GlobeNewswire Inc | Aug 5, 2020 06:30AM EDT

August 05, 2020

-- Second Quarter GAAP Loss of $10 Million or $0.14 Per Share Including Anticipated Acquisition, Integration and Financing Costs; Adjusted Earnings Per Share of $0.13 -- Adjusted EBITDA Totaled $59 Million, Highlighting Positive Operational and Cost Performance While Facing COVID-19 Headwinds, as Well as Timing of Expenditures and Acquisition Contributions -- Net Cash Provided by Operating Activities of $33 Million in Q2; Free Cash Flow Totaled $18 Million Driven by Actions to Lower Capital Spending as Well as Working Capital Initiatives -- Company Net Leverage Ratio of 3.9x and Liquidity Position Exceeded $390 Million at Quarter-End -- Business Continuity Actions In Response to COVID-19 Driving Significant Cost Reductions; Company Remains Committed to Lower Capital Spending and Positive Free Cash Flow

CAMP HILL, Pa., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Harsco Corporation (NYSE:HSC) today reported second quarter 2020 results. On a U.S. GAAP ("GAAP") basis, second quarter of 2020 diluted loss per share from continuing operations was $0.14, which included acquisition and integration costs as well as expenses incurred to amend the Company's credit facilities. Adjusted diluted earnings per share from continuing operations in the second quarter of 2020 were $0.13. These figures compare with second quarter of 2019 GAAP diluted loss per share from continuing operations of $0.04 and adjusted diluted earnings per share from continuing operations of $0.23.

GAAP operating income from continuing operations for the second quarter of 2020 was $2 million, while adjusted EBITDA excluding unusual items totaled $59 million in the quarter.Against a challenging operating environment in the second quarter, we took further action to control costs, optimize spending and enhance our overall financial flexibility, said Chairman and CEO Nick Grasberger. Working together, we are controlling what we can control and moving the company forward with a focus on safety, cost management, and the flawless execution of operational initiatives.

Despite persistent headwinds, we made significant progress in the quarter on a number of key strategic and operational initiatives. Our transformation into a pure-play environmental solutions company continued as we began the integration of ESOL with Clean Earth, and reached our first 100-days of ownership. ESOL represents a tremendous value-creating opportunity and the integration process has been running smoothly, with a focus on instilling greater process discipline within the organization and strengthening its operational and commercial effectiveness. In addition, Rails SCOR program remains on pace to achieve its objectives.

"While we are cautiously optimistic that business activity in our end markets troughed in the second quarter, we expect the impact from the COVID-19 pandemic and market volatility to persist. We continue to believe that our ongoing transformation efforts position Harsco to be a stronger, more resilient company, poised to capitalize on growth opportunities. I am confident that our continued focus on costs, cash flow, debt reduction and serving our customers will continue to help us navigate these uncertain times and guide us as the global economy recovers.

Harsco CorporationSelected Second Quarter Results

($ in millions, except per share amounts) Q2 2020 Q2 2019Revenues $ 447 $ 351 Operating income from continuing operations - GAAP $ 2 $ 18 Diluted EPS from continuing operations - GAAP $ (0.14 ) $ (0.04 )Adjusted EBITDA - excluding unusual items $ 59 $ 63 Adjusted EBITDA margin - excluding unusual items 13.2 % 18.0 %Adjusted diluted EPS from continuing operations - $ 0.13 $ 0.23 excluding unusual items

Note: Income statement details above and commentary below reflect that the prior Industrial segment was reclassified as Discontinued Operations in 2019. Also, 2020 details include ESOL from the date the business was acquired on April 6, 2020 and ESOL results are reported within the Clean Earth segment. Adjusted earnings per share and adjusted EBITDA details presented throughout this release are adjusted for unusual items; in addition, adjusted earnings per share details are also adjusted for acquisition-related amortization expense.

Consolidated Second Quarter Operating Results

Consolidated total revenues from continuing operations were $447 million, an increase of 27 percent compared with the prior-year quarter due to acquisitions (Clean Earth and ESOL) since mid-2019. The revenue contributions from the acquired businesses were partially offset by lower demand for products and services as a result of the COVID-19 pandemic and FX impacts. Foreign currency translation negatively impacted second quarter 2020 revenues by approximately $13 million compared with the prior-year period.

GAAP operating income from continuing operations was $2 million for the second quarter of 2020, compared with $18 million in the same quarter of last year. Meanwhile, adjusted EBITDA totaled $59 million in the second quarter of 2020 versus $63 million in the second quarter of 2019. This change is attributable to lower profitability in the Harsco Environmental and Rail segments due to COVID-19, partially offset by acquisition contributions and lower adjusted Corporate spending.

