Dakota Plains Holdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results Adjusted EBITDA for 2012 Increased 110.7% to $11.8 Million

WAYZATA, Minn., March 14, 2013 /PRNewswire/ -- Dakota Plains Holdings, Inc. ("Dakota Plains" and "DAKP"), (OTC: DAKP) today announced financial results for the three and twelve months ended December 31, 2012. 

Full Year 2012 Operational and Financial Summary

  • 2012 marketing volumes increased approximately 526% over 2011 to 7.7 million barrels sold.
  • Transloading volumes in 2012 increased 37% over 2011 to 7.6 million barrels.
  • Adjusted EBITDA was $11.8 million for 2012 representing a 110.7% gain compared to 2011.
  • Total expenses for 2012 were $3.1 million, a 24.4% decrease compared 2011.
  • Dakota Plains completed a $6.1 million debt offering, restructuring its liabilities and enabling the Company to end the period with positive working capital and net cash.
  • The Company completed the purchase of 124 acres at its New Town facility in Mountrail County, North Dakota, increasing the contiguous acreage owned to 192 and facilitating a planned expansion of its transloading facility during 2013.
  • Sub-contracted with a new operations partner for its transloading facility, increasing its efficiency in the last few months of 2012.

Craig M. McKenzie, Chairman and Chief Executive Officer, Dakota Plains, said: "In 2012, our first year as a public company, our company achieved significant volume increases and turned in an exceptional year of growth. Rapid increases in Bakken crude oil production, shortfalls in pipeline capacity and the lack of available new railcars have positioned us as a key provider of crude oil infrastructure and logistics services in North Dakota's Williston Basin. We experienced a 526% increase in total barrels marketed during the year, achieved growth of 37% in our transloading volume, and more than doubled our EBITDA for the year. We ended the 2012 with an average monthly marketing volume of 642,000 barrels compared to 204,000 at the end of last year, and we look forward to another year of significant growth in 2013."

Mr. McKenzie continued, "We are currently in the late stages of planning another exciting phase of growth for our company which includes bringing equipment, materials, and other freight into the region by rail to store and distribute through state-of-the-art facilities. This expansion, when completed, will further enable us to leverage our resources and generate attractive returns for our shareholders."

Mr. McKenzie concluded, "We are confident that the long term fundamentals of our business are strong, and that we are well-positioned to take advantage of current and new opportunities that continue to emerge in this important region. We enter 2013 with a strong balance sheet, powerful partnerships, and continue to see robust demand for our services.  We believe that our cash flow, as we measure in EBITDA, will grow substantially in 2013 to the $25 million to $30 million range, based on only moderate increases in transloading and trucking volumes."

Full Year 2012 Financial Results

Adjusted EBITDA for the full year ended December 31, 2012 more than doubled to $11.8 million from $5.6 million in 2011. The increase in Adjusted EBITDA was due primarily to increased volumes from the company's marketing and transloading joint ventures. Loss from operations for 2012 declined by 25% to $2.8 million compared to a loss from operations of $3.7 million for 2011. The net loss for the full year of 2012 was $2.0 million compared to a net loss of $3.1 million in 2011. The 2012 net loss was mainly driven by the expense related to an embedded derivative. This charge was partially offset by the $14.7 million reported as a gain on extinguishment of debt and by higher income from the Company's indirect ownership interest in its marketing joint venture, DPTS Marketing LLC.

Fourth Quarter 2012 Financial Results

Adjusted EBITDA for the fourth quarter of December 31, 2012 was $1.8 million compared to $3.0 million for the fourth quarter of 2011. The decrease was primarily due to the decrease in the income from our investments in our joint ventures for the fourth quarter of 2012. The decrease in the income from our transloading joint venture was due to an increase in expenses related to the engagement and implementation of a new contractor to manage the operations. The loss from operations for the fourth quarter was $0.7 million compared to a loss from operations of $1.0 million for the fourth quarter of 2011. Net income for the fourth quarter of 2012 was $10.3 million, or $0.24 per diluted share compared to a net loss of $2.4 million, or $(0.07) per diluted share in the fourth quarter of 2011. The net income for the fourth quarter of 2012 was primarily the result of the gain on the extinguishment of debt realized due to the restructuring of debt in November.

Balance Sheet Summary

As of December 31, 2012, the company had cash and cash equivalents of $2.3 million, compared to $1.8 million as of December 31, 2011. Working capital as of December 31, 2012 was $2.3 million compared to a deficit of $1.7 million as of December 31, 2011. At December 31, 2012, the current ratio was 2.54:1 compared to 0.71:1 as of December 31, 2011. Stockholders' equity was $12.4 million at December 31, 2012, compared to $7.1 million as of December 31, 2011.

