Enviri Corp 10-Q, filed May 2, 2024

Enviri Corp (NVRI)

10-Q 2024-05-02 For: 2024-03-31

Added on June 09, 2026

About this 10-Q

Enviri Corp filed this 10-Q on May 2, 2024, covering the quarter ended March 31, 2024.

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $600.32M; up 7.1% from $560.71M a year earlier
Net loss: $17.96M; compared with a net loss of $9.53M a year earlier
Diluted EPS: -$0.22; compared with -$0.12 a year earlier

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Class						Outstanding at April 30, 2024
Common stock, par value $1.25 per share						80,103,167


		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)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36


PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36





Item 5.	Other Information	37



Item 6.	Exhibits	38


SIGNATURES		39


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
LIBOR						London Interbank Offered Rates
Network Rail						Infrastructure manager for most of the railway in the U.K.
New 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)

PA DEP						Pennsylvania Department of Environmental Protection
Rail						The Harsco Rail reportable business segment
Revolving Credit Facility						$700 million multi-year revolving credit facility under the Senior Secured Credit Facilities
ROU						Right of use
SBB						Federal railway system of Switzerland
SCE						Kingdom of Bahrain's Supreme Council for Environment
SEC						Securities and Exchange Commission
Senior Notes						5.75% Notes due July 31, 2027
Senior Secured Credit Facilities						Primary source of borrowings comprised of the New 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


TSDF						Treatment, storage, and disposal facility permits issued under the Resource Conservation and Recovery Act
U.S. GAAP						Accounting principles generally accepted in the U.S.


(In thousands)	March 31 2024		December 31 2023
ASSETS
Current assets:
Cash and cash equivalents	$	103,876	$	121,239
Restricted cash	3,532		3,375
Trade accounts receivable, net	308,213		338,187

Other receivables	33,693		40,565
Inventories	190,288		189,369
Current portion of contract assets	69,057		64,875
Prepaid expenses	53,081		58,723
Current portion of assets held-for-sale	8,282		195
Other current assets	13,627		10,828
Total current assets	783,649		827,356

Property, plant and equipment, net	688,638		707,397
Right-of-use assets, net	102,278		102,891
Goodwill	771,404		780,978
Intangible assets, net	319,522		327,983


Deferred income tax assets	15,884		16,295
Assets held-for-sale	8,873		—
Other assets	100,030		91,798
Total assets	$	2,790,278	$	2,854,698
LIABILITIES
Current liabilities:
Short-term borrowings	$	3,251	$	14,871
Current maturities of long-term debt	16,021		15,558
Accounts payable	224,509		243,279

Accrued compensation	52,947		79,609
Income taxes payable	5,172		7,567


Reserve for forward losses on contracts	46,592		52,919
Current portion of advances on contracts	35,965		38,313


Current portion of operating lease liabilities	28,569		28,775
Current portion of liabilities of assets held-for-sale	2,342		—
Other current liabilities	162,415		174,342
Total current liabilities	577,783		655,233
Long-term debt	1,444,883		1,401,437


Retirement plan liabilities	44,866		45,087



Operating lease liabilities	75,151		75,476

Environmental liabilities	25,253		25,682
Deferred tax liabilities	33,651		29,160
Other liabilities	42,567		47,215
Total liabilities	2,244,154		2,279,290
COMMITMENTS AND CONTINGENCIES
ENVIRI CORPORATION STOCKHOLDERS’ EQUITY

Common stock	146,548		146,105
Additional paid-in capital	241,833		238,416
Accumulated other comprehensive loss	(546,532)		(539,694)
Retained earnings	1,510,358		1,528,320
Treasury stock	(851,266)		(849,996)
Total Enviri Corporation stockholders’ equity	500,941		523,151
Noncontrolling interests	45,183		52,257
Total equity	546,124		575,408
Total liabilities and equity	$	2,790,278	$	2,854,698


	Three Months Ended
	March 31
(In thousands, except per share amounts)	2024		2023
Revenues from continuing operations:
Service revenues	$	499,154	$	461,560
Product revenues	101,163		99,145
Total revenues	600,317		560,705
Costs and expenses from continuing operations:
Cost of services sold	392,852		369,508
Cost of products sold	85,410		82,549

Selling, general and administrative expenses	87,126		81,861
Research and development expenses	861		520

