HARRISBURG, Pa., Feb. 8, 2006 (PRIMEZONE) -- Worldwide industrial services and products company Harsco Corporation (NYSE:HSC) today reported its cash flow from operations results for 2005, and issued its balance sheet and cash flow statement for the fourth quarter and full year 2005.
In its January 31, 2006 earnings release, the Company had noted that its Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the fourth quarter and full-year 2005 were still being finalized to reflect the inclusion of the Company's fourth quarter acquisitions. Those statements are now complete and attached hereto along with the Consolidated Statements of Income and Review of Operations by Segment as previously issued. This full set of Statements is also being posted to the Company's website.
The Company said its 2005 cash flows from operations climbed 17 percent to $315 million, reflecting its strategic initiatives for continued growth and improved performance and capping a year of strong operating results in sales, income and diluted EPS. For 2006, the Company has set a cash flow target of $400 million, a 27 percent increase over the 2005 level.
Forward-Looking Statements
The nature of the Company's business and the many countries in which it operates subject it to changing economic, competitive, regulatory, and technological conditions, risks, and uncertainties. In accordance with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary remarks regarding important factors which, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. Forward-looking statements include information about management's confidence and strategies for performance; expectations for new and existing products, technologies, and opportunities; and expectations regarding growth, sales, cash flows, earnings, and EVA. These statements are identified by the use of such terms as "may," "could," "expect," "anticipate," "intend," "believe," or other comparable terms.
Risk factors and uncertainties which could affect results include, but are not limited to: (1) changes in the worldwide business environment in which the Company operates, including general economic conditions; (2) changes in currency exchange rates, interest rates, and capital costs; (3) changes in the performance of stock and bond markets, particularly in the United States and United Kingdom; (4) changes in governmental laws and regulations, including taxes and import tariffs; (5) market and competitive changes, including pricing pressures, market demand, and acceptance for new products, services, and technologies; (6) unforeseen business disruptions in one or more of the over 40 countries in which the Company operates due to political instability, civil disobedience, armed hostilities or other calamities; and (7) other risk factors listed from time to time in the Company's SEC reports. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company's ability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes no duty to update forward-looking statements.
About Harsco
Harsco Corporation is a diversified, worldwide industrial services and products company with four market-leading business groups that provide mill services, access services, engineered products and services, and gas containment and control technologies to customers around the globe. The Company employs approximately 21,000 people in over 45 countries of operation. Additional information can be found at www.harsco.com.
The Harsco Corporation logo is available at: http://www.primezone.com/newsroom/prs/?pkgid=361
Harsco Corporation
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, Three Months Ended Twelve Months Ended
except per December 31 December 31
share amounts) 2005 2004 2005 2004
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Revenues from continuing operations:
Service sales $ 487,996 $ 477,596 $1,928,539 $1,764,159
Product sales 244,537 233,325 837,671 737,900
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Total
revenues 732,533 710,921 2,766,210 2,502,059
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Costs and expenses from
continuing operations:
Cost of
services sold 355,247 356,236 1,425,222 1,313,075
Cost of
products sold 191,544 192,537 674,177 603,309
Selling,
general and
administrative
expenses 105,848 100,332 393,187 368,385
Research and
development
expenses 685 608 2,676 2,579
Other expenses 1,654 382 2,000 4,862
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Total costs
and expenses 654,978 650,095 2,497,262 2,292,210
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Operating income
from continuing
operations 77,555 60,826 268,948 209,849
Equity in
income/(loss)
of unconsolidated
entities, net (18) (81) 74 128
Interest income 1,141 663 3,165 2,319
Interest expense (11,134) (10,645) (41,918) (41,057)
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Income from continuing
operations before
income taxes
and minority
interest 67,544 50,763 230,269 171,239
Income tax expense (13,392) (13,418) (64,771) (49,034)
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Income from
continuing
operations
before minority
interest 54,152 37,345 165,498 122,205
Minority interest
in net income (2,290) (2,316) (8,748) (8,665)
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Income from
continuing
operations 51,862 35,029 156,750 113,540
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Discontinued operations:
Income/(loss) from operations
of discontinued
business 23 (183) (430) (801)
Gain on disposal
of discontinued
business -- 23 261 (102)
Income/(loss) related
to discontinued
defense
business (6) 96 20 12,849
Income tax
benefit
(expense) (6) 23 56 (4,275)
---------- ---------- ---------- ----------
Income/(loss)
from discontinued
operations 11 (41) (93) 7,671
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Net Income $ 51,873 $ 34,988 $ 156,657 $ 121,211
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Average shares
of common stock
outstanding 41,756 41,331 41,642 41,129
Basic earnings per common share:
Continuing
operations $ 1.24 $ 0.85 $ 3.76 $ 2.76
Discontinued
operations -- -- -- 0.19
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Basic earnings
per common share $ 1.24 $ 0.85 $ 3.76 $ 2.95
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Diluted average
shares of common
stock outstanding 42,184 41,814 42,080 41,598
Diluted earnings per
common share:
Continuing
operations $ 1.23 $ 0.84 $ 3.73 $ 2.73
Discontinued
operations -- -- -- 0.18
---------- ---------- ---------- ----------
Diluted earnings
per common share $ 1.23 $ 0.84 $ 3.72(a) $ 2.91
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(a) Does not total due to rounding.
