HOUSTON, TX -- (Marketwired) -- 11/23/15 -- Blue Dolphin Energy Company ("Blue Dolphin") (OTCQX: BDCO), an independent refiner and marketer of refined petroleum products in the Eagle Ford Shale, reported net income for the third quarter of 2015 of $1.3 million, or income of $0.12 per share, compared to $0.8 million, or income of $0.08 per share, for the same quarter in 2014. Refinery operations adjusted earnings before interest, income taxes and depreciation ("EBITDA"), a non-GAAP financial measure, totaled $3.8 million for the third quarter of 2015 compared to $2.9 million for the third quarter of 2014. Total adjusted EBITDA totaled $4.2 million compared to $2.5 million for same comparative periods. Refinery operating income for the third quarter of 2015 totaled $2.1 million compared to $1.5 million for the third quarter of 2014.
Net income for the first nine months of 2015 was $5.1 million, or income of $0.49 per share, compared to net income of $8.4 million, or income of $0.81 per share, for the first nine months in 2014. Refinery operations adjusted EBITDA totaled $15.5 million for the first nine months of 2015 compared to $13.8 million for the first nine months of 2014. Total adjusted EBITDA totaled $15.2 million compared to $12.9 million for the same comparative periods. Refinery operating income for the first nine months of 2015 totaled $10.0 million compared to $10.7 million for the first nine months of 2014.
Refinery Operations
For the third quarter of 2015, the Nixon Facility processed 1,109,411 barrels ("bbls"), or 12,752 barrels per day ("bpd"), of crude oil and condensate compared to 849,402 bbls, or 10,890 bpd, of crude oil and condensate for the third quarter of 2014. For the same comparative periods, the Nixon Facility produced 1,084,246 bbls, or 12,463 bpd, of refined petroleum products compared to 831,771 bbls, or 10,664 bpd. The capacity utilization rate for refinery throughput for the third quarter of 2015 was 85.0% compared to 72.6% for the third quarter of 2014. The capacity utilization rate for refinery production for the third quarter of 2015 was 83.1% compared to 71.1% for the third quarter of 2014. Total refinery throughput, total refinery production, and capacity utilization rates increased as a result of: (i) less downtime in the third quarter of 2015 compared to the third quarter of 2014, (ii) debottlenecking efforts in the third quarter of 2015, and (iii) completion of refurbishment of key components of the naphtha stabilizer and depropanizer units late in the third quarter of 2015, all of which contributed to an increase in average refinery throughput for the Current Quarter.
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with generally accepted accounting principles ("GAAP") for the applicable periods, Blue Dolphin also uses the non-GAAP financial measures noted above. These non-GAAP financial measures are reconciled to GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of Blue Dolphin's financial performance for the applicable periods and are indicators management believes are relevant and useful. These performance measures may differ from similar calculations used by other companies within the petroleum industry, thereby limiting their usefulness as a comparative measure.
Below are the definitions of non-GAAP performance measures used by management within this press release:
- EBITDA reflects earnings before: (i) interest income (expense), (ii) income taxes, and (iii) depreciation and amortization. Refinery operations EBITDA reflects EBITDA for our refinery operations business segment. Total EBITDA reflects EBITDA for our refinery operations and pipeline transportation business segments, as well as corporate and other;
- Adjusted EBITDA reflects EBITDA plus the Joint Marketing Agreement Profit Share (the "JMA Profit Share"). The JMA Profit Share represents the GEL TEX Marketing, LLC ("GEL") Profit Share plus the GEL Performance Fee for the period pursuant to the Joint Marketing Agreement. Refinery operations adjusted EBITDA reflects adjusted EBITDA for our refinery operations business segment. Total adjusted EBITDA reflects adjusted EBITDA for our refinery operations and pipeline transportation business segments, as well as corporate and other; and
- Refinery operating income reflects refined petroleum product sales less direct operating costs (including cost of refined products sold and refinery operating expenses) and the JMA Profit Share, which is an indirect operating expense.
Forward-Looking Statements
This press release contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as "outlook," "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q, and our other Securities and Exchange Commission ("SEC") filings. These risks may cause our actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. Blue Dolphin disclaims any intention or obligation to update publicly or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About Blue Dolphin
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. For additional information, visit Blue Dolphin's corporate website at http://www.blue-dolphin-energy.com.
Blue Dolphin Energy Company & Subsidiaries
Financial and operational data presented in this press release is unaudited except as otherwise noted. The consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows should be read in conjunction with Blue Dolphin's quarterly report on Form 10-Q for the quarterly period ended September 30, 2015.
Consolidated Balance Sheets
September 30, December 31,
------------- -------------
2015 2014
------------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,518,359 $ 1,293,233
Restricted cash 5,834,197 1,008,514
Accounts receivable 7,833,519 8,340,303
Prepaid expenses and other current assets 1,045,893 771,458
Deposits 420,176 68,498
Inventory 5,620,827 3,200,651
Deferred tax assets, current portion, net 2,892,459 -
------------- -------------
Total current assets 25,165,430 14,682,657
------------- -------------
Total property and equipment, net 46,054,365 37,371,075
Restricted cash, noncurrent 11,277,441 -
Surety bonds 1,667,000 1,642,000
Debt issue costs, net 1,296,480 479,737
Trade name 303,346 303,346
Deferred tax assets, net 387,824 5,928,342
------------- -------------
Total long-term assets 60,986,456 45,724,500
------------- -------------
TOTAL ASSETS $ 86,151,886 $ 60,407,157
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 16,459,787 $ 12,370,179
Accounts payable, related party - 1,174,168
Asset retirement obligations, current portion 38,644 85,846
Accrued expenses and other current liabilities 2,005,206 2,783,704
Interest payable, current portion 57,140 56,039
Long-term debt, current portion 1,631,539 1,245,476
Deferred tax liabilities, net - 168,236
------------- -------------
Total current liabilities 20,192,316 17,883,648
Long-term liabilities:
Asset retirement obligations, net of current
portion 1,928,371 1,780,924
Deferred revenues and expenses 561,864 691,525
Long-term debt, net of current portion 28,948,021 10,808,803
Long-term interest payable, net of current
portion 1,430,371 1,274,789
------------- -------------
Total long-term liabilities 32,868,627 14,556,041
------------- -------------
TOTAL LIABILITIES 53,060,943 32,439,689
Commitments and contingencies (Note 21)
STOCKHOLDERS' EQUITY
Common stock ($0.01 par value, 20,000,000
shares authorized;10,603,802 and 10,599,444
shares issued at September 30, 2015 and
December 31, 2014, respectively) 106,038 105,995
Additional paid-in capital 36,738,737 36,718,781
Accumulated deficit (2,953,832) (8,057,308)
Treasury stock, 150,000 shares at cost (800,000) (800,000)
------------- -------------
Total stockholders' equity 33,090,943 27,967,468
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 86,151,886 $ 60,407,157
============= =============
Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2015 2014 2015 2014
------------ ------------ ------------ ------------
REVENUE FROM
OPERATIONS
Refined petroleum
product sales $ 54,924,070 $ 87,846,757 $174,830,292 $310,938,981
Tank rental
revenue 286,892 282,516 860,676 847,548
Pipeline
operations 45,925 56,900 119,882 178,793
------------ ------------ ------------ ------------
Total revenue
from operations 55,256,887 88,186,173 175,810,850 311,965,322
COST OF OPERATIONS
Cost of refined
products sold 48,415,627 82,781,856 151,604,774 289,819,720
Refinery operating
expenses 2,953,528 2,496,514 8,420,650 8,092,738
Joint Marketing
Agreement profit
share 1,435,376 1,094,383 4,812,674 2,334,487
Pipeline operating
expenses 63,099 50,100 170,582 139,542
Lease operating
expenses (1,143) 7,041 20,271 21,037
General and
administrative
expenses 312,365 253,437 1,058,267 1,049,981
Depletion,
depreciation and
amortization 414,837 393,871 1,217,005 1,175,643
Accretion expense 52,720 53,731 158,655 158,264
------------ ------------ ------------ ------------
Total cost of
operations 53,646,409 87,130,933 167,462,878 302,791,412
------------ ------------ ------------ ------------
Income from
operations 1,610,478 1,055,240 8,347,972 9,173,910
OTHER INCOME
(EXPENSE)
Easement, interest
and other income 724,349 1,813 856,816 253,745
Interest expense (382,191) (214,407) (1,322,562) (675,586)
Loss on disposal
of property and
equipment - (4,400) - (4,400)
------------ ------------ ------------ ------------
Total other
income
(expense) 342,158 (216,994) (465,746) (426,241)
------------ ------------ ------------ ------------
Income before income
taxes 1,952,636 838,246 7,882,226 8,747,669
Income tax expense (688,403) (22,199) (2,778,750) (298,792)
------------ ------------ ------------ ------------
Net income $ 1,264,233 $ 816,047 $ 5,103,476 $ 8,448,877
============ ============ ============ ============
Income per common
share
Basic $ 0.12 $ 0.08 $ 0.49 $ 0.81
Diluted $ 0.12 $ 0.08 $ 0.49 $ 0.81
Weighted average
number of common
shares outstanding:
Basic 10,453,802 10,446,218 10,451,168 10,439,684
Diluted 10,453,802 10,446,218 10,451,168 10,439,684
Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
--------------------------
2015 2014
------------ ------------
OPERATING ACTIVITIES
Net income $ 5,103,476 $ 8,448,877
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depletion, depreciation and amortization 1,217,005 1,175,643
Unrealized loss on derivatives 362,750 26,150
Deferred taxes 2,479,823 -
Amortization of debt issue costs 517,652 25,350
Accretion expense 158,655 158,264
Common stock issued for services 19,999 75,001
Loss on disposal of assets - 4,400
Changes in operating assets and liabilities
Accounts receivable 506,784 2,058,624
Prepaid expenses and other current assets (274,435) 152,655
Deposits and other assets (1,711,073) (490,838)
Inventory (2,420,176) (2,879,729)
Accounts payable, accrued expenses and other
liabilities 2,916,973 (5,144)
Accounts payable, related party (1,174,168) (1,857,964)
------------ ------------
Net cash provided by operating activities 7,703,265 6,891,289
INVESTING ACTIVITIES
Capital expenditures (9,900,295) (1,145,720)
Change in restricted cash for investing
activities (13,021,438) -
------------ ------------
Net cash used in investing activities (22,921,733) (1,145,720)
FINANCING ACTIVITIES
Proceeds from issuance of debt 25,000,000 -
Payments on long-term debt (9,474,720) (6,103,131)
Proceeds from notes payable 3,000,000 2,000,000
Payments on notes payable - (216,182)
Change in restricted cash for financing
activities (3,081,686) (678,498)
------------ ------------
Net cash provided by (used in) financing
activities 15,443,594 (4,997,811)
------------ ------------
Net increase in cash and cash equivalents 225,126 747,758
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,293,233 434,717
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,518,359 $ 1,182,475
============ ============
Supplemental Information:
Non-cash operating activities
Surety bond funded by seller of pipeline
interest $ - $ 850,000
============ ============
Non-cash investing and financing activities:
New asset retirement obligations $ - $ 300,980
============ ============
Financing of capital expenditures via capital
lease $ - $ 536,635
============ ============
Interest paid $ 959,665 $ 1,211,773
============ ============
Income taxes paid $ 139,500 $ 231,552
============ ============
Reconciliation of Adjusted EBITDA and EBITDA to Net Income
Three Months Ended September 30, 2015
--------------------------------------------------------
Segment
----------------------------
Refinery Pipeline Corporate &
Operations Transportation Other Total
------------ -------------- ------------ ------------
Revenue from
operations $ 55,210,962 $ 45,925 $ - 55,256,887
Less: cost of
operations(1) (51,444,705) (114,675) (236,816) (51,796,196)
Other non-interest
income(2) - 62,500 660,000 722,500
------------ -------------- ------------ ------------
Adjusted EBITDA 3,766,257 (6,250) 423,184 4,183,191
Less: JMA Profit
Share(3) (1,435,376) - - (1,435,376)
------------ -------------- ------------ ------------
EBITDA $ 2,330,881 $ (6,250) $ 423,184 $ 2,747,815
============ ============== ============ ============
Depletion,
depreciation and
amortization (414,837)
Interest expense,
net (380,342)
------------
Income before
income taxes 1,952,636
Income tax expense (688,403)
------------
Net income $ 1,264,233
============
Three Months Ended September 30, 2014
--------------------------------------------------------
Segment
----------------------------
Refinery Pipeline Corporate &
Operations Transportation Other Total
------------ -------------- ------------ ------------
Revenue from
operations $ 88,129,273 $ 56,900 $ - $ 88,186,173
Less: cost of
operations(1) (85,261,533) (110,872) (274,674) (85,647,079)
Other non-interest
income(2) - - - -
------------ -------------- ------------ ------------
Adjusted EBITDA 2,867,740 (53,972) (274,674) 2,539,094
Less: JMA Profit
Share(3) (1,094,383) - - (1,094,383)
------------ -------------- ------------ ------------
EBITDA $ 1,773,357 $ (53,972) $ (274,674) $ 1,444,711
============ ============== ============ ============
Depletion,
depreciation and
amortization (393,871)
Interest expense,
net (212,594)
------------
Income before
income taxes 838,246
Income tax expense (22,199)
------------
Net income $ 816,047
============
Nine Months Ended September 30, 2015
-----------------------------------------------------------
Segment
-----------------------------
Refinery Pipeline Corporate &
Operations Transportation Other Total
------------- -------------- ------------- -------------
Revenue from
operations $ 175,690,968 $ 119,882 $ - $ 175,810,850
Less: cost of
operations(1) (160,208,576) (296,291) (928,331) (161,433,198)
Other non-
interest
income(2) - 187,500 660,000 847,500
------------- -------------- ------------- -------------
Adjusted EBITDA 15,482,392 11,091 (268,331) 15,225,152
Less: JMA
Profit
Share(3) (4,812,674) - - (4,812,674)
------------- -------------- ------------- -------------
EBITDA $ 10,669,718 $ 11,091 $ (268,331) $ 10,412,478
============= ============== ============= =============
Depletion,
depreciation
and
amortization (1,217,005)
Interest
expense, net (1,313,247)
-------------
Income before
income taxes 7,882,226
Income tax
expense (2,778,750)
-------------
-------------
Net income $ 5,103,476
=============
Nine Months Ended September 30, 2014
-----------------------------------------------------------
Segment
-----------------------------
Refinery Pipeline Corporate &
Operations Transportation Other Total
------------- -------------- ------------- -------------
Revenue from
operations $ 311,786,529 $ 178,793 $ - $ 311,965,322
Less: cost of
operations(1) (297,956,882) (355,645) (973,154) (299,285,681)
Other non-
interest
income(2) - 208,333 - 208,333
------------- -------------- ------------- -------------
Adjusted EBITDA 13,829,647 31,481 (973,154) 12,887,974
Less: JMA
Profit
Share(3) (2,334,487) - - (2,334,487)
------------- -------------- ------------- -------------
EBITDA $ 11,495,160 $ 31,481 $ (973,154) $ 10,553,487
============= ============== ============= =============
Depletion,
depreciation
and
amortization (1,175,643)
Interest
expense, net (630,175)
-------------
Income before
income taxes 8,747,669
Income tax
expense (298,792)
-------------
-------------
Net income $ 8,448,877
=============
(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) Other non-interest income reflects FLNG Land II, Inc., a Delaware
corporation ("FLNG"), easement revenue and recognition of a one-time
gain of $660,000 related to settlement proceeds from a nearly two
decades-old case involving Jack J. Grynberg and several defendants in
the oil and gas industry, including Blue Dolphin Pipe Line Company (the
"Grynberg Matter"). See "Part 1, Item 1. Financial Statements - Note
(21) Commitments and Contingencies - FLNG Master Easement Agreement and
Grynberg Settlement Agreement" of Blue Dolphin's Form 10-Q for the
quarterly period ended September 30, 2015 as filed with the SEC for
further discussion related to FLNG and the Grynberg Matter.
(3) The JMA Profit Share represents the GEL Profit Share plus the GEL
Performance Fee for the period pursuant to the Joint Marketing
Agreement. See "Part 1, Item 1. Financial Statements - Note (21)
Commitments and Contingencies" and "Part 1, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Relationship with Genesis" of Blue Dolphin's Form 10-Q for
the quarterly period ended September 30, 2015 as filed with the SEC for
further discussion related to the Joint Marketing Agreement.
Reconciliation of Refinery Operating Income to Refined Petroleum Product
Sales,
Cost of Refined Petroleum Products Sold, Refinery Operating Expenses and JMA
Profit Share
Three Months Ended September Nine Months Ended September
30, 30,
------------------------------ ------------------------------
2015 2014 2015 2014
-------------- -------------- -------------- --------------
Total
refined
petroleum
product
sales $ 54,924,070 $ 87,846,757 $ 174,830,292 $ 310,938,981
Less: Cost
of refined
petroleum
products
sold (48,415,627) (82,781,856) $(151,604,774) (289,819,720)
Less:
Refinery
operating
expenses (2,953,528) (2,496,514) (8,420,650) (8,092,738)
-------------- -------------- -------------- --------------
Refinery
operating
income
before JMA
Profit
Share 3,554,915 2,568,387 14,804,868 13,026,523
Less: JMA
Profit
Share (1,435,376) (1,094,383) (4,812,674) (2,334,487)
-------------- -------------- -------------- --------------
Refinery
operating
income $ 2,119,539 $ 1,474,004 $ 9,992,194 $ 10,692,036
-------------- -------------- -------------- --------------
Total
refined
petroleum
product
sales
(bbls) 1,035,275 823,399 2,958,865 2,818,270
============== ============== ============== ==============
For a reconciliation of refined petroleum product sales to total revenue from operations for our consolidated operations, refer to the consolidated statements of income contained within this press release.
Refinery Throughput and Production Data
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
Operating Days 87 78 257 252
Downtime 5 14 16 21
Total refinery throughput
bbls 1,109,411 849,402 3,086,749 2,909,669
bpd 12,752 10,890 12,011 11,546
Total refinery production
bbls 1,084,246 831,771 3,024,579 2,855,054
bpd 12,463 10,664 11,769 11,330
Capacity utilization rate
refinery throughput 85.0% 72.6% 80.1% 77.0%
refinery production 83.1% 71.1% 78.5% 75.5%
Note: The difference between total refinery throughput (volume processed as
input) and total refinery production (volume processed as output)
represents refinery fuel and energy use.
Contact
Jonathan P. Carroll
Chief Executive Officer and President
713-568-4725
