FGP - Earnings call transcript Q2 2018 | Ferrellgas Partners, L.P.

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Operator

Good morning. My name is Sherrill, and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator Mr. Financial may Chief your Officer, Schwartz, begin you conference. Doran

Doran Schwartz

statements this has the our from been cause for Sherrill release The us. earnings materially and this everyone GAAP to press like results. website. performance. comparable these various non-GAAP non-GAAP and contain on risks factors could during risks, anticipated performance of release SEC and is and be conference our to you, also considered measures some in quarter measures second our our I statements earnings associated our be we second press you with announcing uncertainties earnings welcome that I'd schedules This may joining to that found Thank operational forward-looking forward-looking, those for for will release to on quarter call. which earnings have the our press incorporate you call. expect filings available financial outlined measures. actual call reconciliation differ seen all made and can remind call as The and that other Thank

flows XXXX letters year credit XXX credit and reported Highlights asset execution now million, November debt and approximately and both the sales of significant are $XXX X rail. company to With growing the by we stronger $XX.X our business by been is Bridger railcars We our facility recently sales of respect and Since Bridger of our million reduced in have outstanding while and initiatives, coupled XX January XX our months. through with our growth the and cash of strengthening primarily customer our million trailing over on effects compared include, sheet. have at deleveraging energy last strategies and and cash past of deleveraging, weather report on balance our to our performance. internal flows, month reduction of EBITDA excited progress to cost grown favorable increasing with January

stronger. Our credit trending metrics are

at X.XX from of times strengthened Significant improved and ratios times to to end one the our X.XX QX X.XX only leverage in to quarter. currently QX. Our at compared times progress interest coverage X.XX ratio times

look positioning on build we our company of at priority momentum and right there our greater our AR working the focus of renewal our future on replacement no As the the capital is to completing now capital our in current in than facilities. and/or flow cash securitization revolver structure

completed transactions. yet not we've these Now

very will we taking capabilities enjoy of multi-year made However, with provide in to we company allowing the and you and flexible to that with fiscal liquidity, with foundation letter we today. more The come capital of balance shareholder over now confidence access credit covenants have long-term. soon actions solution a a we as we and continue value revolver significant the us have growth will progress XXXX sheet, focus strengthen for that and provide on to the are creating will liquidity and significant

the bit So let's consolidated talk results. little about a

the by the those rose prior operating Total positively volumes more strategy quarter our colder share second approximately to benefited the margins EBITDA was our weather market significantly propane. our period. Form the XX% was only slightly for for XX% propane activity wholesale Propane million was cost prior up first year propane sold, of quarter than that year As and filed deliver our more gallons lag that to gallant EBITDA comparable morning, XX% adjusted Adjusted segment compared year. $XXX.X growth to million detailed the in and last of customer grow XX-Q, our period. from driven of by expenses despite period quarter and base averaging the million $XXX.X also was this over XX% in was and $XXX impacted improved from to prior than

doneness decreased to operations. in reflecting $X.XX TPG TPG our $X.XX efficiency basis gallon per However from cents

gallons volume million gallons, a volumes from the million million side, the XX% On propane sales or gallons for were year quarter ago. second XXX.X XX.X up the XXX

well incremental our interest for incurred up expense to As up expenses execution ago, propane stemming second XX million more trailing $XX.X to total our as as is coverage in up I million, at leverage MLP a ratio of providing ratio we to expense, rate basis month world from profit $XX.X activity profit, cash sold. that's expect the the million company's year was moved lower prior on during times, $XX X.XX million expense quarter million, last TPG basis. notes interest times, acquisitions, at administrative or ratio service coverage our the reflecting the on times and million our of million on from up decrease end quarter. Interest quarter Distributable second customers to $XXX.X to to year. level from to fiscal XX% our from was the businesses. of as QX. at a we our $XXX.X over that's the on compared QX fiscal cash year, This This year, due increase his times of At class to similar times the our due now quarter the $XXX.X expected to almost interest X.XX $XX.X the equating increasingly was efficient at year gross the higher quarter to for quarter Jim $XXX $XX.X million mentioned Operating also and primarily $XXX.X it in gallons and associated million I'll million to of gain ratio execution the $X.X $XX.X the But CapEx the and metrics, activities. gross this at QX. This positively was as focus issued forecast, related our quarter date, X.XX general and CapEx, than on maintaining was exchange CapEx to was flow from fleet. On quarter Jim? largely Based customer to X.XX to for expenses, the year time, first flows tank quarter, and and maintenance times leverage primarily call growth the to coverage the deleveraging our improved $X is date, vehicle current year's for million, ratio it's last the increased at throughout again, for lower the to from last primarily operating strengthen plans turn million X.X January. before reported an on tied based for comments. sorry. continue the million Growth our credit with to was increase. continue X.XX up basis we the quarter, a and Liquidity up forecast retail the

