PHILADELPHIA, Aug. 02, 2023 (GLOBE NEWSWIRE) — Enviri Corporation (NYSE: NVRI) today reported second quarter 2023 results. On a U.S. GAAP basis, the second quarter of 2023 diluted loss per share from continuing operations was $0.18, after unusual items including an asset impairment charge, strategic costs and an additional gain on a lease termination. Adjusted diluted earnings per share from continuing operations in the second quarter of 2023 was $0.01. These figures compare with second quarter of 2022 GAAP diluted loss per share from continuing operations of $1.34, including a Clean Earth non-cash goodwill impairment charge and other unusual items, and adjusted diluted earnings per share from continuing operations of $0.01.
GAAP operating income from continuing operations for the second quarter of 2023 was $24 million. Adjusted EBITDA was $78 million in the quarter, compared to the Company’s previously provided guidance range of $65 million to $72 million.
“Enviri delivered strong quarterly results supported by our team’s consistent execution across the business, efficiency initiatives, as well as favorable pricing,” said Enviri Chairman and CEO Nick Grasberger. “Our leverage also declined further, as expected. In addition, I’m very pleased that we were able to settle our disputes with Stericycle, an important customer and supplier, amicably and to the parties’ mutual satisfaction.
“Our process to divest our Rail business has also progressed, with support from the recently agreed contract amendment with Network Rail that significantly reduced the risks associated with that contract and favorable business trends.
“Looking ahead, given our continued positive momentum, we are again raising guidance for the year. We are confident that continued execution against our strategic initiatives, along with our focus on deleveraging and driving stronger cash flow will create increased value for stakeholders over time.”
Enviri Corporation—Selected Second Quarter Results
| ($ in millions, except per share amounts) | Q2 2023 | Q2 2022 | ||||||
| Revenues | $ | 520 | $ | 481 | ||||
| Operating income/(loss) from continuing operations – GAAP | $ | 24 | $ | (97 | ) | |||
| Diluted EPS from continuing operations – GAAP | $ | (0.18 | ) | $ | (1.34 | ) | ||
| Adjusted EBITDA – Non GAAP | $ | 78 | $ | 49 | ||||
| Adjusted EBITDA margin – Non GAAP | 14.9 | % | 10.2 | % | ||||
| Adjusted diluted EPS from continuing operations – Non GAAP | $ | 0.01 | $ | 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.
Consolidated Second Quarter Operating Results
Consolidated revenues from continuing operations were $520 million, an increase of 8 percent compared with the prior-year quarter. Both Harsco Environmental and Clean Earth realized an increase in revenues compared to the second quarter of 2022 due to higher services pricing and demand. Foreign currency translation negatively impacted second quarter 2023 revenues by approximately $4 million (1 percent), compared with the prior-year period.
The Company’s GAAP operating income from continuing operations was $24 million for the second quarter of 2023, compared with a GAAP operating loss of $97 million in the same quarter of 2022. Meanwhile, adjusted EBITDA totaled $78 million in the second quarter of 2023 versus $49 million in the second quarter of the prior year. Clean Earth achieved significantly higher adjusted EBITDA relative to the prior-year quarter, while Harsco Environmental’s adjusted EBITDA also increased versus the comparable quarter of 2022.
Second Quarter Business Review
Harsco Environmental
| ($ in millions) | Q2 2023 | Q2 2022 | ||||||
| Revenues | $ | 290 | $ | 278 | ||||
| Operating income – GAAP | $ | 13 | $ | 24 | ||||
| Adjusted EBITDA – Non GAAP | $ | 53.2 | $ | 52.7 | ||||
| Adjusted EBITDA margin – Non GAAP | 18.4 | % | 19.0 | % | ||||
Harsco Environmental revenues totaled $290 million in the second quarter of 2023, an increase of 4 percent compared with the prior-year quarter. This increase is attributable to higher services and products demand as well as price increases. The segment’s GAAP operating income and adjusted EBITDA totaled $13 million and $53 million, respectively, in the second quarter of 2023. These figures compare with GAAP operating income of $24 million and adjusted EBITDA of $53 million in the prior-year period. The year-on-year change in adjusted earnings reflects the above-mentioned items partially offset by FX translation impacts and lower commodity prices.
