Q4 2021 Ferrellgas Partners LP Earnings Call
Okay.
Good day, and thank you for standing by and welcome to the fiscal 2021 Q4 earnings.
Paul.
At this time all participants are in a listen only mode. Please.
Please be advised that todays call friends is being recorded.
If you require any further assistance please press star zero.
I would now like to hand, the conference over to your Speaker today, James E Farrell, Chief Executive Officer and prayer.
Please go ahead.
Thank you and good morning to all my name is Jim Farrell.
Crowd represented 4500 men and women, who make this company work.
As I look back at the year that ended on July 31st It was one of the most remarkable in the company's long history.
History.
Our employee owners responded extremely well as we transformed ourselves into a high performance and very agile logistics company.
Learning to deal with new technology, Dashboards and metrics is not easy.
Specially when.
When the need to restructure our balance sheet created uncertainty regarding our future.
Saying I am proud of our magazine financial results during a time like this is an understatement.
As a result of the restructuring the most expensive portion of our capital structures now the class B units.
Our financial performance allowed us to make a distribution a couple of weeks ago to the b units of $49 $9 million or $38.46.
Per class B unit, beginning a multiyear process of reducing our cost of capital in there.
We are increasing the value of the common equity on which our employee owners and you depend.
There are two other officers on this call and I am first pleased to introduce our new Chief Financial Officer, Dee Mirage cheering.
He joins us.
From Panasonic automatic automotive systems company.
And brings with him more than 20 years of strategic financial and operational achievements.
We are very excited to welcome him on board.
The other person is our chief operating officer.
Jim Murray as their tucci.
It is not new to ferro gas, but as the architect of our transform transformation.
Cambria is the primary reason for our great financial performance.
And she was very instrumental in our restructuring together, we were able to restructure the balance sheet, what transforming an old company.
And to an exceptionally modern logistics organization.
With more to come I will let her fill in with the ops report and M&A. After now handing the call over to Dhiraj cheering.
Thank you Jim.
And welcome to our.
Fourth quarter 2021 earnings call.
Thank you all for joining us.
I'd like to remind all of you that some statements made during this call maybe considered forward looking and that various risks uncertainties and other factors could cause actual performance to differ materially from anticipated performance.
These factors are discussed in our Form 10-K filed last week.
Other documents filed from time to time with the Securities and Exchange Commission.
Additionally, we note that the purpose of this call is to discuss the results of operations for the fourth fiscal quarter and full year ended July 31st two.
2021.
The company's strong performance continued during the fourth quarter of fiscal 'twenty, one leading to a 67 $6 million increase in operating income for the fiscal year.
The gallons of propane so for the quarter were 140.
7 million.
241, 5 million in the prior year quarter.
Or a five 5 million increase.
Blue Rhino tank exchange sales continued to increase due to further market share penetration national marketing strategy and continued growth in backyard.
Yard and outdoor appliance usage.
Also contributing to our strong gallon performance are right time deliveries that shifted gallons into this quarter and additional marketing on key consumer platforms.
This has resulted in a $5 7 million increase in gross margin dollars or four.
It's higher than the prior year quarter.
Highlighting the company's delivery efficiency strategies in response to increased volumes operating expenses decreased by 11% when compared to the same quarter of last year.
For the quarter, the net loss attributable to Ferro.
Gas partners L. P was $18 $8 million or $7.13 per class a unit.
Compared to the prior year quarter net loss of $17 million or 14 point to $6 per class a unit.
Adjusted EBITDA, a non-GAAP measure decreased by $2 6 million or nine 6% compared to the prior year quarter.
For the fourth quarter, adjusted EBITDA was $24 1 million compared to $26 $7 million.
In last year's quarter.
For the fiscal year, the net loss attributable to Pearl gas partners L. P was $68 4 million or $18 nine per class a unit.
Compared to the prior fiscal years net loss of $82 5 million.
Our $16.08 per class a unit a decrease of 12%.
This fiscal year's loss was primarily attributable to the <unk>.
$104 $8 million of loss on extinguishment of debt incurred through our successful restructuring transactions.
As compared to $37 4 million in the prior fiscal year.
Adjusted EBITDA, a non-GAAP measure increased by $52 6 million or 20% compared to the prior year.
Adjusted EBITDA was 318.1.
$1 million compared to $265 $5 million in the last fiscal year.
And now I will hand over to Tamara you could speak to our operations.
Thank you Raj.
Financial restructuring process, we underwent in the third quarter.
One modest to continue growing by M&A. During July we added propane to the federal gas family Profane has operations in long island and will strengthen our position in this area for years to come.
Our retail and tank exchange businesses continue to grow we.
Has a lot cheekily added to our customer base with new locations that positively impact our route density.
In addition, we have expanded our tank exchange home delivery operations to 12 markets across the United States.
The keys to our success.
Lie in our employees.