Second Quarter Business Review

Environmental

($ in millions) Q2 2020 Q2 2019 %ChangeRevenues $ 204 $ 269 (24 ) %Operating income - GAAP $ 14 $ 28 (51 ) %Adjusted EBITDA - excluding unusual items $ 40 $ 58 (30 ) %Adjusted EBITDA margin - excluding unusual 19.7 % 21.4 % items

Environmental revenues totaled $204 million in the second quarter of 2020, compared with $269 million in the prior-year quarter. This change is principally attributable to lower demand for environmental services and applied products as a result of COVID-19 and foreign currency translation impacts. The segment's GAAP operating income and adjusted EBITDA totaled $14 million and $40 million, respectively, in the second quarter of 2020. These figures compare with GAAP operating income of $28 million and adjusted EBITDA of $58 million in the prior-year period. The change in the segment's adjusted EBITDA relative to the prior-year quarter is attributable to the above factors, partially offset by lower SG&A and operating costs resulting from Company actions to mitigate the COVID-19 economic headwinds. Environmental's adjusted EBITDA margin was 19.7 percent in the second quarter of 2020.

Clean Earth

($ in millions) Q2 2020 Q2 2019 %ChangeRevenues $ 162 $ 69 134 %Operating income - GAAP $ ? $ 4 nmfAdjusted EBITDA - excluding unusual items 11.3 10.8 5 %Adjusted EBITDA margin - excluding unusual items 7.0 % 15.6 %

Note: The 2019 financial information provided above and discussed below for Clean Earth is not incorporated within Harsco's consolidated results and is provided only for comparison purposes. Also, these prior-year figures do not include a corporate cost allocation and do not include ESOL.

Clean Earth revenues totaled $162 million in the second quarter of 2020, compared with $69 million in the prior-year quarter. Segment operating income was nominal and adjusted EBITDA totaled $11 million in the second quarter of 2020. These figures compare with $4 million and $11 million, respectively, in the prior-year period. The increase in revenues is attributable to the ESOL acquisition in April 2020, while the EBITDA comparison for the periods reflects that the positive acquisition contributions were offset by lower demand for hazardous and non-hazardous materials services as a result of COVID-19 pandemic.

Rail

($ in millions) Q2 2020 Q2 2019 %ChangeRevenues $ 82 $ 82 ? %Operating income - GAAP $ 8.6 $ 9.4 (9 ) %Adjusted EBITDA - excluding unusual items $ 10 $ 12 (16 ) %Adjusted EBITDA margin - excluding unusual items 12.2 % 14.5 %

Rail revenues were essentially unchanged at $82 million. The segment's operating income and adjusted EBITDA totaled $9 million and $10 million, respectively, in the second quarter of 2020. These figures compare with operating income of $9 million and adjusted EBITDA of $12 million in the prior-year quarter. The EBITDA change year-on-year is attributable to a less favorable product mix and lower aftermarket parts and technology product volumes, partially offset by higher contracting contributions and lower administrative expenses. Rail's adjusted EBITDA margin was 12.2 percent in the second quarter of 2020.

Cash Flow

Net cash provided by operating activities totaled $33 million in the second quarter of 2020, compared with net cash used by operating activities of $9 million in the prior-year period. Free cash flow was $18 million (before transaction expenses) in the second quarter of 2020, compared with $(45) million in the prior-year period. The improvement in free cash flow compared with the prior-year quarter is attributable to changes in net cash from operating activities, including cash generated from working capital, and lower capital expenditures.

COVID-19 Update / Outlook

The Company believes that underlying business volumes stabilized early in the second quarter. However, business conditions remain dynamic and uneven across various markets, and the pace of the recovery remains slow. In this context, Harsco continues to take the necessary steps to minimize the operational and financial impacts of the pandemic on the business, while providing critical services and products to its customers and adhering to its Global Principles, which set operating standards for current business needs as well as workplace safety and flexibility measures.

Capital expenditures will remain tightly controlled for the foreseeable future and Harsco continues to defer certain tax and pension payments. These efforts will strengthen the Company's free cash flow and preserve its financial flexibility. The Company is also taking more aggressive actions to further flex its cost structure. In this regard, the Company is now targeting cost savings of $20 million for the year, versus $15 million previously.

