Attached files
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| 8-K - BLUE DOLPHIN - BLUE DOLPHIN ENERGY CO | bdco8k040115.htm |
PRESS RELEASE
FOR IMMEDIATE RELEASE
April 1, 2015
BLUE DOLPHIN ANNOUNCES IMPROVED FULL YEAR 2014 FINANCIAL RESULTS
Houston, April 1, 2015 / Issuer Direct / -- Blue Dolphin Energy Company (“Blue Dolphin”)(OTCQX:BDCO) today announced financial results for the full year ended December 31, 2014.
2014 Full Year Financial Highlights:
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-
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Net income of $15.8 million, or $1.51 per share, including an income tax benefit of $5.6 million; and
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-
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Total EBITDA of $12.6 million and refinery operations EBITDA of $13.8 million.
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For the full year 2014, Blue Dolphin reported an increase in net income of $19.6 million to $15.8 million, or $1.51 per share, from a net loss of $3.8 million, or a loss of $0.36 per share, for the full year 2013. The significant increase in net income in 2014 was primarily attributable to favorable refining margins, improved product mix, and recognition of a net deferred tax asset of $5.7 million. The net deferred tax asset was primarily related to net operating losses generated before and after Blue Dolphin’s reverse acquisition of Lazarus Energy, LLC in 2012, the primary asset of which is the Nixon Facility.
Total earnings before interest, income taxes and depreciation (“EBITDA”) increased $13.9 million to $12.6 million for the full year 2014 from a negative EBITDA of $1.3 million for the same 2013 period. Refinery operations EBITDA increased $13.2 million to $13.8 million for the full year 2014 from an EBITDA of $0.6 million for the full year 2013 due to improved refining margins.
Total cash flow from operations totaled $7.2 million for the full year 2014 compared to $1.0 million for the full year 2013, representing an increase of $6.2 million. During 2014, Blue Dolphin repaid $4.6 million of debt, net of new proceeds.
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Years Ended December 31,
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2014
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2013
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|||||||
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(in millions)
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||||||||
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Total revenue from operations
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$ | 387.5 | $ | 409.5 | ||||
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Total cost of operations
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(377.9 | ) | (413.3 | ) | ||||
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Income (loss) from operations
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9.6 | (3.8 | ) | |||||
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Total other income
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0.6 | 0.1 | ||||||
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Income (loss) before income taxes
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10.2 | (3.7 | ) | |||||
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Income tax benefit (expense)
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5.6 | (0.1 | ) | |||||
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Net income (loss)
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15.8 | (3.8 | ) | |||||
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Income (loss) per common share
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||||||||
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Basic
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$ | 1.51 | $ | (0.36 | ) | |||
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Diluted
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$ | 1.51 | $ | (0.36 | ) | |||
2014 Full Year Operational Highlights
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-
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Refinery operating income of $12.8 million; and
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-
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Refinery operating income per barrel sold of $3.40.
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Blue Dolphin’s refinery operations business segment, which represents more than 99% of total operations, consists of crude oil and condensate processing at the 15,000 bpd Nixon Facility, as well as the storage and terminaling of petroleum under third-party lease agreements. Refinery operating income increased by $13.4 million to $12.8 million for the full year 2014 compared to a refinery operating loss of $0.5 million for the full year 2013. Refinery operating income per barrel sold increased $3.54 to $3.40 for the full year 2014 from a refinery operating loss per barrel sold of $0.14 for the full year 2013. The increase in refinery operating income and refinery operating income per barrel sold was the result of improved refining margins.
Key Nixon Facility Operational Metrics
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Year Ended December 31,
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Increase
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2014
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2013
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(Decrease)
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Operating Days
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333 | 341 | (8 | ) | ||||||||
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Downtime
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32 | 24 | 8 | |||||||||
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Total refinery throughput(1)
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bbls
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3,862,351 | 3,822,128 | 40,223 | |||||||||
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bpd
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11,599 | 11,209 | 390 | |||||||||
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Total refinery production
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bbls
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3,788,710 | 3,743,482 | 45,228 | |||||||||
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bpd
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11,378 | 10,978 | 400 | |||||||||
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Total refined petroleum product sales
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bbls
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3,779,677 | 3,709,294 | 70,383 | |||||||||
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Fuel and energy losses
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bbls
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73,641 | 78,646 | (5,005 | ) | ||||||||
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bpd
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221 | 231 | (9 | ) | ||||||||
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Capacity utilization rate
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refinery throughput
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77.3 | % | 74.7 | % | 2.6 | % | ||||||
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refinery production
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75.9 | % | 73.2 | % | 2.7 | % | ||||||
_______________
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(1)
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Throughput represents feedstocks. The Nixon Facility’s feedstock consists of crude oil and condensate.
