• Harsco Corporation Reports Third Quarter 2022 Results

    Источник: Nasdaq GlobeNewswire / 01 ноя 2022 07:00:02   America/New_York

    • Third Quarter Revenues from Continuing Operations Totaled $487 Million, An Increase of 4 Percent Over Prior-Year Quarter (or 9 Percent Excluding FX Translation Impacts)

    • Q3 GAAP Operating Income from Continuing Operations of $30 Million

    • Adjusted EBITDA in Q3 Totaled $70 Million; Higher Year-on-Year and Above Company's Guidance Range Due to Clean Earth Improvement Initiatives and Resulting Performance

    • Q3 GAAP Earnings Per Share of $0.01 and Q3 Adjusted Earnings Per Share of $0.10

    • Full Year 2022 Adjusted EBITDA Guidance Range Increased to Between $216 Million and $223 Million

    CAMP HILL, Pa., Nov. 01, 2022 (GLOBE NEWSWIRE) -- Harsco Corporation (NYSE: HSC) today reported third quarter 2022 results. On a U.S. GAAP ("GAAP") basis, third quarter of 2022 diluted earnings per share from continuing operations were $0.01. Adjusted diluted earnings per share from continuing operations in the third quarter of 2022 were $0.10. These figures compare with third quarter of 2021 GAAP diluted earnings per share from continuing operations of $0.06 and adjusted diluted earnings per share from continuing operations of $0.15.

    GAAP operating income from continuing operations for the third quarter of 2022 was $30 million. Adjusted EBITDA was $70 million in the quarter, compared to the Company's previously provided guidance range of $54 million to $59 million.

    “Harsco delivered solid third quarter results, reinforcing our position as a leading provider of recycling and reuse solutions within the industrial waste market,” said Chairman and CEO Nick Grasberger. “In the Clean Earth segment, we made tremendous progress during the quarter to boost overall performance and drive margins by focusing on key initiatives. These benefits offset external challenges within Harsco Environmental and support our improved guidance.

    “Looking further to the future, the outlook for each of our businesses is promising. There is tremendous opportunity for additional improvements in CE that will further lift margins, while Harsco Environmental’s competitive position has never been stronger. HE continues to differentiate itself through best-in-class service and safety as well as innovation. Concerning the divestiture of our Rail business, we continue to manage the supply chain and inflationary impacts on a few large international contracts. Such efforts should reduce the economic risks of these contracts and facilitate the sale of the business. Overall, we’re confident that continued execution against our strategic initiatives and business growth, along with our focus on deleveraging the business and stronger cash flow, will deliver sustained value creation for our stakeholders over time.”

    Harsco Corporation—Selected Third Quarter Results

    ($ in millions, except per share amounts) Q3 2022 Q3 2021
    Revenues $487  $470 
    Operating income from continuing operations - GAAP $30  $27 
    Diluted EPS from continuing operations - GAAP $0.01  $0.06 
    Adjusted EBITDA - Non GAAP $70  $68 
    Adjusted EBITDA margin - Non GAAP  14.4%  14.4%
    Adjusted diluted EPS - Non GAAP $0.10  $0.15 

    Note: Adjusted diluted earnings per share and adjusted EBITDA details presented throughout this release are adjusted for unusual items; in addition, adjusted diluted earnings per share is adjusted for acquisition-related amortization expense.

    Consolidated Third Quarter Operating Results

    Consolidated revenues from continuing operations were $487 million, an increase of 4 percent compared with the prior-year quarter. Clean Earth realized an increase in revenues compared to the second quarter of 2021 while Environmental revenues decreased due to currency translation impacts. Foreign currency translation negatively impacted third quarter 2022 revenues by approximately $24 million (5 percent), compared with the prior-year period.

    The Company's GAAP operating income from continuing operations was $30 million for the third quarter of 2022, compared with GAAP operating income of $27 million in the same quarter of 2021. Meanwhile, adjusted EBITDA totaled $70 million in the third quarter of 2022 versus $68 million in the third quarter of the prior year. Clean Earth experienced higher adjusted EBITDA relative to the prior-year quarter, while Environmental's adjusted EBITDA was below the comparable quarter of 2021.

    Third Quarter Business Review
    Environmental

    ($ in millions) Q3 2022 Q3 2021
    Revenues $265  $270 
    Operating income - GAAP $22  $28 
    Adjusted EBITDA - Non GAAP $51  $56 
    Adjusted EBITDA margin - Non GAAP  19.1%  20.7%

    Environmental revenues totaled $265 million in the third quarter of 2022, an decrease of 2 percent compared with the prior-year quarter. This change is attributable to FX translation impacts, partially offset by higher ecoproductsTM volumes and services activity at certain sites. The segment's GAAP operating income and adjusted EBITDA totaled $22 million and $51 million, respectively, in the third quarter of 2022. These figures compare with GAAP operating income of $28 million and adjusted EBITDA of $56 million in the prior-year period. The year-on-year change in adjusted earnings reflects the above-mentioned FX impacts as well as lower commodity prices, operating cost inflation, and fewer asset sales relative to the prior-year quarter.

