Enviva(EVA) - 2022 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements The unaudited condensed consolidated financial statements show a net loss of $45.3 million for Q1 2022 Condensed Consolidated Balance Sheets Total assets remained stable at approximately $1.9 billion while total equity increased significantly to $501.3 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $168,445 | $198,730 | | Total Assets | $1,929,012 | $1,924,147 | | Total Current Liabilities | $212,395 | $257,006 | | Long-term Debt and Finance Lease Obligations | $1,058,246 | $1,232,441 | | Total Liabilities | $1,427,743 | $1,653,483 | | Total Equity | $501,269 | $270,664 | Condensed Consolidated Statements of Operations The company reported a net loss of $45.3 million in Q1 2022, a significant increase from the prior year's loss Condensed Consolidated Statements of Operations (in thousands) | Metric | Q1 2022 | Q1 2021 (Recast) | | :--- | :--- | :--- | | Net Revenue | $232,982 | $241,621 | | Total operating costs and expenses | $268,187 | $252,209 | | Loss from operations | ($35,205) | ($10,588) | | Net loss | ($45,307) | ($23,175) | | Net loss per share (Basic and diluted) | ($0.71) | ($0.99) | Condensed Consolidated Statements of Cash Flows Net cash used in operations increased significantly while financing activities provided $87.8 million in cash Summary of Cash Flows (in thousands) | Cash Flow Activity | Q1 2022 | Q1 2021 (Recast) | | :--- | :--- | :--- | | Net cash used in operating activities | ($42,923) | ($1,569) | | Net cash used in investing activities | ($58,051) | ($77,662) | | Net cash provided by financing activities | $87,784 | $176,414 | | Net (decrease) increase in cash | ($13,190) | $97,183 | Notes to Condensed Consolidated Financial Statements Notes detail the company's conversion to a C-Corporation, accounting policies, and significant equity transactions - Effective December 31, 2021, Enviva converted from a Delaware limited partnership to a Delaware corporation named "Enviva Inc"[40] - The Simplification Transaction in October 2021 was treated as a business combination of entities under common control, requiring historical financial statements to be retroactively recast[50] - As of March 31, 2022, the aggregate value of unsatisfied or partially satisfied performance obligations from customer contracts was approximately $19.9 billion, with contracts extending through 2045[56] - In January 2022, the company issued 4,945,000 shares of common stock for net proceeds of $333.2 million, which were used to fund capital expenditures and repay debt[83] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a Q1 2022 net loss of $45.3 million, impacted by COVID-19 and the war in Ukraine Business Overview and Recent Developments Enviva operates ten plants with a 6.2 million MTPY capacity and a product sales backlog of $21.3 billion - The company owns and operates ten plants with a combined production capacity of approximately 6.2 million metric tons per year (MTPY)[102] - As of April 1, 2022, the product sales backlog from firm and contingent long-term contracts stood at $21.3 billion, with a weighted-average remaining term of 14.5 years[105] How We Evaluate Our Operations (Non-GAAP Measures) Management utilizes non-GAAP measures like Adjusted EBITDA to evaluate underlying operational performance - The company utilizes non-GAAP financial measures to assess performance, including Adjusted Net Income (Loss), Adjusted Gross Margin, Adjusted EBITDA, and Distributable Cash Flow[110][111][112] - These non-GAAP measures exclude certain items considered unrepresentative of ongoing operations, such as acquisition costs, effects of COVID-19 and the war in Ukraine, and Support Payments[110][112] Results of Operations Net loss widened to $45.3 million, though adjusted EBITDA rose to $36.6 million due to one-time cost adjustments - The Omicron variant of COVID-19 resulted in $15.2 million of incremental costs in Q1 2022[107] - The war in Ukraine led to $5.1 million of incremental costs during Q1 2022, primarily from dislocations in shipping and spikes in energy prices[127][128] Key Operational Results (in thousands) | Metric | Q1 2022 | Q1 2021 (Recast) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $232,982 | $241,621 | ($8,639) | | Loss from Operations | ($35,205) | ($10,588) | ($24,617) | | Net Loss | ($45,307) | ($23,175) | ($22,132) | | Adjusted EBITDA | $36,550 | $21,691 | $14,859 | | Distributable Cash Flow | $25,333 | $5,152 | $20,181 | Liquidity and Capital Resources The company maintained liquidity of $280.4 million and plans capital expenditures of up to $275.0 million in 2022 - Total liquidity as of March 31, 2022 was $280.4 million, comprising cash on hand and availability under the $570.0 million senior secured revolving credit facility[141] - Planned capital expenditures for 2022 are between $255.0 million and $275.0 million, focusing on new plant construction in Lucedale, MS, the Pascagoula terminal, and the Epes plant[147] - The company intends to pay cash dividends of $3.62 per common stock for 2022[142] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk exposure since its 2021 Annual Report - There have been no material changes to the company's market risk exposure since the 2021 Form 10-K[156] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[157] - No material changes were made to internal control over financial reporting during the quarter ended March 31, 2022[158] PART II—OTHER INFORMATION Item 1. Legal Proceedings The company reports no material changes regarding legal proceedings since its 2021 Annual Report - There have been no material changes to legal proceedings as disclosed in the 2021 Form 10-K[161] Item 1A. Risk Factors The company reports no material changes to the risk factors disclosed in its 2021 Annual Report - There have been no material changes to risk factors as disclosed in the 2021 Form 10-K[162] Item 6. Exhibits This section lists all documents filed as part of the report, including required CEO and CFO certifications - This section incorporates the Exhibit Index by reference, which lists documents such as CEO/CFO certifications pursuant to the Sarbanes-Oxley Act[163][165]