And having a strong operations team across the country. Additionally, our management development program created last year continues to thrive.
Third class of 22 candidates from across the country will be graduating next month with a new class starting in early 2022.
Also during the last quarter, we fostered an internship program in which five undergraduate students worked in supply chain finance marketing and technology Department throughout the 12 week program.
And we continued to be affected by storms during those last month, we partnered with operation Bbq.
Q relief to provide support to those areas most impacted in southern United States.
Next.
A Q&A section in an effort to provide more transparency, we will address a few questions that we received over the last few days.
Our operational in nature, therefore, I will address those.
Yes.
The first question would you discuss the recent acquisition and outlook for future acquisition.
The company has long been considered a leader in acquisition the successful capital restructuring allows us to be an active participant in acquisition Act.
Activity.
We look to acquire in areas that strengthen our goals of strategic growth throughout density and operational excellence through leveraging our assets.
The next question is federal casting signs of demand destruction via conservation due to high propane pricing.
For now we are technology enabled logistics company.
And these capabilities when paired with the pass through pricing structure known throughout our industry create a good formula in times of higher protein pricing. Currently we are not forecasting demand destruction due to higher propane pricing.
The next question, why where fourth quarter wholesale volumes down year over year.
We attribute this decrease to external supply chain disruptions, mostly in the steel market.
Our improved delivery efficiencies continuing to push deliveries to the right time and better asset utilization.
The next question.
What drove decline in customers in the fourth quarter.
Improved asset utilization trade at this point in time decrease for this measurement and expect it to be just this fourth quarter measurement.
I will now hand over to Jim to speak to the last question.
Thanks, Tim Murray.
The question has to do with discussing the $79 million broker margin deposit liability listed on the 10-K.
This is not a speculative position.
This is a hedge to backstop our.
Price program, we call platinum plus.
For the fiscal year 2022 heating season.
Let me also say here that this company.
His experience and well run.
We did not expect.
<unk> demand destruction.
Do expect to perform.
Now I'll turn the call back to our moderator, but before I do that as mentioned in the announcement for the call and the additional questions may be submitted via our Investor relations email box at Investor Relations.
<unk> at Pearl gas Dot com.
Thank you all very much for attending our fiscal year end.
Earnings call.
Once again, we are very proud of our performance and look forward to future positive earnings calls.
Goodbye.
Yeah.
This concludes today's conference call. Thank you for participating you may now disconnect.
Presenters. Please stay on the line for the post conference.
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Good day, and thank you for standing by and welcome to the fiscal 2021 Q4 earnings call.
This time all participants are in.
The only mode. Please.
Please be advised that todays call friends is being recorded.
If you require any further assistance please press star zero.
I would now like to hand, the conference over to your Speaker today, James E Farrell, Chief Executive Officer and President. Please go ahead.
Thank you and good morning to all my name is Jim Farrell.
Crowd representative of 4500 men and women, who make this company work.
As I look back at the year that ended on July 31st It was one of the most remarkable in the company's long history.
Our employee owners respond at extreme.
Pretty well as we transformed ourselves into a high performance and very agile logistics company.
Learning to deal with new technology, Dashboards and metrics is not easy.
Specially when the need to restructure our balance sheet created uncertainty.
Dreamy regarding our future.
Saying I am proud of our magazine financial results during a time like this is an understatement.
As a result of the restructuring the most expensive portion of our capital structure is now the class B units.
Our financial performance allowed us to make a decision.
Distribution, a couple of weeks ago to the b units of $49 $9 million or $38.46.
Per class B unit, beginning a multiyear process of reducing our cost of capital in there for increasing the value.
Certain view of the common equity on which our employee owners and you Japan.
There are two other officers on this call and I am first pleased to introduce our new Chief Financial Officer Dhiraj cheering.
He joins us from Panasonic is automatic or automotive.
Motive systems company and.
Brings with him more than 20 years of strategic financial and operational achievements.
We are very excited to welcome him on board.
The other person who's our chief operating officer.
January is there too cheap it is.
Not new to Ferro gas, but it's.
The architect of our transform transformation.
Cambria is the primary reason for our great financial performance.
And she was very instrumental in our restructuring together, we were able to restructure the balance sheet, what transform into an old company and two an exceptionally modern.
Logistics organization.
With more to come.
We'll let her fill in with the Ops report and M&A after now handing the call over to <unk>.
Thank you Jim.
And welcome to our fourth quarter 2021 earnings call.
Thank you all for joining us.
I'd like to remind all of you that some statements made during this call maybe considered forward looking and that various risks uncertainties and other factors could cause actual performance to differ materially from anticipated performance.
These factors are discussed in our.
10-K by last week and other documents filed from time to time with the Securities and Exchange Commission.
Additionally, we note that the purpose of this call is to discuss the results of operations for the fourth fiscal quarter and full year ended July 31st 2021.
For them the company strong.
