GlobeNewswire Inc | Nov 3, 2020 07:00AM EST

November 03, 2020

-- Third Quarter Revenues Increased 14 Percent From The Second Quarter To $509 Million As COVID-19 Business Impacts Began To Ease; Revenues Increased 20 Percent From Prior Year Third Quarter Due Mainly To ESOL Acquisition -- Third Quarter GAAP Operating Income Of $5 Million And GAAP Diluted Loss Per Share Of $0.10 Including Planned ESOL Integration Expenditures -- Q3 Adjusted Earnings Per Share of $0.08 -- Adjusted Q3 EBITDA Of $59 Million -- Net Cash Provided By Operating Activities Of $21 Million And Free Cash Flow Increased To $18 Million In Q3 As A Result Of Capital Spending Discipline And Working Capital Initiatives -- Q4 Adjusted EBITDA Anticipated To Be Between $58 Million To $63 Million; Q4 Free Cash Flow Expected To Be Between $20 Million And $25 Million

CAMP HILL, Pa., Nov. 03, 2020 (GLOBE NEWSWIRE) -- Harsco Corporation (NYSE:HSC) today reported third quarter 2020 results. On a U.S. GAAP ("GAAP") basis, third quarter of 2020 diluted loss per share from continuing operations was $0.10 including acquisition integration costs. Adjusted diluted earnings per share from continuing operations in the third quarter of 2020 was $0.08. These figures compare with third quarter of 2019 GAAP diluted earnings per share from continuing operations of $0.22 and adjusted diluted earnings per share from continuing operations of $0.36.

GAAP operating income from continuing operations for the third quarter of 2020 was $5 million, while adjusted EBITDA excluding unusual items totaled $59 million in the quarter.

Underlying market fundamentals within Harsco Environmental and Clean Earth steadily improved during the quarter and our businesses continued to execute well, said Chairman and CEO Nick Grasberger. In recent months, we also have made strong progress on our key initiatives, including our focus on preserving financial flexibility and integrating ESOL. With respect to ESOL, during the third quarter we began executing on major improvement initiatives to strengthen operational and commercial performance, after spending our initial 100-days focused on foundation-building integration. We're confident these actions will enable us to achieve our long-term financial goals at ESOL.

Looking forward, while we expect business conditions to continue improving in the fourth quarter, our visibility remains limited and the economic environment remains fluid. In this context, we continue to focus on factors within our control, including the safety and well-being of our employees and operational excellence in all functions of our business, as well as ongoing cost and capital-spending management to preserve our financial flexibility. We believe these actions will position us to continue our progress towards becoming a single-thesis environmental solutions company and to capitalize on growth opportunities as the global economy recovers.

Harsco CorporationSelected Third Quarter Results

($ in millions, except per share Q3 2020 Q3 2019 Q2 2020amounts)Revenues $ 509 $ 423 $ 447 Operating income from continuing $ 5 $ 47 $ 2 operations - GAAPDiluted EPS from continuing $ (0.10 ) $ 0.22 $ (0.14 ) operations - GAAPAdjusted EBITDA - excluding $ 59 $ 87 $ 59 unusual itemsAdjusted EBITDA margin - 11.6 % 20.5 % 13.2 %excluding unusual itemsAdjusted diluted EPS fromcontinuing operations - $ 0.08 $ 0.36 $ 0.13 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 Third Quarter Operating Results

Consolidated total revenues from continuing operations were $509 million, an increase of 20 percent compared with the prior-year quarter due to the acquisition of ESOL in April, 2020 and higher revenues in the Rail segment. Foreign currency translation impacts on third quarter 2020 revenues were nominal compared with the prior-year period.

GAAP operating income from continuing operations was $5 million for the third quarter of 2020, compared with $47 million in the same quarter of last year. Meanwhile, adjusted EBITDA totaled $59 million in the third quarter of 2020 versus $87 million in the third quarter of 2019. This EBITDA change is attributable to COVID-19 impacts in each business segment, partially offset by ESOL contributions following its acquisition earlier in 2020.

