GlobeNewswire Inc | May 4, 2021 07:00AM EDT

May 04, 2021

-- First Quarter Revenues Totaled $529 Million, An Increase Compared with Both the Sequential and Prior Year Quarters -- Q1 GAAP Operating Income Of $25 Million And GAAP Diluted Earnings Per Share Of $0.02 -- Q1 Adjusted Earnings Per Share Of $0.15 -- Adjusted Q1 EBITDA Totaled $66 Million; Exceeding Previous Guidance Range and Prior-Year Performance -- Completed Successful Debt Refinancing in Quarter; Transaction Provides Interest Savings, Extends Maturities and Strengthens Financial Position -- 2021 Adjusted EBITDA Guidance Increased to Between $295 Million and $310 Million, Versus A Prior Range Of $275 Million To $295 Million; Change Reflects Improving Markets in Each Business Segment

CAMP HILL, Pa., May 04, 2021 (GLOBE NEWSWIRE) -- Harsco Corporation (NYSE:HSC) today reported first quarter 2021 results. On a U.S. GAAP ("GAAP") basis, first quarter of 2021 diluted earnings per share from continuing operations were $0.02 including a loss on the debt refinancing. Adjusted diluted earnings per share from continuing operations in the first quarter of 2021 were $0.15. These figures compare with first quarter of 2020 GAAP diluted loss per share from continuing operations of $0.11 and adjusted diluted earnings per share from continuing operations of $0.16.

GAAP operating income from continuing operations for the first quarter of 2021 was $25 million. Adjusted EBITDA totaled $66 million in the quarter, compared to the Company's previously provided guidance range of $52 million to $58 million.

Harsco delivered solid operational and financial performance in the first quarter, exceeding expectations in each of our businesses, said Chairman and CEO Nick Grasberger. Our results reflect strong execution by our team together with improving conditions across our end markets, including in Rail. Based on our first quarter performance and improving market visibility, we are raising our full-year 2021 guidance.

There is significant momentum currently within the Company and our near-term priorities, including acquisition integration and strengthening our financial position, remain unchanged. I am proud of our progress to advance our strategic goals, and believe that each of our business segments is well positioned to benefit as the economic recovery continues. We look forward to continuing our business transformation and positioning Harsco to pursue growth and to drive enhanced value for shareholders in the future.

Harsco CorporationSelected First Quarter Results

($ in millions, except per share Q1 2021 Q1 2020 Q4 2020amounts)Revenues $ 529 $ 399 $ 508 Operating income from continuing $ 25 $ 3 $ 11 operations - GAAPDiluted EPS from continuing operations $ 0.02 $ (0.11 ) $ (0.07 )- GAAPAdjusted EBITDA - excluding unusual $ 66 $ 57 $ 62 itemsAdjusted EBITDA margin - excluding 12.4 % 14.4 % 12.3 %unusual itemsAdjusted diluted EPS from continuing $ 0.15 $ 0.16 $ 0.12 operations - excluding unusual items

Note: 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 adjusted for acquisition-related amortization expense.

Consolidated First Quarter Operating Results

Consolidated total revenues from continuing operations were $529 million, an increase of 33 percent compared with the prior-year quarter due to the acquisition of ESOL in April 2020 as well as revenue growth in Environmental and Rail. Foreign currency translation positively impacted first quarter 2021 revenues by approximately $9 million compared with the prior-year period.

GAAP operating income from continuing operations was $25 million for the first quarter of 2021, compared with $3 million in the same quarter of last year. Meanwhile, adjusted EBITDA totaled $66 million in the first quarter of 2021 versus $57 million in the first quarter of 2020. This EBITDA increase is attributable to improved results in the Environmental segment as well as ESOL contributions to the Clean Earth segment following its acquisition in Q2 2020.

