Fourth Quarter Revenues from Continuing Operations Totaled $529 Million, an Increase of 13 Percent Over the Prior-Year Quarter
Q4 GAAP Operating Income from Continuing Operations of $28 Million
Adjusted EBITDA from Continuing Operations in Q4 Totaled $73 million, an Increase of 21 Percent Over the Prior-Year Quarter
Credit Agreement Net Leverage Ratio Declined Further, to 4.1x at Quarter-End
Full Year 2023 Revenue from Continuing Operations Increased 10 Percent; GAAP Operating Income of $111 Million; and Adjusted EBITDA Totaled $293 Million, an Increase of 28 Percent
2024 Adjusted EBITDA Expected to Increase to Between $300 Million and $320 Million
PHILADELPHIA, Feb. 29, 2024 (GLOBE NEWSWIRE) — Enviri Corporation (NYSE: NVRI) today reported fourth quarter 2023 results. On a U.S. GAAP (“GAAP”) basis, the fourth quarter of 2023 diluted loss per share from continuing operations was $0.17, after strategic expenses and other unusual items. The adjusted diluted loss per share from continuing operations in the fourth quarter of 2023 was $0.07. These figures compare with fourth quarter of 2022 GAAP diluted loss per share from continuing operations of $0.30 (including a $15 million intangible asset impairment within Harsco Environmental) and adjusted diluted earnings per share from continuing operations of $0.01.
GAAP operating income from continuing operations for the fourth quarter of 2023 was $28 million. Adjusted EBITDA was $73 million in the quarter, compared to the Company’s previously provided guidance range of $62 million to $69 million.
“Enviri had a strong 2023, finishing the year with solid quarterly results and significant momentum in both Clean Earth and Harsco Environmental,” said Enviri Chairman and CEO Nick Grasberger. “Our results benefited from healthy end-market demand and continuing operational excellence across our businesses. The earnings growth in both the quarter and full year was supported by efficiency and growth initiatives and pricing actions implemented across the Company. I would like to thank our employees for their continued commitment to our customers and our company.”
“Looking forward, we expect to maintain our strong business momentum and that our operating results will improve further in 2024, with Clean Earth again leading the way. We also expect to further improve our debt leverage position in 2024. In addition, we are pleased to see improving financial and operating trends in Rail and our efforts to strengthen and sell the business remain ongoing. We remain optimistic about Enviri’s growth potential and the value within each of our businesses, and we will continue to deliver on our strategic priorities to create value for shareholders in the coming years.”
Enviri Corporation—Selected Fourth Quarter Results
($ in millions, except per share amounts)
Q4 2023
Q4 2022
Revenues
$
529
$
468
Operating income/(loss) from continuing operations – GAAP
$
28
$
2
Diluted EPS from continuing operations – GAAP
$
(0.17
)
$
(0.30
)
Adjusted EBITDA – Non GAAP
$
73
$
61
Adjusted EBITDA margin – Non GAAP
13.9
%
12.9
%
Adjusted diluted EPS from continuing operations – Non GAAP
$
(0.07
)
$
0.01
Note: Adjusted diluted earnings (loss) per share from continuing operations and adjusted EBITDA details presented throughout this release are adjusted for unusual items; in addition, adjusted diluted earnings per share from continuing operations is adjusted for acquisition-related amortization expense. See below for definition of these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures.
Consolidated Fourth Quarter Operating Results
Consolidated revenues from continuing operations were $529 million, an increase of 13 percent compared with the prior-year quarter. Both Clean Earth and Harsco Environmental realized an increase in revenues compared to the fourth quarter of 2022 due to higher services demand and pricing. Foreign currency translation positively impacted fourth quarter 2023 revenues by approximately $4 million, compared with the prior-year period.
The Company’s GAAP operating income from continuing operations was $28 million for the fourth quarter of 2023, compared with GAAP operating income of $2 million in the same quarter of 2022. Meanwhile, adjusted EBITDA totaled $73 million in the fourth quarter of 2023 versus $61 million in the fourth quarter of the prior year. Both Harsco Environmental and Clean Earth achieved higher adjusted EBITDA versus the comparable quarter of 2022.
