PHILADELPHIA, PA — Enviri Corporation (NYSE: NVRI) recently reported third quarter 2023 results. On a U.S. GAAP (“GAAP”) basis, the third quarter of 2023 diluted loss per share from continuing operations was $0.11, after strategic expenses, an accounts receivable provision (linked to an idled steel mill) and other unusual items. Adjusted diluted earnings per share from continuing operations in the third quarter of 2023 was $0.05. These figures compare with third quarter of 2022 GAAP diluted earnings per share from continuing operations of $0.01 and adjusted diluted earnings per share from continuing operations of $0.10.
GAAP operating income from continuing operations for the third quarter of 2023 was $30 million. Adjusted EBITDA was $79 million in the quarter, compared to the Company’s previously provided guidance range of $67 million to $74 million.
“Enviri again delivered strong results in the third quarter, with both Clean Earth and Harsco Environmental realizing meaningful year-on-year earnings growth thanks to solid execution across the Company,” said Enviri Chairman and CEO Nick Grasberger. “Our adjusted EBITDA margin in the third quarter was the highest since early 2020, reflecting strong operational and cost performance, successful improvement initiatives, and the continued recognition of our value-proposition by customers. We also made further progress on our ongoing objective to reduce leverage, supported by healthy cash flow generated by CE and HE.
“Looking ahead, our outlook for Q4 is positive and we’re optimistic about further business growth into 2024. Our competitive position is strong and internal initiatives will continue to further solidify our strong foundation. Lastly, the sale process for our Rail business is ongoing, and we are confident that an agreement will be signed in the coming months.”
Enviri Corporation—Selected Third Quarter Results
| ($ in millions, except per share amounts) | Q3 2023 | Q3 2022 | ||||||
| Revenues | $ | 525 | $ | 487 | ||||
| Operating income/(loss) from continuing operations – GAAP | $ | 30 | $ | 30 | ||||
| Diluted EPS from continuing operations – GAAP | $ | (0.11 | ) | $ | 0.01 | |||
| Adjusted EBITDA – Non GAAP | $ | 79 | $ | 70 | ||||
| Adjusted EBITDA margin – Non GAAP | 15.1 | % | 14.4 | % | ||||
| Adjusted diluted EPS from continuing operations – Non GAAP | $ | 0.05 | $ | 0.10 | ||||
| Note: Adjusted diluted earnings (loss) per share from continuing operations and adjusted EBITDA details presented throughout this release are adjusted for unusual items; in addition, adjusted diluted earnings per share from continuing operations is adjusted for acquisition-related amortization expense. See the Company’s original release for a definition of these non-GAAP measures. | ||||||||
Consolidated revenues from continuing operations were $525 million, an increase of 8 percent compared with the prior-year quarter. Both Harsco Environmental and Clean Earth realized an increase in revenues compared to the third quarter of 2022 due to higher services pricing and demand. Foreign currency translation positively impacted third quarter 2023 revenues by approximately $5 million (1 percent), compared with the prior-year period.
The Company’s GAAP operating income from continuing operations was $30 million for the third quarter of 2023, compared with a GAAP operating income of $30 million in the same quarter of 2022. Meanwhile, adjusted EBITDA totaled $79 million in the third quarter of 2023 versus $70 million in the third quarter of the prior year. Both Harsco Environmental and Clean Earth achieved higher adjusted EBITDA versus the comparable quarter of 2022.
Third Quarter Business Review
Harsco Environmental
| ($ in millions) | Q3 2023 | Q3 2022 | ||||||
| Revenues | $ | 286 | $ | 265 | ||||
| Operating income – GAAP | $ | 18 | $ | 22 | ||||
| Adjusted EBITDA – Non GAAP | $ | 54 | $ | 51 | ||||
| Adjusted EBITDA margin – Non GAAP | 18.9 | % | 19.1 | % | ||||
Clean Earth
| ($ in millions) | Q3 2023 | Q3 2022 | ||||||
| Revenues | $ | 239 | $ | 222 | ||||
| Operating income (loss) – GAAP | $ | 21 | $ | 17 | ||||
| Adjusted EBITDA – Non GAAP | $ | 34 | $ | 28 | ||||
| Adjusted EBITDA margin – Non GAAP | 14.2 | % | 12.7 | % | ||||
Cash Flow
Net cash provided by operating activities was $18 million in the third quarter of 2023, compared with net cash provided by operating activities of $13 million in the prior-year period. Free cash flow (excluding Rail) was $10 million in the third quarter of 2023, compared with $(31) million in the prior-year period. The change in free cash flow compared with the prior-year quarter is attributable to higher cash earnings, working capital changes (net of the accounts receivable securitization benefit of $25 million in the prior-year quarter) and lower net capital spending.
2023 Outlook
The Company has again increased its 2023 guidance for Adjusted EBITDA, reflecting the Company’s positive third quarter performance and business momentum. In total, this change relative to the Company’s prior outlook can be attributed to improved volumes and margin performance in Clean Earth as well as modestly lower Corporate spending.
For the full year 2023, key business drivers for each segment as well as other guidance details are as follows:
- Harsco Environmental adjusted EBITDA is projected to be modestly above prior-year results. For the year, higher services pricing, restructuring benefits, site improvement initiatives and new contracts are expected to be partially offset by FX translation impacts and lower commodity prices.
- strong>Clean Earth adjusted EBITDA is expected to significantly increase versus 2022, as a result of higher services pricing and volumes as well as cost reduction and operational improvement actions, offsetting the impacts of continued labor-market and supply-chain (disposal) tightness.
- Corporate spending is anticipated to be higher relative to the prior year due to the normalization of certain expenditures, including travel and higher planned incentive compensation.
| 2023 Full Year Outlook (Continuing Operations) |
Current | Prior |
| GAAP Operating Income/(Loss) | $103 – $110 million | $97 – $112 million |
| Adjusted EBITDA | $282 – $289 million | $270 – $285 million |
| GAAP Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.50) – $(0.59) | $(0.42) – $(0.58) |
| Adjusted Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.08) – $(0.17) | $(0.09) – $(0.25) |
| Free Cash Flow | $25 – $35 million | $30 – $50 million |
| Net Interest Expense | $97 million | $94 – $95 million |
| Account Receivable Securitization Fees | $11 million | $10 million |
| Pension Expense (Non-Operating) | $22 million | $21 – $22 million |
| Tax Expense, Excluding Any Unusual Items | $16 – $17 million | $13 – $17 million |
| Net Capital Expenditures | $125 – $135 million | $125 – $135 million |
| Q4 2023 Outlook (Continuing Operations) | ||
| GAAP Operating Income | $20 – $27 million | |
| Adjusted EBITDA | $62 – $69 million | |
| GAAP Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.10) – $(0.19) | |
| Adjusted Diluted Earnings/(Loss) Per Share from Continuing Operations | $(0.03) – $(0.12) |
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