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As Of Filer Filing For·On·As Docs:Size 5/08/20 Harsco Corp 10-Q 3/31/20 100:12M |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.38M 2: EX-2.2 Plan of Acquisition, Reorganization, Arrangement, HTML 41K Liquidation or Succession 3: EX-10.2 Material Contract HTML 150K 4: EX-10.3 Material Contract HTML 164K 5: EX-10.4 Material Contract HTML 143K 6: EX-31.1 Certification -- §302 - SOA'02 HTML 35K 7: EX-31.2 Certification -- §302 - SOA'02 HTML 34K 8: EX-32 Certification -- §906 - SOA'02 HTML 31K 39: R1 Cover Page HTML 81K 95: R2 Condensed Consolidated Balance Sheets (Unaudited) HTML 174K 64: R3 Condensed Consolidated Statements of Operations HTML 161K (Unaudited) 26: R4 Condensed Consolidated Statements of Comprehensive HTML 65K Income (Unaudited) 37: R5 Condensed Consolidated Statements of Comprehensive HTML 41K Income (Unaudited) (Parenthetical) 94: R6 Condensed Consolidated Statements of Cash Flows HTML 142K (Unaudited) 63: R7 Condensed Consolidated Statements of Equity HTML 61K (Unaudited) 22: R8 Condensed Consolidated Statements of Equity HTML 42K (Unaudited) (Parenthetical) 41: R9 Basis of Presentation HTML 35K 48: R10 Recently Adopted and Recently Issued Accounting HTML 37K Standards 33: R11 Acquisitions and Dispositions HTML 133K 67: R12 Accounts Receivable (Notes) HTML 55K 96: R13 Inventories HTML 45K 49: R14 Property, Plant and Equipment HTML 45K 35: R15 Leases HTML 176K 68: R16 Goodwill and Other Intangible Assets HTML 93K 97: R17 Debt and Credit Agreements HTML 34K 50: R18 Employee Benefit Plans HTML 67K 32: R19 Income Taxes HTML 33K 73: R20 Commitments and Contingencies HTML 67K 80: R21 Reconciliation of Basic and Diluted Shares HTML 54K 51: R22 Derivative Instruments, Hedging Activities and HTML 167K Fair Value 14: R23 Review of Operations by Segment HTML 89K 74: R24 Revenue Recognition HTML 186K 81: R25 Other (Income) Expenses, Net HTML 44K 52: R26 Components of Accumulated Other Comprehensive Loss HTML 142K 15: R27 Basis of Presentation (Policies) HTML 41K 72: R28 Acquisitions and Dispositions (Tables) HTML 141K 82: R29 Accounts Receivable (Tables) HTML 76K 100: R30 Inventories (Tables) HTML 42K 70: R31 Property, Plant and Equipment (Tables) HTML 46K 31: R32 Leases (Tables) HTML 145K 47: R33 Goodwill and Other Intangible Assets (Tables) HTML 99K 99: R34 Employee Benefit Plans (Tables) HTML 68K 69: R35 Reconciliation of Basic and Diluted Shares HTML 57K (Tables) 30: R36 Derivative Instruments, Hedging Activities and HTML 152K Fair Value (Tables) 46: R37 Review of Operations by Segment (Tables) HTML 94K 98: R38 Revenue Recognition (Tables) HTML 174K 71: R39 Other (Income) Expenses, Net (Tables) HTML 45K 86: R40 Components of Accumulated Other Comprehensive Loss HTML 144K (Tables) 76: R41 Acquisitions and Dispositions - Acquisitions HTML 58K Narrative (Details) 21: R42 Acquisitions and Dispositions - Assets Acquired HTML 119K and Liabilities Assumed (Details) 58: R43 Acquisitions and Dispositions - Preliminary HTML 55K Valuation of Identifiable Intangible Assets and Amortization Periods (Details) 84: R44 Acquisitions and Dispositions - Pro Forma HTML 44K Information (Details) 75: R45 Acquisitions and Dispositions - Dispositions HTML 52K Narrative (Details) 20: R46 Acquisitions and Dispositions - Financial HTML 54K Information Included in Net Income from Discontinued Operations (Details) 57: R47 Acquisitions and Dispositions - Condensed HTML 37K Consolidated Statements of Cash Flows (Details) 83: R48 Accounts Receivable (Details) HTML 42K 77: R49 Accounts Receivable - Schedule of Receivables HTML 45K (Details) 61: R50 Accounts Receivable - Schedule of Changes in HTML 30K Provisions For Allowance For Credit Loss (Details) 89: R51 Accounts Receivable - Schedule of Fair Value of HTML 34K Notes Receivable (Details) 44: R52 Inventories (Details) HTML 43K 28: R53 Inventories - Schedule of Inventory (Details) HTML 43K 62: R54 Property, Plant and Equipment (Details) HTML 49K 90: R55 Leases - Narrative (Details) HTML 35K 45: R56 Leases - Components of Lease Expense (Details) HTML 46K 29: R57 Leases - Supplemental Cash Flow Information HTML 41K Related to Leases (Details) 60: R58 Leases - Supplemental Balance Sheet Information HTML 43K Related to Leases (Details) 91: R59 Leases - Supplemental Additional Information HTML 38K (Details) 53: R60 Leases - Maturities of Lease Liabilities (Details) HTML 69K 17: R61 Goodwill and Other Intangible Assets - Changes in HTML 44K Carrying Amounts of Goodwill by Segment (Details) 78: R62 Goodwill and Other Intangible Assets - Other HTML 70K Intangible Assets (Details) 87: R63 Debt and Credit Agreements - Narrative (Details) HTML 49K 54: R64 Employee Benefit Plans (Details) HTML 65K 18: R65 Income Taxes (Details) HTML 36K 79: R66 Commitments and Contingencies (Details) HTML 112K 88: R67 Reconciliation of Basic and Diluted Shares - HTML 55K Reconciliation of Basic and Diluted Shares (Details) 56: R68 Reconciliation of Basic and Diluted Shares - HTML 38K Antidilutive Securities Excluded from Computation of Earnings per Share (Details) 16: R69 Derivative Instruments, Hedging Activities and HTML 60K Fair Value - Fair Value of Outstanding Derivative Contracts (Details) 24: R70 Derivative Instruments, Hedging Activities and HTML 65K Fair Value - Narrative (Details) 42: R71 Derivative Instruments, Hedging Activities and HTML 58K Fair Value - Effect of Derivative Instruments (Details) 93: R72 Derivative Instruments, Hedging Activities and HTML 80K Fair Value - Derivatives Designated as Hedging Instruments (Details) 66: R73 Review of Operations by Segment (Details) HTML 66K 23: R74 Revenue Recognition - Revenues by Primary HTML 126K Geographical Markets (Details) 40: R75 Revenue Recognition - Narrative (Details) HTML 36K 92: R76 Revenue Recognition - Remaining Performance HTML 58K Obligation (Details) 65: R77 Revenue Recognition - Remaining Performance HTML 33K Obligation (2) (Details) 27: R78 Other (Income) Expenses, Net (Details) HTML 46K 36: R79 Components of Accumulated Other Comprehensive Loss HTML 82K - Accumulated Other Comprehensive Income Loss (Details) 25: R80 Components of Accumulated Other Comprehensive Loss HTML 77K - Reclassification out of Accumulated Other Comprehensive Income (Details) 43: R81 Subsequent Events (Details) HTML 32K 34: R9999 Uncategorized Items - hsc-0331202010q.htm HTML 29K 38: XML IDEA XML File -- Filing Summary XML 181K 59: XML XBRL Instance -- hsc-0331202010q_htm XML 3.54M 19: EXCEL IDEA Workbook of Financial Reports XLSX 102K 10: EX-101.CAL XBRL Calculations -- hsc-20200331_cal XML 322K 11: EX-101.DEF XBRL Definitions -- hsc-20200331_def XML 894K 12: EX-101.LAB XBRL Labels -- hsc-20200331_lab XML 2.07M 13: EX-101.PRE XBRL Presentations -- hsc-20200331_pre XML 1.29M 9: EX-101.SCH XBRL Schema -- hsc-20200331 XSD 209K 85: JSON XBRL Instance as JSON Data -- MetaLinks 457± 687K 55: ZIP XBRL Zipped Folder -- 0000045876-20-000101-xbrl Zip 403K
Document |
FORM | i 10-Q |
i ☒ | QUARTERLY
REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i Delaware | i 23-1483991 | ||
(State
or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) | ||
i 350 Poplar Church Road, | i Camp Hill, | i Pennsylvania | i 17011 |
(Address
of principal executive offices) | (Zip Code) |
Title
of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
i Common stock, par value $1.25 per share | i HSC | i New
York Stock Exchange |
i Large
accelerated filer | ☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | i ☐ |
Emerging
growth company | i ☐ |
Class | Outstanding
at April 30, 2020 | |
Common stock, par value $1.25 per share | i 78,884,749 |
Page | ||
(In thousands) | March 31
2020 | December 31 2019 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash
and cash equivalents | $ | i 66,488 | $ | i 57,259 | ||||
Restricted
cash | i 2,300 | i 2,473 | ||||||
Trade
accounts receivable, net | i 320,710 | i 309,990 | ||||||
Other
receivables | i 18,685 | i 21,265 | ||||||
Inventories | i 167,890 | i 156,991 | ||||||
Current
portion of contract assets | i 50,499 | i 31,166 | ||||||
Current
portion of assets held-for-sale | i 540 | i 22,093 | ||||||
Other
current assets | i 53,668 | i 51,575 | ||||||
Total
current assets | i 680,780 | i 652,812 | ||||||
Property,
plant and equipment, net | i 533,349 | i 561,786 | ||||||
Right-of-use
assets, net | i 50,491 | i 52,065 | ||||||
Goodwill | i 727,882 | i 738,369 | ||||||
Intangible
assets, net | i 294,720 | i 299,082 | ||||||
Deferred
income tax assets | i 9,476 | i 14,288 | ||||||
Assets
held-for-sale | i — | i 32,029 | ||||||
Other
assets | i 50,472 | i 17,036 | ||||||
Total
assets | $ | i 2,347,170 | $ | i 2,367,467 | ||||
LIABILITIES | ||||||||
Current
liabilities: | ||||||||
Short-term borrowings | $ | i 4,820 | $ | i 3,647 | ||||
Current
maturities of long-term debt | i 2,758 | i 2,666 | ||||||
Accounts
payable | i 181,760 | i 176,755 | ||||||
Accrued
compensation | i 33,492 | i 37,992 | ||||||
Income
taxes payable | i 15,956 | i 18,692 | ||||||
Insurance
liabilities | i 9,844 | i 10,140 | ||||||
Current
portion of advances on contracts | i 47,822 | i 53,906 | ||||||
Current
portion of operating lease liabilities | i 12,421 | i 12,544 | ||||||
Current
portion of liabilities of assets held-for-sale | i — | i 11,344 | ||||||
Other
current liabilities | i 141,877 | i 137,208 | ||||||
Total
current liabilities | i 450,750 | i 464,894 | ||||||
Long-term
debt | i 789,619 | i 775,498 | ||||||
Insurance
liabilities | i 17,019 | i 18,515 | ||||||
Retirement
plan liabilities | i 164,499 | i 189,954 | ||||||
Advances
on contracts | i 53,775 | i 6,408 | ||||||
Operating
lease liabilities | i 35,561 | i 36,974 | ||||||
Liabilities
of assets held-for-sale | i — | i 12,152 | ||||||
Other
liabilities | i 77,077 | i 73,413 | ||||||
Total
liabilities | i 1,588,300 | i 1,577,808 | ||||||
COMMITMENTS
AND CONTINGENCIES | i | i |
(In thousands) | March 31 2020 | December 31 2019 | ||||||
HARSCO CORPORATION STOCKHOLDERS’ EQUITY | ||||||||
Preferred
stock | i — | i — | ||||||
Common
stock | i 144,219 | i 143,400 | ||||||
Additional
paid-in capital | i 201,856 | i 200,595 | ||||||
Accumulated
other comprehensive loss | ( i 616,476 | ) | ( i 587,622 | ) | ||||
Retained
earnings | i 1,824,241 | i 1,824,100 | ||||||
Treasury
stock | ( i 842,987 | ) | ( i 838,893 | ) | ||||
Total
Harsco Corporation stockholders’ equity | i 710,853 | i 741,580 | ||||||
Noncontrolling
interests | i 48,017 | i 48,079 | ||||||
Total
equity | i 758,870 | i 789,659 | ||||||
Total
liabilities and equity | $ | i 2,347,170 | $ | i 2,367,467 |
Three
Months Ended | |||||||||
March 31 | |||||||||
(In thousands, except per share amounts) | 2020 | 2019 | |||||||
Revenues from continuing operations: | |||||||||
Service
revenues | $ | i 291,339 | $ | i 229,520 | |||||
Product
revenues | i 107,502 | i 100,382 | |||||||
Total
revenues | i 398,841 | i 329,902 | |||||||
Costs
and expenses from continuing operations: | |||||||||
Cost of services sold | i 236,319 | i 181,871 | |||||||
Cost
of products sold | i 80,149 | i 69,309 | |||||||
Selling,
general and administrative expenses | i 72,499 | i 56,406 | |||||||
Research
and development expenses | i 1,260 | i 749 | |||||||
Other
expenses, net | i 5,733 | i 1,743 | |||||||
Total
costs and expenses | i 395,960 | i 310,078 | |||||||
Operating
income from continuing operations | i 2,881 | i 19,824 | |||||||
Interest
income | i 193 | i 533 | |||||||
Interest
expense | ( i 12,649 | ) | ( i 5,507 | ) | |||||
Unused
debt commitment and amendment fees | ( i 488 | ) | i — | ||||||
Defined
benefit pension income (expense) | i 1,589 | ( i 1,338 | ) | ||||||
Income
(loss) from continuing operations before income taxes and equity income | ( i 8,474 | ) | i 13,512 | ||||||
Income
tax benefit (expense) | i 682 | ( i 1,219 | ) | ||||||
Equity
income of unconsolidated entities, net | i 96 | i 21 | |||||||
Income
(loss) from continuing operations | ( i 7,696 | ) | i 12,314 | ||||||
Discontinued
operations: | |||||||||
Gain on sale of discontinued business | i 18,462 | i — | |||||||
Income
(loss) from discontinued businesses | ( i 225 | ) | i 13,750 | ||||||
Income
tax expense related to discontinued businesses | ( i 9,314 | ) | ( i 3,527 | ) | |||||
Income
from discontinued operations | i 8,923 | i 10,223 | |||||||
Net
income | i 1,227 | i 22,537 | |||||||
Less:
Net income attributable to noncontrolling interests | ( i 1,086 | ) | ( i 1,840 | ) | |||||
Net
income attributable to Harsco Corporation | $ | i 141 | $ | i 20,697 | |||||
Amounts
attributable to Harsco Corporation common stockholders: | |||||||||
Income (loss) from continuing operations, net of tax | $ | ( i 8,782 | ) | $ | i 10,474 | ||||
Income
from discontinued operations, net of tax | i 8,923 | i 10,223 | |||||||
Net
income attributable to Harsco Corporation common stockholders | $ | i 141 | $ | i 20,697 | |||||
Weighted-average
shares of common stock outstanding | i 78,761 | i 79,907 | |||||||
Basic
earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||||||
Continuing operations | $ | ( i 0.11 | ) | $ | i 0.13 | ||||
Discontinued
operations | i 0.11 | i 0.13 | |||||||
Basic
earnings (loss) per share attributable to Harsco Corporation common stockholders | $ | i — | $ | i 0.26 | |||||
Diluted
weighted-average shares of common stock outstanding | i 78,761 | i 81,653 | |||||||
Diluted
earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||||||
Continuing operations | $ | ( i 0.11 | ) | $ | i 0.13 | ||||
Discontinued
operations | i 0.11 | i 0.13 | |||||||
Diluted
earnings (loss) per share attributable to Harsco Corporation common stockholders | $ | i — | $ | i 0.25 | (a) |
(a)
| Does not total due to rounding |
Three
Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Net income | $ | i 1,227 | $ | i 22,537 | ||||
Other
comprehensive income (loss): | ||||||||
Foreign currency translation adjustments, net of deferred income taxes of $(4,082) and $1,131 in 2020 and 2019, respectively | ( i 58,566 | ) | i 9,454 | |||||
Net
loss on cash flow hedging instruments, net of deferred income taxes of $517 and $945 in 2020 and 2019, respectively | ( i 1,687 | ) | ( i 3,147 | ) | ||||
Pension
liability adjustments, net of deferred income taxes of $(1,710) and $(342) in 2020 and 2019, respectively | i 30,269 | ( i 1,791 | ) | |||||
Unrealized
gain (loss) on marketable securities, net of deferred income taxes of $8 and $(5) in 2020 and 2019, respectively | ( i 18 | ) | i 15 | |||||
Total
other comprehensive income (loss) | ( i 30,002 | ) | i 4,531 | |||||
Total
comprehensive income (loss) | ( i 28,775 | ) | i 27,068 | |||||
Less:
Comprehensive (income) loss attributable to noncontrolling interests | i 61 | ( i 2,260 | ) | |||||
Comprehensive
income (loss) attributable to Harsco Corporation | $ | ( i 28,714 | ) | $ | i 24,808 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Cash
flows from operating activities: | ||||||||
Net income | $ | i 1,227 | $ | i 22,537 | ||||
Adjustments
to reconcile net income to net cash provided (used) by operating activities: | ||||||||
Depreciation | i 29,933 | i 30,204 | ||||||
Amortization | i 6,557 | i 3,045 | ||||||
Deferred
income tax expense | i 4,412 | i 595 | ||||||
Equity
income of unconsolidated entities, net | ( i 96 | ) | ( i 21 | ) | ||||
Gain
on sale from discontinued business | ( i 18,462 | ) | i — | |||||
Other,
net | ( i 2,007 | ) | ( i 279 | ) | ||||
Changes
in assets and liabilities: | ||||||||
