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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Harsco Corporation | NYSE:HSC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 9.15 | 0 | 01:00:00 |
FORM 10-Q
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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23-1483991
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. employer identification number)
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|
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350 Poplar Church Road, Camp Hill, Pennsylvania
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17011
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Class
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Outstanding at July 31, 2017
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Common stock, par value $1.25 per share
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80,419,576
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Page
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(In thousands)
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June 30
2017 |
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December 31
2016 |
||||
ASSETS
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Current assets:
|
|
|
|
|
|
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||
Cash and cash equivalents
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|
$
|
58,105
|
|
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$
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69,831
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|
Restricted cash
|
|
4,671
|
|
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2,048
|
|
||
Trade accounts receivable, net
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|
289,280
|
|
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236,554
|
|
||
Other receivables
|
|
22,340
|
|
|
21,053
|
|
||
Inventories
|
|
201,851
|
|
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187,681
|
|
||
Other current assets
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32,840
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|
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33,108
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|
||
Total current assets
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609,087
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550,275
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|
||
Property, plant and equipment, net
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484,100
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490,255
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|
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Goodwill
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393,804
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382,251
|
|
||
Intangible assets, net
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39,972
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41,567
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|
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Deferred income tax assets
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106,044
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106,311
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Other assets
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13,277
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10,679
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Total assets
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$
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1,646,284
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|
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$
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1,581,338
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LIABILITIES
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|
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Current liabilities:
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|
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Short-term borrowings
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$
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5,985
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|
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$
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4,259
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Current maturities of long-term debt
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16,248
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|
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25,574
|
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Accounts payable
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118,633
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107,954
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||
Accrued compensation
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44,210
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|
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46,658
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Income taxes payable
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7,742
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|
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4,301
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Insurance liabilities
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11,949
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11,850
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Advances on contracts and other customer advances
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124,902
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117,329
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Other current liabilities
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135,191
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|
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109,748
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Total current liabilities
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464,860
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427,673
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Long-term debt
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617,674
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629,239
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Insurance liabilities
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23,344
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25,265
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Retirement plan liabilities
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310,278
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319,597
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Other liabilities
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43,232
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42,001
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Total liabilities
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1,459,388
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1,443,775
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COMMITMENTS AND CONTINGENCIES
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HARSCO CORPORATION STOCKHOLDERS’ EQUITY
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Preferred stock
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—
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—
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Common stock
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141,039
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140,625
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Additional paid-in capital
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178,435
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172,101
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Accumulated other comprehensive loss
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(591,735
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)
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(606,722
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)
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Retained earnings
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1,177,907
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1,150,688
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|
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Treasury stock
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(761,717
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)
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(760,391
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)
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Total Harsco Corporation stockholders’ equity
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143,929
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96,301
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Noncontrolling interests
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42,967
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41,262
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Total equity
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186,896
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137,563
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Total liabilities and equity
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$
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1,646,284
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$
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1,581,338
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HARSCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
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||||||||||||||||
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30
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June 30
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||||||||||||
(In thousands, except per share amounts)
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2017
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2016
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2017
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2016
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||||||||
Revenues from continuing operations:
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Service revenues
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$
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251,306
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$
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249,626
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$
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491,915
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$
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475,120
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Product revenues
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143,592
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120,307
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275,524
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248,094
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||||
Total revenues
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394,898
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369,933
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767,439
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723,214
