Ferrellgas Narrows Losses, Refinances Debt Amid Revenue Dip

TL;DR

Ferrellgas's massive debt reclassification and cost cuts are masking continued revenue struggles, so don't get too excited about the narrower loss.

AI Summary

Ferrellgas Partners, L.P. reported a net loss of $27.36 million for the three months ended October 31, 2025, a significant improvement from the $148.33 million net loss in the same period of 2024. Total revenues decreased by 2.4% to $355.19 million in Q1 2026 from $364.09 million in Q1 2025, primarily due to a decline in propane and other gas liquids sales from $336.80 million to $329.31 million. Operating income saw a dramatic turnaround, reaching $1.87 million in Q1 2026 compared to an operating loss of $122.93 million in Q1 2025, largely driven by a substantial reduction in general and administrative expense from $137.93 million to $12.01 million. The company's cash and cash equivalents decreased from $96.88 million at July 31, 2025, to $28.38 million at October 31, 2025, reflecting significant cash usage in operating, investing, and financing activities. Long-term debt increased from $815.46 million to $1,452.81 million, while the current portion of long-term debt decreased sharply from $652.18 million to $1.83 million, indicating a refinancing or reclassification of debt. A loss on extinguishment of debt of $3.00 million was recorded in Q1 2026.

Why It Matters

This filing reveals Ferrellgas Partners' strategic debt restructuring, moving a substantial portion of current debt to long-term, which could alleviate immediate liquidity pressures and improve financial stability for investors. The significant reduction in general and administrative expenses, leading to a positive operating income, suggests improved operational efficiency, a critical factor for long-term investor confidence. However, the continued decline in revenue, particularly from propane sales, highlights ongoing challenges in its core business, potentially impacting future growth and competitive positioning against other energy providers. Employees might see more stability with improved operational metrics, while customers could benefit from a more financially sound company, though the broader market will watch for sustained revenue growth.

Risk Assessment

Risk Level: medium — The company reported a net loss of $27.36 million and a total deficit of $1.08 billion at October 31, 2025, indicating ongoing financial challenges. While the current portion of long-term debt decreased significantly from $652.18 million to $1.83 million, long-term debt simultaneously increased from $815.46 million to $1,452.81 million, suggesting a refinancing that pushes maturities further out but doesn't reduce the overall debt burden, which remains substantial.

Analyst Insight

Investors should closely monitor Ferrellgas's ability to generate positive free cash flow and grow revenues in subsequent quarters, as the current financial improvements are largely driven by debt reclassification and cost cutting rather than top-line growth. Evaluate the terms of the new long-term debt and its impact on future interest expenses before making any investment decisions.

Financial Highlights

debt To Equity

N/A

revenue

$355.19M

operating Margin

0.53%

total Assets

$1,378.53M

total Debt

$1,454.64M

net Income

-$27.36M

eps

-$8.88

gross Margin

56.09%

cash Position

$28.38M

revenue Growth

-2.4%

Revenue Breakdown

Key Numbers

• $27.36M — Net Loss (Improved from $148.33M in prior year quarter)
• $355.19M — Total Revenues (Decreased 2.4% from $364.09M in prior year quarter)
• $1.87M — Operating Income (Turnaround from $122.93M operating loss in prior year quarter)
• $12.01M — General & Administrative Expense (Significantly reduced from $137.93M in prior year quarter)
• $28.38M — Cash and Cash Equivalents (Decreased from $96.88M at July 31, 2025)
• $1.83M — Current Portion of Long-Term Debt (Reduced from $652.18M at July 31, 2025)
• $1.45B — Long-Term Debt (Increased from $815.46M at July 31, 2025)
• $3.00M — Loss on Extinguishment of Debt (Incurred in Q1 2026)
• -$8.88 — Basic and Diluted Net Loss per Class A Unit (Improved from -$33.23 in prior year quarter)
• -$8.49M — Net Cash Used in Operating Activities (Improved from -$34.28M in prior year quarter)

Key Players & Entities

• Ferrellgas Partners, L.P. (company) — primary registrant
• Ferrellgas, L.P. (company) — operating partnership
• Ferrellgas Partners Finance Corp. (company) — registrant
• Ferrellgas Finance Corp. (company) — registrant
• $27.36 million (dollar_amount) — net loss for Q1 2026
• $148.33 million (dollar_amount) — net loss for Q1 2025
• $355.19 million (dollar_amount) — total revenues for Q1 2026
• $364.09 million (dollar_amount) — total revenues for Q1 2025
• $1.87 million (dollar_amount) — operating income for Q1 2026
• $122.93 million (dollar_amount) — operating loss for Q1 2025

