Harsco Corporation (NYSE: HSC) today reported fourth quarter
2022 results. On a U.S. GAAP ("GAAP") basis, fourth quarter of 2022
diluted loss per share from continuing operations was $0.30, after
unusual items including restructuring costs and an intangible asset
impairment within Harsco Environmental. Adjusted diluted earnings
per share from continuing operations in the fourth quarter of 2022
were $0.01. These figures compare with fourth quarter of 2021 GAAP
diluted earnings per share from continuing operations of $0.13 and
adjusted diluted earnings per share from continuing operations of
$0.22.
GAAP operating income from continuing operations
for the fourth quarter of 2022 was $2 million. Adjusted EBITDA was
$61 million in the quarter, compared to the Company's previously
provided guidance range of $47 million to $54 million.
“Harsco delivered strong quarterly operating
performance to finish 2022. We exited the year with positive
momentum, driven in large part by the realization of cost
efficiencies and commercial pricing initiatives, while benefiting
from stabilizing market conditions," said Harsco Chairman and CEO
Nick Grasberger. “In particular, Clean Earth benefited from the
continued implementation of initiatives that drove lower operating
costs as well as incremental demand from infrastructure-related
markets. Harsco Environmental results were aided by lower costs
relative to expectations. I would like to thank our employees for
their efforts through 2022, which began with unprecedented
pressures related to inflation and the Russia-Ukraine conflict. Our
resilience, adaptability through change and unwavering commitment
to our customers enabled us to deliver against our objectives in
the second half of the year.
“Looking forward, our business momentum is
expected to continue. We anticipate a meaningful increase in
operating results in 2023, with Clean Earth leading the way via
pricing and operational efficiencies. In Harsco Environmental,
improvement initiatives and price will also support its results
during the year. Key to our strategy is maintaining capital
discipline, enabling Harsco to strengthen its free cash flow and
leverage position in the future. The sale of our Rail business this
year will further help reduce our leverage. We are excited about
the opportunities ahead and believe that building on our successes
and delivering against our priorities will position Harsco to
create shareholder value in 2023 and beyond.”
Harsco Corporation—Selected Fourth
Quarter Results
($ in millions, except per share amounts) |
|
Q4 2022 |
|
Q4 2021 |
Revenues |
|
$ |
468 |
|
|
$ |
462 |
|
Operating
income from continuing operations - GAAP |
|
$ |
2 |
|
|
$ |
16 |
|
Diluted
EPS from continuing operations - GAAP |
|
$ |
(0.30 |
) |
|
$ |
0.13 |
|
Adjusted
EBITDA - Non GAAP |
|
$ |
61 |
|
|
$ |
58 |
|
Adjusted
EBITDA margin - Non GAAP |
|
|
12.9 |
% |
|
|
12.6 |
% |
Adjusted diluted EPS - Non GAAP |
|
$ |
0.01 |
|
|
$ |
0.22 |
|
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 Fourth Quarter Operating
Results
Consolidated revenues from continuing operations
were $468 million, an increase of 1 percent compared with the
prior-year quarter. Clean Earth realized an increase in revenues
compared to the fourth quarter of 2021, while Harsco Environmental
revenues decreased due to currency translation impacts. Foreign
currency translation negatively impacted fourth quarter 2022
revenues by approximately $19 million (4 percent), compared with
the prior-year period.
The Company's GAAP operating income from
continuing operations was $2 million for the fourth quarter of
2022, compared with GAAP operating income of $16 million in the
same quarter of 2021. Meanwhile, adjusted EBITDA totaled $61
million in the fourth quarter of 2022 versus $58 million in the
fourth quarter of the prior year. Clean Earth experienced higher
adjusted EBITDA relative to the prior-year quarter, while Harsco
Environmental's adjusted EBITDA as anticipated was below the
comparable quarter of 2021.
Harsco Corporation—Selected 2022 Results
($ in millions, except per share amounts) |
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
1,889 |
|
|
$ |
1,848 |
|
Operating
income (loss) from continuing operations - GAAP |
|
$ |
(57 |
) |
|
$ |
88 |
|
Diluted
EPS from continuing operations - GAAP |
|
$ |
(1.73 |
) |
|
$ |
0.28 |
|
Adjusted
EBITDA - excluding unusual items |
|
$ |
229 |
|
|
$ |
252 |
|
Adjusted
EBITDA margin - excluding unusual items |
|
|
12.1 |
% |
|
|
13.6 |
% |
Adjusted diluted EPS from continuing operations - excluding unusual
items |
|
$ |
0.10 |
|
|
$ |
0.69 |
|
Note: Adjusted earnings per share and adjusted
EBITDA details presented throughout this release are adjusted for
unusual items; in addition, adjusted earnings per share details are
adjusted for acquisition-related amortization expense.
Consolidated Full Year 2022 Operating
Results
Consolidated revenues from continuing operations
were $1.89 billion in 2022, compared to $1.85 billion in 2021.
Revenues for Clean Earth increased mainly due to higher pricing for
its services, while Harsco Environmental revenues decreased as
currency translation impacts were only partially offset by higher
pricing. Foreign currency translation negatively impacted 2022
revenues by approximately $70 million compared with the prior
year.
The GAAP operating loss from continuing
operations was $57 million in 2022, while GAAP operating income
from continuing operations in 2021 was $88 million. Adjusted EBITDA
was $229 million and $252 million for these years, respectively,
with the change in adjusted results reflecting the above-mentioned
impact of FX translation as well as the Russia-Ukraine conflict
impact on steel volumes particularly in Europe and inflation, among
other factors. Inflationary pressures were most significant in
Clean Earth during the first-half of 2022, subsequent to which
broad-based price increases as well as cost and operational
initiatives were implemented. The success of these actions led to a
significant improvement in Harsco's financial performance in the
second-half of the 2022.
On a GAAP basis, diluted loss per share from
continuing operations in 2022 was $1.73, and this figure compares
with diluted earnings per share in 2021 of $0.28. These figures
include various unusual items in each year. Adjusted diluted
earnings per share from continuing operations were $0.10 in 2022,
compared with $0.69 in 2021.
