Exhibit 99.1

 

Dakota Plains HOLDINGS, INC.

Reports second QUARTER 2015 Financial Results

 

WAYZATA, Minnesota, (August 7, 2015) -- Dakota Plains Holdings, Inc. (“Dakota Plains” or the “Company”) (NYSE MKT: DAKP) today announced financial results for the three months ended June 30, 2015.

Operational & Corporate Update Summary

·The Company billed 3.3 million barrels of transloaded crude oil, a decrease of approximately 16% compared to second quarter of 2014.
·Frac sand transloading volumes were 195,000 tons compared to 110,000 tons in the first quarter of 2015, a 78% increase. Frac sand transloading operations commenced late in the second quarter of 2014.
·Construction of the third crude oil storage tank was completed on time and on budget and it was commissioned in early July, allowing for increased throughput.
·The Company brought its crude oil and frac sand transloading operations in-house effective June 1, 2015 which will reduce operating costs.

Financial Summary

·Adjusted EBITDA (a non-GAAP measure defined below) was $3.0 million compared to $(0.2) million for the second quarter of 2014.
·The Company had a net loss of $550,000 compared to a net loss of $1.0 million for the second quarter of 2014.
·Revenue from transloading crude oil was $5.8 million compared to $7.3 million for the second quarter of 2014.
·Revenue from transloading frac sand was $1.6 million compared to $0.9 million in the first quarter 2015.

 

Craig M. McKenzie, Chief Executive Officer of Dakota Plains, said: “Despite a ‘bear market’ in crude oil, we achieved solid results. Our crude oil volumes were down, consistent with crude by rail market share in the Bakken, while our frac sand volumes are running well ahead of expectations. Bringing our Pioneer operations in-house reduces our operating costs, and positions us well in this competitive environment.”

 

 

Added McKenzie, “We believe that conditions are stabilizing. We have contracted 58,000 barrels per day for August, our highest monthly volume ever, and we are seeing renewed interest in multi-month contracts. Our recently completed crude oil storage expansion will allow further increases in volume. We remain confident that the progress we have made over the last two years positions us well for the future.”

Second Quarter 2015 Financial Results

Adjusted EBITDA for the quarter was $3.0 million compared to $(0.2) million for the second quarter of 2014. The difference was primarily driven by an increase in frac sand transloading volumes and fees associated with our crude oil transloading contracts. This was partially offset by the increase in transloading operating expenses as a result of assuming the entire cost associated with insuring the Pioneer Terminal facility.

 

The Company experienced a net loss of approximately $550,000 for the second quarter 2015, compared to a net loss of approximately $1.0 million for the second quarter 2014. The net loss for the second quarter of 2015 was driven by lower crude oil transloading volumes. The net loss for the second quarter of 2014 was driven by the loss from the Company’s indirect ownership interest in the subsequently discontinued marketing joint venture.

 

General and administrative expenses were $2.6 million for the second quarter compared to $1.9 million for the second quarter of 2014. The increase in general and administrative expenses was due to an increase in compensation expense associated with increased headcount and higher legal expenses.

 

Revenue from crude oil transloading was $5.8 million in the second quarter compared to $7.3 million for the second quarter of 2014. The decrease was driven by volume, as second quarter 2015 billed volume was 3.3 million barrels of crude oil transloaded compared to 3.9 million of barrels of crude oil for the second quarter of 2014, a 16% decrease. Cost of revenue in the second quarter of 2015 was $1.7 million compared to $1.8 million for the second quarter 2014 due to the decrease in volume. The Company expects to maintain a lower cost of revenue going forward as it realizes the cost savings from bringing the transloading of crude oil in house effective June 1, 2015.

 

Revenue from frac sand transloading was $1.6 million for second quarter compared to $0.2 million for the second quarter 2014.  The increase in revenue was due to the fact that the frac sand transloading operations did not commence until June 2014. The Company transloaded 195,000 short tons of frac sand during the the second quarter 2015, which was the highest quarterly throughput to date. The Company also successfully brought the frac sand transloading services in-house effective June 1, 2015.