FAQ

Risk Factors

• Significant Debt Load [high — financial]: The company's long-term debt increased substantially from $815.46 million to $1,452.81 million. While the current portion of long-term debt decreased sharply, the overall debt burden remains a significant financial risk, potentially impacting future profitability and financial flexibility.
• Cash Burn and Reduced Liquidity [high — financial]: Cash and cash equivalents decreased from $96.88 million to $28.38 million. This significant reduction indicates substantial cash usage across operating, investing, and financing activities, raising concerns about short-term liquidity.
• Dependence on Propane and Gas Liquids Sales [medium — operational]: Total revenues decreased by 2.4%, primarily due to a decline in propane and other gas liquids sales from $336.80 million to $329.31 million. This highlights the company's reliance on this segment, making it vulnerable to market fluctuations and demand changes.
• Loss on Extinguishment of Debt [medium — financial]: A loss of $3.00 million on extinguishment of debt was recorded in Q1 2026. This indicates costs associated with restructuring or paying off debt, which negatively impacts current period earnings.
• Elevated Operating Expenses [medium — operational]: Despite an improvement in operating income, operating expenses related to personnel, vehicle, plant, and other were $149.77 million, a slight increase from $148.17 million in the prior year. Managing these costs is crucial for sustained profitability.

Industry Context

Ferrellgas Partners, L.P. operates in the energy distribution sector, primarily focusing on propane and other gas liquids. This industry is characterized by seasonal demand, fluctuating commodity prices, and significant logistical challenges. Competition can be intense, with regional players and larger national distributors vying for market share. Recent trends include a growing emphasis on energy efficiency and a shift towards cleaner energy sources, which could impact long-term demand for traditional fuels.

Regulatory Implications

The energy distribution sector is subject to various environmental, safety, and transportation regulations. Compliance with these regulations, such as those from the EPA and DOT, requires ongoing investment and can lead to significant penalties if not met. Changes in energy policy or climate-related regulations could also impact the company's operations and profitability.

What Investors Should Do

1. Monitor debt reduction and refinancing strategies.
2. Analyze the drivers of revenue decline in propane and gas liquids.
3. Evaluate the sustainability of reduced G&A expenses.
4. Assess the impact of the loss on extinguishment of debt.

Key Dates

• 2025-10-31: End of Q1 2026 — Reporting period for the condensed consolidated financial statements, showing improved net loss and operating income but decreased revenues and cash.
• 2025-07-31: End of Q4 2025 — Prior period balance sheet date, used for comparison of assets, liabilities, and equity.
• 2024-10-31: End of Q1 2025 — Prior year comparable period for the condensed consolidated statements of operations, highlighting significant improvements in net loss and operating income.

Glossary

Mezzanine equity

A hybrid form of financing that blends debt and equity features, often subordinate to senior debt but senior to common equity. (Ferrellgas Partners, L.P. has $651.35 million in senior preferred units classified as mezzanine equity, impacting its capital structure.)

Deficit

A negative balance in equity, indicating that liabilities exceed assets or that accumulated losses have eroded the equity base. (The company reports a substantial total deficit of $1,082.04 million, primarily driven by the limited partner unitholders' deficit.)

Loss on extinguishment of debt

A non-recurring charge recognized when a company repays or retires debt before its scheduled maturity, often due to refinancing at lower interest rates or other strategic reasons. (Ferrellgas Partners, L.P. incurred a $3.00 million loss on extinguishment of debt in the current quarter.)

Operating lease right-of-use assets

An asset recognized under accounting standards for leases, representing the lessee's right to use an underlying asset for the lease term. (The company has $37.33 million in operating lease right-of-use assets, reflecting its obligations for leased properties and equipment.)

Noncontrolling interest

The portion of equity in a subsidiary that is not attributable to the parent company, representing the ownership interests of other parties. (Ferrellgas Partners, L.P. reports a noncontrolling interest of $(9.03) million, indicating minority ownership in certain consolidated entities.)

Year-Over-Year Comparison

Compared to the prior year's first quarter, Ferrellgas Partners, L.P. has shown a significant improvement in its net loss, narrowing it from $148.33 million to $27.36 million, and achieving an operating income of $1.87 million versus a substantial operating loss. This turnaround was largely driven by a dramatic reduction in general and administrative expenses, from $137.93 million to $12.01 million. However, total revenues saw a slight decrease of 2.4% to $355.19 million, primarily due to lower propane and gas liquids sales. The company's financial position shows a sharp decline in cash and cash equivalents and a significant increase in long-term debt, offset by a drastic reduction in the current portion of long-term debt, suggesting a major debt restructuring.

