Enviri Corp 10-Q, filed Oct 31, 2024

Enviri Corp (NVRI)

10-Q 2024-10-31 For: 2024-09-30

Added on June 09, 2026

About this 10-Q

Enviri Corp filed this 10-Q on October 31, 2024, covering the quarter ended September 30, 2024.

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $573.63M; down 3.9% from $596.97M a year earlier
Net loss: $13.17M; compared with a net loss of $10.8M a year earlier
Diluted EPS: -$0.16; compared with -$0.14 a year earlier

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Class						Outstanding at October 24, 2024
Common stock, par value $1.25 per share						80,135,155


		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Operations (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Condensed Consolidated Statements of Equity (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	42


PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43





Item 5.	Other Information	43



Item 6.	Exhibits	44


SIGNATURES		45


Term						Description
AOCI						Accumulated Other Comprehensive Income (Loss)
AR Facility						Revolving trade receivables securitization facility
ASU						Financial Accounting Standards Board Accounting Standards Update
CE						Clean Earth reportable business segment
CERCLA						Comprehensive Environmental Response, Compensation, and Liability Act of 1980
Consolidated Adjusted EBITDA						EBITDA as calculated in accordance with the Company's Credit Agreement.
Credit Agreement						Credit Agreement governing the Senior Secured Credit Facilities
DEA						United States Drug Enforcement Administration
Deutsche Bahn						National railway company in Germany
DTSC						California Department of Toxic Substances Control
EBITDA						Earnings before interest, tax, depreciation and amortization
EPA						U.S. Environmental Protection Agency
ESOL						Stericycle Environmental Solutions business
FASB						Financial Accounting Standards Board
HE						Harsco Environmental reportable business segment
ICMS						Type of value-added tax in Brazil
IKG						The former Harsco Industrial IKG business
ISDA						International Swaps and Derivatives Association
Network Rail						Infrastructure manager for most of the railway in the U.K.
Term Loan						$500 million term loan raised in March 2021 under the Senior Secured Credit Facilities, maturing on March 10, 2028
OCI						Other Comprehensive Income (Loss)


Performix						Performix Metallurgical Additives, LLC, a subsidiary of HE
Rail						Harsco Rail reportable business segment
Reed						Reed Minerals, LLC, a subsidiary of HE
Revolving Credit Facility						Revolving credit facility under the Senior Secured Credit Facilities containing $50.0 million maturing on March 10, 2026 and $625.0 million maturing on September 5, 2029
SBB						Federal railway system of Switzerland
SCE						Kingdom of Bahrain's Supreme Council for Environment
SEC						U.S. Securities and Exchange Commission
Senior Notes						5.75% Notes due July 31, 2027
Senior Secured Credit Facilities						Primary source of borrowings comprised of the Term Loan and the Revolving Credit Facility
SOFR						Secured Overnight Financing Rate
SPE						The Company's wholly-owned bankruptcy-remote special purpose entity, which is used in connection with the AR Facility
SPRA						State Revenue Authorities from the State of São Paulo, Brazil



U.S. GAAP						Accounting principles generally accepted in the U.S.


(In thousands)	September 30 2024		December 31 2023
ASSETS
Current assets:
Cash and cash equivalents	$	110,243	$	121,239
Restricted cash	2,889		3,375
Trade accounts receivable, net	318,906		338,187

Other receivables	42,960		40,565
Inventories	196,189		189,369
Current portion of contract assets	64,190		64,875
Prepaid expenses	63,818		58,723

Other current assets	6,969		11,023
Total current assets	806,164		827,356

Property, plant and equipment, net	698,315		707,397
Right-of-use assets, net	95,710		102,891
Goodwill	767,076		780,978
Intangible assets, net	305,633		327,983


Deferred income tax assets	16,495		16,295

Other assets	112,682		91,798
Total assets	$	2,802,075	$	2,854,698
LIABILITIES
Current liabilities:
Short-term borrowings	$	14,357	$	14,871
Current maturities of long-term debt	17,952		15,558
Accounts payable	245,996		243,279

Accrued compensation	65,414		79,609
Income taxes payable	8,952		7,567


Reserve for forward losses on contracts	53,513		52,919
Current portion of advances on contracts	16,838		38,313


Current portion of operating lease liabilities	27,381		28,775

Other current liabilities	168,676		174,342
Total current liabilities	619,079		655,233
Long-term debt	1,431,868		1,401,437