    Clean Earth

    ($ in millions) Q3 2022 Q3 2021
    Revenues $222  $200 
    Operating income (loss) - GAAP $17  $10 
    Adjusted EBITDA - Non GAAP $28  $21 
    Adjusted EBITDA margin - Non GAAP  12.7%  10.2%

    Clean Earth revenues totaled $222 million in the third quarter of 2022, an 11 percent increase over the prior-year quarter as a result of higher services pricing and volume growth from retail and industrial customers. The segment's GAAP operating income was $17 million and adjusted EBITDA was $28 million in the third quarter of 2022. These figures compare with $10 million of operating income and $21 million of adjusted EBITDA in the prior-year period. The year-on-year improvement in adjusted earnings resulted from price increases as well as cost reductions and operational efficiencies. These benefits were partially offset by inflationary impacts. As a result, Clean Earth's adjusted EBITDA margin increased to 12.7 percent in the third quarter of 2022 versus 10.2 percent in the comparable quarter of 2021.

    Cash Flow

    Net cash provided by operating activities was $13 million in the third quarter of 2022, compared with net cash provided by operating activities of $33 million in the prior-year period. Free cash flow (excluding Rail) was $(31) million in the third quarter of 2022, compared with $2 million in the prior-year period. The change in free cash flow compared with the prior-year quarter is attributable to working capital changes, exclusive of account receivable securitization (some of which is timing related) as well as higher net capital spending and cash interest payments.

    2022 Outlook

    The Company has increased the mid-point of its 2022 adjusted EBITDA guidance to reflect an improved outlook for Clean Earth, partially offset by lower expectations for Environmental. Key drivers compared with prior guidance include the following; (1) Clean Earth: benefits from improvement initiatives and higher margins; and (2) Environmental: negative impacts from FX translation as well as lower service and ecoproductsTM volumes, which are largely attributable to the energy-crisis in Europe and rising interest rates. Summary Outlook highlights are as follows:

    2022 Full Year Outlook(Continuing Operations)CurrentAugust Outlook
    GAAP Operating Income/(Loss)$(44) - $(51) million$(53) - $(63) million
    Adjusted EBITDA$216 - $223 million$210 - $220 million
    GAAP Diluted Earnings/(Loss) Per Share$(1.52) - $(1.62)$(1.58) - $(1.72)
    Adjusted Diluted Earnings/(Loss) Per Share$(0.02) - $0.08$0.00 - $(0.13)
    Free Cash Flow$90 - $100 million$115 - $125 million
    Net Interest Expense$70 - $71 million$68 - $70 million
    Pension Income (Non-Operating)$8 million$9 million
    Net Capital Expenditures$120 - $125 million$125 - $130 million
       
    Q4 2022 Outlook(Continuing Operations)  
    GAAP Operating Income$8 - $15 million 
    Adjusted EBITDA$47 - $54 million 
    GAAP Diluted Earnings/(Loss) Per Share$(0.10) - $(0.19) 
    Adjusted Diluted Earnings/(Loss) Per Share$(0.02) - $(0.12) 

    Conference Call

    The Company will hold a conference call today at 9:00 a.m. Eastern Time to discuss its results and respond to questions from the investment community. Those who wish to listen to the conference call webcast should visit the Investor Relations section of the Company’s website at www.harsco.com. The live call also can be accessed by dialing (833) 634-5019, or (412) 902-4237 for international callers. Please ask to join the Harsco Corporation call. Listeners are advised to dial in approximately ten minutes prior to the call. If you are unable to listen to the live call, the webcast will be archived on the Company’s website.

    Forward-Looking Statements

    The nature of the Company's business, together with the number of countries in which it operates, subject it to changing economic, competitive, regulatory and technological conditions, risks and uncertainties. In accordance with the "safe harbor" provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, the Company provides the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressed or implied herein. Forward-looking statements contained herein could include, among other things, statements about management's confidence in and strategies for performance; expectations for new and existing products, technologies and opportunities; and expectations regarding growth, sales, cash flows, and earnings. Forward-looking statements can be identified by the use of such terms as "may," "could," "expect," "anticipate," "intend," "believe," "likely," "estimate," "outlook," "plan" or other comparable terms.

