"Our employee-owners delivered another strong quarter, and we couldn't be more proud of what this team accomplished," said Tamria Zertuche, President and CEO. "The final months of the heating season often are unpredictable, and this year was no exception. Navigating that uncertainty while maintaining an unwavering focus on customer service and retention, margin growth, and safety is no small feat. It speaks to the extraordinary dedication and skill of our people. Paired with the significant steps we took this quarter to advance our capital structure, we enter the road ahead with tremendous confidence and a platform built for lasting growth."
Capital Structure Milestones and Board Composition Updates:
In March 2026, the Company completed the conversion of all 1.3 million Class B Units into 6.5 million Class A Units after making the final distribution of approximately $107.0 million to Class B Unitholders. This milestone, made possible by the cash generation of our operations, achieved two important outcomes for the partnership. First, it simplifies the unit structure for current and prospective investors. Second, it eliminates the Class B distribution obligation, directing future cash flows toward debt reduction, operational investment, and long-term value creation for Class A Unitholders.
As previously announced, the Company made two changes to its Board composition. First, Pamela A. Breuckmann was appointed Vice-Chair. Ms. Breuckmann's elevated role reflects her significant contributions to the Company, her deep institutional knowledge, and her important role in advancing the Company's governance and succession planning initiatives. Additionally, Andrew Safran was elected to the Board. Mr. Safran has more than three decades of investment banking and private equity experience, with a deep specialization in natural resources and energy infrastructure, which further enhance the Board's depth of expertise.
Financial Highlights:
Gross profit increased by $2.2 million, or approximately 1%, during the quarter as compared to the prior year period. Average propane prices (based on Mont Belvieu, Texas) declined 15.7% in the third quarter of fiscal 2026 compared to the prior year period. A $36.3 million, or approximately 6%, decline in revenue was more than offset by a $38.5 million, or approximately 14%, reduction in cost of product. Gallons sold during the quarter decreased 2.8 million, or 1%, as a 4.4 million, or 3%, decrease in retail sales was partially offset by a 1.6 million, or 3%, increase in wholesale sales. Margin per gallon was positive, increasing approximately 2% compared to the prior year period as the Company continues to benefit from operational efficiencies.
Net earnings attributable to the Company decreased by $31.1 million, or approximately 53%, to $28.0 million in the third quarter of fiscal 2026, compared to $59.1 million in the prior year period, primarily driven by a $29.0 million increase in operating expense. The increase in operating expense relates to increases of $24.7 million in plant and other, $3.6 million in vehicle expense, and $0.7 million in personnel costs. The $24.7 million increase in plant and other operating expense is primarily due to the resolution of legacy casualty claims. Management does not expect these settlement costs to recur at this level in future periods. The increase in vehicle expense was primarily due to increases of $2.2 million in fuel costs and $1.2 million for repairs and maintenance.
Adjusted EBITDA, a non-GAAP financial measure, decreased by $12.7 million, or approximately 11%, to $102.1 million, compared to $114.8 million in the third quarter of the prior year. As discussed above, operating expenses increased by $16.7 million after adjusting for $12.3 million in non-recurring costs primarily related to settlements. This increase was partially offset by the $2.2 million increase in gross profit previously noted.
Operational Highlights:
The Company's operational investments made in preparation for the winter season continued to benefit results specifically in regions of the company where winter showed up. Weather conditions presented inconsistent challenges across most of our service territories during the quarter, with weighted average heating degree days running 12.4% below the ten-year normal and 8.8% warmer than the prior year period. Where temperatures cooperated, results reflected it, the North Central region grew volumes 2% year-over-year against essentially flat weather conditions, while the Southeast demonstrated resilience, growing volumes despite weather running 4% warmer than prior year. The Northeast maintained near-prior-year volume levels in line with normal seasonal conditions. Average temperatures across the western half of the country, measured by heating degree days, were 24% to 27% warmer than the prior year period, presenting the most significant weather headwinds across our service territories during the quarter. The Company's continued focus on service quality and customer experience resulted in improved retention over the prior year period. Regained accounts increased meaningfully compared to the prior year period, a strong indicator of improving win-back execution, while new location activity showed regional momentum in North Central and the Midwest.
The Wholesale team maintained operational momentum coming off the winter period, leveraging the capacity and distribution investments made in prior quarters. Our exchange business added 1,496 net new selling locations through the third quarter of fiscal 2026, a 2.4% increase since the end of fiscal 2025, bringing Blue Rhino's total presence to over 65,000 retail locations nationwide. Growth was concentrated in the channels where consumer demand is strongest. Selling locations, gallons, and revenue collectively reflect growth on a three-year basis, demonstrating the durability of our wholesale distribution model.
Safety remains a core value and a companywide commitment at Ferrellgas. Our continued investment in telematics has been a meaningful contributor to this progress, strengthening operational discipline by enhancing real-time visibility into driver behavior, enabling faster intervention when safety thresholds are approached, and driving measurable gains in fuel efficiency and fleet productivity.
Several tailwinds support our positive outlook for the business. Propane supply is plentiful, underpinning stable margins and reliable service. The onset of grilling season is driving consumer demand for Blue Rhino, with vending growth extending our reach across key retail channels. Our national accounts team continued to build momentum, extending contracts with 4 existing national accounts covering 3.1 million gallons, signing 5 new national accounts, and adding 17 new Autogas locations projected to contribute 370,000 gallons annually.
