AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 2002
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BLUE RHINO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 56-1870472
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NORTH CAROLINA 27104
(336) 659-6900
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
BILLY D. PRIM
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
BLUE RHINO CORPORATION
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NORTH CAROLINA 27104
(336) 659-6900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPY TO:
PETER A. ZORN, ESQ.
WOMBLE CARLYLE SANDRIDGE & RICE, PLLC
ONE WEST FOURTH STREET
WINSTON-SALEM, NC 27101
(336) 721-3634
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such time or
times after the effective date of this Registration Statement as the selling
stockholders shall determine.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration number of the earlier effective registration
statement for the same offering. [ ] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT OFFERING AGGREGATE AMOUNT OF
REGISTERED TO BE REGISTERED (2) PRICE PER UNIT (1) OFFERING PRICE (1) REGISTRATION FEE
- ---------------------- -------------------- ------------------ ------------------ ----------------
Common Stock ......... 1,500,000 shares $8.625 $12,937,500 $1,190.25
(1) Estimated solely for purposes of calculating the registration fee, and based
on the average of the high and low prices for the Registrant's common stock as
reported on the Nasdaq National Market on April 18, 2002 in accordance with Rule
457 under the Securities Act of 1933.
(2) All of the shares of common stock offered hereby are being sold for the
accounts of selling stockholders. See "Selling Stockholders."
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a),
MAY DETERMINE.
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1,500,000 Shares
[Blue Rhino Logo]
Common Stock
This prospectus is part of a registration statement that covers 1,500,000
outstanding shares of our common stock that may be offered and sold from time to
time by certain of our stockholders. We will not receive any proceeds from the
sale of the shares of common stock. We will bear the costs relating to the
registration of the common shares, which we estimate will be approximately
$21,190.25.
The selling stockholders may offer their shares through public or private
transactions, on or off the Nasdaq National Market at prevailing market prices
or at privately negotiated prices. They may make sales directly to purchasers or
through brokers, agents, dealers or underwriters. The selling stockholders will
bear all commissions and other compensation paid to brokers in connection with
the sale of their shares.
The Common Stock is traded on the Nasdaq National Market under the symbol
"RINO." On April 22, 2002, the last reported sale price for the Common Stock on
the Nasdaq National Market was $8.90 per share.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated April __, 2002
You should rely only on the information contained in this prospectus. We
have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate as of the date on the
front cover of this prospectus only, regardless of the time of delivery of this
prospectus or any sale of our common stock. Our business, financial condition,
results of operations and prospects may have changed since that date.
As used in this prospectus, the terms "we," "us," "Blue Rhino" and "the
Company" refer to Blue Rhino Corporation and its subsidiaries, CPD Associates,
Inc., QuickShip, Inc., Rhino Services, L.L.C., USA Leasing, L.L.C. and Uniflame
Corporation, except where it is made clear that any such term means only the
parent company. The Blue Rhino name and logo, the names RhinoTUFF(R),
Tri-Safe(R), Bison(R), Uniflame(R), UniGrill(R), DuraClay(R), GardenArt(R),
America's Choice For Grill Gas(R), Endless Summer(TM), Endless Summer
Comfort(TM), Grill Gas & Design,(TM) Harmony(TM) and ShippingSpot(TM) are our
registered and pending trademarks. This prospectus may also include trademarks
of other companies. Our principal offices are located at 104 Cambridge Plaza
Drive, Winston-Salem, North Carolina 27104 and our telephone number is (336)
659-6900.
THE COMPANY
We believe we are the leading national provider of gas grill cylinder
exchange and a leading provider of other branded products and services to
retailers, with Blue Rhino cylinder displays at more than 26,000 retail
locations in 46 states and Puerto Rico. Cylinder exchange provides consumers
with a convenient means to exchange empty grill cylinders for clean, safe,
precision-filled cylinders. We offer our cylinder exchange at many major home
improvement centers, mass merchants, and hardware, grocery and convenience
stores including Home Depot, Lowe's, Wal*Mart, Sears, Kmart, Kroger, Food Lion,
Winn-Dixie, SuperAmerica, Circle K and ExxonMobil.
We partner with retailers and independent distributors to provide consumers
with a nationally-branded alternative to traditional grill cylinder refill. We
dedicate our efforts and capital to brand development, value-added marketing,
customer service, cylinders, displays, account growth, distributor network
development and management information systems. Our 43 independent distributors
make the investments in the vehicles and other equipment necessary to operate
cylinder exchange businesses. To facilitate improved service by our distributors
in the Southeastern United States, we have invested in an automated propane
bottling and cylinder refurbishing plant in North Carolina.
