Exhibit 99.1

Dakota Plains HOLDINGS, INC.

Reports THIRD QUARTER 2015 Financial Results

 

WAYZATA, Minnesota, (November 6, 2015) -- Dakota Plains Holdings, Inc. (“Dakota Plains” or the “Company”) (NYSE MKT: DAKP) today announced financial results for the three months ended September 30, 2015.

Operational Summary

·The Company billed 4.8 million barrels of transloaded crude oil, an increase of approximately 43% compared to the third quarter of 2014.
·Frac sand transloading volumes were 141,000 tons, an increase of approximately 102% compared to the third quarter of 2014.
·The Company benefitted from its first full quarter of in-house operations at the Pioneer Terminal, materially reducing operating costs.

Financial Summary

·Adjusted EBITDA (a non-GAAP measure defined below) was $2.0 million compared to $1.5 million for the third quarter of 2014.
·The Company had a net loss of $21.2 million compared to breakeven results for the third quarter of 2014 after adjusting for non-controlling interests. Included in the net loss of $21.2 million was the application of a non-cash valuation allowance on our deferred tax assets of $26.2 million and an offsetting non-cash adjustment made to the Operational Override liability in the amount of $10.0 million.
·Revenue from transloading crude oil was $5.1 million compared to $6.3 million for the third quarter of 2014.
·Revenue from transloading frac sand was $1.0 million compared to $0.6 million in the third quarter 2014.

 

Craig M. McKenzie, Chief Executive Officer of Dakota Plains, said, “The energy industry continues to adjust to lower oil prices, and crude by rail is rationalizing in response to the broader sector. At Dakota Plains we are positioning for long term competitive success as evidenced by our record crude oil transloading volumes, steady top-line, lower costs and increasing market share.”

Third Quarter 2015 Financial Results

Adjusted EBITDA for the quarter was $2.0 million compared to $1.5 million for the third quarter of 2014. The difference was primarily driven by higher crude oil and frac sand transloading throughput and improved efficiencies in crude oil and frac sand transloading from bringing the transloading operations in-house.

 

 

 

 

The Company experienced a net loss of approximately $21.2 million for the third quarter 2015, compared to breakeven results after adjusting for non-controlling interests for the third quarter 2014. The net loss was driven by the valuation allowance on our deferred tax assets of $26.2 million, partially offset by improved operating efficiencies in crude oil and frac sand transloading and the $10.0 million gain realized from the revaluation of the Operational Override liability.

 

General and administrative expenses were $2.6 million for the third quarter compared to $1.6 million for the third quarter of 2014. The increase in general and administrative expenses was primarily due to $0.8 million in fees related to the strategic alternatives process and $0.2 million in non-cash general and administrative expenses.

 

Revenue from crude oil transloading was $5.1 million in the third quarter compared to $6.3 million for the third quarter of 2014. The decrease was driven by lower crude oil transloading fees, partially offset by increased throughput, as the Company billed 4.8 million barrels of transloaded crude oil during the third quarter of 2015 compared to 3.4 million barrels during the same period of 2014. Cost of revenue for crude oil transloading was $1.3 million for the third quarter of 2015 compared to $1.8 million for the third quarter of 2014. The reduction was primarily due to bringing the transloading of crude oil in-house during the second quarter of 2015.

 

Revenue from frac sand transloading was $1.0 million for the third quarter compared to $0.6 million for the third quarter of 2014.  The increase in revenue was driven by volume as the Company transloaded approximately 141,000 tons of frac sand during the third quarter of 2015 compared to approximately 70,000 tons transloaded during the same period of 2014. The cost of revenue related to frac sand transloading was $0.1 million for the third quarter of 2015 compared to $0.3 million for the third quarter of 2014. The decrease was due to improved efficiencies as a result of bringing the transloading operations in-house during the second quarter of 2015.

 

Interest expense was $2.1 million for the third quarter compared to $0.5 million for the third quarter of 2014. The increase was primarily driven by the interest expense related to the Operational Override liability and the additional debt resulting from the acquisition of 50% of the outstanding interest of the transloading, sand and marketing joint ventures in the fourth quarter of 2014.

 

During the quarter the Company reduced the fair value of its Operational Override liability to more accurately reflect the current operating environment, resulting in a $10.0 million non-cash gain. In addition, the Company applied a non-cash valuation allowance of $26.2 million to its net deferred tax assets.

