Dakota Plains Holdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

Adjusted EBITDA for 2012 Increased 110.7% to $11.8 Million

Mar 14, 2013, 19:40 ET from Dakota Plains Holdings, Inc.

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.



RELATED LINKS

http://www.dakotaplains.com