We have strategically expanded our business to diversify our revenue stream,
balance our seasonality and establish more products that use our base grill
cylinder exchange service. By acquisition, we have expanded our offerings to
include an array of products including barbecue grills, patio heaters, a
proprietary overfill prevention device, fireplace accessories and garden
products that are sold primarily through home centers, mass merchants and hearth
stores throughout the United States, as well as an in-store retail shipping
service currently offered through major grocery retailers.
COMPANY BACKGROUND AND CONTACT INFORMATION
We were incorporated in North Carolina on March 24, 1994 and reincorporated
in Delaware on December 16, 1994. We have five wholly owned subsidiaries: Rhino
Services, L.L.C., a Delaware limited liability company; CPD Associates, Inc., a
North Carolina corporation; USA Leasing, L.L.C., a Delaware limited liability
company; Uniflame Corporation, a Delaware corporation; and QuickShip, Inc., a
Delaware corporation. Rhino Services offers centralized purchasing services to
our distributors; CPD Associates holds our intangible assets; USA Leasing offers
cylinder leasing service to our distributors; Uniflame sells various products
including patio heaters, barbecue grills, garden art and fireplace accessories;
and QuickShip offers retail shipping services.
Our principal executive offices are at 104 Cambridge Plaza Drive,
Winston-Salem, North Carolina 27104, and our telephone number is (336) 659-6900.
THE OFFERING
Securities offered.........1,500,000 shares of common stock that may be offered
and sold from time to time by certain of our
stockholders.
Offering price.............All or part of the shares offered hereby may be sold
from time to time in amounts and on terms to be
determined by the selling stockholders at the time of
the sale.
Risk factors...............See "Risk Factors" for a discussion of factors you
should carefully consider before deciding to acquire
the shares of common stock offered under this
prospectus.
Nasdaq symbol..............RINO
2
RISK FACTORS
You should carefully consider the risks described below before making the
decision to acquire the shares of common stock offered hereunder. The risks and
uncertainties described below are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial
may also significantly impair our business, financial condition and results of
operations.
If any of the following risks actually occurs, our business, financial
condition and results of future operations could be materially and adversely
affected. In such case, the trading price of our common stock could decline, and
you could lose all or part of your investment.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by us described below, or described under "Business -
Additional Factors that may Affect our Business or Future Results" in our Annual
Report on Form 10-K/A for the year ended July 31, 2001 or in subsequent filings
made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by reference
in this prospectus.
OUR REVENUES ARE CONCENTRATED WITH A LIMITED NUMBER OF RETAILERS UNDER
NONEXCLUSIVE ARRANGEMENTS THAT THEY MAY TERMINATE AT WILL. IF ONE OR MORE OF
THESE RETAILERS WERE TO MATERIALLY REDUCE OR TERMINATE ITS BUSINESS WITH US, OUR
REVENUES MAY SUFFER.
None of our significant retail accounts are contractually bound to offer
Blue Rhino cylinder exchange or Uniflame products. Therefore, retailers can
discontinue Blue Rhino cylinder exchange or sales of Uniflame product at any
time and offer a competitor's cylinder exchange or products or none at all.
Continued relations with a retailer depend upon various factors, including
customer service, consumer demand, competition and cost. In addition, certain of
our retailers have multiple vendor policies and may seek to offer a competitor's
cylinder exchange program or products competitive with Uniflame's products at
new or existing locations. If any significant retailer materially reduces,
terminates or is unwilling to expand its relationship with us, our revenues may
suffer.
IF OUR DISTRIBUTORS DO NOT PERFORM TO OUR RETAILERS' EXPECTATIONS, OR IF OUR
DISTRIBUTORS AND MANAGEMENT TEAM IS UNABLE TO MANAGE OUR GROWTH SUCCESSFULLY,
ONE OR MORE OF OUR RETAILERS MAY TERMINATE ITS RELATIONSHIP, CAUSING OUR
REVENUES TO SUFFER.
We rely exclusively on independent distributors to deliver our products to
retailers. Our success will depend on our ability to maintain existing
distributor relationships and on the distributors' ability to continue to
operate viable businesses generally and to set up and adequately service an
expanding base of retail accounts specifically. We exercise only limited
influence over the resources that our independent distributors devote to
cylinder exchange. We could suffer a loss of consumer or retailer goodwill if
our distributors do not adhere to our quality control and service guidelines or
fail to ensure an adequate and timely supply of cylinders at retail locations.
The poor performance of a single distributor to a national retailer could
jeopardize our entire relationship with that retailer and cause our revenues to
suffer.
The number of retail locations offering Blue Rhino cylinder exchange and our
corresponding sales have grown significantly over the past several years along
with the creation of our independent distributor network. For us to continue to
grow, our distributors must be able to adequately service an increasing number
of retail accounts. Certain distributors have experienced service problems in
the past, particularly during peak demand periods such as holiday weekends. Our
retailers impose demanding service requirements on us, and our retail
relationships will be jeopardized if our distributors fail to meet these
requirements. Our executive officers, who have only limited prior experience
managing a public company, must implement and improve operational and financial
systems and train and manage our employee base in order to manage our expanding
retailer and distributor relationships. If we fail to manage our growth
effectively, our business may suffer.
IF OUR SUPPLIERS OF CYLINDERS AND VALVES DO NOT PERFORM TO OUR EXPECTATIONS, WE
MAY NOT BE ABLE TO SERVICE OUR RETAIL ACCOUNTS AND OUR CYLINDER EXCHANGE
BUSINESS MAY SUFFER.
To adequately service our retail accounts, our distributors need a
sufficient supply of cylinders and valves. There are only two major cylinder
suppliers and only six major valve suppliers in the U.S. market. The
implementation of National Fire Protection Association guidelines requiring the
introduction of valves with overfill prevention devices and growth in propane
grill sales and use could increase demand for cylinders and valves. If the
distributors were unable to obtain sufficient quantities of cylinders or valves,
delays or reductions in cylinder availability could occur, which may cause our
business to suffer.
3
IF OUR MANAGEMENT INFORMATION SYSTEMS DO NOT PERFORM TO OUR EXPECTATIONS, WE MAY
BE REQUIRED TO EXPEND SIGNIFICANT ADDITIONAL RESOURCES OR TO INVEST ADDITIONAL
CAPITAL TO MANAGE OUR BUSINESS EFFECTIVELY.
We depend on our management information systems (MIS) to process orders,
manage inventory and accounts receivable collections, maintain distributor and
customer information, maintain cost-efficient operations and assist distributors
in delivering products on a timely basis. In addition, our staff of five MIS
professionals relies heavily on the support of Information Management System
Services (IMSS), a division of R. J. Reynolds Tobacco Company. Any disruption in
the operation of our MIS, the loss of employees knowledgeable about such
systems, the termination of our relationship with IMSS or our failure to
continue to effectively modify such systems as our business expands could
require us to expend significant additional resources or to invest additional
capital to continue to manage our business effectively.
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WE MAY LOSE ASSETS OR
REQUIRE COSTLY LITIGATION TO PROTECT OUR RIGHTS.
We consider our trademarks, particularly the Blue Rhino logo and name, and
the design of our product packaging to be valuable to our business and the
establishment of our national branded cylinder exchange program. We rely on a
combination of copyright and trademark laws and other arrangements to protect
our proprietary rights and could incur substantial expense to enforce our rights
under copyright or trademark laws. The requirement to change any of our
trademarks, service marks or trade name could entail significant expense, result
in the loss of any goodwill associated with that trademark, service mark or
trade name, and impact our ability to apply for copyrights and additional
trademarks in the future.
ADVERSE CHANGES IN THE PREVAILING POLITICAL OR ECONOMIC CLIMATES IN CHINA COULD
REDUCE THE SUPPLY OF PRODUCTS AVAILABLE TO US FOR SALE OR REQUIRE US TO INCUR
ADDITIONAL EXPENSE TO IMPORT PRODUCTS FOR SALE.
We rely on the products segment of our business, conducted through Uniflame
Corporation, a wholly owned subsidiary, for a significant percentage of our net
sales. Uniflame imports a significant percentage of its products from companies
based in China. As a result, Uniflame may be adversely affected by changes in
the prevailing political or economic climates in China. In addition, if China
were to lose its "most favored nation" trade status with the United States,
there would likely be an increase in duty for Uniflame's products, which may
reduce gross margins for our products segment and cause our results of
operations to suffer.
PROPANE SUPPLIES AND COSTS ARE UNPREDICTABLE AND PROPANE PRICE INCREASES COULD
IMPACT OUR PROFIT MARGINS.
Our distributors purchase propane from natural gas providers and oil
refineries that produce propane as a by-product of the refining process. Our
automated propane bottling and cylinder refurbishing plant in North Carolina,
which is operated by our jointly-owned R4 Technical Center, also purchases
propane. The supply and price of propane fluctuates depending upon underlying
natural gas and oil prices and the ability of suppliers to deliver propane. A
substantial increase in propane prices could lead to decreased profit margins
for us or our distributors and could impact our distributors' ability or desire
to service our retail accounts.
PROPANE IS A VOLATILE PRODUCT AND WE FACE POTENTIAL PRODUCT LIABILITY EXPOSURE.
Propane is a gas that, if exposed to flame or high pressure, may ignite or
explode, potentially causing significant property damage and bodily harm. In the
past, fires and other incidents have occurred at refurbishing and refilling
facilities operated by us and our distributors that resulted in bodily injuries
and substantial property damage. Because of the volatility of propane, accidents
may occur during the refurbishing, refilling, transport, storage, exchange, use
or disposal of cylinders and other Blue Rhino products. Because the Blue Rhino
name and logo are prominently displayed on all cylinders, cylinder displays and
other Blue Rhino products, such as patio heaters, we could be subjected to
damage claims. In addition, we could be subject to additional product liability
for barbecue grills sold by Uniflame Corporation and for the failure of an OPD
valve, regardless of whether such valve was fitted on a Blue Rhino cylinder.
We could also be subject to claims related to manufacturing defects or
workplace accidents at our automated propane bottling and cylinder refurbishing
plant operated by the R4 Technical Center. If an accident happens, we could
incur substantial expense, receive adverse publicity and suffer a loss of sales.
A cylinder-related accident involving personal injury could result in product
liability actions against us or our distributors and could affect the
willingness of retailers to offer or consumers to use cylinder exchange. Adverse
publicity relating to any such incident could also affect our reputation and the
perceived benefits of cylinder exchange. Furthermore, we cannot be sure that
insurance will provide sufficient coverage in any particular case or that we or
our distributors will be able to continue to obtain insurance coverage at
acceptable levels and cost.
4
In August 2000, 4,700 Blue Rhino propane cylinders filled at the R4
Technical Center's automated propane bottling and cylinder refurbishing plant
were recalled after the cylinder valves were found to have missing or damaged
internal seals. We instructed our distributors to inventory the cylinders at
their plants and retail locations and to remove any cylinders with the recalled
valves. However, we cannot be sure that all the recalled valves have been
removed from circulation. We have not received any reports of injuries, but the
potential defects could cause propane leaks, which can pose the risk of fire,
explosion and burn injuries, and could lead to one or more of the adverse
consequences described above.
FAILURE TO COMPLY WITH THE REGULATIONS GOVERNING PROPANE MAY SUBJECT US TO
FINES, PENALTIES AND/OR INJUNCTIONS THAT MAY MATERIALLY AND ADVERSELY AFFECT OUR
CYLINDER EXCHANGE BUSINESS.
Federal, state and local authorities regulate the transportation, handling,
storage and sale of propane in order to protect consumers, employees, property
and the environment. The handling of propane in most regions of the United
States is governed by guidelines published by the National Fire Protection
Association in Pamphlets 54 and 58. These guidelines currently require that all
cylinders produced or recertified after September 30, 1998, and all grill
cylinders refilled after April 1, 2002 must be fitted with an overfill
prevention device valve. Failure of our distributors to comply with these
regulations could subject us to potential governmental action for violation of
such regulations, which could result in fines, penalties and/or injunctions.
POTENTIAL RETAIL PARTNERS MAY NOT BE ABLE TO OBTAIN NECESSARY PERMITS OR MAY BE
SUBSTANTIALLY DELAYED IN OBTAINING NECESSARY PERMITS, WHICH MAY MATERIALLY AND
ADVERSELY AFFECT OUR ABILITY TO GROW OUR CYLINDER EXCHANGE RETAIL LOCATIONS.
Local ordinances, which vary from jurisdiction to jurisdiction, generally
require retailers to obtain permits to store and sell propane cylinders. These
ordinances influence retailers' acceptance of cylinder exchange, distribution
methods, cylinder packaging and storage. The ability and time required to obtain
permits varies by jurisdiction. Delays in obtaining permits have from time to
time significantly delayed the installation of new retail locations. Some
jurisdictions have refused to issue the necessary permits, which has prevented
some installations. Certain jurisdictions may also impose additional
restrictions on our ability to market and our distributors' ability to transport
cylinders or otherwise maintain our cylinder exchange program. Revisions to
these regulations, or violations of current or future regulations by us or by
our distributors, may reduce the number of retail locations for our cylinder
exchange business.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements relate
to future events or our future financial performance and involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These
risks, uncertainties and other factors include, among other things, those listed
under "Risk Factors" and elsewhere in this prospectus. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue," or the negative of these terms or other
comparable terminology. These statements are only predictions. Actual events or
results may differ materially. In evaluating these statements, you should
carefully consider the various risks, uncertainties and other factors, including
specifically those outlined under "Risk Factors." Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and periodic reports, proxy statements and other
information with the United States Securities and Exchange Commission (the
"SEC"). You may inspect these documents without charge at the principal office
of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549, and you
may obtain copies of these documents from the SEC's Public Reference Room at its
principal office. Information regarding the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330. The SEC maintains a web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of the
SEC's web site is http://www.sec.gov. Our Internet address is
http://www.bluerhino.com. You may also review information about our company at
the offices of Nasdaq, located at 1735 K Street, N.W., Washington, D.C. 20006.
5
We have filed a registration statement on Form S-3 with the SEC relating to
the offering of common stock pursuant to this prospectus. The registration
statement contains information not found in this prospectus. For further
information, you should refer to the registration statement, which you can
inspect and copy in the manner and at the sources described above. Any
statements we make in this prospectus, or that we incorporate by reference in
this prospectus, concerning the provisions of any document filed as an exhibit
to the registration statement or otherwise filed with the SEC are not
necessarily complete and, in each instance, reference is made to the copy of
such document so filed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents that we have previously filed with the SEC or documents
that we will file with the SEC in the future. The information incorporated by
reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below into this
prospectus, and any future filings made by us with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until the
termination of this offering. The documents we incorporate by reference are:
o Our Annual Report on Form 10-K for the fiscal year ended July
31, 2001, as amended on Form 10-K/A filed on April 4, 2002;
o Our Quarterly Reports on Form 10-Q for the quarters ended
October 31, 2001 and January 31, 2002, in each case as amended
on Form 10-Q/A filed on April 5, 2002;
o Our Current Report on Form 8-K/A filed on November 14, 2001
and our Current Report on Form 8-K filed on April 23, 2002;
and
o The description of our common stock contained in our
registration statement on Form 8-A under the Exchange Act as
filed with the SEC on May 19, 1998.
You may request a copy of any of these filings, at no cost to you, by
writing or telephoning us at the following address and telephone number: Mark
Castaneda, Chief Financial Officer, Blue Rhino Corporation, 104 Cambridge Plaza
Drive, Winston-Salem, North Carolina 27104; telephone number (336) 659-6900.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common stock
by the selling stockholders.
SELLING STOCKHOLDERS
The 1,500,000 shares offered hereby were acquired by the initial holders of
the shares from us in a private placement of common stock on April 19, 2002.
The initial holders, or their pledgees, donees, distributees, transferees or
other successors in interest (including, for example, partners in a partnership
receiving a distribution of the shares), who are collectively referred to in
this prospectus as selling stockholders, may from time to time offer and sell
any and all of the shares of common stock offered under this prospectus.
The following table sets forth, for each selling stockholder, the amount of
Blue Rhino common stock beneficially owned, the number of shares of common stock
offered hereby and the number of shares of common stock to be held and the
percentage of outstanding common stock to be beneficially owned after completion
of this offering (assuming the sale of all shares offered under this
prospectus). None of the selling stockholders has had any position, office or
other relationship material to Blue Rhino with Blue Rhino or any of its
affiliates within the past three years.
