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Exhibit 99.3
PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
INTRODUCTION TO PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information is based on the
financial statements of Blue Rhino Corporation and its subsidiaries ("Blue
Rhino"), Uniflame, Inc. and its subsidiary ("Uniflame") and the combined
financial statements of International Propane Products, LLC ("IPP") and Bison
Valve, LLC ("Bison"). IPP and Bison are related through common ownership and
control, and have accordingly been presented on a combined basis for both the
historical financial statements, included elsewhere in this filing, and for the
following pro forma statements.
The following unaudited consolidated pro forma balance sheet as of January 31,
2000 has been prepared as if the acquisition of the assets of Uniflame and
certain assets of the combined entities of IPP and Bison had occurred on that
date. The following unaudited consolidated pro forma statement of operations for
the year ended July 31, 1999, and the six months ended January 31, 2000, gives
effect to the acquisition by Blue Rhino of the assets of Uniflame and the assets
of IPP and Bison, as if such transactions had occurred at the beginning of the
periods presented.
On September 21, 1999, Blue Rhino acquired certain assets of Bison for a
purchase price of approximately $2.2 million. On March 31, 2000, Blue Rhino
acquired certain assets and assumed certain liabilities of IPP for a purchase
price of approximately $4.1 million. The allocation of the aggregate purchase
price of the acquisitions has been allocated to the tangible and intangible
assets and liabilities acquired based upon their respective estimated fair
values. The allocation of the aggregate purchase price reflected in the Pro
Forma Financial Information is preliminary. The final allocation of the purchase
price is contingent upon a final review of the other intangible assets and an
assessment of the acquired net assets; however, that allocation is not expected
to differ materially from the preliminary allocation. The acquisitions will be
accounted for using the purchase method of accounting.
On March 31, 2000, Blue Rhino acquired substantially all the assets of Uniflame,
which will be accounted for using the purchase method of accounting. The
allocation of the aggregate purchase price of the acquisition (approximately
$13.5 million) has been allocated to the tangible and intangible assets and
liabilities acquired based upon their respective fair values. The allocation of
the aggregate purchase price reflected in the Pro Forma Financial Information is
preliminary. The final allocation of the purchase price is contingent upon a
final balance sheet audit as of March 31, 2000, the review for other intangible
assets and an assessment of the acquired net assets; however, that allocation is
not expected to differ materially from the preliminary allocation.
The Pro Forma Financial Information is based on the historical financial
statements of Blue Rhino and Uniflame and the combined financial statements of
IPP and Bison and the assumptions and adjustments described in the accompanying
notes. The unaudited pro forma statements of operations do not purport to
represent what Blue Rhino's results of operations actually would have been if
the acquisitions had occurred as of the dates indicated or what results will be
for any future periods. The Pro Forma Financial Information is based upon
assumptions that Blue Rhino believes are reasonable and should be read in
conjunction with the Financial Statements and the related notes thereto included
elsewhere in this filing.
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BLUE RHINO CORPORATION
UNAUDITED PRO FORMA BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
January 31, December 31, December 31,
2000 1999 1999 Combined Blue Rhino
Blue Rhino Uniflame, Bison Valve Pro Forma Corporation
Corporation Inc. & IPP Adjustments Pro Forma
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS a a a
Current assets:
Cash and cash equivalents $ 284 $ -- $ 218 $ (218) f $ 284
Accounts receivable, net 10,851 1,763 6 (6) f 12,614
Inventories 436 1,957 150 (100) c 2,443
Prepaid expenses and other current assets 2,261 85 18 (275) f 2,089
----------- --------- ----------- ----------- -----------
Total current assets 13,832 3,805 392 (599) 17,430
Cylinders held under operating lease agreements, net 19,621 -- -- -- 19,621
Property, plant and equipment, net 20,974 312 57 -- 21,343
Intangibles, net 11,986 -- -- 15,880 b 27,866
Other assets 1,015 50 -- -- 1,065
----------- --------- ----------- ----------- -----------
Total assets $67,428 $4,167 $ 449 $15,281 $87,325
=========== ========= =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,391 $ 743 $ 464 $ (464) f $ 7,134
Current portion of debt and capital lease obligations 1,307 11 -- -- 1,318
Current portion of deferred purchase price -- -- -- 775 d 775
Amounts payable to Blue Rhino Corporation -- -- 275 (275) f --
Notes payable - member -- -- 1,907 (1,907) f --
Accrued liabilities 1,097 194 97 1,135 b 2,523
----------- --------- ----------- ----------- -----------
Total current liabilities 8,795 948 2,743 (736) 11,750
Notes payable to bank 16,240 -- -- 6,986 e 23,226
Long-term debt, less current maturities 6,693 11 -- -- 6,704
Deferred purchase price, less current portion -- -- -- 1,605 d 1,605
Capital lease obligations, less current maturities 353 -- -- -- 353
Other liabilities -- -- -- 310 b 310
----------- --------- ----------- ----------- -----------
Total liabilities 32,081 959 2,743 8,165 43,948
Stockholders' equity 35,347 3,208 (2,294) 7,116 c 43,377
----------- --------- ----------- ----------- -----------
Total liabilities and stockholders' equity $67,428 $4,167 $ 449 $15,281 $87,325
=========== ========= =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of
this unaudited pro forma balance sheet.