First Quarter Business Review

Environmental

($ in millions) Q1 2021 Q1 2020 Q4 2020Revenues $ 258 $ 242 $ 246 Operating income - GAAP $ 26 $ 11 $ 23 Adjusted EBITDA - excluding unusual items $ 54 $ 43 $ 52 Adjusted EBITDA margin - excluding unusual 20.8 % 17.8 % 21.2 %items

Environmental revenues totaled $258 million in the first quarter of 2021, an increase of 7 percent compared with the prior-year quarter. This increase is attributable to improved demand for environmental services and applied products as well as favorable foreign exchange movements. The segment's GAAP operating income and adjusted EBITDA totaled $26 million and $54 million, respectively, in the first quarter of 2021. These figures compare with GAAP operating income of $11 million and adjusted EBITDA of $43 million in the prior-year period. Higher demand, a more favorable mix of services and lower general and administrative spending contributed to the improvement in adjusted earnings. Results also benefited from the recovery of Brazil sales tax expenses, totaling approximately $2 million, which were not anticipated in the quarter. Lastly, Environmental's adjusted EBITDA margin increased to 20.8 percent in the first quarter of 2021 versus 17.8 percent in the comparable-quarter of 2020.

Clean Earth

($ in millions) Q1 2021 Q1 2020 Q4 2020Revenues $ 189 $ 79 $ 185 Operating income - GAAP $ 3 $ 4 $ 3 Adjusted EBITDA - excluding unusual items $ 15 $ 11 $ 16 Adjusted EBITDA margin - excluding unusual 7.7 % 13.7 % 8.6 %items

Note: The 2020 financial information provided above and discussed below for Clean Earth does not include a corporate cost allocation for ESOL.

Clean Earth revenues totaled $189 million in the first quarter of 2021, compared with $79 million in the prior-year quarter, with the increase attributable to the ESOL acquisition in Q2 2020. Segment operating income was $3 million and adjusted EBITDA totaled $15 million in the first quarter of 2021. These figures compare with $4 million and $11 million, respectively, in the prior-year period. The improvement in adjusted earnings relative to the prior-year quarter can be attributed to ESOL's contributions in the current year. This benefit was partially offset by personnel investments to support the full integration of the Clean Earth platform and other administrative expenses, some which will not occur beyond 2021, as well as lower services demand and a less favorable business mix principally within the contaminated materials business as a result of the pandemic.

Rail

($ in millions) Q1 2021 Q1 2020 Q4 2020Revenues $ 82 $ 78 $ 77 Operating income (loss) - GAAP $ 5 $ 6 $ 1 Adjusted EBITDA - excluding unusual items $ 6 $ 8 $ 3 Adjusted EBITDA margin - excluding unusual 7.3 % 9.9 % 3.3 %items

Rail revenues increased 4 percent compared with the prior-year quarter to $82 million. This change reflects higher equipment and contract services revenues, partially offset by lower aftermarket parts sales. The segment's operating income and adjusted EBITDA totaled $5 million and $6 million, respectively, in the first quarter of 2021. These figures compare with $6 million and $8 million, respectively, in the prior-year quarter. The EBITDA change year-on-year is attributable to lower aftermarket parts contribution as well as a less favorable sales mix.

Cash Flow

Net cash used by operating activities totaled $23 million in the first quarter of 2021, compared with net cash used by operating activities of $12 million in the prior-year period. Free cash flow was $(32) million in the first quarter of 2021, compared with $(26) million in the prior-year period.

The change in free cash flow compared with the prior-year quarter is attributable to changes in net cash from operating activities, including the impact of higher interest payments linked to the ESOL acquisition and the timing of working capital items, partially offset by lower net capital spending.

2021 Outlook

The Company's has increased its 2021 guidance to reflect business momentum and improved visibility in each of its businesses, relative to the outlook provided with the Company's fourth quarter 2020 results. Comments by business segments are as follows:

Environmental outlook is improved to reflect higher services and applied products demand, increased commodity prices and lower administrative spending. For the year, the primary drivers for an increase in adjusted EBITDA compared with 2020 are expected to be favorable demand for underlying services and products as well as higher commodity prices.