As previously announced, Harsco will not be providing detailed guidance given the uncertainty around the pandemic and its evolving impact on relevant markets. The Company's forward-looking guidance is limited to directional comments about the third quarter of 2020. Based on recent and current market conditions and the Company's performance, Harsco anticipates that its revenues in the third quarter will increase relative to the second quarter of 2020. However, the Company believes that its third quarter adjusted EBITDA will be slightly below second quarter 2020 results. This outlook contemplates some modest improvement in end-markets during the third quarter, with this positive impact offset by the timing of certain expenditures which were less impactful on the Company's second quarter 2020 results.

2019 - 2020 ESG Report

Harsco released its 2019-2020 Environmental, Social and Governance (ESG) Report, which highlights the companys sustainability accomplishments throughout the 2019 fiscal year and the first half of 2020. Harscos most comprehensive sustainability report to date provides a detailed look at the companys vision, strategy, governance and key focus areas where Harsco delivers value for its business and positive outcomes for stakeholders Innovative Solutions, Safe Workplaces, Inspired People and Thriving Environment.

Conference Call

The Company will hold a conference call today at 8:30a.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 Company will refer to a slide presentation that accompanies its formal remarks. The slide presentation will be available on the Companys website. The call can also be accessedby telephone by dialing (844) 467-8153 or (270)855-8732. Enter Conference ID number 5787610. Listeners are advised to dial in at least five minutes prior to the call.

Forward-Looking Statement

The nature of the Company's business, together with the number of 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 Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, the Company provides the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressed or implied herein. Forward-looking statements contained herein could include, among other things, statements about management's confidence in and strategies for performance; expectations for new and existing products, technologies and opportunities; and expectations regarding growth, sales, cash flows, and earnings. Forward-looking statements can be identified by the use of such terms as "may," "could," "expect," "anticipate," "intend," "believe," "likely," "estimate," "plan" or other comparable terms.

Factors that could cause actual results to differ, perhaps materially, from those implied by forward-looking statements include, but are not limited to: (1)changes in the worldwide business environment in which the Company operates, including changes in general economic conditions or changes due to COVID-19 and governmental and market reactions to COVID-19; (2)changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs; (3)changes in the performance of equity and bond markets that could affect, among other things, the valuation of the assets in the Company's pension plans and the accounting for pension assets, liabilities and expenses; (4)changes in governmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards and amounts; (5)market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; (6) the Company's inability or failure to protect its intellectual property rights from infringement in one or more of the many countries in which the Company operates; (7)failure to effectively prevent, detect or recover from breaches in the Company's cybersecurity infrastructure; (8) unforeseen business disruptions in one or more of the many countries in which the Company operates due to political instability, civil disobedience, armed hostilities, public health issues or other calamities; (9) disruptions associated with labor disputes and increased operating costs associated with union organization; (10)the seasonal nature of the Company's business; (11)the Company's ability to successfully enter into new contracts and complete new acquisitions or strategic ventures in the time-frame contemplated, or at all; (12)the integration of the Company's strategic acquisitions; (13) potential severe volatility in the capital markets; (14) failure to retain key management and employees; (15)the amount and timing of repurchases of the Company's common stock, if any; (16)the outcome of any disputes with customers, contractors and subcontractors; (17)the financial condition of the Company's customers, including the ability of customers (especially those that may be highly leveraged, have inadequate liquidity or whose business is significantly impacted by COVID-19) to maintain their credit availability; (18) implementation of environmental remediation matters; (19) risk and uncertainty associated with intangible assets and (20) other risk factors listed from time to time in the Company's SEC reports. A further discussion of these, along with other potential risk factors, can be found in PartI, Item1A, "Risk Factors," of the Company's Annual Report on Form10-K for the year ended December31, 2019, together with those described in Item 1A, "Risk Factors," of the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2020. 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 except as may be required by law.

About Harsco

Harsco Corporation is a global market leader providing environmental solutions for industrial and specialty waste streams and innovative technologies for the rail sector. Based in Camp Hill, PA, the 13,000-employee company operates in more than 30 countries.Harscos common stock is a component of the S&P SmallCap 600 Index and the Russell 2000 Index. Additional information can be found at www.harsco.com.