    Factors that could cause actual results to differ, perhaps materially, from those implied by forward-looking statements include, but are not limited to: (1) changes in the worldwide business environment in which the Company operates, including changes in general economic conditions or changes due to COVID-19 and governmental and market reactions to COVID-19; (2) changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs; (3) changes in the performance of equity and bond markets that could affect, among other things, the valuation of the assets in the Company's pension plans and the accounting for pension assets, liabilities and expenses; (4) changes in governmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards and amounts; (5) market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; (6) the Company's inability or failure to protect its intellectual property rights from infringement in one or more of the many countries in which the Company operates; (7) failure to effectively prevent, detect or recover from breaches in the Company's cybersecurity infrastructure; (8) unforeseen business disruptions in one or more of the many countries in which the Company operates due to political instability, civil disobedience, armed hostilities, public health issues or other calamities; (9) disruptions associated with labor disputes and increased operating costs associated with union organization; (10) the seasonal nature of the Company's business; (11) the Company's ability to successfully enter into new contracts and complete new acquisitions or strategic ventures in the time-frame contemplated, or at all; (12) the Company's ability to negotiate, complete, and integrate strategic transactions; (13) failure to complete a divestiture of the Rail division, as announced on November 2, 2021 on satisfactory terms, or at all; (14) potential severe volatility in the capital or commodity markets; (15) failure to retain key management and employees; (16) the outcome of any disputes with customers, contractors and subcontractors; (17) the financial condition of the Company's customers, including the ability of customers (especially those that may be highly leveraged, have inadequate liquidity or whose business is significantly impacted by COVID-19) to maintain their credit availability; (18) implementation of environmental remediation matters; (19) risk and uncertainty associated with intangible assets; (20) the risk that the Company may be unable to implement fully and successfully the expected incremental actions at Clean Earth due to market conditions or otherwise and may fail to deliver the expected resulting benefits; and (21) other risk factors listed from time to time in the Company's SEC reports. A further discussion of these, along with other potential risk factors, can be found in Part II, Item 1A “Risk Factors,” of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2022, and Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company's ability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes no duty to update forward-looking statements except as may be required by law.

    NON-GAAP MEASURES

    Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similarly-titled measurements employed by other companies.

    Adjusted diluted earnings per share: Adjusted diluted earnings per share is a non-GAAP financial measure and consists of diluted earnings (loss) per share from continuing operations adjusted for unusual items and acquisition-related intangible asset amortization expense. It is important to note that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. The Company’s management believes Adjusted diluted earnings per share is useful to investors because it provides an overall understanding of the Company’s historical and future prospects. Exclusion of unusual items permits evaluation and comparison of results for the Company’s core business operations, and it is on this basis that management internally assesses the Company’s performance. Exclusion of acquisition-related intangible asset amortization expense, the amount of which can vary by the timing, size and nature of the Company’s acquisitions, facilitates more consistent internal comparisons of operating results over time between the Company’s newly acquired and long-held businesses, and comparisons with both acquisitive and non-acquisitive peer companies.

    Adjusted EBITDA: Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); facility fees and debt-related income (expense); and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs). The sum of the Segments’ Adjusted EBITDA and Corporate Adjusted EBITDA equals consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance.

    Free cash flow: Free cash flow is a non-GAAP financial measure and consists of net cash provided (used) by operating activities less capital expenditures and expenditures for intangible assets; and plus capital expenditures for strategic ventures, total proceeds from sales of assets and certain transaction-related / debt-refinancing expenditures. The Company's management believes that Free cash flow is meaningful to investors because management reviews Free cash flow for planning and performance evaluation purposes. It is important to note that Free cash flow does not represent the total residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements and settlements of foreign currency forward exchange contracts, are not deducted from this measure. Free cash flow excludes the former Harsco Rail Segment since the segment is reported as discontinued operations. This presentation provides a basis for comparison of ongoing operations and prospects.

    About Harsco

    Harsco Corporation is a global market leader providing environmental solutions for industrial and specialty waste streams. Based in Camp Hill, PA, the 12,000-employee company operates in more than 30 countries. Harsco’s common stock is a component of the S&P SmallCap 600 Index and the Russell 2000 Index. Additional information can be found at www.harsco.com.


