enviri(NVRI) - 2025 Q2 - Quarterly Results

Enviri Corporation Second Quarter 2025 Results Second Quarter 2025 Financial Highlights Enviri reported Q2 2025 revenue of $562 million, a $46 million GAAP loss, and $65 million Adjusted EBITDA, revising full-year guidance and exploring strategic alternatives Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $562 million | $610 million | | GAAP Loss from Continuing Operations | $46 million | $10 million | | GAAP Diluted EPS from Continuing Operations | $(0.58) | $(0.16) | | Adjusted EBITDA | $65 million | $86 million | | Adjusted Diluted EPS from Continuing Operations | $(0.22) | $0.02 | - The company has initiated a formal process to evaluate strategic alternatives to unlock shareholder value[3][16] - Full-year 2025 Adjusted EBITDA guidance has been revised downward to a range of $290 million to $310 million, reflecting a weaker outlook for the Harsco Rail segment[3][20] Consolidated Second Quarter Operating Results Consolidated revenues decreased 8% to $562 million, driven by declines in Harsco Environmental and Rail, while Adjusted EBITDA fell to $65 million - Consolidated revenues from continuing operations were $562 million, an 8% decrease from the prior-year quarter, with divestitures in Harsco Environmental negatively impacting revenues by approximately $22 million[7] - The GAAP consolidated loss from continuing operations widened to $46 million, compared to a $10 million loss in Q2 2024[9] - Adjusted EBITDA totaled $65 million, down from $86 million in the prior-year quarter, with an increase in Clean Earth's Adjusted EBITDA offset by lower contributions from other segments[9] Second Quarter Business Review Q2 segment performance was mixed, with Clean Earth achieving record earnings, Harsco Environmental declining, and Harsco Rail facing a significant downturn and Adjusted EBITDA loss Harsco Environmental Harsco Environmental's revenues decreased to $258 million, with Adjusted EBITDA falling to $40 million and margin contracting to 15.5% Harsco Environmental Segment Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $258 million | $293 million | | Operating Income | $4 million | $20 million | | Adjusted EBITDA | $40 million | $49 million | | Adjusted EBITDA Margin | 15.5% | 16.8% | - The year-over-year revenue decrease was attributed to business divestitures, lower service levels from site closures, and reduced eco-products volumes, with revenues declining 5% excluding divestitures[10] Clean Earth Clean Earth achieved strong Q2 results with revenues up 4% to $246 million, record Adjusted EBITDA of $40 million, and improved margins Clean Earth Segment Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $246 million | $236 million | | Operating Income | $25 million | $24 million | | Adjusted EBITDA | $40 million | $38 million | | Adjusted EBITDA Margin | 16.3% | 16.1% | - The 4% revenue increase was due to higher volumes and services pricing[13] - The improvement in adjusted earnings was attributed to revenue growth and efficiency improvements, partially offset by higher operating expenses[13] Harsco Rail Harsco Rail revenues declined 28% to $58 million, resulting in a $20 million GAAP operating loss and a $3 million Adjusted EBITDA loss Harsco Rail Segment Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $58 million | $81 million | | Operating Loss | $(20) million | $(3) million | | Adjusted EBITDA | $(3) million | $7 million | | Adjusted EBITDA Margin | (5.7)% | 9.1% | - The 28% revenue decrease reflects lower volumes for equipment, aftermarket parts, and technology products[14] - The decline in adjusted earnings was a result of lower volumes, higher manufacturing costs, and a less favorable business mix[14] Cash Flow Q2 2025 operating cash flow decreased to $22 million, with Adjusted Free Cash Flow turning negative at $(14) million due to lower earnings and higher capital expenditures Cash Flow Summary | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $22 million | $39 million | | Adjusted Free Cash Flow | $(14) million | $9 million | - The year-over-year decrease in adjusted free cash flow is attributed to lower cash earnings and higher