Third Quarter Business Review

Environmental

($ in millions) Q3 2020 Q3 2019 Q2 2020Revenues $ 223 $ 261 $ 204 Operating income - GAAP $ 12 $ 33 $ 14 Adjusted EBITDA - excluding unusual items $ 40 $ 60 $ 40 Adjusted EBITDA margin - excluding unusual 17.9 % 22.9 % 19.7 %items

Environmental revenues totaled $223 million in the third quarter of 2020, compared with $261 million in the prior-year quarter. The segment's GAAP operating income and adjusted EBITDA totaled $12 million and $40 million, respectively, in the third quarter of 2020. These figures compare with GAAP operating income of $33 million and adjusted EBITDA of $60 million in the prior-year period. The change in the segment's adjusted EBITDA relative to the prior-year quarter is principally attributable to lower demand for environmental services and applied products as a result of COVID-19. Environmental's adjusted EBITDA margin was 17.9 percent in the third quarter of 2020.

Clean Earth

($ in millions) Q3 2020 Q3 2019 Q2 2020Revenues $ 194 $ 88 $ 162 Operating income - GAAP $ 9 $ 11 $ ? Adjusted EBITDA - excluding unusual items 20 19 $ 11 Adjusted EBITDA margin - excluding unusual items 10.4 % 21.4 % 7.0 %

Note: The 2019 financial information provided above and discussed below for Clean Earth does not include a corporate cost allocation and does not include ESOL.

Clean Earth revenues totaled $194 million in the third quarter of 2020, compared with $88 million in the prior-year quarter. Segment operating income was $9 million and adjusted EBITDA totaled $20 million in the third quarter of 2020. These figures compare with $11 million and $19 million, respectively, in the prior-year period. The increase in revenues and adjusted EBITDA is attributable to the ESOL acquisition in the second quarter of 2020 and higher contributions from dredged material processing, partially offset by lower demand for hazardous and contaminated materials services as a result of the COVID-19 pandemic.

Rail

($ in millions) Q3 2020 Q3 2019 2Q 2020Revenues $ 93 $ 75 $ 82 Operating income - GAAP $ 4 $ 12 $ 9 Adjusted EBITDA - excluding unusual items $ 5 $ 14 $ 10 Adjusted EBITDA margin - excluding unusual 5.8 % 19.1 % 12.2 %items

Rail revenues increased 24 percent compared with the prior-year quarter to $93 million. This change reflects higher equipment sales including revenues from long-duration supply contracts. The segment's operating income and adjusted EBITDA totaled $4 million and $5 million, respectively, in the third quarter of 2020. These figures compare with operating income of $12 million and adjusted EBITDA of $14 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.

Cash Flow

Net cash provided by operating activities totaled $21 million in the third quarter of 2020, compared with net cash provided by operating activities of $45 million in the prior-year period. Free cash flow was $18 million (before transaction expenses) in the third quarter of 2020, compared with $5 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.

Fourth Quarter Outlook

Underlying business conditions improved during the third quarter. However, the improvement realized was uneven and the pace of recovery varied within relevant end-markets. Fundamental improvement was most apparent within Harsco Environmental and Clean Earth and we expect these positive trends to continue in the fourth quarter. Meanwhile, Rail has yet to see a positive inflection as customers, particularly in North America, continue to defer capital spending as a result of pandemic-related pressures within the freight and passenger rail market. In total, the Company anticipates that its adjusted EBITDA in the fourth quarter will modestly improve, at the mid-point of guidance, versus the just-completed quarter. Specifically, Harsco expects its Q4 EBITDA to be within a range of $58 million to $63 million. This outlook also assumes that Corporate spending will be modestly higher in the fourth quarter compared with Q3 due to the timing of certain expenses.

Additionally, measures implemented earlier in 2020 to control costs remain in place and the Company is mindful that further cost actions may be necessary if the pace of economic recovery slows. The Company is also maintaining its capital spending and working capital discipline to support positive free cash flow. These ongoing actions are expected to enable Harsco to generate free cash flow of $20 million to $25 million in the final quarter of the year.