Retirement plan liabilities	39,900		45,087



Operating lease liabilities	69,977		75,476

Environmental liabilities	22,959		25,682
Deferred tax liabilities	31,749		29,160
Other liabilities	60,664		47,215
Total liabilities	2,276,196		2,279,290
COMMITMENTS AND CONTINGENCIES
ENVIRI CORPORATION STOCKHOLDERS’ EQUITY

Common stock	146,706		146,105
Additional paid-in capital	250,855		238,416
Accumulated other comprehensive loss	(545,620)		(539,694)
Retained earnings	1,483,589		1,528,320
Treasury stock	(851,541)		(849,996)
Total Enviri Corporation stockholders’ equity	483,989		523,151
Noncontrolling interests	41,890		52,257
Total equity	525,879		575,408
Total liabilities and equity	$	2,802,075	$	2,854,698


	Three Months Ended					Nine Months Ended
	September 30					September 30
(In thousands, except per share amounts)	2024		2023			2024		2023
Revenues from continuing operations:
Service revenues	$	488,132	$	490,791		$	1,492,569	$	1,434,314
Product revenues	85,495		106,177			291,368		332,375
Total revenues	573,627		596,968			1,783,937		1,766,689
Costs and expenses from continuing operations:
Cost of services sold	373,924		377,539			1,154,998		1,120,578
Cost of products sold	80,821		93,389			258,227		277,086

Selling, general and administrative expenses	89,183		93,513			266,763		262,175
Research and development expenses	888		902			2,692		2,441

Property, plant and equipment impairment charge	—		—			—		14,099
Remeasurement of long-lived assets	—		—			10,695		—
Gain on sale of businesses, net	(8,601)		—			(10,478)		—
Other expense (income), net	40		2,865			6,600		(4,052)
Total costs and expenses	536,255		568,208			1,689,497		1,672,327
Operating income (loss) from continuing operations	37,372		28,760			94,440		94,362
Interest income	981		1,722			6,113		4,796
Interest expense	(28,813)		(27,552)			(84,869)		(78,956)
Facility fees and debt-related income (expense)	(2,978)		(2,806)			(8,687)		(7,899)

Defined benefit pension income (expense)	(4,257)		(5,430)			(12,599)		(16,159)
Income (loss) from continuing operations before income taxes and equity income	2,305		(5,306)			(5,602)		(3,856)
Income tax benefit (expense) from continuing operations	(13,437)		(3,498)			(31,372)		(26,846)
Equity income (loss) of unconsolidated entities, net	38		(151)			(84)		(593)
Income (loss) from continuing operations	(11,094)		(8,955)			(37,058)		(31,295)
Discontinued operations:

Income (loss) from discontinued businesses	(1,584)		(1,538)			(4,287)		(4,358)
Income tax benefit (expense) from discontinued businesses	411		399			1,112		1,131
Income (loss) from discontinued operations, net of tax	(1,173)		(1,139)			(3,175)		(3,227)
Net income (loss)	(12,267)		(10,094)			(40,233)		(34,522)
Less: Net loss (income) attributable to noncontrolling interests	(901)		(708)			(4,498)		2,756
Net income (loss) attributable to Enviri Corporation	$	(13,168)	$	(10,802)		$	(44,731)	$	(31,766)
Amounts attributable to Enviri Corporation common stockholders:
Income (loss) from continuing operations, net of tax	$	(11,995)	$	(9,663)		$	(41,556)	$	(28,539)
Income (loss) from discontinued operations, net of tax	(1,173)		(1,139)			(3,175)		(3,227)
Net income (loss) attributable to Enviri Corporation common stockholders	$	(13,168)	$	(10,802)		$	(44,731)	$	(31,766)

Weighted-average shares of common stock outstanding	80,165		79,850			80,085		79,767
Basic earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations	$	(0.15)	$	(0.12)		$	(0.52)	$	(0.36)
Discontinued operations	(0.01)		(0.01)			(0.04)		(0.04)
Basic earnings (loss) per share attributable to Enviri Corporation common stockholders	$	(0.16)	$	(0.14)	(a)	$	(0.56)	$	(0.40)

Diluted weighted-average shares of common stock outstanding	80,165		79,850			80,085		79,767
Diluted earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations	$	(0.15)	$	(0.12)		$	(0.52)	$	(0.36)
Discontinued operations	(0.01)		(0.01)			(0.04)		(0.04)
Diluted earnings (loss) per share attributable to Enviri Corporation common stockholders	$	(0.16)	$	(0.14)	(a)	$	(0.56)	$	(0.40)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Nine Months Ended September 30
(In thousands)	2024		2023
Cash flows from operating activities:
Net income (loss)	$	(40,233)	$	(34,522)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	111,525		102,893
Amortization	24,089		24,327
Deferred income tax (benefit) expense	5,634		3,946
Equity (income) loss of unconsolidated entities, net	84		593
Dividends from unconsolidated entities	204		—
Property, plant and equipment impairment charge	—		14,099


