Harsco Corporation (NYSE: HSC) today reported first quarter
2021 results. On a U.S. GAAP ("GAAP") basis, first quarter of 2021
diluted earnings per share from continuing operations were $0.02
including a loss on the debt refinancing. Adjusted diluted earnings
per share from continuing operations in the first quarter of 2021
were $0.15. These figures compare with first quarter of 2020 GAAP
diluted loss per share from continuing operations of $0.11 and
adjusted diluted earnings per share from continuing operations of
$0.16.
GAAP operating income from continuing operations
for the first quarter of 2021 was $25 million. Adjusted EBITDA
totaled $66 million in the quarter, compared to the Company's
previously provided guidance range of $52 million to $58
million.
“Harsco delivered solid operational and
financial performance in the first quarter, exceeding expectations
in each of our businesses,” said Chairman and CEO Nick Grasberger.
“Our results reflect strong execution by our team together with
improving conditions across our end markets, including in Rail.
Based on our first quarter performance and improving market
visibility, we are raising our full-year 2021 guidance.”
“There is significant momentum currently within
the Company and our near-term priorities, including acquisition
integration and strengthening our financial position, remain
unchanged. I am proud of our progress to advance our strategic
goals, and believe that each of our business segments is well
positioned to benefit as the economic recovery continues. We look
forward to continuing our business transformation and positioning
Harsco to pursue growth and to drive enhanced value for
shareholders in the future.”
Harsco Corporation—Selected First Quarter
Results
|
($ in millions, except per share amounts) |
|
Q1 2021 |
|
Q1 2020 |
|
Q4 2020 |
|
Revenues |
|
$ |
529 |
|
|
$ |
399 |
|
|
$ |
508 |
|
| Operating
income from continuing operations - GAAP |
|
$ |
25 |
|
|
$ |
3 |
|
|
$ |
11 |
|
| Diluted
EPS from continuing operations - GAAP |
|
$ |
0.02 |
|
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) |
| Adjusted
EBITDA - excluding unusual items |
|
$ |
66 |
|
|
$ |
57 |
|
|
$ |
62 |
|
| Adjusted
EBITDA margin - excluding unusual items |
|
12.4 |
% |
|
14.4 |
% |
|
12.3 |
% |
|
Adjusted diluted EPS from continuing operations - excluding unusual
items |
|
$ |
0.15 |
|
|
$ |
0.16 |
|
|
$ |
0.12 |
|
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 First Quarter Operating
Results
Consolidated total revenues from continuing
operations were $529 million, an increase of 33 percent compared
with the prior-year quarter due to the acquisition of ESOL in April
2020 as well as revenue growth in Environmental and Rail. Foreign
currency translation positively impacted first quarter 2021
revenues by approximately $9 million compared with the prior-year
period.
GAAP operating income from continuing operations
was $25 million for the first quarter of 2021, compared with $3
million in the same quarter of last year. Meanwhile, adjusted
EBITDA totaled $66 million in the first quarter of 2021 versus $57
million in the first quarter of 2020. This EBITDA increase is
attributable to improved results in the Environmental segment as
well as ESOL contributions to the Clean Earth segment following its
acquisition in Q2 2020.
First Quarter Business Review
Environmental
|
($ in millions) |
|
Q1 2021 |
|
Q1 2020 |
|
Q4 2020 |
|
Revenues |
|
$ |
258 |
|
|
$ |
242 |
|
|
$ |
246 |
|
| Operating
income - GAAP |
|
$ |
26 |
|
|
$ |
11 |
|
|
$ |
23 |
|
| Adjusted
EBITDA - excluding unusual items |
|
$ |
54 |
|
|
$ |
43 |
|
|
$ |
52 |
|
|
Adjusted EBITDA margin - excluding unusual items |
|
20.8 |
% |
|
17.8 |
% |
|
21.2 |
% |
Environmental revenues totaled $258 million in
the first quarter of 2021, an increase of 7 percent compared with
the prior-year quarter. This increase is attributable to improved
demand for environmental services and applied products as well as
favorable foreign exchange movements. The segment's GAAP operating
income and adjusted EBITDA totaled $26 million and $54 million,
respectively, in the first quarter of 2021. These figures compare
with GAAP operating income of $11 million and adjusted EBITDA of
$43 million in the prior-year period. Higher demand, a more
favorable mix of services and lower general and administrative
spending contributed to the improvement in adjusted earnings.
Results also benefited from the recovery of Brazil sales tax
expenses, totaling approximately $2 million, which were not
anticipated in the quarter. Lastly, Environmental's adjusted EBITDA
margin increased to 20.8 percent in the first quarter of 2021
versus 17.8 percent in the comparable-quarter of 2020.
Clean Earth
|
($ in millions) |
|
Q1 2021 |
|
Q1 2020 |
|
Q4 2020 |
|
Revenues |
|
$ |
189 |
|
|
$ |
79 |
|
|
$ |
185 |
|
| Operating
income - GAAP |
|
$ |
3 |
|
|
$ |
4 |
|
|
$ |
3 |
|
| Adjusted
EBITDA - excluding unusual items |
|
$ |
15 |
|
|
$ |
11 |
|
|
$ |
16 |
|
|
Adjusted EBITDA margin - excluding unusual items |
|
7.7 |
% |
|
13.7 |
% |
|
8.6 |
% |
Note: The 2020 financial information provided
above and discussed below for Clean Earth does not include a
corporate cost allocation for ESOL.
