Enviva Partners, LP Reports Strong Financial Results For Third Quarter 2016, Announces Drop-Down Transaction, And Provides Guidance For 2017

Enviva Partners, LP (NYSE: EVA) (the "Partnership" or "we") today reported financial and operating results for the third quarter of 2016.

Highlights:
  • Generated net income of $13.0 million and adjusted EBITDA of $25.5 million for the third quarter of 2016, up from $8.8 million and $19.8 million, respectively, for the corresponding period in 2015
  • Agreed to acquire Enviva Pellets Sampson, LLC for $175.0 million
  • Issued $300.0 million of 8.5% senior unsecured notes due 2021
  • Provided full-year 2017 guidance for net income in a range of $31.0 million to $35.0 million and adjusted EBITDA in a range of $110.0 million to $114.0 million, including the impact of the proposed acquisition of Enviva Pellets Sampson, LLC but excluding the impact of any other potential drop-downs or third-party acquisitions

"Strong operating and financial performance for the quarter continues to underpin our durable, growing contracted cash flows," said John Keppler, Chairman and Chief Executive Officer. "In addition to maintaining our track record of quarter-over-quarter distribution increases, we have agreed to terms for our second drop-down transaction, an accretive acquisition of the Sampson plant and associated off-take contracts. The financing needs for the drop-down gave us the opportunity to transform our balance sheet to a more permanent capital structure with substantial flexibility that can be the foundation for financing future growth."

Financial Results

For the third quarter of 2016, we generated net revenue of $109.8 million, a decrease of 5.8 percent, or $6.8 million, from the corresponding quarter of 2015. Included in net revenue was product sales of $102.6 million on volume of 534,000 metric tons of wood pellets. Product sales decreased from the corresponding quarter of last year due to lower wood pellet sales revenue recognized as a result of timing of product delivered to our customers. Other revenue increased to $7.2 million for the third quarter of 2016 from $1.5 million for the corresponding quarter in 2015, primarily due to fees earned by us related to customer requests to delay and cancel shipments. During 2016, a third-party pellet producer committed to purchase a series of shipments of wood pellets from us on a short-term basis because it was unable to meet volume, quality, and sustainability commitments under its customer contract. The third-party pellet producer then requested to delay, and ultimately cancel, the remaining shipments of wood pellets from us in return for a $5.7 million make-whole payment.

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