6
SHARES TO BE PERCENTAGE
SHARES SHARES BENEFICIALLY OWNED BENEFICIAL OWNERSHIP
BENEFICIALLY OFFERED AFTER COMPLETION AFTER COMPLETION
NAME OWNED (1) HEREBY OF THIS OFFERING (1) OF THIS OFFERING (2)
- ---- ------------ --------- -------------------- --------------------
Gruber Family Foundation (3) 20,000 11,000 9,000 *
Jon D. & Linda W. Gruber (3) 49,000 25,900 23,100 *
Jon D. Gruber TTEE FBO Lindsay D. Gruber (3) 10,000 7,800 2,200 *
Jon D. Gruber TTEE FBO Jonathan W. Gruber (3) 10,000 8,800 1,200 *
Lagunitas Partners, LP (4) 276,000 135,900 140,100 1.28%
Zurich Institutional Benchmark Master Fund, Ltd. (4) 35,000 7,000 28,000 *
Hamilton College (4) 36,000 20,100 15,900 *
Gruber & McBaine International (4) 97,000 50,300 46,700 *
J. Patterson McBaine (5) 37,000 13,200 23,800 *
Columbus Capital Partners, L.P. (6) 420,000 420,000 0 0
Columbus Capital Offshore Fund, Ltd. (6) 205,000 205,000 0 0
Colonial Fund, LLC (7) 50,000 50,000 0 0
Gulfstream Partners, L.P. (8) 75,000 75,000 0 0
Hermes Partners, L.P. (9) 80,000 80,000 0 0
Ultra Hermes Fund, Ltd. (9) 120,000 120,000 0 0
Marlin Fund, L.P. (10) 77,500 77,500 0 0
Marlin Fund II, L.P. (10) 10,000 10,000 0 0
Marlin Fund Offshore, Limited (10) 162,500 162,500 0 0
Straus-GEPT, L.P. (11) 38,500 4,500 34,000 *
Straus Partners, L.P. (11) 114,500 14,000 100,500 *
Straus-Spelman , L.P. (11) 15,000 1,500 13,500 *
- -----------------------
*less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
SEC. In computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of common stock subject
to options, warrants or convertible securities held by that person that
are currently convertible or exercisable or convertible or exercisable
within 60 days of the date hereof are deemed outstanding. Except as
indicated in the footnotes to this table and as provided pursuant to
applicable community property laws, each stockholder named in the table
has sole voting and investment power with respect to the shares set forth
opposite the stockholder's name.
(2) Based on 10,917,772 shares outstanding as of April 19, 2002.
(3) The power to vote and dispose of these shares is held by Jon D. Gruber.
Mr. Gruber may be deemed to beneficially own 107,400 shares that he has
the sole right to vote and dispose of and 538,972 shares that he has the
shared right to vote and dispose of in his capacity as Manager of Gruber
& McBaine Capital Management, LLC.
(4) The power to vote and dispose of these shares is held by Jon D. Gruber
and J. Patterson McBaine, Managers of Gruber & McBaine Capital
Management, LLC.
(5) Mr. McBaine may also be deemed to beneficially own 538,972 shares that he
has the shared right to vote and dispose of in his capacity as Manager
of Gruber & McBaine Capital Management, LLC.
(6) The power to vote and dispose of these shares is held by Matthew D.
Ockner, Managing Member of Columbus Capital Management, LLC, the General
Partner of Columbus Capital Partners, L.P. and the Investment Manager of
Columbus Capital Offshore Fund, Ltd.
(7) The power to vote and dispose of these shares is held by Cary G. Brody,
President.
(8) The power to vote and dispose of these shares is held by Piers M.
MacDonald, Managing General Partner.
7
(9) The power to vote and dispose of these shares is held by Hermes Advisors,
Investment Advisor.
(10) The power to vote and dispose of these shares is held by Michael W.
Masters, Managing Member of the General Partner of Marlin Fund, L.P. and
Marlin Fund II, L.P. and of the Investment Manager of Marlin Fund
Offshore, Limited.
(11) The power to vote and dispose of these shares is held by Melville Straus,
General Partner.
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares on any stock exchange,
market, or trading facility on which the shares are traded, in private
transactions, or otherwise, at market prices prevailing at the time of sale, at
prices related to the prevailing market prices or at negotiated prices. In
addition, the selling stockholders may sell some or all of their shares through:
o a block trade in which a broker-dealer may resell a portion of
the block, as principal, in order to facilitate the
transaction;
o purchases by a broker-dealer, as principal, and resale by the
broker-dealer for its account;
o ordinary brokerage transactions and transactions in which a
broker solicits purchasers;
o an underwritten public offering;
o any other method permitted pursuant to applicable law; or
o a combination of any such methods of sale.