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BLUE RHINO CORPORATION.
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(amounts in thousands)
(a) The historical balance sheet for Blue Rhino as of January 31, 2000 was
derived from the unaudited financial statements filed in Form 10Q. The
historical balance sheet for Uniflame and the combined entities of IPP and
Bison are derived from the December 31, 1999 audited balance sheets,
respectively, which are included elsewhere in this filing.
(b) Reflects the preliminary allocation of the purchase price for the
acquisitions. The acquisitions will be accounted for using the purchase
method of accounting. Blue Rhino has not yet determined the final
allocation of the purchase price and, accordingly, the amounts shown below
may differ from the amounts ultimately determined; however, that allocation
is not expected to differ materially from the preliminary allocation.
The preliminary pro forma allocation of the purchase price is as follows:
Combined
IPP and
UniFlame Bison Total
-------- -------- -------
Purchase price for net assets acquired $ 13,550 $ 6,360 $19,910
Less - net assets acquired 3,208 2,267 5,475
-------- -------- -------
Excess purchase price over historical
amounts to be allocated $ 10,342 $ 4,093 $14,435
======== ======== =======
Allocation of excess of purchase based
on preliminary estimated values:
Goodwill and other intangible assets $ 11,182 $ 4,698 $15,880
Accrued liabilities (530) (605) (1,135)
Other liabilities (310) -- (310)
-------- -------- -------
$ 10,342 $ 4,093 $14,435
======== ======== =======
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(c) The adjustment to stockholders equity consists of:
Combined
IPP and
UniFlame Bison Total
-------- -------- -------
Issuance of Blue Rhino common stock $ 6,693 $ 1,437 $ 8,130
Less - Elimination of equity or deficit at
December 31, 1999 (3,208) 2,294 (914)
Less - Elimination of intercompany profit
included in inventory -- (100) (100)
------- ------- -------
$ 3,485 $ 3,631 $ 7,116
======= ======= =======
(d) Reflects the deferred purchase price of $2,250 and $130 for Uniflame and
IPP, respectively, both payable over three years.
(e) Reflects $6,986 of proceeds from Blue Rhino's revolving credit facility
used to finance the acquisitions.
(f) Reflects the elimination of assets and liabilities not acquired and
intercompany amounts.
