OVERLAND PARK, Kan., Dec. 8 /PRNewswire-FirstCall/ -- Ferrellgas Partners,
L.P. (NYSE: FGP), one of the nation's largest propane distributors, today
reported earnings for its fiscal first quarter ended October 31, 2005. The
seasonal net loss for the quarter improved 26% compared to the prior year's
first quarter results. Due to the seasonal nature of the propane industry,
the partnership has historically experienced a net loss during its fiscal
first quarter as fixed costs exceed off-season cash flow.
The resulting Adjusted EBITDA for the quarter was a record $20.2 million,
more than doubling the Adjusted EBITDA of $8.0 million reported in the first
quarter of fiscal 2005, as adjusted for discontinued operations.
Gross profit for the first quarter was a record $127.6 million, an
increase of 13% compared to the first quarter of fiscal 2005. This increase
in gross profit was primarily due to improved margins resulting from enhanced
pricing controls available under the partnership's new operating platform and
the continued growth in the Blue Rhino-branded tank exchange sales. These
increases in gross profit were partially offset by the impact of reduced
propane gallon sales as compared to the first quarter of fiscal 2005.
Propane gallon sales for the first quarter were 167 million, a 9% decrease
compared to the first quarter of fiscal 2005. This decrease was primarily
related to customer conservation, a warmer than normal start to the propane
season this fall and the elimination of past inefficient propane deliveries
due to the improved demand forecasting capabilities available under the new
operating platform.
"We are very pleased to deliver these anticipated, improved financial
results to our investors," said James E. Ferrell, Chairman, President and
Chief Executive Officer. "The significant improvement in our financial
performance this quarter is directly attributable to the remarkable results we
are seeing from our fully implemented operating system and the continued
growth in our tank exchange gallon sales, which have grown nearly 20% over the
last 12 months."
Operating expense for the quarter was $89.7 million, as compared to $88.5
million in the first quarter of fiscal 2005. Anticipated savings achieved
from the new operating platform were offset by increased variable expenses
primarily associated with vehicle fuel and incentive compensation costs and
the continued growth in tank exchange sales volumes. General and
administrative expense was $11.2 million for the fiscal first quarter, as
compared to $10.3 million in the prior year quarter. Equipment lease expense
for the first quarter was $7.0 million, as compared to $6.8 million and $5.8
million reported in the fiscal fourth and first quarters of 2005,
respectively.
"This quarter's performance is the result of more than four years of
development and deployment of advanced logistics and customer service
technologies that have resulted in improved margins, reduced operating
expenses and net customer gains," said Mr. Ferrell. "With the winter heating
season upon us we believe that we are well positioned, both operationally and
financially, to perform regardless of external pressures such as potentially
warmer winters or continued customer conservation."
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., serves more than one million customers in all 50 states, the District of
Columbia, Puerto Rico and Canada. Ferrellgas employees indirectly own more
than 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, 2005, as amended on Form 10-K/A, and other documents filed from time to
time by these entities with the Securities and Exchange Commission.
Contact:
Ryan VanWinkle, Investor Relations, 913-661-1528
Scott Brockelmeyer, Media Relations, 913-661-1830
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS October 31, 2005 July 31, 2005
Current Assets:
Cash and cash equivalents $24,541 $20,505
Accounts and notes receivable, net 121,958 107,778
Inventories 161,865 97,743
Prepaid expenses and other current assets 17,336 12,861
Total Current Assets 325,700 238,887
Property, plant and equipment, net 756,480 766,765
Goodwill 234,663 234,142
Intangible assets, net 257,074 255,277
Other assets, net 13,429 13,902
Total Assets $1,587,346 $1,508,973
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $157,604 $108,667
Short term borrowings 82,982 19,800
Other current liabilities (a) 77,995 71,535
Total Current Liabilities 318,581 200,002
Long-term debt (a) 961,444 948,977
Other liabilities 20,337 20,165
Contingencies and commitments - -
Minority interest 5,670 6,151
Partners' Capital:
Common unitholders (60,172,054 and
60,134,054 units outstanding
at October 2005 and July 2005,
respectively) 338,493 390,422
General partner unitholder (607,799