Fourth Quarter Business ReviewHarsco
Environmental
($ in millions) |
|
Q4 2022 |
|
Q4 2021 |
Revenues |
|
$ |
257 |
|
|
$ |
268 |
|
Operating
income - GAAP |
|
$ |
(4 |
) |
|
$ |
20 |
|
Adjusted
EBITDA - Non GAAP |
|
$ |
43 |
|
|
$ |
49 |
|
Adjusted EBITDA margin - Non GAAP |
|
|
16.7 |
% |
|
|
18.3 |
% |
Harsco Environmental revenues totaled $257
million in the fourth quarter of 2022, a decrease of 4 percent
compared with the prior-year quarter. This change is attributable
to FX translation impacts, partially offset by higher services
activity at certain sites. The segment's GAAP operating loss and
adjusted EBITDA totaled $4 million and $43 million, respectively,
in the fourth quarter of 2022. These figures compare with GAAP
operating income of $20 million and adjusted EBITDA of $49 million
in the prior-year period. The year-on-year change in adjusted
earnings reflects the above-mentioned items as well as lower
commodity prices and the recovery of Brazil sales taxes in the
prior-year quarter which were not repeated in 2022.
Clean Earth
($ in millions) |
|
Q4 2022 |
|
Q4 2021 |
Revenues |
|
$ |
211 |
|
|
$ |
194 |
|
Operating income (loss) - GAAP |
|
$ |
14 |
|
|
$ |
5 |
|
Adjusted EBITDA - Non GAAP |
|
$ |
25 |
|
|
$ |
16 |
|
Adjusted EBITDA margin - Non GAAP |
|
|
11.6 |
% |
|
|
8.4 |
% |
Clean Earth revenues totaled $211 million in the
fourth quarter of 2022, a 9 percent increase over the prior-year
quarter as a result of higher services pricing. The segment's GAAP
operating income was $14 million and adjusted EBITDA was $25
million in the fourth quarter of 2022. These figures compare with
$5 million of operating income and $16 million of adjusted EBITDA
in the prior-year period. The year-on-year improvement in adjusted
earnings reflects higher prices as well as cost reduction and
efficiency initiatives, partially offset by inflationary pressures
on certain expenditures such as transportation, labor and disposal.
As a result, Clean Earth's adjusted EBITDA margin increased to 11.6
percent in the fourth quarter of 2022 versus 8.4 percent in the
comparable quarter of 2021.
Cash Flow
Net cash provided by operating activities was
$19 million in the fourth quarter of 2022, compared with net cash
provided by operating activities of $25 million in the prior-year
period. Free cash flow (excluding Rail) was $3 million in the
fourth quarter of 2022, compared with $(8) million in the
prior-year period. The change in free cash flow compared with the
prior-year quarter is mainly attributable to a decrease in net
capital spending.
For the full-year 2022, net cash provided by
operating activities totaled $151 million, compared with net cash
provided by operating activities of $72 million in 2021. Free cash
flow (excluding Rail) was $75 million in 2022, compared with $(2)
million in the prior-year. The change in full-year free cash flow
can be mainly attributed to the Company's accounts receivable
securitization program (net of other working capital changes) and
lower net capital spending, partially offset by lower cash
operating earnings and higher cash interest payments.
2023 Outlook
The Company's 2023 guidance anticipates that it
will realize a meaningful improvement in financial performance
relative to 2022, with the better financial results driven by
various price and cost reduction initiatives across the Company.
Clean Earth is expected to drive the year-on-year performance
growth, and the Company's outlook contemplates that economic
conditions will remain stable and that certain business challenges
such as labor and disposal inflation will persist. Summary business
segment and consolidated highlights are as follows:
Harsco Environmental adjusted
EBITDA is projected to be modestly above 2022 results at the
mid-point of guidance. For the year, higher services pricing,
restructuring benefits, site improvement initiatives and new
contracts are expected to be partially offset by FX translation
impacts, lower commodity prices and a less favorable services
mix.
Clean Earth adjusted EBITDA is
expected to significantly increase versus 2022, as a result of
higher services pricing as well as cost reduction and operational
improvement actions, offsetting the impacts of continued
labor-market and supply-chain (disposal) tightness.
Lastly, adjusted Corporate
spending is anticipated to be higher relative to the prior year due
to the normalization of certain expenditures, including travel and
higher planned incentive compensation.
2023 Full Year
Outlook(Continuing Operations) |
|
GAAP Operating Income/(Loss) |
$74 - $94 million |
Adjusted EBITDA |
$240 - $260 million |
GAAP Diluted Earnings/(Loss) Per Share |
$(0.50) - $(0.80) |
Adjusted Diluted Earnings/(Loss) Per Share |
$(0.23) - $(0.52) |
Free Cash Flow |
$20 - $40 million |
Net Interest Expense |
$91 - $95 million |
Account Receivable Securitization Fees |
$9 - $10 million |
Pension Expense (Non-Operating) |
$20 - $22 million |
Tax Expense, Excluding Any Unusual Items |
$8 - $11 million |
Net Capital Expenditures |
$125 - $135 million |
|
|
