LIBERTY, Mo., Sept. 27, 2024 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (OTC: FGPR) ("Ferrellgas” or the "Company”) today reported financial results for its fiscal year ("fiscal 2024”) and the fourth fiscal quarter ended July 31, 2024.
For the fourth fiscal quarter, Adjusted EBITDA, a non-GAAP financial measure, increased by $4.6 million, or 16%, to $33.6 million, compared to $29.0 million in the prior year quarter. Gross profit was flat with an increase of $0.4 million. A $7.7 million decrease in general and administrative expense, after adjusting for a $1.8 million decrease in EBITDA adjustments, and a $3.7 million increase in operating expense, were the main drivers of the increase in Adjusted EBITDA for the fourth fiscal quarter as compared to the prior year period.
For fiscal 2024, Adjusted EBITDA decreased by $42.8 million, or 12%, to $317.4 million, compared to $360.2 million in fiscal 2023. Gross profit decreased $24.1 million, or 2%. A $24.1 million increase in operating expense and a $3.7 million decrease in general and administrative expense, after adjusting for a $16.7 million decrease in EBITDA adjustments, also contributed to the decrease in Adjusted EBITDA for fiscal 2024 as compared to fiscal 2023.
In sharing fiscal fourth quarter and fiscal 2024 year end results, Tamria Zertuche, President and Chief Executive Officer of Ferrellgas commented, "Last fall we added over 6,000 accounts to our Blue Rhino branded Tank Exchange business knowing the investment in the first half of the year would pay dividends in the high demand season of the fourth quarter. Blue Rhino EBITDA grew 26% over prior year. However, the real story is in this brand's supply chain excellence. We are fortunate to have some of the best innovators in the industry helping to create opportunities in efficiencies that drive positive results. Removing multiple days of supply across the nationwide network resulted in material improvement in free cash flow and subsequent decreases in capital expenditures for this business over the prior year. The improvements will sustain continued cash flow advantages for the Company. Regarding our retail business, our focus has been on growing our customer base by targeting specific customer types and geographic locations. As with last quarter, we continued to see additional business closings from the effects of inflation, which contributed to a decrease in retail customers in some areas of our national footprint and these decreases were not fully offset by continued customer gains during the year. The modest increase in plant and other expenses are partially attributed to the opening of six locations in growing regions, which is the result of our focus on weather-agnostic opportunities in coastal regions. Our asset strategy is to re-deploy these reclaimed assets related to closed businesses for gallon growth occurring in future periods. Throughout the fourth quarter our highly experienced retail operations professionals have been supporting our strong commercial business while also focusing on seasonal preparedness. We are grateful to have thousands of drivers, service techs, and managers all making sure we are ready for the coming La Nina winter.”
The fourth fiscal quarter increase of $0.4 million in gross profit was driven by a decrease of $1.9 million, or 1%, in cost of product sold, which was partially offset by a decrease of $1.4 million, or 0.4%, in revenues. Gallons sold for the fourth fiscal quarter decreased 6.1 million, or 4%, as the Company continued to see some business closings and effects of inflation. We will be able to re-deploy assets related to these closed businesses for gallon growth occurring in future periods.
Margin per gallon was favorable with a 4% increase compared to the prior year period. Segment mix, our fixed cost price program for residential customers, and national account pricing improvement continue to drive the trend in margin improvement. The $7.7 million decrease in general and administrative expense noted above was primarily due to a $6.0 million reduction in incentive accruals compared to the prior year period. The $3.7 million increase in operating expense was driven by increases of $5.3 million in plant and other costs and $1.0 million in personnel expense, partially offset by a decrease of $2.6 million in vehicle costs.
The fiscal 2024 decrease of $24.1 million, or 2%, in gross profit was driven by a decrease of $189.3 million, or 9%, in revenues, which was partially offset by a decrease of $165.3 million, or 16%, in cost of product sold. This was primarily due to warmer than normal weather, the 5% decrease in retail customers partially related to the business closings noted above, and lower wholesale propane prices at our two major supply points. The 44.3 million, or 5%, year to date decrease in gallons sold correlates with weather that was 10% warmer than normal and 4% warmer than fiscal 2023. Additionally, our two major supply points had wholesale propane prices that averaged 6% and 9% less in fiscal 2024 compared to fiscal 2023, which contributed to the revenues and cost of product decreases. Margin per gallon was also favorable with an increase of 3% in fiscal 2024 compared to the prior year period due to the positive factors noted above.
The fiscal 2024 $24.1 million increase in operating expense compared to fiscal 2023 was driven by increases of $13.1 million in personnel expense, $5.6 million in vehicle expense, and $5.4 million in plant and other costs. Increases of $11.3 million in medical insurance claims paid under our self-insured benefits plan and $6.6 million in payroll costs, partially offset by a $4.7 million decrease for incentive accruals, comprised the change in personnel expense. The increase in vehicle expense was primarily due to increases of $5.7 million for repairs and maintenance and $0.6 million in telematics technology, partially offset by a decrease in fuel costs. The increase in plant and other costs was primarily due to increases of $4.5 million in miscellaneous expense, $1.5 million for property repairs and network costs, and $1.2 million related to legal and general liability costs. These increases were partially offset by a decrease in credit card fees related to a new payment platform, which charges less in processing fees. The $3.7 million decrease in general and administrative expense noted above was primarily due to a $5.4 million reduction in incentive accruals.