Accounts receivable | ( i 22,050 | ) | ( i 3,270 | ) | ||||
Inventories | ( i 16,412 | ) | ( i 14,448 | ) | ||||
Contract
assets | ( i 20,311 | ) | i 6,770 | |||||
Right-of-use
assets | i 3,429 | i 3,895 | ||||||
Accounts
payable | i 12,308 | i 3,099 | ||||||
Accrued
interest payable | ( i 9,891 | ) | i 89 | |||||
Accrued
compensation | ( i 2,752 | ) | ( i 19,924 | ) | ||||
Advances
on contracts | i 40,464 | ( i 3,406 | ) | |||||
Operating
lease liabilities | ( i 3,358 | ) | ( i 3,913 | ) | ||||
Retirement
plan liabilities, net | ( i 15,534 | ) | ( i 9,403 | ) | ||||
Income
taxes payable - Gain on sale of discontinued businesses | i 3,843 | i — | ||||||
Other
assets and liabilities | ( i 2,836 | ) | ( i 732 | ) | ||||
Net
cash provided (used) by operating activities | ( i 11,536 | ) | i 14,838 | |||||
Cash
flows from investing activities: | ||||||||
Purchases of property, plant and equipment | ( i 27,894 | ) | ( i 36,407 | ) | ||||
Purchases
of businesses, net of cash acquired | ( i 4,157 | ) | i 680 | |||||
Proceeds
from sale of business, net | i 37,219 | i — | ||||||
Proceeds
from sales of assets | i 2,185 | i 1,177 | ||||||
Expenditures
for intangible assets | ( i 58 | ) | i — | |||||
Net
proceeds (payments) from settlement of foreign currency forward exchange contracts | i 11,327 | ( i 4,091 | ) | |||||
Net
cash provided (used) by investing activities | i 18,622 | ( i 38,641 | ) | |||||
Cash
flows from financing activities: | ||||||||
Short-term borrowings, net | i 3,697 | ( i 3,578 | ) | |||||
Current
maturities and long-term debt: | ||||||||
Additions | i 52,875 | i 56,998 | ||||||
Reductions | ( i 38,709 | ) | ( i 1,700 | ) | ||||
Sale
of noncontrolling interests | i — | i 876 | ||||||
Stock-based
compensation - Employee taxes paid | ( i 3,437 | ) | ( i 8,237 | ) | ||||
Deferred
financing costs | ( i 1,632 | ) | i — | |||||
Net
cash provided by financing activities | i 12,794 | i 44,359 | ||||||
Effect
of exchange rate changes on cash and cash equivalents, including restricted cash | ( i 10,824 | ) | ( i 17 | ) | ||||
Net
increase in cash and cash equivalents, including restricted cash | i 9,056 | i 20,539 | ||||||
Cash
and cash equivalents, including restricted cash, at beginning of period | i 59,732 | i 67,146 | ||||||
Cash
and cash equivalents, including restricted cash, at end of period | $ | i 68,788 | $ | i 87,685 | ||||
Supplementary
cash flow information: | ||||||||
Change in accrual for purchases of property, plant and equipment included in accounts payable | $ | ( i 281 | ) | $ | i 6,473 |
Harsco Corporation Stockholders’ Equity | ||||||||||||||||||||||||||||
Common Stock | Additional
Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | ||||||||||||||||||||||||
(In thousands, except share amounts) | Issued | Treasury | Total | |||||||||||||||||||||||||
Balances,
December 31, 2018 | $ | i 141,842 | $ | ( i 795,821 | ) | $ | i 190,597 | $ | i 1,298,752 | $ | ( i 567,107 | ) | $ | i 45,113 | $ | i 313,376 | ||||||||||||
Adoption
of new accounting standards | i 21,429 | ( i 21,429 | ) | i — | ||||||||||||||||||||||||
Net
income | i 20,697 | i 1,840 | i 22,537 | |||||||||||||||||||||||||
Total
other comprehensive income, net of deferred income taxes of $1,729 | i 4,111 | i 420 | i 4,531 | |||||||||||||||||||||||||
Sale
of subsidiary shares to noncontrolling interest | i 876 | i 876 | ||||||||||||||||||||||||||
Stock
appreciation rights exercised, net 927 shares | i 2 | ( i 8 | ) | ( i 2 | ) | ( i 8 | ) | |||||||||||||||||||||
Vesting
of restricted stock units and other stock grants, net 94,229 shares | i 198 | ( i 1,456 | ) | ( i 198 | ) | ( i 1,456 | ) | |||||||||||||||||||||
Vesting
of performance share units, net 529,213 shares | i 1,136 | ( i 8,235 | ) | ( i 1,149 | ) | ( i 8,248 | ) | |||||||||||||||||||||
Amortization
of unearned portion of stock-based compensation, net of forfeitures | i 3,664 | i 3,664 | ||||||||||||||||||||||||||
Balances,
March 31, 2019 | $ | i 143,178 | $ | ( i 805,520 | ) | $ | i 192,912 | $ | i 1,340,878 | $ | ( i 584,425 | ) | $ | i 48,249 | $ | i 335,272 |
Harsco Corporation Stockholders’ Equity | ||||||||||||||||||||||||||||
(In thousands) | Common Stock | Additional
Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | |||||||||||||||||||||||
Issued | Treasury | Total | ||||||||||||||||||||||||||
Balances,
December 31, 2019 | $ | i 143,400 | $ | ( i 838,893 | ) | $ | i 200,595 | $ | i 1,824,100 | $ | ( i 587,622 | ) | $ | i 48,079 | $ | i 789,659 | ||||||||||||
Net
income | i 141 | i 1,086 | i 1,227 | |||||||||||||||||||||||||
Total
other comprehensive loss, net of deferred income taxes of $(5,267) | ( i 28,854 | ) | ( i 1,148 | ) | ( i 30,002 | ) | ||||||||||||||||||||||
Vesting
of restricted stock units and other stock grants, net 104,840 shares | i 230 | ( i 889 | ) | ( i 230 | ) | ( i 889 | ) | |||||||||||||||||||||
Vesting
of performance share units, net 265,151 shares | i 589 | ( i 3,205 | ) | ( i 589 | ) | ( i 3,205 | ) | |||||||||||||||||||||
Amortization
of unearned portion of stock-based compensation, net of forfeitures | i 2,080 | i 2,080 | ||||||||||||||||||||||||||
Balances,
March 31, 2020 | $ | i 144,219 | $ | ( i 842,987 | ) | $ | i 201,856 | $ | i 1,824,241 | $ | ( i 616,476 | ) | $ | i 48,017 | $ | i 758,870 |
Preliminary Valuation | ||||||||||||
(In millions) | 2019 | Measurement
Period Adjustments (a) | March 31 2020 | |||||||||
Cash and cash equivalents (b) | $ | i 42.8 | $ | ( i 39.2 | ) | $ | i 3.6 | |||||
Trade
accounts receivable, net | i 63.7 | ( i 1.2 | ) | i 62.5 | ||||||||
Other
receivables | i 0.8 | i 1.3 | i 2.1 | |||||||||
Other
current assets | i 8.7 | ( i 1.4 | ) | i 7.3 | ||||||||
Property,
plant and equipment | i 75.6 | i 1.6 | i 77.2 | |||||||||
Right-of-use
assets | i 14.4 | i 11.4 | i 25.8 | |||||||||
Goodwill | i 313.8 | i 16.3 | i 330.1 | |||||||||
Intangible
assets | i 261.1 | ( i 18.9 | ) | i 242.2 | ||||||||
Other
assets | i 4.0 | ( i 2.8 | ) | i 1.2 | ||||||||
Accounts
payable | ( i 23.0 | ) | ( i 0.1 | ) | ( i 23.1 | ) | ||||||
Acquisition
consideration payable (b) | ( i 39.2 | ) | i 39.2 | i — | ||||||||
Other
current liabilities | ( i 18.0 | ) | ( i 1.7 | ) | ( i 19.7 | ) | ||||||
Net
deferred taxes liabilities | ( i 51.2 | ) | i 5.8 | ( i 45.4 | ) | |||||||
Operating
lease liabilities | ( i 11.1 | ) | ( i 8.4 | ) | ( i 19.5 | ) | ||||||
Other
liabilities | ( i 6.5 | ) | ( i 2.1 | ) | ( i 8.6 | ) | ||||||
Total
identifiable net assets of Clean Earth | $ | i 635.9 | $ | ( i 0.2 | ) | $ | i 635.7 |
(a) | The
measurement period adjustments did not have a material impact on the Company's previously reported operating results. |
(b) | Acquisition consideration payable represents a portion of the cash consideration not paid out until July 2019. |
Preliminary
Valuation | ||||||||||||||
(Dollars in millions) | Weighted-Average Amortization Period | Preliminary Valuation | Measurement Period Adjustments (c) | March 31 2020 | ||||||||||
Permits | i 18
years | $ | i 176.1 | $ | ( i 6.0 | ) | $ | i 170.1 | ||||||
Customer
relationships | i 8 years | i 33.4 | ( i 12.9 | ) | i 20.5 | |||||||||
Air
rights | Usage based (d) | i 25.6 | — | i 25.6 | ||||||||||
Trade
names | i 12 years | i 26.0 | — | i 26.0 | ||||||||||
Total
identifiable intangible assets of Clean Earth | $ | i 261.1 | $ | ( i 18.9 | ) | $ | i 242.2 |
(c) | The
measurement period adjustments did not have a material impact on the Company's previously reported operating results. |
(d) | The Company estimates that based on current usage that the expected useful life would be i 27
years. |
Three
Months Ended | ||||
March 31 | ||||
(In millions) | 2019 | |||
Pro forma revenues | $ | i 393.5 | ||
Pro
forma net income (including discontinued operations) | i 15.6 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In millions) | 2020 | 2019 | ||||||
