HSC - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Jay, I'll be your conference facilitator. At this time, I would like to welcome everyone to the Harsco Corporation First Quarter Release Conference Call. [Operator Instructions] Also, this telephone conference presentation and accompanying webcast made on behalf of Harsco Corporation are subject to copyright by Harsco Corporation and all rights are reserved. No recordings or redistribution of this telephone conference by any other party are permitted without the expressed feeding consent of Harsco Corporation.

agreement. your indicates participation Your I would Corporation. Martin Harsco introduce like to Dave of now Mr. Martin, call. your you begin may

Dave Martin

your Thank We'll and me for our I'm Officer; and Dave 'XX Grasberger, you, CFO. this of Chairman the and Martin then us Jay, our our questions. we Senior and of first welcome Anshooman to This Aga, quarter Harsco. Vice Chief morning, results With and today take Harsco's Nick joining is outlook. Executive everyone President morning. discuss will

Before presentation, mention few our let however, a items. me

First, this our earnings our presentation release as well as call website. a slide on for are available

Second, to we securities within laws. today risks actual cause certain expectations our differ are federal the are statements considered and based on that those may will forward-looking make to forward-looking statements statements. These current results the subject meaning from are of knowledge that and

see such no company Factors For statements. forward-looking revise risks, in discussion to The obligation the a XX-K. most undertakes our Risk any recent update of section or

we call, included in adjusted reporting well to call said, is results this I'll non-GAAP With financial GAAP presentation. purposes. earnings Nick. A turn on release SEC slide considered are may to as the as for Lastly, that that reconciliation results to the the refer

Nick Grasberger

for us thanks and everyone, morning, Good today. joining

of minimal and the related in and let over Russia-Ukraine Before given market impacts Ukraine. direct result The rebalancing Furthermore, conflict, segment diversity Environmental sites within has ongoing is Harsco of limited time, I global and customer quarter. were disruptions exposure any anticipate in our discuss our country of no the to the the Harsco at either results, short-lived to me a portfolio. as steel our we speak crisis in the process

results well tightness XXXX consolidated in characterized X% quarter, chains consistent costs unprecedented results. as first particularly other are however, the commodities and million. in our labor adjusted was with as and These to versus supply the revenue quarter U.S. guidance. up and of the markets, our totaled input EBITDA $XX Much adjusted of Harsco by Turning our was inflation in

concern mitigate to working within factors firm, said, served the in on these key to underlying are industry and our remain by aggressively our steel Clean expect of the of and impact remains We markets most a markets Earth. most including businesses. That demand being the

We to of Rail also in confident remain our impacts. as the business industry from outlook the COVID-related recover continues

we more example, tampers, our the year. of days line we of last XXX product first sold than have in did core For of this the all year

conditions a of comment of X despite quarter on these a let strong Environmental Now each as strong our result had me businesses. execution. core Harsco

HE, recently partner which carbon-negative These benefits steel was ago, and few mindset beginning investments SteelPhalt is within asphalt growth compelling its Echo growth a or are steel product. our coming term Ukraine exposures. of forward, results better the Looking the diversity industry customer for unchanged reflecting muted given full longer outlook expected Any from portfolio year. and to HE of in for as to our in introduced illustrates business investments. our SteelPhalt from is for our the first story products volumes our our expectation are for seasonal be quarters, impacts largely strengthen the is our business, environmental strategic HE our improve. industry. business, innovation the also Altek as projected additional and to conflict outlook a years we positions environmental our us acquired which a to The include

process We the manufacturing waste for build to directly to plants either expect contracts saw from a all better environmental or this solution sell sign year to aluminum at that you need X process. to customers least

where for effects fuel for and additionally, the at customers as affected by well ongoing late drivers quarter, past certain be pandemic-related benefits onboarding has, weeks. the steel Earth. however, The to drivers inflation, the significantly In pronounced Looking of the impacted shortage improved few These weakness waned. more increases and quarter, containers. over by have first incremental cost again, continue in Clean volumes retail we as were were of price particularly within

significant While the quarter, initiated these surcharges increases Recently, of increases bright addressing Earth. a also and third-party begun continue favorable. in fuel, transportation large, and Clean in of and costs series the second items weigh offset within proactively. the challenges been Earth on There we've will our these customers are price Clean we containers. to to responses from cost some By have spots

customers supporting we some increasingly expand to our continue Our avenues our sustainability goals full of unique circle to pursue and service is for capabilities.

large for second In half business Overall, numerous we growth margins is promising unchanged. this and addition, Clean recover of pipeline projects longer-term our for and quite with outlook year the will the Earth, year on XXXX. the anticipate and view and later our dredge the in remain potential in margins soil for into

Turning to sustainability.

