LIBERTY, Mo., Feb. 27 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), the nation's second largest retail marketer of propane, today
reported a 24 percent increase in retail sales volumes and a 28 percent
increase in net earnings for the second quarter ended January 31, 2003, as
compared to the same period last year. These results reflect the positive
impact of colder winter temperatures.
Second quarter retail propane sales volumes were 360 million gallons, an
increase of 70 million gallons as compared to the second quarter of 2002.
These strong sales volumes reflect national temperatures that were 14 percent
colder than the same period last year and, to a lesser extent, acquisitions.
Nationwide temperatures for the quarter were 2 percent warmer than normal as
reported by the National Oceanic and Atmospheric Administration.
Gross profit for the quarter was $209.7 million, an increase of
$30.6 million from the second quarter of last year, primarily as a result of
increased retail sales volumes. Second quarter operating and general and
administrative expenses were $79.7 million and $7.8 million, respectively, up
from $70.4 million and $6.6 million in the second quarter of 2002, due
primarily to increased sales volume and performance-based variable expenses.
Equipment lease expense for the quarter was $5.5 million, down $.6 million
from the prior year's quarter partially reflecting the company's second
quarter refinancing of certain operating tank lease obligations.
EBITDA for the quarter was $116.8 million, an increase of 22 percent as
compared to $96.1 million in the prior year's quarter. Second quarter net
earnings were $87.1 million, an increase of 28 percent as compared to
$68.2 million in the second quarter of 2002.
"We are pleased to see the return of more normal winter temperatures,
resulting in higher sales volumes and operating cash flows for Ferrellgas,"
said James E. Ferrell, Chairman and Chief Executive Officer. "These strong
financial results, combined with our successful acquisition of ProAm in
December 2002 and our completion of recently announced financings, have
positioned us well for continued future success."
During the second quarter, the company announced the acquisition of ProAm,
Inc., the nation's 17th largest retail marketer of propane, adding
approximately 42 million gallons to the company's annual retail sales volumes.
The company also announced the completion of a $48 million offering of 8 3/4%
senior notes due 2012 and the refinancing of its operating partnership's
credit facility, extending its maturity until April 2006.
For the six-months ended January 31, 2003, retail propane sales volumes
and gross profit were 532 million gallons and $302.4 million, respectively,
and operating and general and administrative expenses were $148.1 million and
$14.7 million, respectively. Equipment lease expense for the six-month period
was $11.5 million. As is typically the case, year-to-date results were
primarily impacted by the seasonal performance experienced in the second
quarter. EBITDA and net earnings for the six-month period were $128.1 million
and $62.1 million, respectively, as compared to $110.9 million and
$54.7 million for the same period last year. Net earnings for the six-month
period include special charges of $7.1 million related to the early
extinguishment of debt and $2.8 million related to a cumulative effect of a
change in accounting principle.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 45 states.
Ferrellgas employees indirectly own more than 17 million common units of the
partnership through an employee stock ownership plan. Ferrellgas trades on
the New York Stock Exchange under the ticker symbol FGP. More information
about the company can be found online at http://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 actual results, performance and
expectations to differ materially from anticipated results, performance or
expectations. These risks, uncertainties and other factors are discussed in
the partnership's Form 10-K for the fiscal year ended July 31, 2002, as filed
with the Securities and Exchange Commission on October 23, 2002, and other
documents filed from time to time with the Securities and Exchange Commission.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2003 AND 2002
(in thousands, except per unit data)
(Unaudited)
Three months ended Six months ended
January 31 January 31
2003 2002 2003 2002
Revenues:
Propane and other
gas liquids sales $439,301 $331,129 $634,201 $555,414
Other 25,165 24,609 46,579 45,567
Total revenues 464,466 355,738 680,780 600,981
Cost of product sold 254,718 176,591 378,390 326,538
Gross profit 209,748 179,147 302,390 274,443
Operating expense 79,677 70,373 148,105 137,500
Depreciation and
amortization expense 10,261 10,765 20,156 22,219
General and administrative
expense 7,759 6,632 14,661 13,457
Equipment lease expense 5,528 6,086 11,520 12,631
Employee stock ownership
plan compensation charge 1,639 1,274 3,034 2,583
Loss on disposal of assets
