Exhibit 99.1
For immediate release
Contact:
Ryan VanWinkle, Investor Relations, 816-792-7998
Scott Brockelmeyer, Media Relations, 816-792-7837
Ferrellgas Partners, L.P.
Reports Second Quarter Results
Liberty, MO (February 25, 2004)--Ferrellgas Partners, L.P. (NYSE:FGP), one
of the nation's largest retail marketers of propane, today reported earnings for
the second quarter of fiscal year 2004. The second quarter covers the
three-month period ended January 31, 2004.
Significantly warmer than normal winter heating season temperatures resulted in
retail sales for the quarter of 319 million gallons, compared to the prior
year's near-record sales volume of 360 million gallons sold in the quarter.
Gross profit for the quarter was $194.9 million, compared to $209.7 million
reported in the second quarter of fiscal 2003, primarily the result of the lower
retail gallon sales and contributions from risk management activities, partially
offset by increased margins from retail locations.
Operating expense for the second quarter was $79.8 million, essentially
unchanged compared to the prior year's quarter and general and administrative
expense for the quarter was $9.0 million, compared to $7.8 million reported in
the second quarter of fiscal 2003. Equipment lease expense for the quarter was
$4.7 million, down $0.8 million from the prior year's quarter.
Adjusted EBITDA and net earnings for the second quarter were $101.4 million
and $67.1 million, respectively, compared to $116.8 million and $87.1 million
reported in the prior year period.
"This winter has presented our industry many challenges, as winter heating
season temperatures in our operating areas have been significantly warmer than
normal," said James E. Ferrell, Chairman and Chief Executive Officer. "As we
have demonstrated in the past, we will meet these challenges through effective
margin and cost management, providing a secure distribution to our common
unitholders, while looking for opportunities to expand our operations."
-more-
Ferrellgas
Page 2 of 2
On February 9, 2004, the partnership announced it will acquire
substantially all of the assets of Blue Rhino Corporation from a subsidiary of
Ferrell Companies, Inc., the parent of the partnership's general partner. Blue
Rhino is the nation's leading provider of branded propane tank exchange service
and complimentary products with 29,000 retail locations in 49 states and Puerto
Rico. Terms of the agreement call for the partnership to assume the requirement
to pay $17 in cash for each share of Blue Rhino stock outstanding on the date of
the acquisition by the subsidiary, anticipated to be approximately $340 million.
"Blue Rhino is a great compliment to our existing base business and will
provide us a large presence in the tank exchange market, the fastest growing
portion of the retail propane industry," added Mr. Ferrell. "Blue Rhino's
counter-cyclical operations and cash flow will further enhance our ability to
provide stable, consistent earnings to investors, while providing us the
opportunity to achieve year-over-year organic growth."
For the six-months ended January 31, 2004, retail propane sales volumes and
gross profit were 494 million gallons and $291.0 million, respectively, and
operating and general and administrative expenses were $152.3 million and $15.9
million, respectively. Equipment lease expense for the six-month period was $9.2
million. As is typically the case, year-to-date results were primarily impacted
by the seasonal performance experienced in the second quarter. Adjusted EBITDA
and net earnings for the six-month period were $113.6 million and $48.4 million,
respectively, compared to $128.1 million and $62.1 million for the same period
last year.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 45 states. Ferrellgas
employees indirectly own more than 17 million common units of the partnership
through an employee stock ownership plan.
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 are discussed in
the partnership's Form 10-K for the fiscal year ended July 31, 2003 and
other documents filed from time to time by the partnership with the
Securities and Exchange Commission.
###
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS January 31, 2004 July 31, 2003
- ----------------------------------------------------------------------------- ------------------- -------------------
Current Assets:
Cash and cash equivalents $ 23,072 $ 11,154
Accounts and notes receivable, net 157,581 56,742
Inventories 83,976 69,077
Prepaid expenses and other current assets 8,819 8,306
------------------- -------------------
Total Current Assets 273,448 145,279
Property, plant and equipment, net 698,457 684,917
Goodwill 124,190 124,190
Intangible assets, net 110,067 98,157
Other assets 8,609 8,853
------------------- -------------------
Total Assets $ 1,214,771 $ 1,061,396
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
- -----------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 116,813 $ 59,454
Other current liabilities 71,185 89,687
Short-term borrowings 42,700 -
------------------- -------------------
Total Current Liabilities 230,698 149,141
Long-term debt (a) 900,396 888,226
Other liabilities 19,728 18,747
Contingencies and commitments - -
Minority interest 2,853 2,363
Partners' Capital:
Senior unitholder (1,994,146 units outstanding at both January 2004
and July 2003 - liquidation preference $79,766 at both
January 2004 and July 2003) 79,766 79,766
Common unitholders (39,727,834 and 37,673,455 units outstanding
at January 2004 and July 2003, respectively) 41,879 (15,602)
General partner unitholder (421,434 and 400,683 units outstanding
at January 2004 and July 2003, respectively) (58,736) (59,277)
Accumulated other comprehensive loss (1,813) (1,968)
------------------- -------------------
Total Partners' Capital 61,096 2,919
------------------- -------------------
Total Liabilities and Partners' Capital $ 1,214,771 $ 1,061,396
=================== ===================
<FN>
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., is $218 million of 8 3/4% notes,
which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas,
L.P.