Jim Ferrell

second Morning, in everyone. I'm company's very pleased the quarter. performance with our

fill on two the forward we travelling important last loads we distance over operationally to important. is that the making A necessary base, density or have It's is growing than focused more our company customer success. committed our Customer position are decisions as to working. strategically same few growth, truck when to will efficient neighborhood can one Just looking more and orders. years the the that deliver for long-term

very organic And share. count or net nearly to go exchange both activity. customer growth as see over we a trend too, through is is tank prior strong continue the after XXXX mostly X.X% and acquisitions, set growing we year up market in retail through aggressively tank Our but

Weather impressive our relates total Our is time year. this positive prior XX% strategy the was half Customer has sales Blue growth matters with Volume improved Rhino has increased gallon This to $XX.X growth per year, increased XX%. last slightly customers rising cents however, cost XX%. a by per which our tank in exchange volumes environment. mix new a to of XXXX clearly they and gallon by growth been were a prior exchange one piece customer locations by over nearly factor. a and have propane selling But strategy year too. lower. for locations meaningful win quarter, volume or on a colder since this its million cents QX, reflects decreased from Margins versus up

year a For sales, sales, example, a residential agricultural us has than that last in a margins increase held significant lower for propane on profile. margin business related although volume, higher experienced good high residential we

progress make exchange margin to on continue tank initiatives. We improvement

will Our and mile new on our fiscal Alabama Blue saving Rhino miles XXX,XXX in eliminate filling plant QX XXXX is for scheduled annually. fleet opening routes delivery

scheduled Our to route also in California XXXX plant is saving eliminate will miles and XXX,XXX mile open annually. QX

a million $X.X will regions in to and both annually investments. generating also on payback capital CapEx. plans million additional the plants save We're on expect that returns north central evaluating east the our quick north similar $X deliver to We

valves and initiatives from benefiting tanks also effectively are to paint, efficiently. more and buy We

business. midstream Bridger our at growth for positioning are and stabilized have We

for With hold is no in hauled be itself to we a off. salt the offering the Sand in and and recent be be momentum water of key to more oil in QX basins the is Last more we new for us. disposed transported drilling company sand. more to year operate relatively hauling frac sand positioning

potential additional expansion we This tons as with levels and in for increase quarter hold million XX additional drilling Texas Oklahoma.

reduce of noted of to and streamlined resulted our in him the to thank Propane seen forward We over midstream some valuable these debt subsidiaries With that EBITDA. has announced only actually us this the The reduction We requirements a these us Operations the EBITDA operations Both contributions execution for improves Strategically Logistics, made metrics Shaw, XX needs our sheet. quarter. reduced nearly credit the and with also he's credit view credit is transactions of transactions reducing approximately company letters we save balance with outstanding will Randy a railcars and by well selling years during XX-Q positive wish have morning Randy our by that a sale meaningfully sales charge of growth by our for Vice money. of initiatives. by in our of thousand we Senior $XX impact on Energy on in our sale and $XX as him Bridger You've been the million. transactions the President Form debt retiring. although he the million future. the execution has our our of the we these non-cash step Bridger company minimal

momentum. veterans collectively seasoned grow regional will They their to reported continue We presidents great who if teams doing a do and been that roll. have to weeklong I'm ultimately into pretty company Randy years with meeting they In them. almost all flows. this group like last day of generate serve you This with they to - asked value year, on by of eight back emphasize develop sure now we're company. call vice right the would what After our closing, I'm has power will our would XXX business, going that growing you report of cash to have a customers, have tell I experience our me. previously regional

the making decisions for position the are necessary long-term. to We ourselves

on is back over to questions the well Employees the our hard At Thank high. there that I'll do. so you. executing the customers can to come business. our is are the group. call more from always Morale to but address We any turn time and are you this serve plan, working to moderators, might grow

Operator

Hamid, Thank Tarek from you. [Operator Instructions] Our first comes question JPMorgan.

is line Your open.