Customers friendly uniquely focus strategic proposition. and leading Our industrial market. clear. the direction as positioned consistent our environmental quite are with for environmentally Harsco searching the their solutions waste increasingly value recycling is streams, and more waste reuse is solutions within of for provider

this logistics has We across us operations. have sustainability additional continue There XX.X%, by disclose within carbon goals and our declined published our internally our improve to report and to do next to Since sustainability our putting more later XXXX, XXXX. be and track for to on much year. plant reduction drive a processing details our to us is XX% deliver achievements footprint initiatives here goal to regarding carbon we'll intensity

supports Rail North and in way normalized market step our this in Fundamentals Rail to asset tremendous for We're XX is pickup let financial backlog ratio EBITDA a in our divest particularly maintenance within to leverage in and reduce of an notable transaction parties unique progress me for interest the a to past. year, as sustainable committed quarter about as experienced increase has leverage. in A business return valuable than is order in Harsco under recent Xx, is There we've activity. million. months, to Rail America, globally. clearly improved $XX important regard. of efforts The discussed we've for this in have the continuing been our our of process more on in comment a which more during level the Rail to the this The where Next, anticipated.

We process a now detailed list the buyers this expect smaller group with with weeks. diligence of due potential the more few continue and narrowing to are within next

acknowledging unchanged our in Difficulty]. would remain a engagement compliant is the employees expectations company Rail I shortly to for sale to with in employees safe Harsco's dedication to transaction and quarter [Technical our of and conclude second the XX,XXX Our the the satisfy of commitment for thereafter. the of their customers the closing The ongoing like by manner. business

Anshooman Aga

million, cost impacted to with the in favorable. slightly increasing CE was of earlier the expectations, Thanks, with inflation turn impacted QX a Slide $X Relative from our increased with and results Please driven operations good our everyone. diesel approximately Meanwhile, impact Each increased related quarter Clean the impacted Adjusted X. driver morning, by X% to were year results fuel by compared corporate Nick, translation. of Russia-Ukraine FX items Harsco XX%, EBITDA and million pressures headwind to in to continuing mainly including $XX strongly guidance. $XXX availability, these to volume. revenues prior line million, environmental totaled $X was X% million. including Omicron the performed which quarter by also Earth from conflict,

due range which including respect the We mitigate action loss in spike to pricing, inflation geographic our the GAAP to by while guidance are our was figure the QX Harsco's share to from income. return the the due Russia-Ukraine conflict, with to rate $X.XX. tax of per impacted effective continuing distribution in taking in This was outside was quarter $X.XX, which I'll share operations adjusted loss of adjusted to the later. higher per was

million. result for deficit was consistent of flow was $XX cash free This expectations. with quarter our Lastly, a the our

in year the our flows QX low the payments is typically discussed of timing we've compensation pension and point including the as payments. for well As interest incentive the various past, during as cash for reasons,

$XX adjusted is mix increased cash segment. the $X Our approximately higher million. improve Revenues revenues Also, partially Please expected performance and operating commodity for EBITDA credits Slide and on the adjusted offset X EBITDA the was turn year. ecoproducts. million exchange to million. meaningfully FX in decreased our $X by by reflects to year-on-year. $XXX and quarters favorable X% remaining totaled prices, by Environmental within and Segment change expected volumes Meanwhile, the services mainly tax costs, sales higher The results foreign Brazil and less of impacted impacts. prior million combined year of

date Russia-Ukraine mentioned, customer conflict, the on Harsco seen material have Nick steel to number a did prices disruptions material at and to of the impact We modest energy Environmental. high raw the sites see not On due output any availability. we as

helped illustrates This Earth. Slide some and moved Higher have Clean have global these commodity supported Please likely discuss prices impacts. our the to offset since operations steel elsewhere turn higher Harsco. benefit to However, prices also production portfolio. to has of these X