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Downtime at the Nixon Facility during 2014 primarily related to a planned maintenance turnaround and repair of an overhead accumulator. Downtime during 2013 primarily related to a planned maintenance turnaround. Despite operating for fewer days, refinery production increased slightly for 2014 compared to 2013, rising 45,228 barrels ("bbls"), or 400 bbls per day (“bpd”), as the Nixon Facility increased throughput volumes to capitalize on lower crude oil and condensate acquisition costs and increase jet fuel production. Capacity utilization rates improved as a result of increased refinery throughput and refinery production. The nominal decrease in fuel and energy losses of 5,005 bbls, or 9 bpd, was the result of operational efficiency improvements.
Non-GAAP Financial Measures
This press release and its accompanying financial schedules report refinery operating income, refinery operating income per barrel sold, and EBITDA, which are financial measures defined as non-GAAP by the Securities and Exchange Commission (the “SEC”). These non-GAAP measures are used by management to assess Blue Dolphin's operating results and the effectiveness of its business segments. Blue Dolphin's financial measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles ("GAAP"). An explanation of Blue Dolphin's non-GAAP financial measure and a reconciliation of the financial measure to the GAAP financial measure that Blue Dolphin considers most comparable are presented in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Performance Measures" and "Part II, Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements, Note (4) Business Segment Information" of Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 31, 2015.
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About Blue Dolphin
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Blue Dolphin Energy Company (OTCQX: BDCO) is an independent refiner and marketer of refined petroleum products in the Eagle Ford Shale. Blue Dolphin’s primary business is refinery operations at the 15,000 bpd Nixon Facility, which includes the refining of crude oil and condensate into marketable finished and intermediate products, as well as petroleum storage and terminaling. Blue Dolphin also owns and operates pipeline assets and has leasehold interests in oil and gas properties, which are considered non-core. For additional information, visit Blue Dolphin's corporate website at http://www.blue-dolphin-energy.com.
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Contact:
Jonathan P. Carroll
Chief Executive Officer and President
713-568-4725
Certain of the statements included in this press release, which express a belief, expectation or intention, as well as those regarding future financial performance or results, or which are not historical facts, are “forward-looking” statements as that term is defined in the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements are not guarantees of future performance or events and such statements involve a number of risks, uncertainties and assumptions, including but not limited to: our dependence on Lazarus Energy Holdings, LLC (“LEH”) for financing and management of our property and the property of our subsidiaries; capital needs for which our internally generated cash flows and other sources of liquidity may not be adequate; our ability to use net operating loss carryforwards, which are subject to limitation, to offset future taxable income for U.S. federal income tax purposes; dangers inherent in oil and gas operations that could cause disruptions and expose us to potentially significant losses, costs or liabilities and reduce our liquidity; geographic concentration of our assets, which creates a significant exposure to the risks of the regional economy; competition from companies having greater financial and other resources; laws and regulations regarding personnel and process safety, as well as environmental, health and safety, for which failure to comply may result in substantial fines, criminal sanctions, permit revocations, injunctions, facility shutdowns and/or significant capital expenditures; insurance coverage that may be inadequate or expensive; related party transactions with LEH and its affiliates, which may cause conflicts of interest; and loss of executive officers or key employees, as well as a shortage of skilled labor or disruptions in our labor force, which may make it difficult to maintain productivity; and the factors set forth under the heading “Risk Factors” in Part I, Item 1A of Blue Dolphin’s previously filed Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Blue Dolphin undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
# # #
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Blue Dolphin Energy Company & Subsidiaries
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Consolidated Balance Sheets
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December 31,
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2014
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2013
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 1,293,233 | $ | 434,717 | ||||
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Restricted cash
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1,008,514 | 327,388 | ||||||
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Accounts receivable
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8,340,303 | 13,487,106 | ||||||
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Prepaid expenses and other current assets
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771,458 | 333,683 | ||||||
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Deposits
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68,498 | 1,219,660 | ||||||
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Inventory
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3,200,651 | 4,686,399 | ||||||
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Total current assets
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14,682,657 | 20,488,953 | ||||||
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Total property and equipment, net
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37,371,075 | 36,388,666 | ||||||
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Surety bonds
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1,642,000 | - | ||||||
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Debt issue costs, net
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479,737 | 498,536 | ||||||
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Trade name
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303,346 | 303,346 | ||||||
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Deferred tax assets, net
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5,928,342 | - | ||||||
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TOTAL ASSETS
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$ | 60,407,157 | $ | 57,679,501 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 12,370,179 | $ | 20,783,541 | ||||
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Accounts payable, related party
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1,174,168 | 3,659,340 | ||||||
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Notes payable
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- | 11,884 | ||||||
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Asset retirement obligations, current portion
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85,846 | 107,388 | ||||||
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Accrued expenses and other current liabilities
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2,783,704 | 1,600,444 | ||||||
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Interest payable, current portion
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56,039 | 40,272 | ||||||
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Long-term debt, current portion
