FERRELLGAS PARTNERS L P (FGP) SEC Filing 10-Q Quarterly report for the period ending Wednesday, October 31, 2018

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Exhibit 99.1

 

Ferrellgas Partners, L.P. Reports Fiscal First Quarter 2019 Results

 

·                  Total Retail propane sales volume for the quarter increased approximately nine percent leading to a 15 percent increase in gross margin dollars over the prior year

·                  Retail customer growth of approximately 24,500, or four percent over prior year

·                  Tank Exchange sale locations now exceed 53,800, up 12 percent compared to prior year.

·                  Three accretive acquisitions of Blue Rhino independent distributors completed to date this fiscal year.

 

LIBERTY, Mo., December 6, 2018 (GLOBE NEWSWIRE) — Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its fiscal first quarter ended October 31, 2018.

 

For the quarter, the Company reported a net loss attributable to Ferrellgas Partners, L.P. of $57.0 million, or $.58 per common unit, compared to prior year period net loss of $47.9 million, or $.49 per common unit.

 

Adjusted EBITDA, a non-GAAP measure, was $17.8 million compared to $26.2 million in the prior year. The following table represents the contribution to adjusted EBITDA from ongoing propane operations as well as from assets that were sold during 2018.

 

(in millions)

 

Q1 2019

 

Q1 2018

 

Propane Operations and Corporate Support

 

$

17.8

 

$

19.0

 

Results from Assets Sold in 2018

 

 

 

7.2

 

Consolidated Adjusted EBITDA

 

$

17.8

 

$

26.2

 

 

On a trailing twelve month basis, adjusted EBITDA from ongoing propane operations and corporate support as of October 31, 2018 is $226.5 million compared to $227.7 million as of July 31, 2018.

 

The Company’s propane operations reported that total gallons sold increased 5.9 million gallons, or three percent, over prior year. Margins were over two percent higher than the prior year despite increased competitive pressure in the tank exchange business. The Company continues its aggressive approach to gaining market share.  This strategic focus resulted in approximately 24,500 new customers, or approximately four percent more than prior year. Additionally, the Company’s current Blue Rhino tank exchange sales locations have increased over 12 percent from prior year to over 53,800 locations. Overall, the increase in sales volume growth and margins per gallon resulted in an increase in gross margin dollars of $4.4 million.  The Company’s ongoing commitment to investing in the

 


