LIBERTY, Mo., Sept. 26 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), one of the nation's largest retail marketers of propane, today
reported near record earnings for the fiscal year ended July 31, 2002, despite
experiencing significantly warmer than normal winter heating season
temperatures. Fiscal year 2002 net earnings were $60.0 million, slightly less
than prior year record net earnings of $64.1 million.
"We are extremely pleased to once again deliver strong financial results
to our investors, in light of the challenging operating environment," said
James E. Ferrell, Chairman and Chief Executive Officer. "Our continued focus
on improving retail margins and managing expenses enabled us to effectively
reduce the financial impact of this year's lower retail gallon sales caused by
warm winter temperatures and the soft economic conditions."
Retail propane sales volumes for fiscal year 2002 were 832 million
gallons, compared to the previous year's record gallon sales volume of 957
million. Winter heating season temperatures in fiscal year 2002 were 17
percent warmer than the prior year and 12 percent warmer than normal as
measured by the National Oceanic and Atmospheric Administration, making this
the third warmest winter heating season in the 108-year history such records
have been kept.
Gross profit for fiscal year 2002 was $501.4 million, compared to
$538.6 million in fiscal year 2001, as improved margins realized in retail
locations partially offset the financial impact from warmer winter
temperatures, lower risk management gains and the sluggish national economy.
For the fiscal year, operating expense of $279.6 million decreased from the
prior year primarily due to the effect of lower retail propane sales volumes.
Equipment lease expense for the fiscal year of $24.6 million decreased year
over year as a result of lower interest rates.
The company achieved EBITDA results of $170.0 million, which were near
planned levels, despite experiencing warmer than normal temperatures. The
prior year's company record EBITDA performance of $193.8 million was achieved
in a colder than normal period. Net earnings for the fiscal year of
$60.0 million were favorably impacted by the implementation of the accounting
pronouncement SFAS No. 142, which reduced the company's annual amortization
expense.
"In fiscal 2002, our financial results provided our public equity
investors a best-in-class cash distribution coverage ratio while our common
equity yielded investors a more than 10 percent total return on investment."
Ferrell commented. "We celebrate our recent accomplishments and will build
upon our successes as we focus our efforts on the upcoming winter heating
season."
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 for
the fourth quarter of 111 million gallons and continued strong retail margins
produced a seasonal loss of $31.4 million, a 28 percent improvement as
compared to a $43.7 million loss in the fourth quarter of fiscal year 2001.
On September 24, 2002, the company announced the successful refinancing of
its 9-3/8% senior notes due 2006, capitalizing on the favorable interest rate
environment and securing replacement financing well into the future. Proceeds
from the newly issued $170 million 8-3/4% senior notes due 2012 were used to
redeem the outstanding 9-3/8% senior notes and fund underwriting and other
transaction costs associated with the offering.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., is the nation's second largest retail marketer of propane, serving more
than one million customers in 45 states. Ferrellgas employees indirectly own
more than 17 million units of the partnership through an employee stock
ownership plan. Ferrellgas trades on the New York Stock Exchange under the
ticker symbol FGP.
