By the numbers
Q2 revenue: $610M
Flat year over year, influenced by factors such as foreign exchange rates, rail contract adjustments and the sale of Performix
Adjusted Q2 EBITDA: $86M
Up 7% year over year
Q2 net loss: $11.1M
Compared with a net loss of $15.8M the previous year
- Financial picture: During Enviri’s Q2 earnings call Thursday, CEO Nick Grasberger said each of the company’s three business segments “exceeded expectations” due to a combination of factors such as strong market demand, a continued focus on cost savings and ongoing efficiency measures.
- Clean Earth: The company’s environmental and regulated waste management services division, reported revenues of $236 million, up 2% year over year. Adjusted earnings before interest, taxes, depreciation, and amortization was $38 million, an increase of about 8.6%, the highest of any quarter since the company combined Clean Earth and Stericycle’s environmental solutions business in 2020, executives said. “We believe we are still in the early stages of creating value in the Clean Earth segment,” Grasberger said, adding that “future catalysts” such as PFAS remediation services and M&A could boost earnings.
- Harsco Rail: Enviri reported strong demand and improving operations in its rail segment for Q2, citing “healthy growth” in both EBITDA and EBITDA margin. Enviri previously announced it would pause the divestiture process for this segment because of risks associated with some of its engineered-to-order contracts in Europe. The company is working through negotiations related to cost overruns and delivery delays. “We believe the delivery of the initial vehicles on two of the large ETO contracts in a couple of years will be the catalyst for the successful sale of the business,” Grasberger said.
- Harsco Environmental: The division, which provides material processing and environmental services for the steel and metals industries, had a “solid” quarter, with revenue of $293 million, up about 1% year over year due to higher volumes and price. This was softened by factors including foreign exchange rates and “anemic” steel production levels, particularly in Europe, Grasberger said. The segment also helped improve cash flow through working capital and capital spending initiatives, he said.
- Debt leverage: Enviri’s debt leverage ratio improved to 3.9x, up from 4.1x in Q1, driven by lower debt and higher trailing EBITDA, said CFO Tom Vadaketh. Reducing debt is a “continued focus” for the company, which had previously set a goal to reach a debt leverage ratio of 3.85x by the end of the year and a longer-term goal of 2.5x in a few years, Grasberger added.
