EXHIBIT 99.1
Harsco Reports Second Quarter 2009 Diluted Earnings Per Share From Continuing Operations of $0.52; Solid Cash Performance
* Free cash flow improvement of $122 million for the first six months; cash flow from operations totals $156 million for the same period * Capital expenditures reduced by $176 million or 68% for the first six months, ahead of planned reductions * Second quarter highlights include record results from Harsco Rail and 130 basis point reduction in Debt to Capital ratio * Company continues to expand countermeasures and now expects annual savings of approximately $125 million, up from $100 million * Unilateral contract action by the Company's largest customer has been satisfactorily resolved * Full Year earnings guidance is revised to a range of $1.72 to $1.82 from a previous range of $1.90 to $2.10, due principally to the protracted credit freeze and severe recession which are having a significant negative impact on construction markets
HARRISBURG, Pa., July 28, 2009 (GLOBE NEWSWIRE) -- Worldwide industrial services company Harsco Corporation (NYSE:HSC) reported second quarter 2009 results from continuing operations.
Second Quarter 2009 Highlights
As expected, the stronger U.S. dollar compared with last year and unprecedented low global steel production as well as the ongoing credit freeze continued to have a substantial negative impact on sales and income. Second quarter 2009 diluted earnings per share from continuing operations were $0.52, compared with the record $1.07 in the second quarter of last year. Second quarter income from continuing operations was $43.0 million, compared with $92.9 million last year. Sales in the quarter totaled approximately $0.8 billion, compared with $1.1 billion in the second quarter of last year. Foreign currency translation decreased sales by $115 million and accounted for about a third of the sales decline. Foreign currency translation decreased operating income by approximately $14 million or $0.13 per share in this year's second quarter, in addition to reducing overall operating margins by 40 basis points. Historically low global steel production caused Harsco Metals' results to be substantially lower compared wit h last year, but improved sequentially into positive territory over the first quarter's operating loss.
For the first six months of 2009, sales, income from continuing operations, and diluted earnings per share were below last year's results. Income from continuing operations was $64.0 million, or $ 0.77 per diluted share, compared with $152.3 million, or $1.74 per diluted share in the first six months of 2008. Sales for the first six months of 2009 were approximately $1.5 billion, a decrease of 29 percent from approximately $2.1 billion in the same period a year ago. Foreign currency translation decreased sales for the first six months by approximately $256 million and operating income by approximately $28 million, or $0.27 per share. Foreign currency translation accounted for approximately 42 percent of the sales decline in the first six months.
Despite the global economic challenges, the Company posted strong second quarter and six-month cash flows from operations, which resulted in lower debt levels, an improved debt to capital ratio, and a more liquid balance sheet.
Comment
Commenting on the Company's results, Harsco Chairman and Chief Executive Officer Salvatore D. Fazzolari said, "As we anticipated, our second quarter performance was sharply lower year-over-year due to the ongoing global financial and economic turbulence. Activity levels in the non-residential construction markets continued to deteriorate throughout the quarter due principally to the lack of credit and the protracted economic downturn, while global steel production stabilized at near historically low rates.
"We continue to face three substantial headwinds that are having a significant adverse impact on our business. They are: a strong year-over-year U.S. dollar, which negatively impacts the translation of approximately 70 percent of our total revenues; the worst downturn in the history of the steel industry, where global production remains at near unprecedented low levels; and the continuing credit freeze, which is causing cancellation and deferral of non-residential construction activity. In addition, the originally expected benefits from stimulus packages have not yet materialized in many of our key markets.
"As we enter the second half of the year, it appears that the strong dollar is starting to moderate and global steel production should show a slight improvement from the historical lows of the first half. However, we are not seeing any notable signs that the credit freeze throughout the world is improving, and we are not seeing any meaningful benefits from stimulus funds, as the deferral and cancellation of non-residential construction projects continues unabated with significant negative impact on construction markets. Thus, with the deterioration of our markets during the quarter and the continuation into the third quarter, it is difficult to see any short-term improvement in the Harsco Infrastructure business.
"We proactively and aggressively continued to implement additional countermeasures in the second quarter and we expect to continue through the remainder of the year. The countermeasures that we implemented in the fourth quarter of 2008 and the additional countermeasures taken in the first half of 2009 are beginning to manifest themselves in our results. At a full run-rate, we now expect these benefits to approximate $125 million in total annual cost reductions.