Clean Earth revenues totaled $189 million in the
first quarter of 2021, compared with $79 million in the prior-year
quarter, with the increase attributable to the ESOL acquisition in
Q2 2020. Segment operating income was $3 million and adjusted
EBITDA totaled $15 million in the first quarter of 2021. These
figures compare with $4 million and $11 million, respectively, in
the prior-year period. The improvement in adjusted earnings
relative to the prior-year quarter can be attributed to ESOL's
contributions in the current year. This benefit was partially
offset by personnel investments to support the full integration of
the Clean Earth platform and other administrative expenses, some
which will not occur beyond 2021, as well as lower services demand
and a less favorable business mix principally within the
contaminated materials business as a result of the pandemic.
Rail
|
($ in millions) |
|
Q1 2021 |
|
Q1 2020 |
|
Q4 2020 |
|
Revenues |
|
$ |
82 |
|
|
$ |
78 |
|
|
$ |
77 |
|
| Operating
income (loss) - GAAP |
|
$ |
5 |
|
|
$ |
6 |
|
|
$ |
1 |
|
| Adjusted
EBITDA - excluding unusual items |
|
$ |
6 |
|
|
$ |
8 |
|
|
$ |
3 |
|
|
Adjusted EBITDA margin - excluding unusual items |
|
7.3 |
% |
|
9.9 |
% |
|
3.3 |
% |
Rail revenues increased 4 percent compared with
the prior-year quarter to $82 million. This change reflects higher
equipment and contract services revenues, partially offset by lower
aftermarket parts sales. The segment's operating income and
adjusted EBITDA totaled $5 million and $6 million, respectively, in
the first quarter of 2021. These figures compare with $6 million
and $8 million, respectively, in the prior-year quarter. The EBITDA
change year-on-year is attributable to lower aftermarket parts
contribution as well as a less favorable sales mix.
Cash Flow
Net cash used by operating activities totaled
$23 million in the first quarter of 2021, compared with net cash
used by operating activities of $12 million in the prior-year
period. Free cash flow was $(32) million in the first quarter of
2021, compared with $(26) million in the prior-year period.
The change in free cash flow compared with the
prior-year quarter is attributable to changes in net cash from
operating activities, including the impact of higher interest
payments linked to the ESOL acquisition and the timing of working
capital items, partially offset by lower net capital spending.
2021 Outlook
The Company's has increased its 2021 guidance to
reflect business momentum and improved visibility in each of its
businesses, relative to the outlook provided with the Company's
fourth quarter 2020 results. Comments by business segments are as
follows:
Environmental outlook is
improved to reflect higher services and applied products demand,
increased commodity prices and lower administrative spending. For
the year, the primary drivers for an increase in adjusted EBITDA
compared with 2020 are expected to be favorable demand for
underlying services and products as well as higher commodity
prices.
Clean Earth outlook is improved
to reflect increasing demand for hazardous waste processing
services and stronger margin performance. For the year, adjusted
EBITDA is projected to increase due to the full-year impact of ESOL
ownership, underlying organic growth for hazardous material
services and integration benefits, partially offset by an
additional allocation of Corporate costs and investments which
include various one-time expenditures. Further, performance in the
contaminated materials line of business is expected to strengthen
in the coming quarters as a result of favorable trends within
regional non-residential construction markets.
Rail outlook is improved
principally as a result of strengthening demand for rail
maintenance equipment as well as aftermarket parts, including in
Asia. For the year, the primary drivers for an increase in adjusted
EBITDA versus 2020 remain higher anticipated demand for equipment
and technology products as well as higher contract services
contributions.
Lastly, Corporate spending is
expected to range from $36 million to $37 million for the year.
Summary Outlook highlights are as follows:
|
2021 Full Year Outlook |
|
|
GAAP Operating Income |
$120 - $135 million |
|
Adjusted EBITDA |
$295 - $310 million |
|
GAAP Diluted Earnings Per Share |
$0.45 - 0.59 |
|
Adjusted Diluted Earnings Per Share |
$0.82 - 0.96 |
|
Free Cash Flow Before Growth Capital |
$95 - $115 million |
|
Free Cash Flow |
$35 - $55 million |
|
Net Interest Expense |
$62 - $63 million |
|
Net Capital Expenditures |
$150 - $170 million |
|
Effective Tax Rate, Excluding Any Unusual Items |
34 - 36% |
|
|
|
| Q2 2021
Outlook |
|
|
GAAP Operating Income |
$29 - $35 million |
|
Adjusted EBITDA |
$73 - $79 million |
|
GAAP Diluted Earnings Per Share |
$0.13 - 0.19 |
|
Adjusted Diluted Earnings Per Share |
$0.21 - 0.27 |
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. The conference call will
be broadcast live through the Harsco Corporation website at
www.harsco.com. The Company will refer to a slide presentation that
accompanies its formal remarks. The slide presentation will be
available on the Company’s website.
The call can also be accessed by telephone
by dialing (877) 783-8494 or (614) 999-1829. Enter Conference
ID number 7159057.
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 integration of the Company's strategic
acquisitions; (13) potential severe volatility in the capital
markets; (14) failure to retain key management and employees;
(15) the outcome of any disputes with customers, contractors
and subcontractors; (16) 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; (17) implementation of environmental
remediation matters; (18) risk and uncertainty associated with
intangible assets and (19) 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 I, Item 1A, "Risk Factors," of the Company's Annual
Report on Form 10-K for the year ended December 31, 2020.
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.
About Harsco
Harsco Corporation is a global market leader
providing environmental solutions for industrial and specialty
waste streams and innovative technologies for the rail sector.