Q1 2023 Outlook(Continuing
Operations) |
|
GAAP Operating Income |
$5 - $10 million |
Adjusted EBITDA |
$45 - $50 million |
GAAP Diluted Earnings/(Loss) Per Share |
$(0.30) - $(0.37) |
Adjusted Diluted Earnings/(Loss) Per Share |
$(0.23) - $(0.30) |
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 health
conditions; (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 has been 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 September 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 MEASURESMeasurements 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 Philadelphia, 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
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
December 31 |
|
December 31 |
|
(In thousands, except per share amounts) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenues from continuing operations: |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
468,302 |
|
|
$ |
462,073 |
|
|
$ |
1,889,065 |
|
|
$ |
1,848,399 |
|
|
Costs and expenses
from continuing operations: |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
380,314 |
|
|
|
382,402 |
|
|
|
1,553,335 |
|
|
|
1,490,556 |
|
|
Selling, general and administrative expenses |
|
|
66,832 |
|
|
|
59,184 |
|
|
|
268,066 |
|
|
|
272,233 |
|
|
Research and development expenses |
|
|
145 |
|
|
|
145 |
|
|
|
690 |
|
|
|
956 |
|
|
Goodwill and other intangible asset impairment charges |
|
|
15,000 |
|
|
|
— |
|
|
|
119,580 |
|
|
|
— |
|
|
Other (income) expenses, net |
|
|
4,222 |
|
|
|
4,270 |
|
|
|
4,737 |
|
|
|
(3,722 |
) |
|
Total costs and expenses |
|
|
466,513 |
|
|
|
446,001 |
|
|
|
1,946,408 |
|
|
|
1,760,023 |
|
|
Operating income (loss) from continuing
operations |
|
|
1,789 |
|
|
|
16,072 |
|
|
|
(57,343 |
) |
|
|
88,376 |
|
|
Interest income |
|
|
1,270 |
|
|
|
563 |
|
|
|
3,559 |
|
|
|
2,231 |
|
|
Interest expense |
|
|
(23,621 |
) |
|
|
(15,595 |
) |
|
|
(75,156 |
) |
|
|
(63,235 |
) |
|
Facility fees and debt-related
income (expense) |
|
|
(2,062 |
) |
|
|
— |
|
|
|
(2,956 |
) |
|
|
(5,506 |
) |
|
Defined benefit pension
income |
|
|
2,163 |
|
|
|
3,862 |
|
|
|
8,938 |
|
|
|
15,640 |
|
|
Income (loss) from continuing operations before income
taxes and equity income |
|
|
(20,461 |
) |
|
|
4,902 |
|
|
|
(122,958 |
) |
|
|
37,506 |
|
|
Income tax benefit (expense)
from continuing operations |
|
|
(2,899 |
) |
|
|
5,625 |
|
|
|
(10,381 |
) |
|
|
(9,089 |
) |
|
Equity income (loss) of
unconsolidated entities, net |
|
|
195 |
|
|
|
186 |
|
|
|
(178 |
) |
|
|
(302 |
) |
|
Income (loss) from continuing operations |
|
|
(23,165 |
) |
|
|
10,713 |
|
|
|
(133,517 |
) |
|
|
28,115 |
|
|
Discontinued
operations: |
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued businesses |
|
|
(15,076 |
) |
|
|
(38,766 |
) |
|
|
(50,301 |
) |
|
|
(25,863 |
) |
|
Income tax benefit (expense) from discontinued businesses |
|
|
2,105 |
|
|
|
4,309 |
|
|
|
7,387 |
|
|
|
477 |
|
|
Income (loss) from discontinued operations, net of
tax |
|
|
(12,971 |
) |
|
|
(34,457 |
) |
|
|
(42,914 |
) |
|
|
(25,386 |
) |
|
Net income
(loss) |
|
|
(36,136 |
) |
|
|
(23,744 |
) |
|
|
(176,431 |
) |
|
|
2,729 |
|
|
Less: Net (income) loss attributable to noncontrolling
interests |
|
|
(582 |
) |
|
|
(591 |
) |
|
|
(3,638 |
) |
|
|
(5,978 |
) |
|
Net income (loss)
attributable to Harsco Corporation |
|
$ |
(36,718 |
) |
|
$ |
(24,335 |
) |
|
$ |
(180,069 |
) |
|
$ |
(3,249 |
) |
|
Amounts attributable to Harsco Corporation common
stockholders: |
|
Income (loss) from continuing operations, net of tax |
|
$ |
(23,747 |
) |
|
$ |
10,122 |
|
|
$ |
(137,155 |
) |
|
$ |
22,137 |
|
|
Income (loss) from discontinued operations, net of tax |
|
|
(12,971 |
) |
|
|
(34,457 |
) |
|
|
(42,914 |
) |
|
|
(25,386 |
) |
|
Net income (loss) attributable to Harsco Corporation common
stockholders |
|
$ |
(36,718 |
) |
|
$ |
(24,335 |
) |
|
$ |
(180,069 |
) |
|
$ |
(3,249 |
) |
|
Weighted-average shares of
common stock outstanding |
|
|
79,564 |
|
|
|
79,294 |
|
|
|
79,493 |
|
|
|
79,234 |
|
|
Basic
earnings (loss) per common share attributable to Harsco Corporation
common stockholders: |
|
Continuing operations |
|
$ |
(0.30 |
) |
|
$ |
0.13 |
|
|
$ |
(1.73 |
) |
|
$ |
0.28 |
|
|
Discontinued operations |
|
|
(0.16 |
) |
|
|
(0.43 |
) |
|
|
(0.54 |
) |
|
|
(0.32 |
) |
|
Basic earnings (loss) per share attributable to Harsco
Corporation common stockholders |
|
$ |
(0.46 |
) |
(a) |
$ |
(0.31 |
) |
(a) |
$ |
(2.27 |
) |
|
$ |
(0.04 |
) |
|
Diluted weighted-average
shares of common stock outstanding |
|
|
79,564 |
|
|
|
80,093 |
|
|
|
79,493 |
|
|
|
80,289 |
|
|
Diluted
earnings (loss) per common share attributable to Harsco Corporation
common stockholders: |
|
Continuing operations |
|
$ |
(0.30 |
) |
|
$ |
0.13 |
|
|
$ |
(1.73 |
) |
|
$ |
0.28 |
|
|
Discontinued operations |
|
|
(0.16 |
) |
|
|
(0.43 |
) |
|
|
(0.54 |
) |
|
|
(0.32 |
) |
|
Diluted earnings (loss) per share attributable to Harsco
Corporation common stockholders |
|
$ |
(0.46 |
) |
|
$ |
(0.30 |
) |
|
$ |
(2.27 |
) |
|
$ |
(0.04 |
) |
|
(a) Does not total due to rounding.
