Ferrellgas Partners (FGPR) Q3 2024 earnings summary

Executive summary

• Net earnings attributable to partners were $52.8 million for Q3 2024, down from $72.4 million in the prior year quarter, mainly due to a $19.6 million decrease in gross margin from warmer weather.

• Gallons sold declined 11% year-over-year as above-average temperatures reduced heating demand and retail customers fell 5%.

• Blue Rhino segment EBITDA rose 19% year-over-year, driven by early grilling season demand, power outages, and expanded self-service kiosks.

• Distributable cash flow attributable to equity investors decreased to $77.8 million for Q3 2024 from $99.3 million in Q3 2023.

• A $99.9 million cash distribution was made to Class B Unitholders in April 2024, bringing total Class B distributions to $250 million.

Financial highlights

• Q3 2024 revenues were $515.8 million, down 12% from $587.3 million in Q3 2023; revenue decreased by $71.6 million year-over-year.

• Gross profit declined 7% year-over-year to $272.3 million; operating income for the quarter was $76.7 million, down from $96.8 million a year ago.

• Adjusted EBITDA dropped 17% to $104 million from $125.6 million year-over-year.

• Margin per gallon increased 4% year-over-year due to favorable segment mix and pricing initiatives.

• Distributable cash flow attributable to Class A and B Unitholders was $60.2 million, down from $81.8 million in the prior year quarter.

Outlook and guidance

• Management expects liquidity from operating cash flows, unrestricted cash, and the Credit Facility to be sufficient for foreseeable capital, working capital, and letter of credit needs.

• Continued investment in technology, logistics, and customer service expected to support margin performance and cost reductions.

• Ongoing focus on expanding weather-agnostic business lines and geographic diversification to mitigate weather risk.

• Plans to expand Blue Rhino's home delivery service beyond the current 19 markets.

• Evaluating early refinancing of 2026 senior notes and extension of revolver maturity, with supportive market conditions and lender discussions ongoing.