 

 

 

 

For the second quarter, the Company incurred $0.8 million in expenses related to its inventory of tank cars that were assumed upon the dissolution of the joint ventures. The Company accounted for these expenses under Other Income (Expense) on its income statement as it does not consider the tank cars a core business. The $0.8 million was offset by $0.3 million in income reported related to the decrease in the operational override liability after adjusting for actual barrels of crude oil transloaded during the second quarter of 2015.

 

Interest expense was $2.0 million for the second quarter of 2015 compared to $0.5 million for the second quarter of 2014. The increase was primarily driven by the interest expense related to the operational override liability and the additional debt incurred for the acquisition of 50% of the outstanding interest of the transloading, frac sand, and marketing joint ventures in the fourth quarter of 2014.

 

Adjusted EBITDA

 

Adjusted EBITDA and adjusted EBITDA attributable to stockholders of Dakota Plains Holdings, Inc., 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. is an integrated midstream energy company operating the Pioneer Terminal transloading facility. The Pioneer Terminal is centrally located in Mountrail County, North Dakota, for Bakken and Three Forks related Energy & Production activity. For more information please visit the corporate website at: www.dakotaplains.com.

 

 

 

 

Forward Looking Statements

 

Statements made by representatives of Dakota Plains in this press release that are not historical facts are forward-looking statements. These statements are based on certain assumptions and expectations made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or anticipated in the forward-looking statements. These include risks relating to global economics or politics, our ability to obtain additional capital needed to implement our business plan, minimal operating history, loss of key personnel, lack of business diversification, reliance on strategic, third-party relationships, financial performance and results, prices and demand for oil, our ability to make acquisitions on economically acceptable terms, and other factors described from time to time in the Company’s periodic reports filed with the SEC that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Dakota Plains undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.

 

For more information, please contact:

Company Contact Investor and Media Contact
Tim Brady, CFO Dan Gagnier, Sard Verbinnen
tbrady@dakotaplains.com DGagnier@sardverb.com
Phone: 952.473.9950 Phone: 212.415.8972
www.dakotaplains.com www.sardverb.com

 

– TABLES FOLLOW –

 

 

 

 

 

 

 

 

 

 

 

 

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2015 AND DECEMBER 31, 2014

 

ASSETS
    June 30,     December 31,  
    2015     2014  
CURRENT ASSETS                
Cash and Cash Equivalents   $ 5,221,381     $ 4,690,706  
Trade Receivables, Net     6,959,661       3,268,386  
Income Tax Receivable     14,803       14,803  
Other Current Assets     656,256       99,776  
Other Receivables     527,277       781,135  
Deferred Tax Asset     912,000       2,266,000  
Total Current Assets     14,291,378       11,120,806  
PROPERTY AND EQUIPMENT                
Land     3,191,521       3,191,521  
Site Development     5,829,640       5,829,640  
Terminal     21,505,220       21,383,972  
Machinery     18,208,136       18,133,754  
Construction in Progress     5,388,163       1,886,470  
Other Property and Equipment     12,234,176       11,910,987  
Total Property and Equipment     66,356,856       62,336,344  
Less - Accumulated Depreciation     8,391,499       6,143,159  
Total Property and Equipment, Net     57,965,357       56,193,185  
FINANCE COSTS, NET     1,057,111       1,537,795  
RESTRICTED CASH     3,000,293       3,000,000  
DEFERRED TAX ASSET     28,327,000       26,762,000  
OTHER ASSETS     542,902       512,901  
Total Assets   $ 105,184,041     $ 99,126,687  
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES                
Accounts Payable   $ 10,319,666     $ 7,387,612  
Accrued Expenses     1,776,197       1,696,358  
Promissory Notes, SunTrust     23,625,000       23,250,000  
Operational Override Liability     646,702       715,497  
Notes Payable - Vehicles     56,745        
Total Current Liabilities     36,424,310       33,049,467  
LONG-TERM LIABILITIES                
Promissory Notes, SunTrust     27,500,000       25,250,000  
Operational Override Liability     44,136,636       44,595,370  
Notes Payable - Vehicles     198,688        
Other Non-Current Liabilities     6,417       9,917  
Total Long-Term Liabilities     71,841,741       69,855,287  
Total Liabilities     108,266,051       102,904,754  
COMMITMENTS AND CONTINGENCIES (NOTE 12)                
STOCKHOLDERS’ DEFICIT                
Preferred Stock - Par Value $.001; 10,000,000 Shares Authorized; None Issued or Outstanding            
Common Stock, Par Value $.001; 100,000,000 Shares Authorized; 55,095,810 and 55,044,829 Issued and Outstanding, Respectively     55,095       55,044  
Additional Paid-In Capital     7,330,751       6,267,788  
Accumulated Deficit     (10,467,856 )     (10,100,899 )
Total Stockholders’ Deficit     (3,082,010 )     (3,778,067 )
Total Liabilities and Stockholders’ Deficit   $ 105,184,041     $ 99,126,687  

