Worldwide industrial solutions company Harsco Corporation
(NYSE:HSC) today reported fourth quarter and full-year 2011
results.
Fourth Quarter and Full-Year 2011 Financial
Highlights
- Fourth quarter diluted EPS from continuing operations of $0.36
before restructuring charge and non-cash tax charge; including
charges, diluted EPS from continuing operations were a loss of
($1.14). Excluding the restructuring charge, all four business
segments achieved improved operating results in the quarter
compared with last year's comparable period.
- Fourth quarter pre-tax restructuring charge of $101 million or
$1.05 per diluted share, of which $67 million was
non-cash. The Company anticipates annual benefits of
approximately $36 million in 2012 from these restructuring actions,
or approximately $0.32 per share, and fully annualized benefits of
more than $65 million beginning in 2013, or approximately $0.58 per
share. Additional non-cash tax charge against U.K. deferred
tax assets of $37 million or $0.45 per diluted share due to a
multi-year cumulative loss position in the Company's U.K.
Infrastructure operations; once sustainable profitability is
restored, this charge will be reversed.
- Full-year cash flow from operations of $299 million, compared
with $401 million in 2010. Lower cash flow from operations due
principally to timing of cash receipts and cash outflow from the
Company's restructuring plan. Also, the Company generated $43
million in cash from asset sales in 2011, compared with $23 million
in 2010.
- Full-year diluted EPS from continuing operations of $1.38,
before restructuring and non-cash tax charges; including these
charges, full-year diluted EPS were a loss of ($0.12).
- Full-year sales of $3.30 billion, compared with sales of $3.04
billion in 2010, an increase of approximately nine percent.
- Company reaffirms earnings guidance for 2012 in the range of
$1.55 to $1.70 per diluted share from continuing operations,
excluding the previously announced carry-over restructuring
charge. Company further gives initial guidance for the first
quarter of 2012 in the range of $0.01 to $0.06 per diluted share
from continuing operations, excluding the previously announced
carry-over restructuring charge.
Fourth Quarter and Full-Year 2011 Results
Fourth quarter 2011 diluted EPS from continuing operations were
$0.36 before restructuring and non-cash tax charges. Including
the restructuring and non-cash tax charges, diluted EPS from
continuing operations were a loss of ($1.14). This compares
with diluted EPS of $0.15 per share in the fourth quarter of 2010
before a pre-tax restructuring charge of $84.4 million ($0.77 per
diluted share). Including the restructuring charge, diluted
EPS in the fourth quarter of 2010 were a loss of
($0.62). Fourth quarter 2011 income from continuing operations
was $28.7 million before the restructuring and non-cash tax
charges; after these charges, a loss of
($92.7) million. This compares with fourth quarter 2010
income from continuing operations of $13.4 million before
restructuring charge; after the restructuring charge, a loss of
($49.2) million.
Sales in the fourth quarter of 2011 increased approximately 5
percent to $793 million, compared with $757 million in the fourth
quarter of last year. Foreign currency translation decreased
sales in the fourth quarter of 2011 by approximately $5 million
when compared with the fourth quarter of 2010, but did not have a
material impact on operating income.
As previously announced, the Company incurred a $101 million
pre-tax restructuring charge in the fourth quarter of 2011, or
$1.05 per diluted share, principally to further address the
realignment of the Company's Infrastructure business and position
it for expected breakeven operating income in 2012 and
profitability in 2013, despite the continued challenging global
non-residential construction environment. Also included in
this charge is $12.8 million to enhance returns and operating
margins in the Metals & Minerals business. The Company's
actions are expected to generate pre-tax savings of approximately
$36 million in 2012, or approximately $0.32 per diluted share, and
more than $65 million in pre-tax savings when fully annualized in
2013, or approximately $0.58 per diluted share.
The Company also recorded a fourth quarter non-cash tax charge
against the Company's U.K. deferred tax assets of approximately $37
million, or $0.45 per diluted share. This charge is the result
of a multi-year cumulative loss position in the overall operating
profit of the Company's U.K. operations due to the continued
economic challenges in this market, and more specifically the U.K.
operations of the Company's Harsco Infrastructure
Segment. This loss is magnified by the significant
restructuring expenses the Company recorded during 2010 and 2011,
and is projecting to be recorded in 2012, to reduce the cost
structure of its U.K. businesses and drive towards future
profitability. Looking ahead, the Company believes that with
the near term benefits of its significant cost reductions, and with
the U.K. infrastructure market expected to show improvement over
the next several years, the combination of these two factors is
expected to return the Company's U.K. business to overall
profitability. Once the Company's overall U.K. business
demonstrates sustainable profitability, the non-cash tax charge
will be reversed as an income tax benefit and recognized
accordingly as income.
