UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Earliest Event Reported: April 20, 2004
Date of Report: May 5, 2004
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
Ferrellgas, L.P.
Ferrellgas Finance Corp.
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(Exact name of registrants as specified in their charters)
Delaware 001-11331 43-1698480
Delaware 333-06693 43-1742520
Delaware 000-50182 43-1698481
Delaware 000-50183 14-1866671
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(States or other Commission file (I.R.S. Employer
jurisdictions numbers Identification Nos.)
of incorporation
or organization)
One Liberty Plaza, Liberty, Missouri 64068
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(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (816) 792-1600
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
EXPLANATORY NOTE
On April 20, 2004, an affiliate of our general partner acquired all of the
outstanding common stock of Blue Rhino Corporation in an all cash merger, after
which it converted Blue Rhino Corporation into a limited liability company, Blue
Rhino LLC. On April 21, 2004, this affiliate contributed Blue Rhino LLC to our
operating partnership, Ferrellgas, L.P., through a series of transactions.
Substantially all of Blue Rhino LLC was thereafter merged with and into our
operating partnership. As a result of these transactions, we have become the
leading national provider of propane tank exchange services as well as a leading
supplier of complementary propane and non-propane products to consumers through
many of the nation's largest retailers. Our branded propane tank exchange
service is offered at more than 30,000 retail locations in 49 states, Puerto
Rico and the U.S. Virgin Islands, including at leading home improvement centers,
mass merchants, hardware, grocery and convenience stores and is marketed under
the trade name "Blue Rhino."
The following is a description and overview of the business and strategy of
Blue Rhino Corporation prior to April 20, 2004. On April 20, 2004, Blue Rhino
Corporation filed with the SEC a Certification and Notice of Termination of
Registration under Section 12(g) of the Securities Exchange Act of 1934 on Form
15 related to its common stock. Also on April 20, 2004, Blue Rhino Corporation
requested that it be delisted from The NASDAQ Stock Market. We intend to carry
on the business of Blue Rhino and implement its strategies in substantially the
same manner as described below.
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BUSINESS OVERVIEW OF BLUE RHINO CORPORATION
Blue Rhino Corporation is the leading national provider of propane tank
exchange as well as a leading supplier of complementary propane and non-propane
products to consumers through many of the nation's largest retailers. Its
branded propane tank exchange service is offered at more than 30,000 retail
locations in 49 states, Puerto Rico and the U.S. Virgin Islands, including
leading home improvement centers, mass merchants, hardware, grocery and
convenience stores. Its retail partners include, but are not limited to, Home
Depot, Lowe's, Wal*Mart, Sears, Kroger, Food Lion, Winn-Dixie, SuperAmerica,
Circle K and ExxonMobil.
Blue Rhino Corporation's tank exchange service provides consumers with a
nationally branded, safe and convenient alternative to traditional tank refill.
Its distributor network is comprised of independent and company-owned
distributorships that invest in the vehicles and other operational
infrastructure necessary to operate the tank exchange businesses. Blue Rhino
Corporation believes that its existing distributor network allows it the
opportunity to service more than 85% of the United States.
Blue Rhino Corporation also designs, imports and markets other consumer
products through many of the same mass retailers and home improvement centers
through which it operates its tank exchange program. These consumer products are
primarily those that use portable propane tanks as their fuel source, such as
propane grills, patio heaters and mosquito elimination devices. Blue Rhino
Corporation also designs, imports and markets to these retailers non-propane
consumer products, such as charcoal grills, fireplace accessories and garden
products. Historically, revenues from sales of consumer products have been
strongest in the fall and winter months, which is counter-seasonal to revenues
generated from Blue Rhino Corporation's tank exchange operations.