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. (OTC: DAKP) is a vertically-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 1,100 railroad tank cars.

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 the  report on Form 10-K, filed March 14, 2013, as 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 

 CONSOLIDATED BALANCE SHEETS 

AS OF DECEMBER 31, 2012 AND 2011


 ASSETS 








 December 31, 








2012


2011

 CURRENT ASSETS 





 Cash and Cash Equivalents 

$  2,340,083


$  1,753,665


 Prepaid Expenses 

30,632


16,756


 Due from Related Party 

81,175


-


 Deferred Tax Asset 

1,414,000


2,307,000


      Total Current Assets 

3,865,890


4,077,421





















 PROPERTY AND EQUIPMENT 





 Land 

3,166,849


1,053,576


 Site Development 

2,329,660


2,329,660


 Other Property and Equipment 

45,292


42,075


      Total Property and Equipment 

5,541,801


3,425,311


 Less - Accumulated Depreciation 

424,833


259,520


      Total Property and Equipment, Net 

5,116,968


3,165,791











 PREFERRED DIVIDEND RECEIVABLE 

819,178


317,808











 INVESTMENT IN DPTS MARKETING LLC 

21,905,797


11,996,571











 INVESTMENT IN DAKOTA PETROLEUM TRANSPORT
   
SOLUTIONS, LLC 

 

5,331,599


 

2,890,280











 FINANCE COSTS, NET 

184,225


-











 DEFERRED TAX ASSET 

2,441,000


-












      Total Assets 

$ 39,664,657


$ 22,447,871











 LIABILITIES AND STOCKHOLDERS' EQUITY 

 CURRENT LIABILITIES 





 Accounts Payable 

$     239,674


$       32,616


 Accrued Expenses 

232,905


80,661


 Income Tax Payable 

1,028,000


-


 Derivative Liability 

-


5,540,000


 Deferred Rental Income 

20,679


125,164


      Total Current Liabilities 

1,521,258


5,778,441











 LONG-TERM LIABILITIES 





 Promissory Notes, Net of Debt Discount 

25,614,683


9,000,000


 Deferred Rental Income 

165,434


125,163


 Deferred Tax Liability 

-


460,000


      Total Long-Term Liabilities 

25,780,117


9,585,163












      Total Liabilities 

27,301,375


15,363,604











 STOCKHOLDERS' EQUITY 





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

-


-


Common Stock, Par Value $.001; 100,000,000 Authorized, 41,839,433
   
and 37,014,018 issued and outstanding, respectively 

 

41,839


 

37,014


Additional Paid-In Capital 

17,432,904


10,158,044


Accumulated Deficit 

(5,111,461)


(3,110,791)


      Total Stockholders' Equity 

12,363,282


7,084,267












      Total Liabilities and Stockholders' Equity 

$ 39,664,657


$ 22,447,871











 

 

 

 DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF OPERATIONS 

 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010 




















Year Ended December 31,








2012


2011


2010

 REVENUES 







 Rental Income - Related Party 

$    266,483


$    314,581


$   163,427













 OPERATING EXPENSES 







 General and Administrative Expenses 

2,901,907


3,897,066


110,059


 Depreciation and Amortization 

165,313


159,275


90,929



Total Operating Expenses 

3,067,220


4,056,341


200,988













 LOSS FROM OPERATIONS 

(2,800,737)


(3,741,760)


(37,561)













 OTHER INCOME (EXPENSE) 







 Income from Investment in Dakota Petroleum Transport Solutions, LLC 

3,511,999


4,236,779


1,117,608


 Income from Investment in DPTS Marketing LLC 

10,410,596


2,314,279


-


 Interest Expense (Net of Interest Income) 

(29,211,978)


(3,371,812)


1,259


 Gain (Loss) on Extinguishment of Debt 

14,708,909


(4,552,500)


-


 Other Expense 

-


(2,777)


-



Total Other Income (Expense) 

(580,474)


(1,376,031)


1,118,867













 INCOME (LOSS) BEFORE INCOME TAXES 

(3,381,211)


(5,117,791)


1,081,306













 INCOME TAX PROVISION (BENEFIT) 

(1,380,541)


(2,007,000)


416,000













 NET INCOME (LOSS) 

$(2,000,670)


$(3,110,791)


$   665,306













 Net Income (Loss) Per Common Share – Basic and Diluted 

$        (0.05)


$        (0.09)


$        0.02













 Weighted Average Shares Outstanding – Basic and Diluted 

39,792,973


35,214,940


30,122,634













 

 

 

 DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF OPERATIONS 

 THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011 

 (UNAUDITED) 


