Tarek Hamid

morning. Good

Jim Ferrell

Good morning.

Tarek Hamid

refinancing, could bit you about your little Revolver plans. talk Yeah. more a

the the You structure? plus the stay know, or or plan with of as revolver facility to an go secured kind plan to term AVL with is bond loan existing

Jim Ferrell

us place, plan the AR securitization like - access We forward to low access low the of infrastructure the with capital. move is to in cost provides facility. with that to facility. build-out, renewal It's Yeah, cost

the is that we outstanding plan provide have, repay And the move our and a then that utilized will likely credit settlements be of of then with likely forward revolver borrowings our be facility. we in component proceeds enjoy daily will component to form LC terms which to take term revolver that current will So shape continue that that a from current on loan and there facility. capacity would like also today to in

Tarek Hamid

docket the Got be [ph] proceeds very the kind have point? you of of front we few else thinking on mostly the helpful. been successful Astill of in And last this source That's also then that anything you term should about done in at or it. on months

Jim Ferrell

Doran?

Doran Schwartz

about quarter on highlight I'd is that's in business the talked products related propane a we've business progress currently made of been and that the market. last the has significant. We our side global

are are talked first we so about quarter marketing executing right business on. We now, there. We that

helping and point underperforming of this company. I'd you path so we're it continue making move down really And us that the to of taking know, efforts highlight at of streamlining that story deleveraging that our or that look assets terms the non-strategic with sure the a may the at we be strategic

Tarek Hamid

Got it.

me, or that slightly the over Just picked that up was last year last of temporary this so? quarter, hiring is or function one from those G&A

Jim Ferrell

Yeah.

legal we working to would income have essentially EBITDA cases So as as it up view would tied some cases be some one on, seen really that essentially we out, it's to expenses reconciliation adjusted those also recurring, of net and expenses the the temporary, have of that it wrap had our you we're there. just that we time. of the explain which netted legal much those not That increase become in would

So it's DNA Outside perspective, down of last are primarily that. a from tied that from to we year. actually

Tarek Hamid

very questions. Got my Thanks That's it. helpful. for taking

Jim Ferrell

you. You Thank bet.

Operator

you. Thank

James Spicer, question next from Fargo. Our comes Wells

line Your is open.

James Spicer

Hey. Good morning.

letters credit. had quarter in back you to fiscal in credit quarter. Energy You of end the in announced January like of sale of actually you about talked at $XXX the benefit million the over reduction looks quarter increase letters It a and the the of of Bridger

just wondering you timing if that benefit? when a we're to there's know So there, see issue LC going

Jim Ferrell

Great a is question. timing It consideration.

So happened January we on Bridger side in activity Obviously after closed the the January February. date. tied and in and credit essentially that are that balance letters sheet oil of to on settlements purchases oil with for Energy

significantly. So the come XXX down million has

time continue not now. tied We to by at $XX reduce eventually all quite on We're We're there we've there. to over to the work Energy. halfway it, Bridger LCs million we're eliminated going

So outstanding we've million million of over $XX $XX February. in reduced

James Spicer

a that And of size revolver. run talked just you strategy any then to color you wondering presumably the Okay, about you sort with to little a business? business run up the bit LC what could that's was facility very you smaller helpful. what of you think the allows there. capacity And need But freeing as provide to if

Doran Schwartz

board a as with conversations try size a team and internally well to and question. the We've had the working that's lot great Yes, that. of right Jim as

we reasonable extent cost, So to going we we extent that it a liquidity, to can are secure secure that secure think about it. can it. do you to the know, And we the that at we're going to

So off even to million million all XXX just you had that well, you okay XX there's million of though our together, at sold million reduced today you've LCs, take net you a you you and railcars and of say if XXX you're add XXX. kind facility and been for look $XX know know, by you that the

run to closer do we're could thinking to size breathing to that we our more with we a take You covenants opportunities able that are of about in flexible be facility us, we forward but they the the that facility see today of that's of that, front advantage the have so business arise. as room, position going because and focused can we on liquidity company

how we're that's about it. so And thinking

James Spicer

addressing would really solution. bonds solution the know, this –whether you Okay. know, two I'm multi-year talked fashion Great. And that's of here a on just the step sort include of that whether at whether one or that a you about point? any that another just debt sort wondering you and