Based in Camp Hill, PA, the 13,000-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 |
| |
|
March 31 |
|
(In thousands, except per share amounts) |
|
2021 |
|
2020 |
|
Revenues from continuing operations: |
|
|
|
|
|
Service revenues |
|
$ |
424,449 |
|
|
$ |
291,589 |
|
|
Product revenues |
|
104,406 |
|
|
107,252 |
|
|
Total revenues |
|
528,855 |
|
|
398,841 |
|
| Costs and expenses
from continuing operations: |
|
|
|
|
|
Cost of services sold |
|
334,506 |
|
|
236,608 |
|
|
Cost of products sold |
|
86,576 |
|
|
79,860 |
|
|
Selling, general and administrative expenses |
|
83,043 |
|
|
72,499 |
|
|
Research and development expenses |
|
818 |
|
|
1,260 |
|
|
Other (income) expenses, net |
|
(912 |
) |
|
5,733 |
|
|
Total costs and expenses |
|
504,031 |
|
|
395,960 |
|
|
Operating income from continuing operations |
|
24,824 |
|
|
2,881 |
|
| Interest income |
|
585 |
|
|
193 |
|
| Interest expense |
|
(16,864 |
) |
|
(12,649 |
) |
| Unused debt commitment fees,
amendment fees and loss on extinguishment of debt |
|
(5,258 |
) |
|
(488 |
) |
| Defined benefit pension
income |
|
3,953 |
|
|
1,589 |
|
|
Income (loss) from continuing operations before income
taxes and equity income |
|
7,240 |
|
|
(8,474 |
) |
| Income tax benefit (expense)
from continuing operations |
|
(4,229 |
) |
|
682 |
|
| Equity income (loss) of
unconsolidated entities, net |
|
(119 |
) |
|
96 |
|
|
Income (loss) from continuing operations |
|
2,892 |
|
|
(7,696 |
) |
| Discontinued
operations: |
|
|
|
|
|
Gain on sale of discontinued business |
|
— |
|
|
18,462 |
|
|
Loss from discontinued businesses |
|
(1,791 |
) |
|
(225 |
) |
|
Income tax benefit (expense) from discontinued businesses |
|
464 |
|
|
(9,314 |
) |
|
Income (loss) from discontinued operations, net of
tax |
|
(1,327 |
) |
|
8,923 |
|
| Net
income |
|
1,565 |
|
|
1,227 |
|
|
Less: Net income attributable to noncontrolling interests |
|
(1,430 |
) |
|
(1,086 |
) |
| Net income
attributable to Harsco Corporation |
|
$ |
135 |
|
|
$ |
141 |
|
|
Amounts attributable to Harsco Corporation common
stockholders: |
|
Income (loss) from continuing operations, net of tax |
|
$ |
1,462 |
|
|
$ |
(8,782 |
) |
|
Income (loss) from discontinued operations, net of tax |
|
(1,327 |
) |
|
8,923 |
|
|
Net income attributable to Harsco Corporation common
stockholders |
|
$ |
135 |
|
|
$ |
141 |
|
| Weighted-average shares of
common stock outstanding |
|
79,088 |
|
|
78,761 |
|
| Basic
earnings (loss) per common share attributable to Harsco Corporation
common stockholders: |
|
Continuing operations |
|
$ |
0.02 |
|
|
$ |
(0.11 |
) |
|
Discontinued operations |
|
(0.02 |
) |
|
0.11 |
|
|
Basic earnings (loss) per share attributable to Harsco
Corporation common stockholders |
|
$ |
— |
|
|
$ |
— |
|
| Diluted weighted-average
shares of common stock outstanding |
|
80,015 |
|
|
78,761 |
|
| Diluted
earnings (loss) per common share attributable to Harsco Corporation
common stockholders: |
|
Continuing operations |
|
$ |
0.02 |
|
|
$ |
(0.11 |
) |
|
Discontinued operations |
|
(0.02 |
) |
|
0.11 |
|
|
Diluted earnings (loss) per share attributable to Harsco
Corporation common stockholders |
|
$ |
— |
|
|
$ |
— |
|
| HARSCO
CORPORATIONCONSOLIDATED BALANCE SHEETS
(Unaudited) |
|
|
|
|
|
(In thousands) |
|
March 312021 |
|
December 312020 |
|
ASSETS |
|
|
|
|
| Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
79,308 |
|
|
$ |
76,454 |
|
|
Restricted cash |
|
3,017 |
|
|
3,215 |
|
|
Trade accounts receivable, net |
|
417,830 |
|
|
407,390 |
|
|
Other receivables |
|
32,998 |
|
|
34,253 |
|
|
Inventories |
|
171,587 |
|
|
173,013 |
|
|
Current portion of contract assets |
|
72,133 |
|
|
54,754 |
|
|
Prepaid expenses |
|
55,231 |
|
|
56,099 |
|
|
Other current assets |
|
14,217 |
|
|
10,645 |
|
|
Total current assets |
|
846,321 |
|
|
815,823 |
|
| Property, plant and equipment,
net |
|
655,462 |
|
|
668,209 |
|
| Right-of-use assets, net |
|
89,772 |
|
|
96,849 |
|
| Goodwill |
|
900,314 |
|
|
902,074 |
|
| Intangible assets, net |
|
430,589 |
|
|
438,565 |
|
| Deferred income tax
assets |
|
10,155 |
|
|
15,274 |
|
| Other assets |
|
57,731 |
|
|
56,493 |
|
|
Total assets |
|
$ |
2,990,344 |
|
|
$ |
2,993,287 |
|
|
LIABILITIES |
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
Short-term borrowings |
|
$ |
5,062 |
|
|
$ |
7,450 |
|
|
Current maturities of long-term debt |
|
6,720 |
|
|
13,576 |
|
|
Accounts payable |
|
209,988 |
|
|
218,039 |
|
|
Accrued compensation |
|
43,092 |
|
|
45,885 |
