Dakota Plains Holdings, Inc. Reports First Quarter 2013 Financial Results Positive Earnings as Crude Oil Volumes Grow Across All Segments

Expansion of Pioneer Crude By Rail Terminal on Schedule

WAYZATA, Minn., May 9, 2013 /PRNewswire/ -- Dakota Plains Holdings, Inc. ("Dakota Plains" and "DAKP"), (OTC: DAKP), a provider of crude oil midstream services that include marketing, transloading and trucking in the Bakken region, today announced financial results for the three months ended March 31, 2013. 

First Quarter 2013 Operational and Financial Highlights

  • Net Income was $0.6 million compared to a loss of $(15.9) million for the same period in 2012.
  • Adjusted EBITDA was $2.4 million compared sequentially to $1.8 million and $2.4 million for the same period in 2012.
  • JV transloading volumes were 2.4 million barrels of oil, an increase of 15% sequentially and 45% compared to the same period in 2012.
  • JV marketing volumes were 2.6 million barrels of oil, an increase of 30% sequentially and 75% compared to the same period in 2012.
  • JV trucking volumes, which commenced in the fourth quarter of 2012, were 1.1 million barrels of oil. 
  • The Pioneer Terminal expansion commenced on March 25 and will increase the throughput capacity to 80,000 barrels per day by year-end 2013.
  • Restricted cash totals $29 million, a portion of which will be utilized for funding of the Pioneer Terminal expansion. 

Chairman and Chief Executive Officer, Craig McKenzie, said, "Demand for the Company's three business segments continues to exceed our expectations. The first quarter operational performance was our best to date, and our fifth consecutive quarter of growth.  Our trucking segment continues to build scale with our fleet expanding in the quarter to 14 trucks.  Profit contribution for transloading and trucking met expectations, while marketing was below our historic average.  With Pioneer on track for year-end, we will expand throughput capacity by 2014 and be well-positioned for additional lines of business at the terminal."

First Quarter 2013 Financial Results
The Company experienced net income of $0.6 million for the three months ended March 31, 2013, compared to a net loss of $(15.9) million for the three months ended March 31, 2012. Net income for the first quarter was driven by an increase in throughput crude oil volumes.  The net loss for the three months ended March 31, 2012 was primarily due to higher interest expense related to the change in fair value of the additional payment provision in the Company's outstanding promissory notes.

General and administrative expenses were $1.4 million for the three months ended March 31, 2013, compared to $0.8 million for the three months ended March 31, 2012.  The increase was primarily due to additional staff hired and related expenses.  Of the $1.4 million expense, non-cash and one-time provisions represent approximately $0.5 million

Income from the Company's investment in the transloading joint venture was $1.4 million for the three months ended March 31, 2013, compared to $1.1 million for the three months ended March 31, 2012. The transloading joint venture experienced an increase in volume, as first quarter volume was 2.4 million barrels of oil compared to 1.7 million barrels of oil for the three months ended March 31, 2012, a 45% increase. Cost of revenue was higher due to the increased volume and the higher fee per barrel by the Company's new contractor, however this was offset by the reduction in general and administrative expenses, in particular professional fees. Income from the Company's investment in the marketing joint venture was $1.8 million for the three months ended March 31, 2013, compared to $1.9 million for the three months ended March 31, 2012. Volumes for the marketing joint venture increased, as first quarter volume was 2.6 million barrels of oil compared to 1.5 million barrels of oil for the three months ended March 31, 2012, a 75% increase, but margins contracted. Income from the Company's investment in the trucking joint venture was $62,000 for the three months ended March 31, 2013, with 1.1 million of barrels hauled. The trucking joint venture increased its trucking fleet to 14 trucks for the three months ended March 31, 2013. The trucking joint venture was not operational during the first quarter of 2012.

The Company recognized rental income of $95,000 for the three months ended March 31, 2013, compared to $80,279 for the three months ended March 31, 2012. The increase in rental income is due to the June 2012 and January 2013 renegotiations of the lease agreement with Dakota Petroleum Transport Solutions, LLC.