When selling the shares, the selling stockholders may enter into
hedging transactions. For example, the selling stockholders may:
o enter into transactions involving short sales of the shares by
broker-dealers;
o sell shares short themselves and redeliver such shares to
close out their short positions;
o enter into option or other types of transactions that require
the selling stockholder to deliver shares to a broker-dealer,
who will then resell or transfer the shares under this
prospectus; or
o loan or pledge the shares to a broker-dealer, who may sell the
loaned shares or, in the event of default, sell the pledged
shares.
The selling stockholders may negotiate and pay broker-dealers'
commissions, discounts or concessions for their services. Broker-dealers engaged
by the selling stockholders may allow other broker-dealers to participate in
resales. However, the selling stockholders and any broker-dealers involved in
the sale or resale of the shares may qualify as "underwriters" within the
meaning of Section 2(a)(11) of the Securities Act of 1933. In addition, the
broker-dealers' commissions, discounts or concessions may qualify as
underwriters' compensation under the Securities Act. The Company has agreed to
indemnify each selling stockholder against certain liabilities, including
liabilities arising under the Securities Act. If the selling stockholders
qualify as "underwriters," they will be subject to the prospectus delivery
requirements of Section 5(b)(2) of the Securities Act. Each broker-dealer
engaged by a selling stockholder (or by a broker-dealer engaged by a selling
stockholder) must be registered or licensed in each state in which such
broker-dealer conducts offers and sales of shares of the selling stockholders.
In addition to selling their shares under this prospectus, the selling
stockholders may:
o agree to indemnify any broker-dealer or agent against certain
liabilities related to the selling of the shares, including
liabilities arising under the Securities Act;
8
o transfer their shares in other ways not involving market
makers or established trading markets, including directly by
gift, distribution or other transfer; or
o sell their shares under Rule 144 of the Securities Act rather
than under this prospectus, if the transaction meets the
requirements of Rule 144.
As used herein, the term "selling stockholder" includes donees,
pledgees, transferees or other successors-in-interest selling shares received
after the date of this prospectus from a named selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer.
Upon the Company being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer or underwriter
for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
prospectus supplement will be filed, if required, pursuant to Rule 424(b) under
the Securities Act, disclosing: (1) the name of each such selling stockholder
and of the participating broker-dealer(s) or underwriter(s), (2) the number of
shares involved, (3) the price at which such shares were or will be sold, (4)
the commissions paid or to be paid or discounts or concessions allowed to such
broker-dealer(s) or underwriter(s), where applicable, (5) that, as applicable,
such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus and (6)
other facts material to the transaction. In addition, upon the Company being
notified by a selling stockholder that a donee, pledgee, transferee or other
successor-in-interest intends to sell more than 500 shares, a prospectus
supplement will be filed, if required.
LEGAL MATTERS
The validity of the common stock being offered hereby has been passed upon
for us by Womble Carlyle Sandridge & Rice, PLLC, Winston-Salem, North Carolina.
As of the date of this prospectus, certain members of Womble Carlyle Sandridge &
Rice, PLLC owned an aggregate of approximately 1,000 shares of our common stock.
EXPERTS
The consolidated financial statements of Blue Rhino Corporation appearing in
Blue Rhino Corporation's Form 10-K/A for the year ended July 31, 2001, have been
audited by Ernst & Young, LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of the common stock being registered hereby. All amounts are
estimates except the SEC registration fee.
Amount to Be Paid by
Registrant
--------------------
SEC registration fee................................ $ 1,190.25
Legal fees and expenses............................. $7,500
Accounting fees and expenses........................ $7,500
Printing and engraving expenses..................... $5,000
Miscellaneous....................................... --
----------
Total............................................... $21,190.25
==========
The Registrant intends to pay all expenses of registration, issuance and
distribution.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL")
authorizes indemnification of directors, officers, employees and agents of the
Registrant; allows the advancement of costs of defending against litigation; and
permits companies incorporated in Delaware to purchase insurance on behalf of
directors, officers, employees and agents against liabilities whether or not in
the circumstances such companies would have the power to indemnify against such
liabilities under the provisions of the statute. The Registrant's Second Amended
and Restated Certificate of Incorporation, as amended ("Charter"), provides that
the Registrant will indemnify its directors and officers to the fullest extent
permitted by law.
