This was released on Wednesday
NATIONAL PROPANE EXPECTS SIGNIFICANT DECLINE IN THIRD QUARTER 1998 Operating Results
CEDAR RAPIDS, Iowa--(BUSINESS WIRE)--Oct. 21, 1998--
Board of Directors Reduces Quarterly Distribution
To $0.2625 Per Common Unit
National Propane Partners, L.P. (NYSE:NPL) announced today that,
based on preliminary indications, it expects to report earnings before
interest, taxes, depreciation and amortization (EBITDA) in the third
quarter of 1998 of approximately $0.5 million, a decrease of $1.2
million from the $1.7 million of EBITDA in the 1997 period, and
expects to report a net loss of approximately $4.7 million for the
1998 third quarter, a decrease of $1.3 million from the $3.4 million
net loss of the 1997 period. While net losses during the non-heating
season are normal due to the seasonal nature of the propane industry,
the Partnership noted that its financial results continue to be
negatively impacted by warmer than usual weather conditions and
customer losses.
The Partnership also announced today that the Board of Directors
of its managing general partner declared a quarterly distribution of
$0.2625 per common unit, and related distribution on the 4% general
partners' interest, for a total distribution of $1.8 million. The
distribution is payable on November 13, 1998 to holders of record of
the common units and the 4% general partner interest as of the close
of business on November 6, 1998. The quarterly distribution represents
a reduction from the $0.525 per common unit paid in previous quarters.
Under the terms of the partnership agreement, each common unit will
accrue an arrearage of $0.2625 per common unit. Distributions have not
been made on the Partnership's subordinated units since the
distribution made with respect to the 1997 fourth quarter and future
distributions on subordinated units cannot be made until any common
unit arrearages are paid in full.
After a careful evaluation of the Partnership's recent financial
and operating results, the Board of Directors concluded today that a
reduced distribution was necessary to maintain financial flexibility
in future quarters. In addition, noting the current state of the
financial and credit markets, and the amortization of $13.0 million of
indebtedness scheduled to begin next summer, the Board of Directors
believes that reducing distributions is a prudent step until the
Partnership can further evaluate its financial performance during the
peak heating season.
During the Partnership's 1998 third quarter, Triarc Companies,
Inc. prepaid $10.0 million principal amount (plus accrued interest) of
its $40.7 million note owed to the Partnership, the maximum prepayment
allowed under certain recent amendments to the Partnership's debt
agreements. A portion of the prepayments was used to fund quarterly
distributions to the holders of common units with respect to the
Partnership's second fiscal quarter, and the balance has been used for
working capital purposes (including the repayment of the Partnership's
working capital facility). The Partnership remains in full compliance
with the covenants under its debt agreements.
National Propane Partners, L.P. has operations concentrated in
the Midwest, Northeast, Southeast and West regions of the United
States and serves over 200,000 active customers through its 155 full
service centers and 101 satellite locations.
Notes to Follow
NOTES TO PRESS RELEASE
1. The statements in this press release that are not historical facts,
including most importantly, information concerning possible or assumed
future results of operations of the Partnership and statements
preceded by, followed by, or that include the words "may", "believes",
"expects", "anticipates" or the negation thereof, or similar
expressions, constitute "forward-looking statements." All statements
which address operating performance, events or developments that are
expected or anticipated to occur in the future, including statements
relating to volume and revenue growth, or statements expressing
general optimism about future operating results, are forward-looking
statements. Such forward-looking statements involve risks,
uncertainties and other factors which may cause actual results,
performance or achievements of the Partnership to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. For those
statements, National Propane claims the protection of the safe harbor
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Such factors include, but are not
limited to, the following: changes in wholesale propane prices;
regional weather conditions; general economic conditions where the
Partnership operates; competition from other energy sources and within
the propane industry; success of operating initiatives; development
and operating costs; advertising and promotional efforts; the
existence or absence of adverse publicity; change in business strategy
or development plans; quality of management; availability, terms and
deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs;
the success of the Partnership in identifying systems and programs
that are not yet Year 2000 compliant; unexpected costs associated with
Year 2000 compliance or the business risk associated with Year 2000
non-compliance by customers and/or suppliers; changes in, or failure
to comply with, government regulations; the costs, uncertainties and
other effects of legal and administrative proceedings and other risks
and uncertainties detailed in National Propane's Securities and
Exchange Commission filings. National Propane will not undertake and
specifically declines any obligation to publicly release the result of
any revisions to any forward-looking statements to reflect events or
circumstances after the date of such statements to reflect events or
circumstances after anticipated or unanticipated events.
2. Cash distributions on National Propane's common units are not
guaranteed, will depend on future Partnership operating performance
and will be affected by, among other things, the funding of reserves,
operating and capital expenditures and requirements under the
Partnership's debt agreements. |