Adjusted EBITDA for the first quarter ended March 31, 2013 was $2.4 million compared to $2.4 million for the first quarter of 2012.

Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure. A reconciliation of this measure to its most directly comparable GAAP measure is included in the accompanying financial tables found later in this release. Management believes the use of this non-GAAP financial measure provides useful information to investors to gain an overall understanding of current financial performance. Specifically, management believes the non-GAAP results included herein provide useful information to both management and investors by excluding certain expenses and gains and losses on the extinguishment of debt that management believes are not indicative of Dakota Plains' core operating results. In addition, this non-GAAP financial measure is used by management for budgeting and forecasting as well as subsequently measuring Dakota Plains' performance, and management believes it is providing investors with a financial measure that most closely aligns to its internal measurement processes.

About Dakota Plains Holdings, Inc.
Dakota Plains Holdings, Inc. ("Dakota Plains") (OTC: DAKP) is an integrated midstream energy company, which competes through its 50/50 joint ventures with affiliates of World Fuel Services Corporation (NYSE: INT) and Prairie Field Services, LLC, to provide customers with crude oil off take services that include marketing, transloading and trucking of crude oil and related products.  Direct and indirect company assets include a proprietary trucking fleet, a transloading facility located in Mountrail County, North Dakota, which is centrally located within the Bakken formation, and 1,104 railroad tank cars.

Dakota Plains is uniquely positioned to exploit crude oil 'export' opportunities within the Williston Basin of North Dakota and Montana, which is the largest onshore oil production source in North America, where the lack of available pipeline capacity provides a long-term and increasing surplus of crude oil available for core business of the company.

Cautionary Note Regarding Forward Looking Statements
This announcement contains forward-looking statements that reflect the current views of Dakota Plains, including, but not limited to, statements regarding our future growth and plans for our business and operations.  We do not undertake to update our forward-looking statements.  These statements involve risks and uncertainties.  Our actual results could differ materially from those anticipated in these forward-looking statements as a result of lack of diversification, dependency upon strategic relationships, dependency on a limited number of major customers, competition for the loading, marketing and transporting of crude oil and related products, difficulty in obtaining additional capital that will be needed to implement business plans, difficulties in attracting and retaining talented personnel, risks associated with building and operating a transloading facility, changes in commodity prices and the demand for crude oil and natural gas, competition from other energy sources, inability to obtain necessary facilities, difficulty in obtaining crude oil to transport, increases in our operating expenses, an economic downturn or change in government policy that negatively impacts demand for our services, penalties we may incur, costs imposed by environmental laws and regulations, inability to obtain or maintain necessary licenses, challenges to our properties, technological unavailability or obsolescence, and future acts of terrorism or war, as well as the threat of war and other factors described from time to time in the company's reports filed with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K, filed March 14, 2013, as may be amended and supplemented by subsequent reports from time to time.

 

For more information, please contact:



Company Contact

Investor Contact

Tim Brady, CFO

Peter Seltzberg, Hayden IR

tbrady@dakotaplains.com

peter@haydenir.com

Phone: 952.473.9950

Phone: 646.415.8972

www.dakotaplains.com

www.haydenir.com

 