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Costs and expenses from continuing operations:
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Cost of services sold
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192,690
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191,508
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381,591
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381,325
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||||
Cost of products sold
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100,727
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125,388
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199,593
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218,632
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Selling, general and administrative expenses
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55,606
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49,520
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110,747
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100,304
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Research and development expenses
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1,329
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|
956
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2,160
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1,838
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||||
Other expenses
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2,072
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1,247
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2,966
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10,370
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||||
Total costs and expenses
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352,424
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368,619
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697,057
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712,469
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||||
Operating income from continuing operations
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42,474
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1,314
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70,382
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10,745
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Interest income
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493
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|
552
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1,005
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1,087
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Interest expense
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(12,405
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)
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(13,805
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)
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(24,058
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)
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(26,168
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)
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||||
Change in fair value to the unit adjustment liability and loss on dilution of equity method investment
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—
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(1,489
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)
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—
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(13,706
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)
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||||
Income (loss) from continuing operations before income taxes and equity income (loss)
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30,562
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(13,428
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)
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47,329
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(28,042
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)
|
||||
Income tax expense
|
|
(11,234
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)
|
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(12,000
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)
|
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(17,487
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)
|
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(9,834
|
)
|
||||
Equity income (loss) of unconsolidated entities, net
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—
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|
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(694
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)
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—
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2,481
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|
||||
Income (loss) from continuing operations
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19,328
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|
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(26,122
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)
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29,842
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(35,395
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)
|
||||
Discontinued operations:
|
|
|
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|
|
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|
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||||||
Income on disposal of discontinued business
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628
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|
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2,886
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|
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40
|
|
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2,380
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|
||||
Income tax expense related to discontinued business
|
|
(225
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)
|
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(1,065
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)
|
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(14
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)
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(878
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)
|
||||
Income from discontinued operations
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403
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1,821
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26
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|
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1,502
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Net income (loss)
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19,731
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|
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(24,301
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)
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29,868
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|
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(33,893
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)
|
||||
Less: Net income attributable to noncontrolling interests
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|
(693
|
)
|
|
(1,872
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)
|
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(1,940
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)
|
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(3,149
|
)
|
||||
Net income (loss) attributable to Harsco Corporation
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$
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19,038
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|
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$
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(26,173
|
)
|
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$
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27,928
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|
|
$
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(37,042
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)
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Amounts attributable to Harsco Corporation common stockholders:
|
||||||||||||||||
Income (loss) from continuing operations, net of tax
|
|
$
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18,635
|
|
|
$
|
(27,994
|
)
|
|
$
|
27,902
|
|
|
$
|
(38,544
|
)
|
Income from discontinued operations, net of tax
|
|
403
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|
|
1,821
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|
|
26
|
|
|
1,502
|
|
||||
Net income (loss) attributable to Harsco Corporation common stockholders
|
|
$
|
19,038
|
|
|
$
|
(26,173
|
)
|
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$
|
27,928
|
|
|
$
|
(37,042
|
)
|
Weighted-average shares of common stock outstanding
|
|
80,535
|
|
|
80,337
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|
|
80,460
|
|
|
80,288
|
|
||||
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders:
|
||||||||||||||||
Continuing operations
|
|
$
|
0.23
|
|
|
$
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(0.35
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.48
|
)
|
Discontinued operations
|
|
0.01
|
|
|
0.02
|
|
|
—
|
|
|
0.02
|
|
||||
Basic earnings (loss) per share attributable to Harsco Corporation common stockholders
|
|
$
|
0.24
|
|
|
$
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(0.33
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.46
|
)
|
Diluted weighted-average shares of common stock outstanding
|
|
82,850
|
|
|
80,337
|
|
|
82,558
|
|
|
80,288
|
|
||||
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders:
|
||||||||||||||||
Continuing operations
|
|
$
|
0.22
|
|
|
$
|
(0.35
|
)
|
|
$
|
0.34
|
|
|
$
|
(0.48
|
)
|
Discontinued operations
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.02
|
|
||||
Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders
|
|
$
|
0.23
|
|
(a)
|
$
|
(0.33
|
)
|
|
$
|
0.34
|
|
|
$
|
(0.46
|
)
|
|
|
Three Months Ended
|
||||||
|
|
June 30
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Net income (loss)
|
|
$
|
19,731
|
|
|
$
|
(24,301
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||
Foreign currency translation adjustments, net of deferred income taxes of $1,458 and $(4,977) in 2017 and 2016, respectively
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9,825
|
|
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(14,394
|
)
|
||
Net loss on cash flow hedging instruments, net of deferred income taxes of $611 and $401 in 2017 and 2016, respectively
|
|
(341
|
)
|
|
(144
|
)
|
||
Pension liability adjustments, net of deferred income taxes of $(522) and $(571) in 2017 and 2016, respectively
|
|
(10,348
|
)
|
|
21,855
|
|
||
Unrealized gain on marketable securities, net of deferred income taxes of $- and $(2) in 2017 and 2016, respectively
|
|
—
|
|
|
4
|
|
||
Total other comprehensive income (loss)
|
|
(864
|
)
|
|
7,321
|
|
||
Total comprehensive income (loss)
|
|
18,867
|
|
|
(16,980
|
)
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
|
(1,841
|
)
|
|
(1,183
|
)
|
||
Comprehensive income (loss) attributable to Harsco Corporation
|
|
$
|
17,026
|
|
|
$
|
(18,163
|
)
|
|
|
Six Months Ended
|
||||||
|
|
June 30
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Net income (loss)
