updated 1/27/2011 8:15:57 AM ET 2011-01-27T13:15:57

  • Fourth quarter diluted EPS from continuing operations of $0.15, before Infrastructure Segment restructuring charge; including restructuring charge, diluted EPS of ($0.62)
  • Fourth quarter restructuring charge of $84.4 million or $0.77 per diluted share. Company anticipates Infrastructure Segment benefits of approximately $43 million in 2011 from restructuring actions, or approximately $0.39 per share, and fully annualized benefits of over $60 million beginning in 2012, or approximately $0.54 per share
  • Full-year free cash flow of $209 million, exceeds Company's target
  • Full-year diluted EPS from continuing operations of $0.91, before restructuring charge; including restructuring charge diluted EPS of $0.13
  • Full-year sales of $3.04 billion
  • Company reaffirms earnings guidance for 2011 in the range of $1.25 to $1.35 per diluted share from continuing operations

HARRISBURG, Pa., Jan. 27, 2011 (GLOBE NEWSWIRE) --Worldwide industrial services and engineered products company Harsco Corporation (NYSE:HSC) today reported fourth quarter and full-year 2010 results.

Fourth Quarter and Full-Year 2010 Highlights

Fourth quarter 2010 diluted EPS from continuing operations were $0.15 before the Infrastructure Segment restructuring charge; including the restructuring charge, diluted EPS from continuing operations were a loss of ($0.62). This compares with diluted EPS of $0.50 per share in the fourth quarter of 2009; last year's fourth quarter results benefited by approximately $0.14 per diluted share from a significantly lower effective tax rate when compared with the fourth quarter of this year, due to higher discrete tax benefits in 2009. Fourth quarter 2010 income (loss) from continuing operations was $13.4 million before the restructuring charge; after the restructuring charge was a loss of ($49.2) million.  On a comparative basis, fourth quarter 2009 income from continuing operations was $41.8 million. Sales in the fourth quarter 2010 declined approximately 2 percent to $757 million principally due to foreign currency translation, compared with $772 million in the fourth quarter of last year. Foreign currency translation reduced sales by approximately $19 million but did not have a material effect on pre-tax income compared with the fourth quarter of 2009.

As previously announced, the Company incurred an $84.4 million pre-tax restructuring charge in the fourth quarter of 2010, or $0.77 per diluted share, to address the realignment of the Company's Infrastructure business and position it for a return to profitability and future growth. The Company's actions are expected to generate pre-tax savings of approximately $43 million in 2011, or approximately $0.39 per diluted share, and over $60 million when fully annualized in 2012, or approximately $0.54 per diluted share.

For the full-year 2010, diluted EPS from continuing operations were $0.91 before the Infrastructure Segment restructuring charge; including the restructuring charge diluted EPS were $0.13. This compares with diluted EPS of $1.66 per share for the full-year 2009.  Last year's results benefited by approximately $0.28 per share from a significantly lower effective tax rate when compared with 2010 results, due to higher discrete tax benefits in 2009. Full-year 2010 income from continuing operations was $79.2 million before the restructuring charge; including the restructuring charge was $16.6 million. On a comparative basis, full-year 2009 income from continuing operations was $140.8 million.  Sales for the full-year 2010 were $3.04 billion, compared with sales of $2.99 billion in 2009. For the full-year 2010, foreign currency translation reduced sales by approximately $9 million, but increased pre-tax income by approximately $4 million or $0.04 per diluted share when compared with the results for the full-year 2009.

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 a positive note. We exceeded our earnings forecast for the fourth quarter, we exceeded our very challenging free cash flow target for the year, and we successfully executed the restructuring of the Harsco Infrastructure Segment according to plan. This restructuring will be substantially completed by the end of the first quarter 2011.  We ended the year with a strong balance sheet and excellent financial flexibility.