- TABLES FOLLOW -


 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2013, AND DECEMBER 31, 2012


ASSETS


 March 31,


 December 31,


2013


2012

 CURRENT ASSETS




 Cash and Cash Equivalents

$             658,396


$       2,340,083

 Accounts Receivable

42,883


-

 Prepaid Expenses

326,714


30,632

 Due from Related Party

61,742


81,175

 Deferred Tax Asset

1,334,000


1,414,000

 Total Current Assets

2,423,735


3,865,890





 PROPERTY AND EQUIPMENT




 Land

3,166,849


3,166,849

 Site Development

2,308,114


2,329,660

 Other Property and Equipment

103,520


45,292

 Total Property and Equipment

5,578,483


5,541,801

 Less - Accumulated Depreciation

465,817


424,833

 Total Property and Equipment, Net

5,112,666


5,116,968





 PREFERRED DIVIDEND RECEIVABLE

941,096


819,178





 INVESTMENT IN DPTS MARKETING LLC

23,550,442


21,905,797





 INVESTMENT IN DAKOTA PETROLEUM TRANSPORT SOLUTIONS, LLC

6,712,683


5,331,599





 INVESTMENT IN DAKOTA PLAINS SERVICES, LLC

62,055


-





 FINANCE COSTS, NET

167,970


184,225





 DEFERRED TAX ASSET

2,264,000


2,441,000





 Total Assets

$        41,234,647


$     39,664,657





LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES




 Accounts Payable

$             571,235


$          239,674

 Accounts Payable - Related Party

21,546


-

 Accrued Expenses

156,243


232,905

 Income Taxes Payable

1,110,000


1,028,000

 Deferred Rental Income

19,785


20,679

 Promissory Notes

4,605,300


-

 Total Current Liabilities

6,484,109


1,521,258





 LONG-TERM LIABILITIES




 Promissory Notes, Net of Debt Discount

21,096,791


25,614,683

 Deferred Rental Income

154,932


165,434

 Deferred Tax Liability

-


-

 Total Long-Term Liabilities

21,251,723


25,780,117





 Total Liabilities

27,735,832


27,301,375





 STOCKHOLDERS' EQUITY




 Preferred Stock - Par Value $.001; 10,000,000 Shares Authorized; None Issued or Outstanding

-


-

 Common Stock - Par Value $.001; 100,000,000 Shares Authorized; 42,378,496 and 41,839,433 Issued and Outstanding, Respectively

42,378


41,839

 Additional Paid-In Capital

17,979,001


17,432,904

 Accumulated Deficit

(4,522,564)


(5,111,461)

 Total Stockholders' Equity

13,498,815


12,363,282





 Total Liabilities and Stockholders' Equity

$        41,234,647


$     39,664,657







 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2013, AND 2012




 Three Months Ended



 March 31,



2013


2012

 REVENUES





 Rental Income - Related Party


$              95,199


$              80,279






 OPERATING EXPENSES





 General and Administrative Expenses


1,444,391


759,452

 Depreciation and Amortization


40,984


41,217

 Total Operating Expenses


1,485,375


800,669






 LOSS FROM OPERATIONS


(1,390,176)


(720,390)






 OTHER INCOME (EXPENSE)





 Income from Investment in Dakota Petroleum Transport Solutions, LLC


1,414,260


1,066,632

 Income from Investment in DPTS Marketing LLC


1,766,563


1,888,727

 Income from Investment in Dakota Plains Services, LLC


62,055


-

 Interest Expense (Net of Interest Income)


(890,805)


(27,580,244)

 Total Other Income (Expense)


2,352,073


(24,624,885)






 INCOME (LOSS) BEFORE  TAXES


961,897


(25,345,275)






 INCOME TAX EXPENSE (BENEFIT)


373,000


(9,475,400)






 NET INCOME (LOSS)


$            588,897


$    (15,869,875)






 Net Income (Loss) Per Common Share – Basic


$                  0.01


$               (0.43)






 Net Income (Loss) Per Common Share – Diluted


$                  0.01


$               (0.43)






 Weighted Average Shares Outstanding - Basic


41,418,606


37,237,143






 Weighted Average Shares Outstanding - Diluted


42,827,077


37,237,143

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2013, AND 2012




Three Months Ended


March 31,


2013


2012

 CASH FLOWS FROM OPERATING ACTIVITIES




 Net Income (Loss)

$       588,897


$(15,869,875)

 Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities




 Depreciation and Amortization

40,984


41,217

 Amortization of Debt Discount

87,408


-

 Amortization of Finance Costs

16,255


-

 Loss on Derivative Liability

-


27,311,800

 Deferred Income Taxes

257,000


(9,478,000)

 Share-Based Consulting Fees

130,769


-

 Increase in Deferred Rental Income

(21,273)


(31,290)

 Income from Investment in Dakota Petroleum Transport Solutions, LLC

(1,414,260)


(1,066,632)

 Income from Investment in DPTS Marketing LLC

(1,766,563)


(1,888,727)

