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Ferrellgas Partners, L.P. Reports Third Quarter Fiscal 2024 Results

LIBERTY, Mo., June 19, 2024 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC:FGPR) ("Ferrellgas" or the "Company") today reported financial results for its third fiscal quarter ended April 30, 2024. Adjusted EBITDA, a non-GAAP financial measure, decreased by $21.6 million, or 17%, to $104.0 million in the third fiscal quarter compared to $125.6 million in the prior year quarter. The decreases in both Adjusted EBITDA and net earnings attributable to Ferrellgas Partners, L.P. were primarily driven by a $19.6 million decrease in gross profit noted below, which primarily related to warmer than normal weather and $5.0 million related to higher medical claims realized under the company's self-insured medical plan. In sharing fiscal third quarter results, Tamria Zertuche, President and Chief Executive Officer of Ferrellgas commented, "Regarding our retail business, we have taken positive steps over the last four years to create balance across the different customers segments in our business. Our focus has been on growing our weather agnostic customer base, by customer type and geographic location. We have made great progress in the areas of Autogas, Tank Exchange, and Industrial Customer segments. However, the extended, unseasonably warm heating season negatively impacted demand volumes attributed to the heating segments of our business. In the areas of the country where we have the most customer density, the weather patterns we experienced were 10% warmer than the prior year quarter. We did see some business closings and the effects of inflation, which contributed to a decrease in retail customers in some areas of our national footprint when compared to the prior year period. We will be able to re-deploy these assets related to closed businesses for gallon growth occurring in future periods. Our experienced operations professionals appropriately responded to the weather anomaly - they managed expenses in all areas of operations, including driving fleet expenses down by over 8% when compared to prior year."  The $71.6 million decrease in revenue was partially offset by a decrease of $52.0 million in cost of product as compared to the prior year period. Gross profit decreased by $19.6 million, or 7%, for the third fiscal quarter compared to the prior year period. Gallons sold for the third fiscal quarter of 2024 decreased 24.6 million, or 11%, as the trend of above average temperatures continued for much of the United States. Margin per gallon for the Company increased 4% for the third fiscal quarter of 2024 compared to the prior year period. The favorable increase was primarily due to segment mix, our Platinum Plus fixed cost program for residential customers and national account pricing improvement. Operating income per gallon decreased 10% for the third fiscal quarter of fiscal 2024 compared to the prior year period. We recognized net earnings attributable to Ferrellgas Partners, L.P. of $52.8 million and $72.4 million in the third fiscal quarter of fiscal 2024 and 2023, respectively. As previously announced, on April 9, 2024, the Company made a cash distribution in the aggregate amount of $99.9 million to holders of record of the Class B units as of March 25, 2024. The total distributions paid to date of approximately $250.0 million were discretionary and made possible by the Company's continued strong performance. The warmer than normal temperatures and continued focus on strategic initiatives drove a 19% increase during the third fiscal quarter in Blue Rhino's EBITDA compared to the prior year period. Consumer demand surged as the warmer weather prompted an early kick-off to the grilling season. Additionally, Blue Rhino tank usage increased in areas where the electric grid failed due to the heat. We leveraged our national footprint, supply contacts, and our experienced labor force, executing well against higher-than-normal demand in our tank exchange business. As grilling season arrives, consumers now have even more convenient options to get a Blue Rhino tank. To date, we have installed over 500 self-service kiosks which allow consumers to purchase a propane cylinder 24 hours a day. Home delivery service is also available in 19 markets with plans to expand. More than 50% of these home delivery purchases are from repeat customers. Additionally, Blue Rhino decreased capital expense by nearly $8.0 million in fiscal year 2024 due to supply chain improvements and inventory turn improvements. Blue Rhino recently onboarded two major accounts which added approximately 5,500 tank exchange selling locations to increase total selling locations to over 68,000, an increase of 12% compared to the prior year period. Investing in technology is one of our key strategic initiatives. We've reduced costs over $1.2 million in fiscal 2024 installing tank monitors. Tank monitoring and telematics technology ensure our customers have a ready supply of propane in addition to improving the efficiency of our delivery efforts. The Company's new credit processing platform, a seamless payment process for our customers, is on track to deliver annual, recurring savings to the company as our payment processor charges us a lower interchange fee on debit card payments. Work also continues on our previously announced enterprise resource planning system implementation. As an active member of the National Propane Gas Association ("NPGA"), several key recent regulatory actions benefited us and others in the propane industry. The NPGA successfully led a coalition to oppose the Environmental Protection Agency ("EPA") proposal to sunset Energy Star labels on all gas appliances. As a result, the EPA instead proposed to increase the efficiency level of the Energy Star certification for residential furnaces. On another front, the NPGA worked with Congress to preserve propane's inclusion and eligibility for several programs in the Federal Aviation Administration Reauthorization Act, which provides financing to airports to purchase alternative fuel vehicles and propane-powered generators. Additional efforts continue as the NPGA seeks to promote the use of propane and favorable legislation at both the federal and state levels. On Wednesday, June 19, 2024, the Company will conduct a live teleconference on the Internet at to discuss the results of operations for the third fiscal quarter ended April 30, 2024. The live 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 or through the webcast portal to be answered during live Q&A. 