Enviva Partners (EVA) Announces Prelim. Q3 Results, $300M Notes Offering

October 17, 2016 4:25 PM EDT

Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.

Enviva Partners (NYSE: EVA) disclosed the following on Monday:

Item 2.02. Results of Operations and Financial Condition.

Preliminary financial results for the third quarter of 2016 (unaudited)

In connection with the commencement of the offering of the Notes (defined below), Enviva Partners, LP, a Delaware limited partnership (the "Partnership") is providing preliminary estimates of certain key financial results that it expects for the three months ended September 30, 2016:

Estimated net revenues of between $115.0 million and $116.0 million;
Estimated net income of between $12.5 million and $13.0 million;
Estimated adjusted gross margin of between $29.0 and $30.0;
Estimated adjusted EBITDA of between $25.0 million and $26.0 million; and
Estimated distributable cash flow of between $21.0 million and $21.5 million.

    The Partnership has provided ranges for the preliminary estimated financial results described above because its financial closing procedures for the three months ended September 30, 2016 are not complete. The Partnership currently expects that its final results will be within the ranges described above. The preliminary estimated financial results presented above are subject to the completion of the Partnership's quarter-end financial closing procedures. The Partnership's closing procedures for the three months ended September 30, 2016 will not be complete, and its financial results for the three months ended September 30, 2016 will not be publicly available, until after the expected completion of the offering of the Notes. As a result, the Partnership's actual financial results could be different from these preliminary financial results, and any differences could be material. The Partnership's independent registered public accounting firm has not performed review procedures with respect to the summary preliminary financial results set forth herein, nor have they expressed any opinion or provided any other form of assurance on the results. The information presented above should not be considered a substitute for full unaudited quarterly financial statements.

    2


    The following table reconciles the Partnership's range of estimated adjusted EBITDA and estimated distributable cash flow to estimated net income for the three months ended September 30, 2016:

    (in millions)
    Three Months Ended
    September 30, 2016
    (estimated data)

    Reconciliation of adjusted EBITDA and distributable cash flow to net income (loss):

    Net income (loss)

    between $12.5 and $13.0

    Add:

    Depreciation and amortization

    between 6.7 and 6.8

    Interest expense

    between 3.3 and 3.4

    Early retirement of debt obligation

    between and

    Purchase accounting adjustment to inventory

    between and

    Non-cash unit compensation expense

    between 1.1 and 1.2

    Income tax expense

    between and

    Asset impairments and disposals

    between 1.4 and 1.6

    Acquisition transaction expenses

    between and

    Adjusted EBITDA

    between $25.0 and $26.0

    Less:

    Interest expense net of amortization of debt issuance costs and original issue discount

    between 3.0 and 3.1

    Maintenance capital expenditures

    between 1.0 and 1.4

    Distributable cash flow attributable to Enviva Partners, LP

    between $21.0 and $21.5

    The following table reconciles the Partnership's range of estimated adjusted gross margin to estimated gross margin for the three months ended September 30, 2016:

    (in thousands)
    Three Months Ended
    September 30, 2016
    (estimated data)

    Reconciliation of adjusted gross margin to gross margin:

    Gross margin

    between $22.3 and $23.2

    Depreciation and amortization

    between 6.7 and 6.8

    Adjusted gross margin

    between $29.0 and $30.0

    Item 7.01. Regulation FD Disclosure.

    announced that, subject to market conditions, it intends to offer, with its wholly-owned subsidiary Enviva Partners Finance Corp., $300 million in aggregate principal amount of senior unsecured notes due 2021 in a private placement to eligible purchasers.

    The gross proceeds from the offering will be deposited into an escrow account pending completion of the proposed acquisition of the entity which owns a wood pellet production plant in Sampson County, North Carolina, a ten-year, 420,000 metric ton per year ("MTPY") off-take contract with an affiliate of DONG Energy, a 15-year 95,000 MTPY off-take contract with a joint venture between our sponsor and affiliates of John Hancock Life Insurance Company, and a third-party shipping contract (collectively, the "Sampson Acquisition").

    If the Sampson Acquisition is completed, we expect to use a portion of the net proceeds from the offering, together with cash on hand and net proceeds or other consideration from any issuances of additional equity, to fund the consideration payable by us in connection with the Sampson Acquisition. The remainder of the net proceeds from the offering will be used to repay certain outstanding term loan indebtedness under our credit facilities. We are considering the issuance of up to approximately $30 million of equity in connection with the Sampson Acquisition, potentially under our existing at-the-market equity offering, as partial consideration for the Sampson Acquisition, or by other methods. Any such offering will be subject to market conditions and may not be consummated in advance of the Sampson Acquisition or at all. This offering of the notes, and the release of the proceeds from escrow in connection with the closing of the Transactions, is not conditioned on any such equity offering.

    Although we expect to enter into a definitive agreement in respect of the Sampson Acquisition, there can be no assurance that the Sampson Acquisition will be completed. If the Sampson Acquisition is not completed on or prior to January 31, 2017, or if we earlier determine that the escrow release conditions will not be met on or prior to January 31, 2017, the notes will be subject to special mandatory redemption at a redemption price payable in cash equal to 100.0% of the initial issue price of the notes, plus accrued and unpaid interest to the mandatory redemption date.

    The notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any other jurisdiction. Unless they are registered, the notes may be offered only in transactions that are exempt from registration under the Securities Act and applicable state securities laws. The notes are offered only to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S of the Securities Act. The notes will not be listed on any securities exchange or automated quotation system.

    This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only by means of an offering memorandum.



    Serious News for Serious Traders! Try StreetInsider.com Premium Free!

    You May Also Be Interested In






    Related Categories

    Corporate News, Guidance, Hot Corp. News

    Related Entities

    Earnings, Definitive Agreement, Equity Offerings

    Add Your Comment