Ferrellgas Partners (FGPR) 19 Jun 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Ferrellgas Partners Third Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tamria Zertuche. Please go ahead.

Good morning. Zertuche, Officer Tamria Ferrellgas. President is name Chief and Executive of My want how X,XXX more saying start Ferrellgas I I by our proud to am of employees. than

better well, experienced compared quarter. this to X% fleet expenses of they Our expenses they areas managed weather planned prior key including professionals, executed we year. operations They even when operations, against in experienced down the anomaly over and driving by

impact. weather Regarding

across steps positive balance over the different years our X of create demand taken last in to business. our have the segments customer We

Our base focus and weather-agnostic has been on growing geographic by our customer type both customer location.

made our areas of industrial have tank in progress segments. and gas, We in commercial great exchange, the auto

heating negatively unseasonably the heating and However, impacted season extended segments warm the business. of our

across business. the of our temperatures geographic warmer areas centrally XX% dense, about experienced We

some able redeploy Additionally, a did of effects businesses businesses our hard decrease managers, we doors. those allowing to footprints capital working this But in and downsize the inflation their closed closed other and expenditure. for quarter. to seeing areas, account long-standing some were regretted of even assets The related make overall mark a their they

contributions this employees again I of they the Finally, the the of that great to strong hard Ferrellgas to out make industry. all and work would call like

I Mike our to Cole, turn financial will Officer, for now the quarter. the Chief to our Financial floor over results go over

performance thank remind and for to actual various anticipated today's considered during joining other uncertainties that all factors Tamria, be you some everyone call from materially that could risks, to you, statements I'd and Thank performance. forward-looking us may like differ this on call. cause and made

time XX, and XX-K Form These other filed factors the Securities September in with documents time on are XXXX, to discussed and Exchange Commission. filed our from

to results XX, ended discuss we that operations is the third this quarter XXXX. the purpose of April fiscal for the note call Additionally, of

temperatures of XX.X% quarter the days As results financial warmer year X.X% warmer as Tamria across degree were compared which drove period. high $XX fiscal partially decrease XX% negatively weather the warm cost the and third as product in prior decrease heating than lower, than a offset prior were million much of year sold. commented, during normal, by Revenues United of was Record to the an impacted our quarter. million States gallons in $XX.X

profit compared As year to XXXX for period. result, a fiscal of gross decreased quarter the third prior X% the

income fixed improvements per due the period, increase other compared prior the quarter third year Margin gallon the XXXX cost for customers, pricing favorable decrease the prior primarily program account in gross profit XX% of cost to Operating and previously dynamics. third national the Plus mix, residential noted. increased fiscal fiscal period. to X% due was to per gallon decreased to The for quarter XXXX for segment Platinum compared our year

net a $X.X Partners, percent fiscal recognized decrease to increase $X.X by which in for fiscal to and in $XX.X Ferrellgas XXXX a total million XX% earnings as We XXXX, quarter. the third L.P. the quarter $X.X Operating attributable expense of respectively. increased The $XX.X third million revenue and partially of or a a comprised million was million medical offset of paid, million in due incentive expense increase was personnel operating increase accruals. in in claims primarily $X.X X% expense, million of

the change warmer-than-normal The noted quarter to million decreased weather. million in $XXX prior Adjusted XX% quarter. year was compared EBITDA, primarily to due and increase in $XX.X or $XXX.X measure, the above a non-GAAP to financial million gross fiscal in the by profit third

after distributions our XXXX. is million. date Class It distribution $XX.X of total We also $XXX And possible made these by million important a discretionary cash B paid million. third strong are as given effect April $XX.X XXXX, the balance was distributions at distributions, that made the XX, This end are and the of quarter company's to X, on these Class unitholders of note to to to performance. record cash to B brings the company's continued approximately March

call to now Tamria. back turn I the will

Thank Mike. you,

again and strategic temperatures prompted early of as third growing Consumer an EBITDA season. warmer on Rhino the warmer counter seasonal to surged year increase business, prior Blue than quarter an during our in the Focusing fiscal in kickoff to initiatives compared normal Blue demand resulted the Rhino's XX% the weather period.