Remeasurement of long-lived assets	10,695		—
Gain on sale of businesses, net	(10,478)		—
Other, net	1,928		4,743
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:
Accounts receivable	3,231		(48,175)

Inventories	(17,084)		(10,548)
Contract assets	(14,923)		1,317
Right-of-use assets	23,687		24,467
Accounts payable	7,421		(818)
Accrued interest payable	(5,092)		(6,828)
Accrued compensation	(13,412)		20,436
Advances on contracts	(10,446)		(21,824)


Operating lease liabilities	(23,341)		(22,980)
Retirement plan liabilities, net	(6,981)		(4,862)

Other assets and liabilities	(4,737)		(92)
Net cash (used) provided by operating activities	41,771		46,172
Cash flows from investing activities:
Purchases of property, plant and equipment	(102,094)		(93,630)

Proceeds from sale of business, net	57,667		—
Proceeds from sales of assets	12,479		2,080
Expenditures for intangible assets	(1,181)		(478)
Proceeds from notes receivable	17,023		11,238
Net proceeds (payments) from settlement of foreign currency forward exchange contracts	(6,133)		2,034

Other investing activities, net	—		462
Net cash used by investing activities	(22,239)		(78,294)
Cash flows from financing activities:
Short-term borrowings, net	(2,982)		4,196
Current maturities and long-term debt:
Additions	201,562		185,992
Reductions	(200,584)		(140,522)

Dividends paid to noncontrolling interests	(15,964)		—
Contributions from noncontrolling interests	874		1,654



Stock-based compensation - Employee taxes paid	(1,546)		(1,374)



Deferred financing costs	(3,765)		—

Net cash (used) provided by financing activities	(22,405)		49,946
Effect of exchange rate changes on cash and cash equivalents, including restricted cash	(8,609)		(4,231)
Net increase (decrease) in cash and cash equivalents, including restricted cash	(11,482)		13,593
Cash and cash equivalents, including restricted cash, at beginning of period	124,614		85,094
Cash and cash equivalents, including restricted cash, at end of period	$	113,132	$	98,687

Supplementary cash flow information:
Change in accrual for purchases of property, plant and equipment included in accounts payable	$	3,501	$	(3,252)


	Enviri Corporation Stockholders’ Equity
(In thousands, except share amounts)	Common Stock				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests
	Issued		Treasury										Total
Balances, December 31, 2023	$	146,105	$	(849,996)	$	238,416	$	1,528,320	$	(539,694)	$	52,257	$	575,408

Net income (loss)	—		—		—		(17,962)		—		1,116		(16,846)
Cash dividends declared:

Noncontrolling interests	—		—		—		—		—		(8,243)		(8,243)

Total other comprehensive income (loss), net of deferred income taxes of $(1,433)	—		—		—		—		(6,838)		(821)		(7,659)


Contributions from noncontrolling interests	—		—		—		—		—		874		874







Vesting of restricted stock units, net 201,053 shares	443		(1,270)		(443)		—		—		—		(1,270)


Amortization of unearned portion of stock-based compensation, net of forfeitures	—		—		3,860		—		—		—		3,860
Balances, March 31, 2024	$	146,548	$	(851,266)	$	241,833	$	1,510,358	$	(546,532)	$	45,183	$	546,124
Net income (loss)	—		—		—		(13,601)		—		2,481		(11,120)
Cash dividends declared:

Noncontrolling interests	—		—		—		—		—		(4,308)		(4,308)

Total other comprehensive income (loss), net of deferred income taxes of $(112)	—		—		—		—		(6,016)		(224)		(6,240)









Stock appreciation rights exercised, net 603 shares	1		(2)		(1)		—		—		—		(2)
Vesting of restricted stock units and other stock grants, net 74,725 shares	102		(59)		(102)		—		—		—		(59)


Amortization of unearned portion of stock-based compensation, net of forfeitures	—		—		4,403		—		—		—		4,403
Balances, June 30, 2024	$	146,651	$	(851,327)	$	246,133	$	1,496,757	$	(552,548)	$	43,132	$	528,798
Net income (loss)	—		—		—		(13,168)		—		901		(12,267)
Cash dividends declared:

Noncontrolling interests	—		—		—		—		—		(3,413)		(3,413)