 

 

 

 

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 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 SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

    September 30,     December 31,  
    2015     2014  
ASSETS
CURRENT ASSETS                
Cash and Cash Equivalents   $ 1,776,210     $ 4,690,706  
Trade Receivables, Net     7,600,850       3,268,386  
Income Tax Receivable     9,648       14,803  
Other Current Assets     1,484,556       99,776  
Other Receivables     1,407,374       781,135  
Deferred Tax Asset           2,266,000  
Total Current Assets     12,278,638       11,120,806  
PROPERTY AND EQUIPMENT                
Land     3,191,521       3,191,521  
Site Development     5,829,640       5,829,640  
Terminal     21,437,077       21,383,972  
Machinery     18,218,163       18,133,754  
Construction in Progress           1,886,470  
Other Property and Equipment     18,241,921       11,910,987  
Total Property and Equipment     66,918,322       62,336,344  
Less – Accumulated Depreciation     9,648,336       6,143,159  
Total Property and Equipment, Net     57,269,986       56,193,185  
FINANCE COSTS, NET     859,896       1,537,795  
RESTRICTED CASH     3,000,444       3,000,000  
DEFERRED TAX ASSET     114,000       26,762,000  
OTHER ASSETS     542,901       512,901  
Total Assets   $ 74,065,865     $ 99,126,687  
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES                
Accounts Payable   $ 7,591,751     $ 7,387,612  
Accrued Expenses     2,110,636       1,696,358  
Promissory Notes, SunTrust     23,812,500       23,250,000  
Operational Override Liability     1,884,186       715,497  
Deferred Tax Liability     114,000        
Notes Payable - Vehicles     56,961        
Total Current Liabilities     35,570,034       33,049,467  
LONG-TERM LIABILITIES                
Promissory Notes, SunTrust     29,125,000       25,250,000  
Operational Override Liability     32,910,427       44,595,370  
Notes Payable – Vehicles     182,926        
Other Non-Current Liabilities     4,667       9,917  
Total Long-Term Liabilities     62,223,020       69,855,287  
Total Liabilities     97,793,054       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; 55,087,996 and 55,044,829 Issued and Outstanding, Respectively     55,088       55,044  
Additional Paid-In Capital     7,873,415       6,267,788  
Accumulated Deficit     (31,655,692 )     (10,100,899 )
Total Stockholders' Deficit     (23,727,189 )     (3,778,067 )
Total Liabilities and Stockholders' Deficit   $ 74,065,865     $ 99,126,687  

 

 

 

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2015     2014     2015     2014  
REVENUES                                
Transloading Revenue   $ 5,137,567     $ 6,349,502     $ 19,421,100     $ 19,103,521  
Sand Revenue     983,572       557,168       3,422,000       733,355  
Rental Income     30,000       30,000       90,000       90,000  
Other                 1,316,700        
Total Revenues     6,151,139       6,936,670       24,249,800       19,926,876  
COST OF REVENUES
(exclusive of items shown separately below)
    1,303,801       1,919,429       5,594,297       5,775,590  
OPERATING EXPENSES                                
Transloading Operating Expenses     837,646       759,535       3,241,892       1,737,920  
General and Administrative Expenses     2,626,713       1,552,245       7,171,360       6,046,895  
Depreciation and Amortization     1,256,837       1,108,348       3,505,177       3,229,834  
Total Operating Expenses     4,721,196       3,420,128       13,918,429       11,014,649  
INCOME FROM OPERATIONS     126,142       1,597,113       4,737,074       3,136,637  
OTHER INCOME (EXPENSE)                                
Income (Loss) from Investment in DPTS Marketing LLC           289,232             (1,293,982 )
Income from Investment in Dakota Plains Services, LLC           164,738             589,418  
Interest Expense (Net of Interest Income)     (2,068,419 )     (496,637 )     (6,027,201 )     (1,503,017 )
Change in Operational Override Liability     9,987,725             10,469,736        
Other Income (Expense)                 (1,704,618 )      
Total Other Income (Expense)     7,919,306       (42,667 )     2,737,917       (2,207,581 )
INCOME BEFORE TAXES     8,045,448       1,554,446       7,474,991       929,056  
INCOME TAX PROVISION (BENEFIT)     29,233,284       19,737       29,029,784       (1,142,148 )
NET INCOME     (21,187,836 )     1,534,709       (21,554,793 )     2,071,204  
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS           1,521,295             4,431,102  
NET INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF DAKOTA PLAINS HOLDINGS, INC.   $ (21,187,836 )   $ 13,414     $ (21,554,793 )   $ (2,359,898 )
Net Income (Loss) Per Common Share – Basic and Diluted   $ (0.39 )   $ 0.00     $ (0.40 )   $ (0.04 )
Weighted Average Shares Outstanding – Basic     54,317,463       53,884,637       54,196,842       53,755,966  
Weighted Average Shares Outstanding – Diluted     54,317,463       54,908,368       54,196,842       53,755,966  

 

 

 

 

 