Clean Earth outlook is improved to reflect increasing demand for hazardous waste processing services and stronger margin performance. For the year, adjusted EBITDA is projected to increase due to the full-year impact of ESOL ownership, underlying organic growth for hazardous material services and integration benefits, partially offset by an additional allocation of Corporate costs and investments which include various one-time expenditures. Further, performance in the contaminated materials line of business is expected to strengthen in the coming quarters as a result of favorable trends within regional non-residential construction markets.

Rail outlook is improved principally as a result of strengthening demand for rail maintenance equipment as well as aftermarket parts, including in Asia. For the year, the primary drivers for an increase in adjusted EBITDA versus 2020 remain higher anticipated demand for equipment and technology products as well as higher contract services contributions.

Lastly, Corporate spending is expected to range from $36 million to $37 million for the year.

Summary Outlook highlights are as follows:

2021 Full Year Outlook GAAP Operating Income $120 - $135 millionAdjusted EBITDA $295 - $310 millionGAAP Diluted Earnings Per Share $0.45 - 0.59Adjusted Diluted Earnings Per Share $0.82 - 0.96Free Cash Flow Before Growth Capital $95 - $115 millionFree Cash Flow $35 - $55 millionNet Interest Expense $62 - $63 millionNet Capital Expenditures $150 - $170 millionEffective Tax Rate, Excluding Any Unusual Items 34 - 36% Q2 2021 Outlook GAAP Operating Income $29 - $35 millionAdjusted EBITDA $73 - $79 millionGAAP Diluted Earnings Per Share $0.13 - 0.19Adjusted Diluted Earnings Per Share $0.21 - 0.27

Conference Call

The Company will hold a conference call today at 9:00a.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 (877) 783-8494 or (614)999-1829. Enter Conference ID number 7159057.

Forward-Looking Statements

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," "outlook," "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 outcome of any disputes with customers, contractors and subcontractors; (16)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; (17) implementation of environmental remediation matters; (18) risk and uncertainty associated with intangible assets and (19) 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, 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 CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31(In thousands, except per share amounts) 2021 2020Revenues from continuing operations: Service revenues $ 424,449 $ 291,589 Product revenues 104,406 107,252 Total revenues 528,855 398,841 Costs and expenses from continuing operations: Cost of services sold 334,506 236,608 Cost of products sold 86,576 79,860 Selling, general and administrative expenses 83,043 72,499 Research and development expenses 818 1,260 Other (income) expenses, net (912 ) 5,733 Total costs and expenses 504,031 395,960 Operating income from continuing operations 24,824 2,881 Interest income 585 193 Interest expense (16,864 ) (12,649 )Unused debt commitment fees, amendment fees and (5,258 ) (488 )loss on extinguishment of debtDefined benefit pension income 3,953 1,589 Income (loss) from continuing operations before 7,240 (8,474 )income taxes and equity incomeIncome tax benefit (expense) from continuing (4,229 ) 682 operationsEquity income (loss) of unconsolidated entities, (119 ) 96 netIncome (loss) from continuing operations 2,892 (7,696 )Discontinued operations: Gain on sale of discontinued business ? 18,462 Loss from discontinued businesses (1,791 ) (225 )Income tax benefit (expense) from discontinued 464 (9,314 )businessesIncome (loss) from discontinued operations, net of (1,327 ) 8,923 taxNet income 1,565 1,227 Less: Net income attributable to noncontrolling (1,430 ) (1,086 )interestsNet income attributable to Harsco Corporation $ 135 $ 141 Amounts attributable to Harsco Corporation common stockholders:Income (loss) from continuing operations, net of $ 1,462 $ (8,782 )taxIncome (loss) from discontinued operations, net of (1,327 ) 8,923 taxNet income attributable to Harsco Corporation $ 135 $ 141 common stockholdersWeighted-average shares of common stock outstanding 79,088 78,761 Basic earnings (loss) per common share attributable to Harsco Corporationcommon stockholders:Continuing operations $ 0.02 $ (0.11 )Discontinued operations (0.02 ) 0.11 Basic earnings (loss) per share attributable to $ ? $ ? Harsco Corporation common stockholdersDiluted weighted-average shares of common stock 80,015 78,761 outstandingDiluted earnings (loss) per common share attributable to Harsco Corporationcommon stockholders:Continuing operations $ 0.02 $ (0.11 )Discontinued operations (0.02 ) 0.11 Diluted earnings (loss) per share attributable to $ ? $ ? Harsco Corporation common stockholders

