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EXHIBIT 99.3
UNAUDITED PRO FORMA FINANCIAL INFORMATION
(amounts in thousands)
INTRODUCTION TO UNAUDITED 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") and QuickShip, Inc. ("QuickShip").
The following unaudited consolidated pro forma balance sheet as of July 31, 2000
has been prepared as if the acquisition of the common stock of QuickShip had
occurred on that date. The following unaudited consolidated pro forma statements
of operations for the year ended July 31, 2000, and the three months ended
October 31, 2000, gives effect to the acquisition by Blue Rhino of the stock of
QuickShip, as if such transaction had occurred at the beginning of the periods
presented.
On October 26, 2000, Blue Rhino acquired all the outstanding common stock of
QuickShip, which will be accounted for using the purchase method of accounting.
The aggregate purchase price, including certain acquisition costs, was
approximately $9,803, of which approximately $972 was paid in cash and deferred
payments, $85 in a five-year warrant to purchase 100,000 shares of Blue Rhino
common stock, $1,946 in liabilities assumed, and $6,800 paid in the form of Blue
Rhino Series A Convertible Preferred Stock at $6.00 per share. The preliminary
purchase price allocation, based in large part on an independent valuation, was
as follows: $7,238 to property and equipment consisting principally of computer
software, $2,396 to goodwill and other intangibles, and the balance to other
assets and liabilities. The final allocation of the purchase price is
contingent upon a final review and assessment of the acquired net assets;
however, that allocation is not expected to differ materially from the
preliminary allocation.
The Unaudited Pro Forma Financial Information is based on the historical
financial statements of Blue Rhino and QuickShip 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 acquisition had occurred as of the
date indicated or what results will be for any future periods. The Unaudited 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
July 31, 2000
(in thousands)
<TABLE>
<CAPTION>
Blue Rhino
Blue Rhino QuickShip Pro Forma Corporation
Corporation Inc. Adjustments Pro Forma
----------- --------- ----------- -----------
a a
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,079 $ 3 $ -- $ 1,082
Accounts receivable, net 19,254 16 -- 19,270
Inventories 5,415 -- -- 5,415
Prepaid expenses and other current assets 3,746 182 -- 3,928
--------- --------- --------- ---------
Total current assets 29,494 201 -- 29,695
Cylinders held under operating lease agreements, net 27,277 -- -- 27,277
Property, plant and equipment, net 20,332 1,074 6,164b 27,570
Intangibles, net 27,347 -- 2,396b 29,743
Investment in joint venture 3,027 -- -- 3,027
Other assets 698 44 -- 742
--------- --------- --------- ---------
Total assets $ 108,175 $ 1,319 $ 8,560 $ 118,054
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 16,565 $ 473 $ -- $ 17,038
Current portion of debt and capital lease obligations 5,786 3,620 (3,616)d 5,790
Accrued liabilities 1,476 45 1,908b 3,429
--------- --------- --------- ---------
Total current liabilities 23,827 4,138 (1,708) 26,257
Long-term debt and capital lease obligations, less current maturities 42,396 39 525e 42,960
--------- --------- --------- ---------
Total liabilities 66,223 4,177 (1,183) 69,217
Stockholders' equity (deficit) 41,952 (2,858) 9,743c 48,837
--------- --------- --------- ---------
Total liabilities and stockholders' equity $ 108,175 $ 1,319 $ 8,560 $ 118,054
========= ========= ========= =========
</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 July 31, 2000 was
derived from the audited financial statements filed in Form 10-K. The
historical balances for QuickShip are derived from the monthly internal
financial statements for July 31, 2000.
(b) Reflects the pro-forma allocation of the purchase price for the
acquisition as if the acquisition had occurred on July 31, 2000. The
acquisition was accounted for using the purchase method of accounting.
The pro forma allocation of the purchase price as of July 31, 2000 is
as follows:
<TABLE>
<S> <C>
Issuance of Blue Rhino Series A Redeemable
Preferred Stock, warrants, and cash of $525 $7,410
1,908
Liabilities assumed ------
Purchase price $9,318
------
Allocation of purchase price:
Property and equipment, principally
computer software $6,164
Goodwill and other intangible assets 2,396
Current assets 201
Other accrued liabilities 557
------
$9,318
======
</TABLE>
(c) The adjustment to stockholders equity consists of:
<TABLE>
<S> <C>
Issuance of Blue Rhino preferred stock
and warrant $6,885
Less - Elimination of deficit at July 31, 2000 2,858
------
$9,743
======
</TABLE>
(d) Reflects the repayment of debt to bank and 25% shareholder as required
per the purchase agreement.
(e) Reflects $525 of proceeds from Blue Rhino's revolving credit facility
used to finance the acquisition.
