On September 27, 2024, Ferrellgas Partners LP (FGPR, Financial) released its 8-K filing detailing the financial results for its fiscal year and fourth fiscal quarter ended July 31, 2024. Ferrellgas Partners LP operates as a propane distributor, primarily serving residential, industrial, commercial, and agricultural customers across various regions in the United States.
Performance Overview
For the fourth fiscal quarter, Ferrellgas Partners LP reported an increase in Adjusted EBITDA by $4.6 million, or 16%, to $33.6 million compared to $29.0 million in the prior year quarter. This improvement was driven by a $7.7 million decrease in general and administrative expenses and a $3.7 million increase in operating expenses. Gross profit remained relatively flat with a slight increase of $0.4 million.
However, for the full fiscal year 2024, Adjusted EBITDA decreased by $42.8 million, or 12%, to $317.4 million from $360.2 million in fiscal 2023. Gross profit also saw a decline of $24.1 million, or 2%, primarily due to a $189.3 million decrease in revenues, which was partially offset by a $165.3 million reduction in the cost of products sold.
Key Financial Metrics
Ferrellgas Partners LP's financial achievements and challenges are reflected in several key metrics:
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Adjusted EBITDA | $33.6 million | $29.0 million | $317.4 million | $360.2 million |
| Gross Profit | $188.1 million | $187.7 million | $983.1 million | $1,007.2 million |
| Net Earnings | $(20.8) million | $(29.1) million | $110.2 million | $136.9 million |
| Total Revenues | $340.5 million | $341.9 million | $1,837.1 million | $2,026.5 million |
Challenges and Strategic Initiatives
The company faced several challenges, including warmer-than-normal weather and inflation, which led to a decrease in retail customers and a 5% decline in gallons sold. Despite these hurdles, Ferrellgas Partners LP made strategic investments to mitigate these impacts. The company added over 6,000 accounts to its Blue Rhino branded Tank Exchange business, resulting in a 26% growth in Blue Rhino EBITDA over the prior year.
"Removing multiple days of supply across the nationwide network resulted in material improvement in free cash flow and subsequent decreases in capital expenditures for this business over the prior year," said Tamria Zertuche, President and Chief Executive Officer of Ferrellgas.
Financial Achievements
Ferrellgas Partners LP's focus on operational efficiency and strategic acquisitions has yielded positive results. The company completed the installation of an 18,000-gallon tank and autogas pumps, which will be used to transport nearly 200,000 students to school this year. Additionally, the acquisition of Eastern Sierra Propane in California is expected to help mitigate the impact of weather conditions in specific regions.
Despite the challenges, the company reported a favorable margin per gallon with a 4% increase compared to the prior year period. This was driven by segment mix, fixed cost price programs for residential customers, and national account pricing improvements.
Conclusion
Ferrellgas Partners LP's fiscal 2024 performance highlights both the challenges and achievements faced by the company. While the decrease in Adjusted EBITDA and gross profit reflects the impact of external factors such as weather and inflation, the company's strategic initiatives and operational efficiencies have positioned it for future growth. Investors and stakeholders can gain a deeper understanding of Ferrellgas Partners LP's financial health and strategic direction by reviewing the full 8-K filing.
Explore the complete 8-K earnings release (here) from Ferrellgas Partners LP for further details.