For the full year 2011, diluted EPS from continuing operations
were $1.38 before the pre-tax restructuring and non-cash tax
charges; including these charges, diluted EPS were a loss of
($0.12). This compares with diluted EPS of $0.91 in 2010
before the restructuring last year; including the restructuring
charge, 2010 diluted EPS were $0.13. Full year 2011 income
from continuing operations was $113.9 million before the
restructuring and non-cash tax charges; including these charges,
income from continuing operations was a loss of ($7.5)
million. On a comparative basis, full year 2010 income from
continuing operations was $79.2 million before restructuring
charge; including the restructuring charge, income was $16.6
million. Sales for the full year 2011 were $3.30 billion, an
increase of almost nine percent over 2010 sales of
$3.04 billion. For the full year 2011 foreign currency
translation increased sales by approximately $104 million and
increased pre-tax income by approximately $4 million or $0.04 per
diluted share, compared with the full year 2010 results.
|
|
Fourth Quarter |
Year |
|
|
2011 |
2010 |
2011 |
2010 |
|
Reported Diluted EPS |
$ (1.14) |
$ (0.62) |
$ (0.12) |
$ 0.13 |
|
Add Back: |
|
|
|
|
|
- Restructuring Charge |
1.05 |
0.77 |
1.05 |
0.77 |
|
- Non-cash tax charge |
0.45 |
-- |
0.45 |
-- |
|
Adjusted Diluted EPS from continuing
operations |
$ 0.36 |
$ 0.15 |
$ 1.38 |
$ 0.91 |
(a) |
|
(a) Does not total due to
rounding |
Comment
Commenting on the Company's results, Harsco Chairman, President
and Chief Executive Officer Salvatore D. Fazzolari said, "I am
pleased to report that we closed the year on an encouraging
note. Fourth quarter results were slightly better than our
previous expectations and guidance, although end market conditions
continue to be challenging, particularly in Europe.
"We were especially pleased in the quarter that all business
segments posted improved operating results compared with last
year's fourth quarter, with particularly strong performances by
both Harsco Rail and Harsco Industrial. Both businesses
continue to see solid order books and strong bidding activities as
we enter this year.
"Importantly in the quarter, we took a number of steps to
further drive our cost structure significantly lower to accelerate
Harsco Infrastructure's return to profitability and, likewise,
accelerate the return of Harsco Metals & Minerals to
double-digit operating margins. We are confident that these
actions will better position both businesses to help us achieve our
previously provided 2015 earnings target as outlined in our
strategic roadmap and as reaffirmed at our December analysts
conference.
"The Company continues to generate sufficient levels of
operating cash flow to meet all of our funding requirements in 2012
and beyond, including dividends, as well as both our maintenance
and selective growth capital expenditure opportunities.
"We again expect 2012 to be a year of earnings growth. Our
confidence is underpinned by the significant cost reduction actions
taken at the end of 2011; an expected moderate increase in global
steel production as the year progresses; non-residential
construction activity in 2012 at levels comparable with 2011; and
continued favorable results from our Harsco Rail and Harsco
Industrial businesses.
"As such, we are reaffirming the earnings guidance we provided
in December in the range of $1.55 - $1.70 per diluted share from
continuing operations, before the previously discussed
restructuring charges that will carry-over into 2012. However,
as we also stated in December, results for the first quarter of
2012 will be lower than those of the prior year first quarter due
to the continued soft European market conditions in Harsco
Infrastructure; an expected slowing in global steel production,
particularly in Europe; higher pension costs; the negative effects
of a stronger dollar; a much higher effective tax rate in the first
quarter than in the balance of the year; and our expectation that,
similar to our experience last year, the benefits of the fourth
quarter 2011 restructuring actions taken in both Harsco
Infrastructure and Harsco Metals & Minerals will be more fully
realized in subsequent quarters of 2012. Therefore, our
present outlook for first quarter 2012 earnings from continuing
operations, before carry-over restructuring charge, is in the range
of $0.01 to $0.06 per diluted share, compared with $0.15 per share
in the first quarter of 2011. Beginning in the second quarter,
we expect substantial sequential improvement in earnings due to
increased rail equipment shipments, positive seasonality factors in
Harsco Metals & Minerals and Harsco Infrastructure and
sequentially improving savings from the restructuring
actions. Although the first quarter tax rate will be much
higher, we expect the full-year tax rate to be in the area of 27.5
percent, as previously indicated."
