Financial Highlights
Gross Profit for the second fiscal quarter decreased $3.9 million, or 1%, compared to the prior year period, driven by decreases of $74.1 million and $70.2 million in revenue and cost of sales, respectively. The revenue and cost of sales changes were primarily due to wholesale propane prices that were 10.1% lower from Mt. Belvieu, Texas and 15.0% lower from Conway, Kansas compared to the prior year period.
Margin per gallon for the second fiscal quarter increased $0.05, or 4%, compared to the prior year period. Likewise, operating income per gallon also increased $0.02, or 5%, compared to the prior year period.
Net earnings attributable to Ferrellgas Partners, L.P. decreased $2.3 million, or 2%, compared to the prior year period.
Adjusted EBITDA for the second fiscal quarter decreased by $9.0 million, or 6%, compared to the prior year period.
Company Highlights
The Company acquired Eastern Sierra Propane, based in California, during the second fiscal quarter.
Ferrellgas’ focus on technology continues with a digital welcome package for its customers, installation of tank monitoring equipment and its ongoing Enterprise Resource Planning (“ERP”) system implementation.
Blue Rhino, the Company’s tank exchange brand, celebrated its 30th birthday. Blue Rhino is working with leading influencers in backyard grilling reaching over 17 million people through the second fiscal quarter.
LIBERTY, Mo., March 08, 2024 (GLOBE NEWSWIRE) — Ferrellgas Partners, L.P. (OTC:FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its second fiscal quarter ended January 31, 2024.
“Ferrellgas account managers are one of many high performing teams within Ferrellgas. In the second fiscal quarter, our account managers provided millions of gallons of new business,” said Tamria Zertuche, President and Chief Executive Officer of Ferrellgas. “We believe our General Managers are the best in the industry. Teamed up with the account managers they have grown retail EBITDA, all the while navigating one of the warmest winters on record.”
Gross profit decreased by $3.9 million, or 1%, for the second fiscal quarter compared to the prior year period. The $74.1 million decrease in revenue was partially offset by a decrease of $70.2 million in cost of product as compared to the prior year period. Our wholesale sales price per gallon partially correlates to the change in the wholesale market price of propane. The wholesale market price at our two major supply points averaged 10.1% and 15.0% less in the second fiscal quarter of 2024 compared to the prior year period. These decreases impacted both the revenue and cost of product changes for the period. As expected, propane market cost reduction and stabilization impacted our current period gross profit. Margin per gallon was $1.26 per gallon and $1.21 per gallon for the second fiscal quarter of fiscal 2024 and 2023, respectively. Operating income per gallon was $0.46 per gallon and $0.44 per gallon for the second fiscal quarter of fiscal 2024 and 2023, respectively.
Gallons sold for the second fiscal quarter of 2024 decreased 13.6 million, or 5%, primarily due to customer attrition related to the impact of continued inflationary conditions across the nation and warmer weather during the quarter as compared to the prior year period.
We recognized net earnings attributable to Ferrellgas Partners, L.P. of $95.8 million and $98.1 million in the second fiscal quarter of fiscal 2024 and 2023, respectively. Operating expense as a percentage of total revenue increased 13% for the second fiscal quarter compared to the prior year period. Operating expense – personnel, vehicle, plant and office increased $2.3 million, or 1%. Lower legal costs compared to the prior year period drove the majority of the $5.9 million decrease in General and administrative expense, partially offset by costs related to the technology investments described above.
Adjusted EBITDA, a non-GAAP financial measure, decreased by $9.0 million, or 6%, to $146.9 million in the second fiscal quarter compared to $155.9 million in the prior year quarter. The change was primarily due to a $3.9 million decrease in gross profit and, after adjusting for a $9.0 million decrease in Legal fees and settlements related to non-core businesses, a $5.4 million increase in Operating, general and administrative expense.
In conjunction with our focus on growth, we acquired Eastern Sierra Propane in January 2024 with seller advising support from Matrix Capital Markets Group, Inc. This additional 150-mile service area in the Eastern Sierra mountains was cultivated by owner Tom Sigler over 30 years and complements our existing California service units. The strategic propane gas storage acquired through the sale will benefit our distribution network.
