Blue Dolphin Reports Fourth Quarter And Fiscal Year 2012 Financial Results, Record Full Year Revenue
HOUSTON, April 5, 2013 /PRNewswire/ -- Blue Dolphin Energy Company ("Blue Dolphin," "we" and "our") announced financial results for the quarter and year ended December 31, 2012.
For the year ended December 31, 2012, we reported a net loss of $18,284,632 (which includes $13,879,311 in non-cash charges related to impairment and discontinued operations as described below), or a loss of $1.78 per fully diluted share, on record total revenue from operations of $352,094,714 compared to a net income of $183,854, or an income of $0.02 per fully diluted share, with no revenue from operations for the year ended December 31, 2011.
|
Three Months Ended |
Year Ended | |||||||
|
December 31, |
December 31, | |||||||
|
2012 |
2011 |
2012 |
2011 | |||||
|
Total revenue from operations |
$ 117,168,511 |
$ - |
$ 352,094,714 |
$ - | ||||
|
Total cost of operations |
(120,792,500) |
(146,047) |
(365,527,510) |
(663,128) | ||||
|
Loss from continuing operations |
(3,623,989) |
(146,047) |
(13,432,796) |
(663,128) | ||||
|
Total other income (expense) |
(92,553) |
92,752 |
(398,592) |
846,982 | ||||
|
Income (loss) from continuing operations before income taxes |
(3,716,542) |
(53,295) |
(13,831,388) |
183,854 | ||||
|
Income tax expense |
5,969 |
- |
(9,678) |
- | ||||
|
Net income (loss) from continuing operations, net of tax |
(3,710,573) |
(53,295) |
(13,841,066) |
183,854 | ||||
|
Loss from discontinued operations, net of tax |
(4,443,566) |
- |
(4,443,566) |
- | ||||
|
Net income (loss) |
$ (8,154,139) |
$ (53,295) |
$ (18,284,632) |
$ 183,854 | ||||
|
Basic and diluted earnings (loss) per common share |
||||||||
|
Continuing operations |
$ (0.35) |
$ (0.01) |
$ (1.35) |
$ 0.02 | ||||
|
Discontinued operations |
$ (0.42) |
$ - |
$ (0.43) |
$ - | ||||
|
Basic and diluted earnings (loss) per common share |
$ (0.77) |
$ (0.01) |
$ (1.78) |
$ 0.02 | ||||
Financial Highlights
Financial results for the year ended December 31, 2012 included:
- positive cash flow from operations of $67,327; for the three months ended December 31, 2012, we experienced positive cash flow from operations of $3,112,606. This represented an increase compared to negative cash flow from operations of $28,017 for the third quarter of 2012, negative cash flow from operations of $1,438,903 for the second quarter of 2012 and negative cash flow from operations of $1,578,359 for the first quarter of 2012. Our liquidity improvement quarter over quarter was primarily the result of improved margins on sales of refined products;
- non-cash charges totaling $13,879,311 related to impairment and discontinued operations were as follows:
- an impairment totaling $9,435,745, consisting of $7,990,025 related to our pipeline fixed assets and $1,445,720 related to goodwill. Due to the continued weakness in our pipeline transportation and oil and gas exploration production business segments and the uncertainty of the timing and speed of recovery, an impairment of the pipeline was deemed necessary. All of the goodwill was associated with our pipeline transportation and oil and gas exploration production business segments; and
- discontinued operations, net of tax, totaling $4,443,566. In November 2012 we entered into a sale and purchase agreement with Blue Sky Langsa, Ltd. for the disposal of our 7% working interest in the North Sumatra Basin-Langsa Field ("Indonesia"). Operations associated with Indonesia were discontinued in 2012; and
- an abandonment expense of $1,184,549 associated with plugging and abandonment costs for High Island A-7. The amount recognized reflects the amount incurred less the amount reserved for the abandonment retirement obligation liability, which was $141,099.