for the quarter, increased EBITDA For change containers. XXXX, of $X quarter inflation quarter, results. fuel, relates primarily to million later the X%. and of following crisis the transportation where EBITDA $XXX volume revenues high Meanwhile, hazardous year-on-year. and first impacted was $XX adjusted million the million. particularly in totaled third-party materials This Compared business, and greatest line muted revenues drivers adjusted fewer decreased Russia-Ukraine These somewhat were to costs

our QX implemented price instituted of to on in We introduced and price this percentage large inflation. have book top sales of the offset surcharges we increases additional increases a across

support and in price cost the be will are understand so late a mismatch. QX absorbing increases, customers it we fully till these most for timing realized, While to impacts take price

cost our also to on We focus here. risk controls mitigate continue to

Earth. first recruiting quarter, Clean the was declined on improving. month is shortage Turnover good Lastly, truck and The drivers. driver slowly March in for a

on let to turning me outlook, our briefly Rail. comment Before

During for challenges on price $XX recorded to This have supply production in these adjustments quarter, that customers. further with progress complete and fixed projects, items increased X contracts relate anticipated million. large in amount Rail, future primarily the delayed chain estimated which European we totaled special costs additional These penalties. resulting our costs to delays contract and first

mitigate and We progressing leverage. to our our Rail resulted a to we some to are to these complete to ability this the are reduce our plan optimistic of that according charges. and is mentioned, suppliers important in is of And our Nick process Selling impacts working with Rail sell customers year. as transaction

turn our outlook Now on X. to let's XXXX Slide

million, share EBITDA guidance timing with million $XXX our in to with earnings change This a Our new mismatch of adjusted to be the first attributable the Earth, versus $X.XX. to price of adjusted is in $X.XX factors translates per half. February Clean EBITDA expected entirely adjusted relates to cost $XXX the now guidance inflationary within to to range --

change, tax effective rate. rates our anticipated guidance due higher to change and the EBITDA a market the expense incorporates revised to interest our EPS Beyond anticipated

free million are to $XX we million. Lastly, targeting of now Rail excluding cash $XX flow

the of deck. appendix You the slide can segment find our guidance within

me on million expected Let EBITDA our QX is quarter adjusted XX to with conclude guidance. million. from Slide range second $XX $XX to

mix to adjusted expect price adjusted modestly Earth Clean impacts. earnings is timing to be the modestly We Environmental also lower to be due and cost due business to mismatch. EBITDA FX anticipated lower

for be million of will and In to addition, $XX million call a the operator should hand $XX corporate quarter. to the back Thanks, costs the for range within Q&A. now I

Operator

Stifel. [Operator from question comes of our the And first Instructions] of line Michael Hoffman

Michael Hoffman

like to process? concerned net you What X.X to business bidders, out you've -- Can diligence well charges? event. get Rail sell I'd for that perception of How turn, take And why should about you number model. understand that work these enough There start we can is need bed. we to try get second put about will X delevering you proceeds to due X turns and and can't do this the a through of a that something talked for does this everybody be a

Nick Grasberger

of core bidders high. all, will contracts potential, of first its a the debt-like dialogue as for in the took delivery And a we where I so the for the number to growth of capital of reasonable profitability reiterate all say of believe future the and strength reversing about working with large continue the charges COVID-driven be inflation. very large by course, think we on large be I the of are adjustments, quite important the excess there we is business very our believe interested focused Well, Yes. the nature buyers. or far of of number it's adjusted to process we with European it parties, future really that cost customers which, a quarter the that we to path along is a items effectively part at or as first late looked those those whether will have with

assess look be to minus the So their kind plus adjust valuation relatively think -- what impact the contracts should but for would of I and buyers the core. future be at straightforward in flow and or it those for cash

do a event of So to the in past. that saying way long-winded we've that's, I we delevering this be said guess, significant as a expect

Michael Hoffman

aside, into and Okay. North for your that an the seeing line outlook cost creating gears is Switching American fundamentals. industrial -- timely industrial economic are ability good. issues top Cost a aside account that's to issues environment you favorable

Nick Grasberger

Yes.