"Our overall results for the fourth quarter were better than expected, notwithstanding the restructuring charge for Harsco Infrastructure. All of our operating units performed near or better than expectations, with our Harsco Rail business again exceeding expected results, partly due to a shipment accelerated to the fourth quarter 2010 from the first quarter of 2011 at the request of the customer. Within our newly constituted Harsco Metals & Minerals reporting segment, the fourth quarter contained a number of one-off charges that somewhat reduced this Segment's otherwise encouraging performance. With the primary restructuring actions of our Harsco Infrastructure business near completion, this clearly sets the stage for improved results for this business starting in the second quarter of 2011 and, with some end-market improvement, a return to full-year profitability in 2012 and beyond.

"Most pleasing in the quarter were the strong free cash flows that we generated. These results allowed the Company to produce $209 million of free cash flow in 2010, above our stated goal for the year of $200 million. In the past three years (2008-2010), we have generated approximately $600 million in free cash flow during arguably the most difficult economic period in the modern history of the Company. This performance gives us further confidence in our stated five-year goal of achieving $1 billion in free cash flow in the period 2011-2015.

"As I stated at our December investor conference and as posted to our Harsco website, much has been achieved over the past three years to transform the Company. I believe that 2011 will be a year of transition that will lay the foundation for an era of continuing and consistent growth for the Company over the next five years.

"As such, we are reaffirming the earnings guidance for 2011 that we gave in December in the range of $1.25 to $1.35 per diluted share from continuing operations. As we also stated in December, however, results for the first quarter of 2011 will be lower than those of the prior year first quarter due to the timing of shipments in our Harsco Rail business, including the acceleration of a shipment from the first quarter of 2011 into the fourth quarter of 2010 at the customer's request, and the combination of the carryover of restructuring efforts and lower year-over-year volumes in the Middle East for our Harsco Infrastructure business. Therefore, our present outlook is for first quarter 2011 earnings from continuing operations to be in the range of $0.00 to $0.05 per diluted share, compared with $0.10 per share in the first quarter of 2010."

Fourth Quarter Business Review

Harsco Infrastructure

Sales in the fourth quarter decreased 8 percent to $265 million from $287 million last year. Foreign currency translation reduced sales by approximately $13 million in the quarter but did not have a material effect on operating income when compared with the fourth quarter of 2009. An operating loss, before restructuring charges, of ($14.4) million was incurred in the quarter, compared with operating income in last year's fourth quarter of $2.2 million. As previously noted, during the quarter the Company took an $84.4 million restructuring charge in its Harsco Infrastructure segment to permanently reduce the cost base of this business and set the stage for future earnings growth.

Despite continuing adverse end-market conditions in the final quarter of 2010, and the expected difficult first quarter of 2011, the Company has a positive longer-term outlook for Harsco Infrastructure. As noted in December, substantial restructuring actions being taken are expected to result in approximately $43 million in cost savings in 2011 for this business and over $60 million once fully annualized in 2012. The restructuring actions are on target to be substantially complete by the end of the first quarter of 2011.

Further, there are some early indications that the severe decline in non-residential construction in the end-markets served by Harsco Infrastructure may be reaching a bottom in the first quarter of 2011 and that a gradual turn-around in end-market conditions may be in evidence in the latter part of 2011 or by early 2012.

Harsco Metals & Minerals

Effective with the fourth quarter of 2010, the Company is now reporting Harsco Metals and Harsco Minerals as one segment, reflecting the increasing operating synergies of these businesses within the Company's global markets.

Sales in the fourth quarter increased 4 percent to $372 million from $356 million in last year's comparable quarter. Operating income in the quarter was $23.9 million, compared with $25.7 million in last year's quarter. Operating margins in the quarter were 6.4 percent, compared with 7.2 percent in last year's quarter. Compared with the fourth quarter of 2009, foreign currency translation reduced sales in the quarter by approximately $6 million and did not have a material effect on operating income.

When compared with last year's fourth quarter, the current quarter included net special items such as severance, exit costs and other items totaling approximately $5 million, which lowered operating margins by approximately 130 basis points.

Looking ahead, the outlook for this Segment remains positive. Global steel production appears to have stabilized, with the potential for further growth from increased global economic activity as well as future improvement in the global non-residential construction market. In addition, the Company continues to see significant new bidding activities for its wide range of value-adding services to mills around the world, and also anticipates the start-up in 2011 of several key contract awards previously announced by the Company.