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 fiscal 2001 dated July 31, 2001, as filed with
the Securities and Exchange Commission on October 25, 2001, and other
documents filed from time to time with the Securities and Exchange Commission.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
Unaudited Audited
ASSETS July 31, 2002 July 31, 2001
Current Assets:
Cash and cash equivalents $19,781 $25,386
Accounts and notes receivable, net 74,274 56,772
Inventories 48,034 65,284
Prepaid expenses and other current
assets 10,724 10,504
Total Current Assets 152,813 157,946
Property, plant and equipment, net 506,531 491,194
Goodwill (A) 124,190 124,190
Intangible assets, net (A) 98,170 108,526
Other assets, net (A) 3,424 14,303
Total Assets $885,128 $896,159
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $54,316 $58,274
Other current liabilities 89,061 77,610
Total Current Liabilities 143,377 135,884
Long-term debt 703,858 704,782
Other liabilities 14,861 15,472
Contingencies and commitments - -
Minority interest 1,871 2,034
Partners' Capital:
Senior unitholder (2,782,211 and
2,801,622 units outstanding at July
2002 and July 2001, respectively -
liquidation preference at $40 per
unit) 111,288 112,065
Common unitholders (36,081,203 and
35,908,366 units outstanding
at July 2002 and July 2001,
respectively) (28,320) (12,959)
General partner unitholder (364,457
and 362,711 units outstanding
at July 2002 and July 2001,
respectively) (59,035) (58,738)
Accumulated other comprehensive
income (2,772) (2,381)
Total Partners' Capital 21,161 37,987
Total Liabilities and Partners'
Capital $885,128 $896,159
(A) In accordance with the FASB's SFAS No. 142, Ferrellgas now separately
reports goodwill that was formerly reported in Intangible assets, net
and Other assets, net.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2002 AND 2001
(in thousands, except per unit data)
Three months ended Twelve months ended
July 31 July 31
Unaudited Unaudited Audited
2002 2001 2002 2001
Revenues:
Gas liquids
and related
product sales $127,878 $134,421 $953,117 $1,381,940
Other 18,776 19,577 81,679 86,730
Total revenues 146,654 153,998 1,034,796 1,468,670
Cost of
product sold 72,259 94,537 533,437 930,117
Gross profit 74,395 59,461 501,359 538,553
Operating expense 67,438 59,412 279,624 288,258
Depreciation
and amortization
expense (A) 9,093 14,061 41,937 56,523
General and
administrative
expense 5,583 7,262 27,157 25,508
Equipment lease
expense 6,095 6,600 24,551 30,986
Employee stock
ownership plan
compensation charge 1,362 1,333 5,218 4,843
Loss on disposal
of assets and other 2,127 983 3,957 5,744
Operating
income (loss) (17,303) (30,190) 118,915 126,691
Interest expense (14,569) (14,386) (59,608) (61,544)
Interest income 229 607 1,423 3,027
Other charges (B) - (159) - (3,277)
Earnings (loss)
before minority
interest (31,643) (44,128) 60,730 64,897
Minority interest (281) (411) 771 829
Net earnings (loss) (31,362) (43,717) 59,959 64,068
Distribution to
senior unitholder 2,782 3,703 11,172 18,013
Net earnings
(loss) available
to general partner (341) (474) 488 461
Net earnings (loss)
available to
common unitholders $(33,803) $(46,946) $48,299 $45,594
Net earnings (loss)
per common unit:
Net earnings (loss)
per common unit $(0.94) $(1.38) $1.34 $1.43
Weighted average
common units
outstanding 36,077.4 34,005.8 36,022.3 31,987.3
Supplemental Data (unaudited):
Three months ended Twelve months ended
July 31 July 31
2002 2001 2002 2001
Retail gallons 110,902 108,810 831,592 956,718
Operating income (loss) $(17,303) $(30,190) $118,915 $126,691
Depreciation and
amortization
expense (A) 9,093 14,061 41,937 56,523
Employee stock
ownership plan
compensation
charge 1,362 1,333 5,218 4,843
Loss on disposal of
assets and other 2,127 983 3,957 5,744
EBITDA (C) (4,721) (13,813) 170,027 193,801
Net cash interest
expense (D) (13,824) (13,985) (56,747) (59,263)
Maintenance
capital expenditures
and other charges (B) (2,490) (5,291) (11,806) (15,373)
Distributable cash
flow to equity
investors $(21,035) $(33,089) $101,474 $119,165
(A) In accordance with the FASB's SFAS No. 142, fiscal 2002 amounts do
not include amortization of goodwill. Fiscal 2001 includes $2,506
and $10,531 of goodwill amortization for the three and twelve months
ended July 31, 2001, respectively.
(B) Other charges refer to expenses incurred for the modification of the
terms of senior units and common units on April 6, 2001.
(C) 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 (loss) or net earnings(loss).
(D) Net cash interest expense includes interest expense and other related
charges net of interest income and non-cash interest expense.
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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