We quite But quarter accounts softness actually I few other the that think the industrial be U.S. first and to some in industrial expect did retailers but volume care good. the in in health with national basis, a volumes we short-lived. somewhat market retail on trends are major serve quite we are see a those and good.

Michael Hoffman

to less Or they one? see the in issue traffic led and foot reduction a a And that activity? is did retail timing

Nick Grasberger

consumers in particular from the pandemic. the of These the that patterns it's benefited Yes, are buying retailers few during a latter.

Michael Hoffman

it. Got

And you number. have press line that's the in income Anshooman, Okay. on item release, then pension the cash a a free

X how down about in and that I So XX% the to being is that to two, XX% how XX%? cash XX% do is to revised that of -- the think context

Anshooman Aga

pension impact XX% doesn't our that The noncash item, and XX%. a is income to

about the Combined, second, cash did those midpoint the EBITDA and reduced And guidance, think year. free If cash guidance X as is million, we've really million. interest flow our to are One, cash there about cost year. a $XX new were this slightly X at items. for change interest rates hikes in reduce the you are X going our projections of we for $X by up

So for of decline. part we've compensated the

Michael Hoffman

China X% you growth therefore, Or see sticking production up increased And the and to across base? the you rest make in X% still of of about tons are your the you you're million expecting level Okay. we're when business, of Russian net think year-over-year? XX world customer that's HE with production of the could exported to steel

Nick Grasberger

on Yes. to we I and Ukraine good we're growth yes, up first volume global steel a Russia that HE. to the your Yes, of production Michael, in industry, guidance it's in trends demand question. sticking gap elsewhere. be the But with expect the question, -- part given our original answer made in would

Operator

of of Solow CJS from comes line question Next the Larry Securities.

Larry Solow

late. Sorry, doing little I was the core a

-- sort quarter. the a Just boom Clean Earth, think and the on the It that I source of stuff. couple which little some have addressed may was of you questions a of bit in was

you And a In you terms of -- revenue is -- you waste you what driver happens just this shortages can't make do How -- the side share and get that up? and of whatnot, do shortages, Does make you up don't accumulate? that that as side? Are to is improving? that stuff, that if revenue pick -- other is up on lost Is some losing on that the companies? or that retail hazardous back? does that

Nick Grasberger

Anshooman the I move think Yes. as improves, situation and Well, several the seen think hiring we clearly, terms well. do situation And well, expect weeks the the here. as I first do have No. of we're competitors think all, improving drivers. the as as by last of our in did in I material the and same all we trends mentioned, We of maybe truck

aggressive we the to With I that So clearly of better can be first, of probably the in the recover would be think do assume last improving a volume. second bit fourth than better said, should we year. which all situation see it was that quarter that simply than lost the

will wouldn't think but volume. that, to we're recover expect element I I that certainly an there's of fully confident that recover,

Larry Solow

combined business see you on that? kind side Do down last and and into years forward. comments activity you construction -- back. side. I know now. soil on of the I couple kind know light this. are on terms that that's in hasn't that the on know move to considerably and I side of any if end come coming guys starts guess, of the of been tunnel the wells, But of wet It COVID visibility addressed and about at the as I dredging hopefully don't I that, infrastructure the well? how went color of can't down And dry

Nick Grasberger

are, in of time, first more we the have projects. pipeline a Larry, for we robust visibility into do time Yes, some

for to would bit us. tend so of kind And for view upside I of the a as year that

our revenue that We we're projects into but built generate have of loose for frustrated modest us to hoping relatively But before these this front. guidance, on that volumes and year. some break later we've been

of are time the a we we're So visibility improved for perhaps taking first bit cautious but our in guidance, view in of couple years. a a seeing

Larry Solow

much A side. think couple half before of X a aligned, you PFAS putting had or EBITDA the And had lot of lot all a think before the quarter, over the being couple but of Earth maybe look you guidance, right stars Earth, of PFAS a don't about think, I few side. expect million Clean And years? I projects on on a at I on of the it. X in a have acquired year talk in few year incremental visibility least did -- I we I an know see this you maybe the for Do any Clean probably quarters PFAS next out they talk as provider your numbers cleanup for