Enviri Corporation—Selected 2023 Results
($ in millions, except per share amounts)
2023
2022
Revenues
$
2,069
$
1,889
Operating income (loss) from continuing operations – GAAP
$
111
$
(57
)
Diluted EPS from continuing operations – GAAP
$
(0.57
)
$
(1.73
)
Adjusted EBITDA – excluding unusual items
$
293
$
229
Adjusted EBITDA margin – excluding unusual items
14.2
%
12.1
%
Adjusted diluted EPS from continuing operations – excluding unusual items
$
(0.12
)
$
0.10
Note: Adjusted diluted earnings (loss) per share from continuing operations and adjusted EBITDA details presented throughout this release are adjusted for unusual items; in addition, adjusted diluted earnings per share from continuing operations is adjusted for acquisition-related amortization expense. See below for definition of these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures.
Consolidated Full Year 2023 Operating Results
Consolidated revenues from continuing operations were $2.07 billion in 2023, compared to $1.89 billion in 2022. The revenues increase for the year is again attributable to higher volumes and pricing in both the Clean Earth and Harsco Environmental segments. Foreign currency translation negatively impacted 2023 revenues by approximately $8 million compared with the prior year.
GAAP operating income from continuing operations was $111 million in 2023, while the GAAP operating loss from continuing operations in 2022 was $57 million. Adjusted EBITDA was $293 million and $229 million for these years, respectively, with the change in adjusted results reflecting the above-mentioned items that favorably impacted revenues along with various growth and improvement initiatives across the Company.
On a GAAP basis, the diluted loss per share from continuing operations in 2023 was $0.57, and this figure compares with a diluted loss per share in 2022 of $1.73. These figures include various unusual items in each year (including a Clean Earth non-cash goodwill impairment charge of $105 million in 2022). The adjusted diluted loss per share from continuing operations was $0.12 in 2023, compared with adjusted diluted earnings per share from continuing operations of $0.10 in 2022.
Fourth Quarter Business Review
Harsco Environmental
($ in millions)
Q4 2023
Q4 2022
Revenues
$
292
$
257
Operating income – GAAP
$
25
$
(4
)
Adjusted EBITDA – Non GAAP
$
56
$
43
Adjusted EBITDA margin – Non GAAP
19.3
%
16.7
%
Harsco Environmental revenues totaled $292 million in the fourth quarter of 2023, an increase of 14 percent compared with the prior-year quarter. This increase is attributable to higher services and products demand and price increases. The segment’s GAAP operating income and adjusted EBITDA totaled $25 million and $56 million, respectively, in the fourth quarter of 2023. These figures compare with a GAAP operating loss of $4 million and adjusted EBITDA of $43 million in the prior-year period. The year-on-year change in adjusted earnings reflects the impact of higher demand, including the impact of new services contracts, and higher prices. As a result, Harsco Environmental’s adjusted EBITDA margin increased to 19.3 percent in the fourth quarter of 2023 versus 16.7 percent in the comparable quarter of 2022.
Clean Earth
($ in millions)
Q4 2023
Q4 2022
Revenues
$
237
$
211
Operating income – GAAP
$
16
$
14
Adjusted EBITDA – Non GAAP
$
29
$
25
Adjusted EBITDA margin – Non GAAP
12.2
%
11.6
%
Clean Earth revenues totaled $237 million in the fourth quarter of 2023, a 12 percent increase over the prior-year quarter as a result of higher services pricing and increased demand. The segment’s GAAP operating income was $16 million and adjusted EBITDA was $29 million in the fourth quarter of 2023. These figures compare with GAAP operating income of $14 million and adjusted EBITDA of $25 million in the prior-year period. The year-on-year improvement in adjusted earnings reflects the above-mentioned factors and efficiency initiatives, partially offset by higher incentive compensation, severance and other investments. As a result, Clean Earth’s adjusted EBITDA margin increased to 12.2 percent in the fourth quarter of 2023 versus 11.6 percent in the comparable quarter of 2022.
Cash Flow
Net cash provided by operating activities was $68 million in the fourth quarter of 2023, compared with net cash provided by operating activities of $19 million in the prior-year period. Free cash flow (excluding Rail) was $25 million in the fourth quarter of 2023, compared with $3 million in the prior-year period. The change in free cash flow compared with the prior-year quarter is attributable to higher cash earnings and working capital improvements.
For the full-year 2023, net cash provided by operating activities totaled $114 million, compared with net cash provided by operating activities of $151 million in 2022. Free cash flow (excluding Rail) was $24 million in 2023, compared with $75 million in the prior year. The change in full-year free cash flow can be attributed to the Company’s accounts receivable securitization program implemented in 2022 as well as higher cash interest payments and net capital spending, partially offset by a higher cash earnings from improved business performance and favorable changes in working capital in 2023 from the Company’s continuing operations.
