Ferrellgas Partners, L.P. Reports Second Quarter Fiscal Year 2025 Results

Written by Customer Service on March 7, 2025. Posted in Earnings Releases And Operating Results.

LIBERTY, Mo., March 07, 2025 (GLOBE NEWSWIRE) — Ferrellgas Partners, L.P. (OTC: FGPR) (“Ferrellgas” or the “Company”) today reported financial results for its 2025 second fiscal quarter ended January 31, 2025.

In sharing 2025 fiscal second quarter results, Tamria Zertuche, President and Chief Executive Officer, commented, “In the second fiscal quarter, our experienced field professionals showcased their operational excellence in every facet of our business. With a warm start to the quarter, our leaders needed to manage expenses while adequately planning for the coming heating season. Though dry weather resulted in lower than normal agricultural needs for propane in November, the latter half of December and January provided an opportunity for positive demand in all customer segments. In January, our drivers braced against the elements and safely met the needs of our customers. Safe driving by our experienced and highly tenured employees aided by proven planning practices helped achieve opportunities for growth in Retail and a record January for Blue Rhino. I could not be prouder of the way our teams took advantage of the opportunities Q2 presented. Our employee owners worked together and delivered a solid quarter.”

Gross profit increased $19.1 million, or 6.0%, in the second fiscal quarter compared to the prior year. The increase was driven by an increase of $59.9 million, or 10%, in revenues, which was partially offset by an increase of $40.8 million, or 14%, in cost of product. Gallons sold for the second fiscal quarter increased 14.4 million, or 6%, as wholesale gallons sold increased 11.5 million, or 20%, and retail gallons sold increased 2.9 million, or 1%. In addition to the increase in gallons sold, the revenue and cost of product changes were driven by wholesale propane prices that were 16.9% higher from Mt. Belvieu, Texas and 16.2% higher from Conway, Kansas compared to the prior year period.

The Company recognized net earnings attributable to Ferrellgas Partners, L.P. of $98.8 million and $95.8 million in the second fiscal quarter of fiscal 2025 and 2024, respectively. The $3.1 million increase was primarily due to the $19.1 million increase in gross profit, described above, which was partially offset by an $11.1 million increase in operating expenses and $3.5 million increase in interest expense. The $11.0 million increase in personnel costs includes increased overtime costs and one-time expenses related to workers compensation costs. The remainder of the increase in operating expenses consisted of $0.9 million for plant and other costs. These increases were partially offset by a decrease of $0.8 million in vehicle costs due to a $1.0 million decrease in fuel costs, in addition to negligible amounts for repairs and maintenance driven by optimized fleet maintenance initiatives. The Company continued to focus on gaining efficiencies in delivering to our customers. The metrics showcase results as the days to set a tank improved with a 25% decrease in time to service during the second fiscal quarter as compared to the prior year period.

The Company navigated a dynamic quarter with strategic efforts to manage operational efficiency and customer demand. The second fiscal quarter was warmer than normal by 9.9% and 2.5% in November and December, respectively. In the first two months of the quarter, the Company kept its focus on controlling operating expenses and gearing up for the demand that cooler weather brings. January was the coldest month of fiscal 2025 to date with temperatures that were 12.2% cooler than normal. Overall, weather was 1.5% cooler than normal and 5.1% cooler than the prior year quarter. In addition to a 2% customer decrease, the Company’s Retail business was also impacted by extended drought conditions throughout the country, as demand from our agricultural customers was depressed with lack of rain, which reduced the propane needed for crop drying by 2.4 million gallons during the second fiscal quarter. While the Retail business benefits from colder weather, the Company also continued to gain weather-agnostic customers. For example, the Company gained a new autogas customer during the quarter, expected to provide 100,000 gallons annually, which provides bus services to a number of school districts and other organizations in Minnesota.

