Enviri Corp 10-Q, filed Aug 1, 2024

Enviri Corp (NVRI)

10-Q 2024-08-01 For: 2024-06-30

Added on June 09, 2026

About this 10-Q

Enviri Corp filed this 10-Q on August 1, 2024, covering the quarter ended June 30, 2024.

Headline figures

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

Revenue: $609.99M; up 0.2% from $609.02M a year earlier
Net loss: $13.6M; compared with a net loss of $11.44M a year earlier
Diluted EPS: -$0.17; compared with -$0.14 a year earlier

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Class						Outstanding at July 31, 2024
Common stock, par value $1.25 per share						80,111,701


		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	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39


PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	39

Item 1A.	Risk Factors	39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39





Item 5.	Other Information	40



Item 6.	Exhibits	41


SIGNATURES		42


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.
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
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)	June 30 2024		December 31 2023
ASSETS
Current assets:
Cash and cash equivalents	$	104,044	$	121,239
Restricted cash	3,462		3,375
Trade accounts receivable, net	313,193		338,187

Other receivables	37,101		40,565
Inventories	188,503		189,369
Current portion of contract assets	70,067		64,875
Prepaid expenses	50,637		58,723

Other current assets	16,232		11,023
Total current assets	783,239		827,356

Property, plant and equipment, net	692,416		707,397
Right-of-use assets, net	101,281		102,891
Goodwill	770,858		780,978
Intangible assets, net	310,086		327,983


Deferred income tax assets	15,338		16,295

Other assets	95,449		91,798
Total assets	$	2,768,667	$	2,854,698
LIABILITIES
Current liabilities:
Short-term borrowings	$	7,422	$	14,871
Current maturities of long-term debt	17,752		15,558
Accounts payable	231,384		243,279

Accrued compensation	55,444		79,609
Income taxes payable	2,178		7,567


Reserve for forward losses on contracts	50,092		52,919
Current portion of advances on contracts	30,278		38,313


Current portion of operating lease liabilities	28,530		28,775

Other current liabilities	170,807		174,342
Total current liabilities	593,887		655,233
Long-term debt	1,417,776		1,401,437


Retirement plan liabilities	44,616		45,087



Operating lease liabilities	74,403		75,476

Environmental liabilities	24,540		25,682
Deferred tax liabilities	35,824		29,160
Other liabilities	48,823		47,215
Total liabilities	2,239,869		2,279,290
COMMITMENTS AND CONTINGENCIES
ENVIRI CORPORATION STOCKHOLDERS’ EQUITY

Common stock	146,651		146,105
Additional paid-in capital	246,133		238,416
Accumulated other comprehensive loss	(552,548)		(539,694)
Retained earnings	1,496,757		1,528,320
Treasury stock	(851,327)		(849,996)
Total Enviri Corporation stockholders’ equity	485,666		523,151
Noncontrolling interests	43,132		52,257
Total equity	528,798		575,408
Total liabilities and equity	$	2,768,667	$	2,854,698


	Three Months Ended				Six Months Ended
	June 30				June 30
(In thousands, except per share amounts)	2024		2023		2024			2023
Revenues from continuing operations:
Service revenues	$	505,283	$	481,963	$	1,004,437		$	943,523
Product revenues	104,710		127,053		205,873			226,198
Total revenues	609,993		609,016		1,210,310			1,169,721
Costs and expenses from continuing operations:
Cost of services sold	388,222		373,531		781,074			743,039
Cost of products sold	91,996		101,148		177,406			183,697

Selling, general and administrative expenses	90,454		86,801		177,580			168,662
Research and development expenses	943		1,019		1,804			1,539

Property, plant and equipment impairment charge	—		14,099		—			14,099
Remeasurement of long-lived assets	—		—		10,695			—
Other expense (income), net	7,123		(1,269)		4,683			(6,917)
Total costs and expenses	578,738		575,329		1,153,242			1,104,119
Operating income (loss) from continuing operations	31,255		33,687		57,068			65,602
Interest income	3,435		1,594		5,132			3,074
Interest expense	(27,934)		(26,409)		(56,056)			(51,404)
Facility fees and debt-related income (expense)	(2,920)		(2,730)		(5,709)			(5,093)