|
|
|
|
|
HARSCO
CORPORATIONCONSOLIDATED BALANCE
SHEETS |
|
|
|
|
(In thousands) |
|
December 312022 |
|
December 312021 |
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
81,332 |
|
|
$ |
82,908 |
|
Restricted cash |
|
|
3,762 |
|
|
|
4,220 |
|
Trade accounts receivable, net |
|
|
264,428 |
|
|
|
377,881 |
|
Other receivables |
|
|
25,379 |
|
|
|
33,059 |
|
Inventories |
|
|
81,375 |
|
|
|
70,493 |
|
Prepaid expenses |
|
|
30,583 |
|
|
|
31,065 |
|
Current portion of assets held-for-sale |
|
|
266,335 |
|
|
|
265,413 |
|
Other current assets |
|
|
14,541 |
|
|
|
9,934 |
|
Total current assets |
|
|
767,735 |
|
|
|
874,973 |
|
Property, plant and equipment,
net |
|
|
656,875 |
|
|
|
653,913 |
|
Right-of-use assets, net |
|
|
101,253 |
|
|
|
101,576 |
|
Goodwill |
|
|
759,253 |
|
|
|
883,109 |
|
Intangible assets, net |
|
|
352,160 |
|
|
|
402,801 |
|
Deferred income tax
assets |
|
|
17,489 |
|
|
|
17,883 |
|
Assets held-for-sale |
|
|
70,105 |
|
|
|
71,234 |
|
Other assets |
|
|
65,984 |
|
|
|
48,419 |
|
Total assets |
|
$ |
2,790,854 |
|
|
$ |
3,053,908 |
|
LIABILITIES |
|
|
|
|
Current
liabilities: |
|
|
|
|
Short-term borrowings |
|
$ |
7,751 |
|
|
$ |
7,748 |
|
Current maturities of long-term debt |
|
|
11,994 |
|
|
|
10,226 |
|
Accounts payable |
|
|
205,577 |
|
|
|
186,126 |
|
Accrued compensation |
|
|
43,595 |
|
|
|
48,165 |
|
Income taxes payable |
|
|
3,640 |
|
|
|
6,378 |
|
Current portion of operating lease liabilities |
|
|
25,521 |
|
|
|
25,590 |
|
Current portion of liabilities of assets held-for-sale |
|
|
159,004 |
|
|
|
161,999 |
|
Other current liabilities |
|
|
140,199 |
|
|
|
155,159 |
|
Total current liabilities |
|
|
597,281 |
|
|
|
601,391 |
|
Long-term debt |
|
|
1,336,995 |
|
|
|
1,359,446 |
|
Retirement plan
liabilities |
|
|
46,601 |
|
|
|
93,693 |
|
Operating lease
liabilities |
|
|
75,246 |
|
|
|
74,571 |
|
Liabilities of assets
held-for-sale |
|
|
9,463 |
|
|
|
8,492 |
|
Environmental liabilities |
|
|
26,880 |
|
|
|
28,435 |
|
Deferred tax liabilities |
|
|
30,069 |
|
|
|
33,826 |
|
Other liabilities |
|
|
45,277 |
|
|
|
48,284 |
|
Total liabilities |
|
|
2,167,812 |
|
|
|
2,248,138 |
|
HARSCO CORPORATION
STOCKHOLDERS’ EQUITY |
|
|
|
|
Common stock |
|
|
145,448 |
|
|
|
144,883 |
|
Additional paid-in capital |
|
|
225,759 |
|
|
|
215,528 |
|
Accumulated other comprehensive loss |
|
|
(567,636 |
) |
|
|
(560,139 |
) |
Retained earnings |
|
|
1,614,441 |
|
|
|
1,794,510 |
|
Treasury stock |
|
|
(848,570 |
) |
|
|
(846,622 |
) |
Total Harsco Corporation stockholders’ equity |
|
|
569,442 |
|
|
|
748,160 |
|
Noncontrolling interests |
|
|
53,600 |
|
|
|
57,610 |
|
Total equity |
|
|
623,042 |
|
|
|
805,770 |
|
Total liabilities and equity |
|
$ |
2,790,854 |
|
|
$ |
3,053,908 |
|
|
HARSCO
CORPORATIONCONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) |
|
|
Three Months Ended December
31 |
|
Twelve Months Ended December
31 |
(In thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(36,136 |
) |
|
$ |
(23,744 |
) |
|
$ |
(176,431 |
) |
|
$ |
2,729 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
Depreciation |
|
|
31,753 |
|
|
|
33,066 |
|
|
|
129,712 |
|
|
|
131,449 |
|
Amortization |
|
|
8,532 |
|
|
|
8,670 |
|
|
|
34,137 |
|
|
|
35,224 |
|
Deferred income tax (benefit) expense |
|
|
27 |
|
|
|
(8,019 |
) |
|
|
(12,029 |
) |
|
|
(16,930 |
) |
Equity (income) loss of unconsolidated entities, net |
|
|
(195 |
) |
|
|
(186 |
) |
|
|
178 |
|
|
|
302 |
|
Dividends from unconsolidated entities |
|
|
— |
|
|
|
269 |
|
|
|
526 |
|
|
|
269 |
|
(Gain) loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(2,254 |
) |
|
|
2,668 |
|
Goodwill and other intangible asset impairment charges |
|
|
15,000 |
|
|
|
— |
|
|
|
119,580 |
|
|
|
— |
|
Other, net |
|
|
(808 |
) |
|
|
3,209 |
|
|
|
(427 |
) |
|
|
2,062 |
|
Changes in assets and liabilities, net of acquisitions and
dispositions of businesses: |
Accounts receivable |
|
|
19,323 |
|
|
|
12,782 |
|
|
|
94,317 |
|
|
|
(19,781 |
) |
Income tax refunds receivable, reimbursable to
seller |
|
|
— |
|
|
|
2,135 |
|
|
|
7,687 |
|
|
|
2,870 |
|
Inventories |
|
|
(5,459 |
) |
|
|
(11,340 |
) |
|
|
(16,798 |
) |
|
|
(7,783 |
) |
Contract assets |
|
|
1,954 |
|
|
|
8,695 |
|
|
|
11,543 |
|
|
|
(43,510 |
) |
Right-of-use assets |
|
|
7,342 |
|
|
|
7,250 |
|
|
|
29,171 |
|
|
|
28,300 |
|
Accounts payable |
|
|
6,234 |
|
|
|
2,007 |
|
|
|
19,264 |
|
|
|
14,118 |
|
Accrued interest payable |
|
|
6,916 |
|
|
|
7,429 |
|
|
|
(643 |
) |
|
|
(411 |
) |
Accrued compensation |
|
|
1,614 |
|
|
|
(5,629 |
) |
|
|
(3,945 |
) |
|
|
6,469 |
|
Advances on contracts |
|
|
(5,360 |
) |
|
|
(314 |
) |
|
|
(11,347 |
) |
|
|
(14,311 |
) |
Operating lease liabilities |
|
|
(6,876 |
) |
|
|
