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FERRELLGAS PARTNERS L P (FGPR)·Q1 2025 Earnings Summary

Executive Summary

  • Adjusted EBITDA rose 9% to $35.8M, driven by gross profit up $0.9M and lower G&A after excluding litigation adjustments; margin per gallon increased 3% YoY .
  • Reported net loss widened to $146.6M vs. $17.5M a year ago, primarily due to a $125.0M accrual related to the Eddystone litigation; subsequent January 17, 2025 settlement commits $125.0M in structured payments through January 2026, releasing a $190M appeal bond and letters of credit .
  • Liquidity improved: revolver maturity extended from March 30, 2025 to December 31, 2025, alleviating prior going-concern doubt; commitment step-down on March 31, 2025 from $350.0M to $308.8M .
  • Operational highlights: retail volumes negatively impacted by weather 16% warmer YoY and small business closures; wholesale/tank exchange saw organic growth, new wins, and Southeast storm-driven demand; tank exchange selling locations +9% YoY (+5,500) .
  • Wall Street consensus estimates (EPS, revenue) via S&P Global Capital IQ were unavailable; no quantitative revenue/EPS guidance provided by management .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA increased 9% to $35.8M; gross profit +$0.9M; margin per gallon +3% YoY, supported by fixed-cost residential program, national account wins, and West Coast gains .
  • Blue Rhino posted organic sales growth and its best quarter on record for free cash flow, aided by improved logistics, optimized fleet maintenance, and telematics-driven efficiencies; inventory management initiatives supported results .
  • Liquidity actions: revolver extended to December 31, 2025, commitment reduced in March, and subsequent Eddystone settlement cleared a $171.6M judgment and released a $190M appeal bond, enabling capital restructuring plans with Moelis .

What Went Wrong

  • Retail gallons fell 7% YoY (−7.7M) amid ~16% warmer weather, inflation-related small business closures, and a 3% decrease in retail customers; total gallons −3% YoY .
  • Reported net loss widened to $146.6M due to a $125.0M litigation accrual; G&A and interest expenses increased YoY, despite lower fuel and telematics benefits reducing vehicle costs .
  • Wholesale supply/price volatility related to September propane exports introduced operational complexity, though seasoned teams capitalized on market opportunities .

Financial Results

Sequential Quarterly Performance (oldest → newest)

MetricQ3 2024 (Apr 30)Q4 2024 (Jul 31)Q1 2025 (Oct 31)
Revenues ($000s)$515,774 $340,452 $364,085
Gross Profit ($000s)$272,298 $188,146 $195,283
Operating Income ($000s)$76,739 $2,850 $(122,926)
Net Income attr. FGPR ($000s)$52,766 $(20,783) $(146,668)
GAAP EBITDA ($000s)$103,031 $28,502 $(96,082)
Adjusted EBITDA ($000s)$104,003 $33,581 $35,811
EPS (Class A Unit, $)$(13.13) $(7.58) $(33.23)
Retail Gallons (000s)162,282 84,109 106,731
Wholesale Gallons (000s)47,102 47,025 51,240
Total Gallons (000s)209,384 131,134 157,971

Year-over-Year Comparison (Q1)

MetricQ1 2024 (Oct 31, 2023)Q1 2025 (Oct 31, 2024)
Revenues ($000s)$371,013 $364,085
Gross Profit ($000s)$194,392 $195,283
Operating Income (Loss) ($000s)$5,086 $(122,926)
Net Income (Loss) attr. FGPR ($000s)$(17,556) $(146,668)
GAAP EBITDA ($000s)$31,171 $(96,082)
Adjusted EBITDA ($000s)$32,873 $35,811
EPS (Class A Unit, $)$(6.92) $(33.23)
Retail Gallons (000s)114,440 106,731
Wholesale Gallons (000s)47,765 51,240
Total Gallons (000s)162,205 157,971

Segment Breakdown

SegmentQ3 2024 ($000s)Q4 2024 ($000s)Q1 2025 ($000s)
Propane & Other Gas Liquids Sales$490,057 $318,239 $336,798
Other Revenue$25,717 $22,213 $27,287
Total Revenues$515,774 $340,452 $364,085

KPIs

KPIQ1 2024Q1 2025Notes
Margin per Gallon YoY—+3% Driven by fixed-cost residential program, national accounts, West Coast gains
Tank Exchange Selling Locations YoY—+9% (~+5,500) New major accounts added density
New National Accounts Annual Volume—>700,000 gallons Signed 3 major accounts
Southeast Growth—Double-digit EBITDA growth Storm response in FL/NC

