OVERLAND PARK, Kan., Nov. 30 /PRNewswire-FirstCall/ -- Ferrellgas
Partners, L.P. (NYSE: FGP), one of the nation's largest propane distributors,
today reported earnings for its first quarter ended October 31, 2004.
Propane sales for the first quarter increased 5 percent to 185 million
gallons, from 176 million gallons sold in the first quarter of fiscal 2004,
primarily reflecting the contribution from the partnership's recently acquired
Blue Rhino propane by portable tank exchange operations.
"We are very pleased by the operating performance and growth prospects
from the recently acquired Blue Rhino operations," said James E. Ferrell,
Chairman, President and Chief Executive Officer. "We continue to believe that
these operations allow us the opportunity for growth through the increasing
acceptance of, and uses for, propane by portable tank exchange."
Gross profit for the first quarter was a record $115.2 million, compared
to gross profit results of $96.2 million reported in the first quarter of
fiscal 2004. This increase in gross profit was primarily due to the
contribution from the Blue Rhino operations, partially offset by the impact
from the rapid increase in the wholesale cost of propane during the first
quarter.
Operating and general and administrative expenses for the first quarter
were $89.0 million and $10.3 million, respectively, compared to $72.5 million
and $6.9 million in the first quarter of fiscal 2004. Increases in these
expenses primarily reflect acquisitions completed in the last twelve-month
period and, to a lesser extent, anticipated costs associated with the on-going
roll-out of the partnership's new technology initiative to its retail
distribution outlets.
Interest and depreciation and amortization expenses were $22.9 million and
$19.8 million, respectively, compared to $16.8 million and $11.2 million in
the first quarter of fiscal 2004. Increases in these expenses primarily
reflect the impact of acquisitions completed in the last twelve-month period.
Equipment lease expense for the first quarter was $5.8 million, as compared to
$4.5 million in the prior fiscal year's first quarter.
"We have successfully completed the roll-out of our new technology
initiative to approximately one-third of our retail distribution outlets,"
said Mr. Ferrell. "We anticipate having all of our retail distribution
outlets operating on this new platform by this time next year and we remain
excited about its potential to increase our future returns as we have already
experienced net customer gains and improved operating margins in the recently
converted locations."
The resulting Adjusted EBITDA for the quarter was $10.0 million, as
compared to $12.3 million in the first quarter of fiscal 2004. The
partnership historically experiences a seasonal loss during its first fiscal
quarter, as sales volumes typically represent less than 20 percent of annual
propane gallon sales, causing fixed costs to exceed off-season cash flow. The
first quarter seasonal net loss was $35.0 million, as compared to the prior
year's first fiscal quarter net loss of $18.6 million, primarily due to
increased fixed costs, specifically depreciation and amortization expense and
interest expense associated with acquisitions completed in the last twelve-
month period.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in all 50 states,
Puerto Rico, the U.S. Virgin Islands and Canada. Ferrellgas employees
indirectly own approximately 18 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 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, 2004 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)
ASSETS October 31, 2004 July 31, 2004
Current assets:
Cash and cash equivalents $23,580 $15,428
Accounts and notes receivable, net 125,360 114,211
Inventories 153,950 103,578
Prepaid expenses and other current assets 13,277 10,022
Total current assets 316,167 243,239
Property, plant and equipment, net 795,765 792,436
Goodwill 261,805 261,768
Intangible assets, net 271,171 265,125
Other assets 18,779 15,607
Total assets $1,663,687 $1,578,175
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $171,118 $104,309
Other current liabilities (a) 89,647 92,793
Short-term borrowings 78,756 -
Total current liabilities 339,521 197,102
Long-term debt (a) 1,097,984 1,153,652
Other liabilities 21,690 20,531
Contingencies and commitments - -
Minority interest 4,819 4,791
Partners' capital:
Senior unitholder (1,994,146 units
outstanding and liquidation preference
$79,766 at both October 2004 and
July 2004) 79,766 79,766
Common unitholders (51,770,852 and
48,772,875 units outstanding at
October 2004 and July 2004, respectively) 176,032 178,994
General partner unitholder (543,081
and 512,798 units outstanding at
October 2004 and July 2004, respectively) (57,440) (57,391)
Accumulated other comprehensive income 1,315 730
Total partners' capital 199,673 202,099
Total liabilities and partners'
capital $1,663,687 $1,578,175
(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 MONTHS ENDED OCTOBER 31, 2004 AND 2003
(in thousands, except per unit data)
(unaudited)
Three months ended October 31
2004 2003
Revenues:
Propane and other gas liquids sales $327,111 $232,054
Other 32,577 23,360
Total revenues 359,688 255,414
Cost of product sold 244,516 159,249
Gross profit 115,172 96,165
Operating expense 89,040 72,479
Depreciation and amortization expense 19,847 11,195
General and administrative expense 10,322 6,891
Equipment lease expense 5,766 4,511
Employee stock ownership plan compensation
charge 2,087 1,784
Loss on disposal of assets and other 1,256 1,626
Operating loss (13,146) (2,321)
Interest expense (22,863) (16,794)
Interest income 319 331
Loss before income taxes and minority
interest (35,690) (18,784)
Income tax benefit (406) -
Minority interest (a) (295) (138)
Net loss (34,989) (18,646)
Distribution to senior unitholder 1,994 1,994
Net loss available to general partner
unitholder (370) (206)
Net loss available to common unitholders $(36,613) $(20,434)
Basic loss per common unit:
Net loss available to common unitholders $(0.71) $(0.54)
Weighted average common units outstanding 51,505.1 37,704.7
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended October 31
2004 2003
Propane sales volumes (in thousands of
gallons) 184,699 175,572
Net loss $(34,989) $(18,646)
Income tax benefit (406) -
Interest expense 22,863 16,794
Depreciation and amortization expense 19,847 11,195
Interest income (319) (331)
EBITDA 6,996 9,012
Employee stock ownership plan compensation
charge 2,087 1,784
Loss on disposal of assets and other 1,256 1,626
Minority interest (a) (295) (138)
Adjusted EBITDA (b) $10,044 $12,284
(a) Amounts allocated to the general partner for its 1.0101% general
partner interest in the operating partnership, Ferrellgas, L.P.
(b) 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 loss before interest
expense, interest income, income taxes, depreciation and amortization,
employee stock ownership plan compensation charge, loss on disposal of
assets and other and minority interest. 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 or 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, 913-661-1528
Scott Brockelmeyer, Media Relations, 913-661-1830
SOURCE Ferrellgas Partners, L.P.
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Related links:
http://www.ferrellgas.com
CONTACT:
Ryan VanWinkle, Investor Relations,
+1-913-661-1528, or Scott Brockelmeyer, Media Relations,
+1-913-661-1830, both of Ferrellgas Partners, L.P.
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