 

 

 

 

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014

 

    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2015     2014     2015     2014  
REVENUES                                
Transloading Revenue   $ 5,804,272     $ 7,298,561     $ 14,283,533     $ 12,754,019  
Sand Revenue     1,560,055       176,187       2,438,428       176,187  
Rental Income     30,000       30,000       60,000       60,000  
Other     1,316,700             1,316,700        
Total Revenues     8,711,027       7,504,748       18,098,661       12,990,206  
                                 
COST OF REVENUES     2,075,834       1,757,462       4,290,496       3,856,161  
(exclusive of items shown separately below)                                
                                 
OPERATING EXPENSES                                
Transloading Operating Expenses     1,280,374       516,150       2,404,246       978,385  
General and Administrative Expenses     2,625,458       1,939,107       4,544,647       4,494,650  
Depreciation and Amortization     1,140,326       1,086,271       2,248,340       2,121,486  
Total Operating Expenses     5,046,158       3,541,528       9,197,233       7,594,521  
                                 
INCOME FROM OPERATIONS     1,589,035       2,205,758       4,610,932       1,539,524  
                                 
OTHER INCOME (EXPENSE)                                
Loss from Investment in DPTS Marketing LLC           (1,669,846 )           (1,583,214 )
Income from Investment in Dakota Plains Services, LLC           303,226             424,680  
Interest Expense, Net of Interest Income     (2,012,040 )     (504,244 )     (3,958,782 )     (1,006,380 )
Other Expense     (457,945 )           (1,222,607 )      
Total Other Income (Expense)     (2,469,985 )     (1,870,864 )     (5,181,389 )     (2,164,914 )
                                 
INCOME (LOSS) BEFORE TAXES     (880,950 )     334,894       (570,457 )     (625,390 )
                                 
INCOME TAX BENEFIT     (331,000 )     (647,000 )     (203,500 )     (1,161,885 )
                                 
NET INCOME (LOSS)     (549,950 )     981,894       (366,957 )     536,495  
                                 
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS           2,018,943             2,909,807  
                                 
NET LOSS ATTRIBUTABLE TO SHAREHOLDERS OF DAKOTA PLAINS HOLDINGS, INC.   $ (549,950 )   $ (1,037,049 )   $ (366,957 )   $ (2,373,312 )
                                 
Net Loss Per Common Share – Basic and Diluted   $ (0.01 )   $ (0.02 )   $ (0.01 )   $ (0.04 )
                                 
Weighted Average Shares Outstanding - Basic and Diluted     54,184,792       53,781,435       54,135,531       53,690,564  

 

 

 