"We remain confident that the benefits from our aggressive cost reduction countermeasures, our expansion in emerging markets and our strong market positions in industries that are fundamental to global growth are setting the foundation for future success."
Second Quarter Business Review
Harsco Infrastructure
Several factors contributed to this Segment's lower performance in the second quarter, including: a stronger U.S. dollar which negatively impacted approximately 80 percent of Harsco Infrastructure's revenues and earnings; the continued lack of available credit that has resulted in cancelled and delayed construction projects, as well as export sales of equipment being sharply down; and the deepening recession in several key markets.
Sales in the second quarter decreased 28 percent to $309 million from $429 million last year, in large part due to the stronger U.S. dollar. The significant strengthening of the U.S. dollar in the second quarter had a negative impact on sales from foreign currency translation of $51 million, and accounted for 42 percent of the decline in year-over-year sales. The remainder of the decline was due principally to lower operating performance in the U.K., where sales declined by approximately $42 million. Operating income was approximately $25 million in the quarter, compared with $58 million in last year's second quarter. Here again, negative foreign currency translation was a major factor in the decline. Negative foreign currency translation reduced operating income by $8 million, or nearly one quarter of the year-over-year decline. Also contributing to the decline in income in the second quarter were lower business activity across many regions, principally in the U.K., Eastern Europe and Scandinavia due to the impact of frozen credit markets, which also adversely impacted the Company's Germany-based equipment sales export business; higher restructuring costs of $1.7 million; and pricing pressures, as competitors aggressively pursued orders, particularly in the European and North American markets. Partially offsetting these negative factors were reduced costs and improved results from the Gulf Region of the Middle East and the Asia Pacific region, all of which contributed solidly to the second quarter performance.
Operating margins were 8.1 percent in the second quarter, compared with 13.5 percent last year. Negative foreign currency translation reduced margins approximately 100 basis points, with the remainder due to reorganization costs and the ongoing global economic and financial climate.
The severe recessionary construction environment in Europe and North America, pricing pressures, and the stronger U.S. dollar are all expected to continue to negatively impact year-over-year results for the remainder of 2009. Additionally, the Company does not expect any meaningful near-term benefit from stimulus packages, particularly in the U.S. The strong U.S. dollar will continue to adversely impact results in the second half, but it should not be as material as the first half. The Company expects that second half results should benefit from its aggressive countermeasures as the cost reductions begin to take full effect. However, the second half results for this Segment will still be down from 2008's second half performance.
Harsco Metals
The stronger U.S. dollar also negatively impacts approximately 80 percent of the revenues and earnings of Harsco Metals. This factor in combination with the deterioration of the global steel markets and unprecedented low steel production, the breadth and depth of which the industry has never seen before, plus the deepening global recession in certain geographies, all contributed to another poor operating performance.
Sales in the second quarter decreased 42 percent to $259 million from $445 million last year. Here again, the significant strengthening of the U.S. dollar in the second quarter had a negative impact on sales from foreign currency translation of $58 million, or approximately one-third of the reduction in year-over-year sales in the quarter. Operating performance was also down sharply due to the deterioration of the global steel markets and unprecedented declines in global steel production. Many mills throughout the world were only operating in the 40 percent-plus capacity range in the second quarter. The operating income of $4 million compares with income of $37 million last year. Negative foreign currency translation represented $6 million, or 17 percent of the year-over-year decline in income. The remainder of the decline in operating income was due to the substantial reduction in global steel production and higher reorganization costs.
Operating margins were 1.6 percent in the second quarter, compared with 8.3 percent last year. Negative foreign currency translation reduced margins approximately 150 basis points, with the remainder of the decline resulting from higher reorganization costs and the current global economic climate.
Overall global demand for steel remains weak and the Company does not foresee any measurable pickup in its Harsco Metals operations for the year. However, the second half performance should show improvement over the first half, with an expected modest improvement in steel production. The second half performance should also benefit from the positive contribution to earnings from the Company's countermeasures, as well as the start-up of new contracts.
As reported in Harsco's SEC filings, the Company and its largest customer, ArcelorMittal, have been in active dialogue to resolve the unilateral action taken by the customer to revise fixed-fee provisions of certain contracts. The Company is pleased to report that its senior management in partnership with ArcelorMittal senior management have resolved satisfactorily all major differences, with an outcome that should have long-term benefits for both parties.