Remeasurement of long-lived assets	10,695		—
Other expense (income), net	(2,440)		(5,648)
Total costs and expenses	574,504		528,790
Operating income (loss) from continuing operations	25,813		31,915
Interest income	1,697		1,480
Interest expense	(28,122)		(24,995)
Facility fees and debt-related income (expense)	(2,789)		(2,363)

Defined benefit pension income (expense)	(4,176)		(5,329)
Income (loss) from continuing operations before income taxes and equity income	(7,577)		708
Income tax benefit (expense) from continuing operations	(7,915)		(8,017)
Equity income (loss) of unconsolidated entities, net	(249)		(133)
Income (loss) from continuing operations	(15,741)		(7,442)
Discontinued operations:

Income (loss) from discontinued businesses	(1,492)		(1,655)
Income tax benefit (expense) from discontinued businesses	387		507
Income (loss) from discontinued operations, net of tax	(1,105)		(1,148)
Net income (loss)	(16,846)		(8,590)
Less: Net loss (income) attributable to noncontrolling interests	(1,116)		(935)
Net income (loss) attributable to Enviri Corporation	$	(17,962)	$	(9,525)
Amounts attributable to Enviri Corporation common stockholders:
Income (loss) from continuing operations, net of tax	$	(16,857)	$	(8,377)
Income (loss) from discontinued operations, net of tax	(1,105)		(1,148)
Net income (loss) attributable to Enviri Corporation common stockholders	$	(17,962)	$	(9,525)

Weighted-average shares of common stock outstanding	79,945		79,633
Basic earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations	$	(0.21)	$	(0.11)
Discontinued operations	(0.01)		(0.01)
Basic earnings (loss) per share attributable to Enviri Corporation common stockholders	$	(0.22)	$	(0.12)

Diluted weighted-average shares of common stock outstanding	79,945		79,633
Diluted earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations	$	(0.21)	$	(0.11)
Discontinued operations	(0.01)		(0.01)
Diluted earnings (loss) per share attributable to Enviri Corporation common stockholders	$	(0.22)	$	(0.12)


☒			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


	Three Months Ended March 31
(In thousands)	2024		2023
Cash flows from operating activities:
Net income (loss)	$	(16,846)	$	(8,590)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	36,920		33,039
Amortization	8,174		7,965
Deferred income tax (benefit) expense	3,445		(56)
Equity (income) loss of unconsolidated entities, net	249		133





Remeasurement of long-lived assets	10,695		—
Other, net	772		1,009
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:
Accounts receivable	24,426		(14,533)

Inventories	(5,297)		(8,534)
Contract assets	(9,199)		11,698
Right-of-use assets	8,599		7,842
Accounts payable	(13,751)		17,735
Accrued interest payable	(6,820)		(6,998)
Accrued compensation	(25,531)		7,343
Advances on contracts	(1,618)		(5,591)


Operating lease liabilities	(8,212)		(7,202)
Retirement plan liabilities, net	(340)		814

Other assets and liabilities	(4,318)		838
Net cash (used) provided by operating activities	1,348		36,912
Cash flows from investing activities:
Purchases of property, plant and equipment	(26,881)		(22,146)


Proceeds from sales of assets	4,313		823
Expenditures for intangible assets	(77)		(36)

Net proceeds (payments) from settlement of foreign currency forward exchange contracts	(602)		(1,212)

Other investing activities, net	1		32
Net cash used by investing activities	(23,246)		(22,539)
Cash flows from financing activities:
Short-term borrowings, net	(9,003)		(3,029)
Current maturities and long-term debt:
Additions	35,323		59,000
Reductions	(4,967)		(57,200)

Dividends paid to noncontrolling interests	(8,243)		—
Contributions from noncontrolling interests	874		—



Stock-based compensation - Employee taxes paid	(1,040)		(930)




Other financing activities, net	(1)		—
Net cash (used) provided by financing activities	12,943		(2,159)
Effect of exchange rate changes on cash and cash equivalents, including restricted cash	(8,251)		(1,072)
Net increase (decrease) in cash and cash equivalents, including restricted cash	(17,206)		11,142
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	$	107,408	$	96,236

Supplementary cash flow information:
Change in accrual for purchases of property, plant and equipment included in accounts payable	$	120	$	7,524


	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


(In millions)	March 31 2024		December 31 2023
Net amounts sold under factoring arrangements	$	14.7	$	16.1
Program capacities	32.0		32.6



