.

On Friday, September 30, 2022, the Company will conduct a live teleconference on the Internet at https://edge.media-server.com/mmc/p/ivvt62h7 to discuss the results of operations for the fiscal year ended July 31, 2022. The live webcast of the teleconference will begin at 8:30 a.m. Central Time (9:30 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at InvestorRelations@ferrellgas.com.

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. Its Blue Rhino propane exchange brand is sold at more than 60,000 selling locations nationwide. Ferrellgas employees indirectly own 1.1 million Class A 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 30, 2022. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.

Forward Looking Statements

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 include those discussed in the Form 10-K of Ferrellgas Partners, L.P., Ferrellgas, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2022, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contacts

Investor Relations – InvestorRelations@ferrellgas.com


FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)

(unaudited)

       
ASSETS    July 31, 2022 July 31, 2021
       
Current assets:      
Cash and cash equivalents (including $11,208 and $11,500 of restricted cash at July 31, 2022 and 2021, respectively) $158,737  $281,952 
Accounts and notes receivable, net  150,395   131,574 
Inventories  115,187   88,379 
Price risk management asset  43,015   78,001 
Prepaid expenses and other current assets  30,764   39,092 
Total current assets  498,098   618,998 
       
Property, plant and equipment, net  603,148   582,118 
Goodwill, net  257,099   246,946 
Intangible assets (net of accumulated amortization of $440,121 and $432,032 at July 31, 2022 and 2021, respectively)  97,638   100,743 
Operating lease right-of-use asset  72,888   87,611 
Other assets, net  79,244   93,228 
Total assets $1,608,115  $1,729,644 
       
       
LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)      
       
Current liabilities:      
Accounts payable $57,586  $47,913 
Current portion of long-term debt  1,792   1,670 
Current operating lease liabilities  25,824   25,363 
Other current liabilities  218,610   246,000 
Total current liabilities  303,812   320,946 
       
Long-term debt  1,450,016   1,444,890 
Operating lease liabilities  47,231   74,349 
Other liabilities  43,518   61,189 
       
Contingencies and commitments      
       
Mezzanine equity:      
Senior preferred units, net of issue discount and other offering costs (700,000 units outstanding at July 31, 2022 and 2021)  651,349   651,349 
       
Equity (Deficit):      
Limited partner unitholders      
Class A (4,857,605 units outstanding at July 31, 2022 and 2021)  (1,229,823)  (1,214,813)
Class B (1,300,000 units outstanding at July 31, 2022 and 2021)  383,012   383,012 
General partner unitholder (49,496 units outstanding at July 31, 2022 and 2021)  (71,320)  (72,178)
Accumulated other comprehensive income  37,907   88,866 
Total Ferrellgas Partners, L.P. deficit  (880,224)  (815,113)
Noncontrolling interest  (7,587)  (7,966)
Total deficit  (887,811)  (823,079)
Total liabilities, mezzanine and deficit $1,608,115  $1,729,644 


FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)
(unaudited)

             
  Three months ended  Year ended
  July 31,  July 31, 
   2022   2021   2022   2021 
Revenues:            
Propane and other gas liquids sales $365,460  $317,333  $2,017,879  $$1,668,852 
Other  22,093   17,793   96,661    85,458 
Total revenues  387,553   335,126   2,114,540    1,754,310 
             
Cost of sales:            
Propane and other gas liquids sales  207,295   175,146   1,174,004    881,936 
Other  2,166   2,572   12,509    12,728 
             
Gross profit   178,092   157,408   928,027    859,646 
             
Operating expense - personnel, vehicle, plant & other  128,185   116,918   520,603    465,816 
Operating expense - equipment lease expense  5,607   6,600   23,094    27,062 
Depreciation and amortization expense  24,591   21,462   89,897    85,382 
General and administrative expense  13,459   11,305   52,780    60,065 
Non-cash employee stock ownership plan compensation charge  734   934   3,170    3,215 
(Gain) loss on asset sales and disposals  (52)  (407)  (6,618)   1,831 
             
Operating income  5,568   596   245,101    216,275 
             
Interest expense  (25,594)  (24,606)  (100,093)   (173,616)
Gain (loss) on extinguishment of debt     5,088       (104,834)
Other income, net  427   77   4,833    4,246 
Reorganization expense - professional fees     (236)      (10,443)
             
Earnings (loss) before income tax expense  (19,599)  (19,081)  149,841    (68,372)
             
Income tax expense  156   135   981    741 
             
Net earnings (loss)  (19,755)  (19,216)  148,860    (69,113)
             