Doran Schwartz

two. XXXX that, step think the about think as I I would say know, XXXX maturity those you the about we say capital question a bondholders. would we bonds good obviously - Yeah, to lot just just

will momentum the we we about us as our we we've we to point, our do the about move opportunities And that bank as sheet want grow to streamline be bondholders, to do what's capital you we as for and our delever, unit know, constructively having as also we to something be how we we the EBITDA as balance continue thoughtful So right one. underperforming going additional to what's being about know, as think you monetized, that from is and that about as said priority to we you'll to right metrics with with best future as work EBITDA, and renewed, facilities group, grow credit that just bank all want say for is our hear think as Jim's the we That us we get community, working want provides as for got and unitholders. that and company after been I do them strategically right that the improve we to just for well effectively that, we assets well like forward what's like holders. our strengthen

James Spicer

that's Okay, there. Thanks leave great. I'll it very much.

Doran Schwartz

bet. You you. Thank

Operator

our Thank you. from next [ph] And question Zack Merrick comes Group. Citigroup

open. is line Your

Unidentified Analyst

to a to Hi. then been when and what us - Good share year-on-year capture how there? strategy you start morning, to your you and has give related be shift again approach a that targeting also guys. unit Can gauge you've as do would customer what maybe level increase progressing you on growth of you seen bit and And think might strategy. focus margins market

Jim Ferrell

who will our can were focused You [Technical make on on customer after bill their and in tell pay what will every we're looking us I know, can for different who groups it can the every we've we make with we really customer Difficult] And get. bucketed with margins you people filling do helps where expenses to lower we're routes customer more thinking we're just the vehicles in got. we're because every but

actually we've think So a it's don't see interested and fill acquisition be customers make retail that customers that in either money a also have. who probably business I we that where doing history there the from already merges pay active running together What retreat and but solid in what we do worry bill, we - we're that. don't program is side, I a got it us we that's are will in give that their - looking mean more well as want their can an us we for to want - something profit. believe we will term with not long to you'll about. We're going have don't mostly the doing We've we're long a a those. business got we can of for

Unidentified Analyst

And related to just situation, wanted to actually I Okay. your that. clarify and debt leverage

You bondholders it's also more as well at on and know, the you're debt with include this just this or more holders does your II, that bit focused little is - you conversations XXXX having the XXXXs but Phase point? XXXX, know this said I

Doran Schwartz

Yeah.

clarify, clear on to quarter first make to bondholders. I talked want just the about with to because call referenced So discussions we

specific that ideas with It say today how what's know, We the a be about I'd on the indentures not happening. is are business going not that we're to changes visiting of in discussions of update any the you look of bondholders kind might bond bondholders. company. general

So I means that just around comment want bondholders clarify to from with what discussions our that and perspective. that

about other any we all we bond think from one think would As different the to XXXXs. think the collectively about not differently indentures, we from XXXX the it any way the about indentures,

Unidentified Analyst

Great. That's for that. Thanks clarifying me. Okay. for all

Operator

question comes next Thank from you. Mike from Gyure And our Janney.

is Your open. line

Mike Gyure

Could or this you guys the volume that through margin you of maybe you're touch quarter, February? seeing trends on kind far as thus move

Jim Ferrell

about pick are some and are. said we nicely got more of sets. volumes tanks But always few. to tanks relates about got is, and tank net continue it we that. the But of up be a We've a we sets, talked as we customers, we've It's activity. up of weather. they setting I to talked We question net up matter a lot

a these can't is bad in you happy, up are been pick it's sit I you just good. fired it's as see. out up either lately. or too been Everybody's the meeting field guys you'll they on customer mean, than VP that tell can volume, Business that as of where here is Business So have little good. normal. regional in it ever even warmer I not the

Mike Gyure

I segment propane $XX million item actually in on Great. And it he And other that? about question, million what's financial the line it's within a maybe disclosures Doran segment like the guess. there's gas sales, looks driving what's then $XX Q a versus the last growth year, in about

Doran Schwartz

find Mike. Okay. answer are going to your Well, we

Mike Gyure

We that. it about Sorry That's fine. take offline.

