Q2 2026 Ferrellgas Partners LP Earnings Call

March 5, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the FERRELLGAS PARTNERS L P Q2 2026 earnings conference call. At this time, all lines are to listen-only mode.

Operator: Good morning, ladies and gentlemen, and welcome to the Ferrellgas Partners LP Q2 2026 Earnings Conference Call. At this time, all lines are in a listen-only mode. I would now like to turn the call over to Michelle Maggi, Vice President, Corporate Affairs. Please go ahead, Michelle.

Speaker #1: I would now like to turn the call over to Michelle Maggi, Vice President Corporate Affairs. Please go ahead, Michelle.

Speaker #2: Thank you, Jonathan. Good day, everyone. Thank you for joining us today for our second quarter 2026 earnings conference call. We released this morning pre-market our earnings, and if you haven't seen it yet, you can find it on our website under the Investor Relations tab at FERRELLGAS.com.

Michelle Bimson Maggi: Thank you, Jonathan. Good day, everyone. Thank you for joining us today for our Q2 2026 Earnings Conference Call. We released this morning pre-market our earnings. If you haven't seen it yet, you can find it on our website under the Investor Relations tab at ferrellgas.com. With me today is Tamria Zertuche, our President and Chief Executive Officer, and Nick Heimer, Ferrellgas' Vice President and Corporate Controller. Today's call includes prepared remarks where Tamria and Nick will go over our Q2 results for fiscal 2026, concluding with responses to previously submitted questions. Please note that this call may contain forward-looking statements as determined by federal securities laws. For this purpose, any statements made during this call that are not statements of historical fact may be deemed forward-looking statements.

Speaker #2: With me today is Tamria Zertuche, our President and Chief Executive Officer and Nick

Speaker #1: A . Feral gas . Vice president and corporate controller Today's call includes prepared remarks for Tamra and Nick will go over our second quarter results for fiscal 2026 , concluding with responses to previously submitted questions Please note that this call may contain forward looking statements as determined by federal securities laws .

Speaker #1: For this purpose , any statements made during this call that are not statements of historical fact may be deemed forward looking statements . These statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release .

Michelle Bimson Maggi: These statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements except to the extent required by law. In addition, please refer to the Form 8-K earnings release to find disclosures and reconciliations of non-GAAP financial measures that may be referenced on today's call. This morning's conference call is being webcast and is also available for replay via our website. With that, I will turn the call over to Tamria.

Speaker #1: As a result , actual operations and results may differ materially from the results discussed in any forward looking statements . We undertake no obligation to publicly update any forward looking statements except to the extent required by law .

Speaker #1: In addition , please refer to the 8-K earnings release defined disclosures and reconciliations of non-GAAP Financial measures that may be referenced on today's call .

Speaker #1: This morning's conference call is being webcast and is also available for replay via our website. With that, I will turn the call over to Tamra.

Speaker #2: Thank you , Michel , and thank you to you and Nick for representing Federal Gas at the JP Morgan Global Leveraged Finance Conference this week in Miami .

Tamria Zertuche: Thank you, Michelle, and thank you to you and Nick for representing Ferrellgas at the J.P. Morgan Global Leveraged Finance Conference this week in Miami. We appreciate you. Thank you to all for joining our call today. Let me begin with a discussion of our capital structure. Yesterday, after market, we announced that the board of directors declared a cash distribution to the Class B Units of $82.32 per Class B Unit, or approximately $107 million in aggregate. The distribution is payable on or about 13 March 2026. Upon the payment of this distribution, we will have achieved the Class B Conversion Threshold, which allows us to elect to convert the Class B Units into Class A Units. The board of directors also approved the conversion of all 1.3 million outstanding Class B Units into Class A Units.

Speaker #2: We appreciate you Thank you to all for joining our call today . Let me begin with a discussion of our capital structure . Yesterday after market , we announced that the Board of directors declared a cash distribution to the class B units of $82.32 per class B unit , or approximately 107 million , in aggregate .

Speaker #2: The distribution is payable on or about March 13th , 2026 , upon the payment of this distribution , we will have achieved the class B conversion threshold , which allows us to elect to convert the class B units into class A units .

