LIBERTY, Mo., Sept. 25 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), one of the nation's largest retail marketers of propane, today
reported net earnings of $56.7 million for the fiscal year ended July 31,
2003.
"We are extremely pleased to once again deliver strong financial results
to our investors," said James E. Ferrell, Chairman and Chief Executive
Officer. "Investors continue to benefit from our consistent annual
performance, the security of our quarterly distributions and a total return in
excess of 30 percent from our common units this fiscal year."
Retail propane sales volumes for the fiscal year were 899 million gallons,
an increase of 8 percent as compared to 832 million retail gallons sold in
fiscal year 2002. This increased sales volume reflects the impact of more
normal winter heating season temperatures this fiscal year and, to a lesser
extent, acquisitions, partially offset by the continued effects of a sluggish
economy and customer conservation stemming from higher wholesale propane
product costs.
Gross profit and operating expense for the fiscal year were $530.7 million
and $298.0 million, respectively, increases of $29.3 million and
$18.3 million, respectively, compared to the prior year. These increases were
primarily attributable to this year's increase in retail propane sales
volumes. General and administrative expense was $28.0 million, up slightly
from $27.2 million in the prior fiscal year. Equipment lease expense was
$20.6 million, down $3.9 million from the prior fiscal year, partially
reflecting the Partnership's fiscal year 2003 second quarter refinancing of
certain operating lease obligations.
The resulting Adjusted EBITDA for fiscal year 2003 was $184.0 million, an
increase of 8 percent compared to $170.0 million in the prior fiscal year.
Net earnings were $56.7 million, compared to the prior fiscal year's near
record performance of $60.0 million. The net earnings this fiscal year
included 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. Excluding these special charges, net earnings for this
fiscal year would have exceeded the Partnership's fiscal year 2001 record net
earnings by over $2.0 million.
"We continue our focus on improving operations and effectively managing
our business for the long-term," Ferrell added. "I am proud of this year's
financial results and of our employees, whose hard work and dedication made
this past year a success."
The partnership historically experiences losses during the fourth quarter,
as sales volumes typically represent less than 15 percent of annual sales,
causing fixed costs to exceed off-season cash flow. Retail propane sales
volumes and gross profit for the fourth quarter of fiscal year 2003 were 116
million gallons and $66.8 million, respectively. Operating and general and
administrative expenses were $70.7 million and $6.2 million, respectively.
Equipment lease expense was $4.1 million. These seasonal results produced an
expected Adjusted EBITDA loss of $14.2 million and net loss of $44.8 million
for the fourth quarter. The extraordinary performance experienced during the
same quarter last year was not expected to be repeated this fiscal year. The
fourth quarter results this fiscal year were consistent with recent fiscal
years and consistent with the Partnership's expectations.
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.
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 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
amended, and other documents filed from time to time, by the Partnership,
with the Securities and Exchange Commission.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS July 31, 2003 July 31, 2002
Current Assets:
Cash and cash equivalents $11,154 $19,781
Accounts and notes receivable, net 56,742 74,274
Inventories 69,077 48,034
Prepaid expenses and other current
assets 8,306 10,724
Total Current Assets 145,279 152,813
Property, plant and equipment, net 684,917 506,531
Goodwill 124,190 124,190
Intangible assets, net 98,157 98,170
Other assets, net 8,853 3,424
Total Assets $1,061,396 $885,128
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $59,454 $54,316
Other current liabilities (a) 89,687 89,061
Total Current Liabilities 149,141 143,377
Long-term debt (a) 888,226 703,858
Other liabilities 18,747 14,861
Contingencies and commitments - -
Minority interest 2,363 1,871
Partners' Capital:
Senior unitholder (1,994,146 and
2,782,211 units outstanding at July
2003 and July 2002, respectively -
liquidation preference $79,766 and
$111,288 at July 2003 and July 2002,
respectively) 79,766 111,288
Common unitholders (37,673,455 and
36,081,203 units outstanding at
July 2003 and July 2002, respectively) (15,602) (28,320)
General partner unitholder (400,683
and 392,556 units outstanding
at July 2003 and July 2002,
respectively) (59,277) (59,035)
Accumulated other comprehensive loss (1,968) (2,772)
Total Partners' Capital 2,919 21,161
Total Liabilities and Partners'
Capital $1,061,396 $885,128
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., 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.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2003 AND 2002
(in thousands, except per unit data)
(unaudited)
Three months ended Twelve months ended
July 31 July 31
2003 2002 2003 2002
Revenues:
Propane and other gas liquids
sales $150,819 $127,878 $1,136,358 $953,117
Other 20,675 18,776 85,281 81,679
Total revenues 171,494 146,654 1,221,639 1,034,796
Cost of product sold 104,645 72,259 690,969 533,437
Gross profit 66,849 74,395 530,670 501,359
Operating expense 70,744 67,438 297,970 279,624
Depreciation and amortization
expense 10,060 9,093 40,779 41,937
General and administrative
expense 6,161 5,583 28,024 27,157
Equipment lease expense 4,130 6,095 20,640 24,551
Employee stock ownership plan
compensation charge 2,125 1,362 6,778 5,218
Loss on disposal of assets and
other 2,898 2,127 6,679 3,957
Operating income (loss) (29,269) (17,303) 129,800 118,915
Interest expense (16,337) (14,569) (63,665) (59,608)
Interest income 441 229 1,291 1,423
Early extinguishment of debt
expense (a) - - (7,052) -
Earnings (loss) before minority
interest and cumulative
effect of change in
accounting principle (45,165) (31,643) 60,374 60,730
Minority interest (b) (405) (281) 871 771
Earnings (loss) before
cumulative effect of change in
accounting principle (44,760) (31,362) 59,503 59,959
Cumulative effect of change in
accounting principle, net of
minority interest of $28 (c) - - (2,754) -
Net earnings (loss) (44,760) (31,362) 56,749 59,959
Distribution to senior
unitholder 2,471 2,782 10,771 11,172
Net earnings (loss) available
to general partner (472) (341) 460 488
Net earnings (loss) available
to common unitholders $(46,759) $(33,803) $45,518 $48,299
Basic earnings (loss) per
common unit:
Earnings (loss) before
cumulative effect of change in
accounting principle (d) $(1.27) $(0.94) $1.33 $1.34
Net earnings (loss) available
to common unitholders $(1.27) $(0.94) $1.25 $1.34
Weighted average common units
outstanding 36,769.3 36,077.4 36,300.5 36,022.3
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended Twelve months ended
July 31 July 31
2003 2002 2003 2002
Retail gallons 115,588 110,902 898,622 831,592
Net earnings (loss) $(44,760) $(31,362) $56,749 $59,959
Interest expense 16,337 14,569 63,665 59,608
Depreciation and
amortization expense 10,060 9,093 40,779 41,937
Interest income (441) (229) (1,291) (1,423)
EBITDA $(18,804) $(7,929) $159,902 $160,081
Employee stock ownership
plan compensation charge 2,125 1,362 6,778 5,218
Loss on disposal of assets
and other 2,898 2,127 6,679 3,957
Minority interest (b) (405) (281) 871 771
Early extinguishment of
debt expense (a) - - 7,052 -
Cumulative effect of change
in accounting principle (c) - - 2,754 -
Adjusted EBITDA (e) $(14,186) $(4,721) $184,036 $170,027
(a) Expenses related to the refinancing of the $160 million Ferrellgas
Partners, L.P. senior secured debt in September 2002.
(b) Amounts 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 SFAS No. 143.
(d) Amount calculated as 99% of the earnings (loss) 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) 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
compensation charge, loss from disposal of assets and other, minority
interest, early extinguishment of debt expense, cumulative effect of
change in accounting principle 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 to 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.
Contact: Ryan VanWinkle, Investor Relations, 816-792-7998
SOURCE Ferrellgas Partners, L.P.
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Related links:
http://www.ferrellgas.com
CONTACT:
Ryan VanWinkle, Investor Relations of
Ferrellgas Partners, +1-816-792-7998
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