Three Months Ended December 31,








2012


2011

 REVENUES 





 Rental Income - Related Party 

$       56,864


$      80,280











 OPERATING EXPENSES 





 General and Administrative Expense 

753,329


1,002,187


 Depreciation and Amortization 

41,378


41,130



Total Operating Expenses 

794,707


1,043,317











 LOSS FROM OPERATIONS 

(737,843)


(963,037)











 OTHER INCOME (EXPENSE) 





 Income from Investment in Dakota Petroleum Transport Solutions, LLC 

921,124


1,548,046


 Income from Investment in DPTS Marketing LLC 

1,426,968


1,969,769


 Interest Expense (Net of Interest Income) 

7,851


(1,888,655)


 Gain (Loss) on Extinguishment of Debt 

14,708,909


(4,552,500)


 Other Expense 

-


(1)



Total Other Income (Expense) 

17,064,852


(2,923,341)











 INCOME (LOSS) BEFORE INCOME TAXES 

16,327,009


(3,886,378)











 INCOME TAX PROVISION (BENEFIT) 

5,985,000


(1,523,000)











 NET INCOME (LOSS) 

$ 10,342,009


$(2,363,378)











 Net Income (Loss) Per Common Share – Basic 

$             0.25


$           (0.07)

 Net Income (Loss) Per Common Share – Diluted 

$             0.24


$           (0.07)











 Weighted Average Shares Outstanding – Basic 

41,109,462


36,029,398

 Weighted Average Shares Outstanding – Diluted 

42,592,489


36,029,398

 

 

 

DAKOTA PLAINS HOLDINGS,  INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010


































Retained














Additional


Stock 


Earnings


Total








Common Stock


Paid-In


Subscriptions


(Accumulated


Stockholders'








Shares


Amount


Capital


Receivable


Deficit)


Equity



















Balance – December 31, 2009

29,766,462


$ 29,766


$  1,650,361


$   (110,000)


$      (55,293)


$  1,514,834




















Sale of Common Shares at $0.775 Per Share

700,000


700


541,800


-


-


542,500




















Issuance of Common Shares Related to Consulting Agreements

126,282


126


46,602


-


-


46,728




















Payment on Subscription Receivable

-


-


-


110,000


-


110,000




















Net Income

-


-


-


-


665,306


665,306



















Balance – December 31, 2010

30,592,744


30,592


2,238,763


-


610,013


2,879,368




















Sale of Common Shares at $2.125 Per Share

1,500,000


1,500


3,186,000


-


-


3,187,500




















Sale of Common Shares at $4.00 Per Share

500,000


500


1,999,500


-


-


2,000,000




















Issuance of Common Shares Related to Consulting Agreements

2,280,000


2,280


2,161,470


-


-


2,163,750




















Issuance of Common Shares Related to Administrative Services Agreement













2,000


2


4,248


-


-


4,250




















Issuance of Restricted Common Shares

600,000


600


(600)


-


-


-




















Issuance of Common Shares as a Stock Dividend

1,441,774


1,442


(1,442)


-


-


-




















Issuance of Common Shares to Board of Directors

40,000


40


84,960


-


-


85,000




















Issuance of Common Shares for Finance Costs

7,500


8


29,992


-


-


30,000




















Cash Dividend Paid

-


-


(1,331,619)


-


(610,013)


(1,941,632)




















Share-Based Compensation

-


-


425,756


-


-


425,756




















Issuance of Common Shares Pursuant to Exercise of Warrants

50,000


50


14,200


-


-


14,250




















Warrants Issue Included in Debt Discount

-


-


1,346,816


-


-


1,346,816




















Net Loss

-


-


-


-


(3,110,791)


(3,110,791)



















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



















 

 

 

 DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010 
































Year Ended December 31,








2012


2011


2010

 CASH FLOWS FROM OPERATING ACTIVITIES 







 Net Income (Loss) 

$ (2,000,670)


$(3,110,791)


$   665,306


 Adjustments to Reconcile Net Income (Loss) to Net Cash 







    Provided by (Used in) Operating Activities 







 Depreciation and Amortization 

165,313


159,275


90,929


 Amortization of Debt Discount 

58,272


1,346,816


-


 Amortization of Finance Costs 

10,837


-


-


 (Gain) Loss on Extinguishment of Debt 

(14,708,909)


4,552,500


-


 Loss on Disposal of Property and Equipment 

-


2,776


-


 Loss on Derivative Liability 

27,311,802


1,167,500


-


 Deferred Income Taxes 

(2,412,000)


(2,010,000)


196,000


 Issuance of Common Stock for Consulting Fees 

-


2,168,000


46,728


 Increase (Decrease) in Deferred Rental Income 

40,271


(100,546)


225,709


 Income from Investment in Dakota Petroleum Transport Solutions, LLC 

(3,511,999)


(4,236,779)


(1,117,608)


