Enviri (NVRI) Q4 2023 earnings summary

Executive summary

• Q4 continuing-operations revenue rose 13% YoY to $529M and adjusted EBITDA rose 21% to $73M, exceeding the $62M–$69M guidance range.

• FY 2023 revenue increased 10% to $2.07B and adjusted EBITDA increased 28% to $293M; GAAP operating income was $111M.

• 2024 adjusted EBITDA growth is expected to be led primarily by Clean Earth; Rail trends improved as efforts to strengthen and sell the business continued.

Financial highlights

• Q4 GAAP operating income was $28M versus $2M; adjusted EBITDA was $73M versus $61M, and adjusted EBITDA margin was 13.9% versus 12.9%.

• Q4 adjusted diluted loss per share was $0.07 versus adjusted EPS of $0.01 in Q4 2022.

• FY adjusted EBITDA margin was 14.2% versus 12.1%; adjusted diluted loss per share was $0.12 versus adjusted EPS of $0.10 in 2022.

• FY GAAP diluted loss per share from continuing operations was $0.57.

Outlook and guidance

• FY 2024 continuing-operations guidance: GAAP operating income $122M–$142M, adjusted EBITDA $300M–$320M, adjusted diluted EPS loss $0.00–$0.25 and FCF $20M–$40M; excludes Rail.

• FY 2024 GAAP diluted EPS guidance is a loss of $0.28–$0.52; adjusted EPS excludes unusual items and acquisition-related amortization.

• Q1 2024 guidance: adjusted EBITDA $63M–$70M, adjusted diluted EPS loss $0.05–$0.13, and corporate costs of ~$9M.

• Both segments are expected to post low-single-digit revenue growth in 2024; Clean Earth is expected to lead adjusted EBITDA growth, with annual corporate costs of ~$40M.

• Outlook assumes stable economic conditions; Clean Earth pricing, efficiency and volume are expected to offset less favorable project mix and the non-repeat of a 2023 Stericycle settlement.