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8-K - 8-K - Enviva Partners, LPa16-16037_18k.htm

Exhibit 99.1

 

 

 

Enviva Partners, LP Reports Strong Financial Results for Second Quarter 2016

 

BETHESDA, MD, August 4, 2016 — Enviva Partners, LP (NYSE: EVA) (the “Partnership” or “we”) today reported financial and operating results for the second quarter of 2016.

 

Highlights for the Second Quarter of 2016:

 

·                  Generated net income of $12.0 million and adjusted EBITDA of $23.5 million, up from $2.9 million and $19.1 million, respectively, for the second quarter in 2015

 

·                  Declared a quarterly distribution of $0.5250 per unit, a 2.9 percent increase from the distribution paid for the first quarter of 2016

 

·                  Updated full-year 2016 guidance for net income to a range of $40.0 million to $42.0 million and adjusted EBITDA to a range of $86.0 million to $88.0 million, excluding any impact of potential drop-downs or other acquisitions

 

“Our strong operating and financial performance through the second quarter, coupled with our increased outlook for the remainder of 2016, put us solidly on the path toward our previously announced full-year distribution expectation of at least $2.10 per unit for 2016, excluding the impact of any potential drop-downs or other acquisitions,” said John Keppler, Chairman and Chief Executive Officer.  “In addition, our market position enabled us to capitalize on dislocations in the market this quarter and optimize deliveries to our growing customer base.”

 

Financial Results

 

For the second quarter of 2016, we generated net revenue of $119.7 million, an increase of 9.2 percent, or $10.0 million, from the corresponding quarter of 2015.  Included in net revenue was product sales of $116.2 million on volume of 620 thousand metric tons of wood pellets.  Product sales increased from the corresponding quarter of last year due to higher wood pellet sales volumes as a result of shipment timing, partially offset by a higher percentage of “free on board” shipments, which exclude shipping from revenue and cost of goods sold.

 

For the second quarter, we generated net income of $12.0 million compared to $2.9 million for the corresponding quarter in 2015.  Adjusted EBITDA improved to $23.5 million in the second quarter of 2016, a 23.0 percent increase compared to the corresponding period in 2015.  The increases in net income and adjusted EBITDA were driven by higher wood pellet sales volumes under our long-term, take-or-pay contracts, increased other revenue primarily derived from shipments purchased from and sold to third parties, and lower general and administrative expenses, partially offset by contract pricing mix.  The cost position of our delivered wood pellets, primarily driven by plant utilization and raw material costs, was consistent between periods.

 



 

The Partnership’s distributable cash flow, net of amounts attributable to incentive distribution rights, increased from $15.4 million for the second quarter of 2015 to $19.5 million for the second quarter of 2016, resulting in a distribution coverage ratio of 1.50 times.

 

Distribution

 

As announced yesterday, the board of directors of the Partnership’s general partner declared a distribution of $0.5250 per common and subordinated unit for the second quarter of 2016. This distribution is 2.9 percent higher than the first quarter 2016 distribution.  The second quarter distribution will be paid Monday, August 29, 2016, to unitholders of record as of the close of business Monday, August 15, 2016.

 

Outlook and Guidance

 

The Partnership updated its full-year 2016 guidance.  The guidance amounts provided below do not include the impact of any potential acquisitions from the Partnership’s sponsor or others.

 

The Partnership now expects full-year 2016 net income to be in the range of $40.0 million to $42.0 million, which reflects higher non-cash compensation expense and non-cash asset impairment and disposal charges than previously anticipated, and adjusted EBITDA to be in the range of $86.0 million to $88.0 million, which reflects the Partnership’s better-than-expected performance during the first half of 2016.  The Partnership expects to incur maintenance capital expenditures of $4.0 million and interest expense net of amortization of debt issuance costs and original issue discount of $12.0 million in 2016.  As a result, the Partnership expects full-year distributable cash flow to be in the range of $70.0 million to $72.0 million, prior to any distributions attributable to incentive distribution rights paid to the general partner, which reflects the expected improvement in full-year adjusted EBITDA.  For full-year 2016, we expect to distribute at least $2.10 per common and subordinated unit.