(6,753 |
) |
|
|
(28,374 |
) |
|
|
(27,307 |
) |
Retirement plan liabilities, net |
|
|
(6,307 |
) |
|
|
(9,086 |
) |
|
|
(34,136 |
) |
|
|
(45,786 |
) |
Other assets and liabilities |
|
|
(18,188 |
) |
|
|
5,006 |
|
|
|
(9,204 |
) |
|
|
21,556 |
|
Net cash provided by operating activities |
|
|
19,366 |
|
|
|
25,447 |
|
|
|
150,527 |
|
|
|
72,197 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(35,515 |
) |
|
|
(48,819 |
) |
|
|
(137,160 |
) |
|
|
(158,326 |
) |
Proceeds from sales of assets |
|
|
2,470 |
|
|
|
1,212 |
|
|
|
10,759 |
|
|
|
16,724 |
|
Expenditures for intangible assets |
|
|
(37 |
) |
|
|
(71 |
) |
|
|
(184 |
) |
|
|
(358 |
) |
Proceeds from note receivable |
|
|
— |
|
|
|
— |
|
|
|
8,605 |
|
|
|
6,400 |
|
Net proceeds from settlement of foreign currency forward exchange
contracts |
|
|
7,379 |
|
|
|
12,004 |
|
|
|
20,950 |
|
|
|
10,940 |
|
Proceeds (payments) for settlements of interest rate swaps |
|
|
282 |
|
|
|
— |
|
|
|
(2,304 |
) |
|
|
— |
|
Other investing activities, net |
|
|
53 |
|
|
|
(10 |
) |
|
|
273 |
|
|
|
171 |
|
Net cash used by investing activities |
|
|
(25,368 |
) |
|
|
(35,684 |
) |
|
|
(99,061 |
) |
|
|
(124,449 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Short-term borrowings, net |
|
|
607 |
|
|
|
(3,715 |
) |
|
|
884 |
|
|
|
935 |
|
Current maturities and long-term debt: |
|
|
|
|
|
|
|
|
Additions |
|
|
65,016 |
|
|
|
33,195 |
|
|
|
224,445 |
|
|
|
540,663 |
|
Reductions |
|
|
(57,479 |
) |
|
|
(12,497 |
) |
|
|
(256,310 |
) |
|
|
(464,848 |
) |
Dividends paid to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
(4,841 |
) |
|
|
(3,103 |
) |
Sale (purchase) of noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
1,901 |
|
|
|
— |
|
Stock-based compensation - Employee taxes paid |
|
|
(132 |
) |
|
|
(119 |
) |
|
|
(1,949 |
) |
|
|
(3,392 |
) |
Payment of contingent consideration |
|
|
— |
|
|
|
(854 |
) |
|
|
(6,915 |
) |
|
|
(1,588 |
) |
Deferred financing costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,828 |
) |
Other financing activities, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(601 |
) |
Net cash provided (used) by financing activities |
|
|
8,012 |
|
|
|
16,010 |
|
|
|
(42,785 |
) |
|
|
60,238 |
|
Effect of exchange rate
changes on cash and cash equivalents, including restricted
cash |
|
|
(1,953 |
) |
|
|
1,252 |
|
|
|
(10,715 |
) |
|
|
(527 |
) |
Net increase (decrease) in
cash and cash equivalents, including restricted cash |
|
|
57 |
|
|
|
7,025 |
|
|
|
(2,034 |
) |
|
|
7,459 |
|
Cash and cash equivalents,
including restricted cash, at beginning of period |
|
|
85,037 |
|
|
|
80,103 |
|
|
|
87,128 |
|
|
|
79,669 |
|
Cash and cash
equivalents, including restricted cash, at end of
period |
|
$ |
85,094 |
|
|
$ |
87,128 |
|
|
$ |
85,094 |
|
|
$ |
87,128 |
|
|
HARSCO
CORPORATIONREVIEW OF OPERATIONS BY
SEGMENT (Unaudited) |
|
|
Three Months Ended |
|
Three Months Ended |
|
|
December 31, 2022 |
|
December 31, 2021 |
(In thousands) |
|
Revenues |
|
OperatingIncome (Loss) |
|
Revenues |
|
Operating Income (Loss) |
Harsco Environmental |
|
$ |
256,872 |
|
$ |
(4,372 |
) |
|
$ |
267,649 |
|
$ |
19,614 |
|
Harsco Clean Earth |
|
|
211,430 |
|
|
13,865 |
|
|
|
194,424 |
|
|
5,183 |
|
Corporate |
|
|
— |
|
|
(7,704 |
) |
|
|
— |
|
|
(8,725 |
) |
Consolidated Totals |
|
$ |
468,302 |
|
$ |
1,789 |
|
|
$ |
462,073 |
|
$ |
16,072 |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
Twelve Months Ended |
|
|
December 31, 2022 |
|
December 31, 2021 |
(In thousands) |
|
Revenues |
|
OperatingIncome (Loss) |
|
Revenues |
|
Operating Income (Loss) |
Harsco Environmental |
|
$ |
1,061,239 |
|
$ |
59,559 |
|
|
$ |
1,068,083 |
|
$ |
103,402 |
|
Harsco Clean Earth |
|
|
827,826 |
|
|
(81,785 |
) |
|
|
780,316 |
|
|
25,639 |
|
Corporate |
|
|
— |
|
|
(35,117 |
) |
|
|
— |
|
|
(40,665 |
) |
Consolidated Totals |
|
$ |
1,889,065 |
|
$ |
(57,343 |
) |
|
$ |
1,848,399 |
|
$ |
88,376 |
|
|
|
HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED DILUTED
EARNINGS PER SHARE TO DILUTED EARNINGS (LOSS) PER SHARE FROM
CONTINUING OPERATIONS AS REPORTED (Unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
December 31 |
|
December 31 |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
|
|
Diluted earnings (loss) per share from continuing operations as
reported |
|
$ |
(0.30 |
) |
|
$ |
0.13 |
|
$ |
(1.73 |
) |
|
$ |
0.28 |
|
|
Facility fees and debt-related
expense (income) (a) |
|
|
— |
|
|
|
— |
|
|
(0.01 |
) |
|
|
0.07 |
|
|
Corporate strategic costs
(b) |
|
|
— |
|
|
|
0.02 |
|
|
— |
|
|
|
0.06 |
|
|
Harsco Clean Earth segment
goodwill impairment charge (c) |
|
|
— |
|
|
|
— |
|
|
1.32 |
|
|
|
— |
|
|
Harsco Environmental segment
other intangible asset impairment charge (d) |
