LIBERTY, Mo., Nov. 26 /PRNewswire-FirstCall/ -- Ferrellgas Partners, L.P.
(NYSE: FGP), one of the nation's largest retail marketers of propane, today
reported earnings for the first quarter of fiscal year 2003. The first
quarter covers the three-month period ended October 31, 2002.
Retail propane sales volumes for the fiscal quarter were 172 million
gallons, compared to 190 million gallons in the prior year period, as the
industry experienced continued soft economic conditions and reduced early fall
demand resulting from increased spring and summer propane deliveries.
Gross profit for the quarter was $92.6 million, compared to $95.3 million
in the first quarter of fiscal year 2002, as risk management contributions
partially offset the effect of reduced retail gallon sales in the quarter.
Operating and general and administrative expenses for the quarter were
$68.4 million and $6.9 million, respectively, up slightly from $67.1 million
and $6.8 million in the first quarter of fiscal year 2002. Equipment lease
expense for the quarter decreased 8 percent to $6.0 million from $6.5 million,
due to the favorable interest rate environment. The resulting EBITDA for the
quarter was $11.3 million, compared to $14.8 million in the first quarter of
fiscal year 2002.
"Despite the continued effects of soft economic conditions and recent
increases in wholesale propane costs this quarter, I am pleased with our
efforts to minimize the financial impact from these factors. We will continue
to focus on improving our financial performance through effective margin and
cost management," said James E. Ferrell, Chairman, President and Chief
Executive Officer. "As we enter the early stages of the winter heating season,
we are experiencing increased retail gallon sales. Our employees are focused
and prepared to take on the challenges of the impending winter heating
season."
The partnership historically experiences a seasonal loss during its first
quarter, as sales volumes typically represent less than 20 percent of annual
gallon sales, causing fixed costs to exceed off-season cash flow.
Net loss for the quarter reflects a seasonal loss of $25.0 million, which
includes 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. Net loss for the prior year quarter was $13.5 million.
During the quarter, the company announced the successful refinancing of
its 9-3/8% senior notes due 2006, which resulted in a charge to earnings
related to the early retirement of this debt. The company also implemented
SFAS No. 143 this quarter, which resulted in a one-time cumulative charge to
earnings related to the future retirement of certain long-term assets.
Ferrellgas Partners, L.P., through its operating subsidiary, 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.
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 BALANCE SHEETS
(in thousands, except unit data)
Unaudited Audited
ASSETS October 31, 2002 July 31, 2002
Current Assets:
Cash and cash equivalents $14,516 $19,781
Accounts and notes receivable, net 48,050 74,274
Inventories 76,855 48,034
Prepaid expenses and other current assets 11,299 10,724
Total Current Assets 150,720 152,813
Property, plant and equipment, net 508,137 506,531
Goodwill 124,190 124,190
Intangible assets, net 95,231 98,170
Other assets 17,335 3,424
Total Assets $895,613 $885,128
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $98,594 $54,316
Other current liabilities 66,406 89,061
Short-term borrowings 21,500 -
Total Current Liabilities 186,500 143,377
Long-term debt(a) 713,003 703,858
Other liabilities 17,518 14,861
Contingencies and commitments - -
Minority interest 1,485 1,871
Partners' Capital:
Senior unitholder (2,782,211 units
outstanding at both October 2002
and July 2002 - liquidation
preference at $40 per unit) 111,288 111,288
Common unitholders (36,105,828 and
36,081,203 units outstanding
at October 2002 and July 2002,
respectively) (72,050) (28,320)
General partner unitholder (392,815
and 392,556 units outstanding
at October 2002 and July 2002,
respectively) (59,507) (59,035)
Accumulated other comprehensive loss (2,624) (2,772)
Total Partners' Capital (22,893) 21,161
Total Liabilities and Partners' Capital $895,613 $885,128
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., the operating partnership, is
$170 million of 8 3/4% notes, which are a liability of Ferrellgas
Partners, L.P. and not of Ferrellgas, L.P.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2002 AND 2001
(in thousands, except per unit data)
(Unaudited)
Three months ended October 31
2002 2001
Revenues:
Gas liquids and related product sales $194,900 $224,285
Other 21,414 20,958
Total revenues 216,314 245,243
Cost of product sold 123,672 149,947
Gross profit 92,642 95,296
Operating expense 68,428 67,127
Depreciation and amortization expense 9,895 11,454
General and administrative expense 6,902 6,825
Equipment lease expense 5,992 6,545
Employee stock ownership plan
compensation charge 1,395 1,309
Loss on disposal of assets and other 671 847
Operating income (loss) (641) 1,189
Interest expense (14,696) (15,114)
Interest income 62 326
Early extinguishment of debt expense(a) (7,052) -
Loss before minority interest and
cumulative effect of change in accounting
principle (22,327) (13,599)
Minority interest (b) (115) (97)
Loss before cumulative effect of
change in accounting principle (22,212) (13,502)
Cumulative effect of change in
accounting principle, net of minority
interest of $28(c) (2,754) -
Net loss (24,966) (13,502)
Distribution to senior unitholder 2,782 2,802
Net loss available to general partner (277) (163)
Net loss available to common
unitholders $(27,471) $(16,141)
Net loss per common unit:
Loss before cumulative effect of
change in accounting principle(d) $(0.69) $(0.45)
Net loss available to common unitholders $(0.76) $(0.45)
Weighted average common units outstanding 36,088.1 35,919.0
Supplemental Data:
Three months ended October 31
2002 2001
Retail gallons 172,026 189,911
Operating income (loss) $(641) $1,189
Depreciation and amortization
expense 9,895 11,454
Employee stock ownership plan
compensation charge 1,395 1,309
Loss on disposal of assets and other 671 847
EBITDA (e) 11,320 14,799
Net cash interest expense (f) (14,133) (14,623)
Maintenance capital expenditures (3,012) (4,701)
Distributable cash flow to equity
investors $(5,825) $(4,525)
(a) Expenses related to the refinancing of the $160 million MLP senior
secured debt.
(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 the recently issued
SFAS No. 143.
(d) Amount calculated as 99% of the 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) 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.
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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