GlobeNewswire Inc | Oct 15, 2020 07:01AM EDT

October 15, 2020

-- Operating Incomefor the year increased by $35.6 million, over 30% from prior year, despite weather that was 8% warmer than prior year, which led to a 3.5% decrease in volumes. -- Gross Profit for the fourth fiscal quarter increased by $13.5 million, or 10%. -- Retail customer growth of 3% over prior year. -- Tank Exchange sale locations now exceed59,000, upover 4,000 from prior year, leading to 14% growth in volumes.

OVERLAND PARK, Kan., Oct. 15, 2020 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC:FGPR) (Ferrellgas or the Company) today reported financial results for its fiscal year and fourth quarter ended July 31, 2020.

Despite significant economic and operational uncertainties in the US, the Company produced exceptionally strong results through the end of fiscal 2020, leading to a $35.6 million increase in operating income, or 32% growth over the prior year and set a foundation for continued growth in fiscal 2021. Due to warmer winter weather and the slowdown in the economy, the gallons of propane sold for the year were 873.5 million, compared to 904.8 million last year. However, these decreases were partially offset by continued increase residential demand resulting from 3% retail customer growth as the Company continues to aggressively seek market share. Additionally, Blue Rhino sales locations increased over 8%. Margin per gallon for the year was 7.0, or 9% 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 and increases in tank exchange volumes and customer growth were partially offset by decreased industrial and commercial sales volumes due to the slowdown of the economy. This has resulted in an increase in gross margin dollars of $36.4 million. Operating expenses increased due to the growth of new customers, but also included a $17.3 million reserve for bad debt related to Bridger, a non-core acquisition that has now been divested. Additionally, the $35.6 million growth in operating income was complimented by a $38.4 million, or 35.3%, decrease in capital expenditures as the Company focused on the utilization of existing assets and negotiated lower steel prices.

The Company has numerous initiatives underway to increase efficiency and profitability, these initiatives helped to produce strong results in 4Q 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. Successful transition of essential workers from a corporate work-place to a technology centric work-from-home environment decreased various general and administrative expenses as well as travel expense throughout the Company. Lastly, our continued commitment to safely serving our over 700 thousand customers while adapting to the ever-changing circumstances and new operating protocols to help protect the health and safety of our customers and employees remains our top priority.

For the fiscal year, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $82.5 million, or $0.84 per common unit, compared to prior year period net loss of $64.2 million, or $0.65 per common unit. For the quarter, the net loss attributable to Ferrellgas Partners, L.P. was $70.0 million, or $0.71 per common unit, compared to prior years fourth quarter net loss of $71.0 million, or $0.72 per common unit.

Adjusted EBITDA, a non-GAAP measure, increased by over $35 million, or 15%, compared to prior year. For the fourth quarter, Adjusted EBITDA was $26.7 million compared to $4.0 million in last years quarter resulting from the previously discussed initiatives.

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. Additionally, as the Company continues to evaluate options to address its leverage, the Company does not intend to comment further on its progress in this regard or on potential options until further disclosure is appropriate or required by law.

AboutFerrellgasFerrellgas 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 July 31, 2020 July 31, 2019 Current Assets: Cash and cash equivalents (including$95,759 and $0 of restricted cash at $ 333,761 $ 11,054 July 31, 2020 and July 31, 2019,respectively)Accounts and notes receivable, net(including $103,703 and $106,145 ofaccounts receivable pledged as 101,438 107,596 collateral at July 31, 2020 and July31, 2019, respectively)Inventories 72,664 80,454 Prepaid expenses and other current 35,944 42,275 assetsTotal Current Assets 543,807 241,379 Property, plant and equipment, net 591,042 596,723 Goodwill, net 247,195 247,195 Intangible assets, net 104,049 108,557 Operating lease right-of-use asset 107,349 - Other assets, net 74,748 69,105 Total Assets $ 1,668,190 $ 1,262,959 LIABILITIES AND PARTNERS' DEFICIT Current Liabilities: Accounts payable $ 33,944 $ 33,364 Short-term borrowings - 43,000 Collateralized note payable - 62,000 Current portion of long-term debt (a) 859,095 631,756 Current operating lease liabilities 29,345 - Other current liabilities 167,466 138,237 Total Current Liabilities 1,089,850 908,357 Long-term debt 1,646,396 1,457,004 Operating lease liabilities 89,022 - Other liabilities 51,190 36,536 Contingencies and commitments Partners Deficit: Common unitholders (97,152,665 unitsoutstanding at July 31, 2020 and July (1,126,452 ) (1,046,245 )31, 2019)General partner unitholder (989,926 unitsoutstanding at July 31, 2020 and July 31, (71,287 ) (70,476 )2019)Accumulated other comprehensive loss (2,303 ) (14,512 )Total Ferrellgas Partners, L.P. (1,200,042 ) (1,131,233 )Partners' DeficitNoncontrolling interest (8,226 ) (7,705 )Total Partners' Deficit (1,208,268 ) (1,138,938 )Total Liabilities and Partners' Deficit $ 1,668,190 $ 1,262,959 (a) The principal difference between the Ferrellgas Partners, L.P. balancesheet and that of Ferrellgas, L.P., is $357 million of 8.625% notes which areliabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)(unaudited)