HARSCO CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Twelve Months Ended June 30 June 30 (In thousands,except per share 2020 2019 2020 2019 amounts)Revenues fromcontinuing operations:Service revenues $ 345,578 $ 238,003 $ 636,917 $ 467,523 Product revenues 101,703 112,895 209,205 213,277 Total revenues 447,281 350,898 846,122 680,800 Costs andexpenses from continuingoperations:Cost of services 285,822 186,840 522,141 368,711 soldCost of products 78,320 79,355 158,469 148,664 soldSelling, generaland 80,771 67,501 153,270 123,907 administrativeexpensesResearch anddevelopment 792 1,120 2,052 1,869 expensesOther expenses (292 ) (1,717 ) 5,441 26 (income), netTotal costs and 445,413 333,099 841,373 643,177 expensesOperating incomefrom continuing 1,868 17,799 4,749 37,623 operationsInterest income 816 591 1,009 1,124 Interest expense (14,953 ) (6,103 ) (27,602 ) (11,610 ) Unused debtcommitment and (1,432 ) (7,435 ) (1,920 ) (7,435 ) amendment feesDefined benefitpension income 1,723 (1,472 ) 3,312 (2,810 ) (expense)Income (loss)from continuingoperations (11,978 ) 3,380 (20,452 ) 16,892 before incometaxes and equityincomeIncome taxbenefit 2,304 (3,994 ) 2,986 (5,213 ) (expense)Equity income ofunconsolidated 71 49 167 70 entities, netIncome (loss)from continuing (9,603 ) (565 ) (17,299 ) 11,749 operationsDiscontinued operations:Gain (loss) onsale of (91 ) ? 18,371 ? discontinuedbusinessIncome fromdiscontinued 524 9,936 299 23,686 businessesIncome taxbenefit(expense) (285 ) 1,558 (9,599 ) (1,969 ) related todiscontinuedbusinessesIncome fromdiscontinued 148 11,494 9,071 21,717 operationsNet income (9,455 ) 10,929 (8,228 ) 33,466 (loss)Less: Net incomeattributable to (1,147 ) (2,287 ) (2,233 ) (4,127 ) noncontrollinginterestsNet income(loss)attributable to $ (10,602 ) $ 8,642 $ (10,461 ) $ 29,339 HarscoCorporationAmounts attributable to Harsco Corporation common stockholders: Income (loss)from continuing $ (10,750 ) $ (2,852 ) $ (19,532 ) $ 7,622 operations, netof taxIncome fromdiscontinued 148 11,494 9,071 21,717 operations, netof taxNet income(loss)attributable toHarsco $ (10,602 ) $ 8,642 $ (10,461 ) $ 29,339 CorporationcommonstockholdersWeighted-averageshares of common 78,987 80,328 78,874 80,119 stockoutstandingBasic earnings (loss) per common share attributable to Harsco Corporation common stockholders:Continuing $ (0.14 ) $ (0.04 ) $ (0.25 ) $ 0.10 operationsDiscontinued ? 0.14 0.12 0.27 operationsBasic earnings(loss) per shareattributable toHarsco $ (0.13 ) (a) $ 0.11 (a) $ (0.13 ) $ 0.37 CorporationcommonstockholdersDilutedweighted-averageshares of common 78,987 80,328 78,874 82,074 stockoutstandingDiluted earnings (loss) per common share attributable to Harsco Corporation common stockholders:Continuing $ (0.14 ) $ (0.04 ) $ (0.25 ) $ 0.09 operationsDiscontinued ? 0.14 0.12 0.26 operationsDiluted earnings(loss) per shareattributable toHarsco $ (0.13 ) (a) $ 0.11 (a) $ (0.13 ) $ 0.36 (a)Corporationcommonstockholders

-- Does not total due to rounding.

HARSCO CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) June 30 December 31(In thousands) 2020 2019ASSETS Current assets: Cash and cash equivalents $ 81,784 $ 57,259 Restricted cash 2,267 2,473 Trade accounts receivable, net 406,565 309,990 Other receivables 19,601 21,265 Inventories 173,573 156,991 Current portion of contract assets 59,026 31,166 Current portion of assets held-for-sale ? 22,093 Other current assets 55,270 51,575 Total current assets 798,086 652,812 Property, plant and equipment, net 634,352 561,786 Right-of-use assets, net 101,743 52,065 Goodwill 881,665 738,369 Intangible assets, net 449,445 299,082 Deferred income tax assets 9,468 14,288 Assets held-for-sale ? 32,029 Other assets 51,515 17,036 Total assets $ 2,926,274 $ 2,367,467 LIABILITIES Current liabilities: Short-term borrowings $ 2,719 $ 3,647 Current maturities of long-term debt 2,709 2,666 Accounts payable 211,615 176,755 Accrued compensation 33,913 37,992 Income taxes payable 14,691 18,692 Insurance liabilities 11,293 10,140 Current portion of advances on contracts 50,318 53,906 Current portion of operating lease liabilities 27,850 12,544 Current portion of liabilities of assets ? 11,344 held-for-saleOther current liabilities 157,876 137,208 Total current liabilities 512,984 464,894 Long-term debt 1,242,321 775,498 Insurance liabilities 14,326 18,515 Retirement plan liabilities 156,352 189,954 Advances on contracts 48,183 6,408 Operating lease liabilities 71,553 36,974 Liabilities of assets held-for-sale ? 12,152 Environmental liabilities 30,027 5,600 Other liabilities 86,012 67,813 Total liabilities 2,161,758 1,577,808 HARSCO CORPORATION STOCKHOLDERS? EQUITY Common stock 144,245 143,400 Additional paid-in capital 203,916 200,595 Accumulated other comprehensive loss (603,618 ) (587,622 )Retained earnings 1,813,639 1,824,100 Treasury stock (843,003 ) (838,893 )Total Harsco Corporation stockholders? equity 715,179 741,580 Noncontrolling interests 49,337 48,079 Total equity 764,516 789,659 Total liabilities and equity $ 2,926,274 $ 2,367,467

