SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 5, 2004
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BLUE RHINO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-24287 56-1870472
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NORTH CAROLINA 27104
(Address of principal executive offices)
(336) 659-6900
(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 -- Press Release dated March 5, 2004.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 5, 2004, Blue Rhino Corporation (the "Registrant") issued a press
release announcing results for the fiscal second quarter ended January 31, 2004.
A copy of the press release is furnished with this report as Exhibit 99.1, and
is incorporated herein by reference. The press release includes certain non-GAAP
financial measures, as discussed below. A reconciliation of such non-GAAP
financial measures to the comparable GAAP financial measures is included under
the heading "Supplemental Information" in the financial tables accompanying the
press release as part of Exhibit 99.1.
In connection with disclosing earnings and earnings per share on a GAAP basis
for the fiscal second quarter and six months ended January 31, 2004, the
Registrant also discloses earnings and earnings per share for the fiscal second
quarter and six months ended January 31, 2003 on a non-GAAP basis, each as
adjusted to reflect an assumed income tax rate of 39%. The Registrant also
provides earnings and earnings per share for the fiscal second quarter and six
months ended January 31, 2003 on a GAAP basis. On a GAAP basis, the Registrant
had income tax expense calculated at effective income tax rates of 2% and 1% for
the fiscal second quarter and six months ended January 31, 2003, respectively,
compared to income tax expense calculated at an effective income tax rate of 39%
for the fiscal second quarter and six months ended January 31, 2004. Because of
the difference in effective income tax rates for these corresponding periods for
GAAP reporting purposes, the Registrant believes that providing these non-GAAP
financial measures for the fiscal second quarter and six months ended January
31, 2003 will be useful to investors by enabling investors to make more
meaningful comparisons between the Registrant's fiscal periods.
The information in this report is being furnished, not filed, for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to
Item 12 of Form 8-K will not be incorporated by reference into any filing under
the Securities Act of 1933, as amended, unless specifically identified therein
as being incorporated therein by reference.
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SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Blue Rhino Corporation
Date: March 5, 2004 By: /s/ Billy Prim
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Chairman and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 Press Release dated March 5, 2004
4
Exhibit 99.1
Blue Rhino Releases Second-Quarter Results
WINSTON-SALEM, N.C., March 5 /PRNewswire-FirstCall/ -- Blue Rhino
Corporation (Nasdaq: RINO), a leading national provider of branded propane
tank exchange and complementary propane-fueled products, today reported fiscal
second-quarter net income of $111,000, or $0.01 per fully diluted share, on
quarterly revenues of $59.2 million. Revenues and earnings were below the
company's estimates, primarily due to a delay in approximately $6.0 million of
grill shipments. The revenues from the grill shipments are expected to occur
in the third and fourth quarters of fiscal 2004.
The results for the quarter ended January 31, 2004, compare with net
revenues of $58.1 million and pro forma fully taxed net income of $568,000, or
$0.03 per fully diluted share, for the same period a year ago. In the
year-ago quarter, Blue Rhino had negligible income tax expense, compared to
income tax expense calculated at an effective income tax rate of 39% for the
fiscal second quarter ended January 31, 2004. The majority of the income tax
expense recorded in the current year second quarter will be deferred due to
the Company's net operating loss carryforwards. For GAAP reporting purposes,
the Company reported net income of $916,000 or $0.05 per fully diluted share
in last year's second quarter with an effective tax rate of 2%.
The second-quarter net revenues of $59.2 million were comprised of $30.2
million from tank exchange and $29.0 million in product revenues. Tank
transactions increased 4% to 1.9 million compared with the second quarter of
fiscal 2003; this increase is on top of the strong 45% increase from the
second quarter of fiscal 2002 to the second quarter of fiscal 2003. Blue
Rhino added 1,000 net locations during the second quarter of fiscal 2004,
increasing total locations to more than 29,000 as of January 31, 2004.
Selling, general and administrative ("SG&A") expenses increased to $7.5
million for the quarter, from $6.4 million in the same period in the prior
year. The increase in SG&A expenses was primarily due to increased
professional fees.
"We continue to grow tank exchange revenues despite a decline in the mix
of tank upgrade transactions," said Billy D. Prim, chairman and chief
executive officer. "In addition, our performance came against extremely
strong year-ago results, where tank exchange transactions increased 45% from
the prior year."