|
|
Income taxes payable |
|
4,698 |
|
|
3,499 |
|
|
Current portion of advances on contracts |
|
41,089 |
|
|
39,917 |
|
|
Current portion of operating lease liabilities |
|
23,632 |
|
|
24,862 |
|
|
Other current liabilities |
|
184,451 |
|
|
184,727 |
|
|
Total current liabilities |
|
518,732 |
|
|
537,955 |
|
| Long-term debt |
|
1,334,325 |
|
|
1,271,189 |
|
| Retirement plan
liabilities |
|
206,178 |
|
|
231,335 |
|
| Advances on contracts |
|
31,403 |
|
|
45,017 |
|
| Operating lease
liabilities |
|
64,029 |
|
|
69,860 |
|
| Environmental liabilities |
|
29,044 |
|
|
29,424 |
|
| Deferred tax liabilities |
|
33,178 |
|
|
40,653 |
|
| Other liabilities |
|
56,872 |
|
|
54,455 |
|
|
Total liabilities |
|
2,273,761 |
|
|
2,279,888 |
|
| HARSCO CORPORATION
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Common stock |
|
144,764 |
|
|
144,288 |
|
|
Additional paid-in capital |
|
206,944 |
|
|
204,078 |
|
|
Accumulated other comprehensive loss |
|
(643,446 |
) |
|
(645,741 |
) |
|
Retained earnings |
|
1,797,894 |
|
|
1,797,759 |
|
|
Treasury stock |
|
(846,182 |
) |
|
(843,230 |
) |
|
Total Harsco Corporation stockholders’ equity |
|
659,974 |
|
|
657,154 |
|
| Noncontrolling interests |
|
56,609 |
|
|
56,245 |
|
|
Total equity |
|
716,583 |
|
|
713,399 |
|
|
Total liabilities and equity |
|
$ |
2,990,344 |
|
|
$ |
2,993,287 |
|
| HARSCO
CORPORATIONCONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) |
| |
|
Three Months Ended March 31 |
|
(In thousands) |
|
2021 |
|
2020 |
|
Cash flows from operating activities: |
|
|
|
|
|
Net income |
|
$ |
1,565 |
|
|
$ |
1,227 |
|
|
Adjustments to reconcile net income to net cash used by operating
activities: |
|
Depreciation |
|
32,748 |
|
|
29,933 |
|
|
Amortization |
|
8,967 |
|
|
6,557 |
|
|
Deferred income tax (benefit) expense |
|
(3,421 |
) |
|
4,412 |
|
|
Equity in (income) loss of unconsolidated entities, net |
|
119 |
|
|
(96 |
) |
|
Gain on sale from discontinued business |
|
— |
|
|
(18,462 |
) |
|
Loss on early extinguishment of debt |
|
2,668 |
|
|
— |
|
|
Other, net |
|
1,128 |
|
|
(2,007 |
) |
|
Changes in assets and liabilities, net of acquisitions and
dispositions of businesses: |
|
|
|
|
|
Accounts receivable |
|
(16,446 |
) |
|
(22,050 |
) |
|
Inventories |
|
407 |
|
|
(16,412 |
) |
|
Contract assets |
|
(19,070 |
) |
|
(20,311 |
) |
|
Right-of-use assets |
|
6,768 |
|
|
3,429 |
|
|
Accounts payable |
|
(8,592 |
) |
|
12,308 |
|
|
Accrued interest payable |
|
(7,320 |
) |
|
(9,891 |
) |
|
Accrued compensation |
|
(1,541 |
) |
|
(2,752 |
) |
|
Advances on contracts |
|
(9,698 |
) |
|
40,464 |
|
|
Operating lease liabilities |
|
(6,750 |
) |
|
(3,358 |
) |
|
Retirement plan liabilities, net |
|
(19,267 |
) |
|
(15,534 |
) |
|
Income taxes payable - Gain on sale of discontinued businesses |
|
— |
|
|
3,843 |
|
|
Other assets and liabilities |
|
14,562 |
|
|
(2,836 |
) |
|
Net cash used by operating activities |
|
(23,173 |
) |
|
(11,536 |
) |
| Cash flows from
investing activities: |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(27,382 |
) |
|
(27,894 |
) |
|
Purchase of businesses, net of cash acquired |
|
— |
|
|
(4,157 |
) |
|
Proceeds from sale of discontinued business, net |
|
— |
|
|
37,219 |
|
|
Proceeds from sales of assets |
|
3,862 |
|
|
2,185 |
|
|
Expenditures for intangible assets |
|
(68 |
) |
|
(58 |
) |
|
Net proceeds (payments) from settlement of foreign currency forward
exchange contracts |
|
(1,427 |
) |
|
11,327 |
|
|
Other investing activities, net |
|
46 |
|
|
— |
|
|
Net cash provided (used) by investing
activities |
|
(24,969 |
) |
|
18,622 |
|
| Cash flows from
financing activities: |
|
|
|
|
|
Short-term borrowings, net |
|
575 |
|
|
3,697 |
|
|
Current maturities and long-term debt: |
|
|
|
|
|
Additions |
|
434,873 |
|
|
52,875 |
|
|
Reductions |
|
(374,530 |
) |
|
(38,709 |
) |
|
Stock-based compensation - Employee taxes paid |
|
(2,485 |
) |
|
(3,437 |
) |
|
Deferred financing costs |
|
(6,525 |
) |
|
(1,632 |
) |
|
Other financing activities, net |
|
(400 |
) |
|
— |
|
|
Net cash provided by financing activities |
|
51,508 |
|
|
12,794 |
|
| Effect of exchange rate
changes on cash and cash equivalents, including restricted
cash |
|
(710 |
) |
|
(10,824 |
) |
| Net increase in cash and cash
equivalents, including restricted cash |
|
2,656 |
|
|
9,056 |
|
| Cash and cash equivalents,
including restricted cash, at beginning of period |
|
79,669 |
|
|
59,732 |
|
| Cash and cash
equivalents, including restricted cash, at end of
