Enviri Corporation (NVRI), a maker of environmental solutions for specialty waste streams, recorded an out-of-period adjustment during the three months ended March 31, 2025 that more than doubled the company’s first quarter loss.

The error increased the quarter’s loss from $5.3 million to $11 million, or 107.5%

Management deemed the error immaterial.

Notably, Enviri provided no explanation for how the error occurred— or over how many periods it occurred— other than to say it made a mistake in how it calculates its income tax provision.

The company does not plan to correct inaccurate previously filed financial statements.

The disclosure comes at the same time Enviri revealed a tax dispute in Brazil in which the company received an assessment alleging $1.8 million in unpaid service taxes between 2015 to 2020.

Separately, Enviri signaled in February it may not be as profitable as it previously thought in 2025 based on amendments to the company’s borrowing agreement.

Specifically, Enviri’s lender offered leniency after the company revealed:

“ …its forward-looking projections indicated that it may not meet the minimum level required by the interest coverage ratio.”

Subsequently, Enviri’s total Net Debt to Consolidated Adjusted EBITDA ratio covenant was substantially increased to 5.00x for the quarters ended June 30, 2025 and September 30, 2025.

The interest coverage ratio was set at 2.75x for the quarter ended December 31, 2024 and 2.50x for each quarter after.

With an Enterprise Value (EV) of approximately $2 billion, Enviri is priced as if it will grow annual sales to more than $5.8 billion, up from an estimated $2.38 billion in 2026. To justify its current share price of $6.96 our Reverse DCF— which quantifies investor expectations embedded in the current share price— indicates Enviri must:

—Grow sales 11.4% annually between 2028-2035, faster than the company’s estimated 2026 and 2027 sales growth of 3.7% and 3.1%, respectively, and three-year average of 8.4%
—Increase NOPAT margin to 6.25%, versus our 2024 estimate of (0.65%) and three-year average estimate of 2.9%
—Increase Invested Capital (IC) Turns to 1.2, up from our three-year average estimate of 1.04

Notably, the current share price also implies Enviri increases Return on Invested Capital (ROIC) to 7.5% from our 2024 estimate of 2.8%: