GlobeNewswire Inc | Mar 8, 2021 04:30PM EST

March 08, 2021

-- Gross Profit increased by $9.6 million, or almost 3.6%, compared to the prior year period as a result of an $.09 increase in gross margin per gallon. -- Operating Income for the quarter increased by $18.2 million. -- Operating expense decreased by $13 million or 10%. -- Tank Exchange sale locations now exceed 62,500, up over 5,000 from prior year, contributing to 36% growth in volumes. -- Bankruptcy Court confirms plan for holding company, Ferrellgas Partners, L.P.

OVERLAND PARK, Kan., March 08, 2021 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPRQ) (Ferrellgas or the Company) today reported financial results for its second quarter ended January 31, 2021.

The Company continued its strong operational performance during the second quarter of fiscal 2021, leading to an $18.2 million increase in operating income and setting a foundation for continued growth in fiscal 2021. The Company implemented strategic initiatives, including right-timed delivery of gallons, which led to significant decreases in operating expense during the quarter. These strategies result in less labor, fewer miles driven, less fuel consumed by trucks and less repairs and maintenance while also smoothing out gallons delivered throughout the year. The Company sold 285.3 million propane gallons for the quarter, compared to 305.3 million in the prior year quarter. However, these overall volume decreases were partially offset by a continued increase in Blue Rhino tank exchange sales due to further market share penetration, successful execution of certain marketing strategies, and stay at home buying trends. Margin per gallon for the quarter was $.093, or 11% higher than the prior year, attributable to strategic product placement and better execution of our supply chain and logistics strategies, which drove enhanced profitability per customer. Overall, the increases noted above were partially offset by decreased retail sales volumes due primarily to implementation of the right-timed deliveries strategy and weather that was 2.7% warmer than the prior year quarter and a relatively weaker economy. This has resulted in an increase in gross profit of $9.6 million or 3.6% higher than prior year. Operating expenses decreased $13 million or 10% due to the strategies to deliver gallons more efficiently.

The Company continues to implement numerous initiatives to increase efficiency and profitability. These initiatives produced strong results in the second quarter and enable continued high performance in the areas of growth and operational expense management. Strong execution by a leaner and more agile workforce of essential workers is driving high performance throughout the Company, both in the field and in corporate locations.

For the quarter, the Company reported net earnings attributable to Ferrellgas Partners, L.P. of $63.3 million, or $0.64 per common unit, compared to prior year period net earnings of $48.2 million, or $0.49 per common unit. Adjusted EBITDA, a non-GAAP measure, increased by $19.5 million, or 16%, to $140.9 million in the current quarter compared to $121.4 million in the prior year quarter. Our people continue to generate strong results with less operating expenses. I could not be more proud of our people or the continued transformation of the company. said James E. Ferrell, Chief Executive Officer and President of Ferrellgas.

As previously disclosed, the Company entered into a Transaction Support Agreement (the TSA) with a majority of the holders of the Companys 8.625% Senior Notes Due 2020 (the 2020 Notes) on December 10, 2020. The TSA sets forth a restructuring process to satisfy the obligations under the 2020 Notes and refinance the balance sheet of the Company and its operating partnership. The transactions contemplated by the TSA are intended to de-lever our balance sheet, consistent with the Companys strategy to create a solid financial foundation for future growth.

The TSA executed between the Company and its noteholders will permit Ferrellgas to remain an independent, employee-owned business under current management while restructuring substantially all of its debt. Importantly, the restructuring will have no impact on the Companys operations, will not inhibit its ability to provide propane to its almost 800,000 customers throughout the United States and Puerto Rico, and will allow its premier Blue Rhino tank exchange business to continue to expand beyond the current 62,500 selling locations.

As previously announced, on January 11, 2021 Ferrellgas Partners and Ferrellgas Partners Finance Corp. commenced the Chapter 11 Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. On March 5, 2021, the Bankruptcy Court entered an order confirming the restructuring plan. The effectiveness of the plan is conditioned on certain requirements such as the operating partnership completing its refinancing. This confirmation is a positive step forward in our restructuring plans.