Fourth Quarter Business Review
Harsco Metals & Minerals
Sales in the fourth quarter of $372 million were virtually even
with last year's fourth quarter sales. Foreign currency
translation reduced sales in the quarter by approximately $4.6
million.
Operating income in the fourth quarter increased to $27.6
million before the aforementioned restructuring charge, or
approximately 15 percent above the operating income of $23.9
million in last year's fourth quarter. Operating margins in
the quarter before the restructuring charge were 7.4 percent,
compared with 6.4 percent in the fourth quarter of 2010, a 100
basis point improvement. Foreign currency translation reduced
operating income in the quarter by approximately $0.4 million.
As previously discussed, a pre-tax restructuring charge of
approximately $12.8 million was incurred in the fourth
quarter. This charge was the result of actions within this
segment to reduce its European exposure and lower SG&A
expenses. Including the charge, operating income in the
quarter was $14.8 million. As previously announced, an
additional restructuring charge of approximately $12 million is
expected to be incurred in 2012 due to the above-mentioned
actions.
Results for Metals & Minerals in the quarter, before the
restructuring charge, benefited principally from new contract
signings, improved results from the Company's roofing granules and
abrasives business, and overall cost reductions. These were
somewhat offset by continued lower stainless steel production in
the quarter, as expected.
Looking ahead, the Metals & Minerals segment is expected to
show improved operating margins and overall returns in 2012 as a
result of the aforementioned restructuring actions. End market
activity is expected to continue to be slow in the first quarter of
2012 compared with the same period last year, due principally to
European market conditions, but improve as the year
progresses. The full year 2012 will also benefit from
continued new contract signings.
Harsco Infrastructure
Sales in the fourth quarter increased slightly to $266 million
from $265 million last year. Foreign currency translation did
not have a meaningful impact on results in the quarter, when
compared with the same quarter last year.
An operating loss of approximately ($12.1) million was incurred
in the fourth quarter, before restructuring charge. Last year,
an operating loss of ($14.4) million was incurred in the
fourth quarter, before a restructuring charge of $84.4 million to
reduce this business's branch structure; consolidate office
locations and closures; implement general headcount reductions; and
to facilitate the off-shoring of certain back-office functions.
While the year-over-year fourth quarter operating loss, before
restructuring charges, was reduced by $2.3 million, significant
end-market challenges remain in this business, as Europe, and in
particular the U.K., continue to have depressed end-market
activity. Nevertheless, most regions within Harsco
Infrastructure achieved a modest level of profitability in 2011,
and the business also received the savings benefits of the
restructuring actions taken at the end of 2010.
During the fourth quarter of 2011, the Company took an
additional pre-tax restructuring charge of $87.6 million in this
business segment. The charge was the result of further actions
to rationalize equipment, exit under-performing locations and
reduce European exposure. Including the charge, an operating
loss of ($99.7) million was incurred in the quarter. Due
to timing issues, the Company expects to incur an additional
restructuring charge of approximately $85 million in 2012, as a
result of these previously mentioned actions.
Despite continued bottom cycle activity globally in the
non-residential construction market, the Company expects operating
income in the Infrastructure business to reach at least breakeven
in 2012 due to the significant restructuring actions the Company
has taken in this Segment over the past two years.
Harsco Rail
Sales in the quarter were $72 million, an increase of 18 percent
from sales of $61 million last year. Operating income was
$16.5 million, compared with operating income of $9.7 million in
the fourth quarter of 2010, an increase of approximately
70 percent. Likewise, operating margins of 22.9 percent
in the quarter were significantly higher than operating margins of
15.9 percent in last year's fourth quarter. Foreign currency
translation did not have meaningful impact on results in the
quarter, when compared with the fourth quarter of last year.
Strong performance in the quarter was the result of higher parts
and equipment sales compared with the fourth quarter of last
year. This improvement was partially offset by somewhat lower
contract services activity in the U.S. Improved operating
margins in the quarter were the result of the mix of sales.
Looking ahead, Harsco Rail enters 2012 with a strong order book
and encouraging bidding activity and is again expected to show
strong full-year results.
Harsco Industrial
Sales in the quarter increased by approximately 38 percent to
$82 million from last year's $60 million. Operating income of
$13.2 million compared with $10.4 million last year, an increase of
26 percent. Operating margins in the quarter of 16.0 percent
were below last year's fourth quarter margins of 17.4 percent, due
principally to higher year-over-year material costs. Foreign
currency translation did not have a material impact on results in
the quarter when compared with the fourth quarter of last year.
Improved results in the fourth quarter 2011 were the result of
year-over-year growth due to increased market demand in all three
of Harsco Industrial's businesses, with gains in market share and
overall economic improvement in the principally energy-related
markets served by these businesses.
