Ferrellgas Partners (OTCMKTS:FGPR) reported fourth-quarter adjusted EBITDA of $23.8 million, up 3% from the prior-year period, while full-year fiscal 2026 adjusted EBITDA declined 3% to $321.3 million as warmer weather reduced propane demand and the company resolved legacy liability claims.
President and Chief Executive Officer Tamria Zertuche said the year was marked by operational discipline, capital-structure actions and weather-related volume pressure. The company’s employee stock ownership plan remains central to its culture, she said, noting that employees indirectly own Class A units through the ESOP.
Quarterly Results Reflect Weather Pressure and Cost Controls
Average Mont Belvieu propane prices increased 6.8% year over year during the quarter. Cost of sales rose $3.1 million, or 2%, while revenue declined $800,000, or 0.2%.
Blue Rhino’s tank-exchange business was affected by a cold, wet Memorial Day followed by heat advisories over the July 4 holiday weekend, Heimer said. Wholesale gallons were flat during the quarter.
Despite lower gross profit, adjusted EBITDA rose $700,000, supported by lower expenses. After adjustments for non-recurring costs, operating expense declined $2 million and general and administrative expense fell $1.9 million. Equipment lease expense also decreased $700,000 following lease buyouts and the refinancing of certain operating leases into finance leases.
The company’s net loss attributable to Ferrellgas widened to $31.5 million in the fourth quarter from $26.8 million a year earlier. Heimer attributed the increase primarily to a $6.8 million rise in interest expense, a $3.9 million decrease in gross profit and a $3.4 million increase in losses on disposed assets. Those effects were partly offset by a $9.8 million decline in operating expense.
Full-Year EBITDA Declines as Gallons Sold Fall
For fiscal 2026, gross profit increased $1.1 million, remaining essentially flat despite a 3% decline in gallons sold. Average Mont Belvieu prices fell 8.9% for the year, with a $75.5 million decrease in cost of sales exceeding a $74.3 million reduction in revenue.
Total gallons sold declined by 24.6 million. Wholesale volumes fell 13.8 million gallons, or 6%, while retail volumes declined 10.7 million gallons, or 2%. Ferrellgas said the year was about 3% warmer than average and 11% warmer than the prior year, with temperatures in the West 16% warmer than normal.
Heimer said margin per gallon improved 4% for the year. Retail customer retention held against the prior-year quarter, and the company ended the year with a 92.4% new-customer conversion rate. In later comments, management cited 87% retail retention. Blue Rhino maintained a footprint of more than 65,000 retail locations nationwide.
Full-year adjusted EBITDA fell $9.4 million from fiscal 2025. The company said general and administrative expense decreased $5.4 million after EBITDA adjustments, largely reflecting a $125 million legal settlement recorded in fiscal 2025. That benefit was offset in part by a $20.4 million increase in operating expenses associated largely with settlements of several legacy general liability claims.
Net earnings attributable to the company totaled $71.7 million for fiscal 2026, compared with a net loss of $15.6 million in fiscal 2025. The improvement was driven largely by a $134.2 million decrease in G&A expense related to the prior-year litigation settlement, partially offset by higher operating expenses, interest expense and depreciation and amortization.
Refinancing, Unit Conversion and Liquidity
Ferrellgas completed several capital-structure actions during the year. In October, the company redeemed $650 million of 2026 senior notes and issued $650 million of new senior notes due in 2031. It also extended and expanded its revolving credit facility. Zertuche said S&P Global and Moody’s upgraded the company’s credit ratings following the refinancing.
In March, Ferrellgas converted 1.3 million Class B units into 6.5 million Class A units. Zertuche said the move simplified the partnership’s unit structure, eliminated the Class B distribution obligation and redirected future cash flow toward debt reduction, business investment and long-term value for Class A unit holders.
As of July 31, Ferrellgas had total liquidity of $195.1 million, including $48.4 million of cash and cash equivalents and $146.7 million available under its revolving credit facility. Capital expenditures totaled $77.3 million for the year, including $49.3 million of growth capital and $28 million of maintenance capital.
Safety, Regulatory Developments and Emerging Opportunities
Vice President of Corporate Affairs Michelle Maggi said total workers’ compensation claims improved 3.9% in fiscal 2026, while lost-time incidents decreased 15%. She attributed the gains in part to telematics and driver-safety technology investments.
Management also cited recent regulatory developments as favorable for the propane industry. Maggi said a U.S. Supreme Court decision struck down a Department of Energy rule that would have imposed a 95% annual fuel utilization efficiency standard on residential furnace sales beginning in 2028. She also pointed to Congress overturning an Advanced Clean Truck mandate through the Congressional Review Act, which she said would have required electrification of commercial delivery vehicles.
Looking toward fiscal 2027, Zertuche said Ferrellgas expects plentiful propane supply to support stable margins and reliable service, while the company continues to manage elevated diesel costs and an evolving tariff environment. Management also described propane backup power for data centers as an early-stage opportunity that has not yet been included in company projections.
“We enter fiscal 2027 with a stronger balance sheet, a simplified unit structure,” Zertuche said, adding that management remains focused on operating performance, free cash flow and EBITDA regardless of the units’ OTC trading venue.
About Ferrellgas Partners (OTCMKTS:FGPR)
Ferrellgas Partners, L.P. is a publicly traded master limited partnership that operates through its subsidiary, Ferrellgas, L.P., to distribute propane and related products and services. The company supplies propane for residential heating, cooking and agricultural uses, as well as for commercial, industrial and motor-fuel applications.
Its operations include the distribution of propane in bulk and cylinders, propane tank and equipment services, and the exchange of portable propane cylinders through the Blue Rhino brand.