Under the provisions of the Charter, any director or officer who, in
his or her capacity as such, is made or threatened to be made a party to any
suit or proceeding shall be indemnified if the Board of Directors determines
such director or officer acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Registrant or, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The Registrant will
not however indemnify any director or officer where such director or officer:
(a) breaches his or her duty of loyalty to the Registrant or its stockholders;
(b) fails to act in good faith or engages in intentional misconduct or knowing
violation of law; (c) authorizes payment of an unlawful dividend or stock
repurchase or redemption; or (d) obtains an improper personal benefit. While
liability for monetary damages has been eliminated, equitable remedies such as
injunctive relief or rescission remain available. In addition, a director is not
relieved of his or her responsibilities under any other law, including the
federal securities laws.
Indemnification under the Charter and the Registrant's Amended and
Restated Bylaws ("By-laws") includes payment by the Registrant of expenses in
defending an action, suit or proceeding in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by the
indemnified party to repay such advance if it is ultimately determined that such
person is not entitled to indemnification under the Charter, which undertaking
may be accepted without reference to the financial ability of such person that
makes such repayments. The Registrant is not responsible for the indemnification
of any person seeking indemnification in connection with a proceeding initiated
by such person unless the initiation was approved by the Board of Directors of
the Registrant. The Charter and the DGCL further provide that such
indemnification is not exclusive of any other rights to which such individuals
may be entitled under the Charter, the Bylaws, any agreement, any vote of
stockholders or disinterested directors, or otherwise. The Registrant carries
directors' and officers' insurance covering its executive officers and
directors.
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ITEM 16. EXHIBITS
Exhibit Number Description of Exhibit
- -------------- ----------------------
4.1 Form of Certificate of Common Stock of the Company
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-1 dated May 18, 1998)
4.2(a) Second Amended and Restated Certificate of Incorporation of
the Company, as amended (incorporated by reference to Exhibit
3.1 to the Company's Annual Report on Form 10-K for the year
ended July 31, 2000)
4.2(b) Certificate of Designation, Rights and Preferences of Series A
Convertible Preferred Stock dated September 7, 2000
(incorporated by reference to Exhibit 4.10 to the Company's
Registration Statement on Form S-3 dated September 25, 2000)
4.2(c) Certificate of Designation, Number of Authorized Shares of
Series A Convertible Preferred Stock dated October 25, 2000
(incorporated by reference to Exhibit 4.11 to the Company's
Annual Report on Form 10-K for the year ended July 31, 2000)
4.3 Registration Rights Agreement among the Company and the
purchasers of Common Stock dated April 19, 2002
5 Opinion of Womble Carlyle Sandridge & Rice, PLLC
23.1 Consent of Womble Carlyle Sandridge & Rice, PLLC (included in
Exhibit 5)
23.2 Consent of Ernst & Young LLP
23.3 Consent of Ernst & Young LLP
23.4 Consent of Ernst & Young LLP
24 Power of Attorney (included on the signature page)
- ---------------
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; provided, however, that notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
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provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Winston-Salem, State of North Carolina, on
April 23, 2002.
Blue Rhino Corporation
By: /s/ Billy D. Prim
--------------------------------
Billy D. Prim
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Billy D. Prim and Mark Castaneda, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution, for and in the name, place and stead of the undersigned, in
any and all capabilities, to sign any and all amendments (including
post-effective amendments, exhibits thereto and other documents in connection
therewith) to this Registration Statement and any subsequent registration
statement filed by the Registrant pursuant to Rule 462(b) of the Securities Act
of 1933, as amended, which relates to this Registration Statement, and to file
the same, with all exhibits thereto and all documents in connection therewith,
with the Securities and Exchange Commission, and hereby grants to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on April 23, 2002.
/s/ Billy D. Prim Chairman of the Board, President and Chief
- ----------------- Executive Officer (Principal Executive Officer)
Billy D. Prim
/s/ Mark Castaneda Secretary, Chief Financial Officer and
- ------------------ Director (Principal Financial and Accounting
Mark Castaneda Officer)
/s/ Andrew J. Filipowski Vice Chairman of the Board
- ------------------------
Andrew J. Filipowski
/s/ Richard A. Brenner Director
- ----------------------
Richard A. Brenner
/s/ Steven D. Devick Director
- --------------------
Steven D. Devick
/s/ Robert J. Lunn Director
- ------------------
Robert J. Lunn
/s/ John H. Muehlstein Director
- ----------------------
John H. Muehlstein
Director
- --------------------
David L. Warnock
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