    HARSCO CORPORATION
    CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
         
      Three Months Ended Nine Months Ended 
      September 30 September 30 
    (In thousands, except per share amounts)  2022   2021   2022   2021  
    Revenues from continuing operations:         
    Service revenues $442,775  $430,824  $1,300,828  $1,274,814  
    Product revenues  44,139   39,561   119,935   111,510  
    Total revenues  486,914   470,385   1,420,763   1,386,324  
    Costs and expenses from continuing operations:         
    Cost of services sold  357,194   344,050   1,072,545   1,018,885  
    Cost of products sold  35,609   31,289   100,476   89,269  
    Selling, general and administrative expenses  64,146   70,629   201,234   213,048  
    Research and development expenses  193   331   545   811  
    Goodwill impairment charge        104,580     
    Other (income) expenses, net  (351)  (2,835)  515   (7,993) 
    Total costs and expenses  456,791   443,464   1,479,895   1,314,020  
    Operating income (loss) from continuing operations  30,123   26,921   (59,132)  72,304  
    Interest income  952   544   2,289   1,668  
    Interest expense  (19,751)  (15,741)  (51,535)  (47,640) 
    Facility fees and debt-related income (expense)  (2,511)  (198)  (894)  (5,506) 
    Defined benefit pension income  2,118   3,887   6,775   11,777  
    Income (loss) from continuing operations before income taxes and equity income  10,931   15,413   (102,497)  32,603  
    Income tax benefit (expense) from continuing operations  (9,376)  (7,816)  (7,482)  (14,714) 
    Equity income (loss) of unconsolidated entities, net  (128)  (293)  (373)  (488) 
    Income (loss) from continuing operations  1,427   7,304   (110,352)  17,401  
    Discontinued operations:         
    Income (loss) from discontinued businesses  1,993   1,301   (35,225)  12,904  
    Income tax benefit (expense) from discontinued businesses  (539)  1,223   5,282   (3,832) 
    Income (loss) from discontinued operations, net of tax  1,454   2,524   (29,943)  9,072  
    Net income (loss)  2,881   9,828   (140,295)  26,473  
    Less: Net (income) loss attributable to noncontrolling interests  (802)  (2,264)  (3,056)  (5,386) 
    Net income (loss) attributable to Harsco Corporation $2,079  $7,564  $(143,351) $21,087  
    Amounts attributable to Harsco Corporation common stockholders: 
    Income (loss) from continuing operations, net of tax $625  $5,040  $(113,408) $12,015  
    Income (loss) from discontinued operations, net of tax  1,454   2,524   (29,943)  9,072  
    Net income (loss) attributable to Harsco Corporation common stockholders $2,079  $7,564  $(143,351) $21,087  
    Weighted-average shares of common stock outstanding  79,531   79,287   79,469   79,214  
    Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: 
    Continuing operations $0.01  $0.06  $(1.43) $0.15  
    Discontinued operations  0.02   0.03   (0.38)  0.11  
    Basic earnings (loss) per share attributable to Harsco Corporation common stockholders $0.03 (a)$0.10 (a)$(1.80)(a)$0.27 (a)
    Diluted weighted-average shares of common stock outstanding  79,567   80,275   79,469   80,356  
    Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: 
    Continuing operations $0.01  $0.06  $(1.43) $0.15  
    Discontinued operations  0.02   0.03   (0.38)  0.11  
    Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders $0.03  $0.09  $(1.80)(a)$0.26  

    (a) Does not total due to rounding.

      

    HARSCO CORPORATION
    CONSOLIDATED BALANCE SHEETS (Unaudited)
        


    (In thousands)
     September 30
    2022
     December 31
    2021
    ASSETS    
    Current assets:    
    Cash and cash equivalents $81,740  $82,908 
    Restricted cash  3,297   4,220 
    Trade accounts receivable, net  269,890   377,881 
    Other receivables  26,307   33,059 
    Inventories  80,714   70,493 
    Prepaid expenses  33,592   31,065 
    Current portion of assets held-for-sale  261,888   265,413 
    Other current assets  39,617   9,934 
    Total current assets  797,045   874,973 
    Property, plant and equipment, net  629,895   653,913 
    Right-of-use assets, net  104,227   101,576 
    Goodwill  744,780   883,109 
    Intangible assets, net  372,002   402,801 
    Deferred income tax assets  16,681   17,883 
    Assets held-for-sale  63,864   71,234 
    Other assets  42,901   48,419 
    Total assets $2,771,395  $3,053,908 
    LIABILITIES    
    Current liabilities:    
    Short-term borrowings $9,463  $7,748 
    Current maturities of long-term debt  16,784   10,226 
    Accounts payable  203,900   186,126 
    Accrued compensation  38,041   48,165 
    Income taxes payable  4,271   6,378 
    Current portion of operating lease liabilities  25,989   25,590 
    Current portion of liabilities of assets held-for-sale  157,231   161,999 
    Other current liabilities  136,019   155,159 
    Total current liabilities  591,698   601,391 
    Long-term debt  1,314,918   1,359,446 
    Retirement plan liabilities  49,286   93,693 
    Operating lease liabilities  77,304   74,571 
    Liabilities of assets held-for-sale  7,437   8,492 
    Environmental liabilities  26,678   28,435 
    Deferred tax liabilities  32,497   33,826 
    Other liabilities  45,442   48,284 
    Total liabilities  2,145,260   2,248,138 
    HARSCO CORPORATION STOCKHOLDERS’ EQUITY    
    Common stock  145,390   144,883 
    Additional paid-in capital  223,172   215,528 
    Accumulated other comprehensive loss  (596,764)  (560,139)
    Retained earnings  1,651,159   1,794,510 
    Treasury stock  (848,439)  (846,622)
    Total Harsco Corporation stockholders’ equity  574,518   748,160 
    Noncontrolling interests  51,617   57,610 
    Total equity  626,135   805,770 
    Total liabilities and equity $2,771,395  $3,053,908 