2024 Outlook
The Company’s 2024 guidance anticipates that it will again realize an improvement in financial performance compared with 2023. Clean Earth and Harsco Environmental are both expected to contribute to the growth. This outlook contemplates that economic conditions will remain stable and that the Company will benefit from incremental growth and improvement initiatives. Key business drivers for each segment as well as other 2024 guidance details are as follows:
Harsco Environmental adjusted EBITDA is projected to be modestly above prior-year results. Higher services volumes and pricing, site improvement initiatives and new contracts are expected to be partially offset by lower commodities and certain product volumes as well as personnel investments.
Clean Earth adjusted EBITDA is expected to increase versus 2023 as a result of higher services pricing (net of inflation), efficiency initiatives and higher volumes, offsetting the impacts of a less favorable project-related business mix as well as certain other 2023 items not repeating (Stericycle settlement).
Corporate spending is anticipated to be comparable with 2023.
2024 Full Year Outlook (Continuing Operations)
GAAP Operating Income
$122 – $142 million
Adjusted EBITDA
$300 – $320 million
GAAP Diluted Earnings/(Loss) Per Share from Continuing Operations
$(0.28) – $(0.52)
Adjusted Diluted Earnings/(Loss) Per Share from Continuing Operations
$(0.00) – $(0.25)
Free Cash Flow
$20 – $40 million
Net Interest Expense
$103 – $108 million
Account Receivable Securitization Fees
$10 – $11 million
Pension Expense (Non-Operating)
$17 million
Tax Expense, Excluding Any Unusual Items
$23 – $29 million
Net Capital Expenditures
$130 – $140 million
Q1 2024 Outlook (Continuing Operations)
GAAP Operating Income
$19 – $26 million
Adjusted EBITDA
$63 – $70 million
GAAP Diluted Earnings/(Loss) Per Share from Continuing Operations
$(0.12) – $(0.20)
Adjusted Diluted Earnings/(Loss) Per Share from Continuing Operations
$(0.05) – $(0.13)
Conference Call
The Company will hold a conference call today at 9:00 a.m. Eastern Time to discuss its results and respond to questions from the investment community. Those who wish to listen to the conference call webcast should visit the Investor Relations section of the Company’s website at www.enviri.com. The live call also can be accessed by dialing (833) 630-1956, or (412) 317-1837 for international callers. Please ask to join the Enviri Corporation call. Listeners are advised to dial in approximately ten minutes prior to the call. If you are unable to listen to the live call, the webcast will be archived on the Company’s website.
Forward-Looking Statements
The nature of the Company’s business, together with the number of countries in which it operates, subject it to changing economic, competitive, regulatory and technological conditions, risks and uncertainties. In accordance with the “safe harbor” provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, the Company provides the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressed or implied herein. Forward-looking statements contained herein could include, among other things, statements about management’s confidence in and strategies for performance; expectations for new and existing products, technologies and opportunities; and expectations regarding growth, sales, cash flows, and earnings. Forward-looking statements can be identified by the use of such terms as “may,” “could,” “expect,” “anticipate,” “intend,” “believe,” “likely,” “estimate,” “outlook,” “plan,” “contemplate,” “project” or other comparable terms.
Factors that could cause actual results to differ, perhaps materially, from those implied by forward-looking statements include, but are not limited to: (1) the Company’s ability to successfully enter into new contracts and complete new acquisitions, divestitures, or strategic ventures in the time-frame contemplated or at all, including the Company’s ability to timely divest the Rail business; (2) the Company’s inability to comply with applicable environmental laws and regulations; (3) the Company’s inability to obtain, renew, or maintain compliance with its operating permits or license agreements; (4) various economic, business, and regulatory risks associated with the waste management industry; (5) the seasonal nature of the Company’s business; (6) risks caused by customer concentration,the long-term nature of customer contracts, and the competitive nature of the industries in which the Company operates; (7) the outcome of any disputes with customers, contractors and subcontractors; (8) the financial condition of the Company’s customers, including the ability of customers (especially those that may be highly leveraged or have inadequate liquidity) to maintain their credit availability; (9) higher than expected claims under the Company’s insurance policies, or losses that are uninsurable or that exceed existing insurance coverage; (10) market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs; (11) the Company’s ability to negotiate, complete, and integrate strategic transactions and joint ventures with strategic partners; (12) the Company’s ability to effectively retain key management and employees, including due to unanticipated changes to demand for the Company’s services, disruptions associated with labor disputes, and increased operating costs associated with union organizations; (13) the Company’s inability or failure to protect its intellectual property rights from infringement in one or more of the many countries in which the Company operates; (14) failure to effectively prevent, detect or recover from breaches in the Company’s cybersecurity infrastructure; (15) changes in the worldwide business environment in which the Company operates, including changes in general economic and industry conditions and cyclical slowdowns; (16) fluctuations in exchange rates between the U.S. dollar and other currencies in which the Company conducts business; (17) unforeseen business disruptions in one or more of the many countries in which the Company operates due to changes in economic conditions, changes in governmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards and amounts; political instability, civil disobedience, armed hostilities, public health issues or other calamities; (18) liability for and implementation of environmental remediation matters; (19) product liability and warranty claims associated with the Company’s operations; (20) the Company’s ability to comply with financial covenants and obligations to financial counterparties; (21) the Company’s outstanding indebtedness and exposure to derivative financial instruments that may be impacted by, among other factors, changes in interest rates; (22) tax liabilities and changes in tax laws; (23) changes in the performance of equity and bond markets that could affect, among other things, the valuation of the assets in the Company’s pension plans and the accounting for pension assets, liabilities and expenses; (24) risk and uncertainty associated with intangible assets; and the other risk factors listed from time to time in the Company’s SEC reports. A further discussion of these, along with other potential risk factors, can be found in Part I, Item 1A, “Risk Factors” of the Company’s most recently filed Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, which are filed with the Securities and Exchange Commission. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company’s ability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes no duty to update forward-looking statements except as may be required by law.
NON-GAAP MEASURES
Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similarly-titled measurements employed by other companies. The most comparable GAAP measures are included within the definitions below and reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included at the end of this press release.
Adjusted diluted earnings per share from continuing operations: Adjusted diluted earnings (loss) per share from continuing operations is a non-GAAP financial measure and consists of diluted earnings (loss) per share from continuing operations adjusted for unusual items and acquisition-related intangible asset amortization expense. It is important to note that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. The Company’s management believes Adjusted diluted earnings per share from continuing operations is useful to investors because it provides an overall understanding of the Company’s historical and future prospects. Exclusion of unusual items permits evaluation and comparison of results for the Company’s core business operations, and it is on this basis that management internally assesses the Company’s performance. Exclusion of acquisition-related intangible asset amortization expense, the amount of which can vary by the timing, size and nature of the Company’s acquisitions, facilitates more consistent internal comparisons of operating results over time between the Company’s newly acquired and long-held businesses, and comparisons with both acquisitive and non-acquisitive peer companies.
Adjusted EBITDA: Adjusted EBITDA is a non-GAAP financial measure and consists of income (loss) from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); facility fees and debt-related income (expense); and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs). The sum of the Segments’ Adjusted EBITDA and Corporate Adjusted EBITDA equals consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance.
Free cash flow: Free cash flow is a non-GAAP financial measure and consists of net cash provided (used) by operating activities less capital expenditures and expenditures for intangible assets; and plus capital expenditures for strategic ventures, total proceeds from sales of assets and certain transaction-related / debt-refinancing expenditures. The Company’s management believes that Free cash flow is meaningful to investors because management reviews Free cash flow for planning and performance evaluation purposes. It is important to note that Free cash flow does not represent the total residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements and settlements of foreign currency forward exchange contracts, are not deducted from this measure. Free cash flow excludes the former Harsco Rail Segment since the segment is reported as discontinued operations. This presentation provides a basis for comparison of ongoing operations and prospects.
About Enviri
Enviri is transforming the world to green, as a trusted global leader in providing a broad range of environmental services and related innovative solutions. The company serves a diverse customer base by offering critical recycle and reuse solutions for their waste streams, enabling customers to address their most complex environmental challenges and to achieve their sustainability goals. Enviri is based in Philadelphia, Pennsylvania and operates in more than 150 locations in over 30 countries. Additional information can be found at www.enviri.com.
ENVIRI CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
Twelve Months Ended
December 31
December 31
(In thousands, except per share amounts)
2023
2022
2023
2022
Revenues from continuing operations:
Revenues
$
528,816
$
468,302
$
2,069,225
$
1,889,065
Costs and expenses from continuing operations:
Cost of sales
417,604
380,314
1,633,662
1,553,335
Selling, general and administrative expenses
79,209
66,832
312,383
268,066
Research and development expenses
339
145
1,286
690
Goodwill and other intangible asset impairment charges
—
15,000
—
119,580
Property, plant and equipment impairment charge
—
—
14,099
—
Other expense (income), net
3,745
4,222
(3,219
)
4,737
Total costs and expenses
500,897
466,513
1,958,211
1,946,408
Operating income (loss) from continuing operations
27,919
1,789
111,014
(57,343
)
Interest income
1,969
1,270
6,670
3,559
Interest expense
(27,081
)
(23,621
)
(103,872
)
(75,156
)
Facility fees and debt-related income (expense)
(2,863
)
(2,062
)
(10,762
)
(2,956
)
Defined benefit pension income (expense)
(5,422
)
2,163
(21,600
)
8,938
Income (loss) from continuing operations before income taxes and equity income
(5,478
)
(20,461
)
(18,550
)
(122,958
)
Income tax benefit (expense) from continuing operations
(6,834
)
(2,899
)
(28,185
)
(10,381
)
Equity income (loss) of unconsolidated entities, net
(168
)
195
(761
)
(178
)
Income (loss) from continuing operations
(12,480
)
(23,165
)
(47,496
)
(133,517
)
Discontinued operations:
Income (loss) from discontinued businesses
(44,110
)
(15,076
)
(39,252
)
(50,301
)
Income tax benefit (expense) from discontinued businesses
3,014
2,105
(1,350
)
7,387
Income (loss) from discontinued operations, net of tax
(41,096
)
(12,971
)
(40,602
)
(42,914
)
Net income (loss)
(53,576
)
(36,136
)
(88,098
)
(176,431
)
Less: Net loss (income) attributable to noncontrolling interests
(779
)
(582
)
1,977
(3,638
)
Net income (loss) attributable to Enviri Corporation
$
(54,355
)
$
(36,718
)
$
(86,121
)
$
(180,069
)
Amounts attributable to Enviri Corporation common stockholders:
Income (loss) from continuing operations, net of tax
$
(13,259
)
$
(23,747
)
$
(45,519
)
$
(137,155
)
Income (loss) from discontinued operations, net of tax
(41,096
)
(12,971
)
(40,602
)
(42,914
)
Net income (loss) attributable to Enviri Corporation common stockholders
$
(54,355
)
$
(36,718
)
$
(86,121
)
$
(180,069
)
Weighted-average shares of common stock outstanding
79,881
79,564
79,796
79,493
Basic earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations
$
(0.17
)
$
(0.30
)
$
(0.57
)
$
(1.73
)
Discontinued operations
$
(0.51
)
$
(0.16
)
$
(0.51
)
$
(0.54
)
Basic earnings (loss) per share attributable to Enviri Corporation common stockholders
$
(0.68
)
$
(0.46
)
$
(1.08
)
$
(2.27
)
Diluted weighted-average shares of common stock outstanding
79,881
79,564
79,796
79,493
Diluted earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations
$
(0.17
)
$
(0.30
)
$
(0.57
)
$
(1.73
)
Discontinued operations
$
(0.51
)
$
(0.16
)
$
(0.51
)
$
(0.54
)
Diluted earnings (loss) per share attributable to Enviri Corporation common stockholders
$
(0.68
)
$
(0.46
)
$
(1.08
)
$
(2.27
)
ENVIRI CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31
2023
December 31
2022
ASSETS
Current assets:
Cash and cash equivalents
$
121,239
$
81,332
Restricted cash
3,375
3,762
Trade accounts receivable, net
280,772
264,428
Other receivables
33,857
25,379
Inventories
86,292
81,375
Prepaid expenses
29,926
30,583
Current portion of assets held-for-sale
255,428
266,335
Other current assets
16,467
14,541
Total current assets
827,356
767,735
Property, plant and equipment, net
663,284
656,875
Right-of-use assets, net
95,841
101,253
Goodwill
767,952
759,253
Intangible assets, net
324,861
352,160
Deferred income tax assets
15,322
17,489
Assets held-for-sale
90,930
70,105
Other assets
69,006
65,984
Total assets
$
2,854,552
$
2,790,854
LIABILITIES
Current liabilities:
Short-term borrowings
$
14,871
$
7,751
Current maturities of long-term debt
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