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPS GuidanceFY/Q1 2025None disclosed None disclosed Maintained (no formal guidance)
Revolving Credit Facility MaturityFacilityMarch 30, 2025 December 31, 2025 Raised (extension)
Revolving Credit Facility CommitmentFacility$350.0M $308.8M (effective Mar 31, 2025) Lowered (step-down)
Liquidity/Going ConcernQ1 2025Substantial doubt due to March 2025 maturity Doubt alleviated post fifth amendment Improved
Eddystone LitigationQ1 2025$125.0M accrual Settled for $125.0M in structured payments (post-quarter) Resolved (post-Q1)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Technology & TelematicsTank monitors cut costs; telematics adoption; ERP underway Telematics reduced fuel costs and idling; fleet compliance; Blue Rhino inventory mgmt improved Improving execution
Supply Chain & LogisticsBlue Rhino supply chain efficiency; removed days of supply; cash flow gains Blue Rhino best free cash flow quarter; logistics optimization; storm preparation Positive momentum
Macro/WeatherWarmer temps reduced demand; inflation caused closures ~16% warmer; small business closures; Southeast storm-driven demand Mixed; headwinds persist
Regulatory/LegalMoody’s downgrade; Eddystone appeal; bank amendment focus No comment on pending litigation; fifth amendment alleviated going concern; settlement post-Q1 Risk reduced post-Q1
Product/Segment PerformanceBlue Rhino EBITDA +26% FY; retail footprint expansion; autogas wins Wholesale/tank exchange organic growth; national account wins; retail storm response execution Wholesale strength; retail pressured
Capital StructureEngaged bank (Moelis) to evaluate refinancing alternatives Evaluating 2026 senior notes; Class B redemption/convertibility; monitoring HY market Active planning

Management Commentary

  • CEO: “We leverage our telematics technology platform to manage our fleet which has proven to reduce fuel costs, boost route efficiencies... Safety and Technology are of the upmost importance, but people make a company” .
  • CFO: “Adjusted EBITDA... increased by $2.9 million or 9% to $35.8 million... driven by... $1.6 million decrease in G&A after adjusting for a $126.7 million increase in EBITDA adjustments and a $0.9 million increase in gross profit” .
  • CEO: “Blue Rhino... had their best quarter on record when it comes to free cash flow... supposed to provide counter seasonal EBITDA performance, and they did exactly that” .
  • CFO: “The fifth amendment... extended the maturity date of the revolver... alleviated the substantial doubt about the company's ability to continue as a going concern” .
  • CEO on acquisitions: “This past year, we actually made our largest acquisition in 10 years... quick and successful onboarding of Eastern Sierra Propane... Kilhoffer... 95% residential customers and a perfect tuck-in” .

Q&A Highlights

  • Litigation: Management reiterated no comment policy on Eddystone litigation during Q&A; directed investors to public filings .
  • Credit facility: Fifth amendment extended maturity to 12/31/2025 and alleviated going concern; restricted cash movements remain; allows funding of potential resolutions .
  • Capital structure: Evaluating refinancing options for 2026 senior notes; Class B units redemption/conversion mechanics through March 2026; monitoring HY market .
  • Operations/CapEx: Blue Rhino supply chain improved days of supply and inventory turns, favorably impacting CapEx and cash flow; retail CapEx balanced between growth and maintenance across 800+ properties .
  • Storm response: Nationwide logistics enabled surge support; double-digit EBITDA growth in FL and NC; deployed experienced teams .

Estimates Context

  • Wall Street consensus estimates (EPS, revenue, EBITDA, target price) via S&P Global Capital IQ were unavailable for Q1 FY2025; the company did not provide quantitative revenue/EPS guidance in the release or call .
  • Implication: Without published Street estimates, we cannot label beats/misses; focus shifts to internal operational KPIs (margin per gallon, Blue Rhino density, adjusted EBITDA) and balance sheet/liquidity developments .

Key Takeaways for Investors

  • Adjusted EBITDA resilience (up 9%) despite warmer weather and inflationary pressures highlights effectiveness of price programs, national accounts, and logistics tech; monitor continued margin/gallon improvement into winter quarters .
  • Litigation overhang materially reduced post-quarter with $125.0M Eddystone settlement; capital markets flexibility improves as $190M appeal bond is released; supports ongoing capital restructuring initiatives with Moelis .
  • Liquidity risk mitigated via revolver extension to 12/31/2025; commitment step-down to $308.8M requires continued disciplined working capital and CapEx management, especially through peak retail season .
  • Mix shift: Wholesale/tank exchange strength offsets retail softness; density and location growth (+9% selling locations) should sustain Blue Rhino performance and cash conversion; watch new national accounts (>700k gallons annually) ramp .
  • Operational execution in storms delivered double-digit Southeast EBITDA growth; telematics and fleet optimization lowered fuel/vehicle costs, suggesting durable opex savings levers .
  • Near-term trading considerations: Subsequent settlement could act as a positive catalyst by removing legal uncertainty; however, warmer weather and small business closures remain volume headwinds—watch Q2/Q3 volume trajectory and any refinancing updates on 2026 notes .
  • Medium-term thesis: Continued investment in technology and supply chain, expansion outside Midwest core, and autogas growth can reduce weather sensitivity; capital structure cleanup is the key milestone for re-rating .