    HARSCO CORPORATION
    CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
      Three Months Ended
    September 30
     Nine Months Ended
    September 30
    (In thousands)  2022   2021   2022   2021 
    Cash flows from operating activities:        
    Net income (loss) $2,881  $9,828  $(140,295) $26,473 
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:
    Depreciation  31,892   33,479   97,959   98,383 
    Amortization  8,538   8,771   25,605   26,554 
    Deferred income tax (benefit) expense  (1,660)  (2,504)  (12,056)  (8,911)
    Equity (income) loss of unconsolidated entities, net  128   293   373   488 
    Dividends from unconsolidated entities        526    
    (Gain) loss on early extinguishment of debt        (2,254)  2,668 
    Goodwill impairment charge        104,580    
    Other, net  (639)  1,002   381   (1,147)
    Changes in assets and liabilities, net of acquisitions and dispositions of businesses:
    Accounts receivable  (12,613)  (9,079)  74,994   (32,563)
    Insurance receivable            
    Income tax refunds receivable, reimbursable to seller     735   7,687   735 
    Inventories  (2,904)  (11,899)  (11,339)  3,557 
    Contract assets  1,753   (14,339)  9,589   (52,205)
    Right-of-use assets  7,446   7,153   21,829   21,050 
    Accounts payable  (5,817)  25,602   13,030   12,111 
    Accrued interest payable  (6,819)  (7,703)  (7,559)  (7,840)
    Accrued compensation  325   7,397   (5,559)  12,098 
    Advances on contracts  7,639   (646)  (5,987)  (13,997)
    Operating lease liabilities  (7,403)  (7,048)  (21,498)  (20,554)
    Retirement plan liabilities, net  (6,242)  (8,842)  (27,829)  (36,700)
    Other assets and liabilities  (3,083)  1,020   8,984   16,550 
    Net cash provided by operating activities  13,422   33,220   131,161   46,750 
    Cash flows from investing activities:        
    Purchases of property, plant and equipment  (39,854)  (40,861)  (101,645)  (109,507)
    Proceeds from sales of assets  1,698   5,470   8,289   15,512 
    Expenditures for intangible assets  (47)  (155)  (147)  (287)
    Proceeds from note receivable        8,605   6,400 
    Net proceeds (payments) from settlement of foreign currency forward exchange contracts  8,572   (86)  13,571   (1,064)
    Payments for settlements of interest rate swaps  (463)     (2,586)   
    Other investing activities, net  67   48   220   181 
    Net cash used by investing activities  (30,027)  (35,584)  (73,693)  (88,765)
    Cash flows from financing activities:        
    Short-term borrowings, net  308   206   277   4,650 
    Current maturities and long-term debt:        
    Additions  54,468   41,950   159,429   507,468 
    Reductions  (45,970)  (38,870)  (198,831)  (452,351)
    Dividends paid to noncontrolling interests  (4,841)  (9)  (4,841)  (3,103)
    Sale (purchase) of noncontrolling interests        1,901    
    Stock-based compensation - Employee taxes paid  (119)  (101)  (1,817)  (3,273)
    Payment of contingent consideration     (734)  (6,915)  (734)
    Deferred financing costs           (7,828)
    Other financing activities, net           (601)
    Net cash provided (used) by financing activities  3,846   2,442   (50,797)  44,228 
    Effect of exchange rate changes on cash and cash equivalents, including restricted cash  (3,011)  (2,262)  (8,762)  (1,779)
    Net increase (decrease) in cash and cash equivalents, including restricted cash  (15,770)  (2,184)  (2,091)  434 
    Cash and cash equivalents, including restricted cash, at beginning of period  100,807   82,287   87,128   79,669 
    Cash and cash equivalents, including restricted cash, at end of period $85,037  $80,103  $85,037  $80,103 


    HARSCO CORPORATION
    REVIEW OF OPERATIONS BY SEGMENT (Unaudited)