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1,245,476 | 2,215,918 | ||||||
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Deferred tax liabilities
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168,236 | - | ||||||
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Total current liabilities
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17,883,648 | 28,418,787 | ||||||
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Long-term liabilities:
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Asset retirement obligations, net of current portion
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1,780,924 | 1,490,273 | ||||||
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Deferred revenues and expenses
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691,525 | - | ||||||
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Long-term debt, net of current portion
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10,808,803 | 13,889,349 | ||||||
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Long-term interest payable, net of current portion
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1,274,789 | 1,767,381 | ||||||
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Total long-term liabilities
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14,556,041 | 17,147,003 | ||||||
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TOTAL LIABILITIES
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32,439,689 | 45,565,790 | ||||||
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Commitments and contingencies (Note 22)
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STOCKHOLDERS' EQUITY
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Common stock ($0.01 par value, 20,000,000 shares authorized;10,599,444 and 10,580,973
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shares issued at December 31, 2014 and 2013, respectively)
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105,995 | 105,810 | ||||||
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Additional paid-in capital
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36,718,781 | 36,623,965 | ||||||
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Accumulated deficit
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(8,057,308 | ) | (23,816,064 | ) | ||||
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Treasury stock, 150,000 shares at cost
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(800,000 | ) | (800,000 | ) | ||||
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Total stockholders' equity
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27,967,468 | 12,113,711 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 60,407,157 | $ | 57,679,501 | ||||
See notes to consolidated financial statements in Blue Dolphin's
annual report on Form 10-K for the year ended December 31, 2014.
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Blue Dolphin Energy Company & Subsidiaries
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Consolidated Statements of Operations
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Years Ended December 31,
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2014
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2013
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REVENUE FROM OPERATIONS
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Refined product sales
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$ | 387,304,774 | $ | 409,239,747 | ||||
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Pipeline operations
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220,200 | 303,122 | ||||||
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Oil and gas sales
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- | 200 | ||||||
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Total revenue from operations
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387,524,974 | 409,543,069 | ||||||
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COST OF OPERATIONS
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Cost of refined products sold
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363,762,292 | 399,101,182 | ||||||
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Refinery operating expenses
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10,698,023 | 10,673,722 | ||||||
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Pipeline operating expenses
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208,037 | 163,163 | ||||||
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Lease operating expenses
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26,428 | 67,923 | ||||||
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General and administrative expenses
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1,427,707 | 1,794,053 | ||||||
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Depletion, depreciation and amortization
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1,570,962 | 1,342,563 | ||||||
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Abandonment expense
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- | 63,767 | ||||||
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Accretion expense
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211,995 | 112,686 | ||||||
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Total cost of operations
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377,905,444 | 413,319,059 | ||||||
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Income (loss) from operations
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9,619,530 | (3,775,990 | ) | |||||
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OTHER INCOME (EXPENSE)
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Tank rental and easement revenue
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1,400,898 | 1,155,064 | ||||||
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Interest and other income
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47,522 | 3,105 | ||||||
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Interest expense
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(892,372 | ) | (1,100,053 | ) | ||||
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Loss on disposal of property and equipment
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(4,400 | ) | - | |||||
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Total other income
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551,648 | 58,116 | ||||||
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Income (loss) before income taxes
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10,171,178 | (3,717,874 | ) | |||||
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Income tax benefit (expense)
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5,587,578 | (89,255 | ) | |||||
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Net income (loss)
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$ | 15,758,756 | $ | (3,807,129 | ) | |||
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Income (loss) per common share
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Basic
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$ | 1.51 | $ | (0.36 | ) | |||
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Diluted
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$ | 1.51 | $ | (0.36 | ) | |||
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Weighted average number of common shares outstanding:
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Basic
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10,441,464 | 10,445,883 | ||||||
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Diluted
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10,441,464 | 10,445,883 | ||||||
See notes to consolidated financial statements in Blue Dolphin's
annual report on Form 10-K for the year ended December 31, 2014.