our operations installed failed heat. in contracts Rhino hours To experienced grid than with Blue our national a which professionals a increased Home propane conveniently. higher available a day, purchase We business. plans in areas is and our exchange date, Additionally, well demand the markets, exchange to Rhino the and leveraged quickly days where footprint, against customers allow normal tank in have labor due supply X tank electric service XX to kiosks, Blue executing over XX week, self-service expand. delivery also XXX to cylinder force,

by $X improvements fiscal this year, chain nearly due inventory improvements. expense supply to Additionally, turns and Blue capital million Rhino decreased

turn technology to continues front. in delivery fiscal logistics it the and improving and payment Tank went This our improve which reduced million have projects, cost through in efforts. all We've service over reductions. platform and ago. processing a addition opportunities costs to progress track to of an supply efficiency customers a to Now XXXX. estimated other invest for ensures our live of is million $X.X on The costs reduce platform automation and process monitoring propane Also, our technology on months few tools. new annual for our in credit customer ready company a $X.X customers our offers have to telematics made great the in seamless

of in additional box move segment Relations I submitted questions call Investor before the this to to the moderator. live our mentioned via call, be for Now But call, at turn Q&A back investorrelations@ferrellgas.com. before our any might that, our e-mail announcement I do as we to want the

[Operator Instructions]

All right.

X filing to the of June through As we're the there we several that questions, are the looking see Eddystone. related

on and still not addressing pending are evaluating questions topic today. case, We that be that we will

things going regarding mitigate we're to OpEx and a with in question expense. doing to -- are what year. that compared we're think OpEx start to overall movement our And and up I OpEx prior the as

first all, you've on our think some enterprise-wide system. working an that of So ERP in of seen are we I releases

So related that the to that. obviously, consultants, company across there's are widespread training

seen Additionally, this medical higher be we prior we year, year. which as have to expenses occurrence compared believe in to onetime

cost at business, in same of comparison year. reduce then will And saw our of side about telematics we you Actually, beginning to telematics help when the this fast-tracked the auto the prior to parts, year think fleet it our areas. greatly fleet. we it's study sort people And it's X technology of things, implemented as prices diesel of those and and

mitigating those that working So are on. currently the items expense we're management

This is Mike.

particular, the returns So around we for nonmaintenance CapEx, our received CapEx. have investment in nonmaintenance questions

so spending, capital when look X we there's buckets. essentially And at

We CapEx. will look at then and CapEx, maintenance M&A growth CapEx

And I nonmaintenance a business M&A growth really is CapEx. that refer to of And it's function opportunities and in CapEx, when so more needs.

In terms of the returns. investment

information, on meet hurdle think there think what the those discretionary when relates rate our But companies M&A that's or of call, are that a in they is. either rate. it We I rate a will investments made disclose sensitive of activities. Or terms especially our to, knows hurdle as we as hurdle making look is discretionary exceed to type internal don't everyone investments. those

what what preferreds there trading in terms and units Class and our is senior our of the capital The at. market notes are at in of B are the out cost the

exceeds of So hurdle decision. make that spending drives what portion rate to think -- But do cost is you financial on of our calculate people capital what it sure could you our then capital we'll what and that's is. discretionary the

There was that came up the a for our to deadline is about, "Do file When we the XX-Q? filing?" question expect

Thursday available morning. an It Federal automatic SEC, We received evening with that The last or we Friday. from with be made filed the XX-Q extension tomorrow and an will was either last was filing the the holiday. extension last

will been available has the morning. tomorrow So XX-Q be and filed

turn, In questions been at question. and there's we're the looking some

So we're prioritize. to trying

and for issues. apologies separate pause. X The the notes. 'XX So senior revolver the the extending

this matures of It many know, revolver current As the went March. March in past 'XX.

