Ferrellgas Partners, L.P.

Welcome to the Farrell Gas Partners second quarter fiscal 2025 earnings call. All participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. If you would like to ask a question at that time, please type your question in the ask a question box on the lower left-hand side of your screen. Please note we will pause for a few moments to allow time for the speakers to read them and respond accordingly. Please be advised that this call is being recorded. I would now like to turn the call over to Tamria Zertucci. Please go ahead.

Welcome to our second quarter fiscal 2025 earnings call. In the second fiscal quarter, FerroGas continued to showcase its expense management capabilities and expertly planned for a strong start to the heating season. Of course, it starts with our people. We have the very best in the industry. Our retail employees navigated a warm November and then expertly delivered a strong December and January. Our experienced drivers across all business lines safely navigated wintry conditions, including ice and snow, to meet the needs of our customers. Our wholesale business, which includes the Blue Rhino Tank Exchange brand, had a record January. Blue Rhino's larger customer base this year drove more units delivered in January than any other January. a truly great performance by all business lines. I think it's important to call attention to propane's strong role in the energy choice discussion. Propane is there when other energy grid systems fail. Propane is a key part of our everyday life, but also a key part of disaster relief efforts. When ice storms create energy gaps, propane's strong distribution network is there. Feral gas supported the relief efforts in response to wildfires in Los Angeles, and we continue to provide support to those communities in western North Carolina that are still rebuilding due to the destruction caused by Hurricane Helene. Our people live and work in your community, powering our everyday life and supporting critical energy grid failure events. Our employee owners truly are the power behind our promise. I will now turn the floor over to our Chief Financial Officer, Mike Cole, to go over the financial results of the quarter. Mike?

Thank you, Tamria, and thank you all for joining us today. I'd 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 our operations for the second fiscal quarter ended January 31, Gross profit increased $19.1 million, or 6%, in the second fiscal quarter. The increase in gross profit was driven by an increase of $59.9 million, or 10%, in revenues, which was partially offset by an increase of $40.8 million, or 14%, in cost of products sold. Gallons sold during the quarter increased by 14.4 million gallons, or 6%, as wholesale gallons sold increased by 11.5 million gallons, or 20%, and retail gallons sold increased by 2.9 million gallons, or 1%. In addition to the increase in gallons sold, The revenue and cost of product changes were driven by wholesale propane prices that were 16.9% higher from Mount Bellevue, Texas, and 16.2% higher from Conway, Kansas, compared to the prior year period. We recognize net earnings attributable to FerroGas partners LP of $98.8 million and $95.8 million in the second fiscal quarter of fiscal years 2025 and 2024, respectively. The $3.1 million increase was primarily due to the $19.1 million increase in gross profit described above, which was partially offset by an $11.1 million increase in operating expenses and a $3.5 million increase in interest expense. The $11.1 million increase in operating expenses consists of an increase of $11 million in personnel costs, driven by increased overtime costs and one-time expenses related to workers' compensation costs, and an increase of $0.9 million for plant and other costs. These increases were partially offset by a decrease of $0.8 million in vehicle costs due to a $1 million decrease in fuel costs driven by our investment in telematics technology. For the second fiscal quarter, adjusted EBITDA, a non-GAAP financial measure, increased by $10.1 million or 7% to $157 million compared to $146.9 million in the prior year quarter. The $19.1 million increase in gross profit in a $2.1 million decrease in general and administrative expenses after adjusting for a $1.6 million increase in EBITDA adjustments, primarily related to the Eddystone legal cost, drove the increase in adjusted EBITDA for the second fiscal quarter as compared to the prior year period. This increase was partially offset by a $10.6 million increase in operating expenses after adjusting for a $0.5 million increase in EBITDA adjustments for a settlement related to a core business. As previously disclosed, on January 15th, 2025, the company entered into a settlement agreement related to the Eddystone litigation. Of the $125 million accrual in the first fiscal quarter, $50 million was paid on January 15th, 2025, and two additional payments of $37.5 million will occur on or before June 16, 2025, and January 15, 2026, respectively. As part of this settlement, the $190 million appeal bond and the related letters of credit have been released. I'll now turn the call over to Tamria to discuss operational and company highlights during the quarter.