Net earnings (loss) attributable to noncontrolling interest (a)  (363)  (394)  867    (702)
             
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $(19,392) $(18,822) $147,993  $ (68,411)
             
Class A unitholders' interest in net loss $(83,283) $(34,727) $(18,770) $ (91,751)
             
Net loss per unitholders' interest            
Basic and diluted net loss per Class A Unit $(17.14) $(7.15) $(3.86) $ (18.89)
Weighted average Class A Units outstanding - basic and diluted  4,858   4,858   4,858    4,858 


Supplemental Data and Reconciliation of Non-GAAP Items:

             
  Three months ended  Year ended
  July 31,  July 31, 
   2022   2021   2022   2021 
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $(19,392) $(18,822) $147,993  $(68,411)
Income tax expense  156   135   981   741 
Interest expense  25,594   24,606   100,093   173,616 
Depreciation and amortization expense  24,591   21,462   89,897   85,382 
EBITDA  30,949   27,381   338,964   191,328 
Non-cash employee stock ownership plan compensation charge  734   934   3,170   3,215 
(Gain) loss on asset sales and disposal  (52)  (407)  (6,618)  1,831 
(Gain) loss on extinguishment of debt     (5,088)     104,834 
Other income, net  (427)  (77)  (4,833)  (4,246)
Reorganization expense - professional fees     236      10,443 
Severance costs include $31 and $148 in operating expense for the three and twelve months ended July 31, 2022, respectively. Also include $1 and $430 in general and administrative expense for the three and twelve months ended July 31, 2022, respectively.  32      578   1,761 
Legal fees and settlements related to non-core businesses  3,303   1,557   7,938   10,129 
Provision for doubtful accounts related to non-core businesses           (500)
Net earnings (loss) attributable to noncontrolling interest (a)  (363)  (394)  867   (702)
Adjusted EBITDA (b)  34,176   24,142   340,066   318,093 
Net cash interest expense (c)  (26,973)  (22,437)  (99,366)  (160,153)
Maintenance capital expenditures (d)  (3,903)  (11,651)  (17,019)  (26,168)
Cash paid for income taxes  (368)  (268)  (1,018)  (706)
Proceeds from certain asset sales  745   881   4,113   4,588 
Distributable cash flow attributable to equity investors (e)  3,677   (9,333)  226,776   135,654 
Less: Distributions accrued or paid to preferred unitholders  16,250   16,013   65,287   24,024 
Distributable cash flow attributable to general partner and non-controlling interest  (74)  187   (4,536)  (2,713)
Distributable cash flow attributable to Class A and B Unitholders (f)  (12,647)  (25,159)  156,953   108,917 
Less: Distributions paid to Class A and B Unitholders (g)  49,998      99,996    
Distributable cash flow excess (shortage) (h) $(62,645) $(25,159) $56,957  $108,917 
             
Propane gallons sales            
Retail - Sales to End Users  94,432   95,933   624,316   632,057 
Wholesale - Sales to Resellers  47,561   51,055   206,516   228,025 
Total propane gallons sales  141,993   146,988   830,832   860,082 
             


(a)Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.
  
(b)Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, (gain) loss on asset sales and disposals, (gain) loss on extinguishment of debt, other income, net, reorganization expense – professional fees, severance costs, legal fees and settlements related to non-core businesses, provision for doubtful accounts related to non-core businesses, 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 make it easier to compare its results with other companies that have different financing and capital structures.
  
 Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.
  
(c)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 terminated accounts receivable securitization facility.
  
(d)Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment, and may from time to time include the purchase of assets that are typically leased.
  
(e)Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for income taxes plus proceeds from certain asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to equity investors, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors should be viewed in conjunction with measurements that are computed in accordance with GAAP.
  
(f)Distributable cash flow attributable to Class A and B Unitholders is calculated as Distributable cash flow attributable to equity investors minus distributions accrued or paid on the Preferred Units and distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to Class A and B Unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to Class A and B Unitholders. Distributable cash flow attributable to Class A and B Unitholders, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added to our calculation of distributable cash flow attributable to Class A and B Unitholders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to Class A and B Unitholders should be viewed in conjunction with measurements that are computed in accordance with GAAP.
  
(g)The Company did not pay any distributions to Class A Unitholders during any of the periods in fiscal 2022 or fiscal 2021.
  
(h)Distributable cash flow excess (shortage) is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility or, previously, under our terminated accounts receivable securitization facility. Management considers Distributable cash flow excess (shortage) a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess (shortage), as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess (shortage) that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess (shortage) should be viewed in conjunction with measurements that are computed in accordance with GAAP.