Harsco Rail

As expected, sales in the quarter decreased to $61 million, down approximately 18 percent from sales of $75 million in the comparable quarter of last year. Consequently, operating income of $9.7 million was lower than the $12.5 million in last year's comparable quarter, as expected. Nevertheless, operating margins of 15.9 percent were still only 90 basis points lower than the 16.8 percent operating margins reported in the fourth quarter of 2009. Foreign currency did not have a meaningful impact on results in the quarter when compared with the comparable prior year quarter.

To reiterate previous communications, the quarterly results of Harsco Rail are affected by the timing of unit deliveries as they are completed. In the first half of 2010, there was a significant acceleration of deliveries at the request of a major customer, which therefore reduced delivery volumes in the second half of the year. For the full year, however, Harsco Rail achieved record sales, operating income and operating margins.

Another year of strong results is expected in 2011. This outlook is underpinned by existing backlogs and strong new order bidding activity, as the Company discussed at its December investor conference, the content of which has been posted to the Company's website at www.harsco.com.

Harsco Industrial

With the reporting of Harsco Minerals and Harsco Metals as one segment, Harsco Industrial is now being reported as a stand-alone business segment beginning with the fourth quarter of 2010. 

Sales in the quarter increased by approximately 10 percent to $60 million from last year's $55 million. However, operating income of $10.4 million was 25 percent lower than last year's $14.0 million in the comparable quarter. Likewise, fourth quarter 2010 operating margins of 17.4 percent were lower than the 25.7 percent achieved in the comparable quarter of 2009. The principal reasons for the lower operating income and margins in the fourth quarter of 2010 in comparison with the same quarter last year were higher LIFO cost in 2010 and the recovery of bad debt expense in 2009. Foreign currency translation did not have a material impact on results in the quarter when compared with the fourth quarter of last year.

The outlook remains positive for Harsco Industrial. As discussed at the Company's December investor conference, the new executive management for this Segment sees significant growth opportunities to expand this business beyond its traditional North American focus and achieve a broader global market for its highly engineered products. Included in this strategy is the establishment of certain joint venture partnerships in key geographies, several of which are currently under development.

Liquidity, Capital Resources and Other Matters

Net cash provided by operating activities for the full year 2010 was $401 million, compared with $434 million for the prior year. Net cash used by investing activities was $202 million, compared with $269 million in 2009. A modest increase in capital expenditures year-over-year of $27 million is principally due to capital required for new contract signings in the Harsco Metals & Minerals Segment. Free cash flow (cash from operations less capital expenditures) was $209 million in 2010, compared with the record $269 million in the prior year. The year-over-year decline is the result of substantially lower income for the Harsco Infrastructure business. The Company's target is to average $200 million in free cash flow per year over the next five years.

As a result of its strong free cash flows in 2010, the Company reduced total debt as of December 31, 2010 to $885 million, compared with total debt of $985 million at December 31, 2009, a reduction of $100 million. The total debt-to-capital ratio at December 31, 2010 was 37.6 percent, down from 39.5 percent as of the prior year-end and the lowest year-end debt-to-capital ratio since 1998.

Due to the difficult and challenging operating environment for Harsco Infrastructure throughout the year, Economic Value Added (EVA®) declined in 2010.

Discontinued Operations

For the full year 2010, discontinued operations were a loss after tax of $4.1 million, or $0.05 per diluted share, compared with a loss after tax of $15.1 million or $0.19 per diluted share in 2009.

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; 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; 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 35483966. Listeners are advised to dial in at least five minutes prior to the call. Replays will be available via the Harsco website, or by telephone beginning at approximately 11:00 am ET today through Monday, January 31, 2011. The telephone replay dial-in number is (800) 642-1687, or (706) 645‑9291 for international callers. Enter Conference ID number 35483966.