Speaker #2: The Board of Directors also approved the conversion of all 1.3 million outstanding class B units into class A units . So we will convert the class B unit into class A units on a 5 to 1 ratio .

Tamria Zertuche: We will convert the Class B unit into Class A units on a 5-to-1 ratio after making the distribution. Our consistent and positive cash flow performance has put us in this position to take this meaningful step in strengthening our capital structure. We are fortunate to have strong strategic partners as key stakeholders in our capital structure, such as PGIM and Ares. They have supported the company since our restructuring, and they continue to support us as we work to simplify and improve our capital structure. We also appreciate our bank group, including our administrative agent, J.P. Morgan. We are excited for the future of Ferrellgas and the opportunities that this step allows for us. Growth is always on our mind. This step, it truly unlocks our ability to focus on even more growth initiatives. We are excited about our future.

Speaker #2: After making the distribution our consistent and positive cash flow performance has put us in this position to take this meaningful step in strengthening our capital structure .

Speaker #2: We are fortunate to have strong strategic partners as key stakeholders in our capital structure , such as PJM and Aries . They have supported the company since our restructuring , and they continue to support to support us as we work to simplify and improve our capital structure .

Speaker #2: We also appreciate our bank group , including our administrative agent , JP Morgan . We are excited for the future of gas and the opportunities that this step allows for us .

Speaker #2: Growth is always on our mind and this step it truly unlocks our ability to focus on even more growth initiatives . We are excited about our future , but shifting for a second back to our second quarter performance .

Tamria Zertuche: Shifting for a second back to our Q2 performance, we are very pleased with the results. We continue to demonstrate disciplined execution, executing on our initiatives to grow our customer base strategically, maintain margin performance, and stay relentlessly focused on efficiency. These efforts translate into consistent profitability. Seasonality is part of this industry. However, we're prepared regardless of how winter unfolds early, late. As I've said before, propane is an essential energy source that our customers rely on not only to heat their homes, but to power their businesses. Our strong customer mix helped offset weather inconsistencies. Additionally, the winter readiness that I spoke about last Q, it really proved to be key to our success this Q. Winter weather did arrive later than usual this Q, following unseasonably warm conditions in November and December, especially across the western half of the country.

Speaker #2: We are very pleased with the results we continue to Demonstrate disciplined execution , executing in our initiatives to grow our customer base strategically maintain margin performance and stay relentlessly focused on efficiency .

Speaker #2: These efforts translate into consistent profitability Seasonality is part of this industry . However , we're prepared regardless of how winter unfolds . Early or late .

Speaker #2: As I've said before , propane is an essential energy source that our customers rely on . Not only to heat their homes , but to power their businesses .

Speaker #2: Our strong customer mix helps offset weather inconsistencies Additionally , the winter readiness that I spoke about last quarter , it really proved to be key to our success this quarter Winter weather did arrive later than usual this quarter following unseasonably warm conditions in November and December , especially across the western half of the country .

Speaker #2: In those warmer areas, we really leaned into tank sets and growth initiatives. Winter Storm Fern brought significant snow and ice, and our drivers encountered downed trees and unplowed roads that made travel unsafe at times.

Tamria Zertuche: In those warmer areas, we really leaned into tank sets and growth initiatives. Winter Storm Fern brought significant snow and ice. Our drivers encountered downed trees and unplowed roads that made travel unsafe at times. Through it all, we performed and delivered a great quarter. While talking about our core capabilities, I speak to our national footprint. Our national footprint allowed us to reposition drivers and equipment from the west to the east to meet elevated demand effectively. That flexibility, it's a differentiator. It really shows our ability to scale. The safety of our drivers, our fleet, and the communities we serve, it remains our top priority. We continue to see results from our focus on safety. Our OSHA recordables improved 10% quarter-over-quarter. What we call slips, trips, and falls are down nearly 4% year-over-year, despite the challenging weather.

Speaker #2: But through it all , we performed and delivered a great quarter . While talking about capabilities . I speak to our national footprint , our national footprint allowed us to reposition drivers and equipment from the West to the east to meet elevated demand effectively .

Speaker #2: That flexibility is a differentiator, and it really shows our ability to scale the safety of our drivers, our fleet, and the communities we serve.