      Three Months Ended Three Months Ended
      September 30, 2022 September 30, 2021
    (In thousands) Revenues Operating
    Income (Loss)
     Revenues Operating Income (Loss)
    Harsco Environmental $264,717 $22,117  $269,901 $27,630 
    Harsco Clean Earth  222,197  17,315   200,484  9,893 
    Corporate    (9,309)    (10,602)
    Consolidated Totals $486,914 $30,123  $470,385 $26,921 
             
      Nine Months Ended Nine Months Ended
      September 30, 2022 September 30, 2021
    (In thousands) Revenues Operating
    Income (Loss)
     Revenues Operating Income (Loss)
    Harsco Environmental $804,367 $63,931  $800,433 $83,788 
    Harsco Clean Earth  616,396  (95,650)  585,891  20,457 
    Corporate    (27,413)    (31,941)
    Consolidated Totals $1,420,763 $(59,132) $1,386,324 $72,304 


    HARSCO CORPORATION
    RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE TO DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)
     
      Three Months Ended Nine Months Ended 
      September 30 September 30 
       2022   2021   2022   2021  
    Diluted earnings (loss) per share from continuing operations as reported $0.01  $0.06  $(1.43) $0.15  
    Facility fees and debt-related expense (income) (a)  0.01      (0.01)  0.07  
    Corporate strategic costs (b)     0.02      0.04  
    Harsco Clean Earth segment goodwill impairment charge (c)        1.32     
    Harsco Environmental segment severance (d)     (0.01)     (0.01) 
    Harsco Clean Earth segment severance costs (e)  0.01      0.03     
    Harsco Clean Earth segment contingent consideration adjustments (f)  (0.01)     (0.01)    
    Taxes on above unusual items (g)        (0.04)  (0.02) 
    Adjusted diluted earnings (loss) per share, including acquisition amortization expense  0.02 (i) 0.07   (0.14)  0.22 (i)
    Acquisition amortization expense, net of tax (h)  0.08   0.08   0.23   0.24  
    Adjusted diluted earnings per share $0.10  $0.15  $0.09  $0.47 (i)

    (a) Costs incurred at Corporate to amend the Company's Senior Secured Credit Facilities, partially offset by income recognized related to a gain on the repurchase of $25.0 million of Senior Notes, (Q3 2022 of $1.1 million pre-tax expense; nine months 2022 $0.5 million pre-tax income) and costs at Corporate associated with amending the Company's existing Senior Secured Credit Facilities to establish a New Term Loan the proceeds of which were used to repay in full the outstanding Term Loan A and Term Loan B, to extend the maturity date of the Revolving Credit Facility and to increase certain levels set forth in the total net leverage ratio covenant (Q3 2021 $0.2 million pre-tax; nine months 2021 $5.5 million pre-tax)
    (b) Certain strategic costs incurred at Corporate associated with supporting and executing the Company's long-term strategies. The nine months ended 2022 included the relocation of the Company's headquarters (Q3 2022 $0.3 million pre-tax; nine months 2022 $0.1 million pre-tax) and the nine months ended 2021 included the divestiture of the Harsco Rail segment (Q3 2021 $1.5 million pre-tax; nine months 2021 $3.2 million pre-tax).
    (c) Non-cash goodwill impairment charge in the Harsco Clean Earth segment (nine months 2022 $104.6 million pre-tax).
    (d) Adjustment to prior year severance and related costs incurred in the Harsco Environmental segment (Q3 2021 and nine months 2021 $0.9 million pre-tax).
    (e) Severance and related costs incurred in the Harsco Clean Earth segment (Q3 2022 $1.1 million pre-tax; nine months 2022 $2.5 million pre-tax).
    (f) Adjustment to contingent consideration related to the acquisition of the Harsco Clean Earth segment (Q3 2022 and nine months 2022 $0.8 million pre-tax income).
    (g) Unusual items are tax-effected at the global effective tax rate, before discrete items, in effect at the time the unusual item is recorded, except for unusual items from countries where no tax benefit can be realized, in which case a zero percent tax rate is used.
    (h) Acquisition amortization expense was $7.7 million pre-tax and $23.4 million pre-tax for Q3 2022 and the nine months 2022, respectively, and after-tax was $6.0 million and $18.4 million for Q3 2022 and the nine months 2022, respectively. Acquisition amortization expense was $8.0 million pre-tax and $24.3 million pre-tax for Q3 2021 and the nine months 2021, respectively, and after-tax was $6.4 million and $19.4 million for Q3 2021 and the nine months 2021, respectively.
    (i) Does not total due to rounding.