is about and banks the in That with been conversations that banks. revolver. extension amending the process. have We've extending with process in or generally had We discussions supportive the

the an They're par. X.XXX%. year, currently of senior callable at at callable and of be senior In next they'll refinancing notes the notes. terms 'XX of March early 'XX

caught ago. the our supportive it's And capital they've been markets. months the has had access that we've attention. income something some to 'XX or of early evaluating not the notes. senior high-yield whether much to do have it refinancing of discussions that And of indicative We an was debt makes very we've been market with is investors, to when pricing more economic out our where it The the fixed to sense X X of attractive compared now coming seen

past So the Friday evaluate that the we makes markets us not makes whether to to to whether sense evaluate for to capital it sense. this continue now adds 'XX the refinancing aspect not another notes. the discussion, of for that Obviously, continue or to or come and we'll early ruling

liquidity. on questions Some

questions We a different couple of have liquidity. on

are quarter, talk going a And $XX to there's thereabouts. $XX is math. components. round -- balance $XX of So the end at million, when was for to million we there cash about several easy One of the the liquidity, I'm balance. couple the cash up million

$XXX revolver. We have a million

of need documents, per $XXX do to million maintain, We the financing liquidity.

then we have $XXX $XX So of that puts outstanding. at revolver And about availability LCs million. million

-- public obviously, million That puts information. Combined of down of what... is, $XX $XXX that roughly $XXX of cash, puts this us How million-ish much million with about under you of availability at the All revolver. think the to liquidity. do what us

on performance of outlook and take that. sort here a prior the margin our Let's on years question CPG over

experience related product margin with customers, to to our think I they is to our deliver to like directly again. ability and with our safely an performance want

our are of performance. service margin investments and safety and believe we in this technology training, largely customer continued So supportive

in today always demand some well-being pressures same weather. to the of our economic as the Margin factors, fluctuations been. pricing. customers, are related Also, The commodity they've

those supply. over We see as in Those if opportunities things the those, you've are this and terms And that have we Ferrellgas advantage can remain past you fluctuations, XX years, future in always that in being the shown see advantage take the of at to well. disruptions of in those of industry. always able will taken it looked opportunities acumen has great

capital the questions around There are may capital stack Related to have restructuring we the and senior that refinancing regarding of structure. plans couple a stand our notes.

when the industry It seems we question to be go get a to often conferences. we

obviously, we actions, we around our right Right We will are do earlier of that whether focusing costs, evaluate continue And restructuring. the options makes nothing, evaluate costs. reducing regarding today capital there's capital continuing or structure. talked for I restructuring announce the to to 'XX reducing including is senior it We'll structure. options. terms we to to in now, when operating are the nothing business the take But not There sense there's notes. that. the announce on of could capital and now, us restructuring the about

We're Rhino. questions around jumping that think the capital and around performance a questions between are moving. few company items. helps There keeping with But structure I hopefully Blue

So on due of to and supply that of our $X I again this by decrease want CapEx division. We regards to X Rhino to turns. fiscal call expense million chain fact Blue improvements able first years inventory were really we out this the the company to our focused retail the transformation in year,

to sharing to been and That able our past expense, to really increase year. supply tweaks We turns We've chain that. facilities CapEx at production been continue which Blue shy sites obviously flow. has focus. added the X,XXX accounts. cash about our over Rhino then drive this do to increases inventory our a And We've really been our turned haven't

kiosks installed XX We're will We've self-service demand day. that a create also hours XXX over meeting demand.

the front, of So what we're that's area on the happening all people Blue business. they're doing excited excited about in about that and Rhino the

You is in premium we the a treasuries credit qualitative we X.XX%, on to need X%, can From it expense in X breakeven that to but is, what what people a there's interest kind an that of and interest "Okay, So to whatever then there we a about bonds refinancing be whatever refinancing from rate is where from evaluation. impact how the the quantify of the of and out, economic in our that spreads do going conceptual quantify is the came a bonds. you And increase the certainly you rate benefit." the of assume. quantify to mitigate on question or then amount evaluation X/X perspective, the do dollar analysis figure you look of to Another think call to move perspective, at what expense more order investment from can economic

in the and that risk early of were we taking one derisk in refinancing company go 'XX, in off or to that the the And And of now terms if do would event. sometime table out 'XX. next an months the XXXX that's refinancing of few derisking refinancing