Harsco Minerals & Rail
As expected, operating results in the second quarter for Harsco Rail were a record. The significant decline in metal prices and production adversely impacted the sales and earnings of the Harsco Minerals operations. Harsco Industrial performed relatively well in the quarter, although the ongoing economic and financial environment still poses many near-term challenges.
Sales of $209 million in the second quarter of 2009 were 7 percent lower than the $225 million in the same period last year. Foreign currency translation negatively impacted sales by over $6 million or approximately 40 percent of the year-over-year decline. Operating income was approximately $43 million in the second quarter, compared with $52 million last year. Negative foreign currency translation in the quarter lowered income by $1.4 million over last year. Operating margins were 20.4 percent in the second quarter of 2009, compared with 23.1 percent last year.
The near-term outlook for the Harsco Minerals & Rail Group remains mixed. The continuation of low metal prices and historically low production levels will continue to have a negative impact on Harsco Minerals. This should be mostly offset by continued strong performance from Harsco Rail. The Harsco Industrial units are expected to have results somewhat comparable to last year due principally to lower LIFO costs.
Liquidity, Capital Resources and Other Matters
Net cash provided by operating activities for the first half 2009 was $156.3 million compared with $210.4 million for the prior year. However, net cash used by investing activities was $75.1 million, a 70 percent decrease from the $249.4 million last year. The decreased use of cash was due primarily to lower capital expenditures, which is consistent with the Company's strategy of significantly reducing capital spending in 2009.
As previously announced, the Company began to sharply curtail its capital expenditures in the fourth quarter of 2008. For all of 2009, the Company now expects to reduce such expenditures by at least $300 million, or some 65 percent, from total capital expenditures in 2008 of some $458 million. Such action will allow the Company to significantly increase its level of free cash flows (cash flow from operations less total capital expenditures). This higher level of free cash flow will allow the Company to further enhance its balance sheet and maintain its dividend, as well as take advantage of other opportunities for growth and debt reduction as they present themselves. Free cash flow for the first six months of 2009 was $73.7 million compared with a negative ($47.9) million last year, an improvement of $121.6 million, or 254 percent.
The Company now expects cash flow from operations in 2009 to be in the area of $400 million and total capital expenditures to be in the area of $150 million. Thus, free cash flow is expected to approximate $250 million.
The total debt to capital ratio at June 30, 2009 was 40.6 percent, an improvement over the March 31, 2009 ratio of 41.9 percent and 41.1 percent at the end of 2008. The Company's liquidity remains strong.
Economic Value Added (EVA(r)) declined in the second quarter of 2009 over the comparable 2008 period.
Outlook
Harsco Senior Vice President and Chief Financial Officer Stephen J. Schnoor said, "Given the significant negative impact from the lack of project financing and considering the challenging and uncertain global economic and financial environment we continue to face, with no meaningful improvement expected in the second half of 2009, we feel it prudent to revise our guidance for 2009 EPS from continuing operations from a previous range of $1.90 to $2.10 to a new range of $1.72 to $1.82.
"As stated earlier, we expect our recent 2009 countermeasures will increase overall annual cost reduction benefits from approximately $100 million to $125 million. These additional countermeasures include rationalizing facilities, improving underperforming contracts, a further trimming of our global workforce, relentless cost control, and savings from LeanSigma(tm)-driven continuous improvement efficiencies. There will continue to be a modest cost associated with these additional actions in 2009. In the first quarter of 2009, $1.3 million in charges were taken but were fully offset by asset sales gains. However, in the second quarter, net restructuring costs of $2.3 million were incurred. It is anticipated that additional costs will be incurred between the third and fourth quarters to fully implement these actions. These costs have been factored into our guidance. One of the many countermeasures that we have been working on is the reduction of our effective global tax rate. We now expect our 2009 effective g lobal income tax rate to be in the area of 24 percent.
"We believe the challenges we face will manifest themselves most prominently in the third quarter of 2009, particularly in the Harsco Metals and Harsco Infrastructure businesses. The fourth quarter is expected to show a modest improvement over last year's fourth quarter.
"For the third quarter of 2009, the Company is forecasting earnings from continuing operations in the range of $0.45 to $0.50 per share, compared with $0.99 per share in last year's third quarter."
Discontinued Operations
The second quarter of 2009 includes a loss after tax of $1.5 million, or $0.02 per diluted share from discontinued operations related to the sale of the Gas Technologies business in December 2007, and certain ongoing costs related to this divestiture.
