Exhibit 99.1
FOR IMMEDIATE RELEASE
Inergy, L.P. Reports Fiscal 2002 Financial Results
Management Conference Call Scheduled
Kansas City, MO (November 20, 2002) - Inergy L.P. (NASDAQ: NRGY) today
reported its results of operations for the fourth quarter and year ended
September 30, 2002.
For the three months ended September 30, 2002, Inergy, L.P. (Inergy)
reported income before interest, taxes, depreciation and amortization (EBITDA)
of $1.6 million, as compared to $0.1 million in the fourth quarter of last year.
For the year ended September 30, 2002, EBITDA increased to $28.8 million from
$17.6 million last year. Inergy recorded a seasonal net loss for the three
months ended September 30, 2002 of ($4.3) million, or ($0.55) per limited
partner unit, as compared to a net loss of ($3.7) million for the same period in
the prior year. Due to the seasonal nature of the propane industry, Inergy
typically reports net loss during the fourth quarter. For the year ended
September 30, 2002, net income was $8.3 million, or $1.20 per diluted limited
partner unit, compared with $4.3 million in the same period of the prior year.
EBITDA increased primarily due to an increase in retail gross profit from
acquisitions. The increase in the net loss for the quarter was primarily due to
increased operating expenses, depreciation and amortization, and interest
expense associated with acquisitions. Net income for the year increased
primarily due to an increase in retail gross profit partially offset by
increases in operating expenses, depreciation and amortization and interest
expense, all primarily the result of acquisitions.
Retail gallon sales increased 99% to 14.9 million in the fourth quarter of
fiscal 2002 from 7.5 million gallons sold in the same quarter last year. For the
year ended September 30, 2002, retail gallon sales increased 89% to 88.5 million
gallons in 2002 as compared to 46.8 million gallons sold in the same period of
the prior year. The net increase in retail gallons sales is primarily
attributable to acquisitions partially offset by the effect of warmer weather in
2002 as compared to 2001.
Retail propane gross profit increased to $7.9 million in the quarter ended
September 30, 2002, from $4.6 million in the same period last year. Retail
propane gross profit for the year ended September 30, 2002, was $57.4 million as
compared to $28.5 million in the same period of 2001. As described above, the
increases in retail propane gross profit in these comparable periods is
primarily due to acquisitions. Gross profit (loss) from wholesale operations was
$0.9 million in the fourth quarter of fiscal 2002 compared to a loss of ($0.1)
million in the same period of 2001. For the year ended September 30, 2002, gross
profit from wholesale operations was $5.1 million as compared to $5.9 million in
fiscal 2001. The decrease in gross profit from wholesale operations is
attributable to lower gross profit per gallon. Other gross profits were $3.2
million and $1.6 million in the fourth quarter of 2002 and 2001, respectively
and $12.0 million and $6.2 million in the fiscal years ended September 30, 2002
and 2001, respectively. These gross profits are primarily attributable to our
transportation operations, sales of appliances and service income, with the
increases primarily the result of acquisitions.
Operating and administrative expenses were $10.8 million in the three
months ended September 30, 2002 compared to $6.1 million in the same period of
2001. For the year ended September 30, 2002, operating and administrative
expenses were $46.1 million compared to $23.5 million in the year ended
September 30, 2001. These increases in operating expenses are primarily
attributable to growth related to acquisitions.
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As previously announced, the Board of Directors of the Partnership's
general partner increased Inergy's quarterly distribution from $0.675 to $0.70
per unit ($2.80 annually) with the distribution declaration on October 10, 2002.
The distribution was paid on November 14, 2002, to unitholders of record as of
November 7, 2002.
"We are pleased with our fiscal 2002 operating performance against a
backdrop of challenging industry conditions. We delivered on our promise of
growth by increasing cash distribution during all four quarters of fiscal 2002,"
said John Sherman, President and CEO of Inergy. Sherman continued, "We are
focused on future growth, as evidenced by the recent closing of our Hancock
acquisition, and feel well positioned to continue execution of our growth
strategy."
Inergy - headquartered in Kansas City, Missouri - is one of the fastest
growing propane gas marketing and distribution businesses in the country. The
company's operations include the retail marketing, sale and distribution of
propane to residential, commercial, industrial and agricultural customers and
the wholesale marketing of propane to independent dealers and multi-state
marketers. Inergy also operates a growing supply logistics and transportation
business. Today Inergy serves nearly 200,000 retail customers in 14 states.
Inergy will conduct a conference call on Wednesday, November 20, 2002, to
discuss the Company's third quarter performance. The call is scheduled for 10:00
a.m., CST. Call-in begins at 9:50 a.m., CST. The call-in number is
1-800-922-0755. A digital recording of the call will be available for the two
weeks following the call by dialing 1-877-519-4471 and entering the pass code
3611523. A recording will also will be available on Inergy's website,
www.InergyPropane.com, for two weeks following the call.