PROPANE TANK EXCHANGE AND PROPANE PRODUCTS MARKET
Propane Tank Exchange
The market for consumer propane tank exchange is large and growing. Blue
Rhino Corporation's growth has primarily resulted from converting consumers from
the traditional refilling of empty propane tanks to Blue Rhino Corporation's
convenient and safe alternative of propane tank exchange. Blue Rhino Corporation
currently estimates this market to generate annual sales of $1 billion. In
addition, Blue Rhino Corporation believes it can increase its market opportunity
by selling new propane appliances. Blue Rhino Corporation's products group
focuses on selling an assortment of propane-fueled appliances, such as grills,
patio heaters and mosquito elimination devices. Based on the most recently
published Barbecue Grill Usage and Attitude Study conducted in 2003 on behalf of
the Hearth, Patio and Barbecue Association and based on other data published by
Hearth, Patio and Barbecue Association:
-2-
o approximately 72% of the households in the United States own a grill or
smoker;
o approximately 49 million of the households in the United States, or 63% of
all grill owners, own a propane grill;
o from 2001 to 2003, sales of propane grills exceeded the combined annual
sales of charcoal, natural gas and electric grills;
o more than 8.4 million propane grills were shipped to retailers in 2003;
o the market for grills and other propane appliances exceeds $1.7 billion
annually;
o 61% of propane grills are used year round;
o the average propane grill owner uses 2.1 portable tanks of propane per
year, which results in an estimated 103 million portable propane tank
transactions per year; and
o propane tank exchange, as opposed to the traditional refilling of empty
tanks, represented approximately 32% of all portable tank transactions in
2003, up from 30% in 2001.
BUSINESS STRATEGY
Blue Rhino Corporation's objective is to strengthen its position as the
leading national provider of propane tank exchange by providing the greatest
value to consumers and providing a return to Blue Rhino Corporation's
stockholders. The key elements of Blue Rhino Corporation's strategy to achieve
this objective are:
o converting refill consumers to exchange;
o increasing tank exchange demand; and
o maximizing the utilization of Blue Rhino Corporation's infrastructure.
Converting Traditional Propane Tank Refillers to Propane Tank Exchange
Promote the Blue Rhino Corporation brand and consumer awareness of tank
exchange. Blue Rhino Corporation has created a distinctive Blue Rhino brand name
and logo that Blue Rhino Corporation prominently features on portable propane
tank sleeves and display racks. In addition, Blue Rhino Corporation undertakes
brand marketing and promotional initiatives, including point of purchase
displays, print media and cooperative advertising, and engages in
cross-marketing promotions with other grilling-related products. Blue Rhino
Corporation has also selectively placed targeted broadcast and print media
advertising campaigns that focus on raising consumer awareness of Blue Rhino
Corporation's tank exchange program and are actively involved with consumer,
trade and regulatory associations in an effort to promote the growth of tank
exchange.
Capitalize on recent guidelines requiring overfill prevention valves. Since
April 1, 2002, National Fire Protection Association guidelines have required
that all portable propane tanks refilled be fitted with an overfill prevention
valve. As a result of this safety standard, many of the portable propane tanks
that are presented at refill centers are obsolete, forcing the consumer to
purchase or exchange for a new portable tank to meet the safety standard. Blue
Rhino Corporation believes that this safety standard will positively affect the
demand for tank exchange through Blue Rhino Corporation's fiscal year 2005.
While Blue Rhino Corporation expects the rate of upgrades to slow during fiscal
2004 and fiscal 2005, Blue Rhino Corporation still expects a positive impact on
its business as consumers who previously relied on tank refills turn to tank
exchange to upgrade their obsolete propane tanks.
Develop and selectively expand Blue Rhino Corporation's retailer
relationships. Blue Rhino Corporation has historically targeted the following
four categories of retailers for tank exchange: home centers/hardware stores,
mass merchants, grocery stores and convenience stores. Its relationships with
major retailers such as Home Depot, Lowe's, Wal*Mart, Sears, Kroger, Food Lion,
Winn-Dixie, SuperAmerica, Circle K and ExxonMobil have allowed it to place
portable propane tanks in a large number of convenient, high-traffic locations.
Blue Rhino Corporation continues to seek to develop these relationships and
selectively expand its operations with these retailers and others in the
following ways:
o expand into new locations of Blue Rhino Corporation's existing retailers;
and
o selectively establish relationships with new retailers.