The operating environment during the quarter reflected broader macroeconomic pressures, including elevated diesel costs, rising food and supply expenses for consumers, and tariff-related cost increases that affected our supply chain. We are actively managing their impact through operational efficiencies and ongoing cost discipline across the business. Based on management's analysis of publicly available information, Ferrellgas's operating expense per employee compares favorably to publicly reporting national propane companies reflecting a lean cost structure built over years of operational investment.
Taken together, the third quarter of fiscal 2026 demonstrates what Ferrellgas is capable of when our people are prepared, our operations are disciplined, and our strategy is clear. We navigated weather volatility, resolved legacy liabilities, advanced our capital structure, and continued to retain and grow our customer base. That breadth of execution gives us confidence in finishing the fiscal year strong and executing on our strategy for Fiscal 2027. As the second-largest retail propane marketer in the United States by gallons sold, with a robust fleet utilization expectation, a low operating cost structure among national publicly reporting peers, a fully deployed telematics platform, and a unique dual-channel model spanning bulk delivery and Blue Rhino retail exchange locations, Ferrellgas enters the next fiscal year from a position of demonstrated operational strength and competitive differentiation.
On Friday, June 5, 2026, the Company will conduct a teleconference on the Internet at https://edge.media-server.com/mmc/p/nrae97ca to discuss the results of operations for the third fiscal quarter ended April 30, 2026. The webcast of the teleconference will begin at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Questions may be submitted via the investor relations e-mail box at [email protected].
About Ferrellgas
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico. Its Blue Rhino propane exchange brand is sold at over 65,000 locations nationwide. Ferrellgas employees indirectly own 1.1 million Class A Units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed an Annual Report on Form 10-K for the fiscal year ended July 31, 2025, with the Securities and Exchange Commission on October 15, 2025. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com. For more information, follow Ferrellgas on Facebook, X, LinkedIn, and Instagram.
Cautionary Note Regarding Forward-Looking Statements
Statements included in this release concerning current estimates, expectations, projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are forward-looking statements as defined under federal securities laws. These statements often use words such as "anticipate," "believe," "intend," "plan," "projection," "forecast," "strategy," "position," "continue," "estimate," "expect," "may," "will," or the negative of those terms or other variations of them or comparable terminology. A variety of known and unknown risks, uncertainties and other factors could cause results, performance, and expectations to differ materially from anticipated results, performance, and expectations, including the effect of weather conditions on the demand for propane; the prices of wholesale propane, motor fuel and crude oil; disruptions to the supply of propane; competition from other industry participants and other energy sources; energy efficiency and technology advances; significant delays in the collection of accounts or notes receivable; customer, counterparty, supplier or vendor defaults; changes in demand for, and production of, hydrocarbon products; inherent operating and litigation risks in gathering, transporting, handling and storing propane; costs of complying with, or liabilities imposed under, environmental, health and safety laws; the impact of pending and future legal proceedings; the interruption, disruption, failure or malfunction of our information technology systems including due to cyber-attack; economic and political instability, particularly in areas of the world tied to the energy industry, including the ongoing conflicts between Russia and Ukraine and in the Middle East; disruptions in the capital and credit markets, related to the evolving global tariff environment or otherwise; and access to available capital to meet our operating and debt-service requirements. These risks, uncertainties, and other factors also include those discussed in the Annual Report on Form 10-K of Ferrellgas Partners, L.P., Ferrellgas, L.P., Ferrellgas Partners Finance Corp., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2025, and in other documents filed from time to time by these entities with the Securities and Exchange Commission. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are made only as of the date hereof. Ferrellgas disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
Contacts
Investor Relations – [email protected]
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)(unaudited)
Three months ended
Nine months ended
Twelve months ended
April 30,
April 30,
April 30,
2026
2025
2026
2025
2026
2025
Revenues:
Propane and other gas liquids sales
$
505,510
$
533,546
$
1,436,547
$
1,507,371
$
1,757,269
$
1,825,610
Other
19,049
27,301
84,615
87,337
107,522
109,550
Total revenues
524,559
560,847
1,521,162
1,594,708
1,864,791
1,935,160
Cost of sales:
Propane and other gas liquids sales
230,284
267,891
673,580
750,953
824,699
902,144
Other
2,839
3,727
10,597
11,838
12,208
12,953
Gross profit
291,436
289,229
836,985
831,917
1,027,884
1,020,063
Operating expense - personnel, vehicle, plant & other
188,437
159,392
508,519
478,306
661,047
624,995
Operating expense - equipment lease expense
2,944
3,833
10,525
14,333
14,912
19,924
Depreciation and amortization expense
27,580
24,336
79,322
73,006
104,742
97,298
General and administrative expense
10,932
12,721
34,622
167,361
45,878
174,379
Non-cash employee stock ownership plan compensation charge
1,041
802
2,909
2,358
3,694
3,092
Loss on asset sales and disposals
432
855
2,983
4,546
1,394
5,518
Operating income
60,070
87,290
198,105
92,007
196,217
94,857
Interest expense
(32,360
)
(28,142
)
(92,203
)
(82,116
)
(118,151
)
(107,134
)
Loss on extinguishment of debt
—
—
(3,003
)
—
(3,003
)
—
Other income, net
727
779
1,744
1,957
2,731