Speaker #2: It remains our top priority . We continue to see results from our focus on safety , our OSHA recordable , improved 10% quarter over quarter , what we call slips , trips and falls are down nearly 4% year over year .

Speaker #2: Despite the challenging weather . These gains reflect the investments we continually make in safety At the same continual progress in telematics and in-cab cameras is driving operational discipline with improved real time visibility and stronger integration into samsara .

Tamria Zertuche: These gains reflect the investments we continually make in safety. At the same time, our continual progress in telematics and in-cab cameras is driving operational discipline. With improved real-time visibility and stronger integration into Samsara AI, that's the provider of our telematics, we're seeing reductions in safety events, improved driver performance, and measurable gains in fuel efficiency and fleet productivity. You see that in the results this quarter. All right, I will now turn the call over to Nick Heimer, our controller, to review our Q2 financial accomplishments. Nick?

Speaker #2: AI . That's the provider of our telematics . We're seeing reductions in safety events , improved driver performance and measurable gains in fuel efficiency and fleet productivity .

Speaker #2: You see that in the results this quarter . All right . I will now turn the call over to Nick Heimer . Our controller to review our second quarter financial accomplishments .

Speaker #2: Nick

Speaker #3: Thanks , Tamaria I'll start by thanking our employee owners for delivering on a great second quarter . In particular , their focus on providing excellent customer service margin expansion and improving efficiencies continued to propel us forward .

Nick Heimer: Thanks, Tamria. I'll start by thanking our employee owners for delivering on a great Q2. In particular, their focus on providing excellent customer service, margin expansion, and improving efficiencies continued to propel us forward. We saw strong performance across both retail and wholesale segments. Turning to the financial results, overall gross profit was up $3 million or about 1% compared to last year. Propane prices at Mont Belvieu were down roughly 22% versus prior year, which led to about a $28 million decline in revenue. Because our product cost came down even more by about $31 million, we more than made up for that revenue pressure. Adjusted EBITDA increased $9.1 million or about 6% to $166.1 million. The preparation work we did last quarter really made a difference.

Speaker #3: We saw strong performance across both retail and wholesale segments Turning to the financial results Overall gross profit was up $3 million , or about 1% compared to last year Propane prices at Mont Belvieu were down roughly 22% versus prior year , which led to about a $28 million decline in revenue .

Speaker #3: But because our product costs came down even more by about 31 million , we more than made up for that revenue pressure Adjusted EBITDA increased $9.1 million , or about 6% , to 166.1 million .

Speaker #3: The preparation work we did last quarter really made a difference . When we were ready . Winter demand picked up and that helped drive a $7.1 million improvement in gross profit in our retail business On the wholesale side , results were softer since we didn't have any of the hurricane related activity this year to boost volumes .

Nick Heimer: When we were ready, winter demand picked up, that helped drive a $7.1 million improvement in gross profit in our retail business. On the wholesale side, results were softer since we didn't have any of the hurricane-related activity this year to boost volumes. We also improved how we operate day to day. Margin per gallon increased about 6% as we cut down on unproductive deliveries and reduced skipped stops. Those efficiencies translated into roughly a 13% increase in operating income per gallon. At the bottom line, net earnings increased $3.3 million to $102.2 million. That improvement was mainly driven by higher gross profit, it was also supported by tighter cost control. General and administrative expenses were down $4.6 million, largely due to lower personnel and legal costs.

Speaker #3: We also improved how we operate day-to-day margin per gallon, increasing about 6% as we cut down on unproductive deliveries and reduced skipped stops.

Speaker #3: Those efficiencies translated into roughly a 13% increase in operating income per gallon at the bottom line . Net earnings increased $3.3 million to 102.2 million .

Speaker #3: That improvement was mainly driven by higher gross profit , but it was also supported by tighter cost control , general and administrative expenses were down $4.6 million , largely due to lower personnel and legal costs Operating lease expense declined by 1.6 million as we refinanced several operating leases into finance leases during the quarter Overall , it was a quarter where preparation , operational discipline and cost control all came together nicely .

Nick Heimer: Operating lease expense declined by $1.6 million as we refinanced several operating leases into finance leases during the quarter. Overall, it was a quarter where preparation, operational discipline, and cost control all came together nicely, and you see it in our financial results. Winter is not over yet, we're optimistic about Q3. Back to you, Tamria.

