Financial Data and Key Metrics Changes - Net revenue decreased approximately 2% year-over-year due to lower commercial services activity, which dampened revenue per metric ton, offsetting volume improvements [6] - Net loss for Q3 2023 was $85 million compared to $18 million for Q3 2022, primarily due to four factors including lower average sales prices and higher interest expenses [6][14] - Adjusted EBITDA for Q3 2023 was $36.6 million, down from $60.6 million in Q3 2022, driven by a 17% decrease in revenue per metric ton and higher SG&A expenses [33] Business Line Data and Key Metrics Changes - Production improvements led to a 14% year-over-year increase in sales volumes and a 10% sequential increase compared to Q2 2023 [23] - Delivered at port costs were $152 per metric ton in Q3 2023, down $9 from $161 per metric ton in Q2 2023 [23] Market Data and Key Metrics Changes - Average spot market prices for Q3 2023 were approximately 50% lower than in Q4 2022, significantly impacting revenue expectations [7] - Biomass spot market prices this year did not evolve as anticipated, leading to a significant miss in expectations for Q3 and a reduction in Q4 expectations [29] Company Strategy and Development Direction - The company is executing a multifaceted transformation plan focusing on improving contract profitability and restoring credibility among stakeholders [4][11] - A corporate restructuring program has been initiated, resulting in restructuring costs including severance expenses [24] - The company is evaluating potential alternatives to alleviate liquidity impacts from previous transactions [30] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the quarter's performance and acknowledged the challenges posed by liquidity factors and lower expected commercial activity [5][26] - Despite near-term challenges, management remains optimistic about the long-term value in the biomass industry and aims to strengthen the company's position for future growth [31][48] Other Important Information - Liquidity at the end of Q3 2023 was $440 million, including $315 million of unrestricted cash [15] - The company has drawn the full amount available under its $570 million senior secured revolving credit facility [15] Q&A Session Summary - There was no live Q&A session held during this conference call, and management indicated that they would provide updates and address questions in the future [19][47]

Financial Performance - Enviva's net revenue decreased by $5.1 million year-over-year, from $325.7 million in 3Q22 to $320.6 million in 3Q23[15] - The company reported a net loss of $85.2 million in 3Q23, a significant increase from the $18.3 million net loss in 3Q22[15] - Adjusted EBITDA decreased by $24 million, from $60.6 million in 3Q22 to $36.6 million in 3Q23[15] - Average sales price per MT(Metric Ton) decreased by 17% from 3Q22 to 3Q23[16] - Gross margin per MT decreased from $25.28 in 3Q22 to $9.90 in 3Q23[15] - Adjusted gross margin per MT decreased from $59.99 in 3Q22 to $39.66 in 3Q23[15] Cost Reduction and Production - Delivered At Port (DAP) costs decreased by $9 per MT from $161 in 2Q23 to $152 in 3Q23[10, 17] - Production increased by approximately 5% from 2Q23 to 3Q23[17] Liquidity and Capital Structure - Total liquidity as of September 30, 2023, was $440 million, including $315 million of unrestricted cash and $125 million of restricted cash[22] - Net debt was $1.394 billion as of September 30, 2023[22]

Production and Sales - The company expects a production volume of approximately 5.0 million metric tons of wood pellets in 2023, which is fully contracted [137]. - Wood pellet pricing in 2023 has been approximately 51% lower for the three months and 50% lower for the nine months ended September 30, 2023, compared to the fourth quarter of 2022 [143]. - Sales volumes of wood pellets increased by 12% in Q3 2023 compared to Q3 2022, indicating improved plant utilization [170]. - Product sales revenue decreased by $16.0 million, or 5%, to $306.9 million for the three months ended September 30, 2023, primarily due to a 17% decrease in average sale price per metric ton [169]. - Product sales for the nine months ended September 30, 2023, reached $855.3 million, a slight increase of 1% from $847.5 million in the same period of 2022, driven by an 8% increase in sales volumes [186]. Financial Performance - The net loss for the three months ended September 30, 2023, was $85.2 million, compared to a net loss of $18.3 million for the same period in 2022 [168]. - Adjusted EBITDA for Q3 2023 was $36.6 million, down from $60.6 million in Q3 2022, primarily due to decreased adjusted gross margin and increased legal and financial advisory expenses [183]. - Adjusted net loss for the nine months ended September 30, 2023, was $31.9 million, a decrease of $223.8 million compared to a net loss of $255.7 million for the same period in 2022 [197]. - The net loss for Q3 2023 was $85.2 million, compared to a net loss of $18.3 million in Q3 2022, reflecting a significant increase in losses [182]. - Total interest expense surged to $43.8 million in Q3 2023, up from $18.7 million in Q3 2022, largely due to higher interest rates and Q4 2022 Transactions [180]. Expenses and Costs - Total operating costs and expenses increased by $37.2 million to $364.1 million for the three months ended September 30, 2023, compared to the same period in 2022 [168]. - Cost of goods sold rose to $268.2 million in Q3 2023, a 4% increase from $257.5 million in Q3 2022, primarily due to a 14% increase in product sales volumes [173]. - Total operating costs for the nine months ended September 30, 2023, increased to $1.015 billion from $904.2 million in 2022, reflecting a rise in cost of goods sold and restructuring expenses [185]. - Cost of goods sold increased to $781.6 million for the nine months ended September 30, 2023, from $718.9 million for the same period in 2022, representing a 9% increase [188]. - Selling, general, administrative, and development expenses decreased to $80.5 million for the nine months ended September 30, 2023, from $91.8 million for the same period in 2022, a decrease of $11.3 million [190]. Impairments and Restructuring - The company recognized an impairment expense of $21.2 million due to the permanent shutdown of an underperforming dryer line at the Southampton plant [146]. - The company implemented a restructuring plan in Q2 2023, resulting in pre-tax restructuring expenses of $19.842 million for the nine months ended September 30, 2023 [149]. - The Amory plant in Mississippi sustained damage from a tornado, leading to a $1.2 million impairment recorded in cost of goods sold, with an expected $9.0 million investment to resume operations [152]. Liquidity and Financing - The company raised $249.1 million through a private placement of Series A Preferred Stock, issuing 6,605,671 shares, with net proceeds of $247.9 million intended for growth capital and general corporate purposes [150]. - Liquidity as of September 30, 2023, was $315.2 million, excluding cash restricted for construction projects [201]. - The company anticipates potential covenant breaches under its senior secured credit facility as early as December 31, 2023, due to operational challenges and liquidity constraints [145]. - The company is evaluating a potential deferral of up to 12 months for the construction of the Bond plant due to ongoing liquidity management initiatives [137]. - The company is maintaining a disciplined approach to capital expenditures while navigating leverage and liquidity challenges [205]. Market and Economic Conditions - Inflationary pressures have impacted labor rates and supplier costs, potentially affecting profitability and cash flows if not mitigated [160]. - The average sales price per metric ton (MT) for biomass was approximately $200 to $220 in Q3 2023, significantly lower than over $400 per MT in Q3 2022, reflecting a less favorable pricing environment [170]. - The company entered into agreements to sell and purchase wood pellets at fixed prices, which may negatively impact profitability if market prices do not increase significantly [140]. Other Financial Metrics - Adjusted gross margin decreased to $56.8 million in Q3 2023 from $75.4 million in Q3 2022, with adjusted gross margin per MT dropping from $59.99 to $39.66 [175]. - Total interest expense rose to $136.4 million for the nine months ended September 30, 2023, compared to $42.6 million for the same period in 2022, an increase of $93.8 million [194]. - Adjusted EBITDA was $66.0 million for the nine months ended September 30, 2023, down from $136.6 million for the same period in 2022, a decrease of $70.6 million [199]. - Deferred revenue increased by $94.5 million during the nine months ended September 30, 2023, contributing to favorable changes in working capital [207].

Financial Performance & Guidance - Enviva has a contracted backlog of approximately $23 billion with credit-worthy customers, driving strong cash flows[1] - Sold volumes of 13 million metric tons[3] - The company is executing cost improvements, targeting $100 million in savings[42] - Full-year 2023 CAPEX guidance is lowered to a range of $335 million to $365 million, representing a 10% decrease at the midpoint[57] - The company reaffirms its full-year 2023 Adjusted EBITDA guidance, with expectations for improvements in the second half of the year[40] Production & Operations - Enviva has a nameplate production capacity of approximately 62 million metric tons per year[17] - The company is investing in plant productivity and cost improvements[34] - Corporate restructuring is expected to provide $16 million in reduced cash costs on an annualized basis[42] - The company is focused on investments in the productivity and operational improvement of current assets[48] Growth & Market - The customer sales pipeline exceeds $52 billion, driven by energy transition tailwinds[17] - The company expects to expand its customer mix from 20 customers in 2022 to approximately 40 customers in 2025[77] - The company anticipates that deliveries to its largest customer will be approximately 15% of total deliveries by 2025[98]

Unidentified Analyst Understood. That's very helpful. I just want to circle back on Bond quickly. Is there any rules of thumb we can kind of think about for how you guys are going to make this decision upon timing? If you're in the guide throughout the rest of the year, is it fair to assume that's going to be on track from there? Or are there other things that are going into that decision that we might not be able to see from here? And then just lastly on that. Are there any costs associated with the delay ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Exact name of registrant as specified in its charter) (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 7272 Wisconsin Ave. Suite 1800 Bethesda, MD 20814 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number 0 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or (Exact name of registrant as specified in its charter) (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 7272 Wisconsin Ave. Suite 1800 Bethesda, MD 20814 (Address of principal executive offices) (Zip code) (301) 657-5560 ☐ ...

Kate Walsh - Vice President of Investor Relations Thomas Meth - President and Chief Executive Officer Shai Even - Executive Vice President and Chief Financial Officer Operator Kate Walsh During the course of our remarks and the subsequent Q&A session, we will be making forward-looking statements, which are subject to a variety of risks. Information concerning the risks and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements can be found in our ...

Production Capacity and Expansion - Enviva operates ten wood pellet production plants with a combined capacity of approximately 6.2 million metric tons per year, fully contracted with some contracts extending into the 2040s[177]. - In 2022, Enviva commenced construction of a new plant in Epes, Alabama, designed to produce over 1 million metric tons per year, and is developing another plant in Bond, Mississippi, also with a capacity of over 1 million metric tons per year[177]. Financial Performance - Product sales increased to $1,079.8 million in 2022 from $999.2 million in 2021, an increase of $80.6 million or 8%[230]. - Average sales price per metric ton (MT) rose by 17%, while product sales volumes decreased by 8%[230]. - Cost of goods sold increased to $927.5 million in 2022 from $861.7 million in 2021, an increase of $65.8 million or 8%[234]. - Adjusted gross margin for 2022 was $217.1 million, or $46.65 per MT, compared to $205.1 million, or $40.75 per MT in 2021, reflecting a $12.0 million increase[235]. - Adjusted net loss for 2022 was $81.6 million, compared to a loss of $78.2 million in 2021, reflecting an increase of $3.4 million[247]. - Adjusted EBITDA rose by $38.5 million to $155.2 million in 2022, up from $116.7 million in 2021, driven by improved operational performance[248]. Debt and Financing - Enviva's financing activities include a $250 million issuance of tax-exempt green bonds for the Epes plant, bearing an interest rate of 6.00% and maturing in 2052[187]. - The company also issued $100 million in tax-exempt green bonds for the Bond plant, with an interest rate of 7.75% and maturing in 2047[188]. - Total debt as of December 31, 2022, was $1.6 billion, with significant components including $750 million in senior unsecured notes and $436 million in revolver credit facility borrowings[259]. - Interest expense increased by $15.1 million to $71.6 million in 2022 from $56.5 million in 2021, primarily due to higher borrowing amounts and floating interest rates[243]. Operational Challenges - The Omicron variant of COVID-19 resulted in $15.2 million of incremental costs during the three months ended March 31, 2022, impacting operations and project execution[192]. - The war in Ukraine resulted in $5.1 million of incremental costs during the year ended December 31, 2022, all incurred in the first quarter[193]. - Inflationary pressures have impacted labor rates and supplier costs, potentially increasing overall costs and affecting profit margins[202]. - The polar vortex impacted operations, leading to $4.0 million of incremental costs in 2022[239]. Customer Contracts and Revenue Recognition - The company primarily earns revenue by supplying wood pellets under long-term "take-or-pay" off-take contracts, which define fixed annual volumes and prices per metric ton (MT) for the duration of the contracts[329]. - Revenue from wood pellet sales is recognized upon loading onto a ship, with the amount determined by management and a third-party specialist[329]. - Customers are obligated to pay the majority of the purchase price prior to the arrival of the ship at the discharge port, with revenue generally recognized before invoicing[336]. Cash Flow and Liquidity - Net cash used in operating activities was $88.8 million in 2022, a decrease of $122.2 million compared to a net cash provided of $33.4 million in 2021[260]. - Net cash provided by financing activities increased by $294.4 million to $544.2 million in 2022, compared to $249.8 million in 2021, primarily due to a decrease in cash used for acquiring noncontrolling interests and an increase in proceeds from common shares issuance[263]. - Cash on hand and availability under the senior secured credit facility amounted to $384.1 million as of December 31, 2022[252]. Strategic Initiatives and Goals - Enviva aims to achieve carbon-neutral operations by 2030, targeting a reduction or offset of Scope 1 and Scope 2 greenhouse gas emissions[190]. - The company strategically located its plants in regions with abundant wood fiber sources to manage raw material supply effectively[214]. - Distribution costs include all transportation costs from plants to port locations, with long-term fixed-price shipping contracts to mitigate shipping risks[216]. Internal Controls and Governance - The company reported a material weakness in internal controls over the recoverability assessment of customer assets, necessitating increased audit efforts to test the assumptions used[285]. - In connection with a leadership transition, Enviva entered into a separation agreement with the former CEO, including a severance payment of $3.8 million and a consulting agreement[191]. Market and Economic Conditions - Revenue for the year ended December 31, 2022, was primarily derived from long-term, take-or-pay contracts with seven major customers, predominantly power generators in Europe, indicating a concentration risk[270]. - The company expects to derive substantially all of its revenues from six customers in 2023, four of which are located in Europe, highlighting the need for diversification to mitigate credit risk[270].

Enviva Inc. (NYSE:EVA) Q3 2022 Results Conference Call November 3, 2022 10:00 AM ET Company Participants Kate Walsh - Vice President of Investor Relations John Keppler - Chairman and Chief Executive Officer Thomas Meth - President Shai Even - Executive Vice President and Chief Financial Officer Conference Call Participants Jordan Levy - Truist Securities John Mackay - Goldman Sachs Ryan Levine - Citi Elvira Scotto - RBC Capital Markets Operator Good morning. And welcome to Enviva Inc.'s Third Quarter of 202 ...