|
|
$
|
29,868
|
|
|
$
|
(33,893
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||
Foreign currency translation adjustments, net of deferred income taxes of $1,851 and $(8,554) in 2017 and 2016, respectively
|
|
26,386
|
|
|
(2,773
|
)
|
||
Net loss on cash flow hedging instruments, net of deferred income taxes of $867 and $415 in 2017 and 2016, respectively
|
|
(728
|
)
|
|
(2,551
|
)
|
||
Pension liability adjustments, net of deferred income taxes of $(1,044) and $(1,256) in 2017 and 2016, respectively
|
|
(9,143
|
)
|
|
32,295
|
|
||
Unrealized gain (loss) on marketable securities, net of deferred income taxes of $(3) and $2 in 2017 and 2016, respectively
|
|
6
|
|
|
(3
|
)
|
||
Total other comprehensive income
|
|
16,521
|
|
|
26,968
|
|
||
Total comprehensive income (loss)
|
|
46,389
|
|
|
(6,925
|
)
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
|
(3,474
|
)
|
|
(2,731
|
)
|
||
Comprehensive income (loss) attributable to Harsco Corporation
|
|
$
|
42,915
|
|
|
$
|
(9,656
|
)
|
|
|
Six Months Ended
|
||||||
|
|
June 30
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income (loss)
|
|
$
|
29,868
|
|
|
$
|
(33,893
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation
|
|
60,495
|
|
|
65,736
|
|
||
Amortization
|
|
4,008
|
|
|
5,926
|
|
||
Change in fair value to the unit adjustment liability and loss on dilution of equity method investment
|
|
—
|
|
|
13,706
|
|
||
Deferred income tax expense (benefit)
|
|
3,433
|
|
|
(2,857
|
)
|
||
Equity in (income) loss of unconsolidated entities, net
|
|
—
|
|
|
(2,481
|
)
|
||
Dividends from unconsolidated entities
|
|
19
|
|
|
16
|
|
||
Contract estimated forward loss provision for Harsco Rail Segment
|
|
—
|
|
|
40,050
|
|
||
Other, net
|
|
5,708
|
|
|
1,871
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(42,806
|
)
|
|
3,011
|
|
||
Inventories
|
|
(6,296
|
)
|
|
(23,791
|
)
|
||
Accounts payable
|
|
4,259
|
|
|
(16,308
|
)
|
||
Accrued interest payable
|
|
166
|
|
|
(36
|
)
|
||
Accrued compensation
|
|
(4,365
|
)
|
|
1,237
|
|
||
Advances on contracts and other customer advances
|
|
(1,479
|
)
|
|
(1,109
|
)
|
||
Retirement plan liabilities, net
|
|
(11,221
|
)
|
|
(13,871
|
)
|
||
Other assets and liabilities
|
|
4,990
|
|
|
(8,534
|
)
|
||
Net cash provided by operating activities
|
|
46,779
|
|
|
28,673
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
|
(40,700
|
)
|
|
(32,176
|
)
|
||
Proceeds from sales of assets
|
|
1,534
|
|
|
5,115
|
|
||
Purchases of businesses, net of cash acquired
|
|
—
|
|
|
(26
|
)
|
||
Other investing activities, net
|
|
4,170
|
|
|
(616
|
)
|
||
Net cash used by investing activities
|
|
(34,996
|
)
|
|
(27,703
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Short-term borrowings, net
|
|
2,302
|
|
|
1,949
|
|
||
Current maturities and long-term debt:
|
|
|
|
|
|
|
||
Additions
|
|
24,000
|
|
|
50,019
|
|
||
Reductions
|
|
(46,712
|
)
|
|
(75,608
|
)
|
||
Cash dividends paid on common stock
|
|
—
|
|
|
(4,105
|
)
|
||
Dividends paid to noncontrolling interests
|
|
(1,769
|
)
|
|
(1,702
|
)
|
||
Purchase of noncontrolling interests
|
|
—
|
|
|
(4,731
|
)
|
||
Stock-based compensation - Employee taxes paid
|
|
(1,326
|
)
|
|
(91
|
)
|
||
Proceeds from cross-currency interest rate swap termination
|
|
—
|
|
|
16,625
|
|
||
Deferred financing costs
|
|
(42
|
)
|
|
(895
|
)
|
||
Other financing activities, net
|
|
(368
|
)
|
|
—
|
|
||
Net cash used by financing activities
|
|
(23,915
|
)
|
|
(18,539
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents, including restricted cash
|
|
3,029
|
|
|
7,051
|
|
||
Net decrease in cash and cash equivalents, including restricted cash
|
|
(9,103
|
)
|
|
(10,518
|
)
|
||
Cash and cash equivalents, including restricted cash, at beginning of period
|
|
71,879
|
|
|
79,756
|
|
||
Cash and cash equivalents, including restricted cash, at end of period
|
|
$
|
62,776
|
|
|
$
|
69,238
|
|
|
|
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, January 1, 2016
|
|
$
|
140,503
|
|
|
$
|
(760,299
|
)
|
|
$
|
170,699
|
|
|
$
|
1,236,355
|
|
|
$
|
(515,688
|
)
|
|
$
|
39,233
|
|
|
$
|
310,803
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
(37,042
|
)
|
|
|
|
|
3,149
|
|
|
(33,893
|
)
|
|||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(1,702
|
)
|
|
(1,702
|
)
|
||||||||||||
Total other comprehensive income (loss), net of deferred income taxes of $(9,393)
|
|
|
|
|
|
|
|
|
|
27,386
|
|
|
(418
|
)
|
|
26,968
|
|
|||||||||||
Purchase of subsidiary shares from noncontrolling interest
|
|
|
|
|
|
(5,128
|
)
|
|
|
|
|
|
397
|
|
|
(4,731
|
)
|
|||||||||||
Vesting of restricted stock units and other stock grants, net 80,598 shares
|
|
119
|
|
|
(92
|
)
|
|
(595
|
)
|
|
|
|
|
|
|
|
|
|
|
(568
|
)
|
|||||||
Amortization of unearned portion of stock-based compensation, net of forfeitures
|
|
|
|
|
|
|
|
4,072
|
|
|
|
|
|
|
|
|
|
|
|
4,072
|
|
|||||||
Balances, June 30, 2016
|
|
$
|
140,622
|
|
|
$
|
(760,391
|
)
|
|
$
|
169,048
|
|
|
$
|
1,199,313
|
|
|
$
|
(488,302
|
)
|
|
$
|
40,659
|
|
|
$
|
300,949
|
|
|
|
Harsco Corporation Stockholders’ Equity
|
|
|
|
|
||||||||||||||||||||||
(In thousands)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Loss
|
|
Noncontrolling
Interests
|
|
|
||||||||||||||||
|
Issued
|
|
Treasury
|
|
|
|
|
|
Total
|
|||||||||||||||||||
Balances, January 1, 2017
|
|
$
|
140,625
|
|
|
$
|
(760,391
|
)
|
|
$
|
172,101
|
|
|
$
|
1,150,688
|
|
|
$
|
(606,722
|
)
|
|
$
|
41,262
|
|
|
$
|
137,563
|
|
Adoption of new accounting standard (See Note 2)
|
|
|
|
|
|
1,106
|
|
|
(709
|
)
|
|
|
|
|
|
397
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
27,928
|
|
|
|
|
|
1,940
|
|
|
29,868
|
|
|||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,769
|
)
|
|
(1,769
|
)
|
|||||||
Total other comprehensive income, net of deferred income taxes of $1,671
|
|
|
|
|
|
|
|
|
|
14,987
|
|
|
1,534
|
|
|
16,521
|
|
|||||||||||
Stock Appreciation Rights exercise, net 7,441 shares
|
|
13
|
|
|
(49
|
)
|
|
(13
|
)
|
|
|
|
|
|
|
|
(49
|
)
|
||||||||||
Vesting of restricted stock units and other stock grants, net 236,335 shares
|
|
401
|
|
|
(1,277
|
)
|
|
(401
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,277
|
)
|
|||||||
Amortization of unearned portion of stock-based compensation, net of forfeitures
|
|
|
|
|
|
|
|
5,642
|
|
|
|
|
|
|
|
|
|
|
|
5,642
|
|
|||||||
Balances, June 30, 2017
|
|
$
|
141,039
|
|
|
$
|
(761,717
|
)
|
|
$
|
178,435
|
|
|
$
|
1,177,907
|
|
|
$
|
(591,735
|
)
|
|
$
|
42,967
|
|
|
$
|
186,896
|
|
(In thousands)
|
|
June 30
2017 |
|
December 31
2016 |
||||
Trade accounts receivable
|
|
$
|
297,221
|
|
|
$
|
248,354
|
|
Less: Allowance for doubtful accounts
|
|
(7,941
|
)
|
|
(11,800
|
)
|
||
Trade accounts receivable, net
|
|
$
|
289,280
|
|
|
$
|
236,554
|
|
|
|
|
|
|
||||
Other receivables
(a)
|
|
$
|
22,340
|
|
|
$
|
21,053
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Provision for doubtful accounts related to trade accounts receivable
|
|
$
|
1,197
|
|
|
$
|
323
|
|
|
$
|
1,175
|
|
|
$
|
177
|
|
(In thousands)
|
|
June 30
2017 |
|
December 31
2016 |
||||
Finished goods
|
|
$
|
23,272
|
|
|
$
|
26,464
|
|
Work-in-process
|
|
23,415
|
|
|
22,815
|
|
||
Contracts-in-process
|
|
73,156
|
|
|
54,044
|
|
||
Raw materials and purchased parts
|
|
57,967
|
|
|
61,450
|
|
||
Stores and supplies
|
|
24,041
|
|
|
22,908
|
|
||
Total inventories
|
|
$
|
201,851
|
|
|
$
|
187,681
|
|
(In thousands)
|
|
June 30
2017 |
|
December 31
2016 |
||||
Contract costs accumulated to date
|
|
$
|
110,281
|
|
|
$
|
90,276
|
|
Estimated forward loss provisions for contracts-in-process
(b)
|
|
(37,125
|
)
|
|
(36,232
|
)
|
||
Contracts-in-process
(c)
|
|
$
|
73,156
|
|
|
$
|
54,044
|
|
(b)
|
To the extent that the estimated forward loss provision exceeds accumulated contract costs it is included in the caption Other current liabilities on the Condensed Consolidated Balance Sheets. At
June 30, 2017
and
December 31, 2016
this amount totaled
$5.1 million
and
$6.7 million
, respectively.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
March 31
|
|
March 31
|
||||
(In thousands)
|
|
2016
|
|
2016
|
||||
Net revenues
|
|
$
|
750,394
|
|
|
$
|
1,551,146
|
|
Gross profit
|
|
148,972
|
|
|
329,549
|
|
||
Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries
|
|
(2,682
|
)
|
|
8,378
|
|
||
Harsco's equity in income (loss) of Brand
|
|
(694
|
)
|
|
2,481
|
|
(In thousands)
|
|
June 30
2017 |
|
December 31
2016 |
||||
Land
|
|
$
|
10,822
|
|
|
$
|
10,606
|
|
Land improvements
|
|
15,398
|
|
|
15,032
|
|
||
Buildings and improvements
|
|
192,785
|
|
|
185,657
|
|
||
Machinery and equipment
|
|
1,589,309
|
|
|
1,525,156
|
|
||
Uncompleted construction
|
|
21,088
|
|
|
21,035
|
|
||
Gross property, plant and equipment
|
|
1,829,402
|
|
|
1,757,486
|
|
||
Less: Accumulated depreciation
|
|
(1,345,302
|
)
|
|
(1,267,231
|
)
|
||
Property, plant and equipment, net
|
|
$
|
484,100
|
|
|
$
|
490,255
|
|
(In thousands)
|
|
Harsco Metals & Minerals Segment
|
|
Harsco Industrial Segment
|
|
Harsco Rail
Segment
|
|
Consolidated
Totals
|
||||||||
Balance at December 31, 2016
|
|
$
|
362,386
|
|
|
$
|
6,839
|
|
|
$
|
13,026
|
|
|
$
|
382,251
|
|
Foreign currency translation
|
|
11,553
|
|
|
—
|
|
|
—
|
|
|
11,553
|
|
||||
Balance at June 30, 2017
|
|
$
|
373,939
|
|
|
$
|
6,839
|
|
|
$
|
13,026
|
|
|
$
|
393,804
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
(In thousands)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer related
|
|
$
|
150,373
|
|
|
$
|
117,365
|
|
|
$
|
146,840
|
|
|
$
|
112,610
|
|
Patents
|
|
5,783
|
|
|
5,649
|
|
|
5,729
|
|
|
5,534
|
|
||||
Technology related
|
|
25,918
|
|
|
25,907
|
|
|
25,687
|
|
|
25,634
|
|
||||
Trade names
|
|
8,312
|
|
|
4,687
|
|
|
8,306
|
|
|
4,529
|
|
||||
Other
|
|
8,709
|
|
|
5,515
|
|
|
8,512
|
|
|
5,200
|
|
||||
Total
|
|
$
|
199,095
|
|
|
$
|
159,123
|
|
|
$
|
195,074
|
|
|
$
|
153,507
|
|
(In thousands)
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
||||||||||
Estimated amortization expense
(a)
|
|
$
|
5,000
|
|
|
$
|
4,750
|
|
|
$
|
4,500
|
|
|
$
|
4,250
|
|
|
$
|
4,000
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
June 30
|
||||||||||||||
Defined Benefit Pension Plans Net Periodic Pension Cost
|
|
U.S. Plans
|
|
International Plans
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
|
$
|
942
|
|
|
$
|
946
|
|
|
$
|
406
|
|
|
$
|
405
|
|
Interest cost
|
|
2,470
|
|
|
2,545
|
|
|
5,773
|
|
|
6,984
|
|
||||
Expected return on plan assets
|
|
(3,552
|
)
|
|
(3,601
|
)
|
|
(10,515
|
)
|
|
(11,219
|
)
|
||||
Recognized prior service costs
|
|
8
|
|
|
15
|
|
|
46
|
|
|
45
|
|
||||
Recognized loss
|
|
1,425
|
|
|
1,372
|
|
|
4,087
|
|
|
3,142
|
|
||||
Defined benefit pension plans net periodic pension cost (income)
|
|
$
|
1,293
|
|
|
$
|
1,277
|
|
|
$
|
(203
|
)
|
|
$
|
(643
|
)
|
|
|
Six Months Ended
|
||||||||||||||
|
|
June 30
|
||||||||||||||
Defined Benefit Pension Plans Net Periodic Pension Cost
|
|
U.S. Plans
|
|
International Plans
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service costs
|
|
$
|
1,884
|
|
|
$
|
1,892
|
|
|
$
|
817
|
|
|
$
|
809
|
|
Interest cost
|
|
4,939
|
|
|
5,090
|
|
|
11,507
|
|
|
14,107
|
|
||||
Expected return on plan assets
|
|
(7,104
|
)
|
|
(7,202
|
)
|
|
(20,939
|
)
|
|
(22,682
|
)
|
||||
Recognized prior service costs
|
|
16
|
|
|
31
|
|
|
91
|
|
|
89
|
|
||||
Recognized loss
|
|
2,850
|
|
|
2,744
|
|
|
8,129
|
|
|
6,360
|
|
||||
Defined benefit pension plans net periodic pension cost (income)
|
|
$
|
2,585
|
|
|
$
|
2,555
|
|
|
$
|
(395
|
)
|
|
$
|
(1,317
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Company Contributions
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Defined benefit pension plans (U.S.)