<unk> continued during the fourth quarter of fiscal 'twenty, one leading to a 67 $6 million increase in operating income for the fiscal year.
The gallons of propane sold for the quarter were $147 million.
200.
$41 5 million in the prior year quarter, or a $5 5 million increase.
Blue Rhino tank exchange sales continued to increase due to further market share penetration.
National marketing strategy and continued growth in backyard and outdoor appliance usage.
Also contributing to our strong gallon performance are right time deliveries that shifted gallons into this quarter and additional marketing on key consumer platforms.
This has resulted in a $5 7 million increase in gross margin dollars or 4% higher than the prior year quarter.
Highlighting the company's delivery efficiency strategies in response to increased volumes operating expenses decreased by 11% when compared to the same quarter of last year.
For the quarter, the net loss attributable to Ferro guests partners L. P was $18 eight.
Dollars or $7.13 per class a unit.
Compared to the prior year quarter net loss of $17 million or 14 point to $6 per class a unit.
Adjusted EBITDA, a non-GAAP measure.
<unk> decreased by $2 6 million or nine 6% compared to the prior year quarter.
For the fourth quarter, adjusted EBITDA was $24 1 million compared to $26 7 million in last year's quarter.
For the fiscal year, the net loss attributable to <unk> partners L. P was $68 4 million or $18.09 per class a unit compared.
Compared to the prior fiscal years net loss of $82 5 million or $16.08 for.
Class a unit a decrease of 12%.
This fiscal year's loss is primarily attributable to the $104 $8 million of loss on extinguishment of debt incurred through our successful restructuring transactions.
As compared to $37 4 million.
In the prior fiscal year.
Adjusted EBITDA, a non-GAAP measure increased by $52 6 million or 20% compared to the prior year.
Adjusted EBITDA was $318 1 million.
Compared to 200.
$65 $5 million in the last fiscal year.
And now I will hand over to town, where you can speak to our operations.
Thank you Raj.
The financial restructuring process, we underwent in the third quarter has allowed us to continue growing by M&A.
During July we added propane to the Ferrell gas family Profane has operations in long island and will strengthen our position in this area for years to come.
Our retail and tank exchange businesses continue to grow we have strategically added to our customer base with new.
Locations that positively impact our route density.
In addition, we have expanded our tank exchange home delivery operations to 12 markets across the United States.
The keys to our success.
Lie in our employees.
And having a strong operations team across.
Okay.
Additionally, our management development program created last year continues to thrive.
Third class of 22 candidates from across the country will be graduating next month with a new class starting in early 2022.
Also during the last quarter, we thought.
The country of an internship program in which five undergraduate students work in supply chain finance marketing and technology Department throughout the 12 week program.
And we continued to be affected by storms during those last month, we partnered with operation Bbq relief to provide support to.
Foster areas, most impacted in southern United States.
Next a Q&A section in an effort to provide more transparency, we will address a few questions that we received over the last few days.
Some are operational in nature, Therefore, I will address those first the first question.
Could you discuss the recent acquisition and outlook for future acquisition.
The company has long been considered a leader in acquisition the successful capital restructuring allows us to be an active participant and acquisition activity.
We look to acquire <unk>.
Cause that strengthen our goals of strategic growth throughout density and operational excellence through leveraging our assets.
The next question is federal casting signs of demand destruction via conservation due to high propane pricing.
We are a technology.
<unk> logistics company and.
And these capabilities when paired with the pass through pricing structure known throughout our industry create a good formula in times of higher protein pricing. Currently we are not forecasting demand destruction due to higher propane pricing.
The next question.
Nate why where fourth quarter wholesale volumes down year over year.
We attribute this decrease to external supply chain disruptions, mostly in the steel market.
Our improved delivery efficiencies continuing to push deliveries to the right time and better asset utilization.
The next question.
<unk>.
What drove decline in customers in the fourth quarter.
Improved asset utilization trade at this point in time decrease for for this measurement and expect it to be just this fourth quarter measurement.
I will now hand over to Jim to speak to the last question.
Thanks, Tim Murray.
The question has to do with discussing the 79 million dollar broker margin deposit liabilities listed on the 10-K.
This is not a speculative position.
This is a hedge to backstop our.
Price program, we call platinum plus.
For the fiscal year 2022 heating season.
Let me also say here that this company.
His experience and well run.
We do not expect.
Fixed DRAM disruption.
We do expect to perform.
Now I'll turn the call back to our moderator, but before I do that as mentioned in the announcement for the coal and the additional questions may be submitted via our Investor Relations email box head of Investor Relations.
At Pearl gas Dot com.
Thank you all very much for attending our fiscal year end.
Earnings call.
Once again, we are very proud of our performance and look forward to future positive earnings calls.
Goodbye.
Yeah.
This concludes today's conference call. Thank you for participating you may now disconnect presenters. Please stay on the line for the post conference.