Amounts
directly attributable to the former Harsco Industrial Segment: | ||||||||
Total revenues | $ | i 10,203 | $ | i 117,386 | ||||
Cost
of products sold | i 8,082 | i 87,695 | ||||||
Income
from discontinued business | i 218 | i 14,192 | ||||||
Additional
amounts allocated to the former Harsco Industrial Segment: | ||||||||
Selling, general and administrative expenses (e) | $ | i 1,266 | $ | i — | ||||
Interest
expense (f) | i — | i 4,232 |
Three Months Ended | ||||||||
March
31 | ||||||||
(In millions) | 2020 | 2019 | ||||||
Non-cash operating items | ||||||||
Depreciation and amortization | $ | i — | $ | i 2,025 | ||||
Cash
flows from investing activities | ||||||||
Purchases of property, plant and equipment | i 106 | i 2,175 |
(In thousands) | March 31 2020 | December 31 2019 | ||||||
Trade accounts receivable | $ | i 333,725 | $ | i 323,502 | ||||
Less:
Allowance for expected credit losses and doubtful accounts | ( i 13,015 | ) | ( i 13,512 | ) | ||||
Trade
accounts receivable, net | $ | i 320,710 | $ | i 309,990 | ||||
Other
receivables (a) | $ | i 18,685 | $ | i 21,265 |
(a) | Other
receivables include employee receivables, insurance receivable, tax claims and other miscellaneous items not included in Trade accounts receivable, net. |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Increase
(decrease) in provision for expected credit losses and doubtful accounts related to trade accounts receivable | $ | i 219 | $ | ( i 10 | ) |
(In thousands) | March 31
2020 | December 31 2019 | ||||||
Note receivable | $ | i 34,569 | $ | i — |
(In thousands) | March 31 2020 | December 31
2019 | ||||||
Finished goods | $ | i 13,138 | $ | i 14,550 | ||||
Work-in-process | i 10,795 | i 13,088 | ||||||
Raw
materials and purchased parts | i 118,637 | i 104,488 | ||||||
Stores
and supplies | i 25,320 | i 24,865 | ||||||
Total
inventories | $ | i 167,890 | $ | i 156,991 |
(In thousands) | March 31 2020 | December 31
2019 | ||||||
Land | $ | i 29,811 | $ | i 30,409 | ||||
Land
improvements | i 17,822 | i 19,155 | ||||||
Buildings
and improvements | i 180,907 | i 182,795 | ||||||
Machinery
and equipment | i 1,418,493 | i 1,518,652 | ||||||
Uncompleted
construction | i 57,327 | i 55,592 | ||||||
Gross
property, plant and equipment | i 1,704,360 | i 1,806,603 | ||||||
Less:
Accumulated depreciation | ( i 1,171,011 | ) | ( i 1,244,817 | ) | ||||
Property,
plant and equipment, net | $ | i 533,349 | $ | i 561,786 |
Three Months Ended | ||||||||
(In thousands) | March 31 2020 | March 31 2019 | ||||||
Finance
leases: | ||||||||
Amortization expense | $ | i 371 | $ | i 310 | ||||
Interest
on lease liabilities | i 52 | i 4 | ||||||
Operating
leases | i 4,284 | i 3,693 | ||||||
Short-term
leases | i 6,703 | i 4,571 | ||||||
Variable
lease expense | i 408 | i 219 | ||||||
Sublease
income | ( i 50 | ) | ( i 49 | ) | ||||
Total
lease expense from continuing operations | $ | i 11,768 | $ | i 8,748 |
Three Months Ended | ||||||||
(In thousands) | March 31 2020 | March 31 2019 | ||||||
Cash
paid for amounts included in the measurement of lease liabilities: | ||||||||
Cash flows from operating activities - Operating leases | $ | i 3,789 | $ | i 3,552 | ||||
Cash
flows from financing activities - Finance leases | i 324 | i 363 | ||||||
Right-of-use
assets obtained in exchange for lease obligations: | ||||||||
Operating leases (a) | $ | i 2,217 | $ | i 34,750 | ||||
Finance
leases | i 1,234 | i 373 |
(a)
| Cash flows for Three Months Ended March 31, 2019 include ROU assets of approximately $ i 34 million that were recorded upon adoption at January 1, 2019. |
(In thousands) | March 31 2020 | |||||||
Operating Leases: | ||||||||
Operating
lease right-of-use assets | $ | i 50,491 | $ | i 52,065 | ||||
Current
portion of operating lease liabilities | i 12,421 | $ | i 12,544 | |||||
Operating
lease liabilities | i 35,561 | i 36,974 | ||||||
Finance
Leases: | ||||||||
Property, plant and equipment, net | $ | i 4,291 | $ | i 3,519 | ||||
Current
maturities of long-term debt | i 1,346 | $ | i 1,237 | |||||
Long-term
debt | i 2,984 | i 2,218 |
March 31 2020 | December 31 2019 | |||||
Other information: | ||||||
Weighted
average remaining lease term - Operating leases (in years) | i 11.81 | i 11.57 | ||||
Weighted
average remaining lease term - Finance leases (in years) | i 3.89 | i 4.01 | ||||
Weighted
average discount rate - Operating leases | i 6.3 | % | i 6.3 | % | ||
Weighted
average discount rate - Finance leases | i 4.3 | % | i 4.2 | % |
(In thousand) | Operating Leases | Finance
Leases | ||||||
Year Ending December 31st: | ||||||||
2020 (excluding the three months ended March 31, 2020) | $ | i 11,458 | $ | i 1,069 | ||||
2021 | i 11,527 | i 1,198 | ||||||
2022 | i 7,615 | i 941 | ||||||
2023 | i 5,369 | i 748 | ||||||
2024 | i 3,210 | i 587 | ||||||
After
2024 | i 32,018 | i 43 | ||||||
Total
lease payments | i 71,197 | i 4,586 | ||||||
Less:
Imputed interest | ( i 23,215 | ) | ( i 256 | ) | ||||
Total | $ | i 47,982 | $ | i 4,330 |
(In thousands) | Harsco
Environmental Segment | Harsco Clean Earth Segment | Harsco Rail Segment | Consolidated Totals | ||||||||||||
Balance at December 31, 2019 | $ | i 395,113 | $ | i 330,230 | $ | i 13,026 | $ | i 738,369 | ||||||||
Changes
to goodwill (a) | i 1,785 | ( i 129 | ) | i — | i 1,656 | |||||||||||
Foreign
currency translation | ( i 12,143 | ) | i — | i — | ( i 12,143 | ) | ||||||||||
Balance
at March 31, 2020 | $ | i 384,755 | $ | i 330,101 | $ | i 13,026 | $ | i 727,882 |
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Customer
related | $ | i 143,092 | $ | i 99,280 | $ | i 143,996 | $ | i 99,327 | ||||||||
Permits | i 170,448 | i 7,045 | i 170,322 | i 4,694 | ||||||||||||
Technology
related | i 36,739 | i 6,142 | i 36,467 | i 5,635 | ||||||||||||
Trade
names | i 31,558 | i 2,801 | i 31,719 | i 2,182 | ||||||||||||
Air
rights | i 26,139 | i 549 | i 26,139 | i 411 | ||||||||||||
Patents | i 192 | i 132 | i 249 | i 168 | ||||||||||||
Other | i 3,677 | i 1,176 | i 3,765 | i 1,158 | ||||||||||||
Total | $ | i 411,845 | $ | i 117,125 | $ | i 412,657 | $ | i 113,575 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Amortization
expense for intangible assets | $ | i 5,918 | $ | i 1,939 |
(In thousands) | 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||
Estimated
amortization expense (b) | $ | i 24,300 | $ | i 23,100 | $ | i 22,400 | $ | i 22,400 | $ | i 22,400 |
(b) | These
estimated amortization expense amounts do not reflect the potential effect of future foreign currency exchange fluctuations. |
Three
Months Ended | ||||||||||||||||
March 31 | ||||||||||||||||
Defined Benefit Pension Plans Net Periodic Pension Cost (Benefit) | U.S. Plans | International Plans | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Service
costs | $ | i — | $ | i 10 | $ | i 429 | $ | i 356 | ||||||||
Interest
costs | i 1,845 | i 2,651 | i 4,395 | i 5,664 | ||||||||||||
Expected
return on plan assets | ( i 2,842 | ) | ( i 2,593 | ) | ( i 10,190 | ) | ( i 9,517 | ) | ||||||||
Recognized
prior service costs | i — | i — | i 107 | i 66 | ||||||||||||
Recognized
loss | i 1,425 | i 1,405 | i 3,655 | i 3,653 | ||||||||||||
Defined
benefit pension plans net periodic pension cost (benefit) | $ | i 428 | $ | i 1,473 | $ | ( i 1,604 | ) | $ | i 222 |
Three Months Ended | ||||||||
Company Contributions | March 31 | |||||||
(In thousands) | 2020 | 2019 | ||||||
Defined
benefit pension plans (U.S.) | $ | i 2,027 | $ | i 1,479 | ||||
Defined
benefit pension plans (International) | i 10,060 | i 9,270 | ||||||
Multiemployer
pension plans | i 409 | i 521 | ||||||
Defined
contribution pension plans | i 3,169 | i 3,390 |
Three Months Ended | ||||||||