HARSCO CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) March 31 December 31 2021 2020(In thousands)ASSETS Current assets: Cash and cash equivalents $ 79,308 $ 76,454 Restricted cash 3,017 3,215 Trade accounts receivable, net 417,830 407,390 Other receivables 32,998 34,253 Inventories 171,587 173,013 Current portion of contract assets 72,133 54,754 Prepaid expenses 55,231 56,099 Other current assets 14,217 10,645 Total current assets 846,321 815,823 Property, plant and equipment, net 655,462 668,209 Right-of-use assets, net 89,772 96,849 Goodwill 900,314 902,074 Intangible assets, net 430,589 438,565 Deferred income tax assets 10,155 15,274 Other assets 57,731 56,493 Total assets $ 2,990,344 $ 2,993,287 LIABILITIES Current liabilities: Short-term borrowings $ 5,062 $ 7,450 Current maturities of long-term debt 6,720 13,576 Accounts payable 209,988 218,039 Accrued compensation 43,092 45,885 Income taxes payable 4,698 3,499 Current portion of advances on contracts 41,089 39,917 Current portion of operating lease liabilities 23,632 24,862 Other current liabilities 184,451 184,727 Total current liabilities 518,732 537,955 Long-term debt 1,334,325 1,271,189 Retirement plan liabilities 206,178 231,335 Advances on contracts 31,403 45,017 Operating lease liabilities 64,029 69,860 Environmental liabilities 29,044 29,424 Deferred tax liabilities 33,178 40,653 Other liabilities 56,872 54,455 Total liabilities 2,273,761 2,279,888 HARSCO CORPORATION STOCKHOLDERS? EQUITY Common stock 144,764 144,288 Additional paid-in capital 206,944 204,078 Accumulated other comprehensive loss (643,446 ) (645,741 )Retained earnings 1,797,894 1,797,759 Treasury stock (846,182 ) (843,230 )Total Harsco Corporation stockholders? equity 659,974 657,154 Noncontrolling interests 56,609 56,245 Total equity 716,583 713,399 Total liabilities and equity $ 2,990,344 $ 2,993,287

HARSCO CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31(In thousands) 2021 2020Cash flows from operating activities: Net income $ 1,565 $ 1,227 Adjustments to reconcile net income to net cash used by operating activities:Depreciation 32,748 29,933 Amortization 8,967 6,557 Deferred income tax (benefit) expense (3,421 ) 4,412 Equity in (income) loss of unconsolidated entities, 119 (96 )netGain on sale from discontinued business ? (18,462 )Loss on early extinguishment of debt 2,668 ? Other, net 1,128 (2,007 )Changes in assets and liabilities, net of acquisitions and dispositions of businesses:Accounts receivable (16,446 ) (22,050 )Inventories 407 (16,412 )Contract assets (19,070 ) (20,311 )Right-of-use assets 6,768 3,429 Accounts payable (8,592 ) 12,308 Accrued interest payable (7,320 ) (9,891 )Accrued compensation (1,541 ) (2,752 )Advances on contracts (9,698 ) 40,464 Operating lease liabilities (6,750 ) (3,358 )Retirement plan liabilities, net (19,267 ) (15,534 )Income taxes payable - Gain on sale of discontinued ? 3,843 businessesOther assets and liabilities 14,562 (2,836 )Net cash used by operating activities (23,173 ) (11,536 )Cash flows from investing activities: Purchases of property, plant and equipment (27,382 ) (27,894 )Purchase of businesses, net of cash acquired ? (4,157 )Proceeds from sale of discontinued business, net ? 37,219 Proceeds from sales of assets 3,862 2,185 Expenditures for intangible assets (68 ) (58 )Net proceeds (payments) from settlement of foreign (1,427 ) 11,327 currency forward exchange contractsOther investing activities, net 46 ? Net cash provided (used) by investing activities (24,969 ) 18,622 Cash flows from financing activities: Short-term borrowings, net 575 3,697 Current maturities and long-term debt: Additions 434,873 52,875 Reductions (374,530 ) (38,709 )Stock-based compensation - Employee taxes paid (2,485 ) (3,437 )Deferred financing costs (6,525 ) (1,632 )Other financing activities, net (400 ) ? Net cash provided by financing activities 51,508 12,794 Effect of exchange rate changes on cash and cash (710 ) (10,824 )equivalents, including restricted cashNet increase in cash and cash equivalents, including 2,656 9,056 restricted cashCash and cash equivalents, including restricted cash, 79,669 59,732 at beginning of periodCash and cash equivalents, including restricted cash, $ 82,325 $ 68,788 at end of period

