enviri(US:NVRI)2024-08-01 15:22Revenue Performance - Harsco Environmental segment revenues for Q2 2024 were $292.9 million, a slight increase from $289.6 million in Q2 2023, while total revenues for the first half of 2024 reached $592.0 million, up from $562.8 million in the same period last year [127]. - Clean Earth segment revenues for Q2 2024 were $236.1 million, compared to $230.6 million in Q2 2023, with first half revenues increasing to $462.1 million from $453.0 million [127]. - Harsco Rail segment revenues decreased to $81.0 million in Q2 2024 from $88.8 million in Q2 2023, with first half revenues at $156.1 million, slightly up from $153.9 million [127]. - Total consolidated revenues for Q2 2024 were $610.0 million, compared to $609.0 million in Q2 2023, with first half revenues increasing to $1,210.3 million from $1,169.7 million [127]. - Clean Earth Segment revenues for the three months ended June 30, 2024, were $236.1 million, a 2.4% increase from $230.6 million in the same period of 2023 [132]. - Harsco Rail Segment revenues for the three months ended June 30, 2024, were $81.0 million, a decrease from $88.8 million in the same period of 2023, primarily due to a $15.0 million change in revenue adjustments [135]. - Total revenues for the six months ended June 30, 2024, increased by $40.6 million, or 3.5%, to $1,210.3 million compared to $1,169.7 million for the same period in 2023 [140]. Operating Income and Margins - Operating income for Harsco Environmental improved to $20.3 million in Q2 2024 from $12.7 million in Q2 2023, while Clean Earth reported operating income of $23.9 million, up from $23.0 million [127]. - The consolidated operating margin for Q2 2024 was 5.1%, slightly down from 5.5% in Q2 2023, with the first half margin at 4.7%, compared to 5.6% in the prior year [127]. - Operating income from continuing operations for the six months ended June 30, 2024, was $57.1 million, down from $65.6 million in the same period of 2023 [140]. - The hazardous waste business positively impacted operating income by $7.3 million for the three months ended June 30, 2024, compared to the same period in 2023 [133]. Future Outlook - The company expects Harsco Environmental's 2024 operating results to be comparable to 2023, driven by higher service pricing and operational improvements, despite challenges from lower commodity prices and foreign currency impacts [123]. - Clean Earth is anticipated to see improved operating results in 2024 due to higher service pricing and increased demand, offset by the non-recurrence of a favorable pricing dispute settlement from 2023 [124]. - Harsco Rail's operating results for 2024 are expected to improve, supported by higher global demand for rail maintenance equipment and services, despite lower contributions from after-market parts [125]. - The company maintains a positive outlook for 2024 and beyond, supported by favorable growth characteristics and investments to enhance growth across its segments [122]. Expenses and Losses - Cost of services and products sold for the three months ended June 30, 2024, increased by $5.5 million, or 1.2%, compared to the same period in 2023 [143]. - Selling, general and administrative expenses increased by $3.7 million, or 4.2%, for the three months ended June 30, 2024, compared to the same period in 2023 [144]. - The net loss for the three months ended June 30, 2024, was $11.1 million, compared to a net loss of $15.8 million for the same period in 2023 [140]. - Loss from continuing operations was $10.2 million and $26.0 million for the three and six months ended June 30, 2024, compared to $14.9 million and $22.3 million in 2023 [154]. Tax and Interest - The effective income tax rate for continuing operations was (3,036.4)% for the three months ended June 30, 2024, compared to 2,066.2% for the same period in 2023 [140]. - Interest expense increased by $1.5 million and $4.7 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily due to higher average borrowings [149]. - Interest income rose to $3.4 million and $5.1 million for the three and six months ended June 30, 2024, respectively, compared to $1.6 million and $3.1 million in 2023, including a $2.7 million pre-tax gain from a note receivable settlement [150]. - Income tax expense from continuing operations decreased to $10.0 million and $17.9 million for the three and six months ended June 30, 2024, respectively, compared to $15.3 million and $23.3 million in 2023, primarily due to a favorable adjustment related to a U.S. contract [153]. Cash Flow and Debt - Net cash provided by operating activities increased to $40.4 million for the six months ended June 30, 2024, up $12.2 million from $28.2 million in 2023, primarily due to favorable working capital changes [158]. - Net cash used by investing activities decreased to $19.2 million for the six months ended June 30, 2024, a reduction of $37.2 million from $56.4 million in 2023, including cash inflows from asset sales [159]. - Net cash used by financing activities was $28.5 million for the six months ended June 30, 2024, compared to cash provided of $34.3 million in 2023, primarily due to net repayments of borrowings [160]. - At June 30, 2024, the total net debt to Consolidated Adjusted EBITDA ratio was 3.93x, compliant with the covenant limit of 5.00x, allowing for an increase in net debt by $368.9 million while remaining compliant [165]. Comprehensive Loss - Total other comprehensive loss was $6.2 million and $13.9 million for the three and six months ended June 30, 2024, compared to comprehensive income of $14.4 million and $21.6 million in 2023, driven by currency translation impacts [156]. - The company recorded a $10.7 million remeasurement of long-lived assets during the six months ended June 30, 2024 [146].