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FERRELLGAS PARTNERS L P (FGPR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY2025 delivered solid topline and profitability: Revenue rose 9.8% year over year to $669.8M, Operating Income increased 6.0% to $127.6M, and Net Earnings attributable to FGPR grew to $98.8M; Adjusted EBITDA increased 7% to $157.0M .
  • Blue Rhino had a record January, with cylinders delivered exceeding any summer month in the past three years; wholesale gallons increased 11.5M (+20%) and retail gallons +2.9M (+1%), supporting revenue growth despite higher product costs and mixed weather trends .
  • Cost headwinds included $11.1M higher operating expenses (overtime and one-time workers’ comp), and $3.5M higher interest expense; weather was warm in Nov/Dec but January was 12.2% cooler than normal, aiding demand; agriculture was weak due to drought, reducing crop drying by 2.4M gallons .
  • Strategic catalysts: resolution of the Eddystone litigation via a $125M structured settlement (first $50M paid; two $37.5M payments due June 16, 2025 and Jan 15, 2026), senior notes callable at par after March 2025, and ongoing capital-structure work with Moelis & Company; distribution policy to Class A holders remains paused .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue +$59.9M (+10%) year over year; Operating Income +$7.2M (+6%); Adjusted EBITDA +$10.1M (+7%) to $157.0M, driven by gross profit +$19.1M and lower G&A after adjustments .
    • Blue Rhino demand surged with record January; 2.2M more gallons (+9%) and expanded selling locations (6,000 added last year) lifting organic sales by 14% .
    • Operational execution: “days to set a tank” improved 25% and idling time reduced ~15%, favorably impacting fuel usage and service speed; new autogas win expected to add ~100,000 gallons annually .

  • What Went Wrong

    • Operating expenses rose $11.1M (personnel +$11.0M on overtime and one-time workers’ comp), partially offset by vehicle cost -$0.8M via reduced fuel costs; interest expense +$3.5M .
    • Weather mixed: warmer Nov (+9.9%) and Dec (+2.5%) constrained early-quarter retail demand; January was colder (-12.2% vs normal), but agriculture remained soft due to drought (-2.4M crop-drying gallons) and a 2% customer decrease .
    • No distributions to Class A Unitholders in fiscal 2025 or 2024; elevated legal-related adjustments and ongoing capital-structure complexity remain investor focal points .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Revenues ($USD Thousands)$340,452 $364,085 $669,776
Gross Profit ($USD Thousands)$188,146 $195,283 $347,405
Operating Income ($USD Thousands)$2,850 $(122,926) $127,643
Interest Expense ($USD Thousands)$25,018 $26,081 $27,893
Net Earnings Attributable to FGPR ($USD Thousands)$(20,783) $(146,668) $98,843
Basic & Diluted EPS per Class A Unit ($USD)$(7.58) $(33.23) $2.40
Adjusted EBITDA ($USD Thousands)$33,581 $35,811 $157,040

Segment breakdown and volumes:

Segment/KPIQ2 2024Q2 2025
Propane & Other Gas Liquids Sales ($USD Thousands)$584,209 $637,027
Other Revenue ($USD Thousands)$25,668 $32,749
Retail Gallons Sold (Thousands)203,054 205,975
Wholesale Gallons Sold (Thousands)57,978 69,490
Total Propane Gallons Sold (Thousands)261,032 275,465

KPIs and cash metrics:

KPIQ2 2024Q1 2025Q2 2025
Adjusted EBITDA ($USD Thousands)$146,931 $35,811 $157,040
Net Cash Interest Expense ($USD Thousands)$(21,424) $(20,747) $(23,431)
Maintenance Capex ($USD Thousands)$(4,039) $(10,414) $(8,727)
DCF Attributable to Equity Investors ($USD Thousands)$122,112 $3,403 $125,204
DCF to Class A & B Unitholders ($USD Thousands)$103,419 $(12,897) $106,469
Weighted Avg Class A Units (Thousands)4,858 4,858 4,858
Basic & Diluted EPS per Class A Unit ($USD)$2.31 $(33.23) $2.40

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Eddystone Settlement PaymentsJan 2025; Jun 16, 2025; Jan 15, 2026Judgment outstanding$125.0M payable: $50.0M paid Jan 15, 2025; $37.5M due Jun 16, 2025; $37.5M due Jan 15, 2026 Structured payments disclosed
Revolving Credit FacilityMaturity/CommitmentMatures Mar 30, 2025; $350.0M commitmentMaturity extended to Dec 31, 2025; commitment reduced to $308.8M effective Mar 31, 2025 Extended & resized
Senior Unsecured Notes (2026)CallabilityN/ACallable at par after March 2025; $650M outstanding, coupon ~5 3/8% Enhanced flexibility
Capital Structure ReviewOngoingN/AMoelis engaged to assess alternatives, including refinancing maturities Maintained
Dividends (Class A)FY2024–FY2025N/ANo distributions to Class A Unitholders during FY2024 or FY2025 Maintained pause