	Three Months Ended
	March 31
Defined Benefit Pension Plan Net Periodic Pension Cost (Benefit)	U.S. Plans				International Plans
(In thousands)	2024		2023		2024		2023
Service costs	$	—	$	—	$	338	$	313
Interest costs	2,419		2,543		7,460		7,429
Expected return on plan assets	(2,236)		(1,750)		(8,370)		(7,678)
Recognized prior service costs	—		—		118		114
Recognized actuarial losses	1,045		1,151		3,801		3,519

Defined benefit pension plan net periodic pension cost (benefit)	$	1,228	$	1,944	$	3,347	$	3,697


(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
March 31, 2024
Asset derivatives (Level 2):
Foreign currency exchange forward contracts	Other current assets	$	101	$	4,443	$	4,544
Interest rate swaps	Other current assets	2,202		—		2,202

Total		$	2,303	$	4,443	$	6,746

Liability derivatives (Level 2):
Foreign currency exchange forward contracts	Other current liabilities	$	388	$	394	$	782

Interest rate swaps	Other liabilities	210		—		210
Total		$	598	$	394	$	992

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
	March 31				March 31
(In thousands)	2024		2023		2024		2023
Foreign currency exchange forward contracts	$	223	$	(682)	$	(404)	$	411


Interest rate swaps	3,581		(2,887)		(882)		(248)

	$	3,804	$	(3,569)	$	(1,286)	$	163



	Location of Gain (Loss) Recognized in Income on Derivatives (a)	Three Months Ended
		March 31
(In thousands)			2024		2023

Foreign currency exchange forward contracts	Cost of services and products sold		$	9,914	$	(3,297)



	Three Months Ended
	March 31, 2023
(In thousands)	Harsco Environmental Segment		Clean Earth Segment		Harsco Rail Segment		Consolidated Totals
Primary Geographical Markets (a):
North America	$	78,473	$	222,464	$	44,162	$	345,099
Western Europe	101,386		—		13,187		114,573
Latin America (b)	40,955		—		604		41,559
Asia-Pacific	28,961		—		7,099		36,060
Middle East and Africa	18,405		—		—		18,405
Eastern Europe	5,009		—		—		5,009
Total Revenues	$	273,189	$	222,464	$	65,052	$	560,705


Key Product and Service Groups:
Environmental services related to resource recovery for metals manufacturing and related logistical services	$	229,361	$	—	$	—	$	229,361
Ecoproducts	38,402		—		—		38,402
Environmental systems for aluminum dross and scrap processing	5,426		—		—		5,426
Railway track maintenance equipment	—		—		29,444		29,444
After-market parts and services; safety and diagnostic technology	—		—		27,793		27,793
Railway contracting services	—		—		7,815		7,815
Hazardous waste processing solutions	—		186,112		—		186,112
Soil and dredged materials processing and reuse solutions	—		36,352		—		36,352
Total Revenues	$	273,189	$	222,464	$	65,052	$	560,705


FORM			10-Q


(In thousands)	March 31 2024		December 31 2023
Finished goods	$	16,430	$	16,171
Work-in-process	10,715		13,081

Raw materials and purchased parts	116,073		114,046
Stores and supplies	47,070		46,071
Total inventories	$	190,288	$	189,369


	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	12,446		(a)	(2,684)		(b)	(7,227)		(a)	1		2,536
Amounts reclassified from AOCI, net of tax	—			124			4,492			—		4,616



Total OCI	12,446			(2,560)			(2,735)			1		7,152
Less: OCI attributable to noncontrolling interests	(358)			—			—			—		(358)
OCI attributable to Enviri Corporation	12,088			(2,560)			(2,735)			1		6,794
Balance at March 31, 2023	$	(201,016)		$	(2,403)		$	(357,434)		$	11	$	(560,842)


(In thousands)	Three Months Ended			Location on the Condensed Consolidated Statements of Operations
	March 31
		2024				2023



Amortization of cash flow hedging instruments:
Foreign currency exchange forward contracts		$	(404)	$	411	Product revenues



Interest rate swaps		(882)		(248)		Interest expense

Total before taxes		(1,286)		163
Income taxes		284		(39)
Total reclassification of cash flow hedging instruments, net of tax		$	(1,002)	$	124

Amortization of defined benefit pension items (c):
Actuarial losses		$	4,846	$	4,670	Defined benefit pension income (expense)
Prior service costs		118		114		Defined benefit pension income (expense)