About Harsco

Harsco Corporation is a diversified, global industrial services and engineered products company serving major industries that are fundamental to worldwide 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) 2010 2009 2010 2009
Revenues from continuing operations:        
Service revenues $ 646,172 $ 651,117 $ 2,511,505 $ 2,442,198
Product revenues  111,179  121,374  527,173  548,379
Total revenues  757,351  772,491  3,038,678  2,990,577
         
Costs and expenses from continuing operations:        
Cost of services sold  513,538  512,356  1,994,637  1,897,408
Cost of products sold  78,645  75,669  342,242  354,730
Selling, general and administrative expenses  131,128  127,716  532,624  509,071
Research and development expenses  1,293  915  4,271  3,151
Other expense  88,493  1,133  86,473  7,561
Total costs and expenses  813,097  717,789  2,960,247  2,771,921
         
Operating income (loss) from continuing operations  (55,746)  54,702  78,431  218,656
         
Interest income  818  984  2,668  2,928
Interest expense  (13,383)  (16,126)  (60,623)  (62,746)
         
Income (loss) from continuing operations before income taxes and equity income  (68,311)  39,560  20,476  158,838
         
Income tax benefit (expense)  19,020  2,000  (4,276)  (18,509)
Equity in income of unconsolidated entities, net  81  224  390  504
         
Income (loss) from continuing operations  (49,210)  41,784  16,590  140,833
         
Discontinued operations:        
Loss from discontinued business  (1,054)  (813)  (7,249)  (21,907)
Income tax benefit    402  237  3,118  6,846
Loss from discontinued operations  (652)  (576)  (4,131)  (15,061)
Net Income (loss)  (49,862)  41,208  12,459  125,772
Less: Net income attributable to noncontrolling interests  (1,260)  (1,813)  (5,705)  (6,995)
Net Income (loss) attributable to Harsco Corporation $ (51,122) $ 39,395 $ 6,754 $ 118,777
         
Amounts attributable to Harsco Corporation common stockholders:        
Income (loss) from continuing operations, net of tax $ (50,470) $ 39,971 $ 10,885 $ 133,838
Loss from discontinued operations, net of tax  (652)  (576)  (4,131)  (15,061)
Net income (loss) attributable to Harsco Corporation common stockholders $ (51,122) $ 39,395 $ 6,754 $ 118,777
         
Weighted-average shares of common stock outstanding  80,598  80,325  80,569  80,295
Basic earnings per common share attributable to Harsco Corporation common stockholders:        
Continuing operations $ (0.63) $ 0.50 $ 0.14 $ 1.67
Discontinued operations  (0.01)  (0.01)  (0.05)  (0.19)
Basic earnings per share attributable to Harsco Corporation common stockholders   $ (0.63) (a)  $ 0.49   $ 0.08 (a) $ 1.48
         
Diluted weighted-average shares of common stock outstanding  80,804  80,674  80,761  80,586
Diluted earnings per common share attributable to Harsco Corporation common stockholders:        
Continuing operations $ (0.62) $ 0.50 $ 0.13 $ 1.66
Discontinued operations   (0.01)  (0.01)  (0.05)  (0.19)
Diluted earnings per share attributable to Harsco Corporation common stockholders   $ (0.63) $ 0.49 $ 0.08  $ 1.47
(a) Does not total due to rounding.        
     
     
HARSCO CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)
   
 