|
|
$
|
471
|
|
|
$
|
470
|
|
|
$
|
942
|
|
|
$
|
940
|
|
Defined benefit pension plans (International)
|
|
2,963
|
|
|
3,254
|
|
|
11,300
|
|
|
13,052
|
|
||||
Multiemployer pension plans
|
|
498
|
|
|
505
|
|
|
983
|
|
|
1,026
|
|
||||
Defined contribution pension plans
|
|
2,468
|
|
|
2,476
|
|
|
5,028
|
|
|
5,302
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
June 30
|
|
June 30
|
||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Restricted stock units
|
|
—
|
|
|
957
|
|
|
—
|
|
|
694
|
|
Stock options
|
|
55
|
|
|
90
|
|
|
55
|
|
|
90
|
|
Stock appreciation rights
|
|
972
|
|
|
1,641
|
|
|
1,117
|
|
|
1,364
|
|
Performance share units
|
|
176
|
|
|
835
|
|
|
320
|
|
|
572
|
|
(In thousands)
|
|
Amount
Recognized in Other
Comprehensive
Income (“OCI”) on Derivative -
Effective Portion
|
|
Location of Amount Reclassified
from Accumulated
OCI into Income -
Effective Portion
|
|
Amount
Reclassified from
Accumulated OCI into Income -
Effective Portion
|
|
Location of Amount Recognized in Income on Derivative - Ineffective Portion
and Amount
Excluded from
Effectiveness Testing
|
|
Amount Recognized in Income on Derivative - Ineffective Portion and Amount
Excluded from
Effectiveness Testing
|
|
||||||
Three Months Ended June 30, 2017:
|
|||||||||||||||||
Foreign currency exchange forward contracts
|
|
$
|
1,001
|
|
|
Product revenues/Cost of services and products sold
|
|
$
|
(186
|
)
|
|
|
|
$
|
—
|
|
|
Interest rate swaps
|
|
(2,021
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
Cross-currency interest rate swaps
|
|
3
|
|
|
Interest expense
|
|
251
|
|
|
Cost of services and products sold
|
|
(107
|
)
|
(a)
|
|||
|
|
$
|
(1,017
|
)
|
|
|
|
$
|
65
|
|
|
|
|
$
|
(107
|
)
|
|
Three Months Ended June 30, 2016:
|
|||||||||||||||||
Foreign currency exchange forward contracts
|
|
$
|
(305
|
)
|
|
Cost of services and products sold
|
|
$
|
(1
|
)
|
|
|
|
$
|
—
|
|
|
Cross-currency interest rate swaps
|
|
(520
|
)
|
|
Interest expense
|
|
281
|
|
|
Cost of services and products sold
|
|
(42
|
)
|
(a)
|
|||
|
|
$
|
(825
|
)
|
|
|
|
$
|
280
|
|
|
|
|
$
|
(42
|
)
|
|
(In thousands)
|
|
Amount
Recognized in OCI on Derivative -
Effective Portion
|
|
Location Amount
Reclassified
from Accumulated
OCI into Income -
Effective Portion
|
|
Amount
Reclassified from
Accumulated OCI into Income -
Effective Portion
|
|
Location of Amount Recognized in Income on Derivative - Ineffective Portion
and Amount
Excluded from
Effectiveness Testing
|
|
Amount Recognized in Income on Derivative - Ineffective Portion and Amount
Excluded from
Effectiveness Testing
|
|
||||||
Six Months Ended June 30, 2017:
|
|||||||||||||||||
Foreign currency forward exchange contracts
|
|
$
|
763
|
|
|
Product revenues / Cost of services and products sold
|
|
$
|
(185
|
)
|
|
|
|
$
|
—
|
|
|
Interest rate swaps
|
|
(2,543
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
Cross currency interest rate swaps
|
|
(123
|
)
|
|
Interest expense
|
|
493
|
|
|
Cost of services and products sold
|
|
(317
|
)
|
(a)
|
|||
|
|
$
|
(1,903
|
)
|
|
|
|
$
|
308
|
|
|
|
|
$
|
(317
|
)
|
|
Six Months Ended June 30, 2016:
|
|||||||||||||||||
Foreign currency forward exchange contracts
|
|
$
|
(630
|
)
|
|
Product revenues / Cost of services and products sold
|
|
$
|
(409
|
)
|
|
|
|
$
|
—
|
|
|
Cross currency interest rate swaps
|
|
(2,151
|
)
|
|
Interest expense
|
|
224
|
|
|
Cost of services and products sold
|
|
4,219
|
|
(a)
|
|||
|
|
$
|
(2,781
|
)
|
|
|
|
$
|
(185
|
)
|
|
|
|
$
|
4,219
|
|
|
|
|
Location of Gain
(Loss) Recognized in
Income on Derivative
|
|
Amount of Gain (Loss) Recognized in
Income on Derivative for the
Three Months Ended June 30 (b)
|
||||||
(In thousands)
|
|
|
2017
|
|
2016
|
|||||
Foreign currency exchange forward contracts
|
|
Cost of services and products sold
|
|
$
|
(13,289
|
)
|
|
$
|
8,583
|
|
|
|
Location of Gain
(Loss) Recognized in
Income on Derivative
|
|
Amount of Gain (Loss) Recognized in
Income on Derivative for the
Six Months Ended June 30 (b)
|
||||||
(In thousands)
|
|
|
2017
|
|
2016
|
|||||
Foreign currency forward exchange contracts
|
|
Cost of services and products sold
|
|
$
|
(11,739
|
)
|
|
$
|
1,739
|
|
(In thousands)
|
|
Type
|
|
U.S. Dollar
Equivalent
|
|
Maturity
|
|
Recognized
Gain (Loss)
|
||||
British pounds sterling
|
|
Sell
|
|
$
|
69,228
|
|
|
July 2017
|
|
$
|
(1,516
|
)
|
British pounds sterling
|
|
Buy
|
|
9,788
|
|
|
July 2017 through September 2017
|
|
108
|
|
||
Euros
|
|
Sell
|
|
304,566
|
|
|
July 2017 through December 2017
|
|
(14,233
|
)
|
||
Euros
|
|
Buy
|
|
163,183
|
|
|
July 2017 through May 2018
|
|
2,482
|
|
||
Other currencies
|
|
Sell
|
|
47,184
|
|
|
July 2017 through December 2017
|
|
(880
|
)
|
||
Other currencies
|
|
Buy
|
|
14,292
|
|
|
July 2017 through January 2018
|
|
54
|
|
||
Total
|
|
|
|
$
|
608,241
|
|
|
|
|
$
|
(13,985
|
)
|
(In thousands)
|
|
Type
|
|
U.S. Dollar
Equivalent
|
|
Maturity
|
|
Recognized
Gain (Loss)
|
||||
British pounds sterling
|
|
Sell
|
|
$
|
55,120
|
|
|
January 2017
|
|
$
|
(228
|
)
|
British pounds sterling
|
|
Buy
|
|
827
|
|
|
March 2017
|
|
(14
|
)
|
||
Euros
|
|
Sell
|
|
326,797
|
|
|
January 2017 through December 2017
|
|
628
|
|
||
Euros
|
|
Buy
|
|
171,578
|
|
|
January 2017 through January 2018
|
|
(468
|
)
|
||
Other currencies
|
|
Sell
|
|
43,455
|
|
|
January 2017 through September 2017
|
|
1,477
|
|
||
Other currencies
|
|
Buy
|
|
3,106
|
|
|
March 2017
|
|
(1
|
)
|
||
Total
|
|
|
|
$
|
600,883
|
|
|
|
|
$
|
1,394
|
|
|
|
Annual
Notional Amount
|
|
Interest Rates
|
||||
(In millions)
|
|
|
Receive
|
|
Pay
|
|||
Maturing 2018 through 2021
|
|
$
|
300.0
|
|
|
Floating U.S. dollar rate
|
|
Fixed U.S. dollar rate
|
|
|
|
|
Interest Rates
|
||||
(In millions)
|
|
Contractual Amount
|
|
Receive
|
|
Pay
|
||
Maturing 2017
|
|
$
|
1.4
|
|
|
Floating U.S. dollar rate
|
|
Fixed rupee rate
|
•
|
Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3—Inputs that are both significant to the fair value measurement and unobservable.
|
Level 2 Fair Value Measurements
(In thousands)
|
|
June 30
2017 |
|
December 31
2016 |
||||
Assets
|
|
|
|
|
|
|
||
Foreign currency exchange forward contracts
|
|
$
|
3,206
|
|
|
$
|
4,932
|
|
Interest rate swaps
|
|
35
|
|
|
—
|
|
||
Cross-currency interest rate swaps
|
|
206
|
|
|
514
|
|
||
Liabilities
|
|
|
|
|
|
|
||
Foreign currency exchange forward contracts
|
|
17,191
|
|
|
3,538
|
|
||
Interest rate swaps
|
|
2,578
|
|
|
—
|
|