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Blue Dolphin Energy Company & Subsidiaries
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Consolidated Statements of Cash Flows
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Years Ended December 31,
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2014
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2013
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OPERATING ACTIVITIES
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Net income (loss)
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$ | 15,758,756 | $ | (3,807,129 | ) | |||
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Adjustments to reconcile net income (loss) to net cash
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provided by (used in) operating activities:
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Depletion, depreciation and amortization
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1,570,962 | 1,342,563 | ||||||
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Unrealized gain on derivatives
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(488,950 | ) | (143,050 | ) | ||||
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Deferred taxes
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(5,760,106 | ) | - | |||||
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Amortization of debt issue costs
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33,799 | 33,800 | ||||||
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Amortization of intangible assets
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- | 9,463 | ||||||
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Accretion expense
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211,995 | 112,686 | ||||||
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Abandonment costs incurred
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- | 63,767 | ||||||
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Common stock issued for services
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95,001 | 100,000 | ||||||
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Loss on disposal of assets
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4,400 | - | ||||||
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Changes in operating assets and liabilities
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Restricted cash
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(681,126 | ) | (237,795 | ) | ||||
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Accounts receivable
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5,146,803 | 1,111,649 | ||||||
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Prepaid expenses and other current assets
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(437,775 | ) | (105,369 | ) | ||||
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Deposits and other assets
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(505,838 | ) | 16,787 | |||||
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Inventory
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1,485,748 | (2,385,707 | ) | |||||
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Accounts payable, accrued expenses and other liabilities
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(6,770,318 | ) | 2,846,834 | |||||
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Accounts payable, related party
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(2,485,172 | ) | 2,065,319 | |||||
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Net cash provided by operating activities
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7,178,179 | 1,023,818 | ||||||
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INVESTING ACTIVITIES
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Capital expenditures
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(1,720,156 | ) | (1,477,729 | ) | ||||
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Proceeds from sale of assets
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- | 201,000 | ||||||
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Net cash used in investing activities
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(1,720,156 | ) | (1,276,729 | ) | ||||
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FINANCING ACTIVITIES
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Proceeds from issuance of debt
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- | 5,750,611 | ||||||
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Payments on long-term debt
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(6,226,521 | ) | (5,274,106 | ) | ||||
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Proceeds from notes payable
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2,000,000 | 15,032 | ||||||
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Payments on notes payable
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(372,986 | ) | (224,805 | ) | ||||
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Net cash provided by (used in) financing activities
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(4,599,507 | ) | 266,732 | |||||
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Net increase in cash and cash equivalents
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858,516 | 13,821 | ||||||
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
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434,717 | 420,896 | ||||||
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CASH AND CASH EQUIVALENTS AT END OF PERIOD
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$ | 1,293,233 | $ | 434,717 | ||||
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Supplemental Information:
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Non-cash operating activities
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Reduction in accounts receivable in exchange for treasury stock received
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$ | - | $ | 800,000 | ||||
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Surety bond funded by seller of pipeline interest
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$ | 850,000 | $ | - | ||||
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Non-cash investing and financing activities:
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New asset retirement obligations
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$ | 300,980 | $ | - | ||||
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Changes in estimates of existing ARO obligations
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$ | - | $ | 592,415 | ||||
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Financing of capital expenditures via capital lease
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$ | 536,635 | $ | - | ||||
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Accrued services payable converted to common stock
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$ | - | $ | 50,000 | ||||
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Interest paid
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$ | 1,369,197 | $ | 791,536 | ||||
See notes to consolidated financial statements in Blue Dolphin's
annual report on Form 10-K for the year ended December 31, 2014.
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Blue Dolphin Energy Company & Subsidiaries
|
GAAP to Non-GAAP Reconciliation
Refinery Operating Income and Refinery Operating Income Per Barrel Sold. The following table provides a reconciliation of refinery operating income and refinery operating income per barrel sold to refined petroleum product sales, cost of refined petroleum products sold, and refinery operating expenses for the periods indicated. For a reconciliation of refined petroleum product sales to total revenue from operations for our consolidated operations, see “Part II, Item 8. Financial Statements and Supplementary Data – Consolidated Statements of Operations” of this report.