Blue Rhino Corporation works closely with its largest retail accounts to
coordinate the rollout of its tank exchange services in conjunction with the
opening of new locations of these retailers, thereby further penetrating into
locations where Blue Rhino Corporation does not offer its tank exchange
services.
-3-
Blue Rhino Corporation believes there are approximately 225,000 potential
tank exchange locations in its targeted markets, of which Blue Rhino Corporation
currently services more than 30,000 locations. In addition, Blue Rhino
Corporation establishes new retail relationships through direct sales to
retailers and by acquisition of other suppliers of tank exchange services and
continually reviews its existing locations to ensure that these locations meet
particular performance criteria. Non-performing locations are de-installed and
assets from these locations are relocated to more suitable locations.
Increasing Demand for Tank Exchange
Blue Rhino Corporation also sells consumers appliances that use portable
propane tanks as their fuel source, thereby creating a need for the recurring
purchase of propane and subsequently increasing the demand for propane tank
exchange.
Market propane appliances that use portable propane tanks as their fuel
source. Blue Rhino Corporation currently offers propane grills, patio heaters,
portable patio heaters and mosquito elimination devices that it has historically
sold through major retailers such as Home Depot, Lowe's, Wal*Mart, Sam's and
Sears. These products are manufactured by third parties, primarily in Asia. In
addition, Blue Rhino Corporation expects to identify additional
quality-manufactured, propane-fueled products to sell through major retailers
which, in many instances, will be the same retailers that offer the branded Blue
Rhino Corporation tank exchange service.
Patio heaters. Blue Rhino Corporation began selling its Endless Summer(R)
patio heaters in December 1998. Blue Rhino Corporation's patio heaters use the
same portable propane tanks as propane grills, and it believes these products
will increase the counter-seasonal demand for tank exchange.
Mosquito eliminators. Blue Rhino Corporation successfully introduced its
SkeeterVac(R) propane-powered mosquito elimination device in March 2003. This
product is being sold through major retailers. This product category has begun
to gain retail and consumer acceptance and the category has grown significantly
in the past few years. These products use portable propane tanks to create
carbon dioxide that, when combined with other sensory attractants, attracts
blood-seeking insects such as mosquitoes, black flies and "no see-ums." The
devices then trap the insects where they dehydrate and die. If operated
continuously throughout the mosquito season, Blue Rhino Corporation currently
expects that mosquito eliminators will use as many as six propane portable
propane tanks during that time. Blue Rhino Corporation has also developed a high
performance mosquito eliminator that it believes will help expand market
acceptance of this product more quickly and create even greater demand for tank
exchange. Blue Rhino Corporation has developed new models of its SkeeterVac(R)
product that have added features and benefits and has begun selling these
products to retailers for the 2004 spring and summer seasons. See "-Legal
Proceedings."
Maximizing the Utilization of Blue Rhino Corporation's Infrastructure
Blue Rhino Corporation has developed what it believes to be one of the most
advanced and efficient direct-store delivery infrastructures servicing
retailers. Blue Rhino Corporation will continue to invest in distribution and
administrative processes and systems to enhance its ability to handle
significant growth while minimizing incremental costs.
Leverage national distributor network. Blue Rhino Corporation has
established a network of 54 independent and company-owned distributors that it
believes covers more than 85% of the United States. In November 2002, Blue Rhino
Corporation acquired ten of its distributors whose territories represented
approximately 44% of Blue Rhino Corporation's revenues for the year ended July
31, 2002. Blue Rhino Corporation has leveraged, and intends to continue to
leverage, this network by increasing each distributor's market share through
increased consumer demand for tank exchange and the selective addition of new
retail locations. By leveraging its infrastructure in this manner, Blue Rhino
Corporation believes it can minimize its incremental costs as it increases its
market share of the tank exchange market in the United States. Additionally,
Blue Rhino Corporation assists a distributor's ability to service accounts by
providing portable propane tank and tank display leasing, electronic billing
systems through handheld terminals and other information technology and by
arranging for consolidated propane purchasing, store training and retail
merchandising.
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Investment in refilling, refurbishing and recertifying capacity. Blue Rhino
Corporation has historically made significant investments in the specialized
equipment required to increase its refilling, refurbishing and recertifying
capacity, in an effort to satisfy the expected increase in demand of tank
exchange and reduce its costs. Blue Rhino Corporation operates a refilling,
refurbishing and recertifying facility in North Carolina, R4 Technical
Center--North Carolina, LLC, as well as in the states of Washington and Florida.
Blue Rhino Corporation recently began leasing two additional plants and
anticipates leasing another two additional plants which are currently under
construction. One of the two plants currently under construction will replace
Blue Rhino Corporation's current Florida plant. These four plants will be
smaller in scale than the R4 Technical facility and will be located in different
regions of the country. Blue Rhino Corporation began operations in Chicago and
Denver in the spring of 2004 and expects to begin operations in Los Angeles and
Orlando by the fall of 2004. Blue Rhino Corporation expects these facilities to
provide cost efficiencies and quality control for refilling and refurbishing
portable propane tanks. Blue Rhino Corporation has also invested in two mobile
filling and refurbishing facilities that were installed on a semi-permanent
basis at company-owned distributors in Salt Lake City and Kansas City in
February 2004. These mobile facilities became operational in April 2004. Blue
Rhino Corporation expects the aggregate equipment costs for the four new
refurbishing facilities and two mobile refurbishing facilities to total
approximately $4.4 million.
Use proprietary management information systems to enhance efficiency. Blue
Rhino Corporation has developed and intends to continue to enhance its
sophisticated data and technology infrastructure to streamline its operations.
Blue Rhino Corporation furnishes each distributor with handheld devices that use
its developed custom software to serve as the data collection point for every
delivery. This data is seamlessly integrated with Blue Rhino Corporation's
delivery, imaging and financial databases to allow it to provide the retailer
and the distributor with a detailed transactional and inventory history as well
as demand forecasts. This system also allows it to bill and collect payments
from retailers through an electronic gateway, thereby eliminating data entry of
transactions and the handling of paper documents. The reporting system enables
the distributor to better manage inventory and forecast sales volumes, and
reduces errors and administrative costs for both the retailer and the
distributor.
Market products and services that leverage Blue Rhino Corporation's
infrastructure and offset Blue Rhino Corporation's seasonality. Additional
products and services allow Blue Rhino Corporation to leverage its existing
corporate infrastructure and offset the seasonality of its core propane tank
exchange business. These products and services include:
o Barbecue grills and fireplace accessories. Blue Rhino Corporation's
products group currently offers the propane-fueled products described
above, as well as non-propane products like charcoal grills and fireplace
accessories, that are sold through major retailers such as Home Depot,
Lowe's, Wal*Mart and Sears. These products provide leverage with
manufacturers and offset Blue Rhino Corporation's fixed infrastructure
costs.
o Retail shipping services. QuickShip, Inc., another of Blue Rhino
Corporation's wholly owned subsidiaries, offers in-store, retail shipping
services that provide consumers with a convenient, full-service, in-store
postal and parcel shipping depot and retailers with a new revenue source.
Blue Rhino Corporation is exploring strategic growth alternatives with
regard to this business.
COMPETITION
Tank Exchange
The consumer portable propane tank refilling industry is highly fragmented
and competitive. Competition is based primarily upon convenience, quality of
product, service, historical relationships, perceived safety and price. Blue
Rhino Corporation believes that it is the leading national provider of consumer
propane tank exchange, but the 2003 Hearth, Patio and Barbecue Association study
states that 68% of consumers refill their portable propane tanks rather than
exchange them. Accordingly, Blue Rhino Corporation's primary competition
currently comes from the approximately 20,000 bulk refilling stations owned and
operated by propane dealers, as well as rental outlets, recreational vehicle
centers and hardware stores.