Business Segments
In February 2012, we acquired 100% of the membership interest of Lazarus Energy, LLC ("LE"), which owns a crude oil and condensate processing facility located on a 56-acre site in Nixon, Wilson County, Texas (the "Nixon Facility"). In October 2012, we acquired 100% of the membership interest of Lazarus Refining & Marketing, LLC ("LRM"), which conducts petroleum storage and terminaling operations under third-party lease agreements at the Nixon Facility. As a result of the acquisitions of LE and LRM, our primary business segment is refinery operations, which includes (i) refining of crude oil into marketable finished and refined products, such as Non-Road, Locomotive and Marine Diesel Fuel ("NRLM" or "off-road diesel"), naphtha and atmospheric gas oil and (ii) petroleum storage and terminaling. Increases in Blue Dolphin's revenue, operating expenses and other related costs in 2012 compared to 2011 were primarily attributable to the refinery operations business segment.
Operational Update
For the quarter and year ended December 31, 2012, the Nixon Facility operated for 88 days and 326 days, respectively. For the same period, average throughput at the Nixon Facility was approximately 11,900 barrels per day ("bpd"), or 79% of operating capacity, and approximately 9,700 bpd, or 65% of operating capacity, respectively. For the quarter and year ended December 31, 2012, feedstock runs at the Nixon Facility, which represents barrels of crude oil processed, totaled 1,050,189 barrels ("bbls") and 3,175,283 bbls, respectively. For the same period, refinery production totaled 1,030,680 bbls and 3,116,649 bbls, respectively. The Nixon Facility generated earnings before interest, income taxes and depreciation ("EBITDA") of $1,259,012 for the year ended December 31, 2012. The Nixon Facility had 85,000 bbls of tankage under lease agreement for the year ended December 31, 2012 compared to 20,000 bbls of tankage under lease agreement for the year ended December 31, 2011.
Non-GAAP Financial Measures
This press release and its attachments include EBITDA, a financial measures defined as non-GAAP by the Securities and Exchange Commission. EBITDA is adjusted for: (i) items that do not impact Blue Dolphin's income or loss from continuing operations, such as the impact of accounting changes, (ii) income taxes and (iii) interest expense (or income). Management excludes interest expense (or income) and other expenses or income not pertaining to the operations of Blue Dolphin's business segments from this measure so that investors may evaluate Blue Dolphin's current operating results without regard to Blue Dolphin's financing methods or capital structure.
Blue Dolphin's financial measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles ("GAAP"). An explanation of our non-GAAP financial measure and a reconciliation of the financial measure to the GAAP financial measure Blue Dolphin considers most comparable are presented in "Part II, Item 7. Management's Discussion of Financial Condition and Results of Operations -- EBITDA" and "Part II, Item 8. Financial Statements and Supplementary Data -- Note (6) Business Segment Information" of Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2012.
About Blue Dolphin
Blue Dolphin Energy Company (OTCQX: BDCO) is an independent refiner and marketer of petroleum products in the Eagle Ford Shale. Our primary business is refinery operations, which includes the refining of crude oil into marketable finished and refined products and petroleum storage and terminaling. We also gather and transport oil and natural gas, as well as hold leasehold interests in oil and natural gas properties. For additional information, visit Blue Dolphin's corporate website at http://www.blue-dolphin-energy.com.
