Cornerstone Propane Partners, L.P. Reports Operating Results and Acquisitions for the Quarter and Year Ended June 30, 1997.WATSONVILLE Watsonville, city (1990 pop. 31,099), Santa Cruz co., W Calif., on the Pajaro River near Monterey Bay; founded 1852, inc. 1868. It is a growing trade and processing center for vegetables, fruits, and flowers. , Calif.--(BUSINESS WIRE)--Aug. 13, 1997--Cornerstone Propane Partners, L.P. (NYSE NYSE See: New York Stock Exchange :CNO CNO abbr. chief of naval operations ) ("Cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to " or the "Partnership") today announced the results of the Partnership's operations for the quarter and the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma fiscal year ended June 30, 1997, and reported on recent acquisitions. Cornerstone's sales for the fourth quarter of fiscal 1997 declined by 10 percent to $128.7 million from a pro forma $143.3 for the same period last year. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the fourth quarter was $.7 million versus a pro forma loss of $.9 million for the same quarter in 1996, a 132 percent increase. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were better than the previous year by 10 percent at $22.1 million, down from a pro forma $24.6 million in 1996. The EBITDA for the fourth quarter was better than last year due primarily to a reduction in operating expenses from 1996, offset to some extent by a shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in retail gallon gallon: see English units of measurement. sales. The retail gallons sold during the quarter were down by 3.0 million (approximately 9%) for the fourth quarter of 1996, and down by 21.3 million gallons (approximately 9%) for the fiscal year ended June 30, 1997. The shortfall in retail gallon sales was due primarily to mild weather conditions in most of the markets served by the Partnership during the third quarter, tighter pre-sale credit standards Credit Standards The guidelines a company follows to determine whether a credit applicant is creditworthy. and a decision to exit from some low margin markets. The average heating degree days Heating degree day (HDD) and cooling degree day (CDD) are quantitative indices demonstrated to reflect demand for energy to heat or cool houses and businesses. These indices are derived from daily temperature observations and power demand. in the third quarter of fiscal 1997 were 12.7% warmer than normal and 14.4% warmer than last year. Individual markets experienced temperatures as much as 23% warmer than the 30 year norm and 42% warmer than last year. Historically, the third fiscal quarter has accounted for approximately 36% and 47% of the Partnership's retail sales volume and EBITDA, respectively. Comparing the actual and pro forma results for the fiscal year ended June 30, 1997 to the pro forma year ended June 30, 1996, sales were $664.2 million in fiscal 1997 vs. $595.8 million in fiscal 1996, an increase of 11%. EBITDA for fiscal 1997 was $41.0 million versus $47.0 million for pro forma fiscal 1996, or a 13% decrease. Fiscal 1997 operating expenses of $88.3 million were better than pro forma fiscal 1996 operating expenses of $92.8 million, by $4.5 million (approximately 5%). The primary reason for the sales increase was the higher cost of product which was passed along to the customer during the reporting period. Prices escalated at the winter peak in the mid-continent 151% over the 10 year average. The Partnership was able to manage this extreme price volatility and increase its fuel margin despite inheriting in·her·it v. in·her·it·ed, in·her·it·ing, in·her·its v.tr. 1. a. To receive (property or a title, for example) from an ancestor by legal succession or will. b. a pre-existing supply plan from previous management with little or no hedged inventories for 90% of the retail gallons sold during the period. During the 1996-97 heating season, the majority of the fuel supplies were arranged by Cornerstone's predecessors. (Cornerstone was formed in December of 1996 by combining Empire Energy, Synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. Gas and Coast Gas.) Cornerstone announced several acquisitions completed in the fourth fiscal quarter of 1997. The Partnership purchased Shalldu Ltd. (dba Keene Gas) in Keene, New Hampshire Keene is a city in Cheshire County, New Hampshire, United States. The estimated population was 23,023 in 2005, according to the state Data Center [1] It is the county seat of Cheshire CountyGR6. , Mobile Gas Co. of Jacksonville, Florida “Jacksonville” redirects here. For other uses, see Jacksonville (disambiguation). Jacksonville is the