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 PR Newswire WAYZATA, Minn., May 9, 2013 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 oNet Income was $0.6 million compared to a loss of $(15.9) million for the same period in 2012. oAdjusted EBITDA was $2.4 million compared sequentially to $1.8 million and $2.4 million for the same period in 2012. oJV transloading volumes were 2.4 million barrels of oil, an increase of 15% sequentially and 45% compared to the same period in 2012. oJV marketing volumes were 2.6 million barrels of oil, an increase of 30% sequentially and 75% compared to the same period in 2012. oJV trucking volumes, which commenced in the fourth quarter of 2012, were 1.1 million barrels of oil. oThe Pioneer Terminal expansion commenced on March 25 and will increase the throughput capacity to 80,000 barrels per day by year-end 2013. oRestricted 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 firstname.lastname@example.org email@example.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 $ $ 2,340,083 658,396 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 6,712,683 5,331,599 TRANSPORT SOLUTIONS, LLC INVESTMENT IN DAKOTA PLAINS 62,055 - SERVICES, LLC 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 $ $ 239,674 571,235 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 21,096,791 25,614,683 Discount 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 41,839 42,378,496 and 41,839,433 Issued and Outstanding, Respectively 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' $ 41,234,647 $ 39,664,657 Equity 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 $ $ 80,279 95,199 OPERATING EXPENSES General and Administrative 1,444,391 759,452 Expenses 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 1,414,260 1,066,632 Solutions, LLC Income from Investment in DPTS 1,766,563 1,888,727 Marketing LLC Income from Investment in 62,055 - Dakota Plains Services, LLC Interest Expense (Net of (890,805) (27,580,244) Interest Income) 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 $ $ (0.43) Share – Basic 0.01 Net Income (Loss) Per Common $ $ (0.43) Share – Diluted 0.01 Weighted Average Shares 41,418,606 37,237,143 Outstanding - Basic Weighted Average Shares 42,827,077 37,237,143 Outstanding - Diluted 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 (21,273) (31,290) Income Income from Investment in Dakota Petroleum Transport Solutions, (1,414,260) (1,066,632) LLC Income from Investment in DPTS (1,766,563) (1,888,727) Marketing LLC Income for Investment in Dakota (62,055) - Plains Services, LLC 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 19,433 - Party Increase in Accounts Payable 362,361 450,338 Increase in Accounts Payable - 21,546 - Related Party Increase in Income Taxes Payable 82,000 - Decrease in Accrued Expenses (176,662) (70,331) Decrease in Deferred Rental (894) - Income Net Cash Used In Operating (1,662,027) (663,051) Activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Property and (67,482) (3,199) Equipment Cash Received from Dakota Petroleum Transport Solutions, 47,822 982,718 LLC Net Cash Used In Investing (19,660) 979,519 Activities NET INCREASE IN CASH AND CASH (1,681,687) 316,468 EQUIVALENTS CASH AND CASH EQUIVALENTS – 2,340,083 1,753,665 BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS – END $ 658,396 $ 2,070,133 OF PERIOD Supplemental Disclosure of Cash Flow Information Cash Paid During the Period for $ 787,225 $ 268,515 Interest Cash Paid During the Period for $ 34,000 $ 2,600 Income Taxes Non-Cash Financing and Investing Activities: Purchase of Property and Equipment Paid Subsequent to $ - $ 32,846 Period End Fair Value of Warrants Issued $ 208,663 $ - for Consulting Fees 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, 37,014,018 $37,014 $10,158,044 (3,110,791) $ 7,084,267 2011 Acquisition of MCT Holding 640,200 640 (640) - - 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 1,757,075 1,757 6,130,435 - 6,132,192 Debt Restructure Issuance of Common Shares 3,125 3 24,997 - 25,000 to Board of Directors Warrants Issued Included in - - 644,889 - 644,889 Debt Discount Net Loss - - - (2,000,670) (2,000,670) Balance - December 31, 41,839,433 41,839 17,432,904 (5,111,461) 12,363,282 2012 Share-Based - - 287,973 - 287,973 Compensation Issuance of Restricted 526,563 527 (527) - - Common Shares Issuance of Shares to 12,500 12 49,988 - 50,000 Executive Issuance of Warrants Pursuant to - - 208,663 - 208,663 Consulting Agreements Net Income - - - 588,897 588,897 Balance - March 42,378,496 $42,378 $17,979,001 $ $ 13,498,815 31, 2013 (4,522,564) 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. Website: http://www.dakotaplains.com
Dakota Plains Holdings, Inc. Reports First Quarter 2013 Financial Results
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