Certain of the statements included in this press release, which express a belief, expectation or intention, as well as those regarding future financial performance or results, or which are not historical facts, are "forward-looking" statements as that term is defined in the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements are not guarantees of future performance or events and such statements involve a number of risks, uncertainties and assumptions, including but not limited to: the potential reorganization of Blue Dolphin from a publicly traded "C" corporation to a publicly traded master limited partnership; crude oil and refined petroleum product price fluctuations; significant dependent relationship with Genesis Energy, LLC and its affiliates; key supplier failure; loss of market share with or by a key customer; declaration of an event of default related to our long-term indebtedness; failure to comply with other forbearance agreements relating to our long-term indebtedness; and the factors set forth under the heading "Risk Factors" in Part I, Item 1A of Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2012. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
|
BLUE DOLPHIN ENERGY COMPANY & SUBSIDIARIES Condensed Consolidated Balance Sheets | ||||
|
December 31, | ||||
|
2012 |
2011 | |||
|
ASSETS |
||||
|
CURRENT ASSETS |
||||
|
Cash and cash equivalents |
$ 420,896 |
$ 1,822 | ||
|
Restricted cash |
89,593 |
192,004 | ||
|
Accounts receivable, net |
15,398,755 |
- | ||
|
Prepaid expenses and other current assets |
228,314 |
58,713 | ||
|
Deposits |
1,236,447 |
473,026 | ||
|
Inventory |
2,300,692 |
4,533,961 | ||
|
Total current assets |
19,674,697 |
5,259,526 | ||
|
Property, plant and equipment, net |
35,862,085 |
32,307,929 | ||
|
Debt issue costs, net |
532,335 |
566,133 | ||
|
Other assets |
9,463 |
10,468 | ||
|
Trade name |
303,346 |
- | ||
|
TOTAL ASSETS |
$ 56,381,926 |
$ 38,144,056 | ||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
|
CURRENT LIABILITIES |
||||
|
Accounts payable |
$ 19,171,013 |
$ 4,841,859 | ||
|
Accounts payable, related party |
1,594,021 |
908,139 | ||
|
Note payable |
43,941 |
46,318 | ||
|
Accrued expenses and other current liabilities |
725,238 |
744,921 | ||
|
Interest payable, current portion |
640,352 |
995,916 | ||
|
Long-term debt, current portion |
1,816,960 |
1,839,501 | ||
|
Total current liabilities |
23,991,525 |
9,376,654 | ||
|
Long-term liabilities: |
||||
|
Asset retirement obligations |
921,260 |
- | ||
|
Long-term debt, net of current portion |
13,989,517 |
12,455,102 | ||
|
Long-term interest payable, net of current portion |
858,784 |
650,214 | ||
|
Total long-term liabilities |
15,769,561 |
13,105,316 | ||
|
TOTAL LIABILITIES |
39,761,086 |
22,481,970 | ||
|
Commitments and contingencies |
||||
|
STOCKHOLDERS' EQUITY |
||||
|
Common stock ($0.01 par value, 20,000,000 shares authorized, 10,563,297 and 8,426,456 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively) |
105,633 |
84,265 | ||
|
Additional paid-in capital |
36,524,142 |
17,302,124 | ||
|
Accumulated deficit |
(20,008,935) |
(1,724,303) | ||
|
Total stockholders' equity |
16,620,840 |
15,662,086 | ||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 56,381,926 |
$ 38,144,056 | ||
|
See Notes to Consolidated Financial Statements in Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2012. | ||||
|
BLUE DOLPHIN ENERGY COMPANY & SUBSIDIARIES Condensed Consolidated Statements of Operations | ||||
|
Twelve Months Ended December 31, | ||||
|
2012 |
2011 | |||
|
REVENUE FROM OPERATIONS |
||||
|
Refined product sales |
$ 351,665,234 |
$ - | ||
|
Pipeline operations |
406,812 |
- | ||
|
Oil and gas sales |
22,668 |
- | ||
|
Total revenue from operations |
352,094,714 |
- | ||
|
COST OF OPERATIONS |
||||
|
Cost of refined products sold |
342,035,755 |
- | ||
|
Refinery operating expenses |
8,603,155 |
- | ||
|
Pipeline operating expenses |
391,169 |
- | ||
|