Speaker #3: And you see it in our financial results Winter is not over yet , so we're optimistic about the third quarter . Back to you , Tamra

Speaker #2: Thank you . Nick Really about the third quarter , I want to recognize , as you did our frontline employee owners and the incredible work that they did in February as we approached the close of the heating season .

Tamria Zertuche: Thank you, Nick. really, about the Q3, I wanna recognize, as you did, our frontline employee owners and the incredible work that they did in February as we approached the close of the heating season. Day in and day out, they navigate winter, snow, ice, and rain to make sure that our customers have what they need, all while supporting the communities that they live in, helping families facing food insecurity. Our long-standing partnership with Operation Barbecue Relief remains strong as we work together throughout the quarter to provide essential meals. We remain the clear leader in the propane industry for many reasons. Our continued progress on building out our customer base, maintaining margin, and improving efficiencies, as well as taking advantage of our improved capital structure, allows us to build on this momentum.

Speaker #2: Day in and day out , they navigate winter snow , ice , rain to make sure that our customers have what they need .

Speaker #2: All while supporting the communities that they live in , helping families facing food , food insecurity . Our long standing partnership with Operation Barbecue Relief remains strong as we work together throughout the quarter to provide essential meals .

Speaker #2: We remain the clear leader in the propane industry for many reasons , and our continued progress on building out our customer base , maintaining margins and improving efficiencies , as well as taking advantage of our improved capital structure , allows us to build on this momentum .

Speaker #2: The industry has growth opportunities and power generation . Auto , gas and more , and we look forward to leveraging our improved capital structure to take advantage of the growth opportunities in this industry That is the end of our prepared remarks .

Tamria Zertuche: The industry has growth opportunities in power generation, autogas, and more, and we look forward to leveraging our improved capital structure to take advantage of the growth opportunities in this industry. That is the end of our prepared remarks. We will now go through some previously submitted questions. Nick, if you don't mind, since you took hundreds of them on Monday and Tuesday at the conference, I'll go ahead and go through those. We categorized them into five areas. The first was there were questions around at the Eddystone litigation and whether it was finalized. I want to make sure it's clear for everyone. Yes, we made the final payment in January. The matter is closed. We are not incurring legal costs any longer, and there is no outstanding litigation related to the Bridger transactions.

Speaker #2: We will now go through some previously submitted questions . And , Nick , if you don't mind , since you took hundreds of them on Monday and Tuesday at the conference , I'll go ahead and and go through the categorized them into five areas .

Speaker #2: The first was there were questions around at the Eddystone litigation and whether it was finalized . So I want to make sure it's clear for everyone .

Speaker #2: Yes , we made the final payment in January . The matter is closed . We are not incurring legal costs any longer . And there is no outstanding litigation related to the Bridger Transactions .

Speaker #2: The next set of questions was around our the hiring of a new CFO . It is a priority we , as we previously stated , we continue our search .

Tamria Zertuche: The next set of questions was around the hiring of a new CFO. It is a priority. As we previously stated, we continue our search. We are looking for the right fit and taking our time to find that person. Andy Safran continues to be our advisor, helping us to navigate our capital structure and advising us through our efforts to improve our investor relations program as well. There was a series of questions that we could really categorize as headwinds maybe around Q3 due to geopolitical items. Obviously, we are watching the conflict in Iran carefully to see what effect these actions might have on our costs. You know, due to the positions that we took in Q1 and Q2 to secure favorable pricing, we are optimistic that we will be able to mitigate any potential unfavorable impact.

Speaker #2: We are looking for the right fit and taking our time to find that person . Andy Safran continues to be our advisor , helping us to navigate our capital structure and advising us through our efforts to improve our investor relations program , as well .

Speaker #2: There was a series of questions that could really categorize as headwinds . Maybe around the third quarter due to geopolitical items . Obviously , we are watching the conflict in Iran carefully to see what effect these actions might have on our costs .

Speaker #2: But due to the positions that we took in the first and the second quarter to secure favorable pricing , we are optimistic that we will be able to mitigate any potential unfavorable impact .

