Ferrellgas Partners, L.P.
Q1 2023 Earnings Call Transcript

Published: 9 Dec 2022

[Operator:]

Good day, and welcome to the Ferrellgas Partners First Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions]

[I would now like to turn the call over to James Ferrell, Chief Executive Officer and President of Ferrellgas. You may begin.:]

[James Ferrell:]

Welcome to our first quarter fiscal 2023 earnings call. My name is Jim Ferrell, Chief Executive Officer and President of Ferrellgas. Before we go over the financial results for the quarter, I want to make a couple of points in terms of our performance over the last few months. You may get tired of hearing this, but I have to highlight the employees of our great company. While we are a remote workforce and better because of it, I see hundreds of our employees every week personally contributing on strategy zooms, making this company stronger than ever.

[Our successful performance this last quarter despite the challenging economic environment is directly plated to the outstanding execution by over 4,500 employee owners scattered across the country. We believe in investing in our people and the results, I believe, speak for themselves. We have also continued to build upon the strength of this great clean energy we sell and the good it brings to our thousands of customers.:]

[I will now turn the floor over to our VP of Accounting and Corporate Controller, Wendel Parks, to present the results for the quarter.:]

[Wendel Parks:]

Thank you, Jim, and welcome to our first quarter fiscal year 2023 earnings call. I'd like to remind all of you that some statements made during this call may be considered forward-looking and the 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 on September 30, 2022, 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 first fiscal quarter ended October 31, and 2022.

[The company's growth strategy drove an increase of 1% in gallons sold in the first fiscal quarter. The growth was additionally aided by weather that was favorable compared to the prior year period. As a technology-enabled logistics company, Ferrellgas continues to benefit from its nationwide footprint and focus on continuous improvement. Revenues increased $18.8 million or 5% higher for the first quarter. Cost of sales was favorable with a decrease of $6.3 million or 3% lower, gross profit was favorable with an increase of $25.1 million or 15% higher for the first quarter.:]

[Margin per gallon increased by $0.14 or 13% higher compared to the prior year period. Operating income per gallon was $0.04 or 58% higher compared to the prior year period. Operating, general and administrative expenses increased $15.2 million for the first quarter compared to the prior year period. The $13 million increase in operating costs was primarily attributable to higher fuel cost and fleet costs. General and administrative costs increased $2.2 million, primarily due to legal fees related to noncore businesses.:]

[For the first quarter, the company reported a net loss attributable to Ferrellgas Partners LP of $4.5 million compared to a net loss of $8.6 million in the prior year period. Adjusted EBITDA, a non-GAAP measure increased by $12.4 million or 33% to $49.7 million compared to $37.3 million in the prior year period. Adjusted EBITDA was favorably impacted by an increase of $7.4 million in operating income.:]

[I will now turn it over to Tamria to review our operational and company highlights.:]

[Tamria Zertuche:]

Thank you, Wendel. Ferrellgas welcomed its newest acquisitions to the Ferrellgas family during the first fiscal quarter, Brown's Gas in California and Dubben Gas in New York. We announced the continuation of our partnership with Operation Warm, a national nonprofit for providing winter coats to families facing hardship. The collaboration is a perfect fit as Ferrellgas seeks to support the families that we serve in communities across the country, providing warmth and comfort to those in need. .

[As a category for hurricane tracked towards Florida this fall, we showcased our national logistics capabilities. Blue Rhino production facilities helped the flood to supply chain, staging extra Blue Rhino tanks in strategic areas.:]

[The Ferrellgas team, they ensured an ample supply of propane was on hand. Our drivers for both Blue Rhino and Ferrellgas came in from other parts of the country to assist in the prep and in the recovery. As a result, once Hurricane Ian passed our operations teams were able to serve the heavy demand of our customers without missing a beat.:]

[Meanwhile, using propane donated and delivered by both Blue Rhino and Ferrellgas, the nonprofit organization, operation barbecue relief provided over 865,000 meals for people affected by Hurricane Ian. At 38 days, it was their largest and long appointment to date. We are proud to partner with them.:]

[We celebrated our employees again this quarter in the areas of safety, customer service, innovation and leadership, presenting Ferrellgas Flame Awards to hundreds of Ferrellgas employees who are nominated by their peers. These employees, along with almost 4,500 other Ferrellgas employees are directly responsible for the results that Jim, Wendel and I have shared. While Jim, Wendel and I have the privilege to share these fantastic results today, we know that these results are entirely due to the efforts of our amazing employees. As Jim opened this call today by acknowledging and thanking our employee owners our results are very much an evidence of the investment that we have continued to make in our high-performing workforce.:]

[An example, again, this year, we absorbed all benefit cost increases. The company chose to absorb all additional costs and did not pass those increased cost of benefits to our employees. As Jim stated again at the opening of this call, we will continue to invest in the very best workforce in this industry. Jim, back to you.:]

[James Ferrell:]

I'll now turn the call back to our moderator, but before I do that, as mentioned in the announcement for this call, any additional questions may be submitted via our Investor Relations e-mail box at [e-mail]. Thank you for participating today. Bye.

[Operator:]

Ladies and gentlemen, this does conclude the program, and you may now disconnect. Everyone, have a great day.