Dakota Plains Holdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results Adjusted EBITDA for 2012 Increased 110.7% to $11.8 Million PR Newswire WAYZATA, Minn., March 14, 2013 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 o2012 marketing volumes increased approximately 526% over 2011 to 7.7 million barrels sold. oTransloading volumes in 2012 increased 37% over 2011 to 7.6 million barrels. oAdjusted EBITDA was $11.8 million for 2012 representing a 110.7% gain compared to 2011. oTotal expenses for 2012 were $3.1 million, a 24.4% decrease compared 2011. oDakota 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. oThe 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. oSub-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 email@example.com firstname.lastname@example.org 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, 41,839 37,014 respectively 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' $ 39,664,657 $ 22,447,871 Equity 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 $ 266,483 $ 314,581 $ 163,427 Party OPERATING EXPENSES General and Administrative 2,901,907 3,897,066 110,059 Expenses Depreciation and 165,313 159,275 90,929 Amortization 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 3,511,999 4,236,779 1,117,608 Solutions, LLC Income from Investment in 10,410,596 2,314,279 - DPTS Marketing LLC Interest Expense (Net of (29,211,978) (3,371,812) 1,259 Interest Income) Gain (Loss) on Extinguishment 14,708,909 (4,552,500) - of Debt Other Expense - (2,777) - Total Other Income (580,474) (1,376,031) 1,118,867 (Expense) INCOME (LOSS) BEFORE INCOME (3,381,211) (5,117,791) 1,081,306 TAXES INCOME TAX PROVISION (1,380,541) (2,007,000) 416,000 (BENEFIT) NET INCOME (LOSS) $(2,000,670) $(3,110,791) $ 665,306 Net Income (Loss) Per Common $ (0.05) $ (0.09) $ Share – Basic and Diluted 0.02 Weighted Average Shares Outstanding – Basic and 39,792,973 35,214,940 30,122,634 Diluted 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 921,124 1,548,046 Petroleum Transport Solutions, LLC Income from Investment in DPTS 1,426,968 1,969,769 Marketing LLC Interest Expense (Net of Interest 7,851 (1,888,655) Income) 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 – $ $ (0.07) Basic 0.25 Net Income (Loss) Per Common Share – $ $ (0.07) Diluted 0.24 Weighted Average Shares Outstanding – 41,109,462 36,029,398 Basic Weighted Average Shares Outstanding – 42,592,489 36,029,398 Diluted 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, 29,766,462 $ $ $ (110,000) $ $ 1,514,834 2009 29,766 1,650,361 (55,293) Sale of Common Shares 700,000 700 541,800 - - 542,500 at $0.775 Per Share Issuance of Common Shares Related to 126,282 126 46,602 - - 46,728 Consulting Agreements Payment on Subscription - - - 110,000 - 110,000 Receivable Net Income - - - - 665,306 665,306 Balance – December 31, 30,592,744 30,592 2,238,763 - 610,013 2,879,368 2010 Sale of Common Shares 1,500,000 1,500 3,186,000 - - 3,187,500 at $2.125 Per Share Sale of Common Shares 500,000 500 1,999,500 - - 2,000,000 at $4.00 Per Share Issuance of Common Shares Related to 2,280,000 2,280 2,161,470 - - 2,163,750 Consulting Agreements Issuance of Common Shares Related to AdministrativeServices 2,000 2 4,248 - - 4,250 Agreement Issuance of Restricted 600,000 600 (600) - - - Common Shares Issuance of Common Shares as a Stock 1,441,774 1,442 (1,442) - - - Dividend Issuance of Common Shares to Board of 40,000 40 84,960 - - 85,000 Directors Issuance of Common Shares for Finance 7,500 8 29,992 - - 30,000 Costs Cash Dividend Paid - - (1,331,619) - (610,013) (1,941,632) Share-Based - - 425,756 - - 425,756 Compensation Issuance of Common Shares Pursuant to 50,000 50 14,200 - - 14,250 Exercise of Warrants Warrants Issue Included - - 1,346,816 - - 1,346,816 in Debt Discount Net Loss - - - - (3,110,791) (3,110,791) Balance – December 31, 37,014,018 37,014 10,158,044 - (3,110,791) 7,084,267 2011 Acquisition of MCT 640,200 640 (640) - - - Holding Corporation Issuance of Common Shares Pursuant to 2,386,578 2,387 (2,387) - - - Exercise of Warrants Share-Based - - 477,604 - - 477,604 Compensation Issuance of Restricted 38,437 38 (38) - - - Common Shares Issuance of Common Shares Pursuant to Debt 1,757,075 1,757 6,130,435 - - 6,132,192 Restructure Issuance of Common Shares to Board of 3,125 3 24,997 - - 25,000 Directors Warrants Issued Included in Debt - - 644,889 - - 644,889 Discount Net Loss - - - - (2,000,670) (2,000,670) Balance – December 31, 41,839,433 $ $ $ $ $ 12,363,282 2012 41,839 17,432,904 - (5,111,461) 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 165,313 159,275 90,929 Amortization Amortization of Debt 58,272 1,346,816 - Discount Amortization of Finance 10,837 - - Costs (Gain) Loss on (14,708,909) 4,552,500 - Extinguishment of Debt Loss on Disposal of Property - 2,776 - and Equipment Loss on Derivative 27,311,802 1,167,500 - Liability Deferred Income Taxes (2,412,000) (2,010,000) 196,000 Issuance of Common Stock for - 2,168,000 46,728 Consulting Fees Increase (Decrease) in 40,271 (100,546) 225,709 Deferred Rental Income Income from Investment in Dakota Petroleum Transport (3,511,999) (4,236,779) (1,117,608) Solutions, LLC Income from Investment in (10,410,596) (2,314,279) - DPTS Marketing LLC 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 - - 19,161 Receivables Increase in Prepaid (13,876) (16,756) - Expenses Increase in Due from (81,175) - - Related Party Increase (Decrease) in 207,058 (6,184) 8,000 Accounts Payable Increase (Decrease) in 1,028,000 (220,000) 220,000 Income Taxes Payable Increase (Decrease) in 152,244 80,661 (19,147) Accrued Expenses Increase (Decrease) in (104,485) 12,310 112,854 Deferred Rental Income Net Cash Provided by (Used in) Operating (3,810,092) (2,095,727) 427,686 Activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Property and (2,116,490) (788,126) (1,534,587) Equipment Cash Paid for Investment in Dakota Petroleum Transport - - (50,000) Solutions, LLC Cash Paid for Investment in - (10,000,100) - DPTS Marketing LLC Cash Received from Dakota Petroleum Transport 1,113,463 1,952,210 659,102 Solutions, LLC Net Cash Used in (1,003,027) (8,836,016) (925,485) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Issuance of - 5,187,500 652,500 Common Stock Proceeds from Exercise of - 14,250 - Warrants Repayments of Notes Payable - - (240,000) - Related Parties Cash Paid for Finance Costs (195,062) - - Cash Paid for Debt (45,401) (150,000) - Extinguishment Costs Cash Dividend Paid - (1,941,632) - Repayment of Promissory (500,000) - - Notes Proceeds from Promissory 6,140,000 - - Notes Proceeds from Senior - 3,500,000 - Promissory Notes Proceeds from Junior - 5,500,000 - Promissory Notes Net Cash Provided by 5,399,537 12,110,118 412,500 Financing Activities NET INCREASE (DECREASE) IN 586,418 1,178,375 (85,299) CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS – 1,753,665 575,290 660,589 BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS – $ 2,340,083 $ 1,753,665 $ 575,290 END OF PERIOD Supplemental Disclosure of Cash Flow Information Cash Paid During the Period $ 1,831,353 $ 858,082 $ 34,849 for Interest Cash Paid During the Period $ $ 211,220 $ for Income Taxes 3,459 - Non-Cash Financing and Investing Activities: Purchase of Property and Equipment Paid Subsequent to $ 30,800 $ 30,800 $ 73,078 Period End Fair Value of Warrants $ 1,048,889 $ 1,346,816 $ Issued for Debt Discount - Payment of Debt $ $ Extinguishment Costs through - $ 30,000 - Issuance of Common Stock Preferred Dividend $ 501,370 $ 317,808 $ Receivable - Satisfaction of $ $ Derivative Liability with $ 6,132,192 - - Common Stock Promissory Notes Issued $ $ to Satisfy Derivative $ 11,965,300 - - Liability Loss on Extinguishment of $ $ Debt Related to Derivative - $ 4,372,500 - Liability Dakota Plains Holdings, Inc. Reconciliation of Adjusted EBITDA Three Months Ended Year Ended December 31, December 31, 2012 2011 2012 2011 2010 Net Income $ 10,342,009 $ $ $ $ (Loss) (2,363,378) (2,000,670) (3,110,791) 665,306 Add Back: Income Tax Provision 5,985,000 (1,523,000) (1,380,541) (2,007,000) 416,000 (Benefit) Depreciation and 41,378 41,130 165,313 159,275 90,929 Amortization Share Based Compensation - 128,644 123,252 502,604 510,756 - Employees and Directors Share Based Compensation - - 231,921 - 2,168,000 46,728 Consultants Interest (7,851) 1,888,655 29,211,978 3,371,812 - Expense Loss (Gain) on Extinguishment (14,708,909) 4,552,500 (14,708,909) 4,552,500 - of Debt Adjusted $ $ $ 11,789,775 $ $ EBITDA 1,780,270 2,951,080 5,644,552 1,218,963 SOURCE Dakota Plains Holdings, Inc. Website: http://www.dakotaplains.com
Dakota Plains Holdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results
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