Good morning, everyone. My name is Jamie, and I will be your conference facilitator. At this time, I would like to welcome everyone to the Enviri Corporation fourth quarter release conference call. All lines have been placed on mute to avoid background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star and the number one on your telephone keypad. If you would like to withdraw your questions, you may press star and two, using your telephone keypads. Also, this telephone conference presentation and accompanying webcast made on behalf of Enviri Corporation are subject to copyright by Enviri Corporation, and all rights are reserved. No recordings or redistributions of this telephone conference by any other party are permitted without the expressed written consent of Enviri Corporation. Your participation indicates your agreement. I would now like to introduce Dave Martin of Enviri Corporation. Mr. Martin, you may begin your call.

Thank you, Jamie, and welcome to everyone joining us this morning. I do apologize for the technical issue this morning and appreciate your patience. I am Dave Martin, VP of Investor Relations for Enviri. Again, with me today is Nick Grasberger, our Chairman and Chief Executive Officer, and Tom Vadaketh, our Senior Vice President and Chief Financial Officer. This morning, we will discuss our results for the fourth quarter of 2024 and our outlook for 2025. We will then take your questions. Before our presentation, let me mention a few items. First, our earnings release and slide presentation for this call are available on our website. Second, we will make statements today that are considered forward-looking within the meaning of the federal securities laws. These statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties that may cause actual results to differ from these forward-looking statements. For a discussion of such risks and uncertainties, see the risk factors section in our most recent 10-K and as updated in our subsequent 10-Qs. The company undertakes no obligation to revise or update any forward-looking statement. Lastly, on this call, we will refer to adjusted financial results that are considered non-GAAP for SEC reporting purposes. A reconciliation to GAAP results is included in the earnings release as well as the slide presentation. With that being said, I will turn the call to Nick.

Thank you, Dave, and good morning, everyone. We delivered a solid fourth quarter at Enviri, driven by Clean Earth, which produced another quarter of record revenue, EBITDA, and cash flow. Harsco Environmental's performance was challenged by much weaker global steel production and a strong US dollar, while Harsco Rail's adjusted results were similar to those in Q4 of last year. For the full year 2024, some key highlights include Enviri delivered the highest adjusted EBITDA in over ten years, marked by an increase of 10% on an organic basis and a 100 basis point lift in margins. Cash flow from Clean Earth and Harsco Environmental improved to a record of nearly $200 million. Importantly, we delivered better safety performance across the company. I will share a bit more about each of our businesses, starting with Clean Earth. For the full year, Clean Earth delivered cash earnings, profit margins, and free cash flow that were each two times higher than at the time of acquisition a few years ago. We are entering 2025 with great momentum in this segment and expect a further double-digit EBITDA improvement this year. Our strategic goal is to continue to shift our portfolio to a specialty waste business with higher underlying growth rates and healthy cash flow conversion. To that end, since we fully integrated Clean Earth in 2021, the business's contribution to our consolidated EBITDA has grown from 25% to over 50% as of this year-end. The contribution of Clean Earth's cash flow is even higher and has improved at a similar rate. Clean Earth has become a very valuable business in an attractive and consolidating industry. The significant increase in the value of Clean Earth has been driven not only by the much-improved performance of the business but also by the substantial expansion of…

Thank you, Nick, and good morning, everyone. We had a solid finish to 2024 in the fourth quarter, which was broadly in line with our expectations. Full-year revenues for 2024 were $2.3 billion. Adjusted EBITDA reached $319 million, which was up 4% year on year as reported or up 11% on an organic basis. This was our highest adjusted EBITDA in ten years. From a segment standpoint, HE performed well while facing challenging market conditions. Clean Earth drove our growth by again delivering record earnings and margins. As Nick said, Clean Earth's EBITDA in 2024 was more than double its earnings in 2021, our first full year of ownership. We are very pleased with the execution at Clean Earth and the returns now being generated on our initial investment. Enviri's free cash flow for the year was a negative $34 million. This was a result of cash usage for our large engineer-to-order projects in the rail business as well as delayed collections in our base rail business with certain shipments being pushed out into 2025. HE and Clean Earth together generated free cash flow of more than $190 million in 2024, an improvement over 2023. Our covenant net leverage ratio at the end of 2024 was 4.07 times, an improvement from the beginning of the year. Now let me turn to our fourth-quarter performance details starting on slide five. Similar to quarter three, we faced some headwinds in Q4 within our Harsco Environmental and Rail businesses as a result of market conditions, customer shipment delays, and supply chain pressures. However, our operating teams performed very well, and I am pleased that we delivered adjusted EBITDA within our guidance range for the quarter. We saw positive momentum in the quarter. Clean Earth delivered over 25% EBITDA growth and record Q4 margins.…

To ask a question, you may press star and then one on your telephone keypad. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys. To withdraw from the question queue, you may press star and two. Once again, that is star and then one to join the question queue. We will pause momentarily to assemble the roster. Our first question today comes from Devin Dodge from BMO Capital Markets.