period |
|
$ |
82,325 |
|
|
$ |
68,788 |
|
| HARSCO
CORPORATIONREVIEW OF OPERATIONS BY
SEGMENT (Unaudited) |
| |
|
|
Three Months Ended |
|
Three Months Ended |
| |
|
|
March 31, 2021 |
|
March 31, 2020 |
|
(In thousands) |
|
Revenues |
|
OperatingIncome (Loss) |
|
Revenues |
|
OperatingIncome (Loss) |
|
Harsco Environmental |
|
$ |
257,986 |
|
|
$ |
25,935 |
|
|
$ |
241,559 |
|
|
$ |
10,520 |
|
|
Harsco Clean Earth (a) |
|
189,279 |
|
|
3,178 |
|
|
78,812 |
|
|
4,245 |
|
|
Harsco Rail |
|
81,590 |
|
|
4,664 |
|
|
78,470 |
|
|
6,472 |
|
|
Corporate |
|
— |
|
|
(8,953 |
) |
|
— |
|
|
(18,356 |
) |
|
Consolidated Totals |
|
$ |
528,855 |
|
|
$ |
24,824 |
|
|
$ |
398,841 |
|
|
$ |
2,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
The Company's
acquisition of ESOL closed on April 6, 2020. |
| HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED EARNINGS
(LOSS) PER SHARE FROM CONTINUING OPERATIONS AS REPORTED
(Unaudited) |
| |
| |
|
Three Months Ended |
|
| |
|
March 31 |
|
|
|
|
2021 |
|
|
2020 |
|
|
Diluted earnings (loss) per share from continuing operations as
reported |
|
$ |
0.02 |
|
|
|
$ |
(0.11 |
) |
|
| Corporate unused
debt commitment fees, amendment fees and loss on extinguishment of
debt (a) |
|
0.07 |
|
|
|
0.01 |
|
|
| Corporate
acquisition and integration costs (b) |
|
— |
|
|
|
0.17 |
|
|
| Harsco
Environmental Segment severance costs (c) |
|
— |
|
|
|
0.07 |
|
|
| Taxes on above
unusual items (d) |
|
(0.01 |
) |
|
|
(0.03 |
) |
|
| Adjusted
diluted earnings per share from continuing operations, including
acquisition amortization expense |
|
0.07 |
|
(f) |
|
0.10 |
|
(f) |
| Acquisition
amortization expense, net of tax (e) |
|
0.08 |
|
|
|
0.06 |
|
|
| Adjusted
diluted earnings per share from continuing operations |
|
$ |
0.15 |
|
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
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 (Q1 2021 $5.3 million pre-tax) and costs
related to the new term loan under the Company's existing Senior
Secured Credit Facilities (Q1 2020 $0.5 million pre-tax). |
| (b) |
Costs at Corporate
associated with supporting and executing the Company's growth
strategy (Q1 2020 $13.8 million pre-tax). |
| (c) |
Harsco Environmental
Segment severance costs (Q1 2020 $5.2 million pre-tax). |
| (d) |
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. |
| (e) |
Acquisition
amortization expense was $8.2 million and $5.9 million pre-tax for
Q1 2021 and Q1 2020, respectively. |
| (f) |
Does not total due
to rounding. |
The Company’s management believes Adjusted
diluted earnings per share from continuing operations, which is a
non-GAAP financial measure, 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. 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.
This measure should be considered in addition to, rather than as a
substitute for, other information provided in accordance with
GAAP.
| HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED LOSS PER
SHARE FROM CONTINUING OPERATIONS AS REPORTED
(Unaudited) |
| |
| |
|
Three Months Ended December
31 |
|
|
|
|
2020 |
|
| Diluted loss
per share from continuing operations as reported |
|
$ |
(0.07 |
) |
|
| Corporate acquisition
and integration costs (a) |
|
0.09 |
|
|
| Harsco Environmental
Segment severance costs (b) |
|
0.03 |
|
|
| Harsco Clean Earth
Segment integration costs (c) |
|
0.02 |
|
|
| Taxes on above
unusual items (d) |
|
(0.04 |
) |
|
| Adjusted
diluted earnings per share from continuing operations, including
acquisition amortization expense |
|
0.04 |
|
(f) |
| Acquisition
amortization expense, net of tax (e) |
|
0.08 |
|
|
| Adjusted
diluted earnings per share from continuing operations |
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
| (a) |
Costs at Corporate
associated with supporting and executing the Company's growth
strategy ($6.9 million pre-tax). |
| (b) |
Harsco Environmental
Segment severance costs ($2.2 million pre-tax). |
| (c) |
Costs incurred in the
Harsco Clean Earth Segment related to the integration of ESOL ($1.7
million pre-tax). |
| (d) |
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. |
| (e) |
Acquisition
amortization expense was $8.4 million pre-tax. |
| (f) |
Does not total due to
rounding. |
The Company’s management believes Adjusted
diluted earnings per share from continuing operations, which is a
non-GAAP financial measure, 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. 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.