Total other comprehensive income (loss), net of deferred income taxes of $4,302	—		—		—		—		6,928		1,270		8,198










Vesting of restricted stock units and other stock grants, net 23,351 shares	55		(214)		(55)		—		—		—		(214)


Amortization of unearned portion of stock-based compensation, net of forfeitures	—		—		4,777		—		—		—		4,777
Balances, September 30, 2024	$	146,706	$	(851,541)	$	250,855	$	1,483,589	$	(545,620)	$	41,890	$	525,879


(In millions)	September 30 2024		December 31 2023
Net amounts sold under factoring arrangements	$	14.7	$	16.1
Program capacities	20.1		32.6



	Three Months Ended
	September 30
Defined Benefit Pension Plan Net Periodic Pension Cost (Benefit)	U.S. Plans				International Plans
(In thousands)	2024		2023		2024		2023
Service costs	$	—	$	—	$	334	$	314
Interest costs	2,419		2,543		7,551		7,664
Expected return on plan assets	(2,236)		(1,750)		(8,480)		(7,921)
Recognized prior service costs	—		—		119		116
Recognized actuarial losses	1,045		1,150		3,864		3,633

Defined benefit pension plan net periodic pension cost (benefit)	$	1,228	$	1,943	$	3,388	$	3,806



	Nine Months Ended
	September 30
Defined Benefit Pension Plans Net Periodic Pension Cost (Benefit)	U.S. Plans				International Plans
(In thousands)	2024		2023		2024		2023
Service costs	$	—	$	—	$	1,007	$	941
Interest costs	7,257		7,629		22,445		22,645
Expected return on plan assets	(6,708)		(5,250)		(25,194)		(23,404)
Recognized prior service costs	—		—		354		345
Recognized actuarial losses	3,135		3,451		11,459		10,732


Defined benefit pension plans net periodic pension cost (benefit)	$	3,684	$	5,830	$	10,071	$	11,259


(In thousands)	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
September 30, 2024
Asset derivatives (Level 2):
Foreign currency exchange forward contracts	Other current assets	$	27	$	275	$	302


Total		$	27	$	275	$	302

Liability derivatives (Level 2):
Foreign currency exchange forward contracts	Other current liabilities	$	1,296	$	6,954	$	8,250
Interest rate swaps	Other current liabilities	1,130		—		1,130
Interest rate swaps	Other liabilities	802		—		802
Total		$	3,228	$	6,954	$	10,182

December 31, 2023
Asset derivatives (Level 2):
Foreign currency exchange forward contracts	Other current assets	$	77	$	1,597	$	1,674


Interest rate swaps	Other current assets	1,443		—		1,443

Total		$	1,520	$	1,597	$	3,117

Liability derivatives (Level 2):
Foreign currency exchange forward contracts	Other current liabilities	$	561	$	8,064	$	8,625

Interest rate swaps	Other liabilities	2,150		—		2,150
Total		$	2,711	$	8,064	$	10,775


	Gain (Loss) Recognized in OCI on Derivatives				Loss (Gain) Reclassified from AOCI into Income - Effective Portion or Equity
	Three Months Ended				Three Months Ended
	September 30				September 30
(In thousands)	2024		2023		2024		2023
Foreign currency exchange forward contracts	$	(1,188)	$	373	$	541	$	(270)


Interest rate swaps	(3,284)		2,390		(866)		(825)

	$	(4,472)	$	2,763	$	(325)	$	(1,095)


	Location of Gain (Loss) Recognized in Income on Derivatives (a)	Amount of Gain (Loss) Recognized in Income on Derivatives (a)
		Three Months Ended				Nine Months Ended
		September 30				September 30
(In thousands)		2024		2023		2024		2023

Foreign currency exchange forward contracts	Cost of services and products sold	$	(18,569)	$	12,174	$	(6,344)	$	13,739


FORM			10-Q


(In thousands)	September 30 2024		December 31 2023
Finished goods	$	22,784	$	16,171
Work-in-process	20,617		13,081

Raw materials and purchased parts	105,904		114,046
Stores and supplies	46,884		46,071
Total inventories	$	196,189	$	189,369



	Three Months Ended
	September 30, 2023
(In thousands)	Harsco Environmental Segment		Clean Earth Segment		Harsco Rail Segment		Consolidated Totals
Primary Geographical Markets (a):
North America	$	78,528	$	238,711	$	50,322	$	367,561
Western Europe	109,473		—		20,294		129,767
Latin America (b)	44,351		—		700		45,051
Asia-Pacific	25,787		—		1,064		26,851
Middle East and Africa	22,673		—		—		22,673
Eastern Europe	5,065		—		—		5,065
Total Revenues	$	285,877	$	238,711	$	72,380	$	596,968