</FN>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2004 AND 2003
(in thousands, except per unit data)
(unaudited)
Three months ended January 31 Six months ended January 31
----------------------------- ---------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
Propane and other gas liquids sales $ 457,433 $ 439,301 $ 689,487 $ 634,201
Other 24,348 25,165 47,708 46,579
------------ ------------ ------------ ------------
Total revenues 481,781 464,466 737,195 680,780
Cost of product sold 286,899 254,718 446,148 378,390
------------ ------------ ------------ ------------
Gross profit 194,882 209,748 291,047 302,390
Operating expense 79,804 79,677 152,283 148,105
Depreciation and amortization expense 12,665 10,261 23,860 20,156
General and administrative expense 8,982 7,759 15,873 14,661
Equipment lease expense 4,732 5,528 9,243 11,520
Employee stock ownership plan compensation charge 2,164 1,639 3,948 3,034
Loss on disposal of assets and other 1,926 1,125 3,552 1,796
------------ ------------ ------------ ------------
Operating income 84,609 103,759 82,288 103,118
Interest expense (17,291) (16,084) (34,085) (30,780)
Interest income 470 364 801 426
Early extinguishment of debt expense (a) - - - (7,052)
------------ ------------ ------------ ------------
Earnings before minority interest and cumulative
effect of change in accounting principle 67,788 88,039 49,004 65,712
Minority interest (b) 733 937 595 822
------------ ------------ ------------ ------------
Earnings before cumulative effect of change in
accounting principle 67,055 87,102 48,409 64,890
Cumulative effect of change in accounting
principle, net of minority interest of $28 (c) - - - (2,754)
------------ ------------ ------------ ------------
Net earnings 67,055 87,102 48,409 62,136
Distribution to senior unitholder 1,994 2,743 3,988 5,525
Net earnings available to general partner 650 843 444 566
------------ ------------ ------------ ------------
Net earnings available to common unitholders $ 64,411 $ 83,516 $ 43,977 $ 56,045
============ ============ ============ ============
Basic earnings per common unit:
Earnings before cumulative effect of change in
accounting principle (d) $ 1.65 $ 2.31 $ 1.15 $ 1.62
Net earnings available to common unitholders $ 1.65 $ 2.31 $ 1.15 $ 1.55
Weighted average common units outstanding 39,048.2 36,144.0 38,377.2 36,116.0
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended January 31 Six months ended January 31
----------------------------- ---------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Retail gallons 318,767 360,388 494,339 532,414
============ ============ ============ ============
Net earnings $ 67,055 $ 87,102 $ 48,409 $ 62,136
Interest expense 17,291 16,084 34,085 30,780
Depreciation and amortization expense 12,665 10,261 23,860 20,156
Interest income (470) (364) (801) (426)
------------ ------------ ------------ ------------
EBITDA $ 96,541 $113,083 $105,553 $112,646
Employee stock ownership plan compensation charge 2,164 1,639 3,948 3,034
Loss on disposal of assets and other 1,926 1,125 3,552 1,796
Minority interest (b) 733 937 595 822
Early extinguishment of debt expense (a) - - - 7,052
Cumulative effect of change in accounting principle (c) - - - 2,754
------------ ------------ ------------ ------------
Adjusted EBITDA (e) $ 101,364 $116,784 $113,648 $128,104
============ ============ ============ ============
<FN>
(a) Expenses related to the refinancing of the $160 million Ferrellgas
Partners, L.P. senior secured debt in September 2002.
(b) Amounts allocated to the general partner for its 1.0101% interest in the
operating partnership, Ferrellgas, L.P.
(c) Amount related to recognition of liabilities for future retirements of
underground storage facilities, as required by SFAS No. 143.
(d) Amount calculated as 99% of the earnings (loss) before cumulative effect
of change in accounting principle less distribution to senior unitholder;
the result then divided by the weighted average common units outstanding.
(e) Management considers Adjusted EBITDA to be a chief measurement of the
partnership's overall economic performance and return on invested capital.
Adjusted EBITDA is calculated as earnings before interest, income taxes,
depreciation and amortization, employee stock ownership plan compensation
charge, loss on disposal of assets and other, minority interest, early
extinguishment of debt expense, cumulative effect of change in accounting
principle and other non-cash and non-operating charges. 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 are unusual or non-recurring, and makes it easier to compare its
results with other companies that have different financing and capital
structures. In addition, management believes this measure is consistent
with the manner in which the partnership's lenders and investors measure
its overall performance and liquidity, including its ability to pay
quarterly equity distributions, service its long-term debt and other fixed
obligations and to fund its capital expenditures and working capital
requirements. 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.
</FN>