largest city in the state of Florida and the county seat of Duval County. , and St. Augustine Gas Company in St. Augustine, Florida Parameter not given Error... ''Template needs its first parameter as beg[in], mid[dle], or end. Parameter not given Error... . These customer service centers will continue to operate under their respective trade names with existing management. A total of 12,000 customers with annual sales volumes of 10.8 million gallons were added to Cornerstone's family. These operations bring the total customers and annual sales volumes added since Dec. 12, 1996 by acquisition to 14,000 and 12.7 million gallons respectively. "The disappointing warm winter of 1997 has been more than offset with the tremendous reception that Cornerstone has had in the acquisition area," said Keith G. Baxter, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Not only are we seeing a lot of very attractive propane opportunities, but sellers have been excited about receiving Partnership Common Units to enable them to participate in our future growth. Over 70% of the consideration exchanged in our last three acquisitions has been in the form of Cornerstone Units. The Partnership previously announced its fourth quarter minimum quarterly distribution of $.54 per unit to be paid to all unit holders of record on Aug. 5, 1997, payable on Aug. 15, 1997, as well as the registration of an additional 1.0 million of Cornerstone Common Units to be used exclusively for acquisitions. Cornerstone was formed in December of 1996, and is a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . With its headquarters in Watsonville, Calif., Cornerstone is the nation's fifth largest retail propane marketer, serving approximately 360,000 customers in 26 states through its 296 customer service centers. Cornerstone Propane Partners, L.P. and subsidiary condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of operations for the quarters and pro forma years ended June 30, 1997 and 1996, and the consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. at June 30, 1997 and Dec. 31, 1996 are presented below. Figures are in thousands of dollars, except per unit and per gallon data. -0-
Cornerstone Propane Partners, L.P.
Financial Results of Operations
(Unaudited)
Quarter Ended June 30, Pro Forma Fiscal Year
(pro forma) (a) Ended June 30, (a)
1997 1996 1997 1996
Revenues $128,694 $143,313 $664,197 $595,790
Cost of sales 105,933 119,673 534,892 455,984
Gross profit 22,761 23,640 129,305 139,806
Operating, SG&A
expenses 22,055 24,576 88,264 92,771
EBITDA (b) 706 (936) 41,041 47,035
Depreciation and
amortization 4,125 4,331 15,073 14,500
Net income $(8,174) $(9,856) $7,644 $14,570
Weighted average
units outstanding 16,531 16,513 16,531 16,513
Net income (loss) per
unit $(.49) $(.60) $.46 $.88
EBITDA per unit $.04 $(.06) $2.48 $2.85
EBITDA per retail
gallon $.02 $(.03) $.19 $.20
Retail gallons sold 30,573 33,685 213,700 235,000
(a) Pro forma results for the year ended June 30, 1996 reflect
certain adjustments as if the Partnership was formed at the
beginning of the period reported.
(b) EBITDA is defined as earnings before interest, income taxes,
depreciation and amortization. EBITDA should not be considered as
an alternative to net income (as an indicator of operating
performance) or as an alternative to cash flow (as a measure of
liquidity or ability to service debt obligations) and it is not in
accordance with nor superior to generally accepted accounting
principles but provides additional information for evaluating the
Partnership's ability to distribute the Minimum Quarterly
Distribution ("MQD").
Cornerstone Propane Partners, L.P.
Balance Sheets as of June 30, 1997 and Dec. 31, 1996
(Unaudited)
June 30, Dec. 31,
1997 1996
Assets
Cash and cash equivalents $8,406 $24,050
Trade receivables 41,924 76,204
Inventories 17,338 31,328
Prepayments and other current
assets 4,393 2,942
Total current assets 72,061 134,524
Property, plant and equipment, net
of accumulated depreciation 251,943 243,004
Excess of cost over fair value,
net 210,234 193,802
Other assets, net 15,580 11,256
Total assets $549,818 $582,586
Liabilities and Partners' Capital
Current portion of long-term debt $5,735 $674
Trade accounts payable 42,334 82,856
Accrued liabilities 21,498 10,084
Total current liabilities 69,567 93,614
Notes payable 220,000 220,000
Long-term debt 11,532 10,445
Due to related parties 740 2,074
Other non-current liabilities 4,050 22,590
Partners' capital 243,929 233,863
Total liabilities and partners'
capital $549,818 $582,586
CONTACT: Cornerstone Propane Ronald J. Goedde, 408/724-1921 |
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