(In thousands)
December 31

2010
December 31

2009
ASSETS    
Current assets:    
Cash and cash equivalents  $ 124,238  $ 94,184
Trade accounts receivable, net 585,301 598,318
Other receivables 29,299 30,865
Inventories 271,617 291,174
Other current assets 144,491 154,797
Total current assets 1,154,946 1,169,338
Property, plant and equipment, net 1,366,973 1,510,801
Goodwill 690,787 699,041
Intangible assets, net 120,959 150,746
Other assets 135,555 109,314
 Total assets  $ 3,469,220  $ 3,639,240
LIABILITIES    
Current liabilities:    
Short-term borrowings  $ 31,197  $ 57,380
Current maturities of long-term debt 4,011 25,813
Accounts payable 261,509 215,504
Accrued compensation 83,928 67,652
Income taxes payable 9,718 5,931
Dividends payable 16,505 16,473
Insurance liabilities 25,844 25,533
Advances on contracts 128,794 149,413
Other current liabilities 206,358 187,403
Total current liabilities 767,864 751,102
Long-term debt 849,724 901,734
Deferred income taxes 35,642 90,993
Insurance liabilities 62,202 61,660
Retirement plan liabilities 223,777 250,075
Other liabilities 61,866 73,842
Total liabilities 2,001,075 2,129,406
EQUITY    
Harsco Corporation stockholders' equity:    
Common stock 139,514 139,234
Additional paid-in capital 141,298 137,746
Accumulated other comprehensive loss (185,932) (201,684)
Retained earnings 2,073,920 2,133,297
Treasury stock (737,106) (735,016)
Total Harsco Corporation stockholders' equity 1,431,694 1,473,577
Noncontrolling interests 36,451 36,257
Total equity 1,468,145 1,509,834
Total liabilities and equity  $ 3,469,220  $ 3,639,240


HARSCO CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
  Twelve Months Ended

December 31
(In thousands) 2010 2009
     
Cash flows from operating activities:    
Net income  $ 12,459  $ 125,772
Adjustments to reconcile net income to net cash provided (used) by operating activities:    
Depreciation 279,234 282,976
Amortization 36,005 28,555
Equity in income of unconsolidated entities, net (390) (504)
Dividends or distributions from unconsolidated entities 176 410
Loss on disposal of discontinued business 7,249 21,907
Harsco Infrastructure Segment restructuring plan 72,975 --
Other, net (20,629) (15,762)
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:    
Accounts receivable 4,395 111,207
Inventories 12,599 35,798
Accounts payable 36,529 (54,701)
Accrued interest payable (2,615) (1,305)
Accrued compensation 16,305 (23,402)
Income taxes (18,480) (36,692)
Advances on contracts (20,822) 4,242
Other assets and liabilities (13,563) (44,043)
     
Net cash provided by operating activities 401,427 434,458
     
Cash flows from investing activities:    
Purchases of property, plant and equipment (192,348) (165,320)
Purchases of businesses, net of cash acquired (27,643) (103,241)
Proceeds from sales of assets 22,663 2,115
Other investing activities (4,695) (2,914)
     
Net cash used by investing activities (202,023) (269,360)
     
Cash flows from financing activities:    
Short-term borrowings, net (25,706) (79,670)
Current maturities and long-term debt:    
Additions 747,213 482,493
Reductions (821,038) (487,171)
Cash dividends paid on common stock (65,976) (63,813)
Dividends paid to noncontrolling interests (5,850) (3,487)
Purchase of noncontrolling interest (1,159) (13,057)
Contributions of equity from noncontrolling interests 698 5,332
Common stock issued-options 997 995
Other financing activities (700) (5,705)
     
Net cash used by financing activities (171,521) (164,083)
     
Effect of exchange rate changes on cash 2,171 1,833
     
Net increase in cash and cash equivalents 30,054 2,848
     
Cash and cash equivalents at beginning of period 94,184 91,336
     
Cash and cash equivalents at end of period  $ 124,238  $ 94,184
 
 
HARSCO CORPORATION
REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
 
  Three Months Ended

December 31, 2010
Three Months Ended

December 31, 2009
(In thousands) Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
         
Harsco Infrastructure  $ 264,956  $ (98,879)  $ 287,238  $ 2,170
Harsco Metals & Minerals (a)  371,730  23,902  356,067  25,690
Harsco Rail  60,858  9,694  74,638  12,538
Harsco Industrial (a)  59,807  10,432  54,488  13,991
General Corporate  --  (895)  60  313
Consolidated Totals  $ 757,351  $ (55,746)  $ 772,491  $ 54,702
 
(a) Segment information for prior periods has been reclassified to conform with the current presentation.  Previously, an All Other Category was comprised of the Harsco Minerals and Harsco Industrial operating segments. The Harsco Minerals operating segment has been combined with the Harsco Metals Segment to form the Harsco Metals & Minerals Segment. The Harsco Industrial operating segment now forms a separate segment for financial reporting.
     
