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Harsco Corporation Reports First Quarter 2013 Results

Stocks in this article: HSC

CAMP HILL, Pa., May 9, 2013 (GLOBE NEWSWIRE) -- Diversified global industrial company Harsco Corporation (NYSE:HSC) today reported first quarter 2013 diluted earnings per share from continuing operations of $0.09, compared with a U.S. GAAP ("GAAP") loss of $0.36 in the first quarter of 2012. Excluding special items in the first quarter of 2012, adjusted diluted earnings per share from continuing operations were $0.07. There were no special items in the first quarter of 2013. (See Table 1 for a description of the special items and a reconciliation of GAAP and adjusted results).

CEO Comment

"We delivered better-than-expected financial results despite challenging industry dynamics in our two largest businesses," said Harsco President and CEO Patrick Decker. "While we face headwinds in certain markets, we also have many opportunities to grow in key emerging markets and to serve our customers with our innovative products and services. We will remain steadfast in our commitment to Continuous Improvement, disciplined capital allocation and enhanced cash returns."

Consolidated First Quarter Operating Results

Total revenues were $715 million, compared with $752 million in the prior-year quarter. The majority of this decline was due to the Company's decision to exit underperforming contracts in Metals & Minerals and to cease underperforming operations in certain countries in Infrastructure in 2012. Foreign currency translation negatively impacted revenues by $12 million.

Operating income from continuing operations was $26 million, compared with a GAAP operating loss from continuing operations of $13 million in the prior-year quarter. Excluding special items, adjusted operating income from continuing operations was $25 million in last year's first quarter. Despite an unfavorable mix of equipment deliveries in Rail and challenging market conditions in Metals & Minerals and Infrastructure, the Company increased operating income margin 30 basis points to 3.6 percent in this year's first quarter, primarily due to its prior restructuring and cost-reduction actions in its two largest businesses and operating income growth in the Industrial segment.

Table 1 Special Items First Quarter  
  2013 2012
GAAP diluted EPS from continuing operations $0.09 ($0.36)
Restructuring charges (a) -- 0.41
Former CEO separation expense (b) -- 0.04
Gains on pension curtailment (c) -- (0.02)
Adjusted diluted EPS from continuing operations $0.09 $0.07
(a)  Charges resulting from the Company's previously announced restructuring plans in Infrastructure (1Q 2012 $35.6 million pre-tax).
(b)  Separation expense for former CEO (1Q 2012 $4.1 million pre-tax).
(c)  Pension curtailment gains in Metals & Minerals (1Q 2012 $1.7 million pre-tax).

First Quarter Business Review

Harsco Metals & Minerals

Revenues were $337 million, compared with $360 million in the prior-year quarter. This decline was due principally to exiting certain underperforming contracts and lower steel production volumes, which were partially offset by new contracts. Foreign currency translation negatively impacted revenues by $9 million.

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