HARSCO CORPORATIONREVIEW OF OPERATIONS BY SEGMENT (Unaudited)

Three Months Ended Three Months Ended March 31, 2021 March 31, 2020 Operating Operating(In thousands) Revenues Income Revenues Income (Loss) (Loss)Harsco Environmental $ 257,986 $ 25,935 $ 241,559 $ 10,520 Harsco Clean Earth 189,279 3,178 78,812 4,245 (a)Harsco Rail 81,590 4,664 78,470 6,472 Corporate ? (8,953 ) ? (18,356 )Consolidated Totals $ 528,855 $ 24,824 $ 398,841 $ 2,881 (a) The Company's acquisition of ESOL closed on April 6, 2020.



HARSCO CORPORATIONRECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUINGOPERATIONS TO DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS ASREPORTED (Unaudited)

Three Months Ended March 31 2021 2020 Dilutedearnings(loss) pershare from $ 0.02 $ (0.11 ) continuingoperations asreportedCorporateunused debtcommitmentfees, 0.07 0.01 amendment feesand loss onextinguishmentof debt (a)Corporateacquisitionand ? 0.17 integrationcosts (b)HarscoEnvironmentalSegment ? 0.07 severancecosts (c)Taxes on aboveunusual items (0.01 ) (0.03 ) (d)Adjusteddilutedearnings pershare fromcontinuing 0.07 (f) 0.10 (f)operations,includingacquisitionamortizationexpenseAcquisitionamortization 0.08 0.06 expense, netof tax (e)Adjusteddilutedearnings per $ 0.15 $ 0.16 share fromcontinuingoperations Costs at Corporate associated with amending the Company's existing Senior Secured Credit Facilities to establish a New Term Loan the proceeds of which were used to repay in full the outstanding Term Loan A and Term Loan(a) B, to extend the maturity date of the Revolving Credit Facility and to increase certain levels set forth in the total net leverage ratio covenant (Q1 2021 $5.3 million pre-tax) and costs related to the new term loan under the Company's existing Senior Secured Credit Facilities (Q1 2020 $0.5 million pre-tax).(b) Costs at Corporate associated with supporting and executing the Company's growth strategy (Q1 2020 $13.8 million pre-tax).(c) Harsco Environmental Segment severance costs (Q1 2020 $5.2 million pre-tax). Unusual items are tax-effected at the global effective tax rate, before(d) 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.(e) Acquisition amortization expense was $8.2 million and $5.9 million pre-tax for Q1 2021 and Q1 2020, respectively.(f) 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 DILUTED EARNINGS PER SHARE FROM CONTINUINGOPERATIONS TO DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS AS REPORTED(Unaudited)