March
31 | ||||||||
(In thousands, except per share amounts) | 2020 | 2019 | ||||||
Income (loss) from continuing operations attributable to Harsco Corporation common stockholders | $ | ( i 8,782 | ) | $ | i 10,474 | |||
Weighted-average
shares outstanding: | ||||||||
Weighted-average shares outstanding - basic | i 78,761 | i 79,907 | ||||||
Dilutive
effect of stock-based compensation | i — | i 1,746 | ||||||
Weighted-average
shares outstanding - diluted | i 78,761 | i 81,653 | ||||||
Earnings
(loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: | ||||||||
Basic | $ | ( i 0.11 | ) | $ | i 0.13 | |||
Diluted | $ | ( i 0.11 | ) | $ | i 0.13 |
Three
Months Ended | ||||||
March 31 | ||||||
(In thousands) | 2020 | 2019 | ||||
Restricted stock units | i 749 | i — | ||||
Stock
appreciation rights | i 2,643 | i 608 | ||||
Performance
share units | i 940 | i 233 |
(In thousands) | Balance Sheet Location | Fair Value
of Derivatives Designated as Hedging Instruments | Fair Value of Derivatives Not Designated as Hedging Instruments | Total Fair Value | ||||||||||
Asset
derivatives (Level 2): | ||||||||||||||
Foreign currency exchange forward contracts | Other current assets | $ | i 4,113 | $ | i 4,898 | $ | i 9,011 | |||||||
Total | $ | i 4,113 | $ | i 4,898 | $ | i 9,011 | ||||||||
Liability
derivatives (Level 2): | ||||||||||||||
Foreign currency exchange forward contracts | Other current liabilities | $ | i 27 | $ | i 13,471 | $ | i 13,498 | |||||||
Interest
rate swaps | Other current liabilities | i 3,543 | i — | i 3,543 | ||||||||||
Interest
rate swaps | Other liabilities | i 6,035 | i — | i 6,035 | ||||||||||
Total | $ | i 9,605 | $ | i 13,471 | $ | i 23,076 | ||||||||
Asset derivatives (Level 2): | ||||||||||||||
Foreign
currency exchange forward contracts | Other current assets | $ | i 2,039 | $ | i 946 | $ | i 2,985 | |||||||
Total | $ | i 2,039 | $ | i 946 | $ | i 2,985 | ||||||||
Liability
derivatives (Level 2): | ||||||||||||||
Foreign currency exchange forward contracts | Other current liabilities | $ | i 140 | $ | i 3,733 | $ | i 3,873 | |||||||
Interest
rate swaps | Other current liabilities | i 2,098 | i — | i 2,098 | ||||||||||
Interest
rate swaps | Other liabilities | i 4,281 | i — | i 4,281 | ||||||||||
Total | $ | i 6,519 | $ | i 3,733 | $ | i 10,252 |
Amount Recognized in Other Comprehensive Income (“OCI”) on Derivatives | Location of Amount
Reclassified from Accumulated OCI into Income | Amount Reclassified from Accumulated OCI into Income - Effective Portion or Equity | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||
March
31 | March 31 | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
Foreign
currency exchange forward contracts | $ | i 2,037 | $ | ( i 712 | ) | Product
revenues | $ | ( i 1,404 | ) | $ | ( i 32 | ) | ||||||
Interest
rate swaps | ( i 3,578 | ) | ( i 3,309 | ) | Interest
expense | i 378 | ( i 301 | ) | ||||||||||
Cross-currency
interest rate swaps (a) | i 58 | ( i 52 | ) | Interest
expense | i 305 | i 314 | ||||||||||||
$ | ( i 1,483 | ) | $ | ( i 4,073 | ) | $ | ( i 721 | ) | $ | ( i 19 | ) |
(a) | Amounts
represent changes in foreign currency translation related to balances in Accumulated other comprehensive loss. |
Three Months Ended | ||||||||||||||||
March
31 | ||||||||||||||||
2020 | 2019 | |||||||||||||||
(in thousands) | Product Revenues | Interest Expense | Product Revenues | Interest
Expense | ||||||||||||
Total amounts of line items presented in the Condensed Consolidated Statement of Operations in which the effects of cash flow hedges are recorded | $ | i 107,502 | $ | ( i 12,649 | ) | $ | i 100,382 | $ | ( i 5,507 | ) | ||||||
Interest
rate swaps: | ||||||||||||||||
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income | i — | ( i 378 | ) | i — | i 301 | |||||||||||
Foreign
exchange contracts: | ||||||||||||||||
Amount of gain or reclassified from accumulated other comprehensive loss into income | i 1,404 | i — | i 32 | i — | ||||||||||||
Amount
excluded from effectiveness testing recognized in earnings based on changes in fair value | i 183 | i — | i 78 | i — | ||||||||||||
Cross-currency
interest rate swaps: | ||||||||||||||||
Amount of loss reclassified from accumulated other comprehensive income into income | i — | ( i 305 | ) | i — | ( i 314 | ) |
Location of Gain Recognized in Income on Derivatives | Amount of Gain Recognized in Income on Derivatives (b) | |||||||||
Three
Months Ended | ||||||||||
March 31 | ||||||||||
(In thousands) | 2020 | 2019 | ||||||||
Foreign currency exchange forward contracts | Cost
of services and products sold | $ | i 5,542 | $ | i 2,323 |
(b)
| These gains offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. |
Three
Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Revenues From Continuing Operations (a) | ||||||||
Harsco
Environmental | $ | i 241,559 | $ | i 261,312 | ||||
Harsco
Clean Earth | i 78,812 | i — | ||||||
Harsco
Rail | i 78,470 | i 68,590 | ||||||
Total
Revenues From Continuing Operations | $ | i 398,841 | $ | i 329,902 | ||||
Operating
Income (Loss) From Continuing Operations (a) | ||||||||
Harsco Environmental | $ | i 10,520 | $ | i 24,497 | ||||
Harsco
Clean Earth | i 4,245 | i — | ||||||
Harsco
Rail | i 6,472 | i 5,389 | ||||||
Corporate | ( i 18,356 | ) | ( i 10,062 | ) | ||||
Total
Operating Income From Continuing Operations | $ | i 2,881 | $ | i 19,824 | ||||
Depreciation
and Amortization (a) | ||||||||
Harsco Environmental | $ | i 27,311 | $ | i 28,705 | ||||
Harsco
Clean Earth | i 6,519 | i — | ||||||
Harsco
Rail | i 1,299 | i 1,167 | ||||||
Corporate | i 1,152 | i 1,352 | ||||||
Total
Depreciation and Amortization | $ | i 36,281 | $ | i 31,224 | ||||
Capital
Expenditures (a) | ||||||||
Harsco Environmental | $ | i 24,748 | $ | i 29,163 | ||||
Harsco
Clean Earth | i 1,442 | i — | ||||||
Harsco
Rail | i 1,539 | i 3,916 | ||||||
Corporate | i 58 | i 1,153 | ||||||
Total
Capital Expenditures | $ | i 27,787 | $ | i 34,232 |
(a) | The
Company's acquisition of Clean Earth closed on June 28, 2019. The operating results of the former Harsco Industrial Segment has been reflected as discontinued operations in the Company's Condensed Consolidated Statement of Operations for all periods presented. See Note 3, Acquisitions and Dispositions, for additional details. |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Segment
operating income | $ | i 21,237 | $ | i 29,886 | ||||
General
Corporate expense | ( i 18,356 | ) | ( i 10,062 | ) | ||||
Operating
income from continuing operations | i 2,881 | i 19,824 | ||||||
Interest
income | i 193 | i 533 | ||||||
Interest
expense | ( i 12,649 | ) | ( i 5,507 | ) | ||||
Unused
debt commitment and amendment fees | ( i 488 | ) | — | |||||
Defined benefit pension
income (expense) | i 1,589 | ( i 1,338 | ) | |||||
Income
(loss) from continuing operations before income taxes and equity income | $ | ( i 8,474 | ) | $ | i 13,512 |
Three
Months Ended | ||||||||||||||||||||
(In thousands) | Harsco Environmental Segment | Harsco Clean Earth Segment | Harsco Rail Segment | Corporate | Consolidated
Totals | |||||||||||||||
Primary Geographical Markets (a) (b): | ||||||||||||||||||||
North America | $ | i 69,881 | $ | i 78,812 | $ | i 53,773 | $ | i — | $ | i 202,466 | ||||||||||
Western
Europe | i 96,317 | i — | i 18,164 | i — | i 114,481 | |||||||||||||||
Latin
America (c) | i 33,260 | i — | i 665 | i — | i 33,925 | |||||||||||||||
Asia-Pacific | i 21,996 | i — | i 5,868 | i — | i 27,864 | |||||||||||||||
Middle
East and Africa | i 15,889 | i — | i — | i — | i 15,889 | |||||||||||||||
Eastern
Europe | i 4,216 | i — | i — | i — | i 4,216 | |||||||||||||||
Total
Revenues | $ | i 241,559 | $ | i 78,812 | $ | i 78,470 | $ | i — | $ | i 398,841 | ||||||||||
Key