	Components of AOCI, Net of Tax
(In thousands)	Cumulative Foreign Exchange Translation Adjustments			Effective Portion of Derivatives Designated as Hedging Instruments			Cumulative Unrecognized Actuarial Losses on Pension Obligations			Unrealized Gain (Loss) on Marketable Securities		Total
Balance at December 31, 2022	$	(213,104)		$	157		$	(354,699)		$	10	$	(567,636)

OCI before reclassifications	1,902		(a)	3,671		(b)	(3,433)		(a)	2		2,142
Amounts reclassified from AOCI, net of tax	—			(547)			13,651			—		13,104



Total OCI	1,902			3,124			10,218			2		15,246
Less: OCI attributable to noncontrolling interests	2,056			—			—			—		2,056
OCI attributable to Enviri Corporation	3,958			3,124			10,218			2		17,302
Balance at September 30, 2023	$	(209,146)		$	3,281		$	(344,481)		$	12	$	(550,334)


Significant Effects on Revenues (in millions)	Three Months Ended		Nine Months Ended
Revenues — September 30, 2023	$	285.9	$	848.7
Net effects of price/volume changes, primarily attributable to volume changes and services mix	21.3		61.1
Net impact of new and lost contracts	(6.3)		0.4
Impact of divestitures	(15.4)		(22.6)
Impact of foreign currency translation	(6.4)		(16.4)

Revenues — September 30, 2024	$	279.1	$	871.2



Significant Effects on Revenue (in millions)	Three Months Ended		Nine Months Ended
Revenues — September 30, 2023	$	72.4	$	226.3
Net effect of price/volume changes, primarily attributable to volume changes	(9.9)		7.5
Change in revenue adjustments as a result of certain estimated forward loss provisions (a)	(5.4)		(20.4)
Impact of foreign currency translation	0.6		0.4

Revenues — September 30, 2024	$	57.7	$	213.8


	September 30, 2024
(in millions)	Three Months Ended		Nine Months Ended
Change in costs due to changes in revenue volume and mix	$	(17.2)	$	10.1
Changes in costs from depreciation expense	3.3		10.4
Impact of foreign currency translation	(4.6)		(12.4)
Other	2.3		7.5

Total change in cost of services and products sold — 2024 vs. 2023	$	(16.2)	$	15.6


Summary of Senior Secured Credit Facilities and Notes: (in millions)	September 30 2024		December 31 2023
By type:
Term Loan	$	483.8	$	487.5
Revolving Credit Facility	437.0		422.0
5.75% Senior Notes	475.0		475.0
Total	$	1,395.8	$	1,384.5
By classification:
Current	$	5.0	$	5.0
Long-term	1,390.8		1,379.5
Total	$	1,395.8	$	1,384.5


	September 30, 2024
(In millions)	Facility Limit			Outstanding Balance		Outstanding Letters of Credit		Available Credit


Revolving credit facility	$	675.0	(a)	$	437.0	$	29.9	$	208.1


Exhibit Number						Description
10.1						Amendment No. 14 to Third Amended and Restated Credit Agreement, dated as of September 5, 2024, among Enviri Corporation, the Subsidiary Guarantors party thereto, Bank of America, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated September 5, 2024. Commission File Number 001-03970).
10.2						Omnibus Amendment, dated as of October 1, 2024, including the Third Amendment to the Receivables Purchase Agreement, by and among Harsco Receivables LLC, Enviri Corporation, and PNC Bank, National Association, as administrative agent and as a purchaser; and the Third Amendment to the Purchase and Contribution Agreement, by and among Enviri Corporation, the various entities listed as originators, and Harsco Receivables, LLC.* †

31.1						Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chairman, President and Chief Executive Officer).*
31.2						Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).*
32						Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chairman, President and Chief Executive Officer and Chief Financial Officer).**
101.Def						Definition Linkbase Document
101.Pre						Presentation Linkbase Document
101.Lab						Labels Linkbase Document
101.Cal						Calculation Linkbase Document
101.Sch						Schema Document
101.Ins						Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)



DATE	October 31, 2024	/s/ TOM VADAKETH
		Tom Vadaketh
		Senior Vice President and Chief Financial Officer
		(On behalf of the registrant and as Principal Financial Officer)

DATE	October 31, 2024	/s/ SAMUEL C. FENICE
		Samuel C. Fenice
		Vice President and Corporate Controller
		(Principal Accounting Officer)