Six-Month Results
For the six months ended January 31, 2004, net income totaled $1.6
million, or $0.08 per diluted share, compared with pro forma fully taxed net
income of $1.3 million, or $0.07 per fully diluted share, for the first six
months of fiscal 2003. For GAAP reporting purposes, the Company reported net
income of $2.1 million or $0.11 per fully diluted share for the first half of
fiscal 2003 with an effective tax rate of 1%.
For the six months ended January 31, 2004, net revenues decreased 4% to
$108.5 million from $112.9 million for the same period in the previous fiscal
year. Tank exchange revenues increased 3% to $69.0 million and products
segment revenue decreased 14% to $39.5 million from the first half of the
prior year.
In addition to reporting results for the second quarter and six months
ended January 31, 2004 in accordance with generally accepted accounting
principles (GAAP), the Company has included certain non-GAAP financial
measures to enable investors to make meaningful comparisons between fiscal
periods. It also has included a schedule, shown under "Supplemental
Information" in the attached financial tables, reconciling these non-GAAP
financial measures with the comparable GAAP financial results.
Pending Merger Agreement with FCI Trading Corp., Diesel Acquisition LLC
and Ferrell Companies, Inc.
On February 9, 2004, Blue Rhino announced that it had entered into an
Agreement and Plan of Merger dated as of February 8, 2004 with FCI Trading
Corp, Diesel Acquisition LLC and Ferrell Companies, Inc. pursuant to which all
outstanding shares of Blue Rhino's common stock will be acquired in an all-
cash transaction. Terms of the merger agreement provide for the payment of
$17 in cash for each share of the Company's stock outstanding on the date of
the closing of the transaction, with the total payments for the Company's
stock anticipated to be approximately $340 million. Subject to regulatory and
Blue Rhino stockholder approval, this transaction is currently expected to
close in May or June of 2004. The details of this transaction are discussed
in Blue Rhino's Form 8-K filed with the Securities and Exchange Commission on
February 9, 2004 and its preliminary proxy statement filed with the Securities
and Exchange Commission on March 2, 2004.
Original Fiscal Year End Reinstated
On January 31, 2004, the Board of Directors of Blue Rhino rescinded its
prior approval of a change in fiscal year, thereby reinstating a July 31
fiscal year end.
About Blue Rhino
Blue Rhino is a leading national provider of branded propane tank exchange
and complementary propane-fueled products to consumers. Blue Rhino tank
exchange is offered at leading home improvement centers, mass merchants,
hardware, grocery, and convenience stores, with branded tank displays at more
than 29,000 retail locations in 49 states plus Puerto Rico. Tanks are
delivered to retailers through a national network of both independent and
company-owned distributors. The Company's propane-fueled products segment is
focused on appliances such as grills, patio heaters and mosquito eradication
devices, which are sold through many of the same retailers that offer Blue
Rhino's branded cylinder exchange service. The Company's common stock is
quoted on The Nasdaq Stock Market, Inc. under the symbol RINO. For further
information regarding Blue Rhino, visit the Blue Rhino Web site at
www.bluerhino.com.
This press release contains forward-looking statements that relate to Blue
Rhino's plans, objectives and estimates. The terms "should," "believe,"
"plan," "expect," "anticipate," "estimate," "intend" and "project" and similar
words or expressions are intended to identify forward-looking statements.
These statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and speak only as of the date
of this release. Blue Rhino's business is subject to numerous risks and
uncertainties, including: that the merger with affiliates of Ferrell Companies
will not be consummated and related risks associated with any failure of the
merger to be consummated; that its significant retail relationships are
generally nonexclusive and terminable at will; that prices for its products
and services may decline due to competitive or other factors; that it relies
on a limited number of distributors; its ability to manage growth; its ability
to place Blue Rhino tank exchange at additional retail locations; its ability
to successfully defend certain lawsuits, including the lawsuit filed to enjoin
the merger with affiliates of Ferrell Companies; its ability to protect its
intellectual property and strengthen its brand; its ability to obtain an
adequate supply of tanks that comply with applicable guidelines; its ability
to mitigate the effects of high propane commodity prices successfully; its
ability to launch new products and services successfully and the effect of new
safety guidelines on consumer demand for tank exchange. These and other risks
and uncertainties detailed in its most recent Annual Report on Form 10-K and
in other filings with the Securities and Exchange Commission could cause
actual results and experience to differ materially from those expressed or
implied by any of these forward-looking statements. To the extent permitted by
applicable law, Blue Rhino makes no commitment to update any forward-looking
statement or to disclose any facts, events, or circumstances after the date of
this release that may affect the accuracy of any forward-looking statement.