Product and Service Groups (a): | ||||||||||||||||||||
Environmental services related to resource recovery for metals manufacturing and related logistical services | $ | i 207,346 | $ | i — | $ | i — | $ | i — | $ | i 207,346 | ||||||||||
Applied
products | i 30,262 | i — | i — | i — | i 30,262 | |||||||||||||||
Environmental
systems for aluminum dross and scrap processing | i 3,951 | i — | i — | i — | i 3,951 | |||||||||||||||
Railway
track maintenance equipment | i — | i — | i 42,615 | i — | i 42,615 | |||||||||||||||
After-market
parts and services; safety and diagnostic technology | i — | i — | i 31,200 | i — | i 31,200 | |||||||||||||||
Railway
contracting services | i — | i — | i 4,655 | i — | i 4,655 | |||||||||||||||
Waste
processing and reuse solutions | i — | i 78,812 | i — | i — | i 78,812 | |||||||||||||||
Total
Revenues | $ | i 241,559 | $ | i 78,812 | $ | i 78,470 | $ | i — | $ | i 398,841 |
Three
Months Ended | ||||||||||||||||||||
(In thousands) | Harsco Environmental Segment | Harsco Clean Earth Segment | Harsco Rail Segment | Corporate | Consolidated
Totals | |||||||||||||||
Primary Geographical Markets (a) (b): | ||||||||||||||||||||
North America | $ | i 73,349 | $ | i — | $ | i 50,365 | $ | i — | $ | i 123,714 | ||||||||||
Western
Europe | i 98,221 | i — | i 10,013 | i — | i 108,234 | |||||||||||||||
Latin
America (c) | i 36,991 | i — | i 591 | i — | i 37,582 | |||||||||||||||
Asia-Pacific | i 34,138 | i — | i 7,621 | i — | i 41,759 | |||||||||||||||
Middle
East and Africa | i 13,915 | i — | i — | i — | i 13,915 | |||||||||||||||
Eastern
Europe | i 4,698 | i — | i — | i — | i 4,698 | |||||||||||||||
Total
Revenues | $ | i 261,312 | $ | i — | $ | i 68,590 | $ | i — | $ | i 329,902 | ||||||||||
Key
Product and Service Groups (a): | ||||||||||||||||||||
Environmental services related to resource recovery for metals manufacturing and related logistical services | $ | i 224,061 | $ | i — | $ | i — | $ | i — | $ | i 224,061 | ||||||||||
Applied
products | i 30,390 | i — | i — | i — | i 30,390 | |||||||||||||||
Environmental
systems for aluminum dross and scrap processing | i 6,861 | i — | i — | i — | i 6,861 | |||||||||||||||
Railway
track maintenance equipment | i — | i — | i 33,608 | i — | i 33,608 | |||||||||||||||
After-market
parts and services; safety and diagnostic technology | i — | i — | i 31,301 | i — | i 31,301 | |||||||||||||||
Railway
contracting services | i — | i — | i 3,681 | i — | i 3,681 | |||||||||||||||
Waste
processing and reuse solutions | i — | i — | i — | i — | i — | |||||||||||||||
Total
Revenues | $ | i 261,312 | $ | i — | $ | i 68,590 | $ | i — | $ | i 329,902 |
(a) | The
Company's acquisition of Clean Earth closed on June 28, 2019. The operating results of the former Harsco Industrial Segment have been reflected as discontinued operations in the Company's Condensed Consolidated Statement of Operations for all periods presented. See Note 3, Acquisitions and Dispositions, for additional details. |
(b) | Revenues are attributed to individual countries based on the location of the facility generating the revenue. |
(c) | Includes
Mexico. |
Three
Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Employee termination benefit costs | $ | i 5,455 | $ | i 2,519 | ||||
Other
costs to exit activities | i 176 | i 1,155 | ||||||
Impaired
asset write-downs | i 69 | i 214 | ||||||
Contingent
consideration adjustments | i — | i 369 | ||||||
Net
gains | ( i 19 | ) | ( i 2,271 | ) | ||||
Other | i 52 | ( i 243 | ) | |||||
Other
expenses, net | $ | i 5,733 | $ | i 1,743 |
Components
of Accumulated Other Comprehensive Income (Loss) - Net of Tax | ||||||||||||||||||||
(In thousands) | Cumulative Foreign Exchange Translation Adjustments | Effective Portion of Derivatives Designated as Hedging Instruments | Cumulative Unrecognized Actuarial Losses on Pension Obligations | Unrealized Gain (Loss) on Marketable Securities | Total | |||||||||||||||
Balance
at December 31, 2018 | $ | ( i 159,810 | ) | $ | i 1,389 | $ | ( i 408,655 | ) | $ | ( i 31 | ) | $ | ( i 567,107 | ) | ||||||
Adoption
of new accounting standard | — | i — | ( i 21,429 | ) | (a) | — | ( i 21,429 | ) | ||||||||||||
Other
comprehensive income (loss) before reclassifications | i 11,725 | (b) | ( i 3,084 | ) | (c) | ( i 6,573 | ) | (b) | i 15 | i 2,083 | ||||||||||
Amounts
reclassified from accumulated other comprehensive loss, net of tax | ( i 2,271 | ) | ( i 63 | ) | i 4,782 | i — | i 2,448 | |||||||||||||
Total
other comprehensive income (loss) | i 9,454 | ( i 3,147 | ) | ( i 1,791 | ) | i 15 | i 4,531 | |||||||||||||
Other
comprehensive income attributable to noncontrolling interests | ( i 420 | ) | i — | i — | i — | ( i 420 | ) | |||||||||||||
Other
comprehensive income (loss) attributable to Harsco Corporation | i 9,034 | ( i 3,147 | ) | ( i 1,791 | ) | i 15 | i 4,111 | |||||||||||||
Balance
at March 31, 2019 | $ | ( i 150,776 | ) | $ | ( i 1,758 | ) | $ | ( i 431,875 | ) | $ | ( i 16 | ) | $ | ( i 584,425 | ) |
Components
of Accumulated Other Comprehensive Income (Loss) - Net of Tax | ||||||||||||||||||||
(In thousands) | Cumulative Foreign Exchange Translation Adjustments | Effective Portion of Derivatives Designated as Hedging Instruments | Cumulative Unrecognized Actuarial Losses on Pension Obligations | Unrealized Gain (Loss) on Marketable Securities | Total | |||||||||||||||
Balance
at December 31, 2019 | $ | ( i 143,340 | ) | $ | ( i 3,717 | ) | $ | ( i 440,562 | ) | $ | ( i 3 | ) | $ | ( i 587,622 | ) | |||||
Other
comprehensive income (loss) before reclassifications | ( i 71,472 | ) | (b) | ( i 1,042 | ) | (c) | i 21,429 | (b) | ( i 18 | ) | ( i 51,103 | ) | ||||||||
Amounts
reclassified from accumulated other comprehensive loss, net of tax | i 12,906 | ( i 645 | ) | i 8,840 | i — | i 21,101 | ||||||||||||||
Total
other comprehensive income (loss) | ( i 58,566 | ) | ( i 1,687 | ) | i 30,269 | ( i 18 | ) | ( i 30,002 | ) | |||||||||||
Other
comprehensive income attributable to noncontrolling interests | i 1,148 | i — | i — | i — | i 1,148 | |||||||||||||||
Other
comprehensive income (loss) attributable to Harsco Corporation | ( i 57,418 | ) | ( i 1,687 | ) | i 30,269 | ( i 18 | ) | ( i 28,854 | ) | |||||||||||
Balance
at March 31, 2020 | $ | ( i 200,758 | ) | $ | ( i 5,404 | ) | $ | ( i 410,293 | ) | $ | ( i 21 | ) | $ | ( i 616,476 | ) |
(a) | Represents
the adoption of the new accounting standard on January 1, 2019 related to stranded tax effects from the Tax Cuts and Jobs Act. |
(b) | Principally foreign currency fluctuation. |
(c) | Net change from periodic revaluations. |
(In
thousands) | Three Months Ended | Affected Caption on the Company's Condensed Consolidated Statements of Operations | ||||||||
March 31 2020 | March 31 2019 | |||||||||
Recognition of cumulative foreign currency translation adjustments: | ||||||||||
Gain
on substantial liquidation of subsidiaries (d) | $ | i — | $ | ( i 2,271 | ) | Other
expenses, net | ||||
Loss on substantial liquidation of subsidiaries (d) | i 12,906 | i — | Gain
on sale of discontinued business | |||||||
Amortization of cash flow hedging instruments: | ||||||||||
Foreign currency exchange forward contracts | $ | ( i 1,404 | ) | $ | ( i 32 | ) | Product
revenues | |||
Cross-currency interest rate swaps | i 305 | i 314 | Interest
expense | |||||||
Interest rate swaps | i 378 | ( i 301 | ) | Interest
expense | ||||||
Total before tax | ( i 721 | ) | ( i 19 | ) | ||||||
Tax
expense | i 76 | ( i 44 | ) | |||||||
Total
reclassification of cash flow hedging instruments, net of tax | $ | ( i 645 | ) | $ | ( i 63 | ) | ||||
Amortization
of defined benefit pension items (e): | ||||||||||
Recognized losses | $ | i 5,080 | $ | i 5,058 | Defined
benefit pension income (expense) | |||||