 Income from Investment in DPTS Marketing LLC 

(10,410,596)


(2,314,279)


-


 Non-Cash Rental Income 

(42,783)


(80,986)


(20,246)


 Share-Based Compensation 

502,604


510,756


-


 Changes in Working Capital and Other Items: 







    Decrease in Trade Receivables 

-


-


19,161


    Increase in Prepaid Expenses 

(13,876)


(16,756)


-


    Increase in Due from Related Party 

(81,175)


-


-


    Increase (Decrease) in Accounts Payable 

207,058


(6,184)


8,000


    Increase (Decrease) in Income Taxes Payable    

1,028,000


(220,000)


220,000


    Increase (Decrease) in Accrued Expenses 

152,244


80,661


(19,147)


    Increase (Decrease) in Deferred Rental Income 

(104,485)


12,310


112,854


    Net Cash Provided by (Used in) Operating Activities 

(3,810,092)


(2,095,727)


427,686













 CASH FLOWS FROM INVESTING ACTIVITIES 







 Purchases of Property and Equipment 

(2,116,490)


(788,126)


(1,534,587)


 Cash Paid for Investment in Dakota Petroleum Transport Solutions, LLC 

-


-


(50,000)


 Cash Paid for Investment in DPTS Marketing LLC 

-


(10,000,100)


-


 Cash Received from Dakota Petroleum Transport Solutions, LLC 

1,113,463


1,952,210


659,102


    Net Cash Used in Investing Activities 

(1,003,027)


(8,836,016)


(925,485)













 CASH FLOWS FROM FINANCING ACTIVITIES 







 Proceeds from Issuance of Common Stock 

-


5,187,500


652,500


 Proceeds from Exercise of Warrants 

-


14,250


-


 Repayments of Notes Payable - Related Parties 

-


-


(240,000)


 Cash Paid for Finance Costs 

(195,062)


-


-


 Cash Paid for Debt Extinguishment Costs 

(45,401)


(150,000)


-


 Cash Dividend Paid 

-


(1,941,632)


-


 Repayment of Promissory Notes 

(500,000)


-


-


 Proceeds from Promissory Notes 

6,140,000


-


-


 Proceeds from Senior Promissory Notes 

-


3,500,000


-


 Proceeds from Junior Promissory Notes 

-


5,500,000


-


    Net Cash Provided by Financing Activities 

5,399,537


12,110,118


412,500













 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 

586,418


1,178,375


(85,299)













 CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD 

1,753,665


575,290


660,589













 CASH AND CASH EQUIVALENTS – END OF PERIOD 

$  2,340,083


$  1,753,665


$   575,290

























 Supplemental Disclosure of Cash Flow Information 







 Cash Paid During the Period for Interest 

$  1,831,353


$    858,082


$    34,849


 Cash Paid During the Period for Income Taxes 

$          3,459


$    211,220


$               -














 Non-Cash Financing and Investing Activities: 







    Purchase of Property and Equipment Paid Subsequent to Period End 

$       30,800


$      30,800


$    73,078


    Fair Value of Warrants Issued for Debt Discount 

$  1,048,889


$  1,346,816


$               -


    Payment of Debt Extinguishment Costs through Issuance of Common Stock 

$                   -


$        30,000


$               -


    Preferred Dividend Receivable 

$      501,370


$      317,808


$               -


    Satisfaction of Derivative Liability with Common Stock 

$   6,132,192


$                   -


$               -


    Promissory Notes Issued to Satisfy Derivative Liability 

$ 11,965,300


$                   -


$              -


    Loss on Extinguishment of Debt Related to Derivative Liability 

$                    -


$  4,372,500


$              -













 

 











Dakota Plains Holdings, Inc.

Reconciliation of Adjusted EBITDA






















Three Months Ended


Year Ended


December 31,


December 31,


2012


2011


2012


2011


2010

Net Income (Loss)

$ 10,342,009


$ (2,363,378)


$ (2,000,670)


$ (3,110,791)


$    665,306

Add Back:










Income Tax Provision (Benefit)

5,985,000


(1,523,000)


(1,380,541)


(2,007,000)


416,000

Depreciation and Amortization

41,378


41,130


165,313


159,275


90,929

Share Based Compensation - Employees and Directors

128,644


123,252


502,604


510,756


-

Share Based Compensation - Consultants

-


231,921


-


2,168,000


46,728

Interest Expense 

(7,851)


1,888,655


29,211,978


3,371,812


-

Loss (Gain) on Extinguishment of Debt

(14,708,909)


4,552,500


(14,708,909)


4,552,500


-

Adjusted EBITDA

$   1,780,270


$  2,951,080


$ 11,789,775


$  5,644,552


$ 1,218,963

 

SOURCE Dakota Plains Holdings, Inc.



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