Forward-Looking Statements
This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "may," "could," "believes," "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Harsco, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, changes in the worldwide business environment in which the Company operates, including as a result of the current global financial and credit crisis; changes in the performance of the equity and debt markets; changes in governmental laws and regulations; market and competitive changes, including pricing pressures, market demand and acceptance for new products, services, and technologies; unforeseen business disruptions in one or more of the many countries in which the Company operates; the seasonal nature of the Company's business; the financial condition of the Company's customers; the successful integration of the Company's strategic acquisitions; and the amount and timing of repurchases of the Company's common stock, if any. The Company undertakes no duty to update forward-looking statements.
Conference Call
As previously announced, the Company will hold a conference call today at 10:00 a.m. Eastern Time to discuss its results and respond to questions from the investment community. The conference call will be broadcast live through the Harsco Corporation website at www.harsco.com. The call can also be accessed by telephone by dialing (800) 611-4920, or (973) 200-3957 from outside the United States and Canada. Enter Conference ID number 16412153. Listeners are advised to dial in at least five minutes prior to the call. Replays will be available via the Harsco website, or by telephone beginning at approximately 5:00 pm ET today. The telephone replay dial-in number is (800) 642-1687, or (706) 645-9291 from outside the United States and Canada. Enter Conference ID number 16412153.
About Harsco
Harsco Corporation is one of the world's leading industrial services companies, serving key industries that play a fundamental role in worldwide economic growth and recovery. Harsco's common stock is a component of the S&P MidCap 400 Index and the Russell 1000 Index. Additional information can be found at www.harsco.com.
The Harsco Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=361
HARSCO CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended (In thousands, except June 30 June 30 per share amounts) 2009 2008 (a) 2009 2008 (a) --------------------------------------------------------------------- Revenues from continuing operations: Service revenues $ 616,217 $ 944,490 $1,178,649 $1,797,118 Product revenues 160,758 155,098 295,216 290,260 --------------------------------------------------------------------- Total revenues 776,975 1,099,588 1,473,865 2,087,378 --------------------------------------------------------------------- Costs and expenses from continuing operations: Cost of services sold 471,490 686,531 912,109 1,324,589 Cost of products sold 101,143 105,215 197,409 198,162 Selling, general and administrative expenses 130,915 160,332 255,912 316,964 Research and development expenses 732 1,508 1,375 2,561 Restructuring costs, net 2,336 163 (470) (117) --------------------------------------------------------------------- Total costs and expenses 706,616 953,749 1,366,335 1,842,159 --------------------------------------------------------------------- Operating income from continuing operations 70,359 145,839 107,530 245,219 Equity in income of unconsolidated entities, net 65 246 152 650 Interest income 512 886 1,057 1,800 Interest expense (15,486) (19,075) (30,799) (36,194) --------------------------------------------------------------------- Income from continuing operations before income taxes 55,450 127,896 77,940 211,475 Income tax expense (12,473) (35,000) (13,984) (59,188) --------------------------------------------------------------------- Income from continuing operations 42,977 92,896 63,956 152,287 --------------------------------------------------------------------- Discontinued operations: Loss from discon- tinued business (2,157) (841) (3,911) (586) Income tax benefit 688 353 1,218 246 --------------------------------------------------------------------- Loss from discontinued operations (1,469) (488) (2,693) (340) --------------------------------------------------------------------- Net Income 41,508 92,408 61,263 151,947 Less: Net income attributable to noncontrolling interests (900) (2,525) (2,063) (5,025) --------------------------------------------------------------------- Net Income attributable to Harsco Corporation $ 40,608 $ 89,883 $ 59,200 $ 146,922 ===================================================================== Amounts attributable to Harsco Corporation common stockholders: Income from continuing operation, net of tax $ 42,077 $ 90,371 $ 61,893 $ 147,262 Loss from discontinued operations, net of tax (1,469) (488) (2,693) (340) --------------------------------------------------------------------- Net income attributable to Harsco Corporation common stockholders $ 40,608 $ 89,883 $ 59,200 $ 146,922 ===================================================================== Average shares of common stock outstanding 80,289 84,271 80,269 84,323 Basic earnings per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.52 $ 1.07 $ 0.77 $ 1.75 Discontinued operations (0.02) (0.01) (0.03) (0.00) - ---------------------------------------------------------------------- Basic earnings per share attributable to Harsco Corporation common stockholders $ 0.51(b) $ 1.07(b) $ 0.74 $ 1.74(b) ===================================================================== Diluted average shares of common stock outstanding 80,554 84,751 80,519 84,801 Diluted earnings per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.52 $ 1.07 $ 0.77 $ 1.74 Discontinued operations (0.02) (0.01) (0.03) (0.00) --------------------------------------------------------------------- Diluted earnings per share attributable to Harsco Corporation common stockholders $ 0.50 $ 1.06 $ 0.74 $ 1.73 (b) ===================================================================== (a) On January 1, 2009, the Company adopted SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements -- an amendment of ARB No. 51," the provisions of which, among others, requires that minority interests be renamed noncontrolling interests and that a company present a consolidated net income measure that includes the amount attributable to such noncontrolling interests for all periods presented. Results reclassified accordingly. (b) Does not total due to rounding. HARSCO CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) June 30 December 31 (In thousands) 2009 2008(a) --------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 69,981 $ 91,336 Trade accounts receivable, net 642,073 648,880 Other receivables 36,358 46,032 Inventories 295,890 309,530 Other current assets 95,920 104,430 Assets held-for-sale 578 5,280 --------------------------------------------------------------------- Total current assets 1,140,800 1,205,488 --------------------------------------------------------------------- Property, plant and equipment, net 1,485,581 1,482,833 Goodwill 666,371 631,490 Intangible assets, net 136,077 141,493 Other assets 62,407 101,666 --------------------------------------------------------------------- Total assets $ 3,491,236 $ 3,562,970 ===================================================================== LIABILITIES Current liabilities: Short-term borrowings $ 68,085 $ 117,854 Current maturities of long-term debt 2,546 3,212 Accounts payable 203,668 262,783 Accrued compensation 67,102 85,237 Income taxes payable 13,632 13,395 Dividends payable 16,059 15,637 Insurance liabilities 26,623 36,553 Advances on contracts 141,355 144,237 Other current liabilities 209,798 209,518 --------------------------------------------------------------------- Total current liabilities 748,868 888,426 --------------------------------------------------------------------- Long-term debt 931,639 891,817 Deferred income taxes 34,358 35,442 Insurance liabilities 62,660 60,663 Retirement plan liabilities 197,237 190,153 Other liabilities 48,205 46,497 --------------------------------------------------------------------- Total liabilities 2,022,967 2,112,998 --------------------------------------------------------------------- EQUITY Harsco Corporation stockholders' equity: Common stock 139,163 138,925 Additional paid-in capital 137,038 137,083 Accumulated other comprehensive loss (204,797) (208,299) Retained earnings 2,106,259 2,079,170 Treasury stock (735,016) (733,203) --------------------------------------------------------------------- Total Harsco Corporation stockholders' equity 1,442,647 1,413,676 Noncontrolling interests 25,622 36,296 --------------------------------------------------------------------- Total equity 1,468,269 1,449,972 --------------------------------------------------------------------- Total liabilities and equity $ 3,491,236 $ 3,562,970 ===================================================================== (a) On January 1, 2009, the Company adopted SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51," the provisions of which, among others, requires that minority interests be renamed noncontrolling interests and that a company present such noncontrolling interests as equity for all periods presented. Results reclassified accordingly. HARSCO CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended Six Months Ended June 30 June 30 (In thousands) 2009 2008(a) 2009 2008(a) --------------------------------------------------------------------- Cash flows from operating activities: Net income $ 41,508 $ 92,408 $ 61,263 $ 151,947 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 71,445 80,920 139,146 157,542 Amortization 6,849 7,779 13,556 15,449 Equity in income of unconsolidated entities, net (65) (246) (152) (650) Dividends or distributions from unconsolidated entities 100 484 100 484 Other, net (1,144) (7,362) (9,175) (7,712) Changes in assets and liabilities, net of acquisitions and dispositions of businesses: Accounts