 Income for Investment in Dakota Plains Services, LLC

(62,055)


-

 Non-Cash Rental Income

(3,875)


(20,247)

 Share-Based Compensation

420,890


81,638

 Changes in Working Capital and Other Items:




 Increase in Accounts Receivable

(42,883)


-

 Increase in Prepaid Expenses

(201,105)


(122,942)

 Decrease in Due from Related Party

19,433


-

 Increase in Accounts Payable

362,361


450,338

 Increase in Accounts Payable - Related Party

21,546


-

 Increase in Income Taxes Payable

82,000


-

 Decrease in Accrued Expenses

(176,662)


(70,331)

 Decrease in Deferred Rental Income

(894)


-

 Net Cash Used In Operating Activities

(1,662,027)


(663,051)





 CASH FLOWS FROM INVESTING ACTIVITIES




 Purchases of Property and Equipment

(67,482)


(3,199)

 Cash Received from Dakota Petroleum Transport Solutions, LLC

47,822


982,718

 Net Cash Used In Investing Activities

(19,660)


979,519





 NET INCREASE IN CASH AND CASH EQUIVALENTS

(1,681,687)


316,468





 CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

2,340,083


1,753,665





 CASH AND CASH EQUIVALENTS – END OF PERIOD

$       658,396


$    2,070,133





 Supplemental Disclosure of Cash Flow Information




 Cash Paid During the Period for Interest

$       787,225


$       268,515

 Cash Paid During the Period for Income Taxes

$         34,000


$           2,600





 Non-Cash Financing and Investing Activities:




 Purchase of Property and Equipment Paid Subsequent to Period End

$                   -


$         32,846

 Fair Value of Warrants Issued for Consulting Fees

$       208,663


$                   -

 Preferred Dividend Receivable

$       121,918


$       124,658

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY



FOR THE THREE MONTHS ENDED MARCH 31, 2013, AND THE YEAR ENDED DECEMBER 31, 2012













Retained








Additional


Earnings


Total


Common Stock


Paid-In


(Accumulated


Stockholders'


Shares


Amount


Capital


Deficit)


Equity











Balance - December 31, 2011

37,014,018


$37,014


$10,158,044


$   (3,110,791)


$    7,084,267











Acquisition of MCT Holding Corporation

640,200


640


(640)


-


-











Issuance of Common Shares Pursuant to Exercise of Warrants

2,386,578


2,387


(2,387)


-


-











Share-Based Compensation

-


-


477,604


-


477,604











Issuance of Restricted Common Shares

38,437


38


(38)


-


-











Issuance of Common Shares Pursuant to Debt Restructure

1,757,075


1,757


6,130,435


-


6,132,192











Issuance of Common Shares to Board of Directors

3,125


3


24,997


-


25,000











Warrants Issued Included in Debt Discount

-


-


644,889


-


644,889











Net Loss

-


-


-


(2,000,670)


(2,000,670)











Balance - December 31, 2012

41,839,433


41,839


17,432,904


(5,111,461)


12,363,282











Share-Based Compensation

-


-


287,973


-


287,973











Issuance of Restricted Common Shares

526,563


527


(527)


-


-











Issuance of Shares to Executive

12,500


12


49,988


-


50,000











Issuance of Warrants Pursuant to Consulting Agreements

-


-


208,663


-


208,663











Net Income

-


-


-


588,897


588,897











Balance - March 31, 2013

42,378,496


$42,378


$17,979,001


$   (4,522,564)


$  13,498,815

 

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA




Three Months Ended


March 31,


2013


2012

Net Income (Loss)

$

588,897


$

(15,869,875)

Add Back:






Income Tax Provision (Benefit)


373,000



(9,475,400)

Depreciation and Amortization


40,984



41,217

Share Based Compensation - Employees and Directors


420,890



81,638

Share Based Compensation - Consultants


130,769



-

Interest Expense


890,805



27,580,244

Adjusted EBITDA

$

2,445,345


$

2,357,824

SOURCE Dakota Plains Holdings, Inc.



RELATED LINKS
http://www.dakotaplains.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.