Clean Earth
| ($ in millions) | Q2 2023 | Q2 2022 | ||||||
| Revenues | $ | 231 | $ | 203 | ||||
| Operating income (loss) – GAAP | $ | 23 | $ | (112 | ) | |||
| Adjusted EBITDA – Non GAAP | $ | 35 | $ | 5 | ||||
| Adjusted EBITDA margin – Non GAAP | 15.0 | % | 2.3 | % | ||||
Clean Earth revenues totaled $231 million in the second quarter of 2023, a 13 percent increase over the prior-year quarter as a result of higher services pricing as well as higher volumes. Segment results also reflect the settlement with Stericycle of all significant disputes, including a pricing dispute for services performed in prior periods, which was recently reached amicably and to the parties’ mutual satisfaction. The segment’s GAAP operating income was $23 million, and adjusted EBITDA was $35 million in the second quarter of 2023. These figures compare with a GAAP operating loss of $112 million and adjusted EBITDA of $5 million in the prior-year period. The year-on-year improvement in adjusted earnings reflects the above mentioned factors as well as cost reduction and efficiency initiatives, partially offset by higher labor/compensation and disposal expenditures. As a result, Clean Earth’s adjusted EBITDA margin increased to 15.0 percent in the second quarter of 2023 versus 2.3 percent in the comparable quarter of 2022.
Cash Flow
Net cash used by operating activities was $9 million in the second quarter of 2023, compared with net cash provided by operating activities of $152 million in the prior-year period. Free cash flow (excluding Rail) was $(23) million in the second quarter of 2023, compared with $132 million in the prior-year period. The change in free cash flow compared with the prior-year quarter is mainly attributable to working capital (including the impact of the Company’s accounts receivable securitization transaction in the prior year) and the timing of certain payments as well as higher interest and net capital spending.
2023 Outlook
The Company has increased its 2023 guidance for Adjusted EBITDA from the outlook provided with its first quarter 2023 results, reflecting the Company’s second quarter performance and positive business momentum. Key business drivers for each segment as well as other guidance details in 2023, are as follows:
Harsco Environmental adjusted EBITDA is projected to be modestly above prior-year results. For the year, higher services pricing, restructuring benefits, site improvement initiatives, and new contracts are expected to be partially offset by FX translation impacts and lower commodity prices.
Clean Earth adjusted EBITDA is expected to significantly increase versus 2022, as a result of higher services pricing as well as cost reduction and operational improvement actions, offsetting the impacts of continued labor-market and supply-chain (disposal) tightness.
Corporate spending is anticipated to be higher relative to the prior year due to the normalization of certain expenditures, including travel and higher planned incentive compensation.
2023 Full Year Outlook (Continuing Operations)
| Current | Prior | |||
| GAAP Operating Income/(Loss) | $97 – $112 million | $101 – $116 million | ||
| Adjusted EBITDA | $270 – $285 million | $260 – $275 million | ||
| GAAP Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.42) – $(0.58) | $(0.33) – $(0.54) | ||
| Adjusted Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.09) – $(0.25) | $(0.12) – $(0.33) | ||
| Free Cash Flow | $30 – $50 million | $25 – $45 million | ||
| Net Interest Expense | $94 – $95 million | $92 – $95 million | ||
| Account Receivable Securitization Fees | $10 million | $10 million | ||
| Pension Expense (Non-Operating) | $21 – $22 million | $20 – $22 million | ||
| Tax Expense, Excluding Any Unusual Items | $13 – $17 million | $12 – $15 million | ||
| Net Capital Expenditures | $125 – $135 million | $125 – $135 million | ||
| Q3 2023 Outlook (Continuing Operations) | ||||
| GAAP Operating Income | $24 – $31 million | |||
| Adjusted EBITDA | $67 – $74 million | |||
| GAAP Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.06) – $(0.14) | |||
| Adjusted Diluted Earnings/(Loss) Per Share from Continuing Operations | $0.00 – $(0.07) | |||
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.