Technology remains a strategic priority as we advance various business initiatives such as the design and implementation of the ERP system noted above. Our digital welcome package and tank monitoring installations are other customer service enhancements. As a nationwide logistics company, we will benefit from having better data, miles and minutes management and pricing tools which in turn will allow us to deliver product to our customers timely and efficiently.
Blue Rhino celebrated its 30th birthday this year. A special edition tank sleeve is rolling out nationally to commemorate the occasion. Blue Rhino fans have the opportunity to enter a nationwide sweepstakes to become an honorary Chief Grilling Officer and receive a BBQ master class for up to 30 friends. Grilling enthusiasts can also view favorite grilling recipes on our 30th anniversary e-cookbook in addition to participating in other events.
On Friday, March 8, 2024, the Company will conduct a teleconference at https://edge.media-server.com/mmc/p/5po8ehpw to discuss the results of operations for the second fiscal quarter ended January 31, 2024. The webcast of the teleconference will begin at 8:30 a.m. Central Time (9:30 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at InvestorRelations@ferrellgas.com.
About Ferrellgas
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico. Its Blue Rhino propane exchange brand is sold at 65,000 locations nationwide. Blue Rhino is proudly celebrating its 30th birthday this year with an exclusive sweepstakes, prizes, and more. Ferrellgas employees indirectly own 1.1 million Class A Units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed an Annual Report on Form 10-K for the fiscal year ended July 31, 2023 with the Securities and Exchange Commission on September 29, 2023. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.
Forward-Looking Statements
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 include those discussed in the Annual Report on Form 10-K of Ferrellgas Partners, L.P., Ferrellgas, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2023, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.
Contacts
Investor Relations – InvestorRelations@ferrellgas.com
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS
January 31, 2024
July 31, 2023
Current assets:
Cash and cash equivalents (including $10,789 and $11,126 of restricted cash at January 31, 2024 and July 31, 2023, respectively)
$
139,154
$
137,347
Accounts and notes receivable, net
226,920
159,379
Inventories
100,253
98,104
Price risk management asset
15,276
11,966
Prepaid expenses and other current assets
33,729
29,135
Total current assets
515,332
435,931
Property, plant and equipment, net
622,935
615,174
Goodwill, net
257,006
257,006
Intangible assets (net of accumulated amortization of $354,139 and $349,614 at January 31, 2024 and July 31, 2023, respectively)
116,911
106,615
Operating lease right-of-use assets
54,034
57,839
Other assets, net
54,735
58,838
Total assets
$
1,620,953
$
1,531,403
LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
67,912
$
35,115
Current portion of long-term debt
2,977
2,597
Current operating lease liabilities
24,983
24,600
Other current liabilities
203,785
197,030
Total current liabilities
299,657
259,342
Long-term debt
1,458,693
1,456,184
Operating lease liabilities
30,345
34,235
Other liabilities
25,563
29,084
Contingencies and commitments
Mezzanine equity:
Senior preferred units, net of issue discount and offering costs (700,000 units outstanding at January 31, 2024 and July 31, 2023)
651,349
651,349
Equity (Deficit):
Limited partner unitholders
Class A (4,857,605 Units outstanding at January 31, 2024 and July 31, 2023)
(1,158,241
)
(1,205,103
)
Class B (1,300,000 Units outstanding at January 31, 2024 and July 31,2023)
383,012
383,012
General partner Unitholder (49,496 Units outstanding at January 31, 2024 and July 31, 2023)
(70,092
)
(70,566
)
Accumulated other comprehensive income
7,313
1,059
Total Ferrellgas Partners, L.P. deficit
(838,008
)
(891,598
)
Noncontrolling interest
(6,646
)
(7,193
)
Total deficit
(844,654
)
(898,791
)
Total liabilities, mezzanine and deficit
$
1,620,953
$
1,531,403
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
(unaudited)
Three months ended
Six months ended
Twelve months ended
January 31,
January 31,
January 31,
2024
2023
2024
2023
2024
2023
Revenues:
Propane and other gas liquids sales
$
584,209
$
651,886
$
923,143
$
1,037,730
$
1,802,305
$
2,025,401
Other
25,668
32,057
57,747
59,502
107,818
106,927
Total revenues
609,877
683,943
980,890
1,097,232
1,910,123
2,132,328
Cost of sales:
Propane and other gas liquids sales
277,838
347,492
450,018