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BLUE RHINO CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 1999
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Combined Blue Rhino
Blue Rhino Uniflame, Bison Valve Pro Forma Corporation
Corporation Inc. & IPP Adjustments Pro Forma
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
a a a
Revenues:
Net sales $ 51,704 $ 18,172 $ 812 $ (742) e $ 69,946
Other income 2,116 754 -- -- 2,870
----------- --------- ----------- ----------- -----------
Total revenues 53,820 18,926 812 (742) 72,816
Operating costs and expenses:
Cost of sales 38,661 14,979 966 (883) e 53,723
Selling, general and administrative 8,539 2,606 1,606 (682) b 12,069
Depreciation and amortization 2,872 188 15 913 c 3,988
----------- --------- ----------- ----------- -----------
Total operating costs and expenses 50,072 17,773 2,587 (652) 69,780
----------- --------- ----------- ----------- -----------
Income from operations 3,748 1,153 (1,775) (90) 3,036
Other expenses (income):
Interest expense 837 197 71 576 d 1,681
Loss on investee 311 -- -- (311) g --
Follow-on offering 551 -- -- -- 551
Other, net (48) (18) 19 -- (47)
----------- --------- ----------- ----------- -----------
Income (loss) before provision for income taxes 2,097 974 (1,865) (355) 851
Provision for income taxes 30 -- -- -- 30
----------- --------- ----------- ----------- -----------
Net income (loss) $ 2,067 $ 974 $(1,865) $ (355) $ 821
=========== ========= =========== =========== ===========
Basic and diluted earnings per common share $ 0.27 $ 0.10
Shares used in per share calculations:
Basic 7,645 562 h 8,207
Diluted 7,787 610 h 8,397
</TABLE>
The accompanying notes are an integral part of this
unaudited pro forma financial statement.
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BLUE RHINO CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Combined Blue Rhino
Blue Rhino Uniflame, Bison Valve Pro Forma Corporation
Corporation Inc. & IPP Adjustments Pro Forma
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
a a a
SALES
Net sales $27,865 $13,195 $ 2,452 $ (2,444) e $41,068
Other income 1,557 125 -- 1,682
----------- --------- ----------- ----------- -----------
Total revenues 29,422 13,320 2,452 (2,444) 42,750
Operating costs and expenses:
Cost of sales 21,030 10,302 1,623 (1,618) e 31,337
Selling, general and administrative 5,046 1,672 802 (373) b 7,147
Depreciation and amortization 1,893 96 10 457 c 2,456
----------- --------- ----------- ----------- -----------
Total operating costs and expenses 27,969 12,070 2,435 (1,534) 40,940
----------- --------- ----------- ----------- -----------
Income from operations 1,453 1,250 17 (910) 1,810
Other expenses (income):
Interest expense 752 51 61 288 d 1,152
Other, net 9 8 (1,822) 1,833 f 28
----------- --------- ----------- ----------- -----------
Income before provision for income taxes 692 1,191 1,778 (3,031) 630
Provision for income taxes -- -- -- -- --
----------- --------- ----------- ----------- -----------
Net income $ 692 $ 1,191 $ 1,778 $ (3,031) $ 630
=========== ========= =========== =========== ===========
Basic and diluted earnings per common share $ 0.08 $ 0.07
Shares used in per share calculations:
Basic 8,445 562 h 9,007
Diluted 8,510 571 h 9,081
</TABLE>
The accompanying notes are an integral part of this
unaudited pro forma financial statement.
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BLUE RHINO CORPORATION
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(amounts in thousands)
(a) Historical balances for Blue Rhino for the 12 months ended July 31, 1999,
are derived from the audited financial statements as filed in Form 10-K for
the period. The historical balances for Blue Rhino for the 6 months ended
January 31, 2000, are derived from the unaudited financial statements as
filed in Form 10-Q for the period. The historical balances for Uniflame and
for the combined IPP and Bison are derived from the unaudited monthly
internal records of the respective companies for the corresponding periods.
(b) Reflects the reduction of the historical compensation expense based upon
employment contracts in each of the purchase agreements.
(c) Reflects the incremental change in amortization expense due to purchase
accounting and acquired intangible assets in connection with the
acquisition. Amortization of non-compete, excess purchase price and other
intangible assets is based upon useful lives ranging from 3 to 22 years.
(d) Reflects interest expense (at an assumed rate of 8.25%) associated with the
borrowings under Blue Rhino's revolving credit agreement.
(e) Eliminate sales and cost of sales between Bison Valve, IPP and Blue Rhino.
The purchase agreement for IPP includes royalty payments to be paid on
sales once a certain level is obtained. For the periods presented, these
levels were not obtained, therefore no additional royalty payments have
been included in the pro forma financial statements.
(f) Eliminate the gain on the sale of certain Bison assets to Blue Rhino in
September 1999, which is reflected in the historical amounts of the
combined financial statements of IPP and Bison.
(g) Reflects the elimination of loss on the investment in Bison Valve.
(h) Reflects the issuance of Blue Rhino Corporation's common stock to the
Sellers.
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