capital spending, partially offset by working capital improvements and lower pension contributions[15] Exploration of Strategic Alternatives The Board has initiated a formal process to evaluate strategic alternatives, including a potential sale or separation of Clean Earth, to unlock shareholder value - The Board of Directors has authorized management to conduct a formal process to evaluate and explore strategic alternatives[16] - Value creation alternatives being evaluated include a tax-efficient sale or separation of the Clean Earth business[18] - No timetable has been established for the completion of the review, and the company does not intend to provide additional updates unless necessary[19] 2025 Outlook Enviri revised its full-year 2025 guidance downward due to Harsco Rail weakness, projecting Adjusted EBITDA of $290-$310 million and Adjusted Free Cash Flow of $15-$35 million Full-Year 2025 Outlook Revision | 2025 Full Year Outlook | Current | Prior | | :--- | :--- | :--- | | Adjusted EBITDA | $290 - $310 million | $305 - $325 million | | Adjusted Diluted EPS | $(0.52) - $(0.30) | $(0.34) - $(0.11) | | Adjusted Free Cash Flow | $15 - $35 million | $30 - $50 million | - The revised outlook is primarily due to lower global demand and higher manufacturing costs impacting Harsco Rail's performance[20] - Guidance for Harsco Environmental and Clean Earth is unchanged from the prior quarter[20] - For Q3 2025, the company projects Adjusted EBITDA to be in the range of $76 million to $86 million[25] Financial Statements and Reconciliations Consolidated Financial Statements This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows for Q2 2025 and Q2 2024 Consolidated Statements of Operations The company reported a Q2 2025 net loss of $46.5 million on total revenues of $562.3 million, a decrease from the prior year Consolidated Statements of Operations (Unaudited) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $562,254 | $609,993 | | Operating income (loss) from continuing operations | $(7,191) | $31,255 | | Income (loss) from continuing operations | $(45,892) | $(10,223) | | Net income (loss) | $(46,549) | $(11,120) | | Diluted EPS from continuing operations | $(0.58) | $(0.16) | Consolidated Balance Sheets As of June 30, 2025, total assets were $2.77 billion, total liabilities $2.35 billion, and total equity decreased compared to December 31, 2024 Consolidated Balance Sheets (Unaudited) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $747,881 | $710,525 | | Total assets | $2,770,311 | $2,650,233 | | Total current liabilities | $626,064 | $566,382 | | Long-term debt | $1,482,138 | $1,410,718 | | Total liabilities | $2,352,480 | $2,200,634 | | Total equity | $417,831 | $449,599 | Consolidated Statements of Cash Flows Q2 2025 net cash from operations was $22.0 million, with $42.8 million used in investing and $28.0 million provided by financing activities Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,973 | $39,036 | | Net cash (used) provided by investing activities | $(42,795) | $4,021 | | Net cash (used) provided by financing activities | $28,001 | $(41,393) | | Net increase (decrease) in cash | $9,106 | $98 | Non-GAAP Reconciliations This section details reconciliations of non-GAAP financial measures, including Adjusted EBITDA and Adjusted Free Cash Flow, to their comparable GAAP metrics - For Q2 2025, the reconciliation from GAAP loss from continuing operations of $(47.0) million to adjusted loss of $(17.7) million includes adjustments for contract-related costs ($15.9 million), site exit costs ($10.3 million), and strategic costs ($3.5 million)[51] - The reconciliation of Consolidated Adjusted EBITDA of $64.7 million for Q2 2025 starts with a consolidated loss from continuing operations of $(45.9) million and adds back items such as depreciation ($37.9 million), interest expense ($27.6 million), and various unusual items[58] - Adjusted Free Cash Flow of $(14.0) million for Q2 2025 is reconciled from Net Cash Provided by Operating Activities of $22.0 million by subtracting capital expenditures ($39.0 million) and adding back proceeds from asset sales ($2.3 million) and other items[64]