This measure should be considered in addition to, rather than as a
substitute for, other information provided in accordance with
GAAP.
| HARSCO
CORPORATIONRECONCILIATION OF PROJECTED ADJUSTED
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
(Unaudited) |
| |
| |
|
|
Projected Three
Months Ending June
30 |
|
ProjectedTwelve Months EndingDecember 31 |
|
| |
|
|
2021 |
|
2021 |
|
|
|
|
|
Low |
|
High |
|
Low |
|
|
High |
|
| Diluted
earnings per share from continuing operations |
|
$ |
0.13 |
|
|
$ |
0.19 |
|
|
$ |
0.45 |
|
|
|
$ |
0.59 |
|
|
| Corporate unused
debt commitment fees, amendment fees and loss on extinguishment of
debt |
|
— |
|
|
— |
|
|
0.07 |
|
|
|
0.07 |
|
|
| Taxes on above
unusual items |
|
— |
|
|
— |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
| Adjusted
diluted earnings per share from continuing operations, including
acquisition amortization expense |
|
0.13 |
|
|
0.19 |
|
|
0.50 |
|
(a) |
|
0.64 |
|
(a) |
| Estimated
acquisition amortization expense, net of tax |
|
0.08 |
|
|
0.08 |
|
|
0.32 |
|
|
|
0.32 |
|
|
| Adjusted
diluted earnings per share from continuing operations |
|
$ |
0.21 |
|
|
$ |
0.27 |
|
|
$ |
0.82 |
|
|
|
$ |
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Does not total
due to rounding. |
The Company’s management believes Adjusted
diluted earnings per share from continuing operations, which is a
non-GAAP financial measure, is useful to investors because it
provides an overall understanding of the Company’s historical and
future prospects. 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. 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.
This measure should be considered in addition to, rather than as a
substitute for, other information provided in accordance with
GAAP.
| |
HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED EBITDA BY
SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT
(Unaudited) |
| |
|
| |
(In thousands) |
Harsco Environmental |
|
Harsco CleanEarth (a) |
|
Harsco Rail |
|
Corporate |
|
ConsolidatedTotals |
| |
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended
March 31, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) as reported |
$ |
25,935 |
|
|
$ |
3,178 |
|
|
$ |
4,664 |
|
|
$ |
(8,953 |
) |
|
$ |
24,824 |
|
| |
Depreciation |
25,717 |
|
|
5,337 |
|
|
1,211 |
|
|
483 |
|
|
32,748 |
|
| |
Amortization |
2,048 |
|
|
6,083 |
|
|
85 |
|
|
— |
|
|
8,216 |
|
| |
Adjusted EBITDA |
$ |
53,700 |
|
|
$ |
14,598 |
|
|
$ |
5,960 |
|
|
$ |
(8,470 |
) |
|
$ |
65,788 |
|
| |
Revenues as reported |
$ |
257,986 |
|
|
$ |
189,279 |
|
|
$ |
81,590 |
|
|
|
|
$ |
528,855 |
|
| |
Adjusted EBITDA margin
(%) |
20.8 |
% |
|
7.7 |
% |
|
7.3 |
% |
|
|
|
12.4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended
March 31, 2020: |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating income (loss) as
reported |
$ |
10,520 |
|
|
$ |
4,245 |
|
|
$ |
6,472 |
|
|
$ |
(18,356 |
) |
|
$ |
2,881 |
|
| |
Corporate acquisition and
integration costs |
— |
|
|
— |
|
|
— |
|
|
13,763 |
|
|
13,763 |
|
| |
Harsco Environmental Segment
severance costs |
5,160 |
|
|
— |
|
|
— |
|
|
— |
|
|
5,160 |
|
| |
Operating income (loss)
excluding unusual items |
15,680 |
|
|
4,245 |
|
|
6,472 |
|
|
(4,593 |
) |
|
21,804 |
|
| |
Depreciation |
25,375 |
|
|
2,621 |
|
|
1,215 |
|
|
513 |
|
|
29,724 |
|
| |
Amortization |
1,936 |
|
|
3,898 |
|
|
84 |
|
|
— |
|
|
5,918 |
|
| |
Adjusted EBITDA |
$ |
42,991 |
|
|
$ |
10,764 |
|
|
$ |
7,771 |
|
|
$ |
(4,080 |
) |
|
$ |
57,446 |
|
| |
Revenues as reported |
$ |
241,559 |
|
|
$ |
78,812 |
|
|
$ |
78,470 |
|
|
|
|
$ |
398,841 |
|
| |
Adjusted EBITDA margin
(%) |
17.8 |
% |
|
13.7 |
% |
|
9.9 |
% |
|
|
|
14.4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
The Company's
acquisition of ESOL closed on April 6, 2020. |
Consolidated 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); unused debt commitment fees, amendment
fees and loss on extinguishment of debt; 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 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. However, this measure should be
considered in addition to, rather than as a substitute for, net
income from continuing operations, operating income from continuing
operations and other information provided in accordance with GAAP.