Alright. Thanks. Good morning, guys. So I am going to start with Clean Earth. Really solid performance again this quarter. Some good pricing, I think, some efficiency benefits. But volumes, I think they continue to be a bit soft. Just wondering if you can provide some context for why volumes have been a little bit sluggish in 2024 and, at least based on the guidance, why that should change in 2025.

Sure. Hi, Devin. It is Nick. In terms of 2024 volume in Clean Earth, there was a lot of churn amongst the top retail accounts. That should actually be a bit of a tailwind for us in 2025. Our pipeline on the industrial side of our end markets was somewhat weak in 2024, but the pipeline has grown significantly, and I think we have a 4 or 5% volume lift in industrial within Hazeways and Clean Earth in 2025, and we feel pretty confident about that. Healthcare was reasonably strong in 2024. We expect that to continue. But overall, in Clean Earth, we expect the top line to grow, say, around 5%, half of that price and about half of that volume. And you are right. We have not had volume growth at that level in the last couple of years, but we are pretty confident given our pipeline that we will achieve that this year.

Okay. Okay. Good color. Thanks for that. Then switching over to Harsco Environmental. So your contracts there, I know they provide some downside protection or have some minimum volume guarantees. Look, recognizing it is hard to generalize, but how much more downside from a volume perspective is there across the portfolio before we reach the floors set in those contracts?

Well, I think we likely are kind of at the bottom in terms of volume at most of our plants. The bigger impact has really been site closures. Right? We have had one in the UK, one in the Czech Republic, one in Chile. We have had other large sites reduce production or close the blast furnace, let us say, or idle their facility for a period of time. So really, kind of as we look across the portfolio now of our sites, we do not see further risk for bankruptcies or sites being idled. And to your question, yeah, it is hard to generalize. It is different on a contract-by-contract basis. But I think we are still a ways away at most sites from kind of hitting that floor in terms of volume.

Yep. Okay. Makes sense. Thank you. I will turn it over.

Thank you. Our next question comes from Rob Brown from Lake Street Capital Market.

Good morning. Hi. On the Clean Earth business, you were booking operating improvements in terms of, I think you talked about IT and facility type improvements. How far are you into that effort, and how much can you kind of see in the next year in terms of improvement there?

Well, in terms of IT, we are a little more than halfway through kind of a two-and-a-half-year program to harmonize our systems. We, under the banner of One Clean Earth, it is a very, very broad initiative across many different components of our IT systems. But this year, let us say, at the end of this year, I think we expect to be, I do not know, 80, 90% finished with that effort. And given the complexity of it, it has actually gone quite well. Very, very pleased with that. I am sorry. What was the other part of your question, Rob?

Yeah. It was really on the facility side as well. Where are you in terms of getting that done and how much to go?

Yeah. I think that what we are spending on are new capabilities and capacity in the facilities. We expect very high returns and very quick paybacks relative to what is typical for those kinds of investments. So even though we are spending an extra $20, $30 million on CapEx in Clean Earth this year, we think that is a very good investment for the business. At this level of capital spending, this $50 million or so that we are looking at in 2025 is certainly higher than what we have spent and likely to be higher than what we will spend in the future.

Okay. Got it. And then in the Rail business, you know, you continue to sort of see incremental costs there. How much, I guess, visibility do you have on those incremental costs and the engineer-to-order that you are getting kind of into the mid-days deliveries? I think you said 2026. You get a fair amount of deliveries done, but just a sense of how much more risk you see in those and maybe when or how that starts to taper off in 2026 and 2027 in terms of the amount of remaining risk.

