Ferrellgas Partners Reports 17% Increase in Fourth-Quarter Adjusted EBITDA; Full-Year Adjusted EBITDA Totals Record $251.1 Million, Meeting Partnership's Previous Guidance
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OVERLAND PARK, Kan., Sept. 28 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the largest distributors of propane, today reported that Adjusted EBITDA for the fiscal fourth quarter ended July 31 increased 17% to $12.2 million from $10.4 million in the year-earlier quarter. The lower seasonal loss in the fiscal quarter primarily reflects a 7% increase in total propane sales volumes, that improved the seasonal loss to $35.1 million, or $0.51 per unit, from $38.8 million, or $0.61 per unit, the year before.
For the full year, the partnership reported record Adjusted EBITDA of $251.1 million, in line with the partnership's guidance of "in the range of $250 million," representing a 13% increase over $221.9 million in fiscal 2008. The previous record Adjusted EBITDA had been $237.1 million in fiscal 2007. Net income for the fiscal year more than doubled to $52.6 million, or $0.79 per unit, from $24.7 million, or $0.39 per unit the year before.
Chief Executive Officer and President Steve Wambold commented, "We are very pleased with the fourth-quarter and full-year results. Our dedicated focus to our strategic plan of disciplined growth and cost containment played a significant role in this year's performance." Wambold further observed, "The most impressive fourth-quarter metric was an increase of nearly 8% in retail propane sales, while our major competitors posted lower sales volumes." He added, "For the full year total propane sales were up more than 4% to 874.8 million gallons, while retail sales were practically unchanged, again outperforming the industry."
Wambold concluded by noting, "With our focus toward growth, our management team remained committed to improved efficiency by keeping a tight rein on costs. Most notably, for the full year general and administrative expense declined more than 9%, while equipment lease expense decreased nearly 25%."
During fiscal 2009, revenues were down 9.7% to $2.07 billion. However, the cost of product sold slipped 16.5%, with gross profit up more than 7% or $0.02 per propane gallon sold.
Senior Vice President and Chief Financial Officer Ryan VanWinkle noted, "In addition to the record financial results, the partnership successfully addressed its near- to mid-term capital structure through the refinancing of a $400 million working capital credit facility due 2012 and the issuance of $300 million of long-term debt due 2017. With these financings and the application of the proceeds, Ferrellgas will not only have addressed all its outstanding debt maturities through 2011 but also increased its liquidity to finance its ongoing business strategies." VanWinkle went on to say, "We are very pleased with our recent acquisition of Vanson, LLC, the fifth retail acquisition since fiscal 2008, as it demonstrates our continued focus on supplementing our organic growth initiative through acquisition."
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 more than 20 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, 2009, and 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)
July 31, July 31,
ASSETS 2009 2008
------ --------- ---------
Current Assets:
Cash and cash equivalents $7,066 $16,614
Accounts and notes receivable, net 106,910 145,081
Inventories 129,808 152,301
Price risk management assets 3,391 26,086
Prepaid expenses and other current assets 11,640 10,924
------ ------
Total Current Assets 258,815 351,006
Property, plant and equipment, net 666,535 685,328
Goodwill 248,939 248,939
Intangible assets, net 212,037 225,273
Other assets, net 18,651 18,685
------ ------
Total Assets $1,404,977 $1,529,231
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current Liabilities:
Accounts payable $49,337 $71,348
Short term borrowings 66,159 125,729
Other current liabilities (a) 108,763 107,854
------- -------
Total Current Liabilities 224,259 304,931
Long-term debt (a) 1,010,073 1,034,719
Other liabilities 19,300 23,237
Contingencies and commitments - -
Minority interest 4,272 4,220
Partners' Capital:
Common unitholders (68,236,755 and
62,961,674 units
outstanding at 2009 and 2008, respectively) 206,255 201,618
General partner unitholder (689,260 and
635,977 units
outstanding at 2009 and 2008, respectively) (57,988) (58,036)
Accumulated other comprehensive income (loss) (1,194) 18,542
------ ------
Total Partners' Capital 147,073 162,124
------- -------
Total Liabilities and Partners' Capital $1,404,977 $1,529,231
========== ==========
(a) The principal difference between the Ferrellgas Partners, L.P.