With the 6,000 selling locations that Blue Rhino, the Company’s tank exchange business, added in the prior year, organic sales have grown 14%. Blue Rhino also achieved sales increases driven by demand during the second fiscal quarter as consumers diversify the uses of its product for applications such as propane for patio heaters, outdoor fireplaces, emergency power generation, temporary heating, and additional emergency preparedness and response needs. Cylinders delivered in the month of January were higher than any summer month in the last three years. This drove a 2.2 million, or 9%, increase in gallons sold during the quarter. Blue Rhino makes it easy for customers to purchase propane through its vending operations, which are easily accessible to the busy consumer. The Company also sold an additional 9.3 million wholesale gallons during the second fiscal quarter.

For the second fiscal quarter, Adjusted EBITDA, a non-GAAP financial measure, increased by $10.1 million, or 7%, to $157.0 million, compared to $146.9 million in the prior year quarter. The $19.1 million increase in gross profit and a $2.1 million decrease in general and administrative expense, after adjusting for a $1.6 million increase in EBITDA adjustments, primarily related to Eddystone legal costs, drove the increase in Adjusted EBITDA for the second fiscal quarter as compared to the prior year period. This increase was partially offset by a $10.6 million increase in operating expenses, after adjusting for a $0.5 million increase in EBITDA adjustments for a settlement related to a core business.

As previously disclosed, on January 15, 2025, the Company entered into a settlement agreement related to the Eddystone litigation. Of the $125.0 million accrued in the first fiscal quarter, $50.0 million was paid on January 15, 2025, and two additional payments of $37.5 million will occur on or before June 16, 2025, and January 15, 2026, respectively. As part of the settlement, the $190.0 million appeal bond and the related letters of credit have been released.

On Friday, March 7, 2025, the Company will conduct a live teleconference on the Internet at https://edge.media-server.com/mmc/p/fcigf2x9 to discuss the results of operations for the second fiscal quarter ended January 31, 2025. 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 67,000 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. For more information, follow Ferrellgas on Facebook, X, LinkedIn, and Instagram.

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, in the Quarterly Report on Form 10-Q of Ferrellgas Partners, L.P., Ferrellgas, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the quarter ended January 31, 2025, 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	January 31, 2025			July 31, 2024

Current assets:
Cash and cash equivalents (including $10,678 of restricted cash at July 31, 2024)	$	39,406		$	124,160
Accounts and notes receivable, net		254,695			120,627
Inventories		104,613			96,032
Prepaid expenses and other current assets		40,863			34,383
Total current assets		439,577			375,202

Property, plant and equipment, net		603,453			604,954
Goodwill, net		257,155			257,006
Intangible assets (net of accumulated amortization of $363,056 and $358,895 at January 31, 2025 and July 31, 2024, respectively)		110,211			112,155
Operating lease right-of-use assets		38,281			47,620
Other assets, net		70,288			61,813
Total assets	$	1,518,965		$	1,458,750


LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	77,744		$	33,829
Current portion of long-term debt		2,382			2,510
Current operating lease liabilities		17,619			22,448
Other current liabilities		265,551			184,021
Total current liabilities		363,296			242,808

Long-term debt		1,462,839			1,461,008
Operating lease liabilities		21,825			26,006
Other liabilities		41,305			27,267

Contingencies and commitments

Mezzanine equity:
Senior preferred units, net of issue discount and offering costs (700,000 units outstanding at January 31, 2025 and July 31, 2024)		651,349			651,349

Equity (Deficit):
Limited partner unitholders
Class A (4,857,605 Units outstanding at January 31, 2025 and July 31, 2024)		(1,334,906	)		(1,256,946	)
Class B (1,300,000 Units outstanding at January 31, 2025 and July 31, 2024)		383,012			383,012
General partner Unitholder (49,496 Units outstanding at January 31, 2025 and July 31, 2024)		(70,868	)		(70,080	)
Accumulated other comprehensive income		9,538			2,025
Total Ferrellgas Partners, L.P. deficit		(1,013,224	)		(941,989	)
Noncontrolling interest		(8,425	)		(7,699	)
Total deficit		(1,021,649	)		(949,688	)
Total liabilities, mezzanine and deficit	$	1,518,965		$	1,458,750