and 607,415 units outstanding
at October 2005 and July 2005,
respectively) (56,658) (56,132)
Accumulated other comprehensive loss (521) (612)
Total Partners' Capital 281,314 333,678
Total Liabilities and Partners'
Capital $1,587,346 $1,508,973
(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, 2005 AND 2004
(in thousands, except per unit data)
(unaudited)
Three months ended October 31,
2005 2004
Revenues:
Propane and other gas liquids sales $353,418 $313,022
Other 32,180 30,750
Total revenues 385,598 343,772
Cost of product sold 258,002 231,232
Gross profit 127,596 112,540
Operating expense 89,724 88,472
Depreciation and amortization expense 21,103 19,592
General and administrative expense 11,168 10,322
Equipment lease expense 7,020 5,760
Employee stock ownership plan
compensation charge 2,457 2,087
Loss on sale of assets and other 1,596 1,256
Operating loss (5,472) (14,949)
Interest expense (20,875) (22,863)
Interest income 377 319
Loss before income taxes, minority
interest, and discontinued operations (25,970) (37,493)
Income tax benefit - (406)
Minority interest (b) (202) (313)
Loss before discontinued operations (25,768) (36,774)
Earnings from discontinued operations - 1,785
Net loss (25,768) (34,989)
Distribution to senior unitholder - 1,994
Net loss available to general partner (258) (370)
Net loss available to common unitholders $(25,510) $(36,613)
Basic loss per common unit:
Net loss available to common unitholders
before discontinued operations (c) $(0.42) $(0.74)
Earnings from discontinued operations - 0.03
Net loss available to common unitholders (e) $(0.42) $(0.71)
Weighted average common units outstanding 60,162.1 51,505.1
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended October 31,
2005 2004
Propane gallons 167,407 184,699
Net loss $(25,768) $(34,989)
Income tax benefit - (406)
Interest expense 20,875 22,863
Depreciation and amortization expense 21,103 19,592
Interest income (377) (319)
EBITDA $15,833 $6,741
Employee stock ownership plan
compensation charge 2,457 2,087
Unit and stock-based compensation charge (f) 547 -
Non-cash charges related to
discontinued operations(a) - 273
Loss on disposal of assets and other 1,596 1,256
Minority interest (b) (202) (313)
Adjusted EBITDA (d) $20,231 $10,044
Adjusted EBITDA from discontinued operations - 2,058
Adjusted EBITDA from continuing operations $20,231 $7,986
(a) Earnings related to the storage and distribution business sold
during July 2005 and other non-cash items related to the discontinued
operations for the three months ended October 31, 2004.
(b) Amounts allocated to the general partner for its 1.0101% interest in
the operating partnership, Ferrellgas, L.P.
(c) Amount calculated as 99% of the earnings (loss) before discontinued
operations less distribution to senior unit holder; the result then
divided by the weighted average common units outstanding.
(d) 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
plan compensation charge, loss on disposal of assets and other,
minority interest, 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.
(e) Emerging Issues Task Force ("EITF") 03-6 "Participating Securities
and the Two-Class Method under FASB Statement No. 128, Earnings per
Share," requires the calculation of net earnings per limited partner
unit for each period presented according to distributions declared
and participation rights in undistributed earnings, as if all of the
earnings for the period had to be distributed. In periods with
undistributed earnings above certain levels, the calculation
according to the two-class method results in an increased allocation
of undistributed earnings to the general partner and a dilution of
earnings to the limited partners. Due to the seasonality of the
propane business, the dilution effect of the EITF 03-6 on net
earnings per limited partner unit will impact the three and six
months ending January 31. EITF 03-6 did not have a dilutive effect on
the three months ended October 31, 2005.
(f) Statement of Financial Accounting Standards ("SFAS") No. 123( R),
"Share-Based Payment" was adopted during the first quarter of fiscal
2006 and requires that the cost resulting from all share-based
payment transactions be recognized in the financial statements.
Management adopted this standard using the modified prospective
application method which resulted in a non-cash compensation charge
of $0.1 million and $0.4 million to operating expense and general and
administrative expense, respectively, for the three months ended
October 31, 2005.
SOURCE Ferrellgas Partners, L.P.
 back to top
Related links:
http://www.ferrellgas.com
CONTACT:
Ryan VanWinkle, Investor Relations,
+1-913-661-1528 or Scott Brockelmeyer, Media Relations,
913-661-1830, both of Ferrellgas Partners, L.P.
|