balance sheet and that of Ferrellgas, L.P., is $268 million of 8 3/4%
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, 2009 AND 2008
(in thousands, except per unit data)
(unaudited)
Three months Twelve months
ended ended
July 31, July 31,
-------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Propane and other
gas liquids sales $283,379 $390,547 $1,829,653 $2,055,281
Other 29,311 29,168 239,869 235,408
------ ------ ------- -------
Total revenues 312,690 419,715 2,069,522 2,290,689
Cost of product
sold:
Propane and other
gas liquids sales 165,215 279,500 1,207,368 1,491,918
Other 16,700 15,246 152,853 136,478
------ ------ ------- -------
Gross profit 130,775 124,969 709,301 662,293
Operating expense 103,815 97,250 400,735 372,078
Depreciation and
amortization
expense 20,324 21,638 82,494 85,521
General and
administrative
expense 12,015 11,757 41,382 45,612
Equipment lease
expense 3,988 5,994 18,406 24,478
Employee stock
ownership plan
compensation charge 1,890 2,720 6,755 12,413
Loss on disposal of
assets and other 4,118 2,521 13,042 11,250
----- ----- ------ ------
Operating income
(loss) (15,375) (16,911) 146,487 110,941
Interest expense (20,429) (20,361) (89,519) (86,712)
Other income
(expense), net 30 (309) (1,321) 1,039
-- ---- ------ -----
Earnings (loss)
before income
taxes and
minority interest (35,774) (37,581) 55,647 25,268
Income tax expense
(benefit) - current (405) 1,132 1,904 1,732
Income tax expense
(benefit) -deferred (g) (16) 402 388 (1,650)
Minority interest (a) (296) (335) 783 497
---- ---- --- ---
Net earnings (loss) (35,057) (38,780) 52,572 24,689
Net earnings
(loss)
available to
general partner
unitholder (350) (388) 526 247
---- ---- --- ---
Net earnings (loss)
available to common
unitholders $(34,707) $(38,392) $52,046 $24,442
======== ======== ======= =======
Earnings Per Unit
-----------------
Basic earnings
(loss) per common
unit available to
common unitholders $(0.51) $(0.61) $0.79 $0.39
====== ====== ===== =====
Weighted average
common units
outstanding 68,183.2 62,961.7 65,540.7 62,959.5
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months Twelve months
ended ended
July 31, July 31,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
Net earnings (loss) $(35,057) $(38,780) $52,572 $24,689
Income tax
expense (benefit) (421) 1,534 2,292 82
Interest expense 20,429 20,361 89,519 86,712
Depreciation
and
amortization
expense 20,324 21,638 82,494 85,521
Other income
(expense),
net (30) 309 1,321 (1,039)
--- --- ----- ------
EBITDA 5,245 5,062 228,198 195,965
Employee stock
ownership plan
compensation charge 1,890 2,720 6,755 12,413
Unit and stock-
based
compensation
charge (b) 1,203 433 2,312 1,816
Loss on disposal of
assets and other 4,118 2,521 13,042 11,250
Minority interest (296) (335) 783 497
---- ---- --- ---
Adjusted EBITDA (c) 12,160 10,401 251,090 221,941
Net cash interest
expense (d) (20,439) (21,585) (88,915) (89,781)
Maintenance capital
expenditures (e) (4,439) (5,536) (21,766) (20,594)
Cash paid for taxes (643) (2,514) (1,512) (3,841)
Proceeds from
asset sales 1,321 2,209 8,199 10,874
----- ----- ----- ------
Distributable cash flow
to equity investors (f) $(12,040) $(17,025) $147,096 $118,599
======== ======== ======== ========
Propane gallons sales
Retail - Sales to
End Users 96,710 89,585 652,788 656,832
Wholesale - Sales to
Resellers 52,745 50,603 222,038 182,015
------ ------ ------- -------
Total propane
gallons sales 149,455 140,188 874,826 838,847
======= ======= ======= =======
(a) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(b) Statement of Financial Accounting Standards ("SFAS") No. 123( R),
"Share-Based Payment" requires that the cost resulting from all
share-based payment transactions be recognized in the financial
statements. Share-based payment transactions resulted in a non-cash
compensation charge of $0.5 million and $0.1 million to operating expense
for the three months ended July 31, 2009 and 2008, respectively, and
$0.9 million and $0.5 million to operating expense for the twelve
months ended July 31, 2009 and 2008, respectively. A non-cash charge of
$0.7 million and $0.3 million was recorded to general and administrative
expense for the three months ended July 31, 2009 and 2008, respectively.
A non-cash charge of $1.4 million and $1.3 million was recorded to general
and administrative expense for the twelve months ended July 31, 2009 and
2008, respectively.
(c) Management considers Adjusted EBITDA to be a chief measurement of the
partnership's overall economic performance and return on invested capital.
Adjusted EBITDA is calculated as earnings before interest, income taxes,
depreciation and amortization, employee stock ownership plan compensation
charge, unit and stock-based compensation charge, loss on disposal of
assets and other, minority interest, and other non-cash and non-operating
charges. 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 are unusual or non-recurring, and makes it
easier to compare its results with other companies that have different
financing and capital structures. In addition, management believes this
measure is consistent with the manner in which the partnership's lenders
and investors measure its overall performance and liquidity, including
its ability to pay quarterly equity distributions, service its long-term
debt and other fixed obligations and fund its capital expenditures and
working capital requirements. 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 interest income. This amount also 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.
(g) During the fourth quarter of fiscal 2007 the governor of the state of
Michigan signed into law a new Michigan Business Tax. The passing of
this new tax law caused Ferrellgas to recognize a one time deferred tax
expense of $2.8 million during fiscal 2007. During fiscal 2008 a credit
for this deferred tax expense was created by a new Michigan tax law. The
passing of this new tax law caused Ferrellgas to recognize a one time
deferred tax credit during fiscal 2008.
Contact:
Tom Colvin, Investor Relations, 913-661-1530
Jim Saladin, Media Relations, 913-661-1833
SOURCE Ferrellgas Partners, L.P.
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