|
|
0.19 |
|
|
|
— |
|
|
0.19 |
|
|
|
— |
|
|
Harsco Environmental segment
severance (e) |
|
|
0.05 |
|
|
|
— |
|
|
0.05 |
|
|
|
(0.01 |
) |
|
Harsco Clean Earth segment
severance costs (f) |
|
|
— |
|
|
|
— |
|
|
0.03 |
|
|
|
— |
|
|
Harsco Clean Earth segment
contingent consideration adjustments (g) |
|
|
— |
|
|
|
— |
|
|
(0.01 |
) |
|
|
— |
|
|
Taxes on above unusual items
(h) |
|
|
(0.01 |
) |
|
|
— |
|
|
(0.05 |
) |
|
|
(0.02 |
) |
|
Adjusted diluted
earnings (loss) per share, including acquisition amortization
expense |
|
|
(0.07 |
) |
(i) |
|
0.14 |
(j) |
|
(0.20 |
) |
(j) |
|
0.37 |
|
(j) |
Acquisition amortization expense, net of tax (i) |
|
|
0.08 |
|
|
|
0.08 |
|
|
0.31 |
|
|
|
0.32 |
|
|
Adjusted diluted
earnings per share |
|
$ |
0.01 |
|
|
$ |
0.22 |
|
$ |
0.10 |
|
(j) |
$ |
0.69 |
|
|
(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, (Q4 2022 of $0.1 million pre-tax expense; twelve 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 (of which 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 (twelve months 2021 $5.5 million pre-tax expense). (b)
Certain strategic costs incurred at Corporate associated with
supporting and executing the Company's long-term strategies. The
twelve months ended 2022 included the relocation of the Company's
headquarters (Q4 2022 $0.2 million pre-tax expense; twelve months
2022 $0.4 million pre-tax expense) and the twelve months ended 2021
included the divestiture of the former Harsco Rail segment (Q4 2021
$1.3 million pre-tax expense; twelve months 2021 $4.5 million
pre-tax expense).(c) Non-cash goodwill impairment charge in the
Harsco Clean Earth segment (twelve months 2022 $104.6 million
pre-tax expense).(d) Non-cash other intangible asset impairment
charge in the Harsco Environmental segment (Q4 2022 and twelve
months 2022 $15.0 million pre-tax expense).(e) Severance and
related costs incurred in the Harsco Environmental segment (Q4 2022
and twelve months 2022 $4.2 million pre-tax expense), and
adjustment to prior year severance and related costs incurred in
the Harsco Environmental segment (twelve months 2021 $0.9 million
pre-tax income).(f) Severance and related costs incurred in the
Harsco Clean Earth segment (twelve months 2022 $2.6 million pre-tax
expense), (Q4 2021 and twelve months 2021 $0.4 million pre-tax
expense).(g) Adjustment to contingent consideration related to the
acquisition of the Harsco Clean Earth segment (twelve months 2022
$0.8 million pre-tax income).(h) 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. (i) Acquisition amortization
expense was $7.7 million pre-tax and $31.1 million pre-tax for Q4
2022 and the twelve months 2022, respectively, and after-tax was
$6.2 million and $24.6 million for Q4 2022 and the twelve months
2022, respectively. Acquisition amortization expense was $8.0
million pre-tax and $32.3 million pre-tax for Q4 2021 and the
twelve months 2021, respectively, and after-tax was $6.4 million
and $19.4 million for Q4 2021 and the twelve months 2021,
respectively.(j) Does not total due to rounding.
|
|
HARSCO
CORPORATIONRECONCILIATION OF PROJECTED ADJUSTED
DILUTED EARNINGS (LOSS) PER SHARE TO DILUTED EARNINGS PER SHARE
FROM CONTINUING OPERATIONS (a) (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected |
|
Projected |
|
|
|
Three Months Ending |
|
Twelve Months Ending |
|
|
|
March 31 |
|
December 31 |
|
|
|
|
2023 |
|
|
|
2023 |
|
|
|
|
Low |
|
High |
|
Low |
|
High |
|
Diluted earnings (loss) per share from continuing operations |
|
$ |
(0.37 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.80 |
) |
|
$ |
(0.50 |
) |
|
Estimated acquisition
amortization expense, net of tax |
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.28 |
|
|
|
0.28 |
|
|
Adjusted diluted
earnings (loss) per share |
|
$ |
(0.30 |
) |
(b) |
$ |
(0.23 |
) |
(b) |
$ |
(0.52 |
) |
|
$ |
(0.23 |
) |
(b) |
(a) Excludes Harsco Rail Segment.(b) Does not total due to
rounding.
|
HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED EBITDA BY
SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT
(Unaudited) |
(In thousands) |
|
HarscoEnvironmental |
|
Harsco Clean Earth |
|
Corporate |
|
Consolidated Totals |
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, 2022: |
|
|
|
|
|
|
Operating income (loss) as
reported |
|
$ |
(4,372 |
) |
|
$ |
13,865 |
|
|
$ |
(7,704 |
) |
|
$ |
1,789 |
|
Corporate strategic costs |
|
|
— |
|
|
|
— |
|
|
|
229 |
|
|
|
229 |
|
Harsco Clean Earth segment
severance costs |
|
|
— |
|
|
|
37 |
|
|
|
— |
|
|
|
37 |
|
Harsco Environmental segment
severance costs |
|
|
4,156 |
|
|
|
— |
|
|
|
— |
|
|
|
4,156 |
|
Harsco Environmental segment
intangible asset impairment |
|
|
15,000 |
|
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