Lease operating expenses |
57,122 |
- | ||
|
General and administrative expenses |
2,076,946 |
645,444 | ||
|
Depletion, depreciation and amortization |
1,622,864 |
17,684 | ||
|
Abandonment expense |
1,184,549 |
- | ||
|
Impairment expense |
9,435,745 |
- | ||
|
Bad debt expense |
9,508 |
- | ||
|
Accretion expense |
105,032 |
- | ||
|
Loss on disposal of property and equipment |
5,665 |
- | ||
|
Total cost of operations |
365,527,510 |
663,128 | ||
|
Loss from operations |
(13,432,796) |
(663,128) | ||
|
OTHER INCOME (EXPENSE) |
||||
|
Net tank rental revenue |
534,047 |
874,421 | ||
|
Interest and other income |
21,940 |
23,901 | ||
|
Interest expense |
(954,579) |
(51,340) | ||
|
Total other income (expense) |
(398,592) |
846,982 | ||
|
Income (loss) from continuing operations before income taxes |
(13,831,388) |
183,854 | ||
|
Tax expense |
||||
|
Current |
(9,678) |
- | ||
|
Deferred |
- |
- | ||
|
Income tax expense |
(9,678) |
- | ||
|
Income (loss) from continuing operations, net of tax |
$ (13,841,066) |
$ 183,854 | ||
|
Loss from discontinued operations, net of tax |
$ (4,443,566) |
$ - | ||
|
Net income (loss) |
$ (18,284,632) |
$ 183,854 | ||
|
Basic earnings (loss) per common share |
||||
|
Continuing operations |
$ (1.35) |
$ 0.02 | ||
|
Discontinued operations |
$ (0.43) |
$ - | ||
|
Basic earnings (loss) per common share |
$ (1.78) |
$ 0.02 | ||
|
Diluted earnings (loss) per common share |
||||
|
Continuing operations |
$ (1.35) |
$ 0.02 | ||
|
Discontinued operations |
$ (0.43) |
$ - | ||
|
Diluted earnings (loss) per common share |
$ (1.78) |
$ 0.02 | ||
|
Weighted average number of common shares outstanding: |
||||
|
Basic |
10,284,152 |
8,426,456 | ||
|
Diluted |
10,284,152 |
8,426,456 | ||
|
See Notes to Consolidated Financial Statements in Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2012. | ||||
|
BLUE DOLPHIN ENERGY COMPANY & SUBSIDIARIES Condensed Consolidated Statements of Cash Flows | ||||
|
Twelve Months Ended December 31, | ||||
|
2012 |
2011 | |||
|
OPERATING ACTIVITIES |
||||
|
Net income (loss) |
$ (18,284,632) |
$ 183,854 | ||
|
Loss from discontinued operations |
4,443,566 |
- | ||
|
Adjustments to reconcile net income (loss) to net cash |
||||
|
provided by (used in) operating activities: |
||||
|
Depletion, depreciation and amortization |
1,611,708 |
17,684 | ||
|
Impairment expense |
9,435,745 |
- | ||
|
Unrealized loss on derivatives |
136,100 |
- | ||
|
Amortization of debt issue costs |
33,799 |
33,799 | ||
|
Amortization of intangible assets |
10,468 |
(10,468) | ||
|
Accretion expense |
105,032 |
- | ||
|
Abandonment expense |
503,454 |
- | ||
|
Common stock issued for services |
163,499 |
- | ||
|
Bad debt expense |
9,508 |
- | ||
|
Changes in operating assets and liabilities (net of effects of acquisition in 2012) |
||||
|
Restricted cash |
102,411 |
33,797 | ||
|
Accounts receivable |
(14,724,996) |
- | ||
|
Prepaid expenses and other current assets |
43,894 |
(58,712) | ||
|
Deposits |
(763,421) |
(397,407) | ||
|
Inventory |
2,288,436 |
(4,484,521) | ||
|
Accounts payable, accrued expenses and other liabilities |
12,160,088 |
4,950,484 | ||
|
Accounts payable, related party |
3,228,128 |
(16,227) | ||
|
Net cash provided by operating activities - continuing operations |
502,787 |
252,283 | ||
|
Net cash used in operating activities - discontinued operations |
(435,460) |
- | ||
|
Net cash provided by operating activities |
67,327 |
252,283 | ||
|
INVESTING ACTIVITIES |
||||
|
Capital expenditures |
(2,852,460) |
(3,507,850) | ||
|
Cash acquired on acquisition |
1,674,709 |
- | ||
|
Net cash used in investing activities |
(1,177,751) |
(3,507,850) | ||
|
FINANCING ACTIVITIES |
||||
|
Proceeds from issuance of debt |
4,788,623 |
3,304,300 | ||
|
Payments on long term debt |
(3,276,748) |
(42,610) | ||
|
Proceeds from notes payable |
24,548 |
- | ||
|
Payments on notes payable |
(26,925) |
(5,034) | ||
|
Proceeds from excercse of stock options |
20,000 |