For more information, please contact Mary Adams in Inergy's Investor
Relations Department at 816-842-8181 or via email at madams@inergyservices.com.
This news release contains forward-looking statements, which are statements
that are not historical in nature such as being positioned to continue the
execution of our growth strategy. Forward-looking statements are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or any underlying assumption proves incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Among the key factors that could cause actual results to differ
materially from those referred to in the forward-looking statements, are weather
conditions that vary significantly from historically normal conditions; our
success in hedging our positions; the general level of petroleum product demand,
and the availability of propane supplies; the price of propane to the consumer
compared to the price of alternative and competing fuels; our ability to
generate available cash for distribution to unitholders; the costs and effects
of legal and administrative proceedings against us or which may be brought
against us; and our ability to sustain our historical levels of internal growth.
These and other risks and assumptions are described in Inergy's annual report on
Form 10-K and other reports that are available from the United States Securities
and Exchange Commission.
(TABLE FOLLOWS)
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Inergy, L.P.
Consolidated Statements of Operations
For the Three Months and Year Ended September 30, 2002 and 2001
(in thousands)
(Unaudited) (Unaudited)
Three Months Ended Year Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenues:
Propane (a) $ 34,040 $ 19,102 $ 192,122 $ 158,284
Other 5,145 2,171 16,578 10,698
--------------------------- ---------------------------
39,185 21,273 208,700 168,982
Cost of product sold (a) 27,163 15,158 134,242 128,425
--------------------------- ---------------------------
Gross profit 12,022 6,115 74,458 40,557
Operating and administrative expenses 10,832 6,132 46,057 23,501
Depreciation and amortization 3,125 2,061 11,444 6,532
--------------------------- ---------------------------
Operating income (loss) (1,935) (2,078) 16,957 10,524
Other income (expense):
Interest expense (2,810) (1,672) (8,365) (6,670)
Interest expense related to write-off of deferred
financing costs - (585)
Gain (loss) on sale of property, plant
and equipment 368 10 140 37
Other 91 64 255 458
--------------------------- ---------------------------
Income (loss) before income taxes (4,286) (3,676) 8,402 4,349
Provision for income taxes 11 - 93 -
--------------------------- ---------------------------
Net income (loss) $ (4,297) $ (3,676) $ 8,309 $ 4,349
=========================== ===========================
Net Income (Loss) Per Limited Partner Unit
Basic $ (0.55) $ 1.22
Diluted $ (0.55) $ 1.20
Supplemental Information: (Unaudited)
-------------------------
EBITDA $ 1,649 $ 57 $ 28,796 $ 17,551
Retail gallons sold 14,855 7,529 88,505 46,750
Maintenance capital expenditures $ 364 $ 572 $ 1,556 $ 1,901
Distributable Cash Flow:
------------------------
EBITDA (b) $ 1,649 $ 28,796
Cash interest expense (c) (2,465) (7,112)
Maintenance capital expenditures (364) (1,556)
Provision for income taxes (11) (93)
-------------- --------------
Distributable cash flow (d) $ (1,191) $ 20,035
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(a) New accounting standards affecting the reporting of gains or losses on
certain contracts related to our risk management activities became effective
in this past quarter, requiring such contracts to be reported on a net basis
in the income statement, resulting in an equal reduction in Revenue and Cost
of product sold. Adopting this standard also required reclassifying Revenue
and Cost of product sold for the third quarter and all prior periods. The
adoption of the new standards required that we reduce both Revenue and Cost
of Product Sold by $17.1 million and $9.6 million in the three month periods
ended September 30, 2002 and 2001, respectively and $69.6 million and $54.2
million in the fiscal years ended September 30, 2002 and 2001, respectively.
This reclassification had no impact on gross profit or EBITDA.
(b) EBITDA is defined as income before taxes, plus interest expense and
depreciation and amortization expense, less interest income. EBITDA should
not be considered an alternative to net income, income before income taxes,
cash flows from operating activities, or any other measure of financial
performance calculated in accordance with generally accepted accounting
principles as those items are used to measure operating performance,
liquidity or ability to service debt obligations. We believe that EBITDA
provides additional information for evaluating our ability to make the
minimum quarterly distribution and is presented solely as a supplemental
measure. EBITDA, as we define it, may not be comparable to EBITDA or
similarly titled measures used by other corporations or partnerships.
(c) Cash interest expense is net of amortization charges associated with
deferred financing costs and the write off of $585 of deferred financing
costs.
(d) Distributable cash flow should not be used as a measure of financial
performance calculated in accordance with generally accepted accounting
principles.
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