DEFA14A: Enviri Reports Q4/FY25 Results, Advances Clean Earth Sale

Enviri Corporation reported fourth quarter and full year 2025 results, highlighted by the pending $3 billion sale of its Clean Earth business and a planned spin-off of Harsco Environmental and Harsco Rail.

Summary

• Fourth quarter 2025 revenues totaled $556 million, similar to the prior-year quarter.
• Fourth quarter 2025 GAAP consolidated loss from continuing operations was $86 million, compared to $82 million in Q4 2024.
• Fourth quarter 2025 Adjusted EBITDA was $70 million, flat compared to Q4 2024.
• Full year 2025 revenues totaled $2.24 billion, down from $2.34 billion in 2024.
• Full year 2025 GAAP consolidated loss from continuing operations was $160 million, compared to $120 million in 2024.
• Full year 2025 Adjusted EBITDA totaled $275 million, down from $318 million in 2024.
• The proposed sale of the Clean Earth business to Veolia Environnement S.A. for $3 billion is on track to close in mid-2026.
• Harsco Environmental and Harsco Rail (New Enviri) are expected to be spun off into a new standalone publicly traded company.
• The 2026 outlook for New Enviri's Adjusted EBITDA is approximately $140 million (at guidance mid-point), modestly below 2025, primarily due to weaker demand in Harsco Rail.
• Historic errors related to the UK pension obligation were identified, with a cumulative net impact of approximately $18 million at the end of 2025; the plan remains fully funded.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed report. While the strategic divestiture of Clean Earth is a positive long-term move to unlock value and streamline the business, the immediate financial results show worsening GAAP losses and a significant drag from the Harsco Rail segment, which is projected to continue into 2026.

Positives

• Clean Earth finished another record year with strong execution across the organization, delivering on growth and operational goals.
• Harsco Environmental realized its highest quarterly earnings of the year in Q4 2025, despite global steel industry challenges.
• The $3 billion sale of Clean Earth is expected to unlock significant sum-of-the-parts value for the company.
• New Enviri (Harsco Environmental and Harsco Rail) is expected to be well-capitalized with an improving cash flow outlook and significant earnings potential post-transaction.
• Harsco Environmental's Q4 2025 revenues increased by 7.0% to $257 million, with Adjusted EBITDA rising to $48 million from $41 million in Q4 2024.
• Clean Earth's Q4 2025 revenues increased by 1% to $244 million, with Adjusted EBITDA growing to $38 million from $36 million in Q4 2024.
• Net cash provided by operating activities for the full year 2025 increased to $101 million, up from $78 million in 2024.

Negatives

• GAAP consolidated loss from continuing operations worsened in Q4 2025 ($86 million) compared to Q4 2024 ($82 million) and for the full year 2025 ($160 million) compared to 2024 ($120 million).
• Diluted loss per share from continuing operations worsened in Q4 2025 ($1.07) compared to Q4 2024 ($1.03) and for the full year 2025 ($2.03) compared to 2024 ($1.57).
• Harsco Rail's revenues decreased by 28% in Q4 2025 to $56 million, resulting in an Adjusted EBITDA loss of $4 million, down from a $2 million profit in Q4 2024.
• Full year 2025 Adjusted EBITDA decreased to $275 million from $318 million in 2024.
• Higher Corporate costs, largely due to stock-based compensation and expenses, negatively impacted overall Adjusted EBITDA.
• Harsco Rail's 2026 Adjusted EBITDA outlook is negative, projected between $(26) million and $(19) million, below 2025 results due to lower demand and manufacturing inefficiencies.
• Adjusted free cash flow for the full year 2025 remained negative at $(15) million.
• Overall free cash flow for New Enviri is projected to remain muted in 2026 due to the cash burden of Harsco Rail's existing engineered-to-order (ETO) contracts.