The future outlook for Harsco Industrial remains
positive. With its focus on the energy sector, its successful
globalization of the business and a renewed emphasis on product
development and differentiation, Harsco Industrial expects to see
continued growth in both sales and income in 2012 and beyond.
Liquidity, Capital Resources and Other
Matters
Net cash provided by operating activities for the full year 2011
was $299 million compared with $401 million for the prior
year. The decline was principally due to the timing of working
capital components and the previously discussed restructuring
charges. Net cash used by investing activities was $256
million, compared with $202 million in 2010. As discussed
throughout the year the Company was presented with increased
investment opportunities in its Metals & Minerals Segment to
sign new long-term contracts, which resulted in full-year capital
expenditures (capx) in 2011 of $313 million, compared with $192
million in 2010. Also impacting capital expenditures in 2011
were higher maintenance capx expenditures due to the timing of
contract renewals and generally improved end-market conditions in
2011. Net cash from investing activities benefited from $43
million in cash realized from asset sales in 2011, compared with
$23 million in 2010.
As reported at its recent Annual Analyst Conference in December,
the Company fully expects to generate sufficient levels of
discretionary cash flows, defined as operating cash flows plus
asset sales minus maintenance capital expenditures, to pay
dividends, and take advantage of growth capital expenditures or
other shareholder value enhancing opportunities as they present
themselves.
As of December 31, 2011, total debt outstanding increased
slightly to $909 million, from $885 million at December 31, 2010,
principally due to the previously mentioned restructuring and
non-cash tax charges, as well as a change in pension liabilities
due to a lower discount rate. The total debt-to-capital ratio
at December 31, 2011 was 42.7 percent, up from 37.6 percent at
December 31, 2010.
As a result of increased operating earnings, Economic Value
Added (EVA®) increased modestly in 2011.
Forward Looking Statements
This news release contains forward-looking statements based on
management's current expectations, estimates and
projections. All statements that address expectations or
projections about the future, including statements about the
company's strategy for growth, product development, market
position, expected expenditures and financial results are
forward-looking statements. Some of the forward-looking
statements may be identified by words like "may," "could,"
"believes," "expects," "anticipates," "plans," "intends,"
"projects," "indicates," and similar expressions. These
statements are not guarantees of future performance and involve a
number of risks, uncertainties and assumptions. Many factors,
including those discussed more fully elsewhere in this release and
in documents filed with the Securities and Exchange Commission by
Harsco, particularly its latest annual report on Form 10-K and
quarterly report on Form 10-Q, as well as others, could cause
results to differ materially from those stated. These factors
include, but are not limited to, changes in the worldwide business
environment in which the Company operates, including general
economic conditions; changes in currency exchange rates, interest
rates, commodity and fuel costs and capital costs; changes in the
performance of the equity and debt 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; changes in governmental laws and regulations, including
environmental, tax and import tariff standards; market and
competitive changes, including pricing pressures, market demand and
acceptance for new products, services, and technologies; 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; the seasonal nature of the Company's business; our
ability to successfully enter into new contracts and complete new
acquisitions or joint ventures in the timeframe contemplated or at
all; the recent global financial and credit crisis, which could
result in our customers curtailing development projects,
construction, production and capital expenditures, which, in turn,
could reduce the demand for our products and services and,
accordingly, our sales, margins and profitability; the financial
condition of the Company's customers, including the ability of
customers (especially those that may be highly leveraged and those
with inadequate liquidity) to maintain their credit availability;
risk and uncertainty associated with intangible assets; the
successful integration of the Company's strategic acquisitions; the
amount and timing of repurchases of the Company's common stock, if
any; our ability to successfully implement cost-reduction
initiatives, including the achievement of expected cost savings in
the expected timeframe; and other risk factors listed from time to
time in the Company's SEC reports. The Company undertakes no
duty to update forward-looking statements.
Conference Call
As previously announced, the Company will hold a conference call
today at 10:00 a.m. Eastern Time to discuss its results and
respond to questions from the investment community. The
conference call will be broadcast live through the Harsco
Corporation website at www.harsco.com. The call can also be
accessed by telephone by dialing (800) 611-4920, or (973)
200-3957 for international callers. Enter Conference ID number
40662878. Listeners are advised to dial in at
least five minutes prior to the call. Replays will be
available via the Harsco website.
About Harsco
Harsco Corporation is a global solutions company serving major
industries that are fundamental to worldwide infrastructure
development and economic growth. Harsco's common stock is a
component of the S&P MidCap 400 Index and the Russell 1000
Index. Additional information can be found at
www.harsco.com.