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 over 68,000 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 Cautionary Note Regarding Forward-Looking Statements Statements included in this release concerning current estimates, expectations, projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are forward-looking statements as defined under federal securities laws. These statements often use words such as "anticipate," "believe," "intend," "plan," "projection," "forecast," "strategy," "position," "continue," "estimate," "expect," "may," "will," or the negative of those terms or other variations of them or comparable terminology. 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, including the effect of weather conditions on the demand for propane; the prices of wholesale propane, motor fuel and crude oil; disruptions to the supply of propane; competition from other industry participants and other energy sources; energy efficiency and technology advances; significant delays in the collection of accounts or notes receivable; customer, counterparty, supplier or vendor defaults; changes in demand for, and production of, hydrocarbon products; inherent operating and litigation risks in gathering, transporting, handling and storing propane; costs of complying with, or liabilities imposed under, environmental, health and safety laws; the impact of pending and future legal proceedings; the interruption, disruption, failure or malfunction of our information technology systems including due to cyber-attack; economic and political instability, particularly in areas of the world tied to the energy industry, including the ongoing conflict between Russia and Ukraine; disruptions in the capital and credit markets; and access to available capital to meet our operating and debt-service requirements. These risks, uncertainties, and other factors also 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. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are made only as of the date hereof. Ferrellgas disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except unit data)   (unaudited)               ASSETS   April 30, 2024   July 31, 2023               Current assets:             Cash and cash equivalents (including $10,783 and $11,126 of restricted cash at April 30, 2024 and July 31, 2023, respectively)   $ 73,645     $ 137,347   Accounts and notes receivable, net     178,163       159,379   Inventories     91,275       98,104   Price risk management asset     5,398       11,966   Prepaid expenses and other current assets     28,270       29,135   Total current assets     376,751       435,931                 Property, plant and equipment, net     622,524       615,174   Goodwill, net     257,006       257,006   Intangible assets (net of accumulated amortization of $356,519 and $349,614 at April 30, 2024 and July 31, 2023, respectively)     114,531       106,615   Operating lease right-of-use assets     56,040       57,839   Other assets, net     60,840       58,838   Total assets   $ 1,487,692     $ 1,531,403                               LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)                           Current liabilities:             Accounts payable   $ 47,742     $ 35,115   Current portion of long-term debt     2,620       2,597   Current operating lease liabilities     24,098       24,600   Other current liabilities     153,945       197,030   Total current liabilities     228,405       259,342                 Long-term debt     1,459,856       1,456,184   Operating lease liabilities     33,387       34,235   Other liabilities     28,741       29,084                 Contingencies and commitments                           Mezzanine equity:             Senior preferred units, net of issue discount and offering costs (700,000 units outstanding at April 30, 2024 and July 31, 2023)     651,349       651,349                 Equity (Deficit):             Limited partner unitholders             Class A (4,857,605 Units outstanding at April 30, 2024 and July 31, 2023)     (1,221,021 )     (1,205,103 ) Class B (1,300,000 Units outstanding at April 30, 2024 and July 31,2023)     383,012       383,012   General partner Unitholder (49,496 Units outstanding at April 30, 2024 and July 31, 2023)     (69,716 )     (70,566 ) Accumulated other comprehensive income     1,018       1,059   Total Ferrellgas Partners, L.P. deficit     (906,707 )     (891,598 ) Noncontrolling interest     (7,339 )     (7,193 ) Total deficit     (914,046 )     (898,791 ) Total liabilities, mezzanine and deficit   $ 1,487,692     $ 1,531,403   FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS   (in thousands, except per unit data)(unaudited)                                           Three months ended   Nine months ended   Twelve months ended     April 30,    April 30,    April 30,      2024     2023     2024     2023     2024     2023   Revenues:                                     Propane and other gas liquids sales   $ 490,057     $ 559,047     $ 1,413,200     $ 1,596,777     $ 1,733,315     $ 1,962,237   Other     25,717       28,300       83,464       87,802       105,235       109,895   Total revenues