Recognized prior-service costs | i 107 | i 66 | Defined
benefit pension income (expense) | |||||||
Pension liability transfer - discontinued business | i 5,363 | — | Gain
on sale of discontinued business | |||||||
Total before tax | i 10,550 | i 5,124 | ||||||||
Tax
benefit | ( i 1,710 | ) | ( i 342 | ) | ||||||
Total
reclassification of defined benefit pension items, net of tax | $ | i 8,840 | $ | i 4,782 |
(d) | No
tax impact. |
(e) | These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See Note 10, Employee Benefit Plans, for additional details. |
• | Revenues for the first quarter ended March 31, 2020 increased approximately 21% compared with the first quarter ended March 31, 2019. The primary drivers for this increase were the acquisition of Clean Earth and increased revenue related to maintenance-of-way equipment
sales in the Harsco Rail Segment, partially offset by the impact of foreign currency translation and modestly lower customer productions in the Harsco Environmental Segment inclusive of the impacts from the COVID-19 coronavirus pandemic. |
• | Operating income from continuing operations for the first quarter ended March 31,
2020 decreased approximately 85% compared with the first quarter ended March 31, 2019. The primary drivers for this decrease were incremental strategic costs of approximately $11 million, primarily to support the ESOL acquisition, decreased customer production levels in the Harsco Environmental Segment inclusive of the impacts of the COVID-19 coronavirus pandemic, severance costs of approximately $5 million in the Harsco Environmental Segment and the mix of maintenance-of-way equipment sales in the Harsco Rail Segment. These decreases were partially offset by the inclusion of Clean Earth operating results; lower selling, general and administrative expenses in the Harsco Environmental and Harsco Rail Segments and costs incurred in the Harsco Rail Segment
during 2019 that did not repeat in 2020 related to the consolidation of U.S. manufacturing and distribution into a single facility. |
• | Diluted loss per common share from continuing operations attributable to Harsco Corporation for the first quarter ended March 31, 2020 were $0.11, a decrease of approximately 185% compared with the Diluted earnings per common share from continuing operations during first quarter ended March 31,
2019. In addition to the factors noted above for revenue and operating income from continuing operations, the primary driver of this decrease was increased interest expense. |
• | Cash flows used by operating activities for the three months ended March 31, 2020 were $11.5 million, a decrease of $26.4 million compared with the Cash flows from operating
activities for the three months ended March 31, 2019. The primary driver for this decrease was lower net income (excluding the impacts of the IKG sale), including the strategic costs principally related to the ESOL acquisition. |
• | As a result of the evolving impact of the COVID-19 coronavirus pandemic on the global economy, the Company is anticipating a further slow-down in customer demand and increased business
disruption, the extent and duration of which is not presently known. The Company continues to operate in most countries around the world in which it has a presence, including as a provider of essential services in the U.S., and the Company is continuing to work diligently and safely to provide customers with services and products. |
• | The Harsco Environmental Segment continues to operate in most countries around the world in which it has a presence to support critical metal production, although the Company
expects an overall decline in global steel production, including a limited number of locations where mills are temporarily idled. Over the longer-term the Company expects that Harsco Environmental Segment growth will be driven by investments, innovation and economic growth that supports higher customer steel production. In addition, new site (contract) contributions are expected to outpace site exits during 2020. |
• | The Harsco Clean Earth Segment locations are currently operating as an essential services provider throughout the U.S., enabling the business to continue to
perform critical environmental services despite mandated closures for non-essential businesses in certain states. However, in the near term it is likely that a decrease in construction related activity, resulting from the COVID-19 coronavirus pandemic, may impact the contaminated materials line of business. The immediate impact of the COVID-19 coronavirus pandemic on the hazardous waste line of business, including the recently announced ESOL acquisition, will vary by ultimate end market with certain end-markets such as medical waste and retail, as well as the dredged materials line of business, being more resilient. Over the longer-term the Company expects growth opportunities, including the recently completed ESOL transaction, positive market trends, operational synergy opportunities and the less cyclical nature of this business to provide favorable returns on the
Company's recent investments. |
• | The Harsco Rail Segment continues to fulfill orders critical to global transportation and is on track to increase capacity during the remainder of 2020 through its Supply Chain Operation Recovery program to a level required to deliver on its backlog. In the near term, the Harsco Rail Segment may be impacted by a decrease in certain short-cycle and equipment sales as a result of the COVID-19 coronavirus pandemic, primarily in the U.S. Overall, the Harsco Rail Segment is supported by record backlog, which grew during the first quarter of 2020, and the longer-term outlook for this business remains strong. |
• | The
Company anticipates moderately higher selling, general and administrative costs in the Harsco Rail Segment, necessary to support anticipated volume increases and growth. |
• | The Company anticipates lowering 2020 capital expenditures by approximately $75 million from an originally expected range of $170 million to $180 million with the goal of preserving positive free cash flow (cash flows from operations; deduct capital expenditures; add back proceeds from asset sales) for the year. |
• | The
Company anticipates additional corporate cost reductions during 2020 to offset the impact of the COVID-19 coronavirus pandemic. |
• | Interest expense for 2020 is expected to increase due to higher average debt balances during 2020 and the impact of a higher weighted-average interest rate resulting from the issuance of the 5.75% Notes in 2019 and the New Term Loan. |
• | Net
periodic pension cost will decrease by approximately $12 million during 2020 which will primarily be reflected in the caption Defined benefit pension (income) expense on the Condensed Consolidated Statement of Operations. The decrease is primarily the result of higher plan asset values at December 31, 2019. |
Three
Months Ended | ||||||||
March 31 | ||||||||
(In millions, except percentages) | 2020 | 2019 | ||||||
Revenues: | ||||||||
Harsco
Environmental | $ | 241.6 | $ | 261.3 | ||||
Harsco Clean Earth | 78.8 | — | ||||||
Harsco
Rail | 78.5 | 68.6 | ||||||
Total Revenues | $ | 398.8 | $ | 329.9 | ||||
Operating
Income (Loss): | ||||||||
Harsco Environmental | $ | 10.5 | $ | 24.5 | ||||
Harsco
Clean Earth | 4.2 | — | ||||||
Harsco Rail | 6.5 | 5.4 | ||||||
Corporate | (18.4 | ) | (10.1 | ) | ||||
Total
Operating Income: | $ | 2.9 | $ | 19.8 | ||||
Operating Margins: | ||||||||
Harsco
Environmental | 4.4 | % | 9.4 | % | ||||
Harsco Clean Earth | 5.4 | — | ||||||
Harsco
Rail | 8.2 | 7.9 | ||||||
Consolidated Operating Margin | 0.7 | % | 6.0 | % |
Significant Effects on Revenues (In millions) | Three Months Ended | |||
