Revenue Performance - Total revenues for 2024 were $2,342.6 million, a decrease of $23.4 million or 1.0% compared to 2023[169] - Harsco Environmental segment reported revenues of $1,111.5 million, down 2.6% from $1,140.9 million in 2023[169] - Clean Earth segment achieved revenues of $939.8 million, an increase of 1.2% from 928.3 million in 2023[169] - Harsco Rail segment revenues decreased by 1.9% to $291.3 million from $296.8 million in 2023[169] - Total revenues for 2024 decreased by $23.4 million, or 1%, to $2,342.6 million compared to 2023[185] Operating Income and Margins - Operating income from continuing operations was $31.7 million, a decline of 60.3% from $79.9 million in 2023[171] - Harsco Environmental's operating margin fell to 2.9% in 2024 from 6.8% in 2023[172] - Clean Earth segment's operating margin improved to 9.8% from 8.3% in 2023[172] - Harsco Rail segment reported an operating loss margin of (19.9)%, worsening from (10.7)% in 2023[172] Expenses and Impairments - Cost of services and products sold for 2024 decreased by $13.5 million, or 1%, to $1,902.6 million compared to 2023[186] - Selling, general and administrative expenses increased by $5.4 million, or 2%, to $359.4 million in 2024, driven by higher professional fees[187] - The company recorded impairment charges totaling $15.9 million related to goodwill and intangible assets in 2024[189] - The company recognized $23.4 million of impairment charges related to property, plant, and equipment in 2024[192] - A goodwill impairment charge of $13.0 million was recognized for the Harsco Rail reporting unit in 2024[265] - An impairment charge of $13.9 million was recognized for property, plant, and equipment in 2024 due to lower projections[270] - The Company recorded an additional forward loss provision of $32.7 million for long-term contracts in 2024, primarily due to material and labor cost inflation[279] Net Loss and Taxation - The company experienced a net loss of $122.7 million in 2024, compared to a net loss of $88.1 million in 2023[184] - The effective income tax rate from continuing operations was (16.8)% in 2024, compared to (58.6)% in 2023[184] - Income tax expense from continuing operations decreased to $17.1 million in 2024 from $30.9 million in 2023, with an effective tax rate of (16.8)% compared to (58.6)% in 2023[208] - The Company's annual effective income tax rate on income from continuing operations was (16.8)% for 2024, (58.6)% for 2023, and (2.9)% for 2022[285] Cash Flow and Financing Activities - Net cash provided by operating activities was $78.1 million in 2024, down $36.4 million from $114.4 million in 2023, attributed to lower cash net income and unfavorable changes in net working capital[215] - Net cash used by investing activities was $34.1 million in 2024, a decrease of $82.5 million compared to $116.6 million in 2023, including net proceeds of $57.6 million from divestitures[217] - Net cash used by financing activities was $63.4 million in 2024, contrasting with net cash provided of $44.8 million in 2023, including net repayments of $39.8 million of total debt[218] - The Company expects annual interest payments on long-term debt to be approximately $85 million based on current borrowings and interest rates[220] Debt and Credit Facilities - The company amended its Credit Agreement to adjust covenants, setting the Net Debt to Consolidated Adjusted EBITDA ratio to 4.75x for the quarters ended December 31, 2024, and March 31, 2025[164] - The Company entered into an amendment to the Senior Secured Credit Facilities, adjusting the Net Debt to Consolidated Adjusted EBITDA ratio covenant to 4.75x for Q1 2025[225] - The net debt to consolidated adjusted EBITDA ratio covenant is set at 4.75x for the quarter ended September 30, 2024, decreasing to 4.00x thereafter[227] - As of December 31, 2024, the outstanding balance under the Revolving Credit Facility was $407.0 million, with available credit of $238.2 million[233] Goodwill and Fair Value - The Company's Goodwill balances were $739.8 million and $781.0 million at December 31, 2024 and 2023, respectively[260] - The Harsco Environmental reporting unit's estimated fair value was approximately 22.0% more than its net book value, with a goodwill of $360.5 million[266] - The Clean Earth reporting unit's estimated fair value was approximately 53.0% more than its net book value, with a goodwill of $379.3 million[267] - The Company performed its annual goodwill impairment test as of October 1, with no impairment in 2023 but a charge in 2024[265] - The Company utilizes a discounted cash flow model to estimate the fair value of reporting units, with significant assumptions impacting the results[263] Tax Assets and Liabilities - Valuation allowances related to deferred tax assets were $192.7 million for 2024 and $177.9 million for 2023, primarily due to pension liabilities, net operating losses, and disallowed interest expense[288] - Unrecognized tax benefits were $1.8 million for 2024 and $2.1 million for 2023, excluding accrued interest and penalties[289] - The Company recorded a $15.0 million valuation allowance increase related to disallowed interest expense for 2024[288] - The Company considers future reversals of existing deferred tax liabilities and projected future taxable income when assessing deferred tax assets[287] Other Financial Commitments - The Company has $211.1 million of outstanding purchase commitments, with $131.5 million expected to be fulfilled in the next twelve months[220] - Total commercial commitments amounted to $451.8 million as of December 31, 2024, with $305.8 million due within one year[222] - The Company has centralized cash management systems, with $88.0 million in cash and cash equivalents held by non-U.S. subsidiaries as of December 31, 2024[241]
enviri(NVRI) - 2024 Q4 - Annual Report