Defined benefit pension income (expense)	(4,166)		(5,400)		(8,342)			(10,729)
Income (loss) from continuing operations before income taxes and equity income	(330)		742		(7,907)			1,450
Income tax benefit (expense) from continuing operations	(10,020)		(15,331)		(17,935)			(23,348)
Equity income (loss) of unconsolidated entities, net	127		(309)		(122)			(442)
Income (loss) from continuing operations	(10,223)		(14,898)		(25,964)			(22,340)
Discontinued operations:

Income (loss) from discontinued businesses	(1,211)		(1,165)		(2,703)			(2,820)
Income tax benefit (expense) from discontinued businesses	314		225		701			732
Income (loss) from discontinued operations, net of tax	(897)		(940)		(2,002)			(2,088)
Net income (loss)	(11,120)		(15,838)		(27,966)			(24,428)
Less: Net loss (income) attributable to noncontrolling interests	(2,481)		4,399		(3,597)			3,464
Net income (loss) attributable to Enviri Corporation	$	(13,601)	$	(11,439)	$	(31,563)		$	(20,964)
Amounts attributable to Enviri Corporation common stockholders:
Income (loss) from continuing operations, net of tax	$	(12,704)	$	(10,499)	$	(29,561)		$	(18,876)
Income (loss) from discontinued operations, net of tax	(897)		(940)		(2,002)			(2,088)
Net income (loss) attributable to Enviri Corporation common stockholders	$	(13,601)	$	(11,439)	$	(31,563)		$	(20,964)

Weighted-average shares of common stock outstanding	80,146		79,816		80,045			79,725
Basic earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations	$	(0.16)	$	(0.13)	$	(0.37)		$	(0.24)
Discontinued operations	(0.01)		(0.01)		(0.03)			(0.03)
Basic earnings (loss) per share attributable to Enviri Corporation common stockholders	$	(0.17)	$	(0.14)	$	(0.39)	(a)	$	(0.26)	(a)

Diluted weighted-average shares of common stock outstanding	80,146		79,816		80,045			79,725
Diluted earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations	$	(0.16)	$	(0.13)	$	(0.37)		$	(0.24)
Discontinued operations	(0.01)		(0.01)		(0.03)			(0.03)
Diluted earnings (loss) per share attributable to Enviri Corporation common stockholders	$	(0.17)	$	(0.14)	$	(0.39)	(a)	$	(0.26)	(a)


☒			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


	Six Months Ended June 30
(In thousands)	2024		2023
Cash flows from operating activities:
Net income (loss)	$	(27,966)	$	(24,428)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	73,946		67,496
Amortization	16,180		16,032
Deferred income tax (benefit) expense	5,771		7,622
Equity (income) loss of unconsolidated entities, net	122		442

Property, plant and equipment impairment charge	—		14,099



Remeasurement of long-lived assets	10,695		—
Other, net	968		4,146
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:
Accounts receivable	17,633		(56,383)

Inventories	(3,985)		(7,952)
Contract assets	(12,887)		(3,535)
Right-of-use assets	16,194		16,211
Accounts payable	(5,786)		12,960
Accrued interest payable	(15)		(192)
Accrued compensation	(22,544)		9,194
Advances on contracts	(7,121)		(12,978)


Operating lease liabilities	(15,876)		(14,790)
Retirement plan liabilities, net	(938)		(5,468)

Other assets and liabilities	(4,007)		5,714
Net cash (used) provided by operating activities	40,384		28,190
Cash flows from investing activities:
Purchases of property, plant and equipment	(60,520)		(66,341)

Proceeds from sale of business, net	16,588		—
Proceeds from sales of assets	7,584		1,439
Expenditures for intangible assets	(484)		(427)
Proceeds from notes receivable	17,023		11,238
Net proceeds (payments) from settlement of foreign currency forward exchange contracts	584		(2,408)

