Enviva Partners, LP Reports Incident at Its Chesapeake Terminal
BETHESDA, Md.–(BUSINESS WIRE)–Enviva Partners, LP (NYSE: EVA) (the “Partnership” or “we”) reports that a fire commenced at its deep-water marine terminal in Chesapeake, Virginia (the “Chesapeake terminal”) late on Tuesday, February 27, 2018. The fire was quickly controlled due to the efforts of onsite personnel and the Chesapeake terminal’s fire suppression and mitigation processes, with assistance from local fire departments and other first responders.
While the Chesapeake terminal is being returned to safe, full commercial operations, the Partnership expects to utilize several storage alternatives to minimize the impact of the incident, including excess capacity at its deep-water marine terminal in Wilmington, North Carolina and other temporary storage facilities. The fire may impact the timing and number of shipments in the first quarter of 2018 and the Partnership expects to incur cost and liabilities associated with the event, which may impact the first quarter’s financial results. However, due to the Partnership’s portfolio of production plants and export terminals and the fulfilment flexibility in its off-take contracts and shipping schedule, the Partnership does not expect the fire to impact the guidance provided in its earnings release on February 22, 2018 for full-year 2018 adjusted EBITDA and distributable cash flow, subject to recoveries under insurance policies it maintains to mitigate against certain risks and other contractual rights.
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 plants with a combined production capacity of nearly three million metric tons of wood pellets per year in Virginia, North Carolina, Mississippi, and Florida. In addition, the Partnership exports wood pellets through its owned marine terminal assets at the Port of Chesapeake, Virginia, and the Port of Wilmington, North Carolina and from third-party marine terminals in Mobile, Alabama and Panama City, Florida.
To learn more about Enviva Partners, LP, please visit our website at www.envivabiomass.com.
Non-GAAP Financial Measures
We use adjusted EBITDA and Distributable Cash Flow to measure our financial performance.
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, changes in the fair value of derivative instruments, and certain 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, debt premium, and original issue discounts. We use distributable cash flow as a performance metric to compare the 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 EBITDA and distributable cash flow are not financial measures presented in accordance with 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 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.
A reconciliation of estimated adjusted EBITDA and estimated distributable cash flow to GAAP net income is not provided because forward-looking GAAP net income is not accessible and reconciling information is not available without unreasonable effort. The Partnership has not determined the impact of the fire on reconciling items such as one-time costs and expenses and asset impairments or disposals. The amount of impact of the fire on these and other reconciling items could be significant, such that the actual amount of net income generated by the Partnership in the year ending December 31, 2018 could vary substantially from the amount of estimated adjusted EBITDA and estimated distributable cash flow.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements” within the meaning of federal securities laws, including statements regarding the Partnership’s ability to return the Chesapeake terminal to safe, full commercial operations and to mitigate the disruption caused by the fire on the Partnership’s business, the anticipated recovery of a portion of the costs or liabilities from the Partnership’s insurance carriers or others, and the Partnership’s ability to achieve its full-year 2018 guidance. These forward-looking statements represent the Partnership’s expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties, and other factors, including, among others, the financial and operational impact of the fire, the duration the Chesapeake terminal is non-operational, and the amount of expenditures necessary to remedy any damage, any of which could cause actual results to differ materially from the results discussed in the forward-looking statements.
Any forward-looking statement speaks only as of the date on which it is made and, except as required by law, the Partnership does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. New factors emerge from time to time, and it is not possible for the Partnership to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the Partnership’s annual report on Form 10-K and any quarterly reports on Form 10-Q. The risk factors and other factors noted therein could cause actual events or the Partnership’s actual results to differ materially from those contained in any forward-looking statement.