Those culinary chefs on the Food Network will warn you to steer away from propane grills, but there's no denying the great convenience of being able to get a backyard fire roaring with the flick of a switch. That convenience has also helped propel Blue Rhino
Canister exchange is the simple act of taking an empty propane container to the store, dropping it off, and paying for a new, full one. (It's a convenient, if not necessarily cheaper, alternative to refilling, as Fools were recently discussing in our Community.)
Fueled by partnerships with such leading retailers as Wal-Mart
As reported this morning, the company this year turned in strong sales and earnings growth, despite the fact that same-store exchange transactions and overall top-line growth were hampered by wet weather during the all-important summer quarter. That slowing top-line growth seemed to bother investors enough to send its shares falling in early trading.
Blue Rhino, however, still possesses several characteristics that should prove encouraging to investors, including an improving balance sheet that has reduced interest expense as well as a demonstrated ability to control costs. It will need both if it intends to maintain profit growth while pushing its brand further into the highly competitive business of selling grills, patio heaters, and other devices including the new SkeeterVac.
Perhaps most importantly, it clearly has room to grow and some good ideas about how to do it. Its strong position in the propane business should at least give it the support it needs to fund other growth efforts. A look at past financial statements indicates a potential for strong cash flow operation, as long as the company executes.
You can reach Dave Marino-Nachison at [email protected] .