Products
The $1.5 billion barbecue grill and patio heater market is extremely
competitive. In the barbecue grill industry, five of Blue Rhino Corporation's
competitors control an estimated 90% of the market share. Competition in the
direct import products business is primarily based on price, quality and
performance of products and product features. Blue Rhino Corporation believes a
few competitors dominate the mosquito elimination market today. Blue Rhino
Corporation entered the mosquito elimination market in fiscal 2003 and believes
it has less than 10% market share.
-5-
REGULATIONS AND STANDARDS
Tank Exchange
The storing and dispensing of propane is covered by guidelines published by
the National Fire Protection Association in Pamphlets 54 and 58. National Fire
Protection Association standards include a requirement that all portable propane
tanks refilled after April 1, 2002 must be fitted with an overfill prevention
valve. Blue Rhino Corporation's distributors are also governed by local laws and
regulations that vary by municipality and state. Typically, a distributor must
obtain permits from a local fire marshal for each propane sales location. Blue
Rhino Corporation is actively involved with the National Propane Gas
Association, an industry association that participates in the drafting of model
industry standards designed to promote uniform state and local legislation to
provide consumers, retailers and distributors with up-to-date safety
regulations. With respect to the transportation of propane by truck, Blue Rhino
Corporation is subject to regulations promulgated under the Federal Motor
Carrier Safety Act. These regulations cover the transportation of hazardous
materials and are administered by the United States Department of
Transportation.
Products
Blue Rhino Corporation's propane grills are tested and designed to
standards determined by the American National Standards Institute. Its patio
heaters are tested and designed to standards determined by the Canadian
Standards Association. Electric grills are listed with Underwriters'
Laboratories and designed to standards determined by Underwriters' Laboratories.
Octenol used in conjunction with the SkeeterVac(R) as a sensory attractant is
registered with the Environmental Protection Agency and is classified as a
pesticide.
PROPRIETARY RIGHTS
Blue Rhino Corporation has invested substantial time, effort and capital in
establishing the Blue Rhino brand and believes that its trademarks are an
important part of its business strategy. The Blue Rhino name and logo, the names
RhinoTUFF(R), Tri-Safe(R), Bison(R) and Bison design(R), Uniflame(R),
UniGrill(R), DuraClay(R), GardenArt(R), America's Choice For Grill Gas(R),
Endless Summer(R), Endless Summer Comfort(R), Grill Gas(R) and Grill Gas
design(R), ShippingSpot(R) and Spot design(R), SkeeterVac(R), Grill
Aficionado(TM), Fine Tune(R), Harmony(TM), Spark Something Fun(TM), Patriot(TM),
It's Your Backyard. Enjoy It More With Skeetervac(TM), Less Biting Insects. More
Backyard Fun(TM), Vac & Tac(TM), and Wavedrawer(TM) are Blue Rhino Corporation's
registered and pending trademarks. In addition, Blue Rhino Corporation has
patents issued for an Overflow Protection Valve Assembly and a Method for
Reconditioning a Propane Gas Tank, which expire in 2018 and 2017, respectively,
as well as various other patents and patent applications pending. The protection
afforded by Blue Rhino Corporation's patents is critical to its ability to
provide tank exchange service cost-effectively and to maintain its competitive
advantage. In particular, Blue Rhino Corporation expects its Overflow Protection
Valve Assembly patent to help enable it to capitalize on the National Fire
Protection Association guidelines that became effective April 1, 2002.
SEASONALITY
Blue Rhino Corporation has experienced and expects to continue to
experience seasonal fluctuations in its revenues and operating income. Blue
Rhino Corporation's revenues and operating income have historically been highest
in the spring and summer, which includes the majority of the grilling season,
and lowest in the fall and winter. Blue Rhino Corporation's tank exchange
operations, which generally achieve higher margins than its other operations,
experience higher revenues and operating income in the spring and summer.
Conversely, Blue Rhino Corporation's products operations experience higher
revenues and operating income in the fall and winter. Sustained periods of poor
weather, particularly in the spring and summer, can negatively impact Blue Rhino
Corporation's revenues. Accordingly, Blue Rhino Corporation's results of
operations in any quarter will not necessarily be indicative of the results that
it may achieve for a full fiscal year or any future quarter.
