Ferrellgas Partners, L.P.

Good day and thank you for standing by. Welcome to the Farrell Gas Partners first quarter fiscal 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to please type your question in the ask a question box at the bottom of your screen. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tamria Zertucci. Please go ahead.

Welcome to our first quarter fiscal 2025 earnings call. The first fiscal quarter again showcased our employee owners and their ability to manage and execute against our overall strategic initiatives. Safety, strategic growth, operational excellence, and consolidation continue to be the bedrock of our strategy. In the first quarter, our retail operations team was focused on the onboarding of our latest acquisition, seasonal prep, and storm response, all while our sales and national accounts managers looked for ways to grow market share today and for the future. On the Blue Rhino side, the density that is the result of year-over-year location growth continues to drive down expenses and increase profit. I want to take a moment to highlight our commitment to the communities we serve, which has been highlighted in many ways this first quarter but maybe best showcased in the remarks that we have received from our customers in these storm impacted areas. Their words confirm how fortunate we are to have plentiful amounts of propane in the US. This resilient and dependable propane network showcases an infrastructure able to quickly and efficiently move clean burning propane where it is needed most. As the second largest marketer of propane, We are able to assist customers nationwide when other energy grid systems fail. We are looking forward to the future. Energy choice is a key consideration for consumers across the entire nation, and FerroGas provides a safe and affordable answer. We look to take advantage of these opportunities for propane to support existing and new energy needs. I will now turn the floor over to our Chief Financial Officer, Mike Cole, to go over the financial results for the quarter. Mike?

Good morning, and thank you, Tamria, and thank you all for joining us today. Before we get started, I would like to remind everyone that some statements made during this call may be considered forward-looking and that various risks uncertainties, and other factors could cause actual performance to differ materially from anticipated performance. These factors are discussed in our Form 10-K, filed on September 27, 2024, and other documents filed from time to time with the Securities and Exchange Commission. Additionally, we note that the purpose of this call is to discuss the results of operations for the first fiscal quarter ended October 31st, 2024. Gross profit increased $0.9 million or 0.5% in the first fiscal quarter. Margin per gallon increased 3% due to increased volume on our fixed cost price program for residential customers, the addition of several key new national accounts, and West Coast business gains. The increase in gross profit was driven by a decrease of $7.8 million, or 4%, in cost of products sold, which was primarily offset by a decrease of $6.9 million, or 2%, in revenues for the first fiscal quarter. Gallons sold during the quarter decreased by 4.2 million or 3% as retail gallons sold decreased 7.7 million or 7%, partially offset by an increase of 3.5 million or 7% in wholesale gallons sold. The impact of inflation and severe weather events resulting in small business closings in addition to weather that was 16 percent warmer than the prior year quarter, contributed to the decrease in retail gallons sold and 3 percent decrease in retail customers. The favorable increase related to wholesale was driven by an $8.8 million increase in tank exchange sales due to organic growth, primarily driven by new customer wins. Storm preparations and response during the first fiscal quarter also contributed to this growth. Tank exchange selling locations increased 9% compared to the prior year quarter as new major accounts drove an increase of nearly 5,500 tank exchange selling locations compared to the prior year quarter. we recognized a net loss attributable to Ferro Gas Partners LP of $146.6 million and $17.5 million in the first fiscal quarters of 2025 and 2024, respectively. The $129.1 million change was primarily due to increases of $125.1 million in general and administrative expense, $3.5 million in operating expense, and $1.9 million in interest expense. The change in general and administrative expense was driven by a $125 million accrual related to the ongoing Eddystone litigation. After adjusting for $4 million in legal fees and settlements related to core businesses, we had a $0.5 million decrease in operating expense for the quarter. Lower fuel cost in tandem with the benefits of our telematics technology drove a $2.2 million decrease in vehicle cost. Personnel expense consisted of decreases of $2.5 million in workers' compensation expense and $0.7 million in benefits expense. partially offset by a $1.9 million increase in payroll and related costs. The decrease in benefits expense was primarily due to a pharmacy rebate and vacation accrual adjustments. The increase in payroll costs was due to planned personnel growth, as well as an increase of $0.7 million in overtime to prepare and supply propane to customers impacted by Hurricane Selena and Milton. The favorable variances for vehicle cost and personnel expense were partially offset by a $3 million increase in plant and other. The $3.0 million change consists of increases of $1.5 million in legal and general liability expenses, $1 million in software expense, and $0.7 million in facility rent and repairs, partially offset by a $0.3 million decrease in telephone and related costs. The $1.9 million increase in interest expense consists of a $1.2 million increase for letters of credit fees and a $0.7 million increase for amortization of debt issuance costs for our revolving credit facility related to the Fourth Amendment that was effective in July 2024. On December 5th, 2024, we entered into the Fifth Amendment to the company's revolving credit facility, which among other changes, extended the maturity date of the credit facility to December 31st, 2025 for March 30th, 2025. On March 31, 2025, in conjunction with the commencement of the Fifth Amendment, the commitment level for the credit facility will be reduced from $350 million to $308.8 million. The amended revolving credit facility is expected, along with cash and cash generation from operations, to provide adequate liquidity for the company. Adjusted EBITDA. a non-GAAP financial measure increased by $2.9 million or 9% to $35.8 million compared to $32.9 million in the prior year quarter. The increase was primarily due to a $1.6 million decrease in general and administrative expense after adjusting for a $126.7 million increase in EBITDA adjustments and a $0.9 million increase in gross profit. We intentionally manage our operations to counterbalance economic and weather-related factors with investments in safety, people, and technology, which Tamria will go over next. I will now turn the call back to Tamria.