We recognized a net loss attributable to Ferrellgas Partners, L.P. of $20.8 million and $29.1 million in the fourth fiscal quarter of fiscal 2024 and 2023, respectively. We recognized net earnings attributable to Ferrellgas Partners, L.P. of $110.2 million and $136.9 million in fiscal 2024 and 2023, respectively. The changes relate to the factors noted above. Operating income per gallon increased $0.06, or 150%, for the fourth fiscal quarter of fiscal 2024 and decreased $0.02, or 7%, for fiscal 2024 compared to the respective prior year periods.
As noted above, the weather can impact our results. The Company continues to progress in steps to be more weather-agnostic, such as our autogas business in which school districts are fueling buses with clean energy. In July 2024, we completed the installation of an 18,000-gallon tank and autogas pumps which will be used to transport nearly 200,000 students to school this year. The school district's 38 new autogas-fueled buses will use more than 100,000 gallons of propane a year. We also continue to expand our business in other areas of the country outside of the Midwest, such as our fiscal 2024 acquisition of Eastern Sierra Propane in California. As we seek strategic acquisitions throughout the country, this helps to mitigate the impact of weather conditions in a specific region. We also benefit from our tank exchange brand, Blue Rhino, which thrives during warmer weather as customers seek to enjoy the outdoors. As we see power outages from storms and other events, the Company, with its national distribution network, readily steps up to provide easily accessible portable fuel. Both Blue Rhino and Ferrellgas were on hand to help storm victims and support Operation BBQ Relief by providing propane and tanks to fuel meals for those impacted by the storm and first responders in response to Hurricane Beryl, a category one storm which made landfall in Texas in July 2024, in addition to providing an energy source for those without power. Additionally, Blue Rhino realized savings in both the fourth fiscal quarter and fiscal 2024 in its strategy to refurbish displays for use by its retail partners as well as the implementation of supply chain improvements which reduced our capital expenditures in fiscal 2024.
As a nationwide logistics company, we continue to invest in technology and initiatives to deliver propane to our customers efficiently. In fiscal 2024, we installed more than 10,000 tank monitors on existing residential tanks. We also reduced our skipped stops by 12.6%, which reduced our delivery costs. Our fleet team partnered with national vendors to realize savings in tires, maintenance and short-term rentals. Safety is key to the Company's operations. Last year, we began the installation of back-up cameras in our vehicles. With over 2,400 cameras installed to date, we have realized a 28% reduction in backing incidents. These initiatives drove the decrease in vehicle costs noted above.
On Friday, September 27, 2024, the Company will conduct a live teleconference on the Internet at https://edge.media-server.com/mmc/p/ur62uncc to discuss the results of operations for the fiscal year ended July 31, 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 InvestorRelations@ferrellgas.com 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. 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, 2024, with the Securities and Exchange Commission on September 27, 2024. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.
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 conflicts between Russia and Ukraine and in the Middle East; 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, 2024, 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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data) (unaudited) ASSETS July 31, 2024 July 31, 2023 Current assets: Cash and cash equivalents (including $10,678 and $11,126 of restricted cash at July 31, 2024 and 2023, respectively) $124,160 $137,347 Accounts and notes receivable, net 120,627 159,379 Inventories 96,032 98,104 Price risk management asset 5,925 11,966 Prepaid expenses and other current assets 28,458 29,135 Total current assets 375,202 435,931 Property, plant and equipment, net 604,954 615,174 Goodwill, net 257,006 257,006 Intangible assets (net of accumulated amortization of $358,895 and $349,614 at July 31, 2024 and 2023, respectively) 112,155 106,615 Operating lease right-of-use assets 47,620 57,839 Other assets, net 61,813 58,838 Total assets $1,458,750 $1,531,403 LIABILITIES, MEZZANINE AND EQUITY (DEFICIT) Current liabilities: Accounts payable $33,829 $35,115 Current portion of long-term debt 2,510 2,597 Current operating lease liabilities 22,448 24,600 Other current liabilities 184,021 197,030 Total current liabilities 242,808 259,342 Long-term debt 1,461,008 1,456,184 Operating lease liabilities 26,006 34,235 Other liabilities 27,267 29,084 Contingencies and commitments Mezzanine equity: Senior preferred units, net of issue discount and offering costs (700,000 units outstanding at July 31, 2024 and 2023) 651,349 651,349 Equity (Deficit): Limited partner unitholders Class A (4,857,605 Units outstanding at July 31, 2024 and 2023) (1,256,946) (1,205,103)Class B (1,300,000 Units outstanding at July 31, 2024 and 2023) 383,012 383,012 General partner Unitholder (49,496 Units outstanding at July 31, 2024 and 2023) (70,080) (70,566)Accumulated other comprehensive income 2,025 1,059 Total Ferrellgas Partners, L.P. deficit (941,989) (891,598)Noncontrolling interest (7,699) (7,193)Total deficit (949,688) (898,791)Total liabilities, mezzanine and deficit $1,458,750 $1,531,403
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data)
(unaudited) Three months ended Year ended July 31, July 31, 2024 2023 2024 2023Revenues: Propane and other gas liquids sales $318,239 $320,115 $1,731,439 $1,916,892 Other 22,213 21,771 105,677 109,573 Total revenues 340,452 341,886 1,837,116 2,026,465 Cost of sales: Propane and other gas liquids sales 151,191 150,958 841,490 1,003,357 Other 1,115 3,221 12,481 15,913 Gross profit 188,146 187,707 983,145 1,007,195 Operating expense - personnel, vehicle, plant & other 146,689 142,948 601,602 577,520 Operating expense - equipment lease expense 5,591 5,781 21,585 23,252 Depreciation and amortization expense 24,292 23,917 98,471 93,370 General and administrative expense 7,018