The Harsco Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=361
HARSCO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
|
|
|
Three Months Ended
December 31 |
Twelve Months Ended
December 31 |
(In thousands, except per share
amounts) |
2011 |
2010 |
2011 |
2010 |
Revenues from continuing
operations: |
|
|
|
|
Service revenues |
$ 640,736 |
$ 646,172 |
$ 2,700,664 |
$ 2,511,505 |
Product
revenues |
151,994 |
111,179 |
602,076 |
527,173 |
Total
revenues |
792,730 |
757,351 |
3,302,740 |
3,038,678 |
|
|
|
|
|
Costs and expenses from continuing
operations: |
|
|
|
|
Cost of services
sold |
519,746 |
513,538 |
2,162,948 |
1,994,637 |
Cost of products
sold |
101,847 |
78,645 |
407,680 |
342,242 |
Selling, general and
administrative expenses |
127,722 |
131,128 |
535,679 |
532,624 |
Research and development
expenses |
1,754 |
1,293 |
6,044 |
4,271 |
Other expense |
98,309 |
88,493 |
102,740 |
86,473 |
Total costs
and expenses |
849,378 |
813,097 |
3,215,091 |
2,960,247 |
|
|
|
|
|
Operating income
(loss) from continuing operations |
(56,648) |
(55,746) |
87,649 |
78,431 |
|
|
|
|
|
Interest income |
729 |
818 |
2,751 |
2,668 |
Interest expense |
(11,926) |
(13,383) |
(48,735) |
(60,623) |
|
|
|
|
|
Income (loss)
from continuing operations before income taxes and equity
income |
(67,845) |
(68,311) |
41,665 |
20,476 |
|
|
|
|
|
Income tax benefit (expense) |
(25,035) |
19,020 |
(49,848) |
(4,276) |
Equity in income of unconsolidated
entities, net |
160 |
81 |
690 |
390 |
|
|
|
|
|
Income (loss) from continuing
operations |
(92,720) |
(49,210) |
(7,493) |
16,590 |
|
|
|
|
|
Discontinued
operations: |
|
|
|
|
Loss on disposal of
discontinued business |
(598) |
(1,054) |
(3,306) |
(7,249) |
Income tax benefit
related to discontinued business |
225 |
402 |
1,243 |
3,118 |
Loss from discontinued
operations |
(373) |
(652) |
(2,063) |
(4,131) |
Net Income (loss) |
(93,093) |
(49,862) |
(9,556) |
12,459 |
Less: Net (income)
loss attributable to noncontrolling interests |
625 |
(1,260) |
(1,954) |
(5,705) |
Net Income (loss) attributable
to Harsco Corporation |
$ (92,468) |
$ (51,122) |
$ (11,510) |
$ 6,754 |
|
|
|
|
|
Amounts attributable to Harsco
Corporation common stockholders: |
|
|
|
|
Income (loss) from
continuing operations, net of tax |
$ (92,095) |
$ (50,470) |
$ (9,447) |
$ 10,885 |
Loss from
discontinued operations, net of tax |
(373) |
(652) |
(2,063) |
(4,131) |
Net income
(loss) attributable to Harsco Corporation common
stockholders |
$ (92,468) |
$ (51,122) |
$ (11,510) |
$ 6,754 |
|
|
|
|
|
Weighted-average shares of common stock
outstanding |
80,732 |
80,598 |
80,736 |
80,569 |
Basic earnings (loss) per common share
attributable to Harsco Corporation common stockholders: |
|
|
|
|
Continuing
operations |
$ (1.14) |
$ (0.63) |
$ (0.12) |
$ 0.14 |
Discontinued
operations |
(0.00) |
(0.01) |
(0.03) |
(0.05) |
Basic earnings (loss) per share
attributable to Harsco Corporation common
stockholders |
$ (1.15) (a) |
$ (0.63) (a) |
$ (0.14) (a) |
$ 0.08 (a) |
|
|
|
|
|
Diluted weighted-average shares of common
stock outstanding |
80,956 |
80,804 |
80,987 |
80,761 |
Diluted earnings (loss) per common share
attributable to Harsco Corporation common stockholders: |
|
|
|
|
Continuing
operations |
$ (1.14) |
$ (0.62) |
$ (0.12) |
$ 0.13 |
Discontinued
operations |
(0.00) |
(0.01) |
(0.03) |
(0.05) |
Diluted
earnings (loss) per share attributable to Harsco Corporation common
stockholders |
$ (1.14) |
$ (0.63) |
$ (0.14) (a) |
$ 0.08 |
(a) Does not total due to