Three Months Ended December 31 2020 Diluted loss per sharefrom continuing $ (0.07 ) operations as reportedCorporate acquisitionand integration costs 0.09 (a)Harsco EnvironmentalSegment severance costs 0.03 (b)Harsco Clean EarthSegment integration 0.02 costs (c)Taxes on above unusual (0.04 ) items (d)Adjusted dilutedearnings per share fromcontinuing operations, 0.04 (f)including acquisitionamortization expenseAcquisition amortization 0.08 expense, net of tax (e)Adjusted dilutedearnings per share from $ 0.12 continuing operations (a) Costs at Corporate associated with supporting and executing the Company's growth strategy ($6.9 million pre-tax).(b) Harsco Environmental Segment severance costs ($2.2 million pre-tax).(c) Costs incurred in the Harsco Clean Earth Segment related to the integration of ESOL ($1.7 million pre-tax). Unusual items are tax-effected at the global effective tax rate, before discrete items, in effect at the time the unusual(d) 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.(e) Acquisition amortization expense was $8.4 million pre-tax.(f) 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 PROJECTED ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUINGOPERATIONS TO DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS (Unaudited)

Projected Projected Three MonthsEnding Twelve Months Ending June 30 December 31 2021 2021 Low High Low High Diluted earnings per share $ 0.13 $ 0.19 $ 0.45 $ 0.59 from continuing operationsCorporate unused debtcommitment fees, amendment ? ? 0.07 0.07 fees and loss onextinguishment of debtTaxes on above unusual items ? ? (0.01 ) (0.01 ) Adjusted diluted earnings pershare from continuingoperations, including 0.13 0.19 0.50 (a) 0.64 (a)acquisition amortizationexpenseEstimated acquisitionamortization expense, net of 0.08 0.08 0.32 0.32 taxAdjusted diluted earnings pershare from continuing $ 0.21 $ 0.27 $ 0.82 $ 0.96 operations (a) 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 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 CORPORATION RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited) (In Harsco Harsco Harsco Consolidated thousands) Environmental Clean Rail Corporate Totals Earth (a) Three Months Ended March 31, 2021: Operating income (loss) $ 25,935 $ 3,178 $ 4,664 $ (8,953 ) $ 24,824 as reported Depreciation 25,717 5,337 1,211 483 32,748 Amortization 2,048 6,083 85 ? 8,216 Adjusted $ 53,700 $ 14,598 $ 5,960 $ (8,470 ) $ 65,788 EBITDA Revenues as $ 257,986 $ 189,279 $ 81,590 $ 528,855 reported Adjusted EBITDA margin 20.8 % 7.7 % 7.3 % 12.4 % (%) Three Months Ended March 31, 2020: Operating income (loss) $ 10,520 $ 4,245 $ 6,472 $ (18,356 ) $ 2,881 as reported Corporate acquisition and ? ? ? 13,763 13,763 integration costs Harsco Environmental Segment 5,160 ? ? ? 5,160 severance costs Operating income (loss) 15,680 4,245 6,472 (4,593 ) 21,804 excluding unusual items Depreciation 25,375 2,621 1,215 513 29,724 Amortization 1,936 3,898 84 ? 5,918 Adjusted $ 42,991 $ 10,764 $ 7,771 $ (4,080 ) $ 57,446 EBITDA Revenues as $ 241,559 $ 78,812 $ 78,470 $ 398,841 reported Adjusted EBITDA margin 17.8 % 13.7 % 9.9 % 14.4 % (%) (a) The Company's acquisition of ESOL closed on April 6, 2020.

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 expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; 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 Rail Corporate Totals Earth Three Months Ended December 31, 2020:Operatingincome (loss) $ 22,606 $ 3,151 $ 1,057 $ (15,546 ) $ 11,268 as reportedCorporateacquisitionand ? ? ? 6,909 6,909 integrationcostsHarscoEnvironmentalSegment 2,239 ? ? ? 2,239 severancecostsHarsco CleanEarth Segment ? 1,745 ? ? 1,745 integrationcostsCorporatecontingent ? ? ? (136 ) (136 )considerationadjustmentsOperatingincome (loss) 24,845 4,896 1,057 (8,773 ) 22,025 excludingunusual itemsDepreciation 25,345 4,681 1,383 491 31,900 Amortization 1,998 6,351 85 ? 8,434 Adjusted $ 52,188 $ 15,928 $ 2,525 $ (8,282 ) $ 62,359 EBITDARevenues as $ 246,388 $ 185,099 $ 76,857 $ 508,344 reportedAdjustedEBITDA margin 21.2 % 8.6 % 3.3 % 12.3 %(%)