Filing Documents

• fgp-20251031x10q.htm (10-Q) — 2613KB
• fgp-20251031xex31d1.htm (EX-31.1) — 20KB
• fgp-20251031xex31d2.htm (EX-31.2) — 20KB
• fgp-20251031xex31d3.htm (EX-31.3) — 20KB
• fgp-20251031xex31d4.htm (EX-31.4) — 20KB
• fgp-20251031xex32d1.htm (EX-32.1) — 8KB
• fgp-20251031xex32d2.htm (EX-32.2) — 8KB
• fgp-20251031xex32d3.htm (EX-32.3) — 8KB
• fgp-20251031xex32d4.htm (EX-32.4) — 8KB
• 0001104659-25-120462.txt ( ) — 10610KB
• fgp-20251031.xsd (EX-101.SCH) — 73KB
• fgp-20251031_cal.xml (EX-101.CAL) — 63KB
• fgp-20251031_def.xml (EX-101.DEF) — 392KB
• fgp-20251031_lab.xml (EX-101.LAB) — 566KB
• fgp-20251031_pre.xml (EX-101.PRE) — 494KB
• fgp-20251031x10q_htm.xml (XML) — 1848KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS (unaudited)

FINANCIAL STATEMENTS (unaudited) Ferrellgas Partners, L.P. and Subsidiaries Condensed Consolidated Balance Sheets – October 31, 2025 and July 31, 2025 4 Condensed Consolidated Statements of Operations – Three months ended October 31, 2025 and 2024 5 Condensed Consolidated Statements of Comprehensive Loss – Three months ended October 31, 2025 and 2024 6 Condensed Consolidated Statements of Deficit – Three months ended October 31, 2025 and 2024 7 Condensed Consolidated Statements of Cash Flows – Three months ended October 31, 2025 and 2024 8 Ferrellgas, L.P. and Subsidiaries Condensed Consolidated Balance Sheets – October 31, 2025 and July 31, 2025 9 Condensed Consolidated Statements of Operations – Three months ended October 31, 2025 and 2024 10 Condensed Consolidated Statements of Comprehensive Loss – Three months ended October 31, 2025 and 2024 11 Condensed Consolidated Statements of Partners' Deficit – Three months ended October 31, 2025 and 2024 12 Condensed Consolidated Statements of Cash Flows – Three months ended October 31, 2025 and 2024 13 Ferrellgas Partners, L.P. and Subsidiaries and Ferrellgas, L.P. and Subsidiaries Notes to Condensed Consolidated Financial Statements 14 Ferrellgas Partners Finance Corp. Condensed Balance Sheets – October 31, 2025 and July 31, 2025 36 Condensed Statements of Operations – Three months ended October 31, 2025 and 2024 37 Condensed Statements of Cash Flows – Three months ended October 31, 2025 and 2024 38 Notes to Condensed Financial Statements 39 Ferrellgas Finance Corp. Condensed Balance Sheets – October 31, 2025 and July 31, 2025 40 Condensed Statements of Operations – Three months ended October 31, 2025 and 2024 41 Condensed Statements of Cash Flows – Three months ended October 31, 2025 and 2024 42 Notes to Condensed Financial Statements 43 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 44 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 60 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 61

- OTHER INFORMATION

PART II - OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 62 ITEM 1A.

RISK FACTORS

RISK FACTORS 62 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 62 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 62 ITEM 4. MINE SAFETY DISCLOSURES 62 ITEM 5. OTHER INFORMATION 62 ITEM 6. EXHIBITS 63 3 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS (unaudited)

ITEM 1. FINANCIAL STATEMENTS (unaudited) FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except unit data) (unaudited) October 31, 2025 July 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 28,382 $ 96,883 Accounts receivable (net of allowance for expected credit losses of $ 4,009 and $ 4,330 at October 31, 2025 and July 31, 2025, respectively) 133,565 127,510 Inventories 91,868 87,807 Prepaid expenses and other current assets 45,477 30,471 Total current assets 299,292 342,671 Property, plant and equipment, net 602,113 602,692 Goodwill, net 257,155 257,155 Intangible assets (net of accumulated amortization of $ 368,661 and $ 366,817 at October 31, 2025 and July 31, 2025, respectively) 104,606 106,451 Operating lease right-of-use assets 37,333 39,045 Other assets, net 78,034 68,702 Total assets $ 1,378,533 $ 1,416,716 LIABILITIES, MEZZANINE AND EQUITY (DEFICIT) Current liabilities: Accounts payable $ 55,313 $ 31,083 Current portion of long-term debt 1,828 652,178 Current operating lease liabilities 15,850 16,082 Other current liabilities 216,052 215,154 Total current liabilities 289,043 914,497 Long-term debt 1,452,813 815,462 Operating lease liabilities 22,673 24,079 Other liabilities 44,690 40,457 Contingencies and commitments (Note K) Mezzanine equity: Senior preferred units, net of issue discount and offering costs ( 700,000 units outstanding at October 31, 2025 and July 31, 2025) 651,349 651,349 Deficit: Limited partner unitholders Class A ( 4,857,605 units outstanding at October 31, 2025 and July 31, 2025) ( 1,374,780 ) ( 1,332,704 ) Class B ( 1,300,000 units outstanding at October 31, 2025 and July 31, 2025) 383,012 383,012 General partner unitholder ( 49,496 units outstanding at October 31, 2025 and July 31, 2025) ( 71,270 ) ( 70,845 ) Accumulated other com

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