HARSCO CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended June Six Months Ended June 30 30(In thousands) 2020 2019 2020 2019Cash flows from operating activities:Net income (loss) $ (9,455 ) $ 10,929 $ (8,228 ) $ 33,466 Adjustments to reconcile net income to net cash provided (used) by operatingactivities:Depreciation 31,579 29,653 61,512 59,857 Amortization 9,115 2,747 15,672 5,792 Deferred income tax (5,067 ) (4,418 ) (655 ) (3,823 )expenseEquity in income ofunconsolidated entities, (71 ) (50 ) (167 ) (70 )netLoss (gain) on sale from 91 ? (18,371 ) ? discontinued businessOther, net (237 ) 2,840 (2,244 ) 2,561 Changes in assets andliabilities, net of acquisitions:Accounts receivable 38,584 (23,764 ) 16,534 (27,034 )Inventories (254 ) (6,049 ) (16,666 ) (20,497 )Contract assets (8,623 ) (6,839 ) (28,934 ) (69 )Right-of-use assets 8,405 3,333 11,834 7,228 Accounts payable (20,427 ) 7,818 (8,119 ) 10,917 Accrued interest payable 6,951 196 (2,940 ) 285 Accrued compensation (2,015 ) 5,399 (4,767 ) (14,525 )Advances on contracts (4,628 ) (6,975 ) 35,836 (10,381 )Operating lease (8,238 ) (2,981 ) (11,596 ) (6,894 )liabilitiesRetirement plan (3,492 ) (3,743 ) (19,026 ) (13,146 )liabilities, netIncome taxes payable -Gain on sale of (376 ) ? 3,467 ? discontinued businessesOther assets and 1,215 (17,562 ) (1,621 ) (18,295 )liabilitiesNet cash provided (used) 33,057 (9,466 ) 21,521 5,372 by operating activitiesCash flows from investing activities:Purchases of property, (23,319 ) (54,794 ) (51,213 ) (91,201 )plant and equipmentPurchase of businesses, (438,447 ) (585,165 ) (442,604 ) (584,485 )net of cash acquiredProceeds from sale of ? ? 37,219 ? business, netProceeds from sales of 1,767 1,028 3,952 2,205 assetsExpenditures for 16 (525 ) (42 ) (525 )intangible assetsPayments for interest ? (2,758 ) ? (2,758 )rate swap terminationsNet proceeds (payments)from settlement of (10,562 ) 3,400 765 (691 )foreign currency forwardexchange contractsOther investing 59 ? 59 ? activities, netNet cash used by (470,486 ) (638,814 ) (451,864 ) (677,455 )investing activitiesCash flows from financing activities:Short-term borrowings, (1,020 ) 3,662 2,677 84 netCurrent maturities and long-term debt:Additions 475,726 683,362 528,601 740,360 Reductions (23,697 ) (1,633 ) (62,406 ) (3,333 )Dividends paid to ? (3,098 ) ? (3,098 )noncontrolling interestsSale of noncontrolling ? ? ? 876 interestsStock-based compensation (656 ) (2,930 ) (4,093 ) (11,167 )- Employee taxes paidDeferred financing costs (296 ) (9,464 ) (1,928 ) (9,464 )Other financing (1,371 ) ? (1,371 ) ? activities, netNet cash provided by 448,686 669,899 461,480 714,258 financing activitiesEffect of exchange ratechanges on cash and cash 4,006 (225 ) (6,818 ) (242 )equivalents, includingrestricted cashNet increase in cash andcash equivalents, 15,263 21,394 24,319 41,933 including restricted cashCash and cashequivalents, including 68,788 87,685 59,732 67,146 restricted cash, atbeginning of periodCash and cashequivalents, including $ 84,051 $ 109,079 $ 84,051 $ 109,079 restricted cash, at endof period