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2024; Q-1: Q1 2025)Current Period (Q2 2025)Trend
Telematics/TechnologyFleet telematics investments, reduced delivery costs and backing incidents in FY2024 Idling time reduced ~15%, faster service (25% faster tank set) Continued operational efficiency gains
Supply Chain/Blue RhinoBlue Rhino supply chain improvements; 6,000 accounts added; cash flow benefits Record January, +2.2M gallons, vending and expanded use cases Strengthening demand; broadening use cases
Tariffs/MacroN/AMonitoring tariffs on steel tanks/cylinders; diversification of suppliers (discussed in Q3 call) Heightened vigilance; mitigation actions underway
Product PerformanceMargin per gallon favorable in Q4; retail softness from inflation Residential retail gallons +4.5M; agriculture weak due to drought Mixed segment trends; residential strong
Regional/WeatherQ4 warmer; asset redeployment strategy Warm Nov/Dec; cold January (-12.2% vs normal) supporting demand Weather-driven volatility; planning mitigates
Regulatory/LegalEddystone litigation pending Settlement finalized; payments scheduled; appeal bond released Legal overhang reduced
Capital StructureN/ANotes callable at par post-March; Moelis engaged Optionality improving

Management Commentary

  • “Safe driving by our experienced and highly tenured employees aided by proven planning practices helped achieve opportunities for growth in Retail and a record January for Blue Rhino.” — Tamria Zertuche, CEO .
  • “Gross profit increased $19.1 million or 6%... revenues +$59.9 million (10%)... wholesale prices +16.9% (Mont Belvieu) and +16.2% (Conway). Net earnings attributable to Ferrellgas Partners, L.P. increased to $98.8 million.” — Michael Cole, CFO .
  • “Our days to set a tank improved with a 25% decrease in time to service… idling time reductions of 15% favorably impacted fuel usage.” — Tamria Zertuche .
  • “Of the $125 million accrual in the first fiscal quarter, $50 million was paid on January 15, 2025, with two $37.5 million payments due on or before June 16, 2025 and January 15, 2026; the $190 million appeal bond and related letters of credit have been released.” — Michael Cole .

Q&A Highlights

  • Eddystone settlement and liquidity: $50M paid; two $37.5M LC-supported payments pending; net-neutral liquidity effect vs prior $125M appeal bond LC .
  • Capital structure/Refinancing: Moelis engaged; senior notes become callable at par after March 2025; monitoring HY market conditions, no targeted rate disclosed .
  • Class B units mechanics: Approximate redemption value ~$305M as of end-March (subject to IRR calculation and time); redemption vs conversion pathways clarified .
  • NYSE relisting: Under consideration within capital-structure alternatives; no timeline .
  • Wholesale margins: Attributed to strong supply planning across four pipelines and opportunistic navigation of external factors .
  • Acquisition activity: Kilhoffer aligns with tuck-in strategy (customer base and route density), positive integration outlook .

Estimates Context

  • Wall Street consensus estimates (EPS, Revenue, EBITDA) from S&P Global were unavailable at the time of this analysis due to data access limits; FGPR trades OTC Pink, which can reduce formal analyst coverage density, further limiting consensus visibility .
  • Without consensus figures, we cannot quantify beats/misses; based on reported results, revenue and Adjusted EBITDA increased year over year, with stronger January-driven volumes and Blue Rhino performance .

Key Takeaways for Investors

  • Q2 delivered resilient growth despite mixed weather, with strength in Blue Rhino and residential retail volumes; Adjusted EBITDA +7% to $157.0M supports cash generation into peak season .
  • The Eddystone settlement meaningfully reduces legal overhang and clarifies near-term cash obligations; appeal bond release and LC-backed payment schedule mitigate liquidity strain .
  • Optionality improves as $650M senior notes turn callable at par post-March; ongoing Moelis-led capital-structure work is a central medium-term catalyst .
  • Operational execution continues to be a differentiator (faster service times, lower idling/fuel), potentially offsetting cost pressures and supporting margins in volatile weather environments .
  • Agriculture demand remains a watch item given drought impacts; continued expansion in weather-agnostic customers (autogas, national accounts) diversifies demand drivers .
  • Dividend policy: no Class A distributions in FY2024–FY2025; distributable cash flow remains healthy, but capital priorities (settlement and refinancing) likely take precedence near term .
  • Near-term trading narrative: legal clarity + callability on notes + operational momentum vs cost inflation and weather variability; monitoring tariff developments on steel inputs and capital-structure announcements is key .