So at as to an continue And notes both perspective. of and qualitative earlier, sense. makes the look quantitative early we we it from I a senior refinancing evaluate mentioned whether

received question retire the Class distributions. function Class of a required B of That's timing the shares. additional We also redemption to function on of It's not the a of the Bs. a

the the Class Gap] When -- Class can the you shares, that the of Bs Just shares. to B interpreting retired. [Audio to level retirement really redemption talk set of B be with everyone, Class that I'm mean about the

I I -- through Class B the publicly, So those filings XXXX. prior there in back is available in an believe, IRR documents. are requirement would

go to date. redemption could we calculate based you pick be. amount there, and in would redemption calculate you the made could date could You what could And a distributions on you the

So you not because give made, that I on versus any certainly value time made the redeemed. that having a which distributions. can't of are distributions period reduced those specific the we've it's But in dependent redemption answer

pausing. we've here. is be sure some reading to these what that We'll of most the answer questions that categories We're make of hit

to question as the deal any Class things to ways as A expenses. like come B liquidity in increase litigation has regarding shares well with

litigation or the said impact company. As comments have the responses litigation, to not those we're going litigation the of response onset go the at to into might various and potential that responses detailed Tamria our the on around Q&A,

given sufficient mentioned I what balances. evaluate the to liquidity earlier, periods, to including cash prior our now liquidity in company, consistent the we operate to liquidity with As the of are right that continue have continue revolver are, events our And business. of think terms is and needs judgement. in we Eddystone We front the will

company. of and I about before kind And it talk take other. how a dive weather opportunity the impacts There's always how of couple of to impacts sides positive around questions that sort of I the the into it

So on areas. tank have into the trying move about spoke autogas. if you positive brand -- little much Rhino I about side, spent or company exchange already. time And to think weather-agnostic we a There's the also Blue bit

weather We agnostic. continue have to autogas wins Obviously, in area. being this

volumes portable. a of and to like job Additionally, commercial. especially of events We've is, those demand great at businesses, that hurricanes, our across huge times areas. for has small cylinder of of all one of support business ice mix there storms, Weather industrial need. good the power a forklift best anything propane. done really It managing our It's leads outages, creates distribution

I when demand. great So talked unpredictable about, really just such weather, creates that as there's it

month. actually cold, -- bit had due business had volumes little the of off-season to January into summer exchange A were heat The this months tank of picture January month the that power a side. outages in and the to close tank and

side, in specific the tactic footprint the the itself Ferrellgas of country, no acquisitions we in move just our particular. flip of secret done the have finds upper in geographic dense the on most middle out it's to Midwest center ourself that On country. as coast the a And diversity that

was warmer than been It XX-year warmer our there, study. in it's

we But as So in we'll weather-agnostic dependency, And that the center taking we never be take of steps we country. completely will less to that are tactics help that create mitigate go in part weather-independent. to forward. the believe we're particular, continuing

closing Tamria the think one the question "To address that revolver in is, 'XX before just the we extent And There's Yes. you generally came revolver provides that or her to banks, maturity to about and question lenders directly I comments. what more considering maturity?" extending talk they talk view can't the have things. how to them banks speak about for when would the revolver those will

opine banks I our think in our the that end like material events. perspective, of refinancing But bank that's to or to for of can't -- you. I any would say to But case type do group, sit on in back would from event that. front Tamria, conceptual sit want not questions. generally the I is the of a that's front generally, refinancing of banks whether

your Thank and we the questions something appreciate that and we have you in interest Ferrellgas. today allowing proud company. very a think future. you It's Listen, great asking we truly great about us to a for in of. speak calling we're story. know We We have

company. company answering management. entirely this to are success. questions, in efforts We the room work across It's Those to of been attention expense owners really the of safety, proud is to transform know to the here the the to attention fuel that employee continue the our we've these we they're their of us that of the our doing country. due They customers, success

thank moderator. to the tuning So you for turn And I'll back over it today. in

today's for Thank and conference you. gentlemen, Ladies call. you that Thank concludes your participation.

disconnect. now may You

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