Risks

• The Company's ability to complete the transactions contemplated by the Merger Agreement and the Separation Agreement on the terms expected, in a timely matter or at all.
• The possibility that the Merger and the Separation of Clean Earth may not ultimately achieve the expected benefits.
• The Company's inability to comply with applicable environmental laws and regulations.
• The Company's inability to obtain, renew, or maintain compliance with its operating permits or license agreements.
• Various economic, business, and regulatory risks associated with the waste management industry.
• The seasonal nature of the Company's business.
• Risks caused by customer concentration, fixed price and long-term customer contracts, especially those related to complex engineered equipment, and the competitive nature of the industries in which the Company operates.
• The outcome of any disputes with customers, contractors and subcontractors.
• The financial condition of the Company's customers, including their ability to maintain credit availability.
• Higher than expected claims under the Company's insurance policies, or losses that are uninsurable or that exceed existing insurance coverage.
• Market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs.
• The Company's ability to negotiate, complete, and integrate strategic transactions and joint ventures with strategic partners.
• The Company's ability to effectively retain key management and employees, including due to unanticipated changes to demand for services, disruptions associated with labor disputes, and increased operating costs associated with union organizations.
• The Company's inability or failure to protect its intellectual property rights from infringement.
• Failure to effectively prevent, detect or recover from breaches in the Company's cybersecurity infrastructure.
• Changes in the worldwide business environment, including general economic and industry conditions and cyclical slowdowns impacting the steel and aluminum industries.
• Fluctuations in exchange rates between the U.S. dollar and other currencies.
• Unforeseen business disruptions due to changes in economic conditions, governmental laws and regulations, political instability, civil disobedience, armed hostilities, public health issues or other calamities.
• Liability for and implementation of environmental remediation matters.
• Product liability and warranty claims associated with the Company's operations.
• The Company's ability to comply with financial covenants and obligations to financial counterparties.
• The Company's outstanding indebtedness and exposure to derivative financial instruments that may be impacted by changes in interest rates.
• Tax liabilities and changes in tax laws.
• Changes in the performance of equity and bond markets that could affect pension plan valuations and accounting.
• Risk and uncertainty associated with intangible assets.

Future Outlook

Enviri Corporation expects New Enviri (Harsco Environmental and Harsco Rail) to achieve approximately $140 million in Proforma Adjusted EBITDA in 2026, which is modestly below 2025 results, primarily due to weaker demand in Harsco Rail. Harsco Environmental's Adjusted EBITDA is projected to be $170 million to $180 million, while Harsco Rail is expected to post an Adjusted EBITDA loss of $(26) million to $(19) million. Cash generation for these businesses is projected to improve, but overall free cash flow will remain muted due to Harsco Rail's existing engineered-to-order (ETO) contracts in the short term.

Management Comments

• "2025 was a transformative year for Enviri, culminating in solid financial performance in the fourth quarter." Nick Grasberger, Chairman and CEO.
• "Clean Earth finished another record year, with strong execution across the organization as it delivered on its growth and operational goals." Nick Grasberger.
• "Harsco Environmental realized its highest quarterly earnings of the year in Q4 while continuing to navigate challenges within the global steel industry." Nick Grasberger.
• "In Rail, we're continuing to take actions to address supply-chain and manufacturing pressures and right-size the organization, while remaining focused on efforts to further manage the segment's ETO exposure." Nick Grasberger.
• "We remain on track to close our $3 billion sale of Clean Earth in mid-2026, which will unlock significant sum-of-the-parts value in the Company when completed." Nick Grasberger.
• "Harsco Environmental and Harsco Rail, together known as New Enviri, are expected to be well-capitalized with an improving cash flow outlook and significant earnings potential following the close of the transaction." Nick Grasberger.
• "While both businesses continue to navigate near-term market pressures, their attractive fundamentals combined with our internal actions to reduce complexity and drive operational excellence are expected to further boost margins for New Enviri and enhance value for shareholders in the coming years." Nick Grasberger.