The following information was filed by FERRELLGAS PARTNERS L P on Thursday, December 6, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Click a sentiment analysis snippet below from FERRELLGAS PARTNERS L P's Management Discussions to find these positive and negative remarks within their 10-Q Quarterly report:
  • 18466299_96
    Financial - Cash Flow
    Distributable cash flow attributable to equity investors decreased to $(27.4) million in the current period from $(19.3) million in the prior period primarily due to an $8.4 million decrease in our Adjusted EBITDA which was primarily due to various asset sales in fiscal 2018 encompassing our former midstream operations.
  • 18466299_165
    Financial - Cash Flow
    A comparison of distributable cash flow to distributions paid for the twelve months ended October 31, 2018 to the twelve months ended July 31, 2018 is as follows (in thousands): For the twelve months ended October 31, 2018, distributable cash flow attributable to equity investors decreased $8.0 million compared to the twelve months ended July 31, 2018.
  • 18466299_69
    Revenue - Product
    Conversely, if the United States were to experience a continued warming trend, we could expect nationwide demand for propane for heating purposes to decrease which could lead to a reduction in our sales, income and liquidity availability as well as impact our ability to maintain compliance with our debt covenants.
  • 18466299_136
    Financial - Earnings
    Gross margin - Propane and other gas liquids sales Gross margin increased $7.6 million primarily due to the increase in gallon sales as discussed above.
  • 18466299_77
    Financial - Earnings
    These financial derivative purchase commitment net gains are expected to be offset by decreased margins on propane sales commitments that qualify for the normal purchase normal sale exception.
  • 18466299_141
    Financial - Expense
    "Operating, general and administrative expense" increased primarily due to a $4.9 million increase in field personnel costs, a $1.5 million increase in vehicle fuel costs, a $1.5 million pension settlement charge associated with the withdrawal from a multi-employer pension plan and a $1.0 million increase in general liability and workers compensation costs, partially offset by $3.0 million of costs incurred in the prior year period related to a business sold in fiscal 2018.
  • 18466299_219
    Other - Other
    As our trade accounts receivable increase during the winter heating season, the securitization facility permits us to receive greater proceeds as eligible trade accounts receivable increase, thereby providing additional cash for working capital needs.
  • 18466299_91
    Revenue - Product
    The impact of the sale of a group of assets that sold lower margin propane related equipment resulted in the decrease in "Gross margin - other".
  • 18466299_137
    Financial - Earnings
    The increase in retail gross margin of $12.0 million resulted from a combination of increases in retail customer counts, as discussed above and an increase in gross margin per gallon.
  • 18466299_135
    Revenue - Product
    Other sales decreased $13.8 million compared to the prior year period primarily due to the sale of our lower margin propane related equipment business at the end of fiscal 2018.
  • 18466299_139
    Financial - Earnings
    Gross margin - other Gross margin decreased $3.1 million compared to the prior year period primarily due to the sale of our lower margin propane related equipment business at the end of fiscal 2018.
  • 18466299_44
    Other - Other
    Consolidated fixed charge coverage ratio - Ferrellgas Partners, L.P., the master limited partnership Before a restricted payment (as defined in the Ferrellgas Partners indenture) can be made by Ferrellgas Partners, Ferrellgas Partners must be in compliance with the consolidated fixed charge coverage ratio covenant under the Ferrellgas Partners indenture.
  • 18466299_171
    Financial - Earnings
    Likewise our counterparties may not be able to fulfill their margin calls from us or may default on the settlement of positions with us.
  • 18466299_102
    Revenue - Geography
    This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
  • 18466299_144
    Financial - Expense
    "Operating, general and administrative expense" increased primarily due to a $4.9 million increase in field personnel costs, a $1.5 million increase in vehicle fuel costs and a $1.0 million increase in general liability and workers compensation costs, partially offset by $3.0 million of costs incurred in the prior year period related to a business sold in fiscal 2018.
  • 18466299_85
    Revenue - Product
    During July 2018, we completed the sale of a group of assets encompassing an immaterial reporting unit within our Propane operations segment that sold lower margin propane related equipment.
  • 18466299_204
    Revenue - Product
    The Term Loan does not include any scheduled principal payments and the Revolving Facility does not have any scheduled commitment reductions before maturity; however, the Term Loan requires prepayments pursuant to the following: 1) certain asset sales, 2) 50% of any excess cash flow, as defined by the Term Loan, in any fiscal year beginning with fiscal year 2019, 3) certain insurance proceeds, and 4) certain tax refunds.
  • 18466299_87
    Other - Other
    During the three months ended October 31, 2018, we generated net loss attributable to Ferrellgas Partners L.P. of $57.0 million, compared to net loss attributable to Ferrellgas Partners L.P. of $47.9 million during the three months ended October 31, 2017.
  • 18466299_55
    Financial - Expense
    We do not utilize depreciation, depletion and amortization expense in our key measures, because we focus our performance management on cash flow generation and our revenue generating assets have long useful lives.
  • 18466299_90
    Financial - Expense
    The increase in "Operating, general and administrative expense" and "Gross margin - Propane and other gas liquid sales" primarily resulted from a 4% increase in retail customer count.
  • 18466299_95
    Financial - Expense
    "Interest expense" for Ferrellgas increased $3.1 million primarily due to increased interest rates on our secured credit facility.