Nick Grasberger

question. soils. Cape drivers years. X top business one Cod to of on growth as Yes. mobile the processing joint PFAS contaminated a view few project in the our technology that on be with in at starting X over There's this And no probably fact, Cod the the summer, Cape We next we'll base

opportunities if should for and many we it as be become critical believe expect to us. so we available is more to similar successful And very that should that as a be us, that that opportunities, project

Larry Solow

last just Then question. Okay.

over And Just acquisition; years X this you ago. I did realized on it was ESOL.

separate. you when it's excess know terms issues pricing were But of storage inefficiencies of in I and So there it's -- guys and some part Clean Earth just now acquired it, not just there and facilities.

items. on across pricing raising know couple And the you're business. now Just of I those

So you ESOL still will. on legacy -- is Clean units business if your if there side, Earth or the a there it's the server and then discrepancy what legacy

Nick Grasberger

Yes.

I we've related largely that we addressed benefits -- we maybe think stopped, X/X I benefits We've for the guess, that those know, and target were I integration in, pricing. set achieved a issue. to directly of tracking don't

Operator

Rob from comes question Street Brown Capital. line the of of Next Lake

Rob Brown

What of how increases does just maybe percentage Just on wanted sort the the to increases sort of follow how again CE. take? deeming that into up And -- flow of to in year? price that the you're through price

Nick Grasberger

it's quite types, Well, also Yes. care. upon health industrial And price surcharges, increases the there a across contract retail, or various customer depending mix nature of the the customer. are the there and are

it's So a real mix.

way at that is that expected. budget we Earth $XX about the think look it I our the million. $XX this Clean only to is that is realization offset easiest to to about higher inflation expect year, for than original million in we price And relative

guidance So delta that kind would drives of the Clean and mention. Earth for that the you

to address we the give be to needed, have continue price next million. to year terms is our future, if should this as cost year the in contracts that into of adjust inflation, call enhancement roll full But nice -- about us to and the impact EBITDA, but certainly, those in $XX and increases margins. of the in Now GAAP them, flexibility surprises, the I'll a year

Rob Brown

expense 'XX? line, in Anshooman, Okay. interest the Great. do expect for maybe interest then what on And helpful. sort you That's expense of very

Anshooman Aga

year this for is somewhere X $XX hikes expectations million $XX we're were strikes interest expense From this the of our guidance So year. expectations prior between year. stage, in million now, this X built that rate the interest and interest to at --

the of benefits after X interest interest This reduction doesn't debt then. clarification. and expense in just reduction Sorry, any from sale rail include corresponding the -- the additional doesn't

Operator

of Next question of line the comes Chris Barrington from Howe Research.

Chris Howe

on I the up wanted business. and to dredge follow soil

had that this there You mentioned year. for are projects later

beyond second these perhaps about buckets, in increases, later as half for to increases, the Earth that. in think we Clean at the it As or even some which benefit as different price with QX? relates future other we how And that, margin recovery pricing should such look channels will along

Nick Grasberger

ahead Anshooman. Go

Anshooman Aga

Yes.

So mentioned really price increases, in was if of the year. really thinking Nick you million start the of that uncovered is half that the $XX first

the cost a of the during price So mismatch first half there's year.

us. our as been The for half going surcharge price diesel, tighter in to covering are which we big one increases contributing has And Nick of the be second was of put has fees, which factors is inflation. stop a of really for year place the mentioning, lot inflation

our high margins year. relatively dreg The that. a a soil business is, last business contribution So margin recover would That from as has perspective, come flat volume guidance from incremental very to and will in.

could into if to work mentioned. be able So we were this year, margin as upside, good Nick in some there pull

Now later the for a lot is of XXXX. year pipeline the projects, developing this into

expansion margins start how top you program in recovery rice long-term through soil the couple 'XX, our we really that's on could through digitalization in that, 'XX midterm thinking of then our growth improvements targets. to in as you our of be business, we of which points the a XX%. So business, into targets of the see continued and get margin our a efficiency margin the effort as logistics in factor And

Chris Howe

better you March a of order Got in specific here. Earth, you give perfect. to magnitude shortage where you driver mentioned Can it. the for a And the be? little current sense bit That's recruitment. If shortage we was to versus hope go Clean no of

Nick Grasberger

Yes.