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 expense; 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 CONSOLIDATED ADJUSTED EBITDA TO CONSOLIDATED INCOME (LOSS)FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)

Three Months Ended March 31(In thousands) 2021 2020Consolidated income (loss) from continuing operations $ 2,892 $ (7,696 ) Add back (deduct): Equity in (income) loss of unconsolidated entities, 119 (96 )netIncome tax (benefit) expense 4,229 (682 )Defined benefit pension income (3,953 ) (1,589 )Unused debt commitment fees, amendment fees and loss 5,258 488 on extinguishment of debtInterest expense 16,864 12,649 Interest income (585 ) (193 )Depreciation 32,748 29,724 Amortization 8,216 5,918 Unusual items: Corporate acquisition and integration costs ? 13,763 Harsco Environmental Segment severance costs ? 5,160 Consolidated Adjusted EBITDA $ 65,788 $ 57,446

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 expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; 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 CONSOLIDATED ADJUSTED EBITDA TO CONSOLIDATED LOSS FROMCONTINUING OPERATIONS AS REPORTED (Unaudited)

Three Months Ended December 31(In thousands) 2020Consolidated loss from continuing operations $ (4,257 ) Add back (deduct): Equity in income of unconsolidated entities, net (10 )Income tax expense 1,861 Defined benefit pension income (2,058 )Interest expense 16,293 Interest income (561 )Depreciation 31,900 Amortization 8,434 Unusual items: Corporate acquisition and integration costs 6,909 Harsco Environmental Segment severance costs 2,239 Harsco Clean Earth Segment integration costs 1,745 Corporate contingent consideration adjustments (136 )Consolidated Adjusted EBITDA $ 62,359

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 expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; 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 PROJECTED CONSOLIDATED ADJUSTED EBITDA TO PROJECTED CONSOLIDATED INCOME FROM CONTINUING OPERATIONS(Unaudited) Projected Projected Three Months Ending Twelve Months Ending June 30 December 31 2021 2021 (In millions) Low High Low High Consolidatedincome from $ 12 $ 17 $ 46 $ 58 continuingoperations Add back: Income tax 6 7 26 30 expenseNet interest 16 16 63 62 Definedbenefit (4 ) (4 ) (14 ) (14 ) pension incomeDepreciationand 44 44 175 175 amortization ConsolidatedAdjusted $ 73 (a) $ 79 (a) $ 295 (a) $ 310 (a)EBITDA (a) Does not total due to rounding.

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 expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; 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 March 31(In thousands) 2021 2020Net cash used by operating activities $ (23,173 ) $ (11,536 ) Less capital expenditures (27,382 ) (27,894 ) Less expenditures for intangible assets (68 ) (58 ) Plus capital expenditures for strategic ventures 872 1,139 (a) Plus total proceeds from sales of assets (b) 3,862 2,185 Plus transaction-related expenditures (c) 14,084 9,979 Free cash flow $ (31,805 ) $ (26,185 ) Capital expenditures for strategic ventures represent the partner?s share of(a) capital expenditures in certain ventures consolidated in the Company?s condensed consolidated financial statements.(b) 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(c) transactions and costs at Corporate associated with amending the Company's existing Senior Secured Credit Facilities.

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 and income taxes 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.

HARSCO CORPORATIONRECONCILIATION OF PROJECTED FREE CASH FLOW TO PROJECTED NET CASH PROVIDED BYOPERATING ACTIVITIES (Unaudited)

Projected Twelve Months Ending December 31 2021(In millions) Low HighNet cash provided by operating activities $ 168 $ 208 Less capital expenditures (158 ) (180 )Plus total proceeds from asset sales and capital 8 10 expenditures for strategic venturesPlus transaction related expenditures 17 17 Free cash flow 35 55 Add growth capital expenditures 60 60 Free cash flow before growth capital expenditures $ 95 $ 115

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 and income taxes 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