Lastly, this outlook is subject to certain risks related to COVID-19 and other factors and it assumes that any such factors will not alter the ongoing recovery in the fourth quarter.

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 (844) 467-8153 or (270)855-8732. Enter Conference ID number 7674605. Listeners are advised to dial in at least five minutes prior to the call.

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," "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 June 30, 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 Nine Months Ended September 30 September 30(In thousands,except per share 2020 2019 2020 2019amounts)Revenues fromcontinuing operations:Service revenues $ 384,279 $ 316,667 $ 1,021,196 $ 784,190 Product revenues 125,119 106,488 334,324 319,765 Total revenues 509,398 423,155 1,355,520 1,103,955 Costs and expensesfrom continuing operations:Cost of services 313,136 239,519 835,277 608,230 soldCost of products 99,043 71,970 257,512 220,634 soldSelling, generaland administrative 87,954 63,197 241,224 187,104 expensesResearch anddevelopment 568 1,341 2,620 3,210 expensesOther expenses, net 3,633 383 9,074 409 Total costs and 504,334 376,410 1,345,707 1,019,587 expensesOperating incomefrom continuing 5,064 46,745 9,813 84,368 operationsInterest income 604 445 1,613 1,569 Interest expense (15,794 ) (12,819 ) (43,396 ) (24,429 )Unused debtcommitment and ? (158 ) (1,920 ) (7,593 )amendment feesDefined benefitpension income 1,859 (1,356 ) 5,171 (4,166 )(expense)Income (loss) fromcontinuingoperations before (8,267 ) 32,857 (28,719 ) 49,749 income taxes andequity incomeIncome tax benefit 1,654 (12,601 ) 4,640 (17,814 )(expense)Equity income ofunconsolidated 9 81 176 151 entities, netIncome (loss) fromcontinuing (6,604 ) 20,337 (23,903 ) 32,086 operationsDiscontinued operations:Gain on sale ofdiscontinued ? 527,980 18,371 527,980 businessIncome (loss) fromdiscontinued (1,531 ) 272 (1,232 ) 23,958 businessesIncome tax expenserelated to (204 ) (110,732 ) (9,803 ) (112,701 )discontinuedbusinessesIncome (loss) fromdiscontinued (1,735 ) 417,520 7,336 439,237 operationsNet income (loss) (8,339 ) 437,857 (16,567 ) 471,323 Less: Net incomeattributable to (1,239 ) (2,506 ) (3,472 ) (6,633 )noncontrollinginterestsNet income (loss)attributable to $ (9,578 ) $ 435,351 $ (20,039 ) $ 464,690 Harsco CorporationAmounts attributable to Harsco Corporation common stockholders:Income (loss) fromcontinuing $ (7,843 ) $ 17,831 $ (27,375 ) $ 25,453 operations, net oftaxIncome (loss) fromdiscontinued (1,735 ) 417,520 7,336 439,237 operations, net oftaxNet income (loss)attributable to $ (9,578 ) $ 435,351 $ (20,039 ) $ 464,690 Harsco Corporationcommon stockholdersWeighted-averageshares of common 79,000 79,666 78,916 79,966 stock outstandingBasic earnings (loss) per common share attributable to Harsco Corporationcommon stockholders:Continuing $ (0.10 ) $ 0.22 $ (0.35 ) $ 0.32 operationsDiscontinued (0.02 ) 5.24 0.09 5.49 operationsBasic earnings(loss) per shareattributable to $ (0.12 ) $ 5.46 $ (0.25 ) (a) $ 5.81 Harsco Corporationcommon stockholdersDilutedweighted-average 79,000 81,110 78,916 81,749 shares of commonstock outstandingDiluted earnings (loss) per common share attributable to Harsco Corporationcommon stockholders:Continuing $ (0.10 ) $ 0.22 $ (0.35 ) $ 0.31 operationsDiscontinued (0.02 ) 5.15 0.09 5.37 operationsDiluted earnings(loss) per shareattributable to $ (0.12 ) $ 5.37 $ (0.25 ) (a) $ 5.68 Harsco Corporationcommon stockholders

(a) Does not total due to rounding.