Other investing activities, net	—		84
Net cash used by investing activities	(19,225)		(56,415)
Cash flows from financing activities:
Short-term borrowings, net	(3,138)		601
Current maturities and long-term debt:
Additions	42,007		123,996
Reductions	(54,310)		(90,727)

Dividends paid to noncontrolling interests	(12,551)		—
Contributions from noncontrolling interests	874		1,654



Stock-based compensation - Employee taxes paid	(1,332)		(1,238)





Net cash (used) provided by financing activities	(28,450)		34,286
Effect of exchange rate changes on cash and cash equivalents, including restricted cash	(9,817)		(1,789)
Net increase (decrease) in cash and cash equivalents, including restricted cash	(17,108)		4,272
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	$	107,506	$	89,366

Supplementary cash flow information:
Change in accrual for purchases of property, plant and equipment included in accounts payable	$	1,048	$	(3,170)


	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


(In millions)	June 30 2024		December 31 2023
Net amounts sold under factoring arrangements	$	16.9	$	16.1
Program capacities	19.3		32.6



	Three Months Ended
	June 30
Defined Benefit Pension Plan Net Periodic Pension Cost (Benefit)	U.S. Plans				International Plans
(In thousands)	2024		2023		2024		2023
Service costs	$	—	$	—	$	335	$	314
Interest costs	2,419		2,543		7,434		7,552
Expected return on plan assets	(2,236)		(1,750)		(8,344)		(7,805)
Recognized prior service costs	—		—		117		115
Recognized actuarial losses	1,045		1,150		3,794		3,580

Defined benefit pension plan net periodic pension cost (benefit)	$	1,228	$	1,943	$	3,336	$	3,756



	Six Months Ended
	June 30
Defined Benefit Pension Plans Net Periodic Pension Cost (Benefit)	U.S. Plans				International Plans
(In thousands)	2024		2023		2024		2023
Service costs	$	—	$	—	$	673	$	627
Interest costs	4,838		5,086		14,894		14,981
Expected return on plan assets	(4,472)		(3,500)		(16,714)		(15,483)
Recognized prior service costs	—		—		235		229
Recognized actuarial losses	2,090		2,301		7,595		7,099


Defined benefit pension plans net periodic pension cost (benefit)	$	2,456	$	3,887	$	6,683	$	7,453


(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
June 30, 2024
Asset derivatives (Level 2):
Foreign currency exchange forward contracts	Other current assets	$	150	$	7,000	$	7,150
Interest rate swaps	Other current assets	2,191		—		2,191
Interest rate swaps	Other assets	32		—		32
Total		$	2,373	$	7,000	$	9,373

Liability derivatives (Level 2):
Foreign currency exchange forward contracts	Other current liabilities	$	337	$	1,828	$	2,165

Interest rate swaps	Other liabilities	4		—		4
Total		$	341	$	1,828	$	2,169

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
	June 30				June 30
(In thousands)	2024		2023		2024		2023
Foreign currency exchange forward contracts	$	27	$	(438)	$	(93)	$	866


Interest rate swaps	1,097		6,152		(871)		(617)

	$	1,124	$	5,714	$	(964)	$	249


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

Foreign currency exchange forward contracts	Cost of services and products sold	$	2,311	$	4,862	$	12,225	$	1,565


FORM			10-Q


(In thousands)	June 30 2024		December 31 2023
Finished goods	$	15,239	$	16,171
Work-in-process	25,626		13,081

Raw materials and purchased parts	101,615		114,046
Stores and supplies	46,023		46,071
Total inventories	$	188,503	$	189,369



	Three Months Ended
	June 30, 2023
(In thousands)	Harsco Environmental Segment		Clean Earth Segment		Harsco Rail Segment		Consolidated Totals
Primary Geographical Markets (a):
North America	$	81,616	$	230,575	$	69,450	$	381,641
Western Europe	107,318		—		11,377		118,695
Latin America (b)	42,180		—		561		42,741
Asia-Pacific	32,339		—		7,460		39,799
Middle East and Africa	21,117		—		—		21,117
Eastern Europe	5,023		—		—		5,023
Total Revenues	$	289,593	$	230,575	$	88,848	$	609,016