The Company's method of calculating Adjusted EBITDA may differ from
methods used by other companies and, as a result, Adjusted EBITDA
may not be comparable to other similarly titled measures disclosed
by other companies.
| HARSCO
CORPORATIONRECONCILIATION OF ADJUSTED EBITDA BY
SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT
(Unaudited) |
|
(In thousands) |
|
Harsco Environmental |
|
Harsco CleanEarth |
|
Harsco Rail |
|
Corporate |
|
ConsolidatedTotals |
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months
Ended December 31, 2020: |
|
|
|
|
|
|
|
|
|
Operating income (loss) as reported |
|
$ |
22,606 |
|
|
$ |
3,151 |
|
|
$ |
1,057 |
|
|
$ |
(15,546 |
) |
|
$ |
11,268 |
|
| Corporate acquisition and
integration costs |
|
— |
|
|
— |
|
|
— |
|
|
6,909 |
|
|
6,909 |
|
| Harsco Environmental Segment
severance costs |
|
2,239 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,239 |
|
| Harsco Clean Earth Segment
integration costs |
|
— |
|
|
1,745 |
|
|
— |
|
|
— |
|
|
1,745 |
|
| Corporate contingent
consideration adjustments |
|
— |
|
|
— |
|
|
— |
|
|
(136 |
) |
|
(136 |
) |
| Operating income (loss)
excluding unusual items |
|
24,845 |
|
|
4,896 |
|
|
1,057 |
|
|
(8,773 |
) |
|
22,025 |
|
| Depreciation |
|
25,345 |
|
|
4,681 |
|
|
1,383 |
|
|
491 |
|
|
31,900 |
|
| Amortization |
|
1,998 |
|
|
6,351 |
|
|
85 |
|
|
— |
|
|
8,434 |
|
| Adjusted EBITDA |
|
$ |
52,188 |
|
|
$ |
15,928 |
|
|
$ |
2,525 |
|
|
$ |
(8,282 |
) |
|
$ |
62,359 |
|
| Revenues as reported |
|
$ |
246,388 |
|
|
$ |
185,099 |
|
|
$ |
76,857 |
|
|
|
|
$ |
508,344 |
|
| Adjusted EBITDA margin
(%) |
|
21.2 |
% |
|
8.6 |
% |
|
3.3 |
% |
|
|
|
12.3 |
% |
Consolidated 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); unused debt commitment and amendment
fees; 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
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. However, this measure should be considered in addition
to, rather than as a substitute for, net income from continuing
operations, operating income from continuing operations and other
information provided in accordance with GAAP. The Company's method
of calculating Adjusted EBITDA may differ from methods used by
other companies and, as a result, Adjusted EBITDA may not be
comparable to other similarly titled measures disclosed by other
companies.
| HARSCO
CORPORATIONRECONCILIATION OF CONSOLIDATED ADJUSTED
EBITDA TO CONSOLIDATED INCOME (LOSS) FROM CONTINUING OPERATIONS AS
REPORTED (Unaudited) |
| |
| |
|
Three Months Ended March 31 |
|
(In thousands) |
|
2021 |
|
2020 |
|
Consolidated income (loss) from continuing operations |
|
$ |
2,892 |
|
|
$ |
(7,696 |
) |
| |
|
|
|
|
| Add back
(deduct): |
|
|
|
|
| Equity in (income) loss of
unconsolidated entities, net |
|
119 |
|
|
(96 |
) |
| Income tax (benefit)
expense |
|
4,229 |
|
|
(682 |
) |
| Defined benefit pension
income |
|
(3,953 |
) |
|
(1,589 |
) |
| Unused debt commitment fees,
amendment fees and loss on extinguishment of debt |
|
5,258 |
|
|
488 |
|
| Interest expense |
|
16,864 |
|
|
12,649 |
|
| Interest income |
|
(585 |
) |
|
(193 |
) |
| Depreciation |
|
32,748 |
|
|
29,724 |
|
| Amortization |
|
8,216 |
|
|
5,918 |
|
| |
|
|
|
|
| Unusual
items: |
|
|
|
|
| Corporate acquisition and
integration costs |
|
— |
|
|
13,763 |
|
| Harsco Environmental Segment
severance costs |
|
— |
|
|
5,160 |
|
| Consolidated Adjusted
EBITDA |
|
$ |
65,788 |
|
|
$ |
57,446 |
|
Consolidated 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); unused debt commitment fees, amendment
fees and loss on extinguishment of debt; 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 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. However, this measure should be
considered in addition to, rather than as a substitute for, net
income from continuing operations, operating income from continuing
operations and other information provided in accordance with GAAP.
The Company's method of calculating Adjusted EBITDA may differ from
methods used by other companies and, as a result, Adjusted EBITDA
may not be comparable to other similarly titled measures disclosed
by other companies.
| HARSCO
CORPORATIONRECONCILIATION OF CONSOLIDATED ADJUSTED
EBITDA TO CONSOLIDATED LOSS FROM CONTINUING OPERATIONS AS
REPORTED (Unaudited) |
| |
| |
|
Three Months Ended
December 31 |
|
(In thousands) |
|
2020 |
|
Consolidated loss from continuing operations |
|
$ |
(4,257 |
) |
| |
|
|
| Add back
(deduct): |
|
|
| Equity in income of
unconsolidated entities, net |
|
(10 |
) |
| Income tax expense |
|
1,861 |
|
| Defined benefit pension
income |
|
(2,058 |
) |
| Interest expense |
|
16,293 |
|
| Interest income |
|
(561 |
) |
| Depreciation |
|
31,900 |
|
| Amortization |
|
8,434 |
|
| |
|
|
| Unusual
items: |
|
|
| Corporate acquisition and
integration costs |
|
6,909 |
|
| Harsco Environmental Segment
severance costs |
|
2,239 |
|
| Harsco Clean Earth Segment
integration costs |
|
1,745 |
|
| Corporate contingent
consideration adjustments |
|
(136 |
) |
| Consolidated Adjusted
EBITDA |
|
$ |
62,359 |
|
Consolidated 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); unused debt commitment fees, amendment
fees and loss on extinguishment of debt; 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 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. However, this measure should be
considered in addition to, rather than as a substitute for, net
income from continuing operations, operating income from continuing
operations and other information provided in accordance with GAAP.