onboarded, we're about the business. also first we month actual the people drivers to in short and saw reduction so drivers of good the we was March turnover -- leaving XX but So number probably both drivers in a in XX a the us leaving quarter for

ends for on net positive us. So both

onboarding to of getting that as and Additionally, to onboarding mentioned the about procedures starting drivers hold. certain the of last basically we is us cut into all our productive them we've took for during and earlier, help time on new quarter, effect half

Chris Howe

is price but short these in challenges on this getting last compensate going increases more these ongoing are back extended. to perhaps being factoring duration then point, And be seem my Okay. challenges for the over things at to the supply end. to labor, not future inflation, better, question, doesn't you much How just of of are chain,

Nick Grasberger

of I of Well, lot our think comes structure a contracts. to Yes. the down the work

course, had developed. this inflation not past, quickly the certainly Of this business as in as not it experienced magnitude of

contracts a time that written a the so accommodating were at And not was when even thought.

work avenue us So appropriate be to adjustments done the will forward. giving make through for contract a the of the going lot

Chris Howe

And then account assume somewhat price Okay. that stick likewise, that I us with have a these the to would are occurred? and for while occurring for increases challenges

Nick Grasberger

anticipating. That's what Yes. certainly we're

Operator

[Operator question comes of Instructions] D.A. Next from the line of Zane Davidson. Karimi

Zane Karimi

first speak Earth has on be today? little what announcements targets? So need you're between your off, to those to changes, Clean hit XXXX to can announced what in And if particular, more a on worked any, bit Earth, you previously expectations? and And Clean changed initial

Nick Grasberger

I EBITDA targets that discussed. of XX% referring the Yes. we've margin to assume you're

Zane Karimi

Yes and/or top line.

Nick Grasberger

Yes, yes. Yes.

the returning a think soil I get dredge will today X from and of volume be pre Anshooman key points bridge that business XX%, to mentioned of at least to where component levels. to that So are the we pandemic

points would to then will effective few become a a the we also G&A -- that that an incremental points X the to are from margin be customer the also And volume. would initiatives that more we'll reduction costs. receive improve think on but back-office leading likely underway, IT both serve to in operations of mentioned experience the X which a I lot expect help to incremental leverage I Anshooman So in from do expect

and of XX% inflation normalized are have. been for target components the adjusting gap principal So current that margins, X-point let's it, those that call the we

Zane Karimi

I what discussed you can, was lot – Okay. the there? opportunities for And headwinds, hoping near-term XXXX Earth as little the Clean know you’re seeing XXXX best a maybe of and a I to but bit we’ve talk about potential

A –Nick Grasberger

with are areas the our that we of to front-end work the capabilities our take what course, positive. Well, thesis opportunities there opportunities been when has expand experience opportunity at bought different process improve significant that investment to kind churn with X accounts I opportunities of stated we’re to those think like kind federally PFAS, ongoing we the in permitted are doing consistent the There business. permit waste. sites And customer kinds in of to negative of large that’s to

mentioned the digits, there of we opportunity we are annual basis think of opportunities in we that is we are business benefits plus, bought many that a volume many, the few ago. years So of when price. this those kind indicated course, that – And that with on mid-single consistent any an business

we believe achievable. So that’s still

Operator

Next of Hammond of the Jeff from line question KeyBanc. comes

Jeff Hammond

Sorry, on don't know rail or what though for if disk it's $XX is for gave ops I I I little late. million about you jumped you're a the if quarter even forward. trailing. go EBITDA talking know the it

Anshooman Aga

tampers by the business. during first we call, the were but The number really million give really early the going didn't as I sold in results EBITDA, But recovery strong We very Rail forward, during days. the a XXX we've of in the impacted mentioned into QX call. QX the $XX that charge referenced seen Nick the the and of parts

growth year continue did another core early help as year. that will business of we order good Our this to are this should in more base around last QX all quarter. in the business, the is buyers feel that than received at year this product this the We've they which comfortable a at looking Rail And as segment. result, million near-term looking be potential, pretty $XX we is mark. show this earnings

Jeff Hammond

a if if And guide, like on unchanged, I just nickel you don't scrap Perfect. know how -- be certainly kind any tailwind. seems but offsetting about of headwinds? it there's talk kind moving HE, just there's it seems within pieces should then of can Okay. the

