enviri(US:NVRI)2021-05-09 03:37Financial Data and Key Metrics Changes - Harsco's revenues totaled $529 million, with adjusted EBITDA reaching $66 million in Q1 2021, reflecting a 33% increase in consolidated revenues compared to Q1 2020 [18][21] - Adjusted earnings per share from continuing operations for Q1 was $0.15, compared to $0.16 in the prior year quarter [21] - Free cash outflow for the quarter was $32 million, consistent with expectations and prior year performance [23] Business Line Data and Key Metrics Changes - Harsco Environmental segment revenues totaled $258 million with adjusted EBITDA of $54 million, representing a margin of 21%, up from 18% in the prior year quarter [24] - Clean Earth segment revenues were $189 million with adjusted EBITDA of $15 million, benefiting from the inclusion of ESOL and stronger demand in hazardous waste management [27] - Rail segment revenues totaled $82 million with adjusted EBITDA of approximately $6 million, a decrease from $8 million in the prior year quarter due to lower aftermarket sales in Asia [31] Market Data and Key Metrics Changes - Steel production increased roughly 4% year-over-year, with customer utilization rates averaging 78% in Q1, still below normal operating rates [25][26] - Hazardous waste volumes across industrial, retail, and healthcare customers were better than anticipated, with nearly all categories above pre-COVID levels [14] Company Strategy and Development Direction - The company raised its full-year outlook, with adjusted EBITDA now expected to be in the range of $295 million to $310 million, up from $275 million to $295 million [35] - Harsco aims to strengthen its balance sheet and financial foundation, having completed a successful refinancing that extends debt maturities and lowers financing costs [22] - The company is focused on organic and inorganic growth opportunities within the Clean Earth segment, with plans to identify potential acquisitions [90] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in end markets, noting that each segment is gaining momentum [9] - The outlook for the Rail segment has improved significantly, with EBITDA now about one-third higher than previous guidance due to stronger demand in North America and Asia [15] - Management highlighted the importance of infrastructure projects and consumer spending as drivers for future growth [12] Other Important Information - The company expects free cash flow before growth capital spending to exceed $100 million, with total free cash flow anticipated to be between $35 million and $55 million for the year [38] - Capital spending for the year is projected to be near $160 million, higher than normal due to deferred spending from 2020 [38] Q&A Session Summary Question: Free cash flow concerns - Management explained that cash flow is typically low in Q1 due to interest and pension payments, with expectations for improvement in the second half of the year [45][46] Question: Rail segment growth cadence - Management indicated that Rail revenue and EBITDA are expected to be more back-end loaded this year, with significant growth anticipated in the second half [60] Question: Clean Earth segment margin expectations - Management discussed the expected margin improvements in the Clean Earth segment, driven by synergies from the ESOL acquisition and operational efficiencies [77][78] Question: Strategic interest in Rail segment - Management confirmed strong strategic interest in the Rail segment, with a focus on improving performance before any potential divestiture [68][70]