  Twelve Months Ended

December 31, 2010
Twelve Months Ended

December 31, 2009
(In thousands) Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
         
Harsco Infrastructure  $ 1,031,807  $ (145,346)  $ 1,159,200  $ 68,437
Harsco Metals & Minerals (a)  1,461,531  117,915  1,257,098  43,303
Harsco Rail  313,262  66,124  306,016  56,542
Harsco Industrial (a)  231,898  42,871  268,023  55,084
General Corporate  180  (3,133)  240  (4,710)
Consolidated Totals  $ 3,038,678  $ 78,431  $ 2,990,577  $ 218,656
 
(a) Segment information for prior periods has been reclassified to conform with the current presentation.  Previously, an All Other Category was comprised of the Harsco Minerals and Harsco Industrial operating segments. The Harsco Minerals operating segment has been combined with the Harsco Metals Segment to form the Harsco Metals & Minerals Segment. The Harsco Industrial operating segment now forms a separate segment for financial reporting.
     
     
HARSCO CORPORATION

FREE CASH FLOW (Unaudited)
   
  Twelve Months Ended

December 31
(In thousands) 2010 2009 2008
       
Net cash provided by operating activities  $ 401,427  $ 434,458  $ 574,276
Purchases of property, plant and equipment  (192,348)  (165,320)  (457,617)
Free cash flow  $ 209,079  $ 269,138  $ 116,659

Free Cash Flow is a non-GAAP financial measure.  The Company's Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered necessary to maintain and expand the Company's asset base and are expected to generate future cash flows from operations.  It is important to note that Free Cash Flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.

 
HARSCO CORPORATION
REVIEW OF OPERATING INCOME BY SEGMENT
EXCLUDING RESTRUCTURING CHARGE (a) – Addendum (Unaudited)
   
Three Months Ended December 31, 2010 Operating Income (Loss)
(In thousands) As

Reported
Restructuring

Charge
Excluding

Restructuring

Charge
Harsco Infrastructure  $ (98,879)  $ 84,440  $ (14,439)
Harsco Metals & Minerals  23,902  --  23,902
Harsco Rail  9,694  --  9,694
Harsco Industrial  10,432  --  10,432
General Corporate  (895)  --  (895)
Consolidated Totals  $ (55,746)  $ 84,440  $ 28,694
       
       
Twelve Months Ended December 31, 2010 Operating Income (Loss)
(In thousands) As

Reported
Restructuring

Charge
Excluding

Restructuring

Charge
Harsco Infrastructure  $ (145,346)  $ 84,440  $ (60,906)
Harsco Metals & Minerals  117,915  --  117,915
Harsco Rail  66,124  --  66,124
Harsco Industrial  42,871  --  42,871
General Corporate  (3,133)  --  (3,133)
Consolidated Totals  $ 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 (a) (Unaudited)
(In thousands)
 
  Three Months Ended

December 31
Twelve Months Ended

December 31
  2010 2010
     
Income (loss) from continuing operations (GAAP basis)  $ (49,210)  $ 16,590
     
Restructuring charge:    
     
Severance and other employee related costs (21,075) (21,075)
Operating exit costs (20,433) (20,433)
Product line rationalization (34,302) (34,302)
Asset impairment (8,500) (8,500)
Other (130) (130)
Restructuring charge, before tax (84,440) (84,440)
Tax benefit 21,806 21,806
Restructuring charge, after tax (62,634) (62,634)
     
Income from continuing operations, excluding restructuring charge  $ 13,424  $ 79,224
 
(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
REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
2010, 2009 AND 2008 RECLASSIFIED TO SEPARATELY PRESENT HARSCO METALS & MINERALS AND HARSCO INDUSTRIAL
(In thousands)
       