Nick Grasberger

are input those producing the our a as costs parts, of Yes, you there products, costs to in Echo have number noted, of increased. the moving products some group,

than for bit which benefit prices, a we that, but you a we the the was there thought. with that original provided business tend business the Yes, comfortable quite the we as bit full So to we've quarter quarter some we're probably the speak, have to volume in some in But point higher year. of the price recovering that the due consistent well commodity overall, guidance thoughts. original in as as remained other with a is of out, our headwind second and

Jeff Hammond

just you Okay. of know you I'm just one, Great. wondering then maybe -- that kind of talking on this inflation, bought were shortage driver restructuring differently it last et of business. all in I of kind where think cetera. when the And transfer And guess, are same facilities about you you kind the given transportation evolution in some how ESOL, or I about the and

Nick Grasberger

a and to our changes number planning route made forth. we've Well, of already so

as look is that us it planning. our to you route find lot and a has although to can prompting trying in market, been addressed, in already efficiencies continue level certainly to of So a deeper imagine, this

ongoing So initiative, an that's -- say, Jeff. I'd it's

Operator

question of Stifel. comes the Michael Hoffman Next from line of

Michael Hoffman

just wanted of point get to a I clarity.

million are preventing So faster. doing structural of offset contract limitations headwind, you from that its $XX in that

that think what I heard. is I So

Nick Grasberger

increases Again, be versus through the permanent to price surcharges Yes. bag a us and In and and they work And to of temporary course, quite given yes, severe the of we're bit recur. something this if inflationary environment, the appropriate now a mixed that, or structure and whatever that's of contracts. increase I prices But taken correct. addressing think mechanisms time it's contracts. is effect, when whether that's sudden more

to But of going that. and team bit position certainly quite that to through the we in it Earth mitigate be confidence forward. So taken with a time we'll of has where this today Clean effort better our work have a pleased to get are

Michael Hoffman

businesses segment. all are as I and but being run that they're -- get appreciate underlying one, now I these And

of an this health issue, is is which some here? something issue, a issue, and care a industrial retail there's timing that's why it more So

Nick Grasberger

with stall really a It's Yes. of industrial more respect and not a health more issue to industrial. It's care an customers. Earth retail It's not retail and It's Clean legacy issue. issue.

Michael Hoffman

out something that's the it sold All And then variable right. debt? term this under to to Is you get plans out term Rail from some what and the are of versus out delever tied try get issue? fixed you then and and

Anshooman Aga

paying rail of we're we the some obviously, variable from currently, be fixed. And We -- as variable proceeds, a debt. get versus XX-XX down the we'll

further and current yield interest high a given continue are a isn't and strategy percentage for fixed. probably up, and stronger to goes replacing of but little to interest the year interest we bit out as so monitor costs delever at balance taking continue At look to higher the sheet. our our So rates the have interest we'll that stage, this rest this reduce rates mechanisms towards rates,

Michael Hoffman

want to very the My then recollection Clean soils because Earth incrementals. was was such dredge lastly, ask Nick, And margin. legacy high XX% about I Okay. margin high in

But You the the better Earth. was meant combined Clean be was than 'XX benefit X. of saw virtually because of it to

of getting to because dredge soils soils dredge. thought XX recovering. only we're was and without I Now XX% and

Nick Grasberger

We out to. looked years. Well, we're the where the few a can haven't really years develop few margins beyond next talking and just over

for what road I team. a of X think pick pretty up when can is or And XX%, the target later. reasonable map to beyond good where but so in asking few how do to years margins that's next we we'll have margin get aggressive the points discuss an the go them on we're that there

Operator

back call the remarks. like and no closing would further There turn this time, to questions Martin to for Dave at are

Dave Martin

Feel I Thank you for we and interest apologize the with contact great with speaking again, the end remarks. the to any future. in you in And appreciate issues forward me call, technical Harsco of to at free a for look Have Nick your his with prepared very day. follow-up the questions. joining and

Operator

today's Ladies Thank and you gentlemen, participating. this call. concludes conference for

a now great may disconnect. day. Have You

Enviri (NVRI) 3 May 222022 Q1 Earnings call transcript