Key Product and Service Groups:
Environmental services related to resource recovery for metals manufacturing and related logistical services	$	242,638	$	—	$	—	$	242,638
Ecoproducts	40,504		—		—		40,504
Environmental systems for aluminum dross and scrap processing	6,451		—		—		6,451
Railway track maintenance equipment	—		—		44,796		44,796
After market parts and services; safety and diagnostic technology	—		—		34,530		34,530
Railway contracting services	—		—		9,522		9,522
Hazardous waste processing solutions	—		197,506		—		197,506

Soil and dredged materials processing and reuse solutions	—		33,069		—		33,069
Total Revenues	$	289,593	$	230,575	$	88,848	$	609,016


	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	23,035		(a)	1,554		(b)	(12,405)		(a)	6		12,190
Amounts reclassified from AOCI, net of tax	—			320			9,043			—		9,363



Total OCI	23,035			1,874			(3,362)			6		21,553
Less: OCI attributable to noncontrolling interests	1,477			—			—			—		1,477
OCI attributable to Enviri Corporation	24,512			1,874			(3,362)			6		23,030
Balance at June 30, 2023	$	(188,592)		$	2,031		$	(358,061)		$	16	$	(544,606)



Significant Effects on Revenues (in millions)	Three Months Ended		Six Months Ended
Revenues — June 30, 2023	$	289.6	$	562.8
Net effects of price/volume changes, primarily attributable to volume changes and services mix	17.7		39.7
Impact of foreign currency translation	(7.9)		(10.0)
Net impact of new and lost contracts	0.7		6.7
Impact of divestiture	(7.2)		(7.2)

Revenues — June 30, 2024	$	292.9	$	592.0



Significant Effects on Revenue (in millions)	Three Months Ended		Six Months Ended
Revenues — June 30, 2023	$	88.8	$	153.9
Net effect of price/volume changes, primarily attributable to volume changes	7.3		17.4
Impact of foreign currency translation	(0.1)		(0.2)
Change in revenue adjustments as a result of certain estimated forward loss provisions (a)	(15.0)		(15.0)
Revenues — June 30, 2024	$	81.0	$	156.1



(in millions)	Three Months Ended		Six Months Ended
Change in costs due to changes in revenues volume	$	3.8	$	27.3

Impact of foreign currency translation	(5.9)		(7.8)
Other	7.6		12.2

Total change in cost of services and products sold — 2024 vs. 2023	$	5.5	$	31.7


Summary of Senior Secured Credit Facilities and Notes: (in millions)	June 30 2024		December 31 2023
By type:
New Term Loan	$	485.0	$	487.5
Revolving Credit Facility	419.0		422.0
5.75% Senior Notes	475.0		475.0
Total	$	1,379.0	$	1,384.5
By classification:
Current	$	5.0	$	5.0
Long-term	1,374.0		1,379.5
Total	$	1,379.0	$	1,384.5


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


Revolving credit facility (a U.S.-based program)	$	700.0	$	419.0	$	29.5	$	251.5


Exhibit Number						Description

10.1						Executive Relocation Policy*
10.2						Omnibus Amendment, dated as of June 18, 2024, including the Second 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 Second Amendment to the Purchase and Contribution Agreement, by and among Enviri Corporation, the various entities listed as originators, and Harsco Receivables, LLC.* †
10.3						Amendment No. 4 to the 2013 Equity and Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 18, 2024, Commission File Number 001-03970).
10.4						Forms of RSU Award Agreement*
10.5						Forms of PSU Award Agreement*
10.6						Forms of SAR Award Agreement*
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	August 1, 2024	/s/ TOM VADAKETH
		Tom Vadaketh
		Senior Vice President and Chief Financial Officer
		(On behalf of the registrant and as Principal Financial Officer)

DATE	August 1, 2024	/s/ SAMUEL C. FENICE
		Samuel C. Fenice
		Vice President and Corporate Controller
		(Principal Accounting Officer)