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

09 May, 2013, 16:05 ET from Dakota Plains Holdings, Inc.

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