As previously announced, the Company indefinitely suspended its quarterly cash distribution as a result of not meeting the required fixed charge coverage ratio contained in the senior unsecured notes due 2020.

About FerrellgasFerrellgas 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. Ferrellgas employees indirectly own 22.8 million common units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on October 15, 2020. 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 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, 2020, 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 (DEBTOR-IN-POSSESSION) CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except unit data) (unaudited) ASSETS January 31, 2021 July 31, 2020 Current Assets: Cash and cashequivalents (including $ 326,483 $ 333,761 $109,049 and $95,759 ofrestricted cashat January 31, 2021and July 31, 2020, respectively)Accounts and notesreceivable, net (including $200,443 and $103,703 ofaccountsreceivable pledged ascollateral at January 31, 206,280 101,438 2021 and July 31, 2020,respectively)Inventories 90,473 72,664 Prepaid expenses and 72,914 35,944 other current assetsTotal Current 696,150 543,807 Assets Property, plant and 587,870 591,042 equipment, netGoodwill, net 246,946 247,195 Intangible assets, net 99,644 104,049 Operating lease 97,249 107,349 right-of-use assetOther assets, net 91,159 74,748 Total Assets $ 1,819,018 $ 1,668,190 LIABILITIES AND PARTNERS' DEFICIT Current Liabilities: Accounts payable $ 79,224 $ 33,944 Current portion of 501,865 859,095 long-term debt (a)Current operating lease 27,895 29,345 liabilitiesOther current 191,908 167,466 liabilitiesTotal Current 800,892 1,089,850 Liabilities Long-term debt 1,650,410 1,646,396 Operating lease liabilities 80,901 89,022 Other liabilities 49,541 51,190 Total Liabilities 2,581,744 2,876,458 not subject to compromiseLiabilities subject to 390,101 - compromiseTotal liabilites 2,971,845 2,876,458 Contingencies and commitments Partners Deficit: Common unitholders(97,152,665 units (1,107,979 ) (1,126,452 ) outstanding at January 31,2021 and July 31, 2020)General partnerunitholder (989,926 units (71,100 ) (71,287 ) outstanding at January 31,2021 and July 31, 2020)Accumulated other 33,762 (2,303 ) comprehensive income (loss)Total FerrellgasPartners, L.P. Partners' (1,145,317 ) (1,200,042 ) DeficitNoncontrolling (7,510 ) (8,226 ) interestTotal Partners' (1,152,827 ) (1,208,268 ) DeficitTotal Liabilities $ 1,819,018 $ 1,668,190 and Partners' Deficit (a) The principal difference between the Ferrellgas Partners, L.P. balancesheet and that of Ferrellgas, L.P., is $357 million of 8.625% notes and $33 million of related accrued interestwhich are liabilities of Ferrellgas Partners, L.P.and not of Ferrellgas, L.P. Also Ferrellgas Partners, L.P. holds $19.9 million in cash.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES(DEBTOR-IN-POSSESSION)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 2021 2020 2021 2020 2021 2020 Revenues: Propane andother gas $ 528,434 $ 485,247 $ 809,483 $ 758,632 $ 1,466,642 $ 1,482,412 liquids salesOther 25,126 25,586 44,971 45,415 81,591 80,341 Total 553,560 510,833 854,454 804,047 1,548,233 1,562,753 revenues Cost of sales: Propane andother gas 270,777 237,843 408,404 371,871 709,586 758,720 liquids salesOther 3,504 3,353 7,171 7,034 13,140 11,971 Gross profit 279,279 269,637 438,879 425,142 825,507 792,062 Operatingexpense -personnel, 115,247 128,233 224,274 242,776 474,553 480,094 vehicle, plant &otherDepreciation andamortization 21,249 19,795 42,639 39,014 84,106 79,263 expenseGeneral andadministrative 20,475 14,192 33,555 23,887 55,420 53,360 expenseOperatingexpense - 6,862 8,261 13,692 16,649 30,060 33,444 equipment leaseexpenseNon-cashemployee stockownership plan 762 630 1,470 1,425 2,916 2,426 compensationchargeLoss on assetsales and 80 2,148 893 4,383 4,434 8,631 disposals Operating income 114,604 96,378 122,356 97,008 174,018 134,844 Interest expense (52,595 ) (47,548 ) (106,821 ) (93,245 ) (206,538 ) (182,095 )Loss onextinguishment - - - - (37,399 ) - of debtOther income 3,508 76 3,616 (56 ) 3,212 208 (expense), netReorganization (1,200 ) 0 (1,200 ) - (1,200 ) - items, net Earnings (loss)before income 64,317 48,906 17,951 3,707 (67,907 ) (47,043 )tax expense Income tax 326 115 413 633 631 795 expense Net earnings 63,991 48,791 17,538 3,074 (68,538 ) (47,838 )(loss) Net earnings(loss)attributable to 724 584 333 211 (381 ) (125 )noncontrollinginterest (a) Net earnings(loss)attributable to 63,267 48,207 17,205 2,863 (68,157 ) (47,713 )FerrellgasPartners, L.P. Less: Generalpartner's 633 482 172 29 (682 ) (476 )interest in netearnings (loss) Commonunitholders' $ 62,634 $ 47,725 $ 17,033 $ 2,834 $ (67,475 ) $ (47,237 )interest in netearnings (loss) Earnings (loss) Per Common UnitBasic anddiluted netearnings (loss) $ 0.64 $ 0.49 $ 0.18 $ 0.03 $ (0.69 ) $ (0.49 )per commonunitholders'interest Weighted averagecommon units 97,152.7 97,152.7 97,152.7 97,152.7 97,152.7 97,152.7 outstanding -basic Supplemental Data and Reconciliation of Non-GAAP Items: Three months ended Six months ended Twelve months ended January 31 January 31 January 31 2021 2020 2021 2020 2021 2020 Net earnings(loss)attributable to $ 63,267 $ 48,207 $ 17,205 $ 2,863 $ (68,157 ) $ (47,713 )FerrellgasPartners, L.P.Income tax 326 115 413 633 631 795 expenseInterest 52,595 47,548 106,821 93,245 206,538 182,095 expenseDepreciationand amortization 21,249 19,795 42,639 39,014 84,106 79,263 expenseEBITDA 137,437 115,665 167,078 135,755 223,118 214,440 Non-cashemployee stockownership plan 762 630 1,470 1,425 2,916 2,426 compensationchargeLoss on assetsales and 80 2,148 893 4,383 4,434 8,631 disposalLoss onextinguishment - - - - 37,399 - of debtOther income (3,508 ) (76 ) (3,616 ) 56 (3,212 ) (208 )(expense), netReorganization 1,200 - 1,200 - 1,200 - items, netSeveranceexpense includes$426, $927 and$1,667 in operatingexpense for thethree, six andtwelve monthsended January31, 2021. Also includes $651,$834 and $834 ingeneral andadministrativeexpense for thethree, six and 1,077 - 1,761 - 2,501 - twelve monthsended January31, 2021.Legal fees andsettlementsrelated to 3,628 2,519 6,136 4,562 8,882 13,754 non-corebusinessesProvision fordoubtfulaccounts related (500 ) - (500 ) 16,825 - to non-corebusinessesLeaseaccountingstandard - (116 ) - 54 107 54 adjustment andotherNet earnings(loss)attributable to 724 584 333 211 (381 ) (125 )noncontrollinginterest (b)Adjusted EBITDA 140,900 121,354 174,755 146,446 293,789 238,972 (b)Net cashinterest expense (48,243 ) (43,316 ) (99,959 ) (85,899 ) (196,306 ) (168,111 )(c)Maintenancecapital (5,282 ) (5,430 ) (10,459 ) (11,897 ) (21,802 ) (27,139 )expenditures (d)Cash paid for (270 ) (1 ) (305 ) (1 ) (593 ) (144 )income taxesProceeds fromcertain asset 1,737 824 2,437 1,659 4,775 3,948 salesDistributablecash flowattributable to 88,842 73,431 66,469 50,308 79,863 47,526 equity investors(e)Distributablecash flowattributable togeneral partner 1,904 1,468 1,329 1,006 1,597 950 andnon-controllinginterestDistributablecash flowattributable to 86,938 71,963 65,140 49,302 78,266 46,576 commonunitholders (f)Less:Distributions - - - - - - paid to commonunitholdersDistributable $ 86,938 $ 71,963 $ 65,140 $ 49,302 $ 78,266 $ 46,576 cash flow excess Propane gallons salesRetail - Sales 218,078 236,264 336,096 366,165 607,948 669,720 to End UsersWholesale -Sales to 67,252 68,996 116,842 119,035 233,336 231,986 ResellersTotal propane 285,330 305,260 452,938 485,200 841,284 901,706 gallons sales (a) Amountsallocated to thegeneral partnerfor its 1.0101% interest in theoperatingpartnership,Ferrellgas, L.P.