Speaker #2: We are also continuing to watch the most recent developments in tariffs. As you can imagine, we received many questions around what's next.

Tamria Zertuche: We are also continuing to watch the most recent developments in tariffs. As you can imagine, we received many questions around what's next now that we have announced a conversion of the B units, and kind of several questions relating into that. Going to just answer that as all those questions at a macro level here. This conversion reduces our cost of capital to match the realities of our business performance today. With this conversion, we strengthen our ability to grow, and we look for ways to expand on our leading capabilities, which I've spoke to today and are the catalyst to not only the results this quarter but beyond. We are consistently looking for ways to grow our business and take advantage of the necessary and essential industry that we are leaders in.

Speaker #2: Now that we have announced a conversion of the B units and kind of several questions relating into that . So going to just answer that as all those questions at a at a macro level here , this conversion reduces our cost of capital to match the realities of our business performance today .

Speaker #2: With this conversion , we strengthen our ability to grow and we look for ways to expand on our leading capabilities , which I've spoke to today and are the catalysts to not only the results this quarter , but beyond .

Speaker #2: We are consistently looking for ways to grow our business and take advantage of this necessary and essential industry that we are leaders in power generation .

Tamria Zertuche: Power generation for businesses such as data centers, as well as our expanding autogas business, which is school buses, it's strategic for us. We believe we are experts at acquisitions, and we have a long history of solid acquisitions with really strong returns. We look to continue our focus on simplifying and improving our capital structure. There was a question around what do we think about the range of capital expenditures from here on out. I think really what the question was asking is, what's going to happen with cash? Let me give you a little bit of a history there. We generate a healthy amount of cash each year. We've been able to continue to invest in the company, maintain our debt, and address key pieces of our capital structure.

Speaker #2: For businesses such as data centers , as well as our expanding auto business , which is school buses , it's strategic for us .

Speaker #2: We believe we are experts at acquisitions, and we have a long history of solid acquisitions with really strong returns. We look to continue our focus on simplifying and improving our capital structure.

Speaker #2: There is a question around what do we think about the range of capital expenditures from here on out? And I think really what the question was asking is, so what's going to happen with cash?

Speaker #2: And let me give you a little bit of a history there . We generate a healthy amount of cash each year . We've been able to continue to invest in the company , maintain our debt and address key pieces of our capital structure .

Speaker #2: Over the past four and a half years, the company has paid out $250 million to B units, soon to be $357 million.

Tamria Zertuche: Over the past four and a half years, the company has paid out $250 million to B units, soon to be $357 million. The company has paid $125 million to Eddystone. That alone is almost a half billion dollars of cash over the last four and a half years the company has generated. We also remained current with maintenance on our debt, our senior preferred units, our high-yield bonds, and the company also has invested in operations between $70 and $90 million of CapEx per year. When you think about that, we have been consistent, and we evaluate the needs of the company, and we balance those against our desire to acquire, to maintain our debt, and to tackle key pieces of our capital structure. We appreciate everyone attending the call today.

Speaker #2: The company has paid $125 million to Eddystone. That alone is a half billion dollars of cash over the last four and a half years the company has generated.

Speaker #2: We also remained current with maintenance on our debt , our senior preferred units , our high yield bonds and the company also has invested in operations between 70 and 90 million of CapEx per year .

Speaker #2: So when you think about that , we have we have been consistent and we evaluate the needs of the company , and we balance those against our desire to acquire to maintain our debt and to tackle key pieces of our capital structure We appreciate everyone attending the call today .

Speaker #2: Your support of feral gas now and in the future is more important than ever . We really want to maintain your interest in feral gas , and so our investor Relations program will continue on its outreach .

Tamria Zertuche: Your support of Ferrellgas now and in the future is more important than ever. We really want to maintain your interest in Ferrellgas. Our investor relations program will continue on its outreach. For now, I will turn it back over to the operator.

Speaker #2: And for now , I will turn it back over to the operator .

Speaker #4: Thank you . And thank you , ladies and gentlemen , for your participation in today's conference . This does conclude the program . You may now disconnect .

Operator: Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Q2 2026 Ferrellgas Partners LP Earnings Call

Request a DemoDemo

FGPR

Ferrellgas

Earnings