and other 1,125 431 1,796 1,278
Operating income 103,759 83,586 103,118 84,775
Interest expense (16,084) (15,208) (30,780) (30,322)
Interest income 364 545 426 871
Early extinguishment of
debt expense (a) - - (7,052) -
Earnings before minority
interest and cumulative
effect of change in
accounting principle 88,039 68,923 65,712 55,324
Minority interest (b) 937 735 822 638
Earnings before cumulative
effect of change in
accounting principle 87,102 68,188 64,890 54,686
Cumulative effect of change
in accounting principle,
net of minority interest
of $28 (c) - - (2,754) -
Net earnings 87,102 68,188 62,136 54,686
Distribution to senior
unitholder 2,743 2,802 5,525 5,604
Net earnings available to
general partner 843 654 566 491
Net earnings available to
common unitholders $83,516 $64,732 $56,045 $48,591
Basic earnings per common unit:
Earnings before cumulative
effect of change in
accounting principle (d) $2.31 $1.80 $1.62 $1.35
Net earnings available to
common unitholders $2.31 $1.80 $1.55 $1.35
Weighted average common
units outstanding 36,144.0 36,022.7 36,116.0 35,970.9
Supplemental Data:
Three months ended Six months ended
January 31 January 31
2003 2002 2003 2002
Retail gallons 360,388 290,394 532,414 480,305
Operating income $103,759 $83,586 $103,118 $84,775
Depreciation and
amortization expense 10,261 10,765 20,156 22,219
Employee stock ownership
plan compensation charge 1,639 1,274 3,034 2,583
Loss on disposal of assets
and other 1,125 431 1,796 1,278
EBITDA (e) 116,784 96,056 128,104 110,855
Net cash interest
expense (f) (15,538) (14,352) (29,671) (28,964)
Maintenance capital
expenditures (2,599) (5,457) (5,611) (10,169)
Distributable cash flow
to equity investors $98,647 $76,247 $92,822 $71,722
(a) Expenses related to the refinancing of the $160 million MLP senior
secured debt in September 2002.
(b) Amount allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(c) Amount related to recognition of liabilities for future retirements of
underground storage facilities, as required by the recently issued
SFAS No. 143.
(d) Amount calculated as 99% of the earnings before cumulative effect of
change in accounting principle less distribution to senior unitholder;
the result then divided by the weighted average common units
outstanding.
(e) EBITDA is calculated as earnings before interest, taxes, depreciation,
amortization, other charges and non-cash items such as employee stock
ownership plan compensation charge and loss on disposal of assets and
other. EBITDA is not intended to represent cash flow and does not
represent the measure of cash available for distribution. EBITDA is a
non-GAAP measure, but provides additional information for evaluating
the partnership's ability to make the Minimum Quarterly Distribution.
In addition, EBITDA is not intended as an alternative to operating
income or net earnings.
(f) 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.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
Unaudited Audited
ASSETS January 31, 2003 July 31, 2002
Current Assets:
Cash and cash equivalents $26,245 $19,781
Accounts and notes receivable, net 113,199 74,274
Inventories 71,739 48,034
Prepaid expenses and other current assets 8,321 10,724
Total Current Assets 219,504 152,813
Property, plant and equipment, net 687,426 506,531
Goodwill 124,190 124,190
Intangible assets, net 103,130 98,170
Other assets 23,354 3,424
Total Assets $1,157,604 $885,128
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $100,408 $54,316
Other current liabilities (a) 89,270 89,061
Short-term borrowings - -
Total Current Liabilities 189,678 143,377
Long-term debt (a) 902,235 703,858
Other liabilities 17,718 14,861
Contingencies and commitments - -
Minority interest 2,793 1,871
Partners' Capital:
Senior unitholder (2,743,020 and 2,782,211
units outstanding at January 2003 and July
2002 - liquidation preference at $40 per
unit) 109,721 111,288
Common unitholders (36,180,553 and
36,081,203 units outstanding at January 2003
and July 2002, respectively) (3,769) (28,320)
General partner unitholder (393,167 and
392,556 units outstanding at January 2003
and July 2002, respectively) (58,843) (59,035)
Accumulated other comprehensive loss (1,929) (2,772)
Total Partners' Capital 45,180 21,161
Total Liabilities and Partners'
Capital $1,157,604 $885,128
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., the operating partnership, is
$218 million of 8 3/4% notes and a $10 million short-term note
payable, which are liabilities of Ferrellgas Partners, L.P. and not of
Ferrellgas, L.P.
CONTACT: Ryan VanWinkle, Investor Relations, +1-816-792-7998, or Scott
Brockelmeyer, Media Relations, +1-816-792-7837, both of
Ferrellgas Partners, L.P.
SOURCE Ferrellgas Partners, L.P.
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Related links:
http://www.ferrellgas.com
CONTACT:
Ryan VanWinkle, Investor Relations,
+1-816-792-7998, or Scott Brockelmeyer, Media Relations,
+1-816-792-7837, both of Ferrellgas Partners, L.P.
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