0000045876-26-000100
SEC filingRevenue edged up 0.3% but operating profit plunged to $0.8M, hammered by $12.5M Clean Earth sale costs and Rail segment losses.
For the three months ended March 31, 2026, Enviri Corporation reported total revenues of $549.8 million, a modest increase of 0.3% compared to $547.9 million in the prior-year quarter. The growth was primarily driven by a favorable foreign currency translation impact of $16.6 million, partially offset by lower volumes in Clean Earth and Rail. Gross profit declined to $105.6 million (19.2% margin) from $123.1 million (22.5% margin), reflecting higher cost of services and products sold. Operating income plummeted to $0.8 million from $29.3 million, a drop of 97.3%, largely due to $12.5 million in costs associated with the planned sale of Clean Earth and a $10.4 million non-recurring favorable forward loss provision in the Rail segment in the prior year. Net loss widened to $(9.5) million from $(7.8) million, and diluted EPS from continuing operations fell to $(0.12) from $(0.10). The effective tax rate swung to a benefit of 74.4% from an expense of (42.8)% a year ago, primarily due to the tax benefit from stock-based compensation vesting and the impact of Clean Earth sale costs.
Harsco Environmental revenues increased 5.6% YoY to $256.7 million, benefiting from $14.1 million of foreign currency translation and volume growth, partially offset by net contract losses of $13.7 million. Operating income decreased slightly to $10.0 million from $10.1 million, as a $3.3 million prior-year restructuring benefit did not recur and an unfavorable service mix weighed on margins. Operating margin dipped to 3.9% from 4.1%.
Clean Earth revenues declined 3.9% to $225.8 million, driven by a $9.1 million decrease from lower volumes in hazardous waste and soil/dredged materials businesses, exacerbated by unfavorable weather and higher fuel costs. Operating income fell to $15.8 million from $22.3 million, with SG&A increasing $2.1 million and a $3.2 million negative impact from lower hazardous waste volumes. Margin contracted to 7.0% from 9.5%.
Harsco Rail revenues decreased 3.7% to $67.3 million, primarily due to a $12.2 million negative adjustment from forward loss provisions on the Deutsche Bahn contract, partially offset by higher volumes from railway contracting services. Operating income swung to a loss of $3.2 million from a profit of $7.1 million, as the prior year included a $10.4 million favorable net change in forward loss provisions that did not recur, and lower equipment revenue and higher manufacturing costs hurt results.
Corporate operating loss increased to $(21.8) million from $(10.2) million, driven by $12.5 million of costs related to the planned Clean Earth sale.
Management expects the sale of Clean Earth to Veolia to close on June 1, 2026, with the separation and merger transactions on track for the second quarter. The company amended its credit facility in February 2026, extending a portion of revolving commitments to the earlier of July 1, 2026 or the closing date. The senior secured credit facility covenants were modified, with a net debt to EBITDA ratio of 5.50x for Q1 2026 (actual 4.98x) and interest coverage minimum of 2.50x (actual 2.78x). The company believes it will maintain compliance based on current forecasts, though it acknowledges risks from economic conditions, tariffs, and interest rate changes. No specific revenue or earnings guidance was provided for future periods.
Net cash from operations of $21.5M significantly exceeded the net loss of ($9.5M), indicating strong operational cash generation. Key adjustments included depreciation ($40.4M), amortization ($7.8M), and a large deferred tax benefit ($30.2M). Working capital changes provided a net positive impact: accounts receivable increased $16.3M (use of cash), inventories decreased $7.4M, and accounts payable increased $16.3M. However, the company remained a net cash consumer due to capital expenditures of $33.7M, which were 157% of CFO, and no free cash flow was reported. Investing activities also included $1.9M in asset sale proceeds. Financing activities provided $8.1M, primarily from net revolver borrowings of $31.0M, partially offset by finance lease payments ($5.5M) and employee tax payments on stock compensation ($16.3M). No share repurchases or dividends were paid. Overall, the company relies on debt to fund capital spending, indicating a need for improved working capital management or higher operating margins.