rounding. |
|
|
|
|
|
|
|
|
|
|
HARSCO CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) |
|
|
(In
thousands) |
December 31
2011 |
December 31
2010 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 121,184 |
$ 124,238 |
Trade accounts
receivable, net |
618,475 |
585,301 |
Other receivables |
44,431 |
29,299 |
Inventories |
241,934 |
271,617 |
Other
current assets |
133,407 |
144,491 |
Total
current assets |
1,159,431 |
1,154,946 |
Property, plant and equipment, net |
1,274,484 |
1,366,973 |
Goodwill |
680,901 |
690,787 |
Intangible assets, net |
93,501 |
120,959 |
Other assets |
130,560 |
135,555 |
Total
assets |
$ 3,338,877 |
$ 3,469,220 |
LIABILITIES |
|
|
Current liabilities: |
|
|
Short-term
borrowings |
$ 51,414 |
$ 31,197 |
Current maturities of
long-term debt |
3,558 |
4,011 |
Accounts payable |
252,329 |
261,509 |
Accrued compensation |
92,603 |
83,928 |
Income taxes payable |
8,409 |
9,718 |
Dividends payable |
16,498 |
16,505 |
Insurance
liabilities |
25,075 |
25,844 |
Advances on
contracts |
111,429 |
128,794 |
Other
current liabilities |
220,953 |
206,358 |
Total
current liabilities |
782,268 |
767,864 |
Long-term debt |
853,800 |
849,724 |
Deferred income taxes |
27,430 |
35,642 |
Insurance liabilities |
60,864 |
62,202 |
Retirement plan liabilities |
343,842 |
223,777 |
Other liabilities |
50,755 |
61,866 |
Total
liabilities |
2,118,959 |
2,001,075 |
EQUITY |
|
|
Harsco
Corporation stockholders' equity: |
|
|
Common stock |
139,914 |
139,514 |
Additional paid-in
capital |
149,066 |
141,298 |
Accumulated other
comprehensive loss |
(364,191) |
(185,932) |
Retained earnings |
1,996,234 |
2,073,920 |
Treasury
stock |
(744,644) |
(737,106) |
Total Harsco
Corporation stockholders' equity |
1,176,379 |
1,431,694 |
Noncontrolling
interests |
43,539 |
36,451 |
Total equity |
1,219,918 |
1,468,145 |
Total
liabilities and equity |
$ 3,338,877 |
$ 3,469,220 |
|
|
|
|
|
|
|
|
|
|
HARSCO CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) |
|
|
|
|
|
Three Months
Ended December 31 |
Twelve Months
Ended December 31 |
(In thousands) |
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
Net income |
$ (93,093) |
$ (49,862) |
$ (9,556) |
$ 12,459 |
Adjustments to reconcile
net income to net cash provided (used) by operating
activities: |
|
|
|
|
Depreciation |
68,691 |
69,806 |
276,021 |
279,234 |
Amortization |
8,470 |
8,972 |
34,420 |
36,005 |
Equity in income of
unconsolidated entities, net |
(160) |
(81) |
(690) |
(390) |
Dividends or
distributions from unconsolidated entities |
66 |
-- |
226 |
176 |
Harsco Infrastructure
Segment 2010 Restructuring Program non-cash adjustment |
-- |
43,158 |
-- |
43,158 |
Harsco 2011/2012
Restructuring Program non-cash adjustment |
67,320 |
-- |
67,320 |
-- |
Other, net |
(3,758) |
(3,358) |
(7,432) |
(20,629) |
Changes in assets and
liabilities, net of acquisitions and dispositions of
businesses: |
|
|
|
|
Accounts receivable |
18,961 |
61,694 |
(58,011) |
4,395 |
Inventories |
14,643 |
3,993 |
7,976 |
12,599 |
Accounts payable |
(5,863) |
22,005 |
(2,713) |
36,529 |
Accrued interest
payable |
(7,026) |
(23,867) |
(375) |
(2,615) |
Accrued compensation |
(1,086) |
(124) |
12,554 |
16,305 |
Harsco Infrastructure
Segment 2010 Restructuring Program accrual |
(2,932) |
29,817 |
(19,629) |
29,817 |
Harsco 2011/2012
Restructuring Program accrual |
30,471 |
-- |
30,471 |
-- |
Other
assets and liabilities |
13,965 |
3,294 |
(31,806) |
(45,616) |
|
|
|
|
|
Net cash provided by operating
activities |
108,669 |
165,447 |