HARSCO CORPORATIONREVIEW OF OPERATIONS BY SEGMENT (Unaudited)

Three Months Ended Three Months Ended June 30, 2020 (b) June 30, 2019 (b) Operating Operating Income(In thousands) Revenues Income Revenues (Loss) (Loss)Harsco $ 203,991 $ 13,563 $ 269,338 $ 27,577 EnvironmentalHarsco Clean 161,579 (202 ) ? ? Earth (a)Harsco Rail 81,711 8,631 81,560 9,443 Corporate ? (20,124 ) ? (19,221 )Consolidated $ 447,281 $ 1,868 $ 350,898 $ 17,799 Totals Six Months Ended Six Months Ended June 30, 2020 (b) June 30, 2019 (b) Operating Operating Income(In thousands) Revenues Income Revenues (Loss) (Loss)Harsco $ 445,550 $ 24,083 $ 530,650 $ 52,074 EnvironmentalHarsco Clean 240,391 4,043 ? ? Earth (a)Harsco Rail 160,181 15,103 150,150 14,832 Corporate ? (38,480 ) ? (29,283 )Consolidated $ 846,122 $ 4,749 $ 680,800 $ 37,623 Totals

-- The Company's acquisition of ESOL closed on April 6, 2020 and the Company's acquisition of Clean Earth closed on June 28, 2019. -- The operating results of the former Harsco Industrial Segment have been reflected as discontinued operations in the Company's Consolidated Statement of Operations for all periods presented.

HARSCO CORPORATIONRECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS (LOSS)AS REPORTED (Unaudited) Three Months Ended Six Months Ended June 30 June 30 2020 2019 2020 2019 Diluted earnings (loss)per share from continuing $ (0.14 ) $ (0.04 ) $ (0.25 ) $ 0.09 operations as reportedCorporate acquisition and 0.22 0.15 0.39 0.18 integration costs (a)Harsco EnvironmentalSegment severance costs ? ? 0.07 ? (b)Corporate unused debtcommitment and amendment 0.02 0.09 0.02 0.09 fees (c)Harsco EnvironmentalSegment provision for ? 0.07 ? 0.07 doubtful accounts (d)Harsco Rail Segmentimprovement initiative ? 0.01 ? 0.05 costs (e)Harsco EnvironmentalSegment change in fairvalue to contingent ? (0.05 ) ? (0.04 ) consideration liability(f)Harsco EnvironmentalCumulative translation ? ? ? (0.03 ) adjustment liquidation (g)Taxes on above unusual (0.05 ) (0.03 ) (0.08 ) (0.04 ) items (h)Adjusted diluted earningsper share from continuingoperations, including $ 0.05 $ 0.21 (j) $ 0.15 $ 0.36 (j)acquisition amortizationexpenseAcquisition amortization 0.08 0.02 0.14 0.04 expense, net of tax (i)Adjusted diluted earningsper share from continuing $ 0.13 $ 0.23 $ 0.29 $ 0.41 (j)operations

-- Costs at Corporate associated with supporting and executing the Company's growth strategy (Q2 2020 $17.2 million pre-tax; six months 2020 $30.9 million pretax; Q2 2019 $12.4 million pre-tax; six months 2019 $15.1 million pre-tax). -- Harsco Environmental Segment severance costs (six months 2020 $5.2 million pre-tax). -- Costs at Corporate associated with amending the Company's existing Senior Secured Credit Facilities to increase the net debt to consolidated adjusted EBITDA ratio covenant (Q2 2020 $1.4 million pre-tax; six months 2020 $1.9 million pre-tax) and costs at Corporate related to the unused bridge financing commitment and Term Loan B amendment (Q2 and six months 2019 $7.4 million pre-tax). -- Harsco Environmental Segment provision for doubtful accounts related to a customer in the U.K. entering administration (Q2 and six months 2019 $5.4 million pre-tax). -- Costs associated with a productivity improvement initiative in the Harsco Rail Segment (Q2 2019 $1.2 million pre-tax; six months 2019 $3.8 million pre-tax). -- Fair value adjustment to contingent consideration liability related to the acquisition of Altek (Q2 2019 $3.9 million pretax; six months $3.5 million pre-tax). The Company adjusts operating income and Diluted earnings per share from continuing operations to exclude the impact of the change in fair value to the acquisition-related contingent consideration liability for the Altek acquisition because it believes that the adjustment for this item more closely correlates the reported financial measures with the ordinary and ongoing course of the Company's operations. -- Harsco Environmental Segment gain related to the liquidation of cumulated translation adjustment related to an exited country (six months 2019 $2.3 million pre-tax). -- Unusual items are tax-effected at the global effective tax rate, before discrete items, in effect at the time the unusual item is recorded, except for unusual items from countries where no tax benefit can be realized, in which case a zero percent tax rate is used. -- Acquisition amortization expense was $8.4 million pre-tax and $14.3 million pre-tax for Q2 and six months 2020, respectively; and $1.9 million pre-tax and $3.8 million pre-tax for Q2 and six months 2019, respectively. -- Does not total due to rounding.

