Enviri Corporation (NYSE:NVRI), a Delaware-incorporated company, has entered into a significant amendment to its credit agreement as disclosed in a recent SEC filing. The company, previously known as Harsco (NYSE:NVRI) Corp, reported entering into Amendment No. 14 to its Third Amended and Restated Credit Agreement on September 5, 2024.
The amendment introduces a new revolving credit facility totaling $625 million, set to mature on September 5, 2029. This facility is accompanied by a condition that requires certain debts to be repaid or refinanced by a specified date to avoid an earlier maturity. Additionally, Enviri Corp has retained $50 million of its existing revolving credit commitments, which are scheduled to mature on March 10, 2026.
Amendment No. 14 also brings changes to the total net leverage ratio covenant and adjusts the interest rate margins. The new revolving facility's interest rates will vary between 75 to 125 basis points over the base rate or 175 to 225 basis points over the secured overnight financing rate (SOFR), while the existing facility's rates will range from 50 to 175 basis points over the base rate or 150 to 275 basis points over SOFR, depending on the company's total net leverage.
The company's total net leverage is now capped at 5.00 times its consolidated adjusted EBITDA, with a gradual step-down schedule starting from September 30, 2024, eventually reaching 4.00 times for each quarter following March 31, 2026.
The filing also notes that certain agents and lenders involved in the Senior Secured Credit Facility, along with their affiliates, have historically provided various financial advisory, commercial, and investment banking services to Enviri Corp and its affiliates, for which they received customary fees and commissions.
This financial maneuvering by Enviri Corp is detailed in the company's 8-K filing with the SEC, which serves as the source for this information. The full terms of Amendment No. 14 are incorporated by reference in the attached Exhibit 10.1 of the filing.
In other recent news, Enviri Corporation has disclosed robust Q2 financial results, demonstrating a 7% increase in EBITDA from the same quarter last year, despite the challenges posed by a strong U.S. dollar. The company's EBITDA margin has improved to 14%, a 1-point increase from the previous year. A positive trend in financial leverage was also noted, with the debt-to-EBITDA ratio falling below 4 times, a first since 2020.
These recent developments include Enviri's projection of steady cash flow growth and expectations to generate significant cash proceeds from asset sales within the year. The firm anticipates a cash flow growth to $150 million per annum due to EBITDA growth and reduced expenses. Additionally, Enviri expects a range of $50-75 million in cash proceeds from asset sales in 2024.
Enviri Corporation's full-year adjusted EBITDA is expected to be $327 million to $340 million, indicating approximately 9% year-over-year growth. However, the strong U.S. dollar is expected to offset some of these financial gains. Despite these challenges, Enviri remains focused on strengthening its financial position and streamlining operations across its segments.
InvestingPro Insights
In light of Enviri Corporation's recent amendment to its credit agreement, InvestingPro data and tips offer a deeper understanding of the company's financial health and stock performance. With a market capitalization of $766.67 million, Enviri Corp operates under a significant debt burden, which is reflected in its negative P/E ratio of -7.88, signaling that the company has not been profitable over the last twelve months. Despite this, analysts predict that Enviri Corp will be profitable this year, which could be a positive sign for potential investors.
The company's stock has experienced notable volatility, taking a considerable hit over the last week with a -12.97% total return, yet it has shown resilience with a strong 21.14% return over the last three months. This suggests that while short-term movements have been unfavorable, the company has managed to deliver robust returns over a longer period. It's also worth noting that Enviri Corp does not currently pay dividends, which may influence investment decisions for income-focused shareholders.
For those looking to delve further into Enviri Corp's financials and stock performance, InvestingPro offers additional tips and insights. Currently, there are 7 more InvestingPro Tips available for Enviri Corp at https://www.investing.com/pro/NVRI, which can provide investors with a comprehensive analysis of the company's prospects.
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