Level 3 Liabilities—Unit Adjustment Liability (c) for the Six Months Ended June 30
(In thousands)
|
|
Six Months Ended
|
||
|
June 30
|
|||
|
2016
|
|||
Balance at beginning of period
|
|
$
|
79,934
|
|
Reduction in the fair value related to election not to make 2016 payments
|
|
(19,145
|
)
|
|
Change in fair value to the unit adjustment liability
|
|
3,402
|
|
|
Balance at end of period
|
|
$
|
64,191
|
|
(c)
|
During the quarter ended March 31, 2016, the Company decided that it would not make the four quarterly payments to CD&R for 2016. This resulted in the Company revaluing the Unit Adjustment Liability. The Company sold its investment in Brand in September 2016 and the unit adjustment liability ceased at that time. See Note 4, Equity Method Investment, for additional information related to the unit adjustment liability.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues From Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
||||||
Harsco Metals & Minerals
|
|
$
|
259,306
|
|
|
$
|
253,560
|
|
|
$
|
506,340
|
|
|
$
|
483,232
|
|
Harsco Industrial
|
|
73,563
|
|
|
66,270
|
|
|
139,448
|
|
|
128,139
|
|
||||
Harsco Rail
|
|
61,994
|
|
|
50,103
|
|
|
121,582
|
|
|
111,843
|
|
||||
Corporate
|
|
35
|
|
|
—
|
|
|
69
|
|
|
—
|
|
||||
Total Revenues From Continuing Operations
|
|
$
|
394,898
|
|
|
$
|
369,933
|
|
|
$
|
767,439
|
|
|
$
|
723,214
|
|
Operating Income (Loss) From Continuing Operations
|
||||||||||||||||
Harsco Metals & Minerals
|
|
$
|
32,177
|
|
|
$
|
30,927
|
|
|
$
|
58,606
|
|
|
$
|
37,868
|
|
Harsco Industrial
|
|
9,151
|
|
|
7,300
|
|
|
11,955
|
|
|
13,771
|
|
||||
Harsco Rail
|
|
7,961
|
|
|
(31,948
|
)
|
|
13,947
|
|
|
(27,042
|
)
|
||||
Corporate
|
|
(6,815
|
)
|
|
(4,965
|
)
|
|
(14,126
|
)
|
|
(13,852
|
)
|
||||
Total Operating Income From Continuing Operations
|
|
$
|
42,474
|
|
|
$
|
1,314
|
|
|
$
|
70,382
|
|
|
$
|
10,745
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
||||||||
Harsco Metals & Minerals
|
|
$
|
27,928
|
|
|
$
|
30,662
|
|
|
$
|
55,808
|
|
|
$
|
61,687
|
|
Harsco Industrial
|
|
1,843
|
|
|
1,850
|
|
|
3,683
|
|
|
3,568
|
|
||||
Harsco Rail
|
|
1,025
|
|
|
1,361
|
|
|
2,062
|
|
|
2,795
|
|
||||
Corporate
|
|
1,479
|
|
|
1,744
|
|
|
2,950
|
|
|
3,612
|
|
||||
Total Depreciation and Amortization
|
|
$
|
32,275
|
|
|
$
|
35,617
|
|
|
$
|
64,503
|
|
|
$
|
71,662
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
||||||||
Harsco Metals & Minerals
|
|
$
|
21,599
|
|
|
$
|
13,305
|
|
|
$
|
37,071
|
|
|
$
|
28,725
|
|
Harsco Industrial
|
|
796
|
|
|
1,162
|
|
|
1,548
|
|
|
2,296
|
|
||||
Harsco Rail
|
|
1,083
|
|
|
767
|
|
|
1,303
|
|
|
1,139
|
|
||||
Corporate
|
|
233
|
|
|
(9
|
)
|
|
778
|
|
|
16
|
|
||||
Total Capital Expenditures
|
|
$
|
23,711
|
|
|
$
|
15,225
|
|
|
$
|
40,700
|
|
|
$
|
32,176
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment operating income
|
|
$
|
49,289
|
|
|
$
|
6,279
|
|
|
$
|
84,508
|
|
|
$
|
24,597
|
|
General Corporate expense
|
|
(6,815
|
)
|
|
(4,965
|
)
|
|
(14,126
|
)
|
|
(13,852
|
)
|
||||
Operating income from continuing operations
|
|
42,474
|
|
|
1,314
|
|
|
70,382
|
|
|
10,745
|
|
||||
Interest income
|
|
493
|
|
|
552
|
|
|
1,005
|
|
|
1,087
|
|
||||
Interest expense
|
|
(12,405
|
)
|
|
(13,805
|
)
|
|
(24,058
|
)
|
|
(26,168
|
)
|
||||
Change in fair value to the unit adjustment liability and loss on dilution of equity method investment
|
|
—
|
|
|
(1,489
|
)
|
|
—
|
|
|
(13,706
|
)
|
||||
Income (loss) from continuing operations before income taxes and equity income (loss)
|
|
$
|
30,562
|
|
|
$
|
(13,428
|
)
|
|
$
|
47,329
|
|
|
$
|
(28,042
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Employee termination benefit costs
|
|
$
|
1,695
|
|
|
$
|
1,194
|
|
|
$
|
2,448
|
|
|
$
|
6,966
|
|
Harsco Metals & Minerals Segment separation costs
|
|
—
|
|
|
10
|
|
|
—
|
|
|
3,297
|
|
||||
Net gains
(a)
|
|
(88
|
)
|
|
(105
|
)
|
|
(210
|
)
|
|
(757
|
)
|
||||
Other costs to exit activities
|
|
247
|
|
|
36
|
|
|
347
|
|
|
218
|
|
||||
Impaired asset write-downs
|
|
281
|
|
|
23
|
|
|
281
|
|
|
116
|
|
||||
Other
|
|
(63
|
)
|
|
89
|
|
|
100
|
|
|
530
|
|
||||
Other expenses
|
|
$
|
2,072
|
|
|
$
|
1,247
|
|
|
$
|
2,966
|
|
|
$
|
10,370
|
|
(a)
|
Net gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets.
|
|
|
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, 2015
|
|
$
|
(125,561
|
)
|
|
$
|
(400
|
)
|
|
$
|
(389,696
|
)
|
|
$
|
(31
|
)
|
|
$
|
(515,688
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(9,502
|
)
|
(a)
|
(2,262
|
)
|
(b)
|
23,873
|
|
(a)
|
(3
|
)
|
|
12,106
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
|
—
|
|
|
(129
|
)
|
|
8,190
|
|
|
—
|
|
|
8,061
|
|
|||||
Realized (gains) losses reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment (See Note 4, Equity Method Investments)
|
|
3,079
|
|
|
106
|
|
|
(148
|
)
|
|
—
|
|
|
3,037
|
|
|||||
Other comprehensive income (loss) from equity method investee
|
|
3,650
|
|
|
(266
|
)
|
|
380
|
|
|
—
|
|
|
3,764
|
|
|||||
Total other comprehensive income (loss)
|
|
(2,773
|
)
|
|
(2,551
|
)
|
|
32,295
|
|
|
(3
|
)
|
|
26,968
|
|
|||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
|
425
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
418
|
|
|||||
Other comprehensive income (loss) attributable to Harsco Corporation
|
|
(2,348
|
)
|
|
(2,558
|
)
|
|
32,295
|
|
|
(3
|
)
|
|
27,386
|
|
|||||
Balance at June 30, 2016
|
|
$
|
(127,909
|
)
|
|
$
|
(2,958
|
)
|
|
$
|
(357,401
|
)
|
|
$
|
(34
|
)
|
|
$
|
(488,302
|
)
|
|
|
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, 2016
|
|
$
|
(144,534
|
)
|
|
$
|
(1,089
|
)
|
|
$
|
(461,094
|
)
|
|
$
|
(5
|
)
|
|
$
|
(606,722
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
26,386
|
|
(a)
|
(913
|
)
|
(b)
|
(19,185
|
)
|
(a)
|
6
|
|
|
6,294
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
|
—
|
|
|
185
|
|
|
10,042
|
|
|
—
|
|
|
10,227
|
|
|||||
Total other comprehensive income (loss)
|
|
26,386
|
|
|
(728
|
)
|
|
(9,143
|
)
|
|
6
|
|
|
16,521
|
|
|||||
Less: Other comprehensive income attributable to noncontrolling interests
|
|
(1,534
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,534
|
)
|
|||||
Other comprehensive income (loss) attributable to Harsco Corporation
|
|
24,852
|
|
|
(728
|
)
|
|
(9,143
|
)
|
|
6
|
|
|
14,987
|
|
|||||
Balance at June 30, 2017
|
|
$
|
(119,682
|
)
|
|
$
|
(1,817
|
)
|
|
$
|
(470,237
|
)
|
|
$
|
1
|
|
|
$
|
(591,735
|
)
|
(a)
|
Principally foreign currency fluctuation.
|
(b)
|
Net change from periodic revaluations.