  • 18466299_138
    Revenue - Product
    The $4.4 million decrease in wholesale gross margin primarily relates to decreased gross margin per gallon.
  • 18466299_215
    Financial - Cash Flow
    Cash flows from our accounts receivable securitization facility increased $13.0 million, as we received net funding of $32.0 million from this facility during the three months ended October 31, 2018 as compared to receiving net funding of $19.0 million from this facility during the three months ended October 31, 2017.
  • 18466299_76
    Financial - Expense
    Upon settlement, realized gains or losses on these contracts will be reclassified to "Cost of sales-propane and other gas liquid sales" in the condensed consolidated statements of operations as the underlying inventory is sold.
  • 18466299_110
    Financial - Cash Flow
    Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interest.
  • 18466299_104
    Financial - Cash Flow
    Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for taxes, plus proceeds from asset sales.
  • 18466299_193
    Other - Other
    However, future fluctuations in growth capital expenditures could occur due to the opportunistic nature of these projects.
  • 18466299_206
    Financial - Debt
    As of October 31, 2018, the operating partnership had outstanding borrowings of $275.0 million under the Term Loan at a rate of 8.01%, which was classified as long-term debt and no borrowings under the Revolving Facility.
  • 18466299_133
    Revenue - Product
    This decrease primarily resulted from an $3.1 million decrease in sales volumes.
  • 18466299_179
    Financial - Cash Flow
    This decrease in cash provided by The decrease in cash flow from operations is primarily due to a $8.2 million decrease in gross margin, as well as a net increase in "General and administrative expense" and "Equipment lease expense" of $2.1 million, and a $3.1 million increase in "Interest expense," due to increased interest rates on our new secured credit facility.
  • 18466299_130
    Revenue - Product
    Revenues Retail sales increased $34.0 million compared to the prior period.
  • 18466299_126
    Revenue - Product
    The increase in propane sales volumes to retail customers was primarily due to the 4% increase in retail customer count.
  • 18466299_192
    Revenue - Product
    Due to the mature nature of our Propane operations and related equipment sales operations segment, we do not anticipate significant fluctuations in maintenance capital expenditures.
  • 18466299_94
    Financial - Expense
    Corporate costs increased primarily due to a $3.7 million increase in legal costs, partially offset by a $1.2 million decrease in non-cash employee stock ownership plan compensation costs.
  • 18466299_151
    Financial - Expense
    Corporate costs increased primarily due to a $3.7 million increase in legal costs, partially offset by a $1.2 million decrease in non-cash employee stock ownership plan compensation costs.
  • 18466299_66
    Revenue - Product
    Although there is a strong correlation between weather and customer usage, general economic conditions in the United States and the wholesale price of propane can have a significant impact on this correlation.
  • 18466299_64
    Revenue - Product
    Accordingly, the volume of propane used by our customers for this purpose is directly affected by the severity of the winter weather in the regions we serve and can vary substantially from year to year.
  • 18466299_173
    Other - Other
    Relatively colder weather or higher propane prices during the winter heating season are factors that could significantly increase our working capital requirements.
  • 18466299_217
    Other - Other
    As of October 31, 2018, we had received cash proceeds of $90.0 million related to the securitization of our trade accounts receivable, with no remaining capacity receive additional proceeds.
  • 18466299_131
    Revenue - Product
    This increase resulted from an $18.0 million increase in sales price per gallon and $16.0 million in increased sales volumes, as discussed above.
  • 18466299_225
    Financial - Expense
    These reimbursable costs, which totaled $66.1 million for the three months ended October 31, 2018, include operating expenses such as compensation and benefits paid to employees of our general partner who perform services on our behalf as well as related general and administrative expenses.
  • 18466299_183
    Financial - Cash Flow
    The decrease in cash flow from operations is primarily due to a $8.2 million decrease in gross margin, as well as a net increase in "General and administrative expense" and "Equipment lease expense" of $2.1 million, and a $3.0 million increase in "Interest expense," due to increased interest rates on our new secured credit facility.
  • 18466299_188
    Other - Other
    Examples include expenditures for purchases of both bulk and portable propane tanks and other equipment to facilitate expansion of our customer base and operating capacity.
  • 18466299_12
    Other - Other
    You may read and download our SEC filings over the Internet from several commercial document retrieval services as well as at the SEC?s website at www.sec.gov.
  • 18466299_9
    Other - Other
    The parent company of our general partner, Ferrell Companies, beneficially owns approximately 23% of our outstanding common units.
  • 18466299_119
    Financial - Cash Flow
    Distributable cash flow excess, if any, is retained to establish reserves for future distributions, reduce debt, fund capital expenditures and for other partnership purposes.
  • 18466299_134
    Revenue - Product
    Other gas sales increased $2.7 million compared to the prior year period primarily due to an increase in sales price per gallon, as discussed above.

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  • Form Type: Quarterly
  • Number of times amended: 0
  • Accession Number: 0000922358-18-000013
  • Submitted to the SEC: Thursday, December 6, 2018 6:57:32 AM EST
  • Accepted by the SEC: Thursday, December 6, 2018
  • Period ending: October 2018
  • Industry: Retail Miscellaneous Retail
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FGP

FERRELLGAS PARTNERS L P

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