       

    HARSCO CORPORATION
    RECONCILIATION OF PROJECTED ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE TO DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS (a)
    (Unaudited)

     
      Projected Three Months
    Ending December 31
     Projected Twelve Months
    Ending December 31
     
       2022   2022  
      Low High Low High 
    Diluted earnings (loss) per share from continuing operations $(0.19) $(0.10) $(1.62) $(1.52) 
    Harsco Clean Earth segment goodwill impairment charge        1.32   1.32  
    Harsco Clean Earth segment severance costs        0.04   0.04  
    Harsco Clean Earth segment contingent consideration adjustments        (0.01)  (0.01) 
    Facility fees and debt-related expense (income)        (0.01)  (0.01) 
    Taxes on above unusual items        (0.04)  (0.04) 
    Adjusted diluted earnings (loss) per share, including acquisition amortization expense  (0.19)  (0.10)  (0.32)  (0.22) 
    Estimated acquisition amortization expense, net of tax  0.08   0.08   0.30   0.30  
    Adjusted diluted earnings (loss) per share $(0.12)(b)$(0.02) $(0.02) $0.08  

    (a) Excludes Harsco Rail Segment.
    (b) Does not total due to rounding.

    HARSCO CORPORATION
    RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited)

    (In thousands) Harsco
    Environmental
     Harsco Clean Earth Corporate Consolidated Totals
             
    Three Months Ended September 30, 2022:      
    Operating income (loss) as reported $22,117  $17,315  $(9,309) $30,123 
    Corporate strategic costs        346   346 
    Harsco Clean Earth segment severance costs     1,092      1,092 
    Harsco Clean Earth segment contingent consideration adjustments     (827)     (827)
    Operating income (loss) excluding unusual items  22,117   17,580   (8,963)  30,734 
    Depreciation  26,772   4,576   544   31,892 
    Amortization  1,619   6,071      7,690 
    Adjusted EBITDA $50,508  $28,227  $(8,419) $70,316 
    Revenues as reported $264,717  $222,197    $486,914 
    Adjusted EBITDA margin (%)  19.1%  12.7%    14.4%
             
    Three Months Ended September 30, 2021:      
    Operating income (loss) as reported $27,630  $9,893  $(10,602) $26,921 
    Corporate strategic costs        1,489   1,489 
    Harsco Environmental Segment severance costs  (900)        (900)
    Operating income (loss) excluding unusual items  26,730   9,893   (9,113)  27,510 
    Depreciation  27,179   4,576   491   32,246 
    Amortization  1,997   6,033      8,030 
    Adjusted EBITDA $55,906  $20,502  $(8,622) $67,786 
    Revenues as reported $269,901  $200,484    $470,385 
    Adjusted EBITDA margin (%)  20.7%  10.2%    14.4%


    HARSCO CORPORATION
    RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited)

    (In thousands) Harsco
    Environmental
     Harsco Clean Earth Corporate Consolidated Totals
    Nine Months Ended September 30, 2022:        
    Operating income (loss) as reported $63,931  $(95,650) $(27,413) $(59,132)
    Corporate strategic costs        128   128 
    Harsco Clean Earth segment goodwill impairment charge     104,580      104,580 
    Harsco Clean Earth segment severance costs     2,540      2,540 
    Harsco Clean Earth segment contingent consideration adjustment     (827)     (827)
    Operating income (loss) excluding unusual items  63,931   10,643   (27,285)  47,289 
    Depreciation  82,311   14,213   1,435   97,959 
    Amortization  5,161   18,277      23,438 
    Adjusted EBITDA  151,403   43,133   (25,850)  168,686 
    Revenues as reported $804,367  $616,396    $1,420,763 
    Adjusted EBITDA margin (%)  18.8%  7.0%    11.9%
             
    Nine Months Ended September 30, 2021:      
    Operating income (loss) as reported $83,788  $20,457  $(31,941) $72,304 
    Corporate strategic costs        3,170   3,170 
    Harsco Environmental segment severance costs  (900)        (900)
    Operating income (loss) excluding unusual items  82,888   20,457   (28,771)  74,574 
    Depreciation  78,446   14,818   1,468   94,732 
    Amortization  6,080   18,179      24,259 
    Adjusted EBITDA  167,414   53,454   (27,303)  193,565 
    Revenues as reported $800,433  $585,891    $1,386,324 
    Adjusted EBITDA margin (%)  20.9%  9.1%    14.0%
             


    HARSCO CORPORATION
    RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA TO CONSOLIDATED INCOME (LOSS) FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)

      
      Three Months Ended September 30
    (In thousands)  2022   2021 
    Consolidated income (loss) from continuing operations $1,427  $7,304 
         