Industry Context

StockSavvy.ai notes that Enviri's performance reflects broader industry trends, with its Harsco Environmental segment navigating challenges within the global steel industry, a common theme for industrial service providers. The planned divestiture of Clean Earth and spin-off of New Enviri aligns with a strategic focus on core competencies and unlocking value in specialized environmental and industrial services, a trend seen in diversified conglomerates seeking to streamline operations. The struggles in Harsco Rail, particularly with supply-chain and manufacturing pressures, are indicative of broader issues impacting the rail infrastructure and equipment sector.

Comparison to Industry Standards

• The filing does not provide specific comparable companies or projects for direct benchmarking.
• Harsco Environmental's Adjusted EBITDA margin of 18.7% in Q4 2025 (up from 17.1% in Q4 2024) suggests strong operational efficiency within its niche, potentially outperforming some general industrial service providers facing steel industry headwinds.
• Clean Earth's Adjusted EBITDA margin of 15.6% in Q4 2025 (up from 15.1% in Q4 2024) indicates solid profitability in the hazardous materials and waste management sector, which often commands higher margins due to specialized services and regulatory compliance.
• Harsco Rail's negative Adjusted EBITDA margin of (8.1)% in Q4 2025 (down from 2.4% in Q4 2024) is significantly below industry averages for rail equipment and services, highlighting severe operational and market challenges.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for significant value unlock from the Clean Earth sale and future growth of New Enviri, but current financial performance (GAAP losses, Harsco Rail struggles) presents near-term headwinds. The pension obligation error, while not requiring future funding, is a historical accounting issue.
• Employees: Actions to "right-size" Harsco Rail suggest potential for workforce adjustments in that segment. The spin-off will create a new standalone company, impacting employee structure and benefits.
• Customers: Harsco Environmental customers may benefit from improvement initiatives and new contracts. Harsco Rail customers might experience impacts from supply-chain issues and manufacturing pressures. Clean Earth customers will transition to Veolia.
• Creditors: The Clean Earth sale is expected to make New Enviri "well-capitalized" with an improving cash flow outlook, which could positively impact creditors. The revised Adjusted EBITDA calculation aligns with credit agreements.

Next Steps

• Close the $3 billion sale of Clean Earth to Veolia Environnement S.A. in mid-2026.
• Spin-off Harsco Environmental and Harsco Rail into a new standalone publicly traded company (New Enviri).
• Continue actions to address supply-chain and manufacturing pressures and right-size Harsco Rail.
• Focus on efforts to further manage Harsco Rail's engineered-to-order (ETO) exposure.
• Implement internal actions to reduce complexity and drive operational excellence in New Enviri.
• Revise the calculation of reported Adjusted EBITDA for external reporting starting in the first quarter of 2026 to include stock-based compensation costs.
• Hold a conference call on February 24, 2026, at 9:00 a.m. Eastern Time to discuss results.
• File preliminary and definitive proxy statements with the SEC related to the proposed transaction.
• File a registration statement relating to the shares of New Enviri.

Key Dates

Recommendation

The filing presents a complex picture. While the strategic move to divest Clean Earth for $3 billion and spin off New Enviri is a significant positive that could unlock long-term value, the current financial performance, particularly the worsening GAAP losses and the continued struggles of Harsco Rail, are concerning. The 2026 outlook for New Enviri is modest and impacted by Rail's weakness. Investors should hold to observe the successful execution of the Clean Earth sale and the subsequent performance of the streamlined New Enviri, especially how management addresses the challenges in Harsco Rail.

Keywords

Enviri Corporation, NVRI, Clean Earth, Harsco Environmental, Harsco Rail, Veolia Environnement, Spin-off, Divestiture, Waste Management, Environmental Services, Steel Industry, Rail Equipment, Financial Results, Q4 2025, Full Year 2025, Adjusted EBITDA, GAAP Loss, SEC Filing, Proxy Statement, Corporate Governance