Revenues — 2019 | $ | 261.3 | ||
Impact
of foreign currency translation. | (10.6 | ) | ||
Net impact of new and lost contracts. | (6.8 | ) | ||
Net effects of price/volume changes, primarily attributable to volume changes. | (2.3 | ) | ||
Revenues
— 2020 | $ | 241.6 |
• | Lower selling, general and administrative expenses improved operating income by $2.8 million during the first quarter of 2020 compared to the same period in the prior year. |
• | Operating
income was positively affected by improved pricing and lower costs for both abrasives and roofing materials during the first quarter of 2020 compared with the same period in the prior year. |
• | Overall steel production by customers under environmental services contracts, including the impact of new and exited contracts, decreased modestly for the first quarter of 2020
compared with the same period in the prior year. Additionally, estimated customer mill utilization decreased 8% compared with the same period in the prior year. |
• | Operating results for the first quarter of 2020 were also negatively impacted by $5.2 million of employee termination benefit costs incurred to improve operational efficiency and support near-term financial performance. |
• | Foreign currency translation decreased operating
income by $1.2 million for the first quarter of 2020 compared with the same period in the prior year. |
• | Operating income for the first quarter of 2020 was negatively impacted by a $2.3 million gain during the first quarter of 2019 related to the recognition of a foreign currency cumulative translation adjustment resulting from the substantial liquidation of a subsidiary that did not repeat. |
Significant Effects on Revenues (In millions) | Three Months Ended | |||
Revenues — 2019 | $ | 68.6 | ||
Net effect of price/volume changes, primarily attributable to volume changes. | 10.7 | |||
Impact
of foreign currency translation. | (0.8 | ) | ||
Revenues — 2020 | $ | 78.5 |
• | Increased
railway contracting services, primarily related to a new contract start in the U.S., increased operating income during the first quarter of 2020 compared with the same period in the prior year. |
• | Results for the first quarter of 2019 included $2.6 million of costs associated with the consolidation of U.S. manufacturing and distribution into once facility that did not repeat during the first quarter of 2020. |
• | The
mix of maintenance-of-way equipment sales decreased operating income during the first quarter of 2020 compared with the same period in the prior year. |
March 31 | ||||||||
Three
Months Ended | ||||||||
(In millions, except per share amounts) | 2020 | 2019 | ||||||
Total revenues | $ | 398.8 | $ | 329.9 | ||||
Cost
of services and products sold | 316.5 | 251.2 | ||||||
Selling, general and administrative expenses | 72.5 | 56.4 | ||||||
Research
and development expenses | 1.3 | 0.7 | ||||||
Other expenses, net | 5.7 | 1.7 | ||||||
Operating
income from continuing operations | 2.9 | 19.8 | ||||||
Interest income | 0.2 | 0.5 | ||||||
Interest
expense | (12.6 | ) | (5.5 | ) | ||||
Unused debt commitment and amendment fees | (0.5 | ) | — | |||||
Defined
benefit pension income (expense) | 1.6 | (1.3 | ) | |||||
Income tax benefit (expense) | 0.7 | (1.2 | ) | |||||
Equity
income of unconsolidated entities, net | 0.1 | — | ||||||
Income (loss) from continuing operations | (7.7 | ) | 12.3 | |||||
Gain
on sale of discontinued business | 18.5 | — | ||||||
Income (loss) from discontinued businesses | (0.2 | ) | 13.8 | |||||
Income
tax expense related to discontinued operations | (9.3 | ) | (3.5 | ) | ||||
Income from discontinued operations | 8.9 | 10.2 | ||||||
Net
income | 1.2 | 22.5 | ||||||
Total other comprehensive income (loss) | (30.0 | ) | 4.5 | |||||
Total
comprehensive income (loss) | (28.8 | ) | 27.1 | |||||
Diluted earnings (loss) per common share from continuing operations attributable to Harsco Corporation common stockholders | (0.11 | ) | 0.13 | |||||
Effective
income tax rate for continuing operations | 8.0 | % | 9.0 | % |
(In millions) | Three Months Ended | |||
Impact of Clean Earth acquisition | $ | 63.4 | ||
Increased costs due to changes in revenues (exclusive of the Clean Earth acquisition and effects of foreign currency translation and including fluctuations in commodity costs included in selling prices) | 12.9 | |||
Impact
of foreign currency translation | (9.3 | ) | ||
Other | (1.7 | ) | ||
Total change in cost of services and products sold — 2020 vs. 2019 | $ | 65.3 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2020 | 2019 | ||||||
Employee
termination benefit costs | $ | 5,455 | $ | 2,519 | ||||
Other costs to exit activities | 176 | 1,155 | ||||||
Impaired
asset write-downs | 69 | 214 | ||||||
Contingent consideration adjustments | — | 369 | ||||||
Net
gains | (19 | ) | (2,271 | ) | ||||
Other | 52 | (243 | ) | |||||
Other
expenses, net | $ | 5,733 | $ | 1,743 |
Three Months Ended | ||||||||
March
31 | ||||||||
(In millions) | 2020 | 2019 | ||||||
Net cash provided (used) by: | ||||||||
$ | (11.5 | ) | $ | 14.8 | ||||
Investing activities | 18.6 | (38.6 | ) | |||||
Financing
activities | 12.8 | 44.4 | ||||||
Effect of exchange rate changes on cash and cash equivalents, including restricted cash | (10.8 | ) | — | |||||
Net
change in cash and cash equivalents, including restricted cash | $ | 9.1 | $ | 20.5 |
Summary of Senior Secured Credit Facility Borrowings(a): (In
millions) | March 31 2020 | December 31 2019 | ||||||
By type: | ||||||||
Revolving Credit Facility | $ | 80.0 | $ | 67.0 | ||||
Term
Loan Facility | 218.2 | 218.2 | ||||||
5.75% Notes | 500.0 | 500.0 | ||||||
Total | $ | 798.2 | $ | 785.2 |
(a) | All
amounts outstanding under the Senior Secured Credit Facility are classified as long-term on the Company's Condensed Consolidated Balance Sheets at both March 31, 2020 and December 31, 2019. |
(In millions) | Facility Limit | Outstanding Balance | Outstanding Letters of Credit | Available Credit | ||||||||||||
Multi-year revolving credit facility | $ | 700.0 | $ | 80.0 | $ | 25.4 | $ | 594.6 |
Exhibit Number | Description | |
2.1 | ||
2.2 | ||
2.3 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
31.1 | ||
31.2 | ||
32 | ||
101.Def | Definition Linkbase Document | |
101.Pre | Presentation Linkbase Document | |
101.Lab | Labels Linkbase Document | |
101.Cal | Calculation
Linkbase Document | |
101.Sch | Schema Document | |
101.Ins | Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
HARSCO
CORPORATION | |||
(Registrant) | |||
DATE | /s/ PETER F. MINAN | ||
Senior Vice President and Chief Financial Officer | |||
(On
behalf of the registrant and as Principal Financial Officer) | |||
DATE | /s/ SAMUEL C. FENICE | ||
Vice President and Corporate Controller | |||
(Principal Accounting Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/31/27 | ||||
6/28/24 | ||||
3/31/24 | ||||
3/31/23 | ||||
12/31/22 | ||||
3/31/22 | ||||
4/24/21 | ||||
3/31/21 | ||||
1/1/21 | ||||
Filed on: | 5/8/20 | 8-K | ||
4/30/20 | ||||
4/6/20 | ||||
For Period end: | 3/31/20 | 8-K | ||
3/2/20 | 3, 4 | |||
1/21/20 | ||||
1/1/20 | ||||
12/31/19 | 10-K, 11-K, SD | |||
11/1/19 | ||||
6/28/19 | 3, 8-K | |||
6/13/19 | 8-K | |||
3/31/19 | 10-Q | |||
3/18/19 | ||||
1/1/19 | ||||
12/31/18 | 10-K, 11-K, SD | |||
12/6/18 | ||||
10/31/18 | 10-Q, 8-K | |||
10/19/18 | ||||
8/6/18 | ||||
7/27/18 | 8-K | |||
6/4/18 | 4 | |||
5/2/18 | 10-Q, 4, 8-K | |||
1/1/18 | ||||
3/24/17 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/29/24 Enviri Corp. 10-K 12/31/23 131:21M 3/01/23 Enviri Corp. 10-K 12/31/22 132:23M 2/24/22 Enviri Corp. 10-K 12/31/21 131:24M 5/04/21 Enviri Corp. 10-Q 3/31/21 96:11M 2/25/21 Enviri Corp. 10-K 12/31/20 124:25M |