|
(In thousands)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Affected Caption in the Condensed Consolidated Statements of Operations
|
||||||||||||
|
June 30
2017 |
|
June 30
2016 |
|
June 30
2017 |
|
June 30
2016 |
|||||||||||
Amortization of cash flow hedging instruments:
|
||||||||||||||||||
Foreign currency exchange forward contracts
|
|
$
|
(189
|
)
|
|
$
|
—
|
|
|
$
|
(189
|
)
|
|
$
|
(408
|
)
|
|
Product revenues
|
Foreign currency exchange forward contracts
|
|
3
|
|
|
(1
|
)
|
|
4
|
|
|
(1
|
)
|
|
Cost of services and products sold
|
||||
Cross-currency interest rate swaps
|
|
251
|
|
|
281
|
|
|
493
|
|
|
224
|
|
|
Interest expense
|
||||
Total before tax
|
|
65
|
|
|
280
|
|
|
308
|
|
|
(185
|
)
|
|
|
||||
Tax expense
|
|
(29
|
)
|
|
(109
|
)
|
|
(123
|
)
|
|
56
|
|
|
|
||||
Total reclassification of cash flow hedging instruments, net of tax
|
|
$
|
36
|
|
|
$
|
171
|
|
|
$
|
185
|
|
|
$
|
(129
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of defined benefit pension items
(c)
:
|
||||||||||||||||||
Actuarial losses
|
|
$
|
2,706
|
|
|
$
|
2,285
|
|
|
$
|
5,358
|
|
|
$
|
4,661
|
|
|
Selling, general and administrative expenses
|
Actuarial losses
|
|
2,806
|
|
|
2,229
|
|
|
5,621
|
|
|
4,443
|
|
|
Cost of services and products sold
|
||||
Prior-service benefits
|
|
(10
|
)
|
|
(3
|
)
|
|
(22
|
)
|
|
(4
|
)
|
|
Selling, general and administrative expenses
|
||||
Prior-service costs
|
|
64
|
|
|
63
|
|
|
129
|
|
|
124
|
|
|
Cost of services and products sold
|
||||
Total before tax
|
|
5,566
|
|
|
4,574
|
|
|
11,086
|
|
|
9,224
|
|
|
|
||||
Tax benefit
|
|
(522
|
)
|
|
(517
|
)
|
|
(1,044
|
)
|
|
(1,034
|
)
|
|
|
||||
Total reclassification of defined benefit pension items, net of tax
|
|
$
|
5,044
|
|
|
$
|
4,057
|
|
|
$
|
10,042
|
|
|
$
|
8,190
|
|
|
|
(In thousands)
|
|
Six Months Ended
|
|
Affected Caption in the Condensed Consolidated Statements of Operations
|
||
|
June 30
2016 |
|
||||
Foreign exchange translation adjustments
|
|
$
|
4,880
|
|
|
Change in fair value to the adjustment liability and loss on dilution of equity method investment
|
Cash flow hedging instruments
|
|
168
|
|
|
Change in fair value to the adjustment liability and loss on dilution of equity method investment
|
|
Defined benefit pension obligations
|
|
(235
|
)
|
|
Change in fair value to the adjustment liability and loss on dilution of equity method investment
|
|
Total before tax
|
|
4,813
|
|
|
|
|
Tax benefit
|
|
(1,776
|
)
|
|
|
|
Total amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment
|
|
$
|
3,037
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
Revenues by Segment
|
|
June 30
|
|||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
|
%
|
|||||||
Harsco Metals & Minerals
|
|
$
|
259.3
|
|
|
$
|
253.6
|
|
|
$
|
5.7
|
|
|
2.3
|
%
|
Harsco Industrial
|
|
73.6
|
|
|
66.3
|
|
|
7.3
|
|
|
11.0
|
|
|||
Harsco Rail
|
|
62.0
|
|
|
50.1
|
|
|
11.9
|
|
|
23.7
|
|
|||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total revenues
|
|
$
|
394.9
|
|
|
$
|
369.9
|
|
|
$
|
25.0
|
|
|
6.7
|
%
|
|
|
Six Months Ended
|
||||||||||||||
Revenues by Segment
|
|
June 30
|
||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
|
%
|
||||||||
Harsco Metals & Minerals
|
|
$
|
506.3
|
|
|
$
|
483.2
|
|
|
$
|
23.1
|
|
|
4.8
|
%
|
|
Harsco Industrial
|
|
139.4
|
|
|
128.1
|
|
|
11.3
|
|
|
8.8
|
|
||||
Harsco Rail
|
|
121.6
|
|
|
111.8
|
|
|
9.7
|
|
|
8.7
|
|
||||
Corporate
|
|
0.1
|
|
—
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Total revenues
|
|
$
|
767.4
|
|
|
$
|
723.2
|
|
|
$
|
44.2
|
|
|
6.1
|
%
|
|
|
Three Months Ended
|
|||||||||||||
Revenues by Region
|
|
June 30
|
|||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
|
%
|
|||||||
North America
|
|
$
|
186.7
|
|
|
$
|
159.4
|
|
|
$
|
27.2
|
|
|
17.1
|
%
|
Western Europe
|
|
104.3
|
|
|
110.6
|
|
|
(6.2
|
)
|
|
(5.6
|
)
|
|||
Latin America (includes Mexico)
|
|
45.8
|
|
|
45.0
|
|
|
0.8
|
|
|
1.8
|
|
|||
Asia-Pacific
|
|
41.5
|
|
|
34.5
|
|
|
7.0
|
|
|
20.3
|
|
|||
Middle East and Africa
|
|
10.0
|
|
|
12.2
|
|
|
(2.3
|
)
|
|
(18.7
|
)
|
|||
Eastern Europe
|
|
6.6
|
|
|
8.2
|
|
|
(1.6
|
)
|
|
(19.6
|
)
|
|||
Total revenues
|
|
$
|
394.9
|
|
|
$
|
369.9
|
|
|
$
|
25.0
|
|
|
6.7
|
%
|
|
|
Six Months Ended
|
|||||||||||||
Revenues by Region
|
|
June 30
|
|||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
|
%
|
|||||||
North America
|
|
$
|
357.4
|
|
|
$
|
321.7
|
|
|
$
|
35.7
|
|
|
11.1
|
%
|
Western Europe
|
|
205.6
|
|
|
218.9
|
|
|
(13.3
|
)
|
|
(6.1
|
)
|
|||
Latin America (included Mexico)
|
|
90.9
|
|
|
79.7
|
|
|
11.2
|
|
|
14.0
|
|
|||
Asia-Pacific
|
|
79.4
|
|
|
66.2
|
|
|
13.2
|
|
|
20.0
|
|
|||
Middle East and Africa
|
|
20.5
|
|
|
21.5
|
|
|
(0.9
|
)
|
|
(4.4
|
)
|
|||
Eastern Europe
|
|
13.5
|
|
|
15.2
|
|
|
(1.7
|
)
|
|
(11.4
|
)
|
|||
Total revenues
|
|
$
|
767.4
|
|
|
$
|
723.2
|
|
|
$
|
44.2
|
|
|
6.1
|
%
|
|
|
Three Months Ended
|
|||||||||||||
Operating Income (Loss) by Segment
|
|
June 30
|
|||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
|
%
|
|||||||
Harsco Metals & Minerals
|
|
$
|
32.2
|
|
|
$
|
30.9
|
|
|
$
|
1.3
|
|
|
4.0
|
%
|
Harsco Industrial
|
|
9.2
|
|
|
7.3
|
|
|
1.9
|
|
|
25.4
|
|
|||
Harsco Rail
|
|
8.0
|
|
|
(31.9
|
)
|
|
39.9
|
|
|
124.9
|
|
|||
Corporate
|
|
(6.8
|
)
|
|
(5.0
|
)
|
|
(1.9
|
)
|
|
(37.3
|
)
|
|||
Total operating income
|
|
$
|
42.5
|
|
|
$
|
1.3
|
|
|
$
|
41.2
|
|
|
3,132.4
|
%
|
|
|
Six Months Ended
|
|||||||||||||
Operating Income (Loss) by Segment
|
|
June 30
|
|||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
|
%
|
|||||||
Harsco Metals & Minerals
|
|
$
|
58.6
|
|
|
$
|
37.9
|
|
|
$
|
20.7
|
|
|
54.8
|
%
|
Harsco Industrial
|
|
12.0
|
|
|
13.8
|
|
|
(1.8
|
)
|
|
(13.2
|
)
|
|||
Harsco Rail
|
|
13.9
|
|
|
(27.0
|
)
|
|
41.0
|
|
|
151.6
|
|
|||
Corporate
|
|
(14.1
|
)
|
|
(13.9
|
)
|
|
(0.3
|
)
|
|
(2.0
|
)
|
|||
Total operating income
|
|
$
|
70.4
|
|
|
$
|
10.7
|
|
|
$
|
59.6
|
|
|
555.0
|
%
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
June 30
|
|
June 30
|
||||||||
Operating Margin by Segment
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Harsco Metals & Minerals
|
|
12.4
|
%
|
|
12.2
|
%
|
|
11.6
|
%
|
|
7.8
|
%
|
Harsco Industrial
|
|
12.4
|
|
|
11.0
|
|
|
8.6
|
|
|
10.7
|
|
Harsco Rail
|
|
12.8
|
|
|
(63.8
|
)
|
|
11.5
|
|
|
(24.2
|
)
|
Consolidated operating margin
|
|
10.8
|
%
|
|
0.4
|
%
|
|
9.2
|
%
|
|
1.5
|
%
|
Significant Impacts on Revenues
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(In millions)
|
|
June 30, 2017
|
|
June 30, 2017
|
||||
Revenues — 2016
|
|
$
|
253.6
|
|
|
$
|
483.2
|
|
Net effects of price/volume changes, primarily attributable to volume changes.
|
|
10.8
|
|
|
33.8
|
|
||
Impact of foreign currency translation.
|
|
(4.0
|
)
|
|
(8.0
|
)
|
||
Net impact of new and lost contracts (including exited underperforming contracts).
|
|
(1.1
|
)
|
|
(2.4
|
)
|
||
Other.
|
|
—
|
|
|
(0.3
|
)
|
||
Revenues — 2017
|
|
$
|
259.3
|
|
|
$
|
506.3
|
|
•
|
Increased global steel production. Overall, steel production by customers under services contracts, including the impact of new and exited contracts, increased by 6% and 8%, respectively, for the second quarter and first six months of 2017 compared with the same periods in the prior year. Excluding the impact of new and exited contracts, steel production by customers under services contracts increased by 4% and 6%, respectively, for the second quarter and first six months of 2017 compared with the same periods in the prior year.
|
•
|
Increased income attributable to the impact of improved nickel, chrome and scrap prices. Nickel-related prices increased 5% and 13%, respectively during the second quarter and first six months of 2017 compared with the same periods in the prior year.
|
•
|
Severance costs resulting from a site exit decreased operating income by $5.1 million during the first six months of 2016, which did not repeat in the first six months of 2017.
|
•
|
Moderately higher selling, general and administrative costs due to higher compensation costs, professional fees and bad debt expense.
|
Significant Impacts on Revenues
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(In millions)
|
|
June 30, 2017
|
|
June 30, 2017
|
||||
Revenues — 2016
|
|
$
|
66.3
|
|
|
$
|
128.1
|
|
Net effects of price/volume changes, primarily attributable to volume changes.