    Add back (deduct):    
    Equity in (income) loss of unconsolidated entities, net  128   293 
    Income tax (benefit) expense  9,376   7,816 
    Defined benefit pension income  (2,118)  (3,887)
    Facility fees and debt-related expense (income)  2,511   198 
    Interest expense  19,751   15,741 
    Interest income  (952)  (544)
    Depreciation  31,892   32,246 
    Amortization  7,690   8,030 
    Corporate strategic costs  346   1,489 
    Harsco Environmental segment severance costs     (900)
    Harsco Clean Earth segment severance costs  1,092    
    Clean Earth segment contingent consideration adjustment  (827)   
    Consolidated Adjusted EBITDA $70,316  $67,786 


    HARSCO CORPORATION
    RECONCILIATION OF ADJUSTED EBITDA TO CONSOLIDATED INCOME (LOSS) FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)

      
      Nine Months Ended
    September 30
    (In thousands)  2022   2021 
    Consolidated income (loss) from continuing operations $(110,352) $17,401 
         
    Add back (deduct):    
    Equity in (income) loss of unconsolidated entities, net  373   488 
    Income tax (benefit) expense  7,482   14,714 
    Defined benefit pension income  (6,775)  (11,777)
    Facility fees and debt-related expense (income)  894   5,506 
    Interest expense  51,535   47,640 
    Interest income  (2,289)  (1,668)
    Depreciation  97,959   94,732 
    Amortization  23,438   24,259 
    Corporate strategic costs  128   3,170 
    Harsco Environmental segment severance costs     (900)
    Harsco Clean Earth segment goodwill impairment charge  104,580    
    Harsco Clean Earth segment severance costs  2,540    
    Harsco Clean Earth segment contingent consideration adjustments  (827)   
    Adjusted EBITDA $168,686  $193,565 


    HARSCO CORPORATION
    RECONCILIATION OF PROJECTED CONSOLIDATED ADJUSTED EBITDA TO PROJECTED CONSOLIDATED INCOME FROM CONTINUING OPERATIONS (a)
    (Unaudited)
     
      Projected Three Months Ending
    December 31
     Projected Twelve Months Ending
    December 31
     
       2022   2022  
    (In millions) Low High Low High 
    Consolidated loss from continuing operations  (13)  (5)  (124)  (116) 
              
    Add back (deduct):         
    Income tax (income) expense        8   7  
    Facility fees and debt-related (income) expense  1   1   2   2  
    Net interest  22   21   71   71  
    Defined benefit pension income  (2)  (2)  (8)  (8) 
    Depreciation and amortization  39   39   161   161  
              
    Unusual items:         
    Harsco Clean Earth goodwill impairment        105   105  
    Harsco Clean Earth Segment severance costs        3   3  
    Harsco Clean Earth segment contingent consideration adjustment        (1)  (1) 
    Consolidated Adjusted EBITDA $47  $54  $216 (b)$223 (b)

    (a) Excludes Harsco Rail Segment
    (b) Does not total due to rounding.

    HARSCO CORPORATION
    RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited)
      Three Months Ended Nine Months Ended
      September 30 September 30
    (In thousands)  2022   2021   2022   2021 
    Net cash provided by operating activities $13,422  $33,220   131,161  $46,750 
    Less capital expenditures  (39,854)  (40,861)  (101,645)  (109,507)
    Less expenditures for intangible assets  (47)  (155)  (147)  (287)
    Plus capital expenditures for strategic ventures (a)  920   1,185   1,428   2,983 
    Plus total proceeds from sales of assets (b)  1,698   5,470   8,289   15,512 
    Plus transaction-related expenditures (c)  758   784   1,854   18,788 
    Harsco Rail free cash flow deficit/(benefit)  (8,161)  2,089   30,827   31,837 
    Free cash flow $(31,264) $1,732  $71,767  $6,076 

    (a) Capital expenditures for strategic ventures represent the partner’s share of capital expenditures in certain ventures consolidated in the Company’s condensed consolidated financial statements.
    (b) Asset sales are a normal part of the business model, primarily for the Harsco Environmental segment.
    (c) Expenditures directly related to the Company's acquisition and divestiture transactions and costs at Corporate associated with certain debt refinancing transactions.

    HARSCO CORPORATION
    RECONCILIATION OF PROJECTED FREE CASH FLOW TO PROJECTED NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) (a)
      Projected
    Twelve Months Ending
    December 31
       2022 
    (In millions) Low High
    Net cash provided by operating activities $206  $221 
    Less net capital / intangible asset expenditures  (120)  (125)
    Plus capital expenditures for strategic ventures  2   2 
    Plus transaction-related expenditures  2   2 
    Free cash flow  90   100 

    (a) Excludes former Harsco Rail Segment

    Investor Contact
    David Martin
    717.612.5628
    damartin@harsco.com
    Media Contact
    Jay Cooney
    717.730.3683
    jcooney@harsco.com

     


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