-6-
LEGAL PROCEEDINGS
Class Action Lawsuit Challenging the Merger of a subsidiary of FCI Trading and
Blue Rhino Corporation
On February 12, 2004, a purported stockholder class action lawsuit was
filed in Forsyth County, North Carolina Superior Court against the Board of
Directors of Blue Rhino Corporation, entitled Richard Marcoux, et al. v. Billy
D. Prim, et al., Case No. 04CVS920. The complaint generally alleges that the
directors of Blue Rhino Corporation breached their fiduciary duties to the
stockholders of Blue Rhino Corporation in connection with the approval of the
merger between Blue Rhino Corporation and a subsidiary of the general partner of
Ferrellgas Partners, L.P. and sought to enjoin and/or void the agreement and
plan of merger among other forms of relief. The case has been assigned to the
North Carolina Business Court. A hearing in the matter was held on April 15,
2004. On April 16, 2004 the Court issued an order and opinion denying the
plaintiff's motion for a preliminary injunction as well as Blue Rhino
Corporation's motion to dismiss. Blue Rhino Corporation intends to vigorously
defend this lawsuit and believes that the plaintiffs' claims are without merit.
Patent Lawsuit and Related Proceedings
On August 8, 2003, American Biophysics Corporation filed a patent
infringement suit against Blue Rhino Corporation in the U.S. District Court for
the District of Rhode Island. American Biophysics Corporation alleges that the
SkeeterVac(R) mosquito elimination product infringes U.S. Patent Nos. 6,145,243
and 6,286,249. The complaint seeks treble damages and attorneys' fees. Also on
August 8, 2003, American Biophysics Corporation filed a complaint against Blue
Rhino Corporation with the United States International Trade Commission pursuant
to Section 337 of the Tariff Act of 1930, as amended. That complaint requests
that the International Trade Commission institute an investigation regarding
alleged violations of Section 337 based upon the importation into the United
States by Blue Rhino Corporation and/or the offer for sale and sale within the
United States after importation of SkeeterVac(R) products that allegedly
infringe U.S. Patent Nos. 6,145,243 and 6,286,249. American Biophysics
Corporation also requested that the International Trade Commission issue a
permanent exclusion order pursuant to Section 337, which would exclude further
entry into the United States of the allegedly infringing products, and a
permanent cease and desist order under Section 337, which would prohibit the
importation into the United States, the sale for importation and/or sale within
the United States after importation, of allegedly infringing products. The
International Trade Commission has instituted an investigation, and a hearing
before an Administrative Law Judge is currently scheduled for May 26 - 28, 2004.
On April 9, 2004, the Administrative Law Judge granted Blue Rhino's motion for
partial termination with respect to U.S. Patent No. 6,286,249 based on a consent
order. The Administrative Law Judge has not yet issued a claim construction of
the claims of the remaining patent at issue in the proceeding, and thus has not
made any rulings on the patent infringement or patent invalidity issues. On
August 13, 2003, Blue Rhino Corporation's subsidiary, Blue Rhino Consumer
Products, LLC, filed suit against American Biophysics Corporation in the U.S.
District Court for the Middle District of North Carolina seeking a declaration
that Blue Rhino Consumer Product's SkeeterVac(R) product does not infringe
American Biophysics Corporation's patents. On August 14, 2003, Blue Rhino
Consumer Products and another one of Blue Rhino Corporation's subsidiaries, CPD
Associates, Inc., filed a lawsuit in the Superior Court of North Carolina,
Forsyth County, against American Biophysics Corporation asserting unfair and
deceptive trade practices, unfair competition under North Carolina common law,
tortious interference with business relations and prospective economic
advantage, violations of Section 43(a) of the Lanham Act and violation of the
Anticybersquatting Consumer Protection Act. The complaint seeks, among other
relief against American Biophysics Corporation, a permanent injunction, treble
damages, punitive damages, attorneys' fees and other costs and expenses. This
case has been removed to the U.S. District Court for the Middle District of
North Carolina. Blue Rhino Corporation continues to believe that it and its
affiliates have meritorious defenses to American Biophysics Corporation's
allegations and meritorious claims against American Biophysics Corporation, and
intends to vigorously pursue those defenses and claims in those actions.
-7-
Securities Class Actions and Shareholder Derivative Actions
On May 19, 2003, George Schober filed a shareholder securities class action
lawsuit in the United States District Court for the Central District of
California, naming Blue Rhino Corporation, along with four of Blue Rhino
Corporation's officers and directors, as defendants. Six tag-along securities
class actions arising out of the same alleged facts and circumstances as the
original action were subsequently filed in the same court. The cases have been
consolidated into a single action and Andy Lee, Charles Anderberg and Steven
Lendeman have been designated as lead plaintiffs. Plaintiffs filed a
consolidated complaint on December 3, 2003. The plaintiffs seek to represent a
class of investors who purchased Blue Rhino Corporation's publicly traded
securities between August 2002 and February 2003. The plaintiffs allege
violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule
10b-5 promulgated thereunder. In particular, the plaintiffs have alleged that
Blue Rhino Corporation and the individual defendants violated federal securities
laws by, among other things, improperly failing to consolidate distributors Ark
Holding Company LLC and Platinum Propane, L.L.C. for financial reporting
purposes prior to the date of their being acquired by Blue Rhino Corporation,
making materially false and misleading statements and/or failing to disclose
material facts related to the financial performance and prospects of Blue Rhino
Corporation and distributors Ark Holding Company and Platinum Propane, and
making materially false and misleading statements and/or failing to disclose
material facts relating to Blue Rhino Corporation's acquisition of Ark Holding
Company and Platinum Propane, including the repayment of specific debt
obligations guaranteed by some of the individual defendants. On May 22, 2003,
Richard Marcoux filed a shareholder derivative action in the Superior Court of
California, Los Angeles County, naming all of Blue Rhino Corporation's directors
and particular officers of Blue Rhino Corporation as individual defendants and
Blue Rhino Corporation as a nominal defendant. On June 19, 2003, Randy Gish
filed a substantially similar derivative action in the same court. Both the
Marcoux and Gish actions were removed to the U.S. District Court for the Central
District of California. The Marcoux case was subsequently remanded to Los
Angeles Superior Court, but has been stayed pending resolution of the federal
actions. The derivative actions arise out of substantially similar facts and
circumstances as the securities class actions, and allege violations of the
California Corporations Code, breach of fiduciary duty, abuse of control, gross
mismanagement, waste of corporate assets and unjust enrichment. The defendants,
including Blue Rhino Corporation, have filed motions to dismiss both the
securities class action lawsuit and the Gish derivative lawsuit. On April 12,
2004, the judge in the class action lawsuit granted the defendants' motion to
dismiss, but granted plaintiffs' leave to amend with respect to specified
claims. On April 14, 2004, the judge in the Gish derivative lawsuit granted
defendants' motion to dismiss without prejudice for lack of standing and
plaintiff's failure to verify the complaint. Mr. Gish has subsequently filed an
amended complaint. Blue Rhino Corporation believes that all of the foregoing
securities class actions and derivative actions are without merit and intends to
vigorously defend itself against these actions.
Other Litigation
Blue Rhino Corporation is also a party to other litigation which it
considers routine and incidental to its business. Blue Rhino Corporation does
not expect the results of any of these other actions to have a material adverse
effect on its business, results of operation or financial condition.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FERRELLGAS PARTNERS, L.P.
By Ferrellgas, Inc., its general partner
Date: May 5, 2004 By /s/ Kevin T. Kelly
-------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer
FERRELLGAS PARTNERS FINANCE CORP.
Date: May 5, 2004 By /s/ Kevin T. Kelly
-------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer
FERRELLGAS, L.P.
By Ferrellgas, Inc., its general Partner
Date: May 5, 2004 By /s/ Kevin T. Kelly
-------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer
FERRELLGAS FINANCE CORP.
Date: May 5, 2004 By /s/ Kevin T. Kelly
-------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer