EVA - Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Enviva Inc. (EVA)
NEW YORK, Sept. 14, 2023 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the District of Maryland on behalf of all persons or entities who purchased Enviva Inc. (“Enviva” or “Company”) (NYSE: EVA) between November 3, 2022 through May 3, 2023, both dates inclusive (the “Class Period”).
According to the Complaint, Defendants made false and/or misleading statements and/or failed to disclose that: Defendant Keppler told call participants on a November 3, 2022 earning call, “[a]s we look into 2023, we are really starting to hit our stride as a corporation …” (emphasis added). The Complaint further alleges that Keppler added that the Company was experiencing “the continued operational improvements … across our fully contracted asset base” and that “productivity and the benefit of the multi-plant expansions drives increased volume and improved fixed cost absorption.”
The Complaint alleges that the Defendants continued to make statements promoting the financial stability of Enviva and on a March 1, 2023 earnings call, Defendant Meth told call participants that “we firmly believe in the cash flow profile of this business and I’ve strong conviction around our ability to not only deliver $305 million to $335 million in adjusted EBITDA for 2023 but also to double adjusted EBITDA over the next four years and to self-fund our growth by 2027” (emphasis added). The Complaint also alleges that Meth stated “we have significant growth forecasted for 2023 which is underwritten by our existing contracted backlog … our investors that know us the best, are increasing their investment positions given their strong level of conviction in what this business can and will do” (emphasis added). The Complaint further alleges that in a press release coinciding with the earnings call, Meth noted the “immense growth opportunity for Enviva,” adding “we aim to sell close to 7 million metric tons at higher prices than we have seen historically, and at a meaningfully lower cost position, achieved by higher plant utilization, a stable and fully staffed workforce.”
Similarly, during an April 3, 2023 “Investor Day” presentation, the Complaint alleges that Defendants reiterated that the Company’s adjusted EBITDA for 2023 was in the range of $305 million to $335 million. Defendants estimated that the 2023 net loss would be in the range of $18 million to $48 million. The Complaint all alleges that Defendants also made representations that the dividend payout was stable and would be covered at 1.09x to 1.30x.
On May 3, 2023, the Complaint alleges that the truth behind the Company’s financial condition was revealed when the Defendants, in a press release issued before the market opened, dramatically lowered their FY 2023 guidance downward and suspended Enviva’s dividend payments going forward. Defendants now projected that Enviva’s 2023 EBITDA would be substantially lower, in the range of $200-250 million, net loss would be substantially higher, increasing to a range of $136-$186 million, and Enviva’s $0.905 per share quarterly dividend was eliminated.
On May 4, 2023, the Complaint alleges that Defendants held their quarterly earnings call, during which Meth stated that “we have to reset expectations here and just provide a much more realistic cost profile.” According to the Complaint, Meth stated that certain undisclosed issues were previously evident as far back as November 2022, telling investors for the first time “… as we went into 2022, cost position certainly went up, right? We initially thought it was more temporal through the war in Ukraine and inflationary pressures. We really struggled through the first quarter with pandemic-related issues.” The Complaint alleges that Keppler added that “the cost and productivity challenges … that the team outlined a month ago are deeper and more significant” than previously stated.
The revelation of the true financial condition of the Company led Enviva’s common stock price to collapse $14.34 per share from $21.35 per share to $7.01 per share or down 67.2% on enormous volume.
Investors who purchased or otherwise acquired shares of Enviva should contact the Firm prior to the November 13, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com .
Please visit our website at http://www.gme-law.com for more information about the firm.