Ferrellgas Partners (OTCMKTS:FGPR) executives used the company’s fiscal second-quarter 2026 earnings call to highlight improved profitability, continued operating efficiencies, and a significant capital structure step involving its Class B Units.
Capital structure: Class B cash distribution and planned conversion
Chief Executive Officer Tamria Zertuche said the company announced after the market close the prior day that its board declared a cash distribution to the Class B Units of $82.32 per Class B Unit, or approximately $107 million in aggregate. The distribution is payable on or about March 13, 2026.
Management framed the move as a simplification that reflects the company’s cash flow performance and supports future growth initiatives. Zertuche also cited strategic partners PGIM and Ares, as well as the bank group led by administrative agent J.P. Morgan, as supporters of the company’s post-restructuring capital structure.
Q2 operating backdrop: late winter and shifting resources
Zertuche said the company was “very pleased” with second-quarter results and pointed to disciplined execution focused on customer growth, margin performance, and efficiency. She noted that winter weather arrived later than usual after unseasonably warm conditions in November and December, particularly across the western half of the U.S.
During warmer conditions, she said the company “leaned into tank sets and growth initiatives.” She also referenced Winter Storm Fern, describing significant snow and ice that created hazardous driving conditions, including downed trees and unplowed roads.
Zertuche emphasized that Ferrellgas’ national footprint allowed it to reposition drivers and equipment from the West to the East to meet elevated demand, calling that flexibility a differentiator.
Safety and technology initiatives
Safety was a recurring theme in prepared remarks. Zertuche said OSHA recordables improved 10% quarter-over-quarter, and “slips, trips, and falls” were down nearly 4% year-over-year despite challenging weather conditions.
She also pointed to continued progress with telematics and in-cab cameras and said stronger integration with Samsara AI—the provider of its telematics—was contributing to fewer safety events, improved driver performance, and measurable gains in fuel efficiency and fleet productivity.
Financial results: higher EBITDA and net earnings despite lower propane pricing
Vice President and Corporate Controller Nick Heimer said overall gross profit increased by $3 million, or about 1%, from the prior year. Heimer noted propane prices at Mont Belvieu were down roughly 22% versus the prior year, which contributed to about a $28 million decline in revenue. However, he said product costs fell by about $31 million, offsetting the revenue pressure.
Heimer reported adjusted EBITDA increased $9.1 million, or about 6%, to $166.1 million. He said preparation work done in the prior quarter helped the company respond as winter demand picked up, driving a $7.1 million improvement in retail gross profit. He described wholesale results as softer, attributing that to the absence of hurricane-related activity that had boosted volumes in the year-ago period.
On operating metrics, Heimer said margin per gallon increased about 6% due to fewer unproductive deliveries and reduced skipped stops, which translated into roughly a 13% increase in operating income per gallon.
Heimer also reported net earnings increased $3.3 million to $102.2 million, primarily driven by higher gross profit and cost control. He said:
- General and administrative expenses declined by $4.6 million, largely due to lower personnel and legal costs.
- Operating lease expense declined by $1.6 million after the company refinanced several operating leases into finance leases during the quarter.
Heimer said the company remained optimistic about the third quarter, noting that winter was not over yet.
Q&A highlights: Eddystone closure, CFO search, and macro headwinds
In responses to previously submitted questions, Zertuche said the company made the final payment related to the Eddystone litigation in January and that the matter is closed. She said Ferrellgas is no longer incurring legal costs and that there is no outstanding litigation related to the Bridger transactions.
Regarding leadership, she said hiring a new CFO remains a priority and that the company continues its search, taking time to find the right fit. She added that Andy Safran continues to serve as an advisor, including on capital structure and improvements to the investor relations program.
On potential third-quarter headwinds, Zertuche said the company is monitoring the conflict in Iran for its potential impact on costs, and also watching developments around tariffs. She said the company took positions in the first and second quarters to secure favorable pricing and expressed optimism that Ferrellgas can mitigate potential unfavorable impacts.
Looking ahead, Zertuche said the Class B conversion reduces the company’s cost of capital to better match its business performance and strengthens its ability to pursue growth. She pointed to opportunities in power generation—including for businesses such as data centers—and the company’s expanding autogas business, including school buses. She also said Ferrellgas views itself as experienced in acquisitions and intends to continue simplifying and improving its capital structure.
Addressing questions on capital expenditures and cash use, Zertuche said Ferrellgas has generated healthy cash flow and has continued to invest in the business, maintain debt, and address capital structure items. She said that over the past four and a half years the company paid $250 million to Class B Units (rising to $357 million with the upcoming distribution) and $125 million to Eddystone, while also investing in operations with annual capital expenditures of $70 million to $90 million.
About Ferrellgas Partners (OTCMKTS:FGPR)
Ferrellgas Partners, L.P. (OTCMKTS:FGPR) is a master limited partnership that operates as the retail propane distribution arm of Ferrellgas, Inc, one of the largest retail propane providers in the United States. Headquartered in Liberty, Missouri, the partnership was formed in 1997 to acquire and manage propane assets and inventory in support of Ferrellgas’s nationwide network.
The company’s primary business activities include the procurement, transportation and distribution of propane to residential, commercial, industrial and agricultural customers.
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