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December 31,
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|
2014
|
2013
|
|||||||
|
Total refined petroleum product sales
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$ | 387,304,774 | $ | 409,239,747 | ||||
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Less:
|
||||||||
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Cost of refined petroleum products sold
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(363,762,292 | ) | (399,101,182 | ) | ||||
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Refinery operating expenses
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(10,698,023 | ) | (10,673,722 | ) | ||||
| (374,460,315 | ) | (409,774,904 | ) | |||||
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Refinery operating income
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$ | 12,844,459 | $ | (535,157 | ) | |||
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Total refined petroleum product sales (bbls)
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3,779,677 | 3,709,294 | ||||||
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Refinery operating income per bbl sold
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$ | 3.40 | $ | (0.14 | ) | |||
EBITDA. EBITDA should be considered in conjunction with net income (loss) and other performance measures such as operating cash flows. Following is a reconciliation of EBITDA, capital expenditures, and identifiable assets by business segment for the year ended December 31, 2014 (and at December 31, 2014) and the year ended December 31, 2013 (and at December 31, 2013):
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Year Ended December 31, 2014
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Segment
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||||||||||||||||
| Refinery Pipeline |
Corporate &
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|||||||||||||||
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Operations
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Transportation
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Other
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Total
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|||||||||||||
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Revenue
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$ | 387,304,774 | $ | 220,200 | $ | - | $ | 387,524,974 | ||||||||
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Less: Operation cost(1)
|
(374,613,154 | ) | (483,262 | ) | (1,242,466 | ) | (376,338,882 | ) | ||||||||
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Other non-interest income
|
1,130,065 | 270,833 | - | 1,400,898 | ||||||||||||
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EBITDA
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$ | 13,821,685 | $ | 7,771 | $ | (1,242,466 | ) | $ | 12,586,990 | |||||||
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Depletion, depreciation and amortization
|
(1,570,962 | ) | ||||||||||||||
|
Interest expense, net
|
(844,850 | ) | ||||||||||||||
|
Income before income taxes
|
$ | 10,171,178 | ||||||||||||||
|
Capital expenditures
|
$ | 1,720,156 | $ | - | $ | - | $ | 1,720,156 | ||||||||
|
Identifiable assets(2)
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$ | 50,950,050 | $ | 3,028,719 | $ | 6,428,388 | $ | 60,407,157 | ||||||||
________________________
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(1)
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Operation cost within the “Refinery Operations” and “Pipeline Transportation” segments includes related general, administrative, and accretion expenses. Operation cost within “Corporate and Other” includes general and administrative expenses associated with corporate maintenance costs, such as accounting fees, director fees and legal expense.
|
|
(2)
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Identifiable assets contain related legal obligations of each business segment including cash, accounts receivable and recorded net assets.
|
|
Year Ended December 31, 2013
|
||||||||||||||||
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Segment
|
||||||||||||||||
|
Refinery
|
Pipeline
|
Corporate &
|
||||||||||||||
|
Operations
|
Transportation
|
Other
|
Total
|
|||||||||||||
|
Revenue
|
$ | 409,239,747 | $ | 303,322 | $ | - | $ | 409,543,069 | ||||||||
|
Less: Operation cost(1)
|
(409,800,285 | ) | (524,051 | ) | (1,652,160 | ) | (411,976,496 | ) | ||||||||
|
Other non-interest income
|
1,113,397 | 41,667 | - | 1,155,064 | ||||||||||||
|
EBITDA
|
$ | 552,859 | $ | (179,062 | ) | $ | (1,652,160 | ) | $ | (1,278,363 | ) | |||||
|
Depletion, depreciation and amortization
|
(1,342,563 | ) | ||||||||||||||
|
Interest expense, net
|
(1,096,948 | ) | ||||||||||||||
|
Loss before income taxes
|
$ | (3,717,874 | ) | |||||||||||||
|
Capital expenditures
|
$ | 1,477,729 | $ | - | $ | - | $ | 1,477,729 | ||||||||
|
Identifiable assets(2)
|
$ | 54,470,723 | $ | 2,399,467 | $ | 809,311 | $ | 57,679,501 | ||||||||
_____________
|
(1)
|
Operation cost within the “Refinery Operations” and “Pipeline Transportation” segments includes related general, administrative, and accretion expenses. Operation cost within “Corporate and Other” includes general and administrative expenses associated with corporate maintenance costs, such as accounting fees, director fees and legal expense.
|
|
(2)
|
Identifiable assets contain related legal obligations of each business segment including cash, accounts receivable and recorded net assets.
|
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