Harsco Corporation
CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31 December 31
(In thousands) 2005 2004 (a)
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ASSETS
Current assets:
Cash and cash equivalents $ 120,929 $ 94,093
Accounts receivable, net 666,252 555,191
Inventories 251,080 217,026
Other current assets 60,436 58,614
Assets held for sale 2,326 932
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Total current assets 1,101,023 925,856
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Property, plant and
equipment, net 1,139,808 932,298
Goodwill, net 542,501 433,125
Other assets 184,075 98,477
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Total assets $ 2,967,407 $ 2,389,756
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LIABILITIES
Current liabilities:
Short-term borrowings $ 97,963 $ 16,145
Current maturities of
long-term debt 6,066 14,917
Accounts payable 247,179 220,322
Accrued compensation 75,742 63,776
Income taxes 42,284 40,227
Dividends payable 13,580 12,429
Insurance liabilities 47,244 23,470
Other current liabilities 218,345 187,111
Liabilities associated
with assets held for sale -- 691
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Total current liabilities 748,403 579,088
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Long-term debt 905,859 594,747
Deferred income taxes 114,938 95,702
Insurance liabilities 55,049 53,960
Retirement plan liabilities 98,946 97,586
Other liabilities 50,318 54,483
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Total liabilities 1,973,513 1,475,566
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STOCKHOLDERS' EQUITY
Common stock 85,322 84,889
Additional paid-in capital 154,017 139,532
Accumulated other
comprehensive expense (167,318) (127,491)
Retained earnings 1,526,216 1,420,637
Treasury stock (603,225) (603,377)
Unearned stock-based
compensation (1,118) --
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Total stockholders'
equity 993,894 914,190
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Total liabilities and
stockholders' equity $ 2,967,407 $ 2,389,756
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(a) Reclassified for comparative purposes.
Harsco Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
(In thousands) 2005 2004(a) 2005 2004(a)
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Cash flows from operating activities:
Net income $ 51,873 $ 34,988 $ 156,657 $ 121,211
Adjustments to
reconcile net income
to net cash provided
(used) by operating
activities:
Depreciation 49,832 48,466 195,139 181,914
Amortization 1,031 598 2,926 2,457
Equity in income
of unconsolidated
entities, net 18 81 (74) (128)
Dividends or
distributions from
unconsolidated
entities 110 44 170 589
Other, net 3,864 3,043 8,134 (2,781)
Changes in assets
and liabilities,
net of acquisitions
and dispositions
of businesses:
Accounts receivable (7,003) (14,388) (64,580) (81,403)
Inventories 17,152 31,801 (25,908) (22,278)
Accounts payable 8,133 5,600 10,787 22,310
Accrued interest
payable (17,163) (18,409) 1,222 (656)
Accrued
compensation 6,457 6,666 6,941 14,515
Net receipts
(disbursements)
related to
discontinued
defense business (9) 12,500 (141) 12,280
Other assets and
liabilities (31,595) (6,351) 24,006 22,435
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Net cash provided
by operating
activities 82,700 104,639 315,279 270,465
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Cash flows from
investing activities:
Purchases of
property, plant
and equipment (80,992) (50,351) (290,239) (204,235)
Purchase of
businesses,
net of cash
acquired (387,482) (7,099) (394,493) (12,264)
Proceeds from
sales of assets 22,189 3,333 39,543 6,897
Other investing
activities 4 -- 4 --
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Net cash used
by investing
activities (446,281) (54,117) (645,185) (209,602)
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Cash flows from financing activities:
Short-term borrowings, net
(including reclassifications
to/from long-term
debt) 74,468 (7,474) 73,530 (5,863)
Current maturities and
long-term debt:
Additions 424,446 45,203 571,928 198,032
Reductions (including
reclassifications
to short-term (109,054) (93,142) (230,010) (214,551)
borrowings)
Cash dividends
paid on common
stock (12,522) (11,339) (49,928) (45,170)
Common stock
issued-options 761 6,305 9,097 16,656
Other financing
activities (1,760) (836) (5,292) (5,616)
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Net cash provided
(used) by financing
activities 376,339 (61,283) 369,325 (56,512)
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Effect of exchange rate
changes on cash (5,060) 11,395 (12,583) 9,532
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Net increase in cash
and cash equivalents 7,698 634 26,836 13,883
Cash and cash equivalents
at beginning of
period 113,231 93,459 94,093 80,210
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Cash and cash
equivalents at end
of period $ 120,929 $ 94,093 $ 120,929 $ 94,093
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(a) Reclassified for comparative purposes.
Harsco Corporation
REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
(In thousands)
Three Months Ended Three Months Ended
December 31, 2005 December 31, 2004
Operating Operating
Sales Income Income
(loss) Sales (loss)
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Mill Services Segment $ 265,576 $ 26,091 $ 273,964 $ 30,434
Access Services Segment 203,223 23,256 189,218 13,297
Gas Technologies Segment 100,023 7,016 94,122 3,594
Engineered Products and
Services ("all other")
Category 163,711 21,517 153,617 14,021
General Corporate -- (325) -- (520)
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Consolidated Totals $ 732,533 $ 77,555 $ 710,921 $ 60,826
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Twelve Months Ended Twelve Months Ended
December 31, 2005 December 31, 2004
Operating Operating
Sales Income Income
(loss) Sales (loss)
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Mill Services Segment $1,060,354 $ 109,591 $ 997,410 $ 105,490
Access Services Segment 788,750 74,742 706,490 44,464
Gas Technologies Segment 370,201 17,912 339,086 14,393
Engineered Products and
Services ("all other")
Category 546,905 69,699 459,073 47,029
General Corporate -- (2,996) -- (1,527)
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Consolidated Totals $2,766,210 $ 268,948 $2,502,059 $ 209,849
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