receivable 6,213 (55,802) 34,933 (104,705) Inventories 26,812 (3,819) 20,927 (45,846) Accounts payable (22,931) 34,320 (67,122) 41,397 Accrued interest payable 1,451 11,540 10,987 15,818 Accrued compensation (956) 5,970 (19,795) (18,368) Other assets and liabilities (12,632) 12,267 (28,418) 5,057 --------------------------------------------------------------------- Net cash provided by operating activities 116,650 178,459 156,250 210,413 --------------------------------------------------------------------- Cash flows from investing activities: Purchases of property, plant and equipment (46,537) (138,463) (82,579) (258,283) Purchases of businesses, net of cash acquired (2,646) (9,552) (2,754) (13,575) Proceeds from sales of assets 5,046 5,200 11,034 7,167 Other investing activities 461 482 (815) 15,279 --------------------------------------------------------------------- Net cash used by investing activities (43,676) (142,333) (75,114) (249,412) --------------------------------------------------------------------- Cash flows from financing activities: Short-term borrowings, net (43,812) (38,436) (53,881) 73,783 Current maturities and long-term debt: Additions 124,868 547,221 241,725 686,373 Reductions (126,637) (517,778) (244,349) (675,649) Cash dividends paid on common stock (16,054) (16,428) (31,687) (32,899) Dividends paid to noncontrolling interests (2,440) (3,372) (2,440) (3,372) Purchase of noncontrolling interest (12,886) -- (12,886) -- Common stock issued-options 356 30 434 1,276 Common stock acquired for treasury -- -- -- (16,858) Other financing activities -- (28) -- (64) --------------------------------------------------------------------- Net cash provided (used) by financing activities (76,605) (28,791) (103,084) 32,590 --------------------------------------------------------------------- Effect of exchange rate changes on cash 4,443 1,072 593 7,885 --------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 812 8,407 (21,355) 1,476 Cash and cash equivalents at beginning of period 69,169 114,902 91,336 121,833 --------------------------------------------------------------------- Cash and cash equivalents at end of period $ 69,981 $ 123,309 $ 69,981 $ 123,309 ===================================================================== (a) On January 1, 2009, the Company adopted SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51," the provisions of which, among others, requires that minority interests be renamed noncontrolling interests for all periods presented. Results reclassified accordingly. Harsco Corporation REVIEW OF OPERATIONS BY SEGMENT (Unaudited) (In thousands) Three Months Ended Three Months Ended June 30, 2009 June 30, 2008 Operating Operating Income Income Sales (loss) Sales (loss) --------------------------------------------------------------------- Harsco Infrastructure $ 308,765 $ 24,928 $ 429,176 $ 58,134 Harsco Metals 259,479 4,220 445,490 37,114 All Other Category (Harsco Minerals & Rail) 208,671 42,659 224,862 52,036 General Corporate 60 (1,448) 60 (1,445) --------------------------------------------------------------------- Consolidated Totals $ 776,975 $ 70,359 $1,099,588 $ 145,839 ===================================================================== Six Months Ended Six Months Ended June 30, 2009 June 30, 2008 Operating Operating Income Income Sales (loss) Sales (loss) --------------------------------------------------------------------- Harsco Infrastructure $ 592,511 $ 43,765 $ 808,000 $ 95,972 Harsco Metals 497,865 1,405 862,206 66,321 All Other Category (Harsco Minerals & Rail) 383,369 66,100 417,052 85,978 General Corporate 120 (3,740) 120 (3,052) --------------------------------------------------------------------- Consolidated Totals $1,473,865 $ 107,530 $2,087,378 $ 245,219 ===================================================================== HARSCO CORPORATION FREE CASH FLOW (Unaudited) Three Months Ended Six Months Ended June 30 June 30 (In thousands) 2009 2008 2009 2008 --------------------------------------------------------------------- Net cash provided by operating activities $ 116,650 $ 178,459 $ 156,250 $ 210,413 Purchases of property, plant and equipment (46,537) (138,463) (82,579) (258,283) --------------------------------------------------------------------- Free Cash Flow $ 70,113 $ 39,996 $ 73,671 $ (47,870) --------------------------------------------------------------------- Free Cash Flow is a non-GAAP financial measure. The Company's Management believes that this measure is useful to investors because it provides cash flows available to the Company after capital expenditures for both growth initiatives and to maintain the current revenue stream. Such cash flows provide the Company flexibility to pay down debt, to the extent such debt is available to be paid, pay stockholder dividends and for use in other investing activities such as acquisitions.
CONTACT: Harsco Corporation Investor Contact Eugene M. Truett 717.975.5677 etruett@harsco.com Media Contact Kenneth D. Julian 717.730.3683 kjulian@harsco.com