 

Market and Contracting Update

 

Our sales strategy is to fully contract the production capacity of the Partnership.  We are fully contracted for 2016 and our current capacity is matched with a portfolio of off-take contracts that  has a weighted-average remaining term of 8.0 years from July 1, 2016, including the Partnership’s recently announced 9.5 year contract to supply 800,000 metric ton per year (“MTPY”) to Lynemouth Power Limited, but excluding potential sales under the Partnership’s 15-year contract to supply MGT Power’s Teesside Renewable Energy Plant in the UK, which continues to proceed towards financial close.

 

As we disclosed June 8, 2016, subsidiaries of Graanul Invest group (“Graanul”) announced that they had purchased the shares of the company which owns the Langerlo power station in Genk, Belgium and intend to convert the power station from coal to biomass.  The Langerlo power station has already received a subsidy from the Flemish government to support the conversion, is a system-relevant production asset for the Belgium power grid, and its conversion is a critical component of Belgium’s plan for meeting binding European Union renewable energy consumption requirements.  We are in discussions with Graanul in regards to potentially supplying a portion of the Langerlo power station’s wood pellet fuel needs, which are expected to be 1.8 million MTPY commencing in the second half of 2018.  We had previously entered into an off-take contract to supply wood pellets to an affiliate of German Pellets GmbH that intended to use our product at the Langerlo power station.  As a result of the sale to Graanul, however, we believe it is unlikely that our contract counterparty will perform its

 

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obligations under this contract and, although we intend to preserve all of our rights against our counterparty, we do not expect our counterparty to take deliveries of wood pellets under it.

 

In the Netherlands, the government awarded several biomass co-firing, dedicated biomass heat, and combined heat and power projects a total of 2.5 billion euros in subsidies in the first of two rounds of applications for the 2016 renewable incentive program. Biomass co-firing projects owned by RWE and Engie were among the initial recipients. The budget for the program had already been substantially increased to 8.0 billion euros for 2016 from 3.5 billion euros in 2015, and the budget for the second round of applications, open from September through October 2016, was increased further from 4.0 billion euros to 5.0 billion euros.

 

“In light of our contracting activity this quarter, our sales book and production capacity are substantially balanced through early 2022 and include contracts that extend out to 2027.  Additional growth will be driven by demand continuing to materialize in our core European market and the developing Asian market, which we believe can be supplied cost-competitively from our assets in the Southeastern U.S. due to its advantaged fiber basket,” said Mr. Keppler.  “As the market leader, we are excited about the opportunities to further extend our contracted position and diversify our customer base, and the opportunities our sponsor may have to build substantial new, fully-contracted production capacity that would add to its inventory of potential drop-down assets.”

 

Sponsor Activity

 

Construction of the 515,000 MTPY production plant in Sampson County, North Carolina (the “Sampson plant”) and deep-water marine terminal in Wilmington, North Carolina (the “Wilmington terminal”) is nearing completion.  Our sponsor’s operations team expects to assume full operational control of the Sampson plant later this month and for the first vessel to load at the Wilmington terminal in October.  The Partnership expects to have the opportunity to acquire the Sampson plant, along with our sponsor’s ten-year off-take contract with an affiliate of DONG Energy, in late 2016 and the Wilmington terminal in 2017.  Due to the related-party nature of such transactions, the board of directors of the Partnership’s general partner has formed a Conflicts Committee comprised solely of independent directors in anticipation of evaluating such opportunities.

 

In addition, our sponsor has executed an agreement with the Jackson County Port Authority granting our sponsor an option to build and operate a marine export terminal at the Port of Pascagoula, Mississippi.

 

Conference Call

 

We will host a conference call with executive management related to our second quarter 2016 results and to discuss our outlook, guidance, and a more detailed market update at 10:00 a.m. (Eastern Time) on Thursday, August 4, 2016.  Information on how interested parties may listen to the conference call is available in the Investor Relations page of our website (www.envivabiomass.com).  A replay of the conference call will be available on our website after the live call concludes.

 

About Enviva Partners, LP

 

Enviva Partners, LP (NYSE: EVA) is a publicly traded master limited partnership that aggregates a natural resource, wood fiber, and processes it into a transportable form, wood pellets.  The Partnership sells a significant majority of its wood pellets through long-term, take-or-pay agreements with creditworthy customers in the United Kingdom and Europe.  The Partnership owns and operates six

 

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plants in Southampton County, Virginia; Northampton County and Ahoskie, North Carolina; Amory and Wiggins, Mississippi; and Cottondale, Florida.  We have a combined production capacity of approximately 2.3 million metric tons of wood pellets per year.  In addition, the Partnership owns a deep-water marine terminal at the Port of Chesapeake, Virginia, which is used to export wood pellets. Enviva Partners also exports pellets through the ports of Mobile, Alabama and Panama City, Florida.

 

To learn more about Enviva Partners, LP, please visit our website at www.envivabiomass.com.

 

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Non-GAAP Financial Measures

 

We use adjusted gross margin per metric ton, adjusted EBITDA, and distributable cash flow to measure our financial performance.

 

Adjusted Gross Margin per Metric Ton

 

We define adjusted gross margin as gross margin excluding depreciation and amortization included in cost of goods sold.  We believe adjusted gross margin per metric ton is a meaningful measure because it compares our off-take pricing to our operating costs for a view of profitability and performance on a per metric ton basis.  Adjusted gross margin per metric ton will primarily be affected by our ability to meet targeted production volumes and to control direct and indirect costs associated with procurement and delivery of wood fiber to our production plants and the production and distribution of wood pellets.

 

Adjusted EBITDA

 

We define adjusted EBITDA as net income or loss excluding depreciation and amortization, interest expense, income tax expense, early retirement of debt obligations, non-cash unit compensation expense, asset impairments and disposals and certain other items of income or loss that we characterize as unrepresentative of our ongoing operations.  Adjusted EBITDA is a supplemental measure used by our management and other users of our financial statements, such as investors, commercial banks, and research analysts, to assess the financial performance of our assets without regard to financing methods or capital structure.

 

Distributable Cash Flow

 

We define distributable cash flow as adjusted EBITDA less maintenance capital expenditures and interest expense net of amortization of debt issuance costs and original issue discount.  We use distributable cash flow as a performance metric to compare cash generating performance of the Partnership from period to period and to compare the cash generating performance for specific periods to the cash distributions (if any) that are expected to be paid to our unitholders.  We do not rely on distributable cash flow as a liquidity measure.

 

Adjusted gross margin per metric ton, adjusted EBITDA, and distributable cash flow are not financial measures presented in accordance with accounting principles generally accepted in the United States (“GAAP”).  We believe that the presentation of these non-GAAP financial measures provides useful information to investors in assessing our financial condition and results of operations.  Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures.  Each of these non-GAAP financial measures has important limitations as an analytical tool because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures.  You should not consider adjusted gross margin per metric ton, adjusted EBITDA, or distributable cash flow in isolation or as substitutes for analysis of our results as reported under GAAP.  Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

 

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The following tables present a reconciliation of adjusted gross margin per metric ton, adjusted EBITDA, and distributable cash flow to the most directly comparable GAAP financial measure, as applicable, for each of the periods indicated.

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2016

 

2015 (Recast)

 

2016

 

2015 (Recast)

 

 

 

(in thousands, except per metric ton)

 

Reconciliation of gross margin to adjusted gross margin per metric ton:

 

 

 

 

 

 

 

 

 

Metric tons sold

 

620

 

560

 

1,180

 

1,143

 

Gross margin

 

$

19,612

 

$

15,259

 

$

35,367

 

$

26,914

 

Depreciation and amortization

 

7,114

 

8,225

 

13,995

 

16,484

 

Adjusted gross margin

 

$

26,726

 

$

23,484

 

$

49,362

 

$

43,398

 

Adjusted gross margin per metric ton

 

$

43.11

 

$

41.94

 

$

41.83

 

$

37.97

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2016

 

2015 (Recast)

 

2016

 

2015 (Recast)

 

 

 

(in thousands)

 

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

 

 

 

 

 

 

 

 

 

Net income

 

$

12,020

 

$

2,865

 

$

19,499

 

$

5,376

 

Add:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

7,120

 

8,237

 

14,013

 

16,507

 

Interest expense

 

3,340

 

3,087

 

6,730

 

5,805

 

Early retirement of debt obligation

 

 

4,699

 

 

4,699

 

Purchase accounting adjustment to inventory

 

 

 

 

697

 

Non-cash unit compensation expense

 

819

 

183

 

1,500

 

183

 

Income tax expense

 

 

 

 

2,667

 

Asset impairments and disposals

 

155

 

9

 

156

 

27

 

Acquisition transaction expenses

 

6

 

 

59

 

 

Adjusted EBITDA

 

23,460

 

19,080

 

41,957

 

35,961

 

Less:

 

 

 

 

 

 

 

 

 

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

 

2,894

 

2,717

 

5,838

 

4,930

 

Maintenance capital expenditures

 

832

 

975

 

1,383

 

1,700

 

Distributable cash flow attributable to Enviva Partners, LP

 

19,734

 

15,388

 

34,736

 

29,331

 

Less: Distributable cash flow attributable to incentive distribution rights

 

257

 

 

413

 

 

Distributable cash flow attributable to Enviva Partners, LP limited partners

 

$

19,477

 

$

15,388

 

$

34,323

 

$

29,331

 

 

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The following table provides a reconciliation of the estimated range of adjusted EBITDA and Distributable Cash Flow to the estimated range of net income, in each case for the twelve months ending December 31, 2016 (in millions except per unit figures):

 

 

 

Twelve Months
Ending
December 31,
2016

 

Estimated net income

 

$

40.0 – 42.0

 

Add:

 

 

 

Depreciation and amortization

 

27.4

 

Interest expense

 

13.4

 

Non-cash unit compensation expense

 

3.0

 

Asset impairments and disposals

 

2.1

 

Acquisition transaction expenses

 

0.1

 

Estimated adjusted EBITDA

 

$

86.0 – 88.0

 

Less:

 

 

 

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

 

12.0

 

 

 

4.0

 

Estimated Distributable Cash Flow

 

$

70.0 – 72.0

 

 

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Cautionary Note Concerning Forward-Looking Statements

 

Certain statements and information in this press release, including those concerning our future results of operations, acquisition opportunities, and distributions, may constitute “forward-looking statements.”  The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.  These forward-looking statements are based on the Partnership’s current expectations and beliefs concerning future developments and their potential effect on the Partnership.  Although management believes that these forward-looking statements are reasonable when made, there can be no assurance that future developments affecting the Partnership will be those that it anticipates.  The forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnership’s control) and assumptions that could cause actual results to differ materially from the Partnership’s historical experience and its present expectations or projections.  Important factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to: (i) the amount of products that the Partnership is able to produce, which could be adversely affected by, among other things, operating difficulties; (ii) the volume of products that the Partnership is able to sell; (iii) the price at which the Partnership is able to sell products; (iv) changes in the price and availability of natural gas, coal, or other sources of energy; (v) changes in prevailing economic conditions; (vi) the Partnership’s ability to complete acquisitions, including acquisitions from its sponsor; (vii) unanticipated ground, grade, or water conditions; (viii) inclement or hazardous weather conditions, including extreme precipitation, temperatures, and flooding; (ix) environmental hazards; (x) fires, explosions, or other accidents; (xi) changes in domestic and foreign laws and regulations (or the interpretation thereof) related to renewable or low-carbon energy, the forestry products industry, or power generators; (xii) inability to acquire or maintain necessary permits; (xiii) inability to obtain necessary production equipment or replacement parts; (xiv) technical difficulties or failures; (xv) labor disputes; (xvi) late delivery of raw materials; (xvii) inability of the Partnership’s customers to take delivery or their rejection of delivery of products; (xviii) failure of the Partnership’s customers to pay or perform their contractual obligations to the Partnership; (xix) changes in the price and availability of transportation; and (xx) the Partnership’s ability to borrow funds and access capital markets.

 

For additional information regarding known material factors that could cause the Partnership’s actual results to differ from projected results, please read its filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K and the Quarterly Reports on Form 10-Q most recently filed with the SEC.  Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof.  The Partnership undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

 

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Financial Statements

ENVIVA PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

 

 

June 30,
2016

 

December 31,
2015

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

19,806

 

$

2,175

 

Accounts receivable, net of allowance for doubtful accounts of $72 as of June 30, 2016 and $85 as of December 31, 2015

 

47,556

 

38,684

 

Related party receivables

 

462

 

94

 

Inventories

 

21,262

 

24,245

 

Prepaid expenses and other current assets

 

1,928

 

2,123

 

Total current assets

 

91,014

 

67,321

 

Property, plant and equipment, net of accumulated depreciation of $77.4 million as of June 30, 2016 and $64.7 million as of December 31, 2015

 

398,139

 

405,582

 

Intangible assets, net of accumulated amortization of $8.3 million as of June 30, 2016 and $7.0 million as of December 31, 2015

 

2,165

 

3,399

 

Goodwill

 

85,615

 

85,615

 

Other long-term assets

 

429

 

7,063

 

Total assets

 

$

577,362

 

$

568,980

 

Liabilities and Partners’ Capital

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

9,789

 

$

9,303

 

Related party payables

 

6,302

 

11,013

 

Accrued and other current liabilities

 

21,065

 

13,059

 

Deferred revenue and deposits

 

9,341

 

485

 

Current portion of long-term debt and capital lease obligations

 

3,649

 

6,523

 

Related party current portion of long-term debt

 

3,187

 

150

 

Total current liabilities

 

53,333

 

40,533

 

Long-term debt and capital lease obligations

 

199,903

 

186,294

 

Related party long-term debt

 

 

14,664

 

Long-term interest payable

 

841

 

751

 

Other long-term liabilities

 

874

 

586

 

Total liabilities

 

254,951

 

242,828

 

Commitments and contingencies

 

 

 

 

 

Partners’ capital:

 

 

 

 

 

Limited partners:

 

 

 

 

 

Common unitholders—public (11,520,614 and 11,502,934 units issued and outstanding at June 30, 2016 and December 31, 2015, respectively)

 

209,272

 

210,488

 

Common unitholder—sponsor (1,347,161 units issued and outstanding at June 30, 2016 and December 31, 2015)

 

19,367

 

19,619

 

Subordinated unitholder—sponsor (11,905,138 units issued and outstanding at June 30, 2016 and December 31, 2015)

 

131,202

 

133,427

 

General Partner interest (no outstanding units)

 

(40,373

)

(40,373

)

Total Enviva Partners, LP partners’ capital

 

319,468

 

323,161

 

Noncontrolling partners’ interests

 

2,943

 

2,991

 

Total partners’ capital

 

322,411

 

326,152

 

Total liabilities and partners’ capital

 

$

577,362

 

$

568,980

 

 

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ENVIVA PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit amounts)
(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2016

 

2015 (Recast)

 

2016

 

2015 (Recast)

 

Product sales

 

$

116,247

 

$

107,195

 

$

219,692

 

$

220,776

 

Other revenue

 

3,462

 

2,464

 

7,269

 

3,197

 

Net revenue

 

119,709

 

109,659

 

226,961

 

223,973

 

Cost of goods sold, excluding depreciation and amortization

 

92,983

 

86,175

 

177,599

 

180,575

 

Depreciation and amortization

 

7,114

 

8,225

 

13,995

 

16,484

 

Total cost of goods sold

 

100,097

 

94,400

 

191,594

 

197,059

 

Gross margin

 

19,612

 

15,259

 

35,367

 

26,914

 

General and administrative expenses

 

4,392

 

4,623

 

9,409

 

8,393

 

Income from operations

 

15,220

 

10,636

 

25,958

 

18,521

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

(3,039

)

(2,791

)

(6,220

)

(4,708

)

Related party interest expense

 

(301

)

(296

)

(510

)

(1,097

)

Early retirement of debt obligation

 

 

(4,699

)

 

(4,699

)

Other income

 

140

 

15

 

271

 

26

 

Total other expense, net

 

(3,200

)

(7,771

)

(6,459

)

(10,478

)

Income before income tax expense

 

12,020

 

2,865

 

19,499

 

8,043

 

Income tax expense

 

 

 

 

2,667

 

Net income

 

12,020

 

2,865

 

19,499

 

5,376

 

Less net loss attributable to noncontrolling partners’ interests

 

33

 

8

 

48

 

16

 

Net income attributable to Enviva Partners, LP

 

$

12,053

 

$

2,873

 

$

19,547

 

$

5,392

 

Less: Predecessor loss to May 4, 2015 (prior to IPO)

 

$

 

$

(4,651

)

$

 

$

(2,132

)

Less: Pre-acquisition income from April 10, 2015 to June 30, 2015 from operations of Enviva Pellets Southampton Drop-Down allocated to General Partner

 

 

1,839

 

 

1,839

 

Enviva Partners, LP partners’ interest in net income from May 4, 2015 to June 30, 2015

 

$

12,053

 

$

5,685

 

$

19,547

 

$

5,685

 

 

 

 

 

 

 

 

 

 

 

Net income per common unit:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.48

 

$

0.24

 

$

0.77

 

$

0.24

 

Diluted

 

$

0.47

 

$

0.24

 

$

0.76

 

$

0.24

 

 

 

 

 

 

 

 

 

 

 

Net income per subordinated unit:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.48

 

$

0.24

 

$

0.77

 

$

0.24

 

Diluted

 

$

0.47

 

$

0.24

 

$

0.76

 

$

0.24

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of limited partner units outstanding:

 

 

 

 

 

 

 

 

 

Common — basic

 

12,862

 

11,905

 

12,857

 

11,905

 

Common — diluted

 

13,445

 

12,159

 

13,391

 

12,159

 

Subordinated — basic and diluted

 

11,905

 

11,905

 

11,905

 

11,905

 

 

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ENVIVA PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2016

 

2015 (Recast)

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

19,499

 

$

5,376

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

14,013

 

16,507

 

Amortization of debt issuance costs and original issue discount

 

892

 

875

 

General and administrative expense incurred by Enviva Holdings, LP

 

 

475

 

Allocation of income tax expense from Enviva Cottondale Acquisition I, LLC

 

 

2,663

 

Early retirement of debt obligation

 

 

4,699

 

Loss on disposals of property, plant and equipment

 

156

 

27

 

Unit-based compensation expense

 

1,500

 

183

 

Change in fair value of interest rate swap derivatives

 

 

23

 

Change in operating assets and liabilities:

 

 

 

 

 

Accounts receivable, net

 

(8,872

)

(2,609

)

Related party receivables

 

(368

)

(705

)

Prepaid expenses and other current assets

 

660

 

(1,318

)

Inventories

 

2,776

 

(2,502

)

Other long-term assets

 

6,635

 

398

 

Accounts payable and accrued liabilities

 

7,819

 

6,095

 

Related party payables

 

94

 

1,321

 

Accrued interest

 

90

 

1,933

 

Deferred revenue and deposits

 

8,856

 

477

 

Other liabilities

 

(109

)

19

 

Net cash provided by operating activities

 

53,641

 

33,937

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(4,586

)

(2,494

)

Payment of acquisition related costs

 

 

(3,573

)

Proceeds from the sale of equipment

 

 

53

 

Net cash used in investing activities

 

(4,586

)

(6,014

)

Cash flows from financing activities:

 

 

 

 

 

Principal payments on debt and capital lease obligations

 

(36,125

)

(182,394

)

Principal payments on related party debt

 

(204

)

 

Cash paid related to debt issuance costs

 

 

(5,123

)

Termination payment for interest rate swap derivatives

 

 

(146

)

Release of cash restricted for debt service

 

 

11,640

 

IPO proceeds, net

 

 

215,050

 

Cash paid for deferred offering costs

 

(224

)

(1,340

)

Proceeds from debt issuance

 

34,500

 

178,505

 

Distributions to unitholders, distribution equivalent rights and incentive distribution rights

 

(24,369

)

 

Distributions to sponsor

 

(5,002

)

(174,552

)

Proceeds from contributions from sponsor

 

 

10,236

 

Net cash (used in) provided by financing activities

 

(31,424

)

51,876

 

Net increase in cash and cash equivalents

 

17,631

 

79,799

 

Cash and cash equivalents, beginning of period

 

2,175

 

592

 

Cash and cash equivalents, end of period

 

$

19,806

 

$

80,391

 

 

11



 

ENVIVA PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2016

 

2015 (Recast)

 

Non-cash investing and financing activities:

 

 

 

 

 

The Partnership acquired property, plant and equipment in non-cash transactions as follows:

 

 

 

 

 

Property, plant and equipment acquired included in accounts payable and accrued liabilities

 

$

1,247

 

$

405

 

Property, plant and equipment acquired under capital leases

 

44

 

 

Property, plant and equipment transferred from prepaid expenses

 

 

173

 

Depreciation capitalized to inventories

 

145

 

247

 

Contribution of Cottondale non-cash assets

 

 

122,529

 

Application of IPO costs to Partners’ capital

 

 

5,913

 

Related party long-term debt transferred to third-party long-term debt

 

14,757

 

 

Third-party long-term debt transferred to related party long-term debt

 

3,316

 

 

Offering costs included in accounts payable and accrued liabilities

 

241

 

370

 

Distribution of Cottondale assets to sponsor

 

 

319

 

Distributions included in liabilities

 

371

 

 

Inventory transferred to fixed assets

 

63

 

 

Non-cash adjustments to financed insurance and prepaid expenses

 

 

105

 

Non-cash capital contributions from sponsor

 

 

304

 

Supplemental information:

 

 

 

 

 

Interest paid

 

$

5,745

 

$

2,956

 

 

Investor Contact:

 

Raymond Kaszuba
(240) 482-3856
ir@envivapartners.com

 

12