(b) Adjusted EBITDA is calculated as net earnings (loss) attributable toFerrellgas Partners, L.P., less the sum of the following: income tax expense, interest expense, depreciationand amortization expense, non-cash employee stock ownership plan compensationcharge, loss on asset sales and disposals, loss on extinguishment of debt,other income (expense), net, reorganization items, netseverance expense, legal fees and settlements related to non-core businesses,provision for doubtful accounts related to non-core businesses, leaseaccounting standard adjustment and other and net earnings (loss) attributabletononcontrolling interest. Management believes the presentation of this measureis relevant and useful, becauseit allows investors to view the partnership's performance in a manner similarto the method management uses, adjusted for items management believes makes iteasier to compare its results with other companies that have different financing and capital structures.This method of calculating Adjusted EBITDA may not be consistent with that ofother companies and should be viewed in conjunction with measurements that arecomputed in accordance with GAAP.(c) Net cash interest expense is the sum ofinterest expense less non-cash interest expense and other expense, net. This amountincludes interestexpense relatedto the accountsreceivable securitizationfacility.(d) Maintenance capital expenditures includecapitalized expenditures for betterment and replacement of property, plant and equipment.(e) Distributable cash flow attributable to equity investors is calculated asAdjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for taxes plusproceeds from certain asset sales. Management considers distributable cash flowattributable to equity investors a meaningful measure of the partnership?s ability to declare and payquarterly distributions to equity investors. Distributable cash flowattributable to equity investors, as management defines it, may not be comparable to distributable cash flowattributable to equity investors or similarly titled measurements used byother corporations and partnerships. Items added into our calculation of distributable cash flowattributable to equity investors that will not occur on a continuing basis mayhave associated cash payments. Distributable cash flow attributable to equity investors may not be consistentwith that of other companies andshould be viewed in conjunction with measurements that arecomputed in accordance with GAAP.(f) Distributable cash flow attributable to common unitholders is calculated asDistributable cash flow attributable to equity investors minus distributable cash flow attributable to general partnerand noncontrolling interest. Management considers distributable cash flowattributable to common unitholders a meaningful measure of the partnership?s ability to declareand pay quarterly distributions to common unitholders. Distributable cash flowattributable to common unitholders, as management defines it, may not be comparable to distributablecash flow attributable to common unitholders or similarly titledmeasurements used by other corporations and partnerships. Items added to our calculation of distributable cash flowattributable to common unit holders that will not occur on a continuingbasis may have associated cash payments. Distributable cash flow attributable to common unitholdersmay not be consistent with that of other companies and shouldbe viewed in conjunction with measurements that are computed in accordance with GAAP .