The Companys management believes Adjusted diluted earnings per share from continuing operations, which is a non-GAAP financial measure, is useful to investors because it provides an overall understanding of the Companys historical and future prospects. Exclusion of unusual items permits evaluation and comparison of results for the Companys core business operations, and it is on this basis that management internally assesses the Companys performance. Exclusion of acquisition-related intangible asset amortization expense, the amount of which can vary by the timing, size and nature of the Companys acquisitions, facilitates more consistent internal comparisons of operating results over time between the Companys newly acquired and long-held businesses, and comparisons with both acquisitive and non-acquisitive peer companies. It is important to note that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.

HARSCO CORPORATIONRECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) ASREPORTED BY SEGMENT (Unaudited)

(In Harsco Harsco Harsco ? Consolidatedthousands) Environmental Clean Earth Rail Corporate Totals (a) Three Months Ended June 30, 2020:Operatingincome (loss) $ 13,563 $ (202 ) $ 8,631 $ (20,124 ) $ 1,868 as reportedCorporateacquisitionand ? ? ? 17,176 17,176 integrationcostsOperatingincome (loss) 13,563 (202 ) 8,631 (2,948 ) 19,044 excludingunusual itemsDepreciation 24,663 5,138 1,257 521 $ 31,579 Amortization 1,921 6,347 83 ? 8,351 Adjusted $ 40,147 $ 11,283 $ 9,971 $ (2,427 ) $ 58,974 EBITDARevenues as $ 203,991 $ 161,579 $ 81,711 $ 447,281 reportedAdjustedEBITDA margin 19.7 % 7.0 % 12.2 % 13.2 %(%) Three Months Ended June 30, 2019:Operatingincome (loss) $ 27,577 $ ? $ 9,443 $ (19,221 ) $ 17,799 as reportedCorporateacquisitionand ? ? ? 12,390 12,390 integrationcostsHarscoEnvironmentalSegment 5,359 ? ? ? 5,359 provision fordoubtfulaccountsHarscoEnvironmentalSegmentcumulative (3,879 ) ? ? ? (3,879 translationadjustmentliquidationHarsco RailSegmentimprovement ? ? 1,152 ? 1,152 initiativecostsOperatingincome (loss) 29,057 ? 10,595 (6,831 ) 32,821 excludingunusual itemsDepreciation 26,680 ? 1,125 718 28,523 Amortization 1,817 ? 84 ? 1,901 Adjusted $ 57,554 $ ? $ 11,804 $ (6,113 ) $ 63,245 EBITDARevenues as $ 269,338 $ ? $ 81,560 $ 350,898 reportedAdjustedEBITDA margin 21.4 % 14.5 % 18.0 %(%)

-- The Company's acquisition of ESOL closed on April 6, 2020 and the Company's acquisition of Clean Earth closed on June 28, 2019.

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest; defined benefit pension income (expense); unused debt commitment and amendment fees; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs). The sum of the Segments Adjusted EBITDA equals consolidated Adjusted EBITDA. The Companys management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company's method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATIONRECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) ASREPORTED BY SEGMENT (Unaudited)