DAKOTA PLAINS HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

    Nine Months Ended  
    September 30,  
    2015     2014  
CASH FLOWS FROM OPERATING ACTIVITIES                
 Net Income (Loss)   $ (21,554,793 )   $ 2,071,204  
 Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities                
 Depreciation and Amortization     3,505,177       3,229,834  
 Amortization of Debt Discount           262,221  
 Amortization of Finance Costs     721,023       52,841  
 Deferred Income Taxes     29,028,000       (1,154,000 )
 Loss from Investment in DPTS Marketing LLC           1,293,982  
 Income for Investment in Dakota Plains Services, LLC           (589,418 )
 Decrease in Operational Override Liability     (10,469,736 )      
 Non-Cash Rental Expense           14,685  
 Amortization of Deferred Rent     (5,250 )     (5,250 )
 Share-Based Compensation     1,884,485       1,904,658  
 Changes in Working Capital and Other Items                
    Increase in Trade Receivables     (4,332,464 )     (1,860,513 )
    Decrease (Increase) in Other Receivables     (626,239 )     45,176  
    Decrease in Income Taxes Receivable     5,155       949,099  
    Decrease (Increase) in Other Current Assets     (1,309,781 )     334,130  
    Decrease in Due from Related Party           1,991,745  
    Decrease in Accounts Payable     (156,000 )     (181,754 )
    Increase (Decrease) in Accrued Expenses     407,402       (1,301,290 )
    Decrease in Accounts Payable - Related Party           (722 )
    Increase in Restricted Cash     (444 )      
 Increase in Other Assets           (125,000 )
Net Cash Provided By (Used In) Operating Activities     (2,903,465 )     6,931,628  
CASH FLOWS FROM INVESTING ACTIVITIES                
Purchases of Property and Equipment     (4,221,839 )     (9,670,840 )
Cash Paid for Deposits     (30,000 )      
Net Cash Used In Investing Activities     (4,251,839 )     (9,670,840 )
  CASH FLOWS FROM FINANCING ACTIVITIES                
 Cash Paid for Finance Costs     (43,124 )      
 Commons Shares Surrendered     (346,937 )     (645,679 )
 Principal Payments on Promissory Note, Pioneer Terminal           (530,405 )
 Cash Distributions Paid to Non-Controlling Interests           (2,561,694 )
 Capital Contribution to DPTS Sand, LLC           1,000  
 Advances on Promissory Notes, SunTrust     5,000,000        
 Payments on Promissory Notes, SunTrust     (562,500 )      
 Proceeds from Notes Payable - Vehicles     270,165        
 Payments on Notes Payable - Vehicles     (30,278 )      
 Payments on Operational Override Liability     (46,518 )      
Net Cash Provided By (Used In) Financing Activities     4,240,808       (3,736,778 )
NET DECREASE IN CASH AND CASH EQUIVALENTS     (2,914,496 )     (6,475,990 )
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD     4,690,706       13,011,608  
CASH AND CASH EQUIVALENTS – END OF PERIOD   $ 1,776,210     $ 6,535,618  
Supplemental Disclosure of Cash Flow Information                
Cash Paid During the Period for Interest   $ 4,320,449     $ 1,259,582  
Cash Paid During the Period for Income Taxes   $ 1,784     $ 11,852  
Non-Cash Financing and Investing Activities:                
Purchase of Property and Equipment Paid Subsequent to Period End   $ 1,114,772     $ 885,639  
Change in Preferred Dividend Receivable   $     $ 373,970  

 

 

 

 

NON-GAAP FINANCIAL MEASURES

DAKOTA PLAINS HOLDINGS, INC.

RECONCILIATION OF ADJUSTED EBITDA

 

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2015     2014     2015     2014  
Net Income (Loss)   $ (21,187,836 )   $ 1,534,709     $ (21,554,793 )   $ 2,071,204  
  Add Back                                
   Income Tax Provision (Benefit)     29,233,284       19,737       29,029,784       (1,142,148 )
   Depreciation and Amortization     1,256,837       1,108,348       3,505,177       3,229,834  
   Share Based Compensation     624,534       400,365       1,884,485       1,904,658  
   Interest Expense     2,068,419       496,637       6,027,201       1,503,017  
   Decrease in Operational Override Liability     (9,987,725 )           (10,469,736 )      
    Adjusted EBITDA   $ 2,007,513     $ 3,559,796     $ 8,422,118     $ 7,566,565  
                                 
   Adjusted EBITDA Attributable to Non-Controlling Interests           2,051,009             5,973,149  
                                 
Adjusted EBITDA Attributable to Shareholders of Dakota Plains Holdings, Inc.   $ 2,007,513     $ 1,508,787       8,422,118     $ 1,593,416  

 

 

 

 

 

 

 

 


The following information was filed by Dakota Plains Holdings, Inc. (DAKP) on Friday, November 6, 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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