one of the largest distributors of propane, today reported operating results for the fiscal third quarter ended April 30.

Revenues rose 19% to $732.4 million while gross profit declined to $189.2 million reflecting the impact of sharply higher commodity prices resulting in lower margins and customer demand. Despite a 21% increase in the wholesale cost of propane, third-quarter propane sales volumes still grew 2%.

Operating expense declined more than 2% to $103.8 million and general and administrative expense declined by nearly 30%, excluding a $10.0 million litigation reserve recorded during the quarter. Equipment lease expense, as expected, increased slightly to $3.7 million.

Common unitholder's interest in net earnings, after absorbing a $10.5 million loss on extinguishment of debt and the $10.0 million litigation reserve, was $3.1 million or $0.04 per unit. Excluding the non-recurring charge for the extinguishment of debt and the litigation reserve, earnings per unit would have been $0.32 in this fiscal year's third quarter. Adjusted EBITDA was $73.9 million compared with $88.2 million achieved the year before.

President and Chief Executive Officer Steve Wambold commented, "Third-quarter results reflected similar dynamics from the first half of the fiscal year, notably sharply higher wholesale propane prices that drove customer conservation."

Wambold pointed out, "On a positive note, we were successful in flexing our operating expenses, further evidencing management's focus on driving shareholder value. In addition, our Blue Rhino brand turned in a solid quarter, even though inclement weather adversely affected early-season tank exchange sales volumes. More important, Blue Rhino is very well positioned for the all-important grilling season, strengthened by the addition of more than 2,800 Walgreens and Safeway locations this year. As the industry leader, Blue Rhino is fast approaching 50,000 sales locations."

Wambold concluded, "During the third quarter, our financial team continued to strengthen our balance sheet through the issuance of more than 5 million common units, which the partnership used to reduce long-term borrowings of more than $116.0 million."