12/12/2025

speaker
Conference Operator
Moderator

Good morning, ladies and gentlemen, and welcome to the Ferrell Gas Partners LPQ1 2026 earnings conference call. At this time, all lines are in a listen-only mode. I would now like to turn the call over to Michelle Magai, Vice President, Corporate Affairs. Please go ahead, Michelle.

speaker
Michelle Magai
Vice President, Corporate Affairs

Thank you. Good morning, everyone. Thank you for joining us today for our first quarter 2026 earnings conference call. We released this morning premarket our earnings, and if you haven't seen it yet, You can find it on our website under the Investor Relations tab at ferrelgas.com. With me today is Tamria Zertucci, our President and Chief Executive Officer, and Nick Hymer, Ferrel Gas' Controller. Today's call includes prepared remarks where Tamria and Nick will go over our first quarter results for fiscal 2026, concluding with responses to submitted questions. Please note that this call may contain forward-looking statements as determined by federal securities laws. For this purpose, any statements made during this call that are not statements of historical facts may be deemed forward-looking statements. These statements may be affected by important factors set forth in our filing for the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in any forward-looking statement. We undertake no obligation to publicly update any forward-looking statements except to the extent required by law. In addition, please refer to the 8K earnings release to find disclosures and reconciliations of non-GAAP financial measures that may be referenced on today's call. This morning's conference call is being webcast and is also available for replay via our website. With that, I will turn the call over to Tamria.

speaker
Tamria Zertucci
President and Chief Executive Officer

Thank you, Michelle. And thank you to all joining our call today. I'm proud to share results. a strong first quarter reflecting the dedication of our 4,000 employee owners who provide not only warmth and energy to our customers coast to coast, but also the solid financial and operational results that position us for sustainable long-term growth. Throughout the quarter, our team stayed focused on what matters most, serving our customers safely and efficiently. Our mission to grow the business continues in FY2026 through several key strategic priorities. Most notable are safely building a profitable customer base through both organic growth and acquisitions, increasing operational efficiencies, and improving margin performance. A key component in achieving our strategic priorities occurred in October 2025 when we strengthened feral gases financial foundation with a few essential moves. We retired 650 million of senior notes due in 2026 and replaced them with 650 million of new notes maturing in 2031, extending our debt timeline and improving flexibility. We also expanded our revolving credit facility, giving us even more opportunity to grow. These actions set us up to invest confidently in the business, and to capture new growth. Against this backdrop, we're also encouraged by the national shift in the energy conversation, which increasingly recognizes propane as an affordable, versatile, and essential component of a long-term national energy strategy. Turning to safety for a moment, we continued to focus on our safety investments. This quarter, we continued our NCAB safety strategy. technology investment, enhancing the driving skills of our professional drivers. We also took a leading role in the industry and successfully transitioned to the new PERC education program. This is a function-based, modular, and more targeted approach to employee safety and technical training. These programs, among others, are important factors to lowering our recordable injuries. FerroGas stands out in a highly fragmented market thanks to our nationwide footprint in our unmatched customer service. This quarter, we had several key drivers to our performance. In the retail business line, we secured seven new national contracts and renewed five existing ones. Together, those represent about 3.5 million gallons, highlighting our ability to win and retain large nationwide customers. At the same time, demand in our autogas division is rising, as customers such as school districts appreciate the lower carbon footprint of propane versus diesel. The tailwind of electric vehicle subsidies is tapering off, opening new growth opportunities in this segment of the business. A further focus was on our temp heat market, where our strategy resulted in a 37% increase in tank sets over prior year. The wholesale team also successfully executed in the first quarter. Blue Rhino was prepared for a robust hurricane season, but quickly adjusted to lower storm-related demand by performing well on controllable metrics of efficient routing, flexing labor to the demand, and upgrading production facilities to meet our future growth. Ferro Gas remains deeply committed to making a meaningful difference in the communities we serve. In the first quarter, we strengthened this commitment by expanding our partnerships with organizations such as Operation Warm and Operation Barbecue Relief. Working with Operation Warm, we provided coats to children in Indianapolis, and through Operation Barbecue Relief, we helped deliver hot meals to first responders across St. Paul, Kansas City, and Tampa. Our focus on community extends to our people. as we celebrated customer service week and driver appreciation week and awarded feral gas scholarships and recognized outstanding performance through our flame and golden rhino awards. Beyond these efforts, feral gas employee owners supported community, veterans, first responders, and youth initiatives nationwide. I will now turn the call over to Nick Hymer, our controller, to review our first quarter financial accomplishments. Nick?

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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