Operating income (loss)
excluding unusual items |
|
|
14,784 |
|
|
|
13,902 |
|
|
|
(7,475 |
) |
|
|
21,211 |
|
Depreciation |
|
|
26,569 |
|
|
|
4,623 |
|
|
|
561 |
|
|
|
31,753 |
|
Amortization |
|
|
1,648 |
|
|
|
6,022 |
|
|
|
— |
|
|
|
7,670 |
|
Adjusted EBITDA |
|
$ |
43,001 |
|
|
$ |
24,547 |
|
|
$ |
(6,914 |
) |
|
$ |
60,634 |
|
Revenues as reported |
|
$ |
256,872 |
|
|
$ |
211,430 |
|
|
|
|
$ |
468,302 |
|
Adjusted EBITDA margin
(%) |
|
|
16.7 |
% |
|
|
11.6 |
% |
|
|
|
|
12.9 |
% |
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, 2021: |
|
|
|
|
|
|
Operating income (loss) as
reported |
|
$ |
19,614 |
|
|
$ |
5,183 |
|
|
$ |
(8,725 |
) |
|
$ |
16,072 |
|
Corporate strategic costs |
|
|
— |
|
|
|
— |
|
|
|
1,280 |
|
|
|
1,280 |
|
Harsco Environmental segment
severance costs |
|
|
— |
|
|
|
390 |
|
|
|
— |
|
|
|
390 |
|
Operating income (loss)
excluding unusual items |
|
|
19,614 |
|
|
|
5,573 |
|
|
|
(7,445 |
) |
|
|
17,742 |
|
Depreciation |
|
|
27,384 |
|
|
|
4,854 |
|
|
|
434 |
|
|
|
32,672 |
|
Amortization |
|
|
1,972 |
|
|
|
6,001 |
|
|
|
— |
|
|
|
7,973 |
|
Adjusted EBITDA |
|
$ |
48,970 |
|
|
$ |
16,428 |
|
|
$ |
(7,011 |
) |
|
$ |
58,387 |
|
Revenues as reported |
|
$ |
267,649 |
|
|
$ |
194,424 |
|
|
|
|
$ |
462,073 |
|
Adjusted EBITDA margin
(%) |
|
|
18.3 |
% |
|
|
8.4 |
% |
|
|
|
|
12.6 |
% |
|
HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED EBITDA BY
SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT
(Unaudited) |
(In
thousands) |
|
HarscoEnvironmental |
|
Harsco Clean Earth |
|
Corporate |
|
Consolidated Totals |
Twelve Months Ended December 31, 2022: |
|
|
|
|
|
|
|
|
Operating income (loss) as
reported |
|
$ |
59,559 |
|
|
$ |
(81,785 |
) |
|
$ |
(35,117 |
) |
|
$ |
(57,343 |
) |
Corporate strategic costs |
|
|
— |
|
|
|
— |
|
|
|
357 |
|
|
|
357 |
|
Harsco Clean Earth segment
goodwill impairment charge |
|
|
— |
|
|
|
104,580 |
|
|
|
— |
|
|
|
104,580 |
|
Harsco Clean Earth segment
severance costs |
|
|
— |
|
|
|
2,577 |
|
|
|
— |
|
|
|
2,577 |
|
Harsco Clean Earth segment
contingent consideration adjustment |
|
|
— |
|
|
|
(827 |
) |
|
|
— |
|
|
|
(827 |
) |
Harsco Environmental segment
severance costs |
|
|
4,156 |
|
|
|
— |
|
|
|
— |
|
|
|
4,156 |
|
Harsco Environmental segment
intangible asset impairment |
|
|
15,000 |
|
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
Operating income (loss)
excluding unusual items |
|
|
78,715 |
|
|
|
24,545 |
|
|
|
(34,760 |
) |
|
|
68,500 |
|
Depreciation |
|
|
108,880 |
|
|
|
18,836 |
|
|
|
1,996 |
|
|
|
129,712 |
|
Amortization |
|
|
6,809 |
|
|
|
24,299 |
|
|
|
— |
|
|
|
31,108 |
|
Adjusted EBITDA |
|
|
194,404 |
|
|
|
67,680 |
|
|
|
(32,764 |
) |
|
|
229,320 |
|
Revenues as reported |
|
$ |
1,061,239 |
|
|
$ |
827,826 |
|
|
|
|
$ |
1,889,065 |
|
Adjusted EBITDA margin
(%) |
|
|
18.3 |
% |
|
|
8.2 |
% |
|
|
|
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31, 2021: |
|
|
|
|
|
|
Operating income (loss) as
reported |
|
$ |
103,402 |
|
|
$ |
25,639 |
|
|
$ |
(40,665 |
) |
|
$ |
88,376 |
|
Corporate strategic costs |
|
|
— |
|
|
|
— |
|
|
|
4,450 |
|
|
|
4,450 |
|
Harsco Clean Earth segment
severance costs |
|
|
— |
|
|
|
390 |
|
|
|
— |
|
|
|
390 |
|
Harsco Environmental segment
severance costs |
|
|
(900 |
) |
|
|
— |
|
|
|
— |
|
|
|
(900 |
) |
Operating income (loss)
excluding unusual items |
|
|
102,502 |
|
|
|
26,029 |
|
|
|
(36,215 |
) |
|
|
92,316 |
|
Depreciation |
|
|
105,830 |
|
|
|
19,672 |
|
|
|
1,900 |
|
|
|
127,402 |
|
Amortization |
|
|
8,052 |
|
|
|
24,180 |
|
|
|
— |
|
|
|
32,232 |
|
Adjusted EBITDA |
|
|
216,384 |
|
|
|
69,881 |
|
|
|
(34,315 |
) |
|
|
251,950 |
|
Revenues as reported |
|
$ |
1,068,083 |
|
|
$ |
780,316 |
|
|
|
|
$ |
1,848,399 |
|
Adjusted EBITDA margin
(%) |
|
|
20.3 |
% |
|
|
9.0 |
% |
|
|
|
|
13.6 |
% |
HARSCO
CORPORATIONRECONCILIATION OF CONSOLIDATED ADJUSTED
EBITDA TO CONSOLIDATED INCOME (LOSS) FROM CONTINUING OPERATIONS AS
REPORTED (Unaudited) |
|
|
|
|
Three Months Ended December 31 |
(In thousands) |
|
|
2022 |
|
|
|
2021 |
|
Consolidated income (loss) from continuing operations |
|
$ |
(23,165 |
) |
|
$ |
10,713 |
|
|
|
|
|
|
Add back
(deduct): |
|
|
|
|
Equity in (income) loss of
unconsolidated entities, net |
|
|
(195 |
) |
|
|
(186 |
) |
Income tax (benefit)
expense |
|
|
2,899 |
|
|
|
(5,625 |
) |
Defined benefit pension
income |
|
|
(2,163 |
) |
|
|
(3,862 |
) |
Facility fees and debt-related
expense (income) |
|
|
2,062 |
|
|
|
— |
|
Interest expense |
|
|
23,621 |
|
|
|
15,595 |
|
Interest income |
|
|
(1,270 |
) |
|
|
(563 |
) |
Depreciation |
|
|
31,753 |
|
|
|
32,672 |
|
Amortization |
|
|
7,670 |
|
|
|
7,973 |
|
|
|
|
|
|
Unusual items: |
|
|
|
|
Corporate strategic costs |
