GlobeNewswire Inc | Dec 15, 2020 07:00AM EST

December 15, 2020

-- Gross Profit increased by $4.1 million, or almost 3%, compared to the prior year period as a result of an $.08 increase in gross margin per gallon -- Operating Income for the quarter increased by $7.1 million. -- Operating expense decreased by $5.5 million or 5%. -- Tank Exchange sale locations now exceed 62,000, up over 6,000 from prior year, contributing to 27% growth in volumes.

OVERLAND PARK, Kan., Dec. 15, 2020 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) (Ferrellgas or the Company) today reported financial results for its first quarter ended October 31, 2020.

The Company continued its strong operational performance during the first quarter of fiscal 2021, leading to a $7.1 million increase in operating income and setting a foundation for continued growth in fiscal 2021. The Company implemented strategies to deliver gallons more efficiently leading to significant decreases in operating expense during the quarter. The Company sold 167.6 million propane gallons for the quarter, compared to 179.9 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 increased strategies in marketing and stay at home buying trends. Margin per gallon for the year was $.08, or 10% higher than the prior year, attributable to strategic product placement, sound supply chain logistics strategies and lower wholesale propane prices. Overall, the increase in margin, increase in tank exchange volumes and customer growth were partially offset by decreased retail sales volumes due to a relatively weaker economy. This has resulted in an increase in gross margin dollars of $4.1 million or 2.6% higher than prior year. Operating expenses decreased $5.5 million or 5% 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 first 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 a net loss attributable to Ferrellgas Partners, L.P. of $46.1 million, or $0.47 per common unit, compared to prior year period net loss of $45.3 million, or $0.46 per common unit. Adjusted EBITDA, a non-GAAP measure, increased by $8.8 million, or 35%, to $33.9 million in the current quarter compared to $25.1 million in the prior year quarter. I could not be more proud of our people as we continue the transformation of the company. If you compare our financial results with first quarter last year you can see why, said James E. Ferrell, Interim 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 60,000 selling locations.

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 SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except unit data)(unaudited) ASSETS October 31, 2020 July 31, 2020 Current Assets: Cash and cash equivalents (including$96,909 and $95,759 of restricted $ 299,527 $ 333,761 cashat October 31, 2020 and July 31,2020, respectively)Accounts and notes receivable, net(including $120,261 and $103,703 ofaccounts receivable pledged as 119,488 101,438 collateral at October 31, 2020 and July31, 2020, respectively)Inventories 78,980 72,664 Prepaid expenses and other current 40,088 35,944 assetsTotal Current Assets 538,083 543,807 Property, plant and equipment, net 592,132 591,042 Goodwill, net 246,946 247,195 Intangible assets, net 101,812 104,049 Operating lease right-of-use asset 100,349 107,349 Other assets, net 73,522 74,748 Total Assets $ 1,652,844 $ 1,668,190 LIABILITIES AND PARTNERS' DEFICIT Current Liabilities: Accounts payable $ 44,641 $ 33,944 Current portion of long-term debt (a) 859,095 859,095 Current operating lease liabilities 28,280 29,345 Other current liabilities 186,938 167,466 Total Current Liabilities 1,118,954 1,089,850 Long-term debt 1,647,106 1,646,396 Operating lease liabilities 83,337 89,022 Other liabilities 49,543 51,190 Contingencies and commitments Partners Deficit: Common unitholders (97,152,665 unitsoutstanding at October 31, 2020 and (1,171,359 ) (1,126,452 )July 31, 2020)General partner unitholder (989,926units outstanding at October 31, 2020 (71,741 ) (71,287 )and July 31, 2020)Accumulated other comprehensive income 5,534 (2,303 )(loss)Total Ferrellgas Partners, L.P. (1,237,566 ) (1,200,042 )Partners' DeficitNoncontrolling interest (8,530 ) (8,226 )Total Partners' Deficit (1,246,096 ) (1,208,268 )Total Liabilities and Partners' Deficit $ 1,652,844 $ 1,668,190 (a) The principal difference between the Ferrellgas Partners, L.P. balancesheet and that of Ferrellgas, L.P., is $357 million of 8.625% noteswhich areliabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data) (unaudited) Three months ended Twelve months ended October 31 October 31 2020 2019 2020 2019 Revenues: Propane andother gas $ 281,049 $ 273,385 $ 1,423,455 $ 1,547,277 liquids salesOther 19,845 19,829 82,051 78,020 Total 300,894 293,214 1,505,506 1,625,297 revenues Cost of sales: Propane andother gas 137,627 134,028 676,652 832,408 liquids salesOther 3,667 3,681 12,989 12,040 Gross profit 159,600 155,505 815,865 780,849 Operatingexpense -personnel, 109,027 114,543 487,539 473,080 vehicle, plant& otherDepreciationand 21,390 19,219 82,652 79,073 amortizationexpenseGeneral andadministrative 13,080 9,695 49,137 55,510 expenseOperatingexpense - 6,830 8,388 31,459 33,598 equipment leaseexpenseNon-cashemployee stockownership plan 708 795 2,784 3,740 compensationchargeLoss on assetsales and 813 2,235 6,502 8,699 disposals Operating 7,752 630 155,792 127,149 income (loss) Interest (54,226 ) (45,697 ) (201,491 ) (179,438 ) expenseLoss onextinguishment - - (37,399 ) of debtOther income 108 (132 ) (220 ) 218 (expense), net Loss beforeincome tax (46,366 ) (45,199 ) (83,318 ) (52,071 ) expense(benefit) Income tax 87 518 420 683 expense Net loss (46,453 ) (45,717 ) (83,738 ) (52,754 ) Net lossattributable to (391 ) (373 ) (521 ) (178 ) noncontrollinginterest (a) Net lossattributable to (46,062 ) (45,344 ) (83,217 ) (52,576 ) FerrellgasPartners, L.P. Less: Generalpartner's (461 ) (453 ) (833 ) (525 ) interest in netloss Commonunitholders' $ (45,601 ) $ (44,891 ) $ (82,384 ) $ (52,051 ) interest in netloss Loss Per Common UnitBasic anddiluted netloss per common $ (0.47 ) $ (0.46 ) $ (0.85 ) $ (0.54 ) unitholders'interest Weightedaverage commonunits 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 Twelve months ended October 31 October 31 2020 2019 2020 2019 Net lossattributable to $ (46,062 ) $ (45,344 ) $ (83,217 ) $ (52,576 ) FerrellgasPartners, L.P.Income tax 87 518 420 683 expenseInterest 54,226 45,697 201,491 179,438 expenseDepreciationand 21,390 19,219 82,652 79,073 amortizationexpenseEBITDA 29,641 20,090 201,346 206,618 Non-cashemployee stockownership plan 708 795 2,784 3,740 compensationchargeLoss on assetsales and 813 2,235 6,502 8,699 disposalLoss onextinguishment - - 37,399 - of debtOther income (108 ) 132 220 (218 ) (expense), netSeveranceexpenseincludes $501in operating expense and$183 in generalandadministrativeexpense forthe three endedOctober 31,2020. Also includes $1,241and $690 inoperatingexpensefor the twelvemonths endedOctober 31, 2020and 2019, respectively and$183 and $910 ingeneralandadministrativeexpense for thetwelve months 684 - 1,424 1,600 ended October31, 2020 and2019,respectively.Legal feesand settlementsrelated to 2,508 2,043 7,880 16,843 non-corebusinessesProvision fordoubtfulaccounts - - 17,325 - related tonon-corebusinessesLeaseaccountingstandard - 170 (116 ) 170 adjustment andotherNet lossattributable to (391 ) (373 ) (521 ) (178 ) noncontrollinginterest (b)Adjusted EBITDA 33,855 25,092 274,243 237,274 (b)Net cashinterest (51,716 ) (42,583 ) (191,379 ) (166,474 ) expense (c)Maintenancecapital (5,177 ) (6,467 ) (21,950 ) (47,856 ) expenditures(d)Cash paid for (35 ) - (324 ) (139 ) income taxesProceedsfrom certain 700 835 3,862 4,023 asset salesDistributablecash flowattributable to (22,373 ) (23,123 ) 64,452 26,828 equityinvestors (e)Distributablecash flowattributable togeneral partner 575 462 (1,289 ) (537 ) andnon-controllinginterestDistributablecash flowattributable to (21,798 ) (22,661 ) 63,163 26,291 commonunitholders (f)Less:Distributions - - - - paid to commonunitholdersDistributablecash flow $ (21,798 ) $ (22,661 ) $ 63,163 $ 26,291 excess/(shortage) Propane gallons salesRetail -Sales to End 118,018 129,901 626,134 672,500 UsersWholesale -Sales to 49,590 50,039 235,080 233,645 ResellersTotal propane 167,608 179,940 861,214 906,145 gallons sales (a) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.(b) Adjusted EBITDA is calculated as net loss attributable to FerrellgasPartners, L.P., less the sum of the following: income tax expense, interestexpense, depreciation and amortization expense, non-cash employee stockownership plan compensation charge, loss on asset sales and disposals, loss onextinguishment of debt, other income (expense), net, severanceexpense, legalfees and settlements related to non-core businesses, multi-employer pensionplan withdrawal settlement, lease accounting standard adjustment and other andnet loss attributable tononcontrolling interest. Management believes thepresentation of this measure is relevant and useful, because it allowsinvestors to view the partnership's performance in a manner similarto themethod management uses, adjusted for items management believes makes it easierto compare its results with other companies that have different financing andcapital structures.This method of calculating Adjusted EBITDA may not beconsistent with that of other companies and should be viewed in conjunctionwith measurements that are computed in accordance with GAAP. (c) Net cash interest expense is the sum of interest expense less non-cashinterest expense and other expense, net. This amount includes interestexpenserelated to the accounts receivable securitization facility.(d) Maintenance capital expenditures include capitalized expenditures forbetterment 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 capitalexpenditures and cash paid for taxes plus proceeds from certain asset sales.Management considers distributable cash flow attributable to equity investors ameaningful measure of the partnership?s ability to declare and pay quarterlydistributions to equity investors. Distributable cash flow attributable toequity investors, as management defines it, may not be comparable todistributable cash flowattributable to equity investors or similarly titledmeasurements used by other corporations and partnerships. Items added into ourcalculation of distributable cash flowattributable to equity investors thatwill not occur on a continuing basis may have associated cash payments.Distributable cash flow attributable to equity investors may not beconsistentwith that of other companies and should be viewed in conjunctionwith measurements that are computed in accordance with GAAP.(f) Distributable cash flow attributable to common unitholders is calculated asDistributable cash flow attributable to equity investors minus distributablecash flow attributable to general partnerand noncontrolling interest.Management considers distributable cash flow attributable to common unitholdersa meaningful measure of the partnership?s ability to declareand pay quarterlydistributions to common unitholders. Distributable cash flow attributable tocommon unitholders, as management defines it, may not be comparable todistributablecash flow attributable to common unitholders or similarly titledmeasurements used by other corporations and partnerships. Items added to ourcalculation of distributable cash flowattributable to common unit holders thatwill not occur on a continuing basis may have associated cash payments.Distributable cash flow attributable to common unitholdersmay not beconsistent with that of other companies and should be viewed in conjunctionwith measurements that are computed in accordance with GAAP .