Three months ended Twelve months ended July 31 July 31 2020 2019 2020 2019 Revenues: Propane and other $ 265,414 $ 264,224 $ 1,415,791 $ 1,608,858 gas liquids salesOther 16,235 14,857 82,035 75,534 Total revenues 281,649 279,081 1,497,826 1,684,392 Cost of sales: Propane and other 124,917 136,460 673,053 902,516 gas liquids salesOther 3,229 2,617 13,003 11,406 Gross profit 153,503 140,004 811,770 770,470 Operating expense- personnel, 128,721 117,327 493,055 468,868 vehicle, plant &otherDepreciation andamortization 21,101 19,632 80,481 78,846 expenseGeneral andadministrative 9,305 17,957 45,752 59,994 expenseOperating expense- equipment lease 8,293 8,476 33,017 33,073 expenseNon-cash employeestock ownership 689 1,005 2,871 5,693 plan compensationchargeLoss on assetsales and 1,682 2,565 7,924 10,968 disposals Operating income (16,288 ) (26,958 ) 148,670 113,028 (loss) Interest expense (54,014 ) (44,688 ) (192,962 ) (177,619 )Loss onextinguishment of - - (37,399 ) - debtOther income (246 ) 13 (460 ) 369 (expense), net Loss beforeincome tax (70,548 ) (71,633 ) (82,151 ) (64,222 )expense Income tax 57 39 851 323 expense Net loss (70,605 ) (71,672 ) (83,002 ) (64,545 ) Net lossattributable to (636 ) (635 ) (503 ) (298 )noncontrollinginterest (a) Net lossattributable to (69,969 ) (71,037 ) (82,499 ) (64,247 )FerrellgasPartners, L.P. Less: Generalpartner's (700 ) (710 ) (825 ) (642 )interest in netloss Commonunitholders' $ (69,269 ) $ (70,327 ) $ (81,674 ) $ (63,605 )interest in netloss Loss Per Common UnitBasic and dilutednet loss percommon $ (0.71 ) $ (0.72 ) $ (0.84 ) $ (0.65 )unitholders'interest Weighted averagecommon units 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 July 31 July 31 2020 2019 2020 2019 Net lossattributable to $ (69,969 ) $ (71,037 ) $ (82,499 ) $ (64,247 )FerrellgasPartners, L.P.Income tax 57 39 851 323 expenseInterest expense 54,014 44,688 192,962 177,619 Depreciation andamortization 21,101 19,632 80,481 78,846 expenseEBITDA 5,203 (6,678 ) 191,795 192,541 Non-cash employeestock ownership 689 1,005 2,871 5,693 plan compensationchargeLoss on assetsales and 1,682 2,565 7,924 10,968 disposalLoss onextinguishment of - - 37,399 - debtOther income 246 (13 ) 460 (369 )(expense), netSeverance expense(includes $740 inoperating expensefor the three andtwelve monthsended July 31,2020 and $690 inoperating expense 740 - 740 1,600 and $910 ingeneral andadministrativeexpense for thetwelve monthsended July 31,2019)Legal fees andsettlementsrelated to 1,421 7,721 7,308 18,364 non-corebusinessesProvision fordoubtful accountsrelated to 17,325 - 17,325 - non-corebusinessesMulti-employerpension plan - - - 1,524 withdrawalsettlementLease accountingstandard 27 - 161 - adjustment andotherNet lossattributable to (636 ) (635 ) (503 ) (298 )noncontrollinginterest (b)Adjusted EBITDA 26,697 3,965 265,480 230,023 (b)Net cash interest (52,905 ) (41,465 ) (182,246 ) (164,790 )expense (c)Maintenancecapital (4,540 ) (1,736 ) (23,240 ) (46,774 )expenditures (d)Cash paid for (239 ) (120 ) (289 ) (141 )income taxesProceeds fromcertain asset 1,487 1,833 3,997 4,249 salesDistributablecash flowattributable to (29,500 ) (37,523 ) 63,702 22,567 equity investors(e)Distributablecash flowattributable togeneral partner (590 ) (751 ) 1,274 451 andnon-controllinginterestDistributablecash flowattributable to (28,910 ) (36,772 ) 62,428 22,116 commonunitholders (f)Less:Distributions - - - 9,715 paid to commonunitholdersDistributablecash flow excess/ $ (28,910 ) $ (36,772 ) $ 62,428 $ 12,401 (shortage) Propane gallons salesRetail - Sales to 85,677 99,114 638,017 672,266 End UsersWholesale - Sales 55,834 53,310 235,529 232,566 to ResellersTotal propane 141,511 152,424 873,546 904,832 gallons sales (a) Amounts allocated to the general partner for its 1.0101% interest in theoperating 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, severance expense, legalfeesand settlements related to non-core businesses, provision for doubtfulaccounts related to non-core businesses, multi-employer pension plan withdrawalsettlement, lease accounting standardadjustment and other and net lossattributable to noncontrolling interest. Management believes the presentationof this measure is relevant and useful, because it allows investors to viewthepartnership's performance in a manner similar to the method managementuses, adjusted for items management believes makes it easier to compare itsresults with other companies that havedifferent financing and capitalstructures. This method of calculating Adjusted EBITDA may not be consistentwith that of other companies and should be viewed in conjunctionwithmeasurements 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 plusproceeds from certain asset sales.Management considers distributable cash flow attributable to equity investors ameaningful measure of the partnership?s ability to declare and payquarterlydistributions 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 .