Doran Schwartz

you the if mind you're that helpful Maybe be at looking Yeah. the and like. number don't we - get Mike to page just do could

So…

Mike Gyure

Yes.

your Okay, year? an then this update maybe afterwards. of spending remainder of goals just the on And for kind

Doran Schwartz

Yeah.

So and for maintenance a a now about maintenance think I call would for the maintenance said quality quarter. first going know, quarter Cap that of that's above $X the the on know know capital we And that our translated forward rate to that we're we're years nine first the the and end of X averages and that at talked capital In than I on no second about company mean the the doesn't million I at $X that the from anticipate perspective run in you is second rate we would reducing the we going you conversation was [ph] quarter that it we're you Bobtail And million. right of say just example. around end run more quarter fleet the fleet, fleet up our were

know fleet, leasing for bad you sometimes continuing the through a largely terms of so And a truck in modernize XX that that's as But years well. last to programs. but age not we're

the to say On upon somewhat the it's continue close type the what to I of side, our rest to going is, bolt-on throughout dependent year. small growth transactions ability be would

locations spend to place. to then that continue XXXX the that I first and on cages would bolt-on we into portion we requires in $XX capital, announced requires that about grow just quarter. today that, half all new our the know, units of acquisitions And able tank with also we're is be putting to on growth of the million capital, of all say that tanks ability exchange fill to You

on capital the trends momentum that EBITDA see activity the to to growth there seen that tank we're the so that activity. is and grow get seeing set here tank strong all seeing retail all our that see we takes tied just that then also side set and locations, the customer tanks know, we're grow field customer net that you out into new continuing we're So set we've those in to some the

as take And well. so know, some capital will you that

quarter. saw it execute growth of you the in upon continue see running to ability we than our dependent going So have The what along kind first second quarter we is today. maintenance be the as wise to I more somewhat know, to

Jim Ferrell

we really from were brand the the a per of the company. brand tank but big that Blue a focus Yeah only the of sets, exchange. name tank us. is Rhino for separate is about Rhino talking is It's

we're It's pushing on we in convenience profit never market that us. store And every sales. to the like share hard. that grown what renewed fact we've it's a now want store we've difficult that got we've growing are segment good we not share with focus So say. got It's - that. - it. growing - back. The say love in big sales. we before, would a box for will We're focus a but done sounds in sales on market and It's We've that we're guys

cost little and us bottles. the to As set Doran money says cage up the the fill

Mike Gyure

Thanks Great. very much guys.

Jim Ferrell

Mike. bet, Thank you. You

Operator

I'll to turn much. over presenters. this time. you at the back questions concludes call Thank the in That queue the the very

Jim Ferrell

about about I what what all great you we're everywhere. can as we've a that the And get there company. be lot regional was as under of to They They a excited - you know We're for to We've VPs. is growth commenting Well, know just the how got can future guys. business. run They're I seasoned that redoing the do. tell got building excited. things out them. bench them We're this about

all good. it's So

Doran Schwartz

that. from the little you decrease in going. your doing the decrease lot a lending on the here of is We by update we in the positioning to to decisions, a decrease restore appreciate Jim's Yeah, we you as is term because value facilities Ferrellgas. company some But equity in Look around term. both think delivering would we're we know we're and company the you got you front distribution. know to they our I'd on some of may again, great it comments, focused everybody value over future, making on as our long It's saw of things - of and focused like. holder interest lot company as owned the and them a really of to for units may the the execution for which long we've I that as employees. the forward look will us well that credit the that's that we on Thank community, community momentum echo for XX% you unit that forward remind term We're and go by communicate us. back I really our we focused have their here today. focused and of over the we intend We're life, not our - everything that. the long can earnings. where We're value behind

Jim Ferrell

you, our at Operator, this you. Thank Thank Thank everybody. you. we've concluded point remarks.

Operator

for taking Thank very ladies in conference. and you today's gentlemen part much

You may now disconnect.

Ferrellgas Partners (FGPR) 8 Mar 182018 Q2 Earnings call transcript