Yeah. Rob, let me, it is Tom Vadaketh. I will just try and take that. As I think you have heard us say before, the risk sort of truly dissipates dramatically once we have delivered the very first vehicle in the series of vehicles or equipment that we are meant to deliver to the customer. And once that customer has accepted that, so at that point, you have your bill of material locked in. You have got supplier contracts from your various vendors locked in, and you kind of know where you are. And so we are, I would say, from today, you know, about a year to fifteen, fifteen, eighteen months away from that occurring for our three big contracts. No. For two of the three big contracts. On one of them, we have made quite a bit of progress already and expect to kind of actually enter to get to the end of that contract during 2026. So I would say, you know, long way to answer your question. Look, we learn a little bit every order. Sometimes there are changes in the supply chain. The supply chains and these are complex, and so some of the charges we had to take in the fourth quarter reflect just changes in the supply chain. We had to switch suppliers. The new supplier happens to be a little bit more expensive than the old supplier and that sort of thing. But we are full flow in terms of the production process. And, yeah, like I said, risk will really dissipate dramatically once we have delivered in that very first vehicle. And we are about twelve to fifteen months away from that occurring.

Yeah. I will just add to that. Again, referencing the three large contracts, which are really the only ones I will say relevant at this point because the others have either been completed or will be this year. On two of the three large remaining contracts, the net risks and opportunities are probably close to zero because we have some expected relief coming on one of those. The largest remaining risk that we have is really in a contract in the UK. And that is where Tom and myself and our general counsel and others are very focused on trying to mitigate the risk and improve the outcome on that contract.

Okay. Great. Thanks for the color. I will turn it over.

Once again, if you would like to ask a question, please press star and one using a touch-tone telephone. To withdraw yourself from the question queue, you may press star and two. Again, that is star and then one to get in the question queue. And our next question comes from Brian Butler from Stifel. Please go ahead with your question.

Hey, good morning. Thanks for taking the questions. I guess on the first one, what is assumed in 2025 guidance from the perspective of steel production? What is embedded into that estimate?

Yeah. So hi, Brian. Of course, it varies a good bit by region. So our fastest-growing region has been India, the Middle East, and Africa. And that has grown quite nicely. We expect volume in that region to grow kind of three or four percent this year. And then I will say essentially flat in the other regions. So North America, Europe, Latin America, primarily.

Okay. And then, but of course, it also varies a good bit by site. But I think we overall have volume from liquid steel tonnage up one or two percent, I think, overall.

Okay. That is helpful. And when you think of your new footprint in the HE business in the sense of post the closing, a normalized production environment, what would be the expected...

Yeah. If we ever get back there. So it is a function of that as well as the dollar. You know, we have lost $30 million of EBITDA in HE just from a strengthening dollar over the last four years. So let us assume, you know, constant currency. But I would say if we got back kind of mid on production of the revenue base today, which is, what, $1.1 billion, about a billion? You know, there is at least another $100 million of revenue there just from getting back to mid-cycle. Probably more. Let us say $100 to $200 million with a fall-through rate that is pretty high. Right? It is, I do not know, 30, 35, 40 percent.

Okay. That is good. And then on the Clean Earth business, when you think of 2025 and the opportunity around PFAS, I mean, right now, I do not think you are doing any PFAS work, but that seems... Is that a place you are looking to put capital to work in that area? And where do you see that opportunity in 2025 and maybe beyond?

Yeah. Well, we are treating some PFAS-contaminated wastewater. We have a facility, a permanent facility up in Detroit, and that has been good business for us. We are also working with the DOD and others on various sites, kind of testing our technology or other technology at our permitted sites and facilities. So I think we are quite active, but we do not have anything substantial built into 2025 for PFAS. I think we feel that with our technology and our permitted facilities and access to others' technology, you know, we are very well positioned in PFAS when those opportunities begin to flow, likely for us initially with the DOD. So I think we are very confident in our capabilities and our capacity in our permitted facilities. But we really, and this even goes back to our long-range plan that we presented at our Analyst Day here back in June, we really have not built any PFAS revenue or EBITDA into our three-year plan.

Okay. And then last one on Rail. How should we think about the cadence in 2025 based on the guidance that you have given here? You know, how should we work there, I guess, model that through the year?

So I gave some guidance, Brian, for the first quarter. And then I would suggest, you know, the back three quarters, I would just spread it about evenly, you know, whatever you are modeling. So we have tried to, from a production perspective, you heard me talk about some of the things we are working on, and we have tried to level load the production plan through the year so that it allows us to optimize manufacturing and allow us a chance to work on some of the improvements that I described. So, yeah, for your assumptions, what will we do? Basically, level load it.

Okay. Thanks for taking the questions.

And ladies and gentlemen, that will conclude our question-and-answer session. I would like to turn the floor back over to Dave Martin for closing remarks.

Thank you for joining the call this morning. Feel free to call me with any follow-up questions. And as always, we appreciate your interest in Enviri and look forward to speaking with you soon. Take care.

And ladies and gentlemen, with that, we will conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.