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BLUE RHINO CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2000
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Blue Rhino
Blue Rhino QuickShip Pro Forma Corporation
Corporation Inc. Adjustments Pro Forma
----------- --------- ----------- -----------
a a
<S> <C> <C> <C> <C>
Net revenues $ 78,733 $ 299 -- $ 79,032
Operating costs and expenses:
Cost of sales 57,994 37 -- 58,031
Selling, general and administrative 13,469 2,150 (402)b 15,217
Depreciation and amortization 4,717 211 1,573c 6,501
--------- --------- --------- ---------
Total operating costs and expenses 76,180 2,398 1,171 79,749
--------- --------- --------- ---------
Income (loss) from operations 2,553 (2,099) (1,171) (717)
Other expenses (income):
Interest expense 2,188 327 (273)d 2,242
Other, net 16 34 -- 50
--------- --------- --------- ---------
Income (loss) before other non-operating expenses 349 (2,460) (898) (3,009)
Other non-operating expenses:
Loss in investee 403 -- -- 403
--------- --------- --------- ---------
Loss before income taxes (54) (2,460) (898) (3,412)
Income taxes 32 -- -- 32
--------- --------- --------- ---------
Loss before extraordinary item (86) (2,460) (898) (3,444)
Extraordinary loss, net 486 -- -- 486
--------- --------- --------- ---------
Net loss (572) (2,460) (898) (3,930)
Preferred dividends -- -- 340e 340
--------- --------- --------- ---------
Loss available to common stockholders $ (572) $ (2,460) $ (1,238) $ (4,270)
========= ========= ========= =========
Basic and diluted loss per common share $ (0.07) $ (0.43)
========= =========
Shares used in per share calculations:
Basic and Diluted 8,736 1,133e 9,869
</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 THREE MONTHS ENDED OCTOBER 31, 2000
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Blue Rhino
Blue Rhino QuickShip Pro Forma Corporation
Corporation Inc. Adjustments Pro Forma
----------- --------- ----------- -----------
a a
<S> <C> <C> <C> <C>
Net revenues $ 33,821 $ 44 -- $ 33,865
Operating costs and expenses:
Cost of sales 25,757 7 25,764
Selling, general and administrative 4,810 490 (80)b 5,220
Depreciation and amortization 1,637 46 393c 2,076
--------- ------- --------- ---------
Total operating costs and expenses 32,204 543 313 33,060
--------- ------- --------- ---------
Income (loss) from operations 1,617 (499) (313) 805
Other expenses (income):
Interest expense 1,209 84 (70)d 1,223
Other, net 20 (16) -- 4
--------- ------- --------- ---------
Income (loss) before other non-operating expenses 388 (567) (243) (422)
Other non-operating expenses:
Loss in investee 570 -- -- 570
--------- ------- --------- ---------
Loss before income taxes (182) (567) (243) (992)
Income taxes 2 -- -- 2
--------- ------- --------- ---------
Net loss (184) (567) (243) (994)
Preferred dividends 128 -- 77e 205
--------- ------- --------- ---------
Loss available to common stockholders $ (312) $ (567) $ (320) $ (1,199)
========= ======= ========= =========
Basic and diluted loss per common share $ (0.03) $ (0.10)
========= =========
Shares used in per share calculations:
Basic and diluted 10,293 1,133e 11,426
</TABLE>
The accompanying notes are an integral part of this unaudited pro forma
financial statement.
<PAGE> 6
BLUE RHINO CORPORATION
NOTES TO UNAUDITED PRO FORMA INCOME STATEMENTS
FOR THE TWELVE MONTHS ENDING JULY 31, 2000
AND
FOR THE THREE MONTHS ENDING OCTOBER 31, 2000
(amounts in thousands)
(a) Historical balances for Blue Rhino for the twelve months ending July
31, 2000, are derived from the audited financial statements filed in
Form 10-K. The historical balances for Blue Rhino for the three
months ending October 31, 2000, are derived from the unaudited
financial statements as filed in Form 10-Q. The historical balances for
QuickShip are derived from the monthly internal financial statements
for the corresponding periods.
(b) Reflects the reduction of the historical compensation expense based
upon employment contracts in the purchase agreements and employees
terminated as a result of the acquisition.
(c) Reflects the incremental change in amortization expense arising from
purchase accounting, increase in capitalized software, and intangible
assets in connection with the acquisition. Amortization of excess
purchase price, capitalized software and other intangible assets is
based upon useful lives ranging from 2 to 5 years.
(d) Reflects interest expense (at an assumed rate of 7.36%) associated with
the borrowings under Blue Rhino's revolving credit agreement, net of
interest savings due to debt repayment to bank per the purchase
agreement.
(e) Reflects the issuance of 1,133 shares of Blue Rhino Series A Preferred
Stock to the Sellers. The stock is convertible into Blue Rhino Common
Stock and accrues dividends at the annual rate of 6%.