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data) (unaudited)

	Three months ended						Six months ended						Twelve months ended
	January 31,						January 31,						January 31,
	2025			2024			2025			2024			2025			2024
Revenues:
Propane and other gas liquids sales	$	637,027		$	584,209		$	973,825		$	923,143		$	1,782,121		$	1,802,305
Other		32,749			25,668			60,036			57,747			107,966			107,818
Total revenues		669,776			609,877			1,033,861			980,890			1,890,087			1,910,123

Cost of sales:
Propane and other gas liquids sales		318,706			277,838			483,062			450,018			874,534			892,802
Other		3,665			3,730			8,111			8,171			12,421			15,065

Gross profit		347,405			328,309			542,688			522,701			1,003,132			1,002,256

Operating expense – personnel, vehicle, plant & other		170,740			159,638			318,914			304,284			616,232			594,709
Operating expense – equipment lease expense		4,996			5,343			10,500			10,719			21,366			22,361
Depreciation and amortization expense		24,345			24,435			48,670			48,839			98,302			96,509
General and administrative expense		16,714			17,191			154,640			30,016			174,963			62,806
Non-cash employee stock ownership plan compensation charge		703			900			1,556			1,620			3,170			3,110
Loss on asset sales and disposals		2,264			382			3,691			1,717			4,793			5,438

Operating income		127,643			120,420			4,717			125,506			84,306			217,323

Interest expense		(27,893	)		(24,359	)		(53,974	)		(48,520	)		(103,677	)		(98,046	)
Other income, net		321			849			1,178			2,185			3,484			3,797

Earnings (loss) before income tax expense		100,071			96,910			(48,079	)		79,171			(15,887	)		123,074

Income tax expense		385			309			565			471			780			931

Net earnings (loss)		99,686			96,601			(48,644	)		78,700			(16,667	)		122,143

Net earnings (loss) attributable to noncontrolling interest⁽¹⁾		843			812			(819	)		467			(825	)		584

Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	98,843		$	95,789		$	(47,825	)	$	78,233		$	(15,842	)	$	121,559

Class A unitholders’ interest in net earnings (loss)	$	11,660		$	11,226		$	(79,810	)	$	6,421		$	(141,891	)	$	8,000

Net earnings (loss) per unitholders’ interest
Basic and diluted net earnings (loss) per Class A Unit	$	2.40		$	2.31		$	(16.43	)	$	1.32		$	(29.21	)	$	1.65
Weighted average Class A Units outstanding – basic and diluted		4,858			4,858			4,858			4,858			4,858			4,858

(1)	Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.

Supplemental Data and Reconciliation of Non-GAAP Items:

	Three months ended						Six months ended						Twelve months ended
	January 31,						January 31,						January 31,
	2025			2024			2025			2024			2025			2024
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	98,843		$	95,789		$	(47,825	)	$	78,233		$	(15,842	)	$	121,559
Income tax expense		385			309			565			471			780			931
Interest expense		27,893			24,359			53,974			48,520			103,677			98,046
Depreciation and amortization expense		24,345			24,435			48,670			48,839			98,302			96,509
EBITDA		151,466			144,892			55,384			176,063			186,917			317,045
Non-cash employee stock ownership plan compensation charge		703			900			1,556			1,620			3,170			3,110
Loss on asset sales and disposal		2,264			382			3,691			1,717			4,793			5,438
Other income, net		(321	)		(849	)		(1,178	)		(2,185	)		(3,484	)		(3,797	)
Legal fees and settlements related to non-core businesses		1,768			103			129,154			1,157			130,987			8,929
Legal fees and settlements related to core businesses		500			—			4,540			—			4,540			—
Acquisition and related costs ⁽¹⁾		(798	)		—			(798	)		—			1,371			—
Business transformation costs ⁽²⁾		615			691			1,321			965			2,966			3,053
Net earnings (loss) attributable to noncontrolling interest ⁽³⁾		843			812			(819	)		467			(825	)		584
Adjusted EBITDA ⁽⁴⁾		157,040			146,931			192,851			179,804			330,435			334,362
Net cash interest expense⁽⁵⁾		(23,431	)		(21,424	)		(45,904	)		(42,171	)		(88,778	)		(85,995	)
Maintenance capital expenditures⁽⁶⁾		(8,727	)		(4,039	)		(19,141	)		(8,569	)		(32,261	)		(18,531	)
Cash paid for income taxes		(333	)		(256	)		(410	)		(359	)		(750	)		(955	)
Proceeds from certain asset sales		655			900			1,211			1,380			2,141			2,044
Distributable cash flow attributable to equity investors⁽⁷⁾		125,204			122,112			128,607			130,085			210,787			230,925
Less: Distributions accrued or paid to preferred unitholders		16,231			16,250			32,463			32,501			64,740			64,342
Distributable cash flow attributable to general partner and non-controlling interest		(2,504	)		(2,443	)		(2,572	)		(2,602	)		(4,216	)		(4,619	)
Distributable cash flow attributable to Class A and B Unitholders ⁽⁸⁾		106,469			103,419			93,572			94,982			141,831			161,964
Less: Distributions paid to Class A and B Unitholders ⁽⁹⁾		—			—			—			—			99,996			49,998
Distributable cash flow excess ⁽¹⁰⁾	$	106,469		$	103,419		$	93,572		$	94,982		$	41,835		$	111,966

Propane gallons sales
Retail – Sales to End Users		205,975			203,054			312,706			317,494			559,097			587,579
Wholesale – Sales to Resellers		69,490			57,978			120,730			105,743			214,857			206,819
Total propane gallons sales		275,465			261,032			433,436			423,237			773,954			794,398

(1)	Non-recurring due diligence related to potential acquisition activities, restructuring costs, and other adjustments.
(2)	Non-recurring costs included in “Operating, general and administrative expense” primarily related to the implementation of an ERP system as part of our business transformation initiatives.
(3)	Amounts allocated to the general partner for its 1.0101% interest (excluding the economic interest attributable to the preferred unitholders) in the operating partnership, Ferrellgas, L.P.
(4)	Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, loss on asset sales and disposals, other income, net, legal fees and settlements related to non-core businesses, legal fees and settlements related to core businesses, acquisition and related costs, business transformation costs, and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful because it allows investors to view the partnership’s performance in a manner similar to the method management uses, adjusted for items management believes make it easier to compare its results with other companies that have different financing and capital structures. Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(5)	Net cash interest expense is the sum of interest expense less non-cash interest expense and other income, net.
(6)	Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment, and may from time to time include the purchase of assets that are typically leased.
(7)	Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for income taxes plus proceeds from certain asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to equity investors, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(8)	Distributable cash flow attributable to Class A and B Unitholders is calculated as Distributable cash flow attributable to equity investors minus distributions accrued or paid on the Preferred Units and distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to Class A and B Unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to Class A and B Unitholders. Distributable cash flow attributable to Class A and B Unitholders, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added to our calculation of distributable cash flow attributable to Class A and B Unitholders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to Class A and B Unitholders should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(9)	The Company did not pay any distributions to Class A Unitholders during any of the periods in fiscal 2025 or fiscal 2024.
(10)	Distributable cash flow excess is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility. Management considers Distributable cash flow excess a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess should be viewed in conjunction with measurements that are computed in accordance with GAAP.

CONTACT: Contacts

Investor Relations – InvestorRelations@ferrellgas.com

Ferrellgas Partners, L.P. Reports Second Quarter Fiscal Year 2025 Results

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