298,776 |
401,427 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
Purchases of property,
plant and equipment |
(72,281) |
(62,406) |
(313,101) |
(192,348) |
Proceeds from sales of
assets |
5,472 |
4,242 |
42,653 |
22,663 |
Purchases of businesses,
net of cash acquired |
-- |
-- |
(1,938) |
(27,643) |
Other investing
activities |
6,450 |
(1,602) |
16,564 |
(4,695) |
|
|
|
|
|
Net cash
used by investing activities |
(60,359) |
(59,766) |
(255,822) |
(202,023) |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
Short-term borrowings,
net |
(7,304) |
25,213 |
21,637 |
(25,706) |
Current maturities and
long-term debt: |
|
|
|
|
Additions |
86,092 |
247,946 |
301,515 |
747,213 |
Reductions |
(87,093) |
(569,392) |
(297,854) |
(821,038) |
Cash dividends paid on
common stock |
(16,546) |
(16,516) |
(66,146) |
(65,976) |
Dividends paid to
noncontrolling interests |
(849) |
(830) |
(4,171) |
(5,850) |
Purchase of
noncontrolling interest |
-- |
-- |
-- |
(1,159) |
Contributions and
adjustments from noncontrolling interests |
(222) |
256 |
8,851 |
698 |
Common stock
issued-options |
735 |
177 |
2,403 |
997 |
Common stock acquired for
treasury |
(5,788) |
-- |
(5,788) |
-- |
Other
financing activities |
-- |
(331) |
(1) |
(700) |
|
|
|
|
|
Net cash
used by financing activities |
(30,975) |
(313,477) |
(39,554) |
(171,521) |
|
|
|
|
|
Effect of exchange rate changes on
cash |
(2,439) |
1,697 |
(6,454) |
2,171 |
|
|
|
|
|
Net increase (decrease) in cash and cash
equivalents |
14,896 |
(206,099) |
(3,054) |
30,054 |
|
|
|
|
|
Cash and cash equivalents at beginning
of period |
106,288 |
330,337 |
124,238 |
94,184 |
|
|
|
|
|
Cash and cash equivalents at end
of period |
$ 121,184 |
$ 124,238 |
$ 121,184 |
$ 124,238 |
|
|
|
|
|
|
|
|
|
|
HARSCO CORPORATION |
|
|
|
|
REVIEW OF OPERATIONS BY
SEGMENT (Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2011 |
Three Months Ended
December 31, 2010 |
|
|
|
|
|
(In
thousands) |
Sales |
Operating Income
(Loss) |
Sales |
Operating Income
(Loss) |
|
|
|
|
|
Harsco Metals &
Minerals |
$ 372,298 |
$ 14,829 |
$ 371,730 |
$ 23,902 |
|
|
|
|
|
Harsco Infrastructure |
266,073 |
(99,680) |
264,956 |
(98,879) |
|
|
|
|
|
Harsco Rail |
72,044 |
16,467 |
60,858 |
9,694 |
|
|
|
|
|
Harsco Industrial |
82,315 |
13,188 |
59,807 |
10,432 |
|
|
|
|
|
General Corporate |
-- |
(1,452) |
-- |
(895) |
|
|
|
|
|
Consolidated Totals |
$ 792,730 |
$ (56,648) |
$ 757,351 |
$ (55,746) |
|
|
|
|
|
|
Twelve Months Ended
December 31, 2011 |
Twelve Months Ended
December 31, 2010 |
|
|
|
|
|
(In
thousands) |
Sales |
Operating Income
(Loss) |
Sales |
Operating Income
(Loss) |
|
|
|
|
|
Harsco Metals &
Minerals |
$ 1,588,302 |
$ 109,593 |
$ 1,461,531 |
$ 117,915 |
|
|
|
|
|
Harsco Infrastructure |
1,108,293 |
(125,555) |
1,031,807 |
(145,346) |
|
|
|
|
|
Harsco Rail |
300,029 |
58,746 |
313,262 |
66,124 |
|
|
|
|
|
Harsco Industrial |
306,116 |
50,656 |
231,898 |
42,871 |
|
|
|
|
|
General Corporate |
-- |
(5,791) |
180 |
(3,133) |
|
|
|
|
|
Consolidated Totals |
$ 3,302,740 |
$ 87,649 |
$ 3,038,678 |
$ 78,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HARSCO
CORPORATION |
REVIEW OF OPERATING
INCOME BY SEGMENT |
EXCLUDING RESTRUCTURING
CHARGE (a) – Addendum (Unaudited) |
|
|
|
Three Months
Ended December 31, 2011 Operating Income (Loss) |
Three Months
Ended December 31, 2010 Operating Income (Loss) |
(In thousands) |
As
Reported |
Restructuring
Charge |
Excluding Restructuring
Charge |
As
Reported |
Restructuring
Charge |
Excluding Restructuring
Charge |
