Financial Data and Key Metrics Changes - Harsco's consolidated revenues from continuing operations increased to $496 million, up 9% year-over-year, driven by pricing and increased demand for environmental services [17] - Adjusted EBITDA totaled $63 million, representing a 28% improvement from the prior year [17] - Free cash flow for the quarter was $12 million, an improvement both year-on-year and sequentially [18] - The company expects full year adjusted EBITDA to be within a range of $260 million to $275 million, up 17% year-on-year [47] Business Line Data and Key Metrics Changes - Harsco Environmental segment revenues totaled $273 million, with adjusted EBITDA of $44 million; revenues increased year-on-year due to higher services pricing and demand, while adjusted EBITDA decreased by $4 million year-on-year [19] - Clean Earth segment revenues totaled $222 million, with adjusted EBITDA of $27 million, representing a 17% increase in revenues year-on-year, primarily driven by price increases [20] - Clean Earth's adjusted EBITDA increased by $17 million year-on-year, with margins improving approximately 700 basis points to over 12% [21] Market Data and Key Metrics Changes - Overall steel output at customer sites decreased approximately 1% year-on-year, with production performance varying by region [45] - Hazardous materials revenues reached $186 million, up 17% year-over-year, led by industrial markets [46] - Soil and dredge revenues totaled $36 million for the quarter, representing a 15% increase over the prior year [46] Company Strategy and Development Direction - The company plans to initiate the sale of its Rail business later this year, with expectations of a successful divestiture [5][40] - Harsco aims to limit growth capital in Harsco Environmental to opportunities that provide strong risk-adjusted returns [13] - The company is focused on improving operational performance, including service levels, logistics, safety, and labor efficiency [39] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment appears stable, and they are lifting their outlook for the year [12] - The company expects free cash flow conversion to grow from 55% last year to over 80% this year [39] - Management expressed confidence in achieving the 15% EBITDA margin target for Clean Earth, although the timing remains uncertain [55] Other Important Information - The company welcomed Jeff Beswick as the new President of Clean Earth, highlighting his experience in the hazardous waste industry [7] - Corporate governance updates include the addition of Tim Laurion to the Board of Directors, bringing extensive industry knowledge [41] Q&A Session Summary Question: Guidance clarification regarding Clean Earth - Management acknowledged a strong start to the year but indicated that guidance reflects current outlook and uncertainty in the economy [50] Question: Labor issues in Clean Earth - Management confirmed improvements in staffing and operational performance, leading to increased volumes [27] Question: Pricing initiatives - Management stated that pricing initiatives have been effective, with cumulative price increases now exceeding inflation [28] Question: Soil business performance - Management noted that the soil business remains below previous peaks but is showing positive trends [66] Question: PFAS opportunity - Management indicated that while there are challenges with specific projects, the overall PFAS strategic model is robust [76] Question: Rail business sale timeline - Management expects to process the sale of the Rail business in the latter half of the year [62]
enviri(NVRI) - 2023 Q1 - Earnings Call Transcript