|
|
229 |
|
|
|
1,280 |
|
Harsco Environmental segment
intangible asset impairment charge |
|
|
15,000 |
|
|
|
— |
|
Harsco Environmental segment
severance costs |
|
|
4,156 |
|
|
|
— |
|
Harsco Clean Earth segment
severance costs |
|
|
37 |
|
|
|
390 |
|
Consolidated Adjusted
EBITDA |
|
$ |
60,634 |
|
|
$ |
58,387 |
|
|
|
|
HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED EBITDA TO
CONSOLIDATED INCOME (LOSS) FROM CONTINUING OPERATIONS AS
REPORTED (Unaudited) |
|
|
|
|
Twelve Months EndedDecember
31 |
(In thousands) |
|
|
2022 |
|
|
|
2021 |
|
Consolidated income (loss) from continuing operations |
|
$ |
(133,517 |
) |
|
$ |
28,115 |
|
|
|
|
|
|
Add back
(deduct): |
|
|
|
|
Equity in (income) loss of
unconsolidated entities, net |
|
|
178 |
|
|
|
302 |
|
Income tax (benefit)
expense |
|
|
10,381 |
|
|
|
9,089 |
|
Defined benefit pension
income |
|
|
(8,938 |
) |
|
|
(15,640 |
) |
Facility fees and debt-related
expense (income) |
|
|
2,956 |
|
|
|
5,506 |
|
Interest expense |
|
|
75,156 |
|
|
|
63,235 |
|
Interest income |
|
|
(3,559 |
) |
|
|
(2,231 |
) |
Depreciation |
|
|
129,712 |
|
|
|
127,402 |
|
Amortization |
|
|
31,108 |
|
|
|
32,232 |
|
|
|
|
|
|
Unusual items: |
|
|
|
|
Corporate strategic costs |
|
|
357 |
|
|
|
4,450 |
|
Harsco Environmental segment
severance costs |
|
|
4,156 |
|
|
|
(900 |
) |
Harsco Environmental segment
other intangible asset impairment charge |
|
|
15,000 |
|
|
|
— |
|
Harsco Clean Earth segment
goodwill impairment charge |
|
|
104,580 |
|
|
|
— |
|
Harsco Clean Earth segment
severance costs |
|
|
2,577 |
|
|
|
390 |
|
Harsco Clean Earth segment
contingent consideration adjustments |
|
|
(827 |
) |
|
|
— |
|
Adjusted
EBITDA |
|
$ |
229,320 |
|
|
$ |
251,950 |
|
|
|
HARSCO
CORPORATIONRECONCILIATION OF PROJECTED
CONSOLIDATED ADJUSTED EBITDA TO PROJECTED CONSOLIDATED INCOME FROM
CONTINUING OPERATIONS (a)(Unaudited) |
|
|
|
Projected |
|
Projected |
|
|
|
Three Months Ending |
|
Twelve Months Ending |
|
|
|
March 31 |
|
December 31 |
|
|
|
|
2023 |
|
|
|
2023 |
|
|
(In millions) |
|
Low |
|
High |
|
Low |
|
High |
|
Consolidated loss from continuing operations |
|
$ |
(29 |
) |
|
$ |
(23 |
) |
|
$ |
(61 |
) |
|
$ |
(36 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add back
(deduct): |
|
|
|
|
|
|
|
|
|
Income tax (income)
expense |
|
|
3 |
|
|
|
4 |
|
|
|
8 |
|
|
|
11 |
|
|
Facility fees and debt-related
(income) expense |
|
|
2 |
|
|
|
2 |
|
|
|
10 |
|
|
|
9 |
|
|
Net interest |
|
|
23 |
|
|
|
22 |
|
|
|
95 |
|
|
|
91 |
|
|
Defined benefit pension
(income) expense |
|
|
6 |
|
|
|
5 |
|
|
|
22 |
|
|
|
20 |
|
|
Depreciation and
amortization |
|
|
40 |
|
|
|
40 |
|
|
|
166 |
|
|
|
166 |
|
|
Consolidated Adjusted
EBITDA |
|
$ |
45 |
|
|
$ |
50 |
|
|
$ |
240 |
|
|
$ |
260 |
|
(b) |
(a) Excludes former Harsco Rail Segment(b) Does not total due to
rounding.
|
HARSCO
CORPORATIONRECONCILIATION OF FREE CASH FLOW TO NET
CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
December 31 |
|
December 31 |
(In thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by operating activities |
|
$ |
19,366 |
|
|
$ |
25,447 |
|
|
|
150,527 |
|
|
$ |
72,197 |
|
Less capital expenditures |
|
|
(35,515 |
) |
|
|
(48,819 |
) |
|
|
(137,160 |
) |
|
|
(158,326 |
) |
Less expenditures for
intangible assets |
|
|
(37 |
) |
|
|
(71 |
) |
|
|
(184 |
) |
|
|
(358 |
) |
Plus capital expenditures for
strategic ventures (a) |
|
|
361 |
|
|
|
677 |
|
|
|
1,789 |
|
|
|
3,660 |
|
Plus total proceeds from sales
of assets (b) |
|
|
2,470 |
|
|
|
1,212 |
|
|
|
10,759 |
|
|
|
16,724 |
|
Plus transaction-related
expenditures (c) |
|
|
— |
|
|
|
150 |
|
|
|
1,854 |
|
|
|
18,938 |
|
Harsco Rail free cash flow
deficit/(benefit) |
|
|
16,783 |
|
|
|
13,774 |
|
|
|
47,610 |
|
|
|
45,611 |
|
Free cash flow |
|
$ |
3,428 |
|
|
$ |
(7,630 |
) |
|
$ |
75,195 |
|
|
$ |
(1,554 |
) |
(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
CORPORATIONRECONCILIATION OF PROJECTED FREE CASH
FLOW TO PROJECTED NET CASH PROVIDED BY OPERATING
ACTIVITIES (Unaudited) (a) |
|
|
ProjectedTwelve Months
EndingDecember 31 |
|
|
|
2023 |
|
(In millions) |
|
Low |
|
High |
Net cash provided by operating activities |
|
$ |
140 |
|
|
$ |
170 |
|
Less net capital / intangible
asset expenditures |
|
|
(125 |
) |
|
|
(135 |
) |
Plus capital expenditures for
strategic ventures |
|
|
5 |
|
|
|
5 |
|
Free cash flow |
|
$ |
20 |
|
|
$ |
40 |
|
(a) Excludes former Harsco Rail Segment
|
|
Investor
Contact David
Martin267.946.1407damartin@harsco.com |
Media ContactJay
Cooney267.857.8017jcooney@harsco.com |
Harsco (NYSE:HSC)
Gráfica de Acción Histórica
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Harsco (NYSE:HSC)
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