(In Harsco Harsco Harsco ? Consolidatedthousands) Environmental Clean Earth Rail Corporate Totals (a) Six Months Ended June 30, 2020:Operatingincome (loss) $ 24,083 $ 4,043 $ 15,103 $ (38,480 ) $ 4,749 as reportedCorporateacquisitionand ? ? ? 30,939 30,939 integrationcostsHarscoEnvironmentalSegment 5,160 ? ? ? 5,160 severancecostsOperatingincome (loss) 29,243 4,043 15,103 (7,541 ) 40,848 excludingunusual itemsDepreciation 50,038 7,759 2,472 1,034 61,303 Amortization 3,857 10,245 167 ? 14,269 Adjusted $ 83,138 $ 22,047 $ 17,742 $ (6,507 ) $ 116,420 EBITDARevenues as $ 445,550 $ 240,391 $ 160,181 $ 846,122 reportedAdjustedEBITDA margin 18.7 % 9.2 % 11.1 % 13.8 %(%) Six Months Ended June 30, 2019:Operatingincome (loss) $ 52,074 $ ? $ 14,832 $ (29,283 ) $ 37,623 as reportedCorporateacquisitionand ? ? ? 15,129 15,129 integrationcostsHarscoEnvironmentalSegment 5,359 ? ? ? 5,359 provision fordoubtfulaccountsHarsco RailSegmentimprovement ? ? 3,800 ? 3,800 initiativecostsHarscoEnvironmentalSegmentchange in (3,510 ) ? ? ? (3,510 )fair value tocontingentconsiderationliabilityHarscoEnvironmentalSegmentcumulative (2,271 ) ? ? ? (2,271 )translationadjustmentliquidationOperatingincome (loss) 51,652 ? 18,632 (14,154 ) 56,130 excludingunusual itemsDepreciation 53,517 ? 2,222 1,378 57,117 Amortization 3,685 ? 154 ? 3,839 Adjusted $ 108,854 $ ? $ 21,008 $ (12,776 ) $ 117,086 EBITDARevenues as $ 530,650 $ ? $ 150,150 $ 680,800 reportedAdjustedEBITDA margin 20.5 % 14.0 % 17.2 %(%)

-- The Company's acquisition of ESOL closed on April 6, 2020 and the Company's acquisition of Clean Earth closed on June 28, 2019.

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest; defined benefit pension income (expense); unused debt commitment and amendment fees; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs). The sum of the Segments Adjusted EBITDA equals consolidated Adjusted EBITDA. The Companys management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company's method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATIONRECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, INCOME TAXES, ANDDEPRECIATION AND AMORTIZATION TO LOSS FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)

Three Months Ended June 30(In thousands) 2020Loss from continuing operations $ (9,603 ) Add back (deduct): Equity in income of unconsolidated entities, net (71 )Income tax benefit (2,304 )Defined benefit pension income (1,723 )Unused debt commitment and amendment fees 1,432 Interest expense 14,953 Interest income (816 )Depreciation 31,579 Amortization 8,351 Unusual items: Corporate acquisition and integration costs 17,176 Adjusted EBITDA $ 58,974

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest; defined benefit pension income (expense); unused debt commitment and amendment fees; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs). The sum of the Segments Adjusted EBITDA equals consolidated Adjusted EBITDA. The Companys management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company's method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATIONRECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED (USED) BY OPERATINGACTIVITIES (Unaudited)

Three Months Ended Six Months Ended June 30 June 30(In thousands) 2020 2019 2020 2019Net cash provided (used) $ 33,057 $ (9,466 ) $ 21,521 $ 5,372 by operating activitiesLess capital expenditures (23,319 ) (54,794 ) (51,213 ) (91,201 )Less expenditures for 16 (525 ) (42 ) (525 )intangible assetsPlus capital expenditures 225 2,527 1,364 3,370 for strategic ventures (a)Plus total proceeds from 1,767 1,028 3,952 2,205 sales of assets (b)Plus transaction-related 5,961 15,990 15,940 15,990 expenditures (c)Plus taxes paid on sale of 376 ? 376 ? businessFree cash flow 18,083 (45,240 ) $ (8,102 ) $ (64,789 )

-- Capital expenditures for strategic ventures represent the partners share of capital expenditures in certain ventures consolidated in the Companys financial statements. -- Asset sales are a normal part of the business model, primarily for the Harsco Environmental Segment. -- Expenditures directly related to the Company's acquisition and divestiture transactions.

The Company's management believes that Free cash flow, which is a non-GAAP financial measure, is meaningful to investors because management reviews cash flows generated from operations less capital expenditures net of asset sales proceeds and transaction-related expenditures for planning and performance evaluation purposes. It is important to note that free cash flow does not represent the total residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements and settlements of foreign currency forward exchange contracts, are not deducted from this measure. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.

Investor Contact Media ContactDavid Martin Jay Cooney717.612.5628 717.730.3683damartin@harsco.com jcooney@harsco.com