Enviri Q1 Earnings Call Highlights
Enviri (NYSE:NVRI) reported first-quarter 2026 revenue that was flat from a year earlier, while executives said the company remains on track to complete the sale of Clean Earth and the spin-off of New Enviri around June 1.
Chairman and Chief Executive Officer Nick Grasberger said shareholders approved the Clean Earth sale last week, and the Form 10 filing tied to the New Enviri spin-off was declared effective by the SEC. Grasberger said the company has cleared the key regulatory milestones for both transactions and expects closing in approximately three weeks, in line with prior expectations.
“We will announce the cash payout to shareholders from the Clean Earth sale shortly prior to closing,” Grasberger said. He added that the company’s cash conversion range remains $14.50 to $16.50 per share but said management would not comment further on potential outcomes during the call.
The transaction will mark a leadership transition for the company. Grasberger said this would be his final earnings call with Enviri after 12 years leading the company. Tom Vadaketh, senior vice president and chief financial officer, also said it would be his final earnings call. Russell Hochman, currently president and chief operating officer, is the incoming CEO of New Enviri, while Pete Minan is the incoming CFO.
First-quarter results
Vadaketh said total first-quarter revenue was $550 million, unchanged from the prior-year period. Adjusted EBITDA was $65 million, and adjusted diluted earnings per share were $0.10.
Vadaketh said adjusted earnings for Harsco Environmental and Rail were “little changed” year over year, while Clean Earth’s results were pressured by lower volumes. He said unusual items in the quarter included strategic costs related to the Clean Earth sale and New Enviri spin-off, as well as previously discussed Rail restructuring costs.
Adjusted free cash flow was negative $6 million in the quarter, which Vadaketh described as a traditionally weak cash period for the company. He said cash performance for Harsco Environmental and Rail improved from a year earlier, although Rail remained a user of cash. Rail’s negative cash flow was $18 million, largely tied to its engineered-to-order, or ETO, contracts.
Harsco Environmental posts revenue growth
Harsco Environmental generated first-quarter revenue of $257 million, up 6% from the prior-year quarter. Adjusted EBITDA was $38 million, which Vadaketh said exceeded the company’s expectations.
Vadaketh attributed the year-over-year earnings performance to volume from new sites, higher services demand, operational improvements at existing sites and foreign exchange benefits. Customer steel output was up modestly, with higher production in India and the Middle East mostly offset by lower production in Europe.
Those benefits were partially offset by contract exits, lower Eco product volumes and a change in business mix, Vadaketh said. He also said trade measures intended to further support the European Union steel industry continue to progress, with alignment on quota and tariff changes achieved in mid-April. Formal endorsement is expected later in May, with implementation anticipated in July.
Clean Earth affected by weather and volume pressure
Clean Earth “executed well” during the quarter, Vadaketh said, but its financial results were affected by sluggish project-related work and industrial volumes. He said much of the weakness was related to winter storms in the first quarter.
The extreme weather conditions were most pronounced in late January and again in mid-March, Vadaketh said, adding that peers were also affected.
Grasberger said the sale of Clean Earth to Veolia provides “a great outcome” for shareholders and said he expects the Clean Earth team to “thrive” as part of Veolia.
Rail remains a key turnaround focus
Rail revenue totaled $67 million in the first quarter, and the segment posted an adjusted EBITDA loss of $1 million. Vadaketh said Rail’s base business generated positive EBITDA and exceeded expectations, but the segment’s overall loss was tied to overhead costs supporting ETO contracts.
The year-over-year change in Rail earnings reflected higher contributions from contract and services work, offset by lower equipment volumes and higher operating costs. Vadaketh said equipment demand remains weak.
Hochman said Harsco Environmental and Rail both exceeded expectations in the quarter due to better volumes, positive operational execution and prudent cost management. He said New Enviri will have a stronger capital structure and lower interest cost burden following the Clean Earth transaction.
Hochman said management is conducting an accelerated business review of both Harsco Environmental and Rail, with the goal of improving performance over the coming quarters and years. In Harsco Environmental, he said the company is focused on site-level productivity, maintenance efficiency and opportunities to optimize selling, general and administrative expenses and support costs.
In Rail, Hochman said restructuring is underway, with actions aimed at improving the supply chain and reducing inventory. He said the company is prioritizing Rail’s aftermarket business, where margins are attractive, while also evaluating other capital-light opportunities and potential steps to optimize manufacturing operations, global footprint and SG costs.
Hochman also said reducing ETO risk at Rail is a top priority in 2026. For the SBB contract, most of the first group of vehicles has been delivered and accepted, with the remaining two of 48 vehicles expected to be accepted in the coming months. Homologation for the second vehicle type has started and is expected to be completed in early 2027. Hochman said the risk profile for SBB has improved significantly over the past year and that the project is expected to turn cash positive in 2027.
For Deutsche Bahn, Hochman said the first three vehicles are progressing as the company looks to maximize net cash flows and reduce risk. For Network Rail, he said Enviri is engaging with the customer to improve the financial outlook for the contract or otherwise minimize volatility and risk.
Guidance unchanged despite uncertainty
Minan said guidance for Harsco Environmental, Rail and New Enviri remains unchanged for 2026. Harsco Environmental’s adjusted EBITDA range remains $170 million to $180 million, while Rail’s EBITDA loss range remains $19 million to $26 million. Using the midpoint of those ranges, New Enviri’s pro forma EBITDA is expected to be approximately $140 million.
The company’s expectation for modest free cash flow in 2026 is also unchanged, Minan said. He noted that first-quarter results were stronger than expected but said significant economic uncertainty remains. For Harsco Environmental, uncertainties include the geopolitical situation in the Middle East, where the company has operations, and the potential impact of higher energy prices on Europe and global business conditions.
In Rail, Minan said equipment demand remains challenged, and the company has not yet filled its order book for the year. For the second quarter, Harsco Environmental performance is expected to be comparable with the second quarter of 2025, while Rail EBITDA is expected to decline because of lower volumes.
During the question-and-answer session, Minan said Rail’s order book is running behind where it would typically be at this point in the year, primarily because of North American original equipment manufacturing demand. He said management expects some improvement in the second half.
Minan also said aftermarket represents roughly 40% of Rail revenue and had a solid first quarter. He said aftermarket revenue provides an offset to weaker OEM activity and carries margins that are “pretty much 2x” original equipment margins, making it a clear area of focus for the company.
About Enviri (NYSE:NVRI)
Enviri Inc (NYSE: NVRI) is a provider of environmental monitoring, data intelligence and sustainability solutions for critical infrastructure and industrial operations. The company integrates Internet of Things (IoT) sensor hardware, cloud-based analytics and field services to collect, process and visualize environmental data. Enviri’s platform supports real-time monitoring and historical trend analysis across water, air and wastewater streams to help clients meet regulatory requirements and manage environmental risk.
Enviri’s product suite includes ruggedized sensor networks, remote data loggers, automated sampling systems and a web-based analytics portal.
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