Blue Rhino Corporation
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended January 31, 2004 and 2003
(in thousands, except per share data)
Three Months Ended Six Months Ended
January 31, January 31,
2004 2003 2004 2003
(unaudited) (unaudited)
Net revenues $59,242 $58,054 $108,512 $112,870
Operating costs and expenses:
Cost of sales 48,386 47,102 84,507 88,453
Selling, general and
administrative 7,535 6,399 14,846 14,792
Depreciation and amortization 2,517 2,267 5,132 4,425
Total operating costs and
expenses 58,438 55,768 104,485 107,670
Income from operations 804 2,286 4,027 5,200
Interest and other expenses (income):
Interest expense 605 1,380 1,261 2,636
Loss on investee -- -- -- 455
Other, net 15 (25) 132 (96)
Income before income taxes 184 931 2,634 2,205
Income taxes 73 15 1,028 30
Net income 111 916 1,606 2,175
Preferred dividends -- -- -- 71
Income available to common
stockholders $111 $916 $1,606 $2,104
Earnings per common share:
Basic $0.01 $0.06 $0.09 $0.14
Diluted $0.01 $0.05 $0.08 $0.11
Shares used in per share
calculations:
Basic 17,870 16,114 17,856 15,123
Diluted 19,999 19,587 19,922 18,676
Supplemental Information
Three Months Ended Six Months Ended
January 31, January 31,
2004 2003 2004 2003
(unaudited) (unaudited)
Net income $111 $916 $1,606 $2,175
Income taxes 73 15 1,028 30
Pre-tax earnings 184 931 2,634 2,205
Preferred dividends -- -- -- 71
Pre-tax income available to
common stockholders $184 $931 $2,634 $2,134
Pre-tax net income $184 $931 $2,634 $2,205
Pro forma income taxes at 39% rate 73 363 1,028 860
Pro forma net income
(non-GAAP for 2003) 111 568 1,606 1,345
Preferred dividends -- -- -- 71
Pro forma income available to
common stockholders
(non-GAAP for 2003) $111 $568 $1,606 $1,274
Pro forma fully taxed earnings
per share (non-GAAP for 2003) $0.01 $0.03 $0.08 $0.07
Cylinder Transactions 1,881 1,802 4,323 4,060
BLUE RHINO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of January 31, 2004 and July 31, 2003
(In thousands)
January 31, July 31,
2004 2003
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $2,351 $2,495
Accounts receivable, net 14,351 25,809
Inventories 26,561 20,372
Prepaid expenses and other current assets 7,096 7,055
Deferred income taxes 2,266 2,266
Total current assets 52,625 57,997
Cylinders, net 45,461 50,917
Property, plant and equipment, net 40,038 37,765
Intangibles, net 63,121 62,862
Other assets 1,064 1,264
Total assets $202,309 $210,805
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $17,689 $19,193
Current portion of long-term debt
and capital lease obligations 6,590 6,433
Accrued liabilities 5,405 5,679
Total current liabilities 29,684 31,305
Long-term debt and capital lease
obligations, less current maturities 33,357 42,800
Deferred income taxes 5,042 4,232
Total liabilities 68,083 78,337
Stockholders' equity 134,226 132,468
Total liabilities and
stockholders' equity $202,309 $210,805
SOURCE Blue Rhino Corporation
-0- 03/05/2004
/CONTACT: Mark Castaneda, Chief Financial Officer of Blue Rhino
Corporation, +1-336-659-6755/
/Photo: http://www.newscom.com/cgi-bin/prnh/20011127/CHTU007LOGO-a
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 212-782-2840/
/Web site: http://www.bluerhino.com /
(RINO)
CO: Blue Rhino Corporation
ST: North Carolina
IN: OIL UTI
SU: ERN