|
|
7.5
|
|
|
12.0
|
|
||
Impact of foreign currency translation.
|
|
(0.2
|
)
|
|
(0.7
|
)
|
||
Revenues — 2017
|
|
$
|
73.6
|
|
|
$
|
139.4
|
|
•
|
Higher overall volumes and a favorable sales mix in the air-cooled heat exchanger business, resulting in increased operating income during the second quarter and first six months of 2017 compared with the comparable periods in 2016.
|
•
|
Lower volumes and an unfavorable sales mix in the industrial grating products business.
|
•
|
Increased operating expenses including higher commissions due to the increase in volumes in the air-cooled heat exchanger business.
|
Significant Impacts on Revenues
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(In millions)
|
|
June 30, 2017
|
|
June 30, 2017
|
||||
Revenues — 2016
|
|
$
|
50.1
|
|
|
$
|
111.8
|
|
Net impacts of price/volume changes, primarily attributable to volume changes.
|
|
12.3
|
|
|
11.2
|
|
||
Other.
|
|
0.3
|
|
|
0.2
|
|
||
Impact of foreign currency translation.
|
|
(0.7
|
)
|
|
(1.6
|
)
|
||
Revenues — 2017
|
|
$
|
62.0
|
|
|
$
|
121.6
|
|
•
|
During the second quarter of 2016, the Harsco Rail Segment recorded an estimated loss provision of $40.1 million related to the Company's contracts with SBB which did not repeat in the first six months of 2017.
|
•
|
Increased equipment sales during the second quarter and first six months of 2017 compared with the same periods in prior year.
|
•
|
Increased after-market part sales increased operating income during the first six months of 2017 compared with the same period in prior year.
|
•
|
Reductions in contract service revenues decreased operating income during the second quarter and first six months of 2017 compared with the same periods in the prior year.
|
•
|
Reductions in after-market part sales decreased operating income during the second quarter of 2017 compared with the same period in prior year.
|
•
|
Increased selling, general and administrative expenses primarily related to compensation, commissions and other costs.
|
•
|
The Company will focus on providing returns above its cost of capital for its stockholders by continuing to develop an attractive portfolio of businesses and by continuing to focus on internal growth and operational excellence.
|
•
|
The Company will assess capital needs in the context of operational trends and strategic initiatives and expects to maintain a reasonable amount of financial leverage. Management will be selective and disciplined in allocating capital by rigorously analyzing projects and utilizing a return-based capital allocation process.
|
•
|
The Company expects its operational effective income tax rate to approximate 36% to 38% in 2017, excluding the tax impact of the new stock-based compensation accounting standard.
|
•
|
Steel markets demonstrated some pricing improvement since early 2016 and the Company experienced improvements in demand and certain commodity prices during the second quarter and first six months of 2017. The Company expects these factors along with the effect of new contracts, the continued benefits achieved as part of Project Orion and additional improvement initiatives to positively affect operating income in 2017 in the Harsco Metals & Minerals Segment.
|
•
|
In addition to the benefits and discipline that resulted from Project Orion, the Company will continue to focus on ensuring that forecasted results and other requirements for contracts meet certain established standards and deliver returns above its cost of capital. In connection with this focus, the possibility exists that the Company may take strategic actions that result in exit costs and non-cash asset impairment charges that may have an adverse effect on the Company's results of operations and liquidity.
|
•
|
In January 2017, the Company announced two multi-year contracts for steel mill services in China and Brazil with projected revenues totaling more than $100 million. In March 2017, the Company announced a joint agreement with Hydro Industries for waste recycling solutions. In April 2017, the Company announced a ten year mill services contract in Egypt with projected revenues totaling approximately $60 million. In addition, in May 2017 the Company announced a multi-year contract in India to provide metal recovery and slag sales services with projected revenues totaling more than $25 million, and formation of a joint venture for metal recovery and slag sales services in Turkey.
|
•
|
As the Company has previously disclosed, over the past several years the Company has been in discussions with officials at the Supreme Council for Environment in Bahrain ("Bahrain Council") with regard to a processing by-product ("salt cakes") located at Hafeera. During 2015, the Company recorded a charge of $7.0 million, payable over approximately seven to ten years, related to the estimated cost of processing and disposal of the salt cakes. The Company's Bahrain operations are operated under a strategic venture for which its strategic venture partner has a 35% minority interest. The Company is awaiting final approval from the Bahrain Council regarding the proposed processing and disposal method. If the Bahrain Council does not approve the proposed method or mandates alternative solutions, the Company’s estimated liability could change, and such change could be material in any one period.
|
•
|
During 2016, one of the Company's customers announced its intention to conduct a strategic review of its steelmaking operations in Europe, including the possibility of strategic collaborations through a joint venture with another major steelmaker. Depending on the outcome of any potential transactions, there could be a material impact on the Company's results of operations, cash flows and asset valuations in any one period.
|
•
|
One of the Company's customers in Australia has begun the process of voluntary administration under Australian law, the purpose of which is to focus on long-term solvency. The customer is continuing its operations during the voluntary administration proceedings. The Company had approximately $5 million of receivables with the customer prior to the start of the voluntary administration. The Company continues to believe that these amounts are collectible. The Company continues to provide services to the customer and continues to collect on post-administration invoices timely. However the administration process is uncertain in nature and length. As such, a loss on the pre-administration receivables is reasonably possible, and if there was a change in the Company's view on collectability, there could be a charge against income in future periods.
|
•
|
The Company will focus on growing the Harsco Metals & Minerals Segment through the provision of innovative solutions to handle customers' waste and by-products, improving commercial effectiveness and disciplined investments to improve competitive positioning in core and adjacent markets.
|
•
|
As energy markets have demonstrated some fundamental improvement, the Harsco Industrial Segment’s air-cooled heat exchangers business has seen steadily improving results. Bookings for this business have increased but may fluctuate with energy prices and underlying market fundamentals. Accordingly, these factors are expected to impact revenue and operating income in 2017 in the Harsco Industrial Segment.
|
•
|
The Harsco Industrial Segment's industrial grating business continues to be impacted by a lack of large-scale projects, delayed capital expenditures, competitive market dynamics and increased material costs. Accordingly, these factors are expected to impact revenue and operating income in 2017 in the Harsco Industrial Segment.
|
•
|
The Company is committed to maintaining recent efficiency gains in the air-cooled heat exchangers and industrial grating products businesses and implementing additional improvements in response to the recent industry and economic challenges.
|
•
|
The Company will continue to focus on product innovation and development to drive strategic growth in its businesses. During January 2017, the Company announced the launch of an all-new capability for remote indoor boiler monitoring that can be downloaded directly to wireless and desktop devices.
|
•
|
The Company will focus on growing the Harsco Industrial Segment through disciplined organic expansion and acquisitions that improve competitive positioning in core markets or adjacent markets.
|
•
|
The global demand for railway maintenance-of-way equipment, parts and services continues to be generally positive over the long-term, though the North American market is experiencing weakness due to reduced capital and operating spending by Class I railways.
|
•
|
During January 2017, the Company announced a new order to equip the entire Denver, Colorado regional railway fleet with enhanced safety systems. In addition during June 2017, the Company announced a new order in the U.K. for seven Stoneblower track geometry machines. The order calls for deliveries over two years starting in late 2019.
|
•
|
In prior years, the Company secured two contract awards with initial contract values totaling approximately $200 million from SBB. The majority of deliveries under these contracts are anticipated to occur during late 2017 through 2020. The Harsco Rail Segment recorded estimated forward loss provisions of $40.1 million and $5.0 million during the second and fourth quarters of 2016, respectively, which resulted from increased vendor costs, ongoing discussions with SBB, and increased estimates for commissioning, certification and testing costs, as well as expected settlements with SBB. It is possible that the Company's overall estimate of costs to complete these contracts may increase which would result in an additional estimated forward loss provision at such time.