Total before taxes		4,964		4,784
Income taxes		(263)		(292)
Total reclassification of defined benefit pension items, net of tax		$	4,701	$	4,492


	Three Months Ended
	March 31
(in millions, except percentages)		2024			2023
Revenues:
Harsco Environmental		$	299.1		$	273.2
Clean Earth		226.0			222.5
Harsco Rail		75.2			65.1

Total Revenues		$	600.3		$	560.7
Operating income (loss):
Harsco Environmental		$	19.6		$	22.3
Clean Earth		20.6			16.5
Harsco Rail		(9.1)			2.3
Corporate		(5.3)			(9.2)
Total operating income (loss)		$	25.8		$	31.9
Operating margin:
Harsco Environmental		6.5		%	8.2		%
Clean Earth		9.1		%	7.4		%
Harsco Rail		(12.1)		%	3.6		%
Consolidated operating margin		4.3		%	5.7		%



Significant Effects on Revenues (in millions)	Three Months Ended
Revenues — March 31, 2023	$	273.2
Net effects of price/volume changes, primarily attributable to volume changes and services mix	22.0
Impact of foreign currency translation	(2.1)
Net impact of new and lost contracts	6.0


Revenues — March 31, 2024	$	299.1



Significant Effects on Revenue (in millions)	Three Months Ended
Revenues — March 31, 2023	$	65.1
Net effect of price/volume changes, primarily attributable to volume changes	10.2
Impact of foreign currency translation	(0.1)

Revenues — March 31, 2024	$	75.2


		March 31
	Three Months Ended
(in millions, except per share amounts and percentages)		2024			2023
Total revenues		$	600.3		$	560.7
Cost of services and products sold		478.3			452.1
Selling, general and administrative expenses		87.1			81.9
Research and development expenses		0.9			0.5

Remeasurement of long-lived assets		10.7			—
Other expense (income), net		(2.4)			(5.6)
Operating income (loss) from continuing operations		25.8			31.9
Interest income		1.7			1.5
Interest expense		(28.1)			(25.0)
Facility fees and debt-related income (expense)		(2.8)			(2.4)

Defined benefit pension income (expense)		(4.2)			(5.3)
Income (loss) from continuing operations before income taxes and equity income		(7.6)			0.7
Income tax benefit (expense) from continuing operations		(7.9)			(8.0)
Equity income (loss) of unconsolidated entities, net		(0.2)			(0.1)
Income (loss) from continuing operations		(15.7)			(7.4)

Income (loss) from discontinued businesses		(1.5)			(1.7)
Income tax benefit (expense) related to discontinued operations		0.4			0.5
Income (loss) from discontinued operations, net of tax		(1.1)			(1.1)
Net income (loss)		(16.8)			(8.6)
Total other comprehensive income (loss)		(7.7)			7.2
Total comprehensive income (loss)		(24.5)			(1.4)
Diluted earnings (loss) per common share from continuing operations attributable to Enviri Corporation common stockholders		$	(0.21)		$	(0.11)
Effective income tax rate for continuing operations		(104.5)		%	1,132.3		%



(in millions)	Three Months Ended
Change in costs due to changes in revenues volume	$	23.5

Impact of foreign currency translation	(1.9)
Other	4.6

Total change in cost of services and products sold — 2024 vs. 2023	$	26.2


Summary of Senior Secured Credit Facilities and Notes: (in millions)	March 31 2024		December 31 2023
By type:
New Term Loan	$	486.3	$	487.5
Revolving Credit Facility	457.0		422.0
5.75% Senior Notes	475.0		475.0
Total	$	1,418.3	$	1,384.5
By classification:
Current	$	5.0	$	5.0
Long-term	1,413.3		1,379.5
Total	$	1,418.3	$	1,384.5


	March 31, 2024
(In millions)	Facility Limit		Outstanding Balance		Outstanding Letters of Credit		Available Credit


Revolving credit facility (a U.S.-based program)	$	700.0	$	457.0	$	29.5	$	213.5


Exhibit Number						Description

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	May 2, 2024	/s/ TOM VADAKETH
		Tom Vadaketh
		Senior Vice President and Chief Financial Officer
		(On behalf of the registrant and as Principal Financial Officer)

DATE	May 2, 2024	/s/ SAMUEL C. FENICE
		Samuel C. Fenice
		Vice President and Corporate Controller
		(Principal Accounting Officer)