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014

    Six Months Ended
June 30,
 
    2015     2014  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net Income (Loss)   $ (366,957 )   $ 536,495  
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities:                
Depreciation and Amortization     2,248,340       2,121,486  
Amortization of Debt Discount           174,813  
Amortization of Finance Costs     480,684       36,586  
Deferred Income Taxes     (211,000 )     (1,170,000 )
Loss from Investment in DPTS Marketing LLC           1,583,214  
Income from Investment in Dakota Plains Services, LLC           (424,680 )
Non-Cash Rental Expense           9,790  
Amortization of Deferred Rent     (3,500 )     (3,500 )
Share-Based Compensation     1,259,951       1,504,293  
Changes in Working Capital and Other Items                
Increase in Trade Receivables     (3,691,275 )     (1,321,269 )
Decrease (Increase) in Other Receivables     253,858       (116,775 )
Decrease (Increase) in Other Current Assets     (406,481 )     153,068  
Decrease in Due from Related Party           1,514,475  
Increase in Accounts Payable     428,160       122,509  
Decrease in Accrued Expenses     (46,048 )     (1,317,679 )
Decrease in Accounts Payable - Related Party           (722 )
Increase in Restricted Cash     (293 )      
Decrease in Operational Override Liability     (481,011 )      
Decrease in Other Assets           1,802  
Net Cash Provided By (Used In) Operating Activities     (535,572 )     3,403,906  
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Purchases of Property and Equipment     (1,516,618 )     (8,481,863 )
Cash Paid for Deposits     (30,000 )      
Net Cash Used In Investing Activities     (1,546,618 )     (8,481,863 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Commons Shares Surrendered     (221,050 )     (645,679 )
Principal Payments on Promissory Note, Pioneer Terminal           (287,703 )
Cash Distributions Paid to Non-Controlling Interests           (1,954,941 )
Advances on Promissory Notes, SunTrust     3,000,000        
Payments on Promissory Notes, SunTrust     (375,000 )      
Proceeds from Notes Payable - Vehicles     270,165        
Payments on Notes Payable - Vehicles     (14,732 )      
Payment on Operational Override Liability     (46,518 )      
Net Cash Provided By (Used In) Financing Activities     2,612,865       (2,888,323 )
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     530,675       (7,966,280 )
                 
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD     4,690,706       13,011,608  
                 
CASH AND CASH EQUIVALENTS – END OF PERIOD   $ 5,221,381     $ 5,045,328  
                 
Supplemental Disclosure of Cash Flow Information                
Cash Paid During the Period for Interest   $ 2,681,241     $ 866,041  
Cash Paid During the Period for Income Taxes   $ 7,500     $ 8,115  
                 
Non-Cash Financing and Investing Activities:                
Purchase of Property and Equipment Paid Subsequent to Period End   $ 3,258,527     $ 1,382,639  
Change in Preferred Dividend Receivable   $     $ 247,942  

 

 

 

 

Non-GAAP Financial Measures

Dakota Plains Holdings, Inc.

Reconciliation of Adjusted EBITDA

 

 

    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2015     2014     2015     2014  
Net Income (Loss)   $ (549,950 )   $ 981,894     $ (366,957 )   $ 536,495  
Add Back:                                
Income Tax Benefit     (331,000 )     (647,000 )     (203,500 )     (1,161,885 )
Depreciation and Amortization     1,140,326       1,086,271       2,248,340       2,121,486  
Share-Based Compensation     750,420       375,361       1,259,951       1,504,293  
Interest Expense     2,012,040       504,244       3,958,782       1,006,380  
Adjusted EBITDA   $ 3,021,836     $ 2,300,770     $ 6,896,616     $ 4,006,769  
                                 
Adjusted EBITDA Attributable to Non-Controlling Interests           2,537,723             3,922,140  
                                 
Adjusted EBITDA Attributable to Shareholders of Dakota Plains Holdings, Inc.   $ 3,021,836     $ (236,953 )   $ 6,896,616     $ 84,629  

 

 

 

 

 


The following information was filed by Dakota Plains Holdings, Inc. (DAKP) on Friday, August 7, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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