|
•
|
The Company will focus on growing the Harsco Rail Segment through disciplined organic expansion and acquisitions that improve competitive positioning in core markets or adjacent markets.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In millions, except per share amounts)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total revenues
|
|
$
|
394.9
|
|
|
$
|
369.9
|
|
|
$
|
767.4
|
|
|
$
|
723.2
|
|
Cost of services and products sold
|
|
293.4
|
|
|
316.9
|
|
|
581.2
|
|
|
600.0
|
|
||||
Selling, general and administrative expenses
|
|
55.6
|
|
|
49.5
|
|
|
110.7
|
|
|
100.3
|
|
||||
Research and development expenses
|
|
1.3
|
|
|
1.0
|
|
|
2.2
|
|
|
1.8
|
|
||||
Other expenses
|
|
2.1
|
|
|
1.2
|
|
|
3.0
|
|
|
10.4
|
|
||||
Operating income from continuing operations
|
|
42.5
|
|
|
1.3
|
|
|
70.4
|
|
|
10.7
|
|
||||
Interest income
|
|
0.5
|
|
|
0.6
|
|
|
1.0
|
|
|
1.1
|
|
||||
Interest expense
|
|
(12.4
|
)
|
|
(13.8
|
)
|
|
(24.1
|
)
|
|
(26.2
|
)
|
||||
Change in fair value to the unit adjustment liability and loss on dilution of equity method investment
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(13.7
|
)
|
||||
Income tax expense
|
|
(11.2
|
)
|
|
(12.0
|
)
|
|
(17.5
|
)
|
|
(9.8
|
)
|
||||
Equity income (loss) of unconsolidated entities, net
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
2.5
|
|
||||
Income (loss) from continuing operations
|
|
19.3
|
|
|
(26.1
|
)
|
|
29.8
|
|
|
(35.4
|
)
|
||||
Income from discontinued operations
|
|
0.4
|
|
|
1.8
|
|
|
—
|
|
|
1.5
|
|
||||
Net income (loss)
|
|
19.7
|
|
|
(24.3
|
)
|
|
29.9
|
|
|
(33.9
|
)
|
||||
Total other comprehensive income (loss)
|
|
(0.9
|
)
|
|
7.3
|
|
|
16.5
|
|
|
27.0
|
|
||||
Total comprehensive income (loss)
|
|
18.9
|
|
|
(17.0
|
)
|
|
46.4
|
|
|
(6.9
|
)
|
||||
Diluted earnings (loss) per common share from continuing operations attributable to Harsco Corporation common stockholders
|
|
0.22
|
|
|
(0.35
|
)
|
|
0.34
|
|
|
(0.48
|
)
|
||||
Effective income tax rate for continuing operations
|
|
36.8
|
%
|
|
(89.4
|
)%
|
|
36.9
|
%
|
|
(35.1
|
)%
|
Change in Revenues — 2017 vs. 2016
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(In millions)
|
|
June 30, 2017
|
|
June 30, 2017
|
||||
Net effects of price/volume changes in the Harsco Metals & Minerals Segment, primarily attributable to volume changes.
|
|
$
|
10.8
|
|
|
33.8
|
|
|
Net effects of price/volume changes in the Harsco Industrial Segment, primarily attributable to volume changes.
|
|
7.5
|
|
|
12.0
|
|
||
Net impacts of price/volume changes in the Harsco Rail Segment, primarily attributable to volume changes.
|
|
12.3
|
|
|
11.2
|
|
||
Net impact of new and lost contracts (including exited underperforming contracts) in the Harsco Metals & Minerals Segment.
|
|
(1.1
|
)
|
|
(2.4
|
)
|
||
Impact of foreign currency translation.
|
|
(4.8
|
)
|
|
(10.3
|
)
|
||
Other.
|
|
0.3
|
|
|
(0.1
|
)
|
||
Total change in revenues — 2017 vs. 2016
|
|
$
|
25.0
|
|
|
$
|
44.2
|
|
Change in Cost of Services and Products Sold — 2017 vs. 2016
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(In millions)
|
|
June 30, 2017
|
|
June 30, 2017
|
||||
Decreased costs due to estimated loss provision in the Harsco Rail Segment during prior year.
|
|
$
|
(40.1
|
)
|
|
$
|
(40.1
|
)
|
Impact of foreign currency translation.
|
|
(4.1
|
)
|
|
(8.6
|
)
|
||
Increased costs due to changes in revenues (exclusive of the effects of foreign currency translation and fluctuations in commodity costs included in selling prices).
|
|
22.0
|
|
|
34.5
|
|
||
Other.
|
|
(1.3
|
)
|
|
(4.6
|
)
|
||
Total change in cost of services and products sold — 2017 vs. 2016
|
|
$
|
(23.5
|
)
|
|
$
|
(18.8
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Employee termination benefit costs
|
|
$
|
1,695
|
|
|
$
|
1,194
|
|
|
$
|
2,448
|
|
|
$
|
6,966
|
|
Harsco Metals & Minerals Segment separation costs
|
|
—
|
|
|
10
|
|
|
—
|
|
|
3,297
|
|
||||
Net gains
(a)
|
|
(88
|
)
|
|
(105
|
)
|
|
(210
|
)
|
|
(757
|
)
|
||||
Other costs to exit activities
|
|
247
|
|
|
36
|
|
|
347
|
|
|
218
|
|
||||
Impaired asset write-downs
|
|
281
|
|
|
23
|
|
|
281
|
|
|
116
|
|
||||
Other
|
|
(63
|
)
|
|
89
|
|
|
100
|
|
|
530
|
|
||||
Other expenses
|
|
$
|
2,072
|
|
|
$
|
1,247
|
|
|
$
|
2,966
|
|
|
$
|
10,370
|
|
|
|
June 30, 2017
|
||||||||||||||
(In millions)
|
|
Facility Limit
|
|
Outstanding
Balance
|
|
Outstanding Letters of Credit
|
|
Available
Credit
|
||||||||
Multi-year revolving credit facility
|
|
$
|
400.0
|
|
|
$
|
90.0
|
|
|
$
|
43.5
|
|
|
$
|
266.5
|
|
(Dollars in millions)
|
|
June 30
2017 |
|
December 31
2016 |
|
Increase
(Decrease)
|
||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
|
$
|
58.1
|
|
|
$
|
69.8
|
|
|
$
|
(11.7
|
)
|
Restricted cash
|
|
4.7
|
|
|
2.0
|
|
|
2.6
|
|
|||
Trade accounts receivable, net
|
|
289.3
|
|
|
236.6
|
|
|
52.7
|
|
|||
Other receivables
|
|
22.3
|
|
|
21.1
|
|
|
1.3
|
|
|||
Inventories
|
|
201.9
|
|
|
187.7
|
|
|
14.2
|
|
|||
Other current assets
|
|
32.8
|
|
|
33.1
|
|
|
(0.3
|
)
|
|||
Total current assets
|
|
609.1
|
|
|
550.3
|
|
|
58.8
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings and current maturities
|
|
22.2
|
|
|
29.8
|
|
|
(7.6
|
)
|
|||
Accounts payable
|
|
118.6
|
|
|
108.0
|
|
|
10.7
|
|
|||
Accrued compensation
|
|
44.2
|
|
|
46.7
|
|
|
(2.4
|
)
|
|||
Income taxes payable
|
|
7.7
|
|
|
4.3
|
|
|
3.4
|
|
|||
Advances on contracts and other customer advances
|
|
124.9
|
|
|
117.3
|
|
|
7.6
|
|
|||
Other current liabilities
|
|
147.1
|
|
|
121.6
|
|
|
25.5
|
|
|||
Total current liabilities
|
|
464.9
|
|
|
427.7
|
|
|
37.2
|
|
|||
Working Capital
|
|
$
|
144.2
|
|
|
$
|
122.6
|
|
|
$
|
21.6
|
|
Current Ratio
(a)
|
|
1.3
|
:1
|
|
1.3
|
:1
|
|
|
|
•
|
Working capital was positively affected by an increase in Trade accounts receivable, net of $52.7 million, primarily due to increased sales for all segments and the timing of sales and collections in the Harsco Rail Segment and the effect of foreign currency translation; and
|
•
|
Working capital was positively affected by an increase in Inventories of $14.2 million, primarily due to the Harsco Rail Segment related to the continued inventory build for the SBB contract and the effect of foreign currency translation, partially offset by other shipments in the Harsco Rail Segment.
|
•
|
Working capital was negatively impacted by an increase in Other Liabilities of $25.5 million, primarily due to the timing of settlement of the Company's foreign currency exchange forward contracts; and
|
•
|
Working capital was negatively impacted by an increase in Accounts payable of $10.7 million, primarily due to the timing of payments and the impact of foreign currency translation.
|
|
|
Six Months Ended
|
||||||
|
|
June 30
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Net cash provided (used) by:
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
46.8
|
|
|
$
|
28.7
|
|
Investing activities
|
|
(35.0
|
)
|
|
(27.7
|
)
|
||
Financing activities
|
|
(23.9
|
)
|
|
(18.5
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents, including restricted cash
|
|
3.0
|
|
|
7.1
|
|
||
Net change in cash and cash equivalents, including restricted cash
|
|
$
|
(9.1
|
)
|
|
$
|
(10.5
|
)
|
|
|
|
HARSCO CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
DATE
|
August 3, 2017
|
|
/s/ PETER F. MINAN
|
|
|
|
Peter F. Minan
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(On behalf of the registrant and as Principal Financial and Chief Accounting Officer)
|
Exhibit
Number
|
|
Description
|
10.1
|
|
Amendment No. 1 to the 2013 Equity and Incentive Compensation Plan, effective as of April 25, 2017 (incorporate by reference to the Company's Current Report on Form 8-K filed May 1, 2017).
|
31.1
|
|
Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
|
31.2
|
|
Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
|
32
|
|
Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer).
|
101
|
|
The following financial statements from Harsco Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed with the Securities and Exchange Commission on August 3, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the Condensed Consolidated Statements of Cash Flows; (v) the Condensed Consolidated Statements of Equity; and (vi) the Notes to Condensed Consolidated Financial Statements.
|
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