  Three Months Ended

March 31, 2010
Three Months Ended

March 31, 2009
Three Months Ended

March 31, 2008
   

Sales
Operating

Income (Loss)
Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
             
Harsco Infrastructure  $ 250,629  $ (19,273)  $ 283,746  $ 18,837  $ 378,824  $ 37,838
Harsco Metals & Minerals  344,262  19,284  271,613  367  465,664  39,700
Harsco Rail  95,402  20,414  59,840  7,224  59,118  9,087
Harsco Industrial  52,053  8,378  81,631  13,035  84,124  14,362
General Corporate  60  (564)  60  (2,292)  60  (1,607)
Consolidated Totals  $ 742,406  $ 28,239  $ 696,890  $ 37,171  $ 987,790  $ 99,380
             
       
  Three Months Ended

June 30, 2010
Three Months Ended

June 30, 2009
Three Months Ended

June 30, 2008
   

Sales
Operating

Income (Loss)
Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
             
Harsco Infrastructure  $ 262,653  $ (13,551)  $ 308,765  $ 24,928  $ 429,176  $ 58,134
Harsco Metals & Minerals  376,188  40,702  300,877  9,861  506,928  59,857
Harsco Rail  86,327  21,614  94,301  21,996  69,374  10,644
Harsco Industrial  61,313  13,716  72,972  15,022  94,050  18,649
General Corporate  40  (614)  60  (1,448)  60  (1,445)
Consolidated Totals  $ 786,521  $ 61,867  $ 776,975  $ 70,359  $ 1,099,588  $ 145,839
             
       
  Three Months Ended

September 30, 2010
Three Months Ended

September 30, 2009
Three Months Ended

September 30, 2008
   

Sales
Operating

Income (Loss)
Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
             
Harsco Infrastructure  $ 253,569  $ (13,643)  $ 279,450  $ 22,503  $ 393,292  $ 59,998
Harsco Metals & Minerals  369,351  34,026  328,542  7,384  480,843  49,851
Harsco Rail  70,675  14,401  77,237  14,785  70,062  8,684
Harsco Industrial  58,726  10,345  58,932  13,035  100,640  16,727
General Corporate  80  (1,059)  60  (1,283)  60  (1,387)
Consolidated Totals  $ 752,401  $ 44,070  $ 744,221  $ 56,424  $ 1,044,897  $ 133,873
             
 
HARSCO CORPORATION
REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
2010, 2009 AND 2008 RECLASSIFIED TO SEPARATELY PRESENT HARSCO METALS & MINERALS AND HARSCO INDUSTRIAL
(In thousands)
       
  Three Months Ended

December 31, 2010
Three Months Ended

December 31, 2009
Three Months Ended

December 31, 2008
   

Sales
Operating

Income (Loss)
Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
             
Harsco Infrastructure  $ 264,956  $ (98,879)  $ 287,238  $ 2,170  $ 338,966  $ 29,412
Harsco Metals & Minerals  371,730  23,902  356,067  25,690  325,542  (11,798)
Harsco Rail  60,858  9,694  74,638  12,538  79,042  7,991
Harsco Industrial  59,807  10,432  54,488  13,991  91,937  12,513
General Corporate  --  (895)  60  313  60  (5,221)
Consolidated Totals  $ 757,351  $ (55,746)  $ 772,491  $ 54,702  $ 835,547  $ 32,897
             
       
  Twelve Months Ended

December 31, 2010 (a)
Twelve Months Ended

December 31, 2009 (a)
Twelve Months Ended

December 31, 2008 (a)
   

Sales
Operating

Income (Loss)
Sales Operating

Income (Loss)
Sales Operating

Income (Loss)
             
Harsco Infrastructure  $ 1,031,807  $ (145,346)  $ 1,159,200  $ 68,437  $ 1,540,258  $ 185,382
Harsco Metals & Minerals  1,461,531  117,915  1,257,098  43,303  1,778,977  137,609
Harsco Rail  313,262  66,124  306,016  56,542  277,595  36,406
Harsco Industrial  231,898  42,871  268,023  55,084  370,752  62,251
General Corporate  180  (3,133)  240  (4,710)  240  (9,660)
Consolidated Totals  $ 3,038,678  $ 78,431  $ 2,990,577  $ 218,656  $ 3,967,822  $ 411,988
 
(a) The aggregation of three-month amounts may not total to twelve-month amounts due to rounding.
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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