The Company's method of calculating Adjusted EBITDA may differ from
methods used by other companies and, as a result, Adjusted EBITDA
may not be comparable to other similarly titled measures disclosed
by other companies.
| HARSCO
CORPORATIONRECONCILIATION OF PROJECTED
CONSOLIDATED ADJUSTED EBITDA TO PROJECTED CONSOLIDATED INCOME FROM
CONTINUING OPERATIONS (Unaudited) |
|
| |
|
| |
|
|
Projected Three Months Ending
June 30 |
|
|
ProjectedTwelve Months Ending December
31 |
|
| |
|
|
2021 |
|
|
2021 |
|
|
(In millions) |
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
|
Consolidated income from continuing
operations |
|
$ |
12 |
|
|
|
$ |
17 |
|
|
|
$ |
46 |
|
|
|
$ |
58 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax
expense |
|
6 |
|
|
|
7 |
|
|
|
26 |
|
|
|
30 |
|
|
| Net interest |
|
16 |
|
|
|
16 |
|
|
|
63 |
|
|
|
62 |
|
|
| Defined benefit
pension income |
|
(4 |
) |
|
|
(4 |
) |
|
|
(14 |
) |
|
|
(14 |
) |
|
| Depreciation and
amortization |
|
44 |
|
|
|
44 |
|
|
|
175 |
|
|
|
175 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA |
|
$ |
73 |
|
(a) |
|
$ |
79 |
|
(a) |
|
$ |
295 |
|
(a) |
|
$ |
310 |
|
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Does not total
due to rounding. |
Consolidated 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); unused debt commitment fees, amendment
fees and loss on extinguishment of debt; 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 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. However, this measure should be
considered in addition to, rather than as a substitute for, net
income from continuing operations, operating income from continuing
operations and other information provided in accordance with GAAP.
The Company's method of calculating Adjusted EBITDA may differ from
methods used by other companies and, as a result, Adjusted EBITDA
may not be comparable to other similarly titled measures disclosed
by other companies.
| HARSCO
CORPORATIONRECONCILIATION OF FREE CASH FLOW TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
(Unaudited) |
| |
| |
|
|
Three Months Ended |
| |
|
|
March 31 |
|
(In thousands) |
|
2021 |
|
2020 |
| Net cash
used by operating activities |
|
$ |
(23,173 |
) |
|
$ |
(11,536 |
) |
|
|
Less capital expenditures |
|
(27,382 |
) |
|
(27,894 |
) |
|
|
Less expenditures for intangible assets |
|
(68 |
) |
|
(58 |
) |
|
|
Plus capital expenditures for strategic ventures (a) |
|
872 |
|
|
1,139 |
|
|
|
Plus total proceeds from sales of assets (b) |
|
3,862 |
|
|
2,185 |
|
|
|
Plus transaction-related expenditures (c) |
|
14,084 |
|
|
9,979 |
|
|
|
Free cash
flow |
|
$ |
(31,805 |
) |
|
$ |
(26,185 |
) |
| |
|
|
|
|
|
|
|
|
|
| (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 amending the Company's
existing Senior Secured Credit Facilities. |
The Company's management believes that Free cash
flow, which is a non-GAAP financial measure, is meaningful to
investors because management reviews cash flows generated from
operations less capital expenditures net of asset sales proceeds
and transaction-related expenditures and income taxes 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. This measure should
be considered in addition to, rather than as a substitute for,
other information provided in accordance with GAAP.
| HARSCO
CORPORATIONRECONCILIATION OF PROJECTED FREE CASH
FLOW TO PROJECTED NET CASH PROVIDED BY OPERATING
ACTIVITIES (Unaudited) |
| |
| |
|
Projected Twelve Months Ending
December 31 |
| |
|
2021 |
|
(In millions) |
|
Low |
|
High |
|
Net cash provided by operating activities |
|
$ |
168 |
|
|
$ |
208 |
|
| Less capital expenditures |
|
(158 |
) |
|
(180 |
) |
| Plus total proceeds from asset
sales and capital expenditures for strategic ventures |
|
8 |
|
|
10 |
|
| Plus transaction related
expenditures |
|
17 |
|
|
17 |
|
| Free cash flow |
|
35 |
|
|
55 |
|
| Add growth capital
expenditures |
|
60 |
|
|
60 |
|
| Free cash flow before growth
capital expenditures |
|
$ |
95 |
|
|
$ |
115 |
|
The Company's management believes that Free cash
flow, which is a non-GAAP financial measure, is meaningful to
investors because management reviews cash flows generated from
operations less capital expenditures net of asset sales proceeds
and transaction-related expenditures and income taxes 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. This measure should
be considered in addition to, rather than as a substitute for,
other information provided in accordance with GAAP.
|
Investor Contact David
Martin717.612.5628damartin@harsco.com |
Media ContactJay
Cooney717.730.3683jcooney@harsco.com |
Harsco (NYSE:HSC)
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