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 statements of operations for the
year ended July 31, 2001 gives effect to the acquisition by Blue Rhino of the
stock of QuickShip, as if such transaction had occurred at the beginning of the
period 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 final
allocation of the purchase price was allocated based on an independent valuation
as follows: approximately $7,433 to intangibles, approximately $2,201 to
property, plant and equipment consisting primarily of software and the balance
to other assets and liabilities.
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.
BLUE RHINO CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2001 (in thousands,
except for per share amounts)
Blue Rhino
Blue Rhino QuickShip Pro Forma Corporation
Corporation Inc. Adjustments Pro Forma
-------------------- ----------------- ----------------- -------------------
Net revenues $139,063 $44 $139,107
Operating costs and expenses:
Cost of sales 106,783 7 106,790
Selling, general and administrative 19,794 490 (80) b 20,204
Depreciation and amortization 8,461 46 393 c 8,900
-------------------- ----------------- ----------------- -------------------
Total operating costs and expenses 135,038 543 313 135,894
-------------------- ----------------- ----------------- -------------------
Income from operations 4,025 (499) (313) 3,213
Other expenses (income):
Interest expense 5,134 84 (70) d 5,148
Loss on investee 2,572 - 2,572
Non-recurring items 449 - 449
Other, net (301) (16) (317)
-------------------- ----------------- ----------------- -------------------
Loss before income taxes (3,829) (567) (243) (4,639)
Income Taxes 123 - 123
-------------------- ---------------- ------------------ -------------------
Net loss (3,952) (567) (243) (4,762)
Preferred Dividends 770 - 77 e 847
-------------------- ---------------- ------------------ -------------------
Loss available to common shareholders $ (4,722) $(567) $(320) $(5,609)
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Basic and diluted loss per common share $ (0.41) $(0.47)
==================== ===================
Shares used in per share calculations:
Basic and diluted 11,641 270 e 11,911
BLUE RHINO CORPORATION
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2001
(amounts in thousands)
(a) Historical balances for Blue Rhino for the twelve months ending July
31, 2001, are 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 the corresponding period.
(b) Reflects the reduction of the historical compensation expense based
upon employment contracts in the purchase agreement 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%.