- | ||
|
Net cash provided by financing activities |
1,529,498 |
3,256,656 | ||
|
Net increase in cash and cash equivalents |
419,074 |
1,089 | ||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
1,822 |
733 | ||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 420,896 |
$ 1,822 | ||
|
Supplemental Information: |
||||
|
Non-cash investing and financing activities: |
||||
|
Related party payable converted to equity |
$ 993,732 |
$ - | ||
|
Issuance of stock for acquisition of Blue Dolphin at fair value, inclusive |
||||
|
of cash acquired of $1,674,709 |
$ 18,046,154 |
$ - | ||
|
Accrued services payable converted to common stock |
$ 183,500 |
$ - | ||
|
See Notes to Consolidated Financial Statements in Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2012. | ||||
|
BLUE DOLPHIN ENERGY COMPANY & SUBSIDIARIES GAAP to Non-GAAP Reconciliation -- EBITDA | ||||||||||
|
Twelve Months Ended December 31, 2012 |
||||||||||
|
Segment |
||||||||||
|
Oil and Gas |
||||||||||
|
Refinery |
Pipeline |
Exploration & |
Corporate & |
|||||||
|
Operations |
Transportation |
Production |
Other(1) |
Total | ||||||
|
Revenue |
$ 351,665,234 |
$ 406,812 |
$ 22,668 |
$ - |
$ 352,094,714 | |||||
|
Operation cost(2) |
$ 350,940,269 |
$ 8,676,242 |
$ 2,018,126 |
$ 2,270,009 |
363,904,646 | |||||
|
Other non-interest income |
$ 534,047 |
- |
- |
- |
534,047 | |||||
|
EBITDA |
$ 1,259,012 |
$ (8,269,430) |
$ (1,995,458) |
$ (2,270,009) |
||||||
|
Depletion, depreciation and |
||||||||||
|
amortization |
(1,622,864) | |||||||||
|
Other income (expense), net |
(932,639) | |||||||||
|
Loss from continuing operations, |
||||||||||
|
before income taxes |
$ (13,831,388) | |||||||||
|
Loss from discontinued operations |
$ (4,443,566) | |||||||||
|
Capital expenditures |
$ 2,852,460 |
$ - |
$ - |
$ - |
$ 2,852,460 | |||||
|
Identifiable assets(3) |
$ 52,745,767 |
$ 1,861,055 |
$ 48,247 |
$ 1,726,857 |
$ 56,381,926 | |||||
|
(1) |
Includes unallocated general and administrative costs associated with corporate maintenance costs (such as director fees and legal expenses) and goodwill impairment. |
|
(2) |
General and administrative costs are allocated based on revenue. In addition, the effect of the economic hedges on refined products, executed by Genesis Energy, LLC ("Genesis"), is included within the operation cost of our Refinery Operations group. Cost of refined products sold includes a realized loss of $90,507 and an unrealized gain of $136,100 for the year ended December 31, 2012. |
|
(3) |
Identifiable assets contain related legal obligations of each segment including cash, accounts receivable and payable and recorded net assets. |
|
Twelve Months Ended December 31, 2011 |
||||||||||
|
Segment |
||||||||||
|
Oil and Gas |
||||||||||
|
Refinery |
Pipeline |
Exploration & |
Corporate & |
|||||||
|
Operations |
Transportation |
Production |
Other(1) |
Total | ||||||
|
Revenue |
$ - |
$ - |
$ - |
$ - |
$ - | |||||
|
Operation cost(2) |
645,444 |
- |
- |
- |
645,444 | |||||
|
Other non-interest income |
874,421 |
- |
- |
- |
874,421 | |||||
|
EBITDA |
$ 228,977 |
$ - |
$ - |
$ - |
||||||
|
Depletion, depreciation and |
||||||||||
|
amortization |
(17,684) | |||||||||
|
Other income (expense), net |
(27,439) | |||||||||
|
Income from continuing operations |
||||||||||
|
before income taxes |
$ 183,854 | |||||||||
|
Capital expenditures |
$ 3,507,850 |
$ - |
$ - |
$ - |
$ 3,507,850 | |||||
|
Identifiable assets(3) |
$ 38,144,056 |
$ - |
$ - |
$ - |
$ 38,144,056 | |||||
|
(1) |
Includes unallocated general and administrative costs associated with corporate maintenance costs (such as director fees and legal expenses). |
|
(2) |
General and administrative costs are allocated based on revenue. |
|
(3) |
Identifiable assets contain related legal obligations of each segment including cash, accounts receivable and payable and recorded net assets. |
SOURCE Blue Dolphin Energy Company
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