|
|
|
|
|
|
|
Harsco Metals &
Minerals |
$ 14,829 |
$ 12,775 |
$ 27,604 |
$ 23,902 |
$ -- |
$ 23,902 |
|
|
|
|
|
|
|
Harsco Infrastructure |
(99,680) |
87,604 |
(12,076) |
(98,879) |
84,440 |
(14,439) |
|
|
|
|
|
|
|
Harsco Rail |
16,467 |
50 |
16,517 |
9,694 |
-- |
9,694 |
|
|
|
|
|
|
|
Harsco Industrial |
13,188 |
-- |
13,188 |
10,432 |
-- |
10,432 |
|
|
|
|
|
|
|
General Corporate |
(1,452) |
351 |
(1,101) |
(895) |
-- |
(895) |
|
|
|
|
|
|
|
Consolidated Totals |
$ (56,648) |
$ 100,780 |
$ 44,132 |
$ (55,746) |
$ 84,440 |
$ 28,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2011 Operating Income (Loss) |
Twelve Months
Ended December 31, 2010 Operating Income (Loss) |
(In thousands) |
As
Reported |
Restructuring
Charge |
Excluding Restructuring
Charge |
As
Reported |
Restructuring
Charge |
Excluding Restructuring
Charge |
|
|
|
|
|
|
|
Harsco Metals &
Minerals |
$ 109,593 |
$ 12,775 |
$ 122,368 |
$ 117,915 |
$ -- |
$ 117,915 |
|
|
|
|
|
|
|
Harsco Infrastructure |
(125,555) |
87,604 |
(37,951) |
(145,346) |
84,440 |
(60,906) |
|
|
|
|
|
|
|
Harsco Rail |
58,746 |
50 |
58,796 |
66,124 |
-- |
66,124 |
|
|
|
|
|
|
|
Harsco Industrial |
50,656 |
-- |
50,656 |
42,871 |
-- |
42,871 |
|
|
|
|
|
|
|
General Corporate |
(5,791) |
351 |
(5,440) |
(3,133) |
-- |
(3,133) |
|
|
|
|
|
|
|
Consolidated Totals |
$ 87,649 |
$ 100,780 |
$ 188,429 |
$ 78,431 |
$ 84,440 |
$ 162,871 |
|
|
|
|
|
|
|
(a) The
Company's management believes operating income excluding the
restructuring charge is useful to investors because it provides an
overall understanding of the Company's historical financial
performance and future prospects. Exclusion of these 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. |
|
HARSCO
CORPORATION |
RECONCILIATION OF INCOME
(LOSS) FROM CONTINUING OPERATIONS (GAAP BASIS) TO INCOME FROM
CONTINUING OPERATIONS, |
EXCLUDING RESTRUCTURING
CHARGE AND U.K. DEFERRED TAX ASSET ADJUSTMENT (a)
(Unaudited) |
(In
thousands) |
|
|
Three Months
Ended December 31 |
Twelve Months
Ended December 31 |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
Income (loss) from continuing
operations (GAAP basis) |
$ (92,720) |
$ (49,210) |
$ (7,493) |
$ 16,590 |
|
|
|
|
|
Restructuring charge: |
|
|
|
|
|
|
|
|
|
Employee termination benefit costs |
(28,586) |
(12,770) |
(28,586) |
(12,770) |
Cost to exit activities |
(6,131) |
(28,382) |
(6,131) |
(28,382) |
Product rationalization |
(66,063) |
(34,230) |
(66,063) |
(34,230) |
Asset write-down |
-- |
(8,928) |
-- |
(8,928) |
Other |
-- |
(130) |
-- |
(130) |
Restructuring charge, before tax |
(100,780) |
(84,440) |
(100,780) |
(84,440) |
Tax benefit |
16,198 |
21,806 |
16,198 |
21,806 |
Restructuring charge, after tax |
(84,582) |
(62,634) |
(84,582) |
(62,634) |
U.K. deferred tax asset
adjustment |
(36,833) |
-- |
(36,833) |
-- |
|
|
|
|
|
Income from continuing
operations, excluding restructuring charge and U.K. deferred
tax asset adjustment |
$ 28,695 |
$ 13,424 |
$ 113,922 |
$ 79,224 |
|
(a) The
Company's management believes operating income excluding the
restructuring charge and the U.K. deferred tax asset adjustment is
useful to investors because it provides an overall understanding of
the Company's historical financial performance and future
prospects. Exclusion of these 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. |
CONTACT: Investor Contact
Eugene M. Truett
717.975.5677
etruett@harsco.com
Media Contact
Kenneth D. Julian
717.730.3683
kjulian@harsco.com
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