Enviri Corp. 10-Q Summary: Period Ended June 30, 2026
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026. The filing reflects a transformative corporate restructuring completed on June 1, 2026. Enviri Corporation (the "Company") became a separate, publicly traded entity following a reverse spin-off from Legacy Enviri. The Company now holds the Harsco Environmental and Harsco Rail segments. The Clean Earth segment was sold to Veolia for $3.0 billion and is reported as discontinued operations. The Company is treated as the accounting successor to Legacy Enviri, with historical financial statements recast to reflect the divestiture.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenues | $187.3 million | $511.4 million |
| Operating Income (Loss) | $(244.4) million | $(250.3) million |
| Net Income (Loss) | $(394.5) million | $(404.0) million |
| Diluted EPS | $(14.21) | $(14.70) |
| Cash and Cash Equivalents | $253.4 million | $253.4 million (Balance Sheet) |
| Total Debt (Long-term + Current) | $389.0 million | $389.0 million |
| Net Debt to Adjusted EBITDA | 1.94x | 1.94x |
| Interest Coverage Ratio | 4.60x | 4.60x |
Note: Net cash used in operating activities for the six months ended June 30, 2026, was $275.4 million, driven by significant transaction costs and working capital changes.
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 40.7% year-over-year for the quarter and 18.7% for the six-month period. This is primarily due to the exclusion of Clean Earth (discontinued operations) and a $136.5 million revenue reduction in the Rail segment related to contract exits.
- Significant Losses: The Company recorded a $207.4 million loss in Q2 2026 related to the exit of long-term, fixed-price contracts with Network Rail and Deutsche Bahn. This included non-cash impairments of contract assets, inventory, and prepaid balances, plus an estimated $133 million liability for future obligations.
- Debt Reduction: Total debt decreased significantly from $1.5 billion (Dec 31, 2025) to $389.0 million (June 30, 2026). Proceeds from the Clean Earth sale were used to repay $628.0 million of the Revolving Credit Facility, $105.6 million of the Term Loan, and redeem $475.0 million of Senior Notes.
- Transaction Costs: The Company incurred approximately $28.3 million in transaction-related costs for the quarter, including change-in-control payments and accelerated stock compensation.
Guidance, Outlook, and Risks
Management Commentary: Management states the decision to exit the Network Rail and Deutsche Bahn contracts was made to eliminate future performance risk and financial volatility. The Company remains committed to its remaining contract with SBB (92% complete). The Company expects sufficient liquidity to fund operations for the next 12 months, supported by cash on hand and the Senior Secured Credit Facilities.
Risks and Contingencies:
- Legal Proceedings: Network Rail has notified the Company of an alleged breach of contract regarding the stoneblower vehicles, intending to seek damages. The Company intends to contest this vigorously. Additionally, the Company faces ongoing environmental litigation in Brazil (slag accumulation) and the Netherlands (dust releases), though management does not believe losses are probable or material at this time.
- Contractual Risks: The SBB contract remains subject to potential forward loss provisions if cost estimates change.
- Debt Covenants: The Company is currently compliant with its amended Net Debt to Consolidated Adjusted EBITDA covenant (1.94x vs. 3.00x limit) and Interest Coverage Ratio (4.60x vs. 2.50x minimum). However, future compliance could be impacted by economic deterioration or working capital timing.
Key Facts for Investor Verification
- Contract Exit Liability: Verify the $133 million estimated incremental liability recorded for the Network Rail and Deutsche Bahn contract exits and the potential for additional damages if Network Rail's breach claims are successful.
- SBB Contract Status: Monitor the progress and cost-to-complete estimates for the remaining SBB contract, which is 92% complete but carries forward loss risk.
- Liquidity Position: Confirm the availability of the $152.0 million Revolving Credit Facility and the sufficiency of cash reserves to cover the $207.4 million exit costs and ongoing operations.
- Discontinued Operations: Review the final settlement of the Clean Earth sale to Veolia and any post-closing adjustments to the $3.0 billion purchase price.
- Environmental Reserves: Assess the adequacy of the $27.1 million environmental liability reserve, particularly regarding the Bahrain salt cake processing and Brazil slag matters.