HARSCO CORPORATIONCONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands) September 30 December 31 2020 2019ASSETS Current assets: Cash and cash equivalents $ 83,859 $ 57,259 Restricted cash 2,283 2,473 Trade accounts receivable, net 400,994 309,990 Other receivables 38,325 21,265 Inventories 170,037 156,991 Current portion of contract assets 53,256 31,166 Current portion of assets held-for-sale ? 22,093 Other current assets 66,219 51,575 Total current assets 814,973 652,812 Property, plant and equipment, net 640,887 561,786 Right-of-use assets, net 96,800 52,065 Goodwill 881,911 738,369 Intangible assets, net 443,682 299,082 Deferred income tax assets 11,871 14,288 Assets held-for-sale ? 32,029 Other assets 55,365 17,036 Total assets $ 2,945,489 $ 2,367,467 LIABILITIES Current liabilities: Short-term borrowings $ 10,246 $ 3,647 Current maturities of long-term debt 2,753 2,666 Accounts payable 230,948 176,755 Accrued compensation 41,320 37,992 Income taxes payable 3,872 18,692 Insurance liabilities 11,589 10,140 Current portion of advances on contracts 42,763 53,906 Current portion of operating lease liabilities 26,577 12,544 Current portion of liabilities of assets ? 11,344 held-for-saleOther current liabilities 169,898 137,208 Total current liabilities 539,966 464,894 Long-term debt 1,246,395 775,498 Insurance liabilities 16,267 18,515 Retirement plan liabilities 151,230 189,954 Advances on contracts 43,273 6,408 Operating lease liabilities 67,995 36,974 Liabilities of assets held-for-sale ? 12,152 Environmental liabilities 29,747 5,600 Deferred tax liabilities 43,178 24,242 Other liabilities 41,024 43,571 Total liabilities 2,179,075 1,577,808 HARSCO CORPORATION STOCKHOLDERS? EQUITY Common stock 144,268 143,400 Additional paid-in capital 206,113 200,595 Accumulated other comprehensive loss (597,052 ) (587,622 )Retained earnings 1,804,061 1,824,100 Treasury stock (843,098 ) (838,893 )Total Harsco Corporation stockholders? equity 714,292 741,580 Noncontrolling interests 52,122 48,079 Total equity 766,414 789,659 Total liabilities and equity $ 2,945,489 $ 2,367,467

HARSCO CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended Nine Months Ended September 30 September 30(In thousands) 2020 2019 2020 2019Cash flows from operating activities:Net income (loss) $ (8,339 ) $ 437,857 $ (16,567 ) $ 471,323 Adjustments to reconcile net income (loss) to net cash provided by operatingactivities:Depreciation 32,352 29,824 93,864 89,681 Amortization 9,049 6,149 24,721 11,941 Deferred income tax 3,001 15,323 2,346 11,500 expenseEquity in income ofunconsolidated entities, (9 ) (81 ) (176 ) (151 )netDividends from ? 125 ? 125 unconsolidated entitiesGain on sale from ? (527,980 ) (18,371 ) (527,980 )discontinued businessLoss on early ? 5,314 ? 5,314 extinguishment of debtOther, net 1,908 (374 ) (336 ) 2,187 Changes in assets andliabilities, net ofacquisitions and dispositions ofbusinesses:Accounts receivable 9,774 14,639 26,308 (12,395 )Income tax refunds (11,168 ) ? (11,168 ) ? receivableInventories 4,865 (22,980 ) (11,801 ) (43,477 )Contract assets 2,159 (5,200 ) (26,775 ) (5,269 )Right-of-use assets 6,361 3,976 18,195 11,204 Accounts payable 6,631 (5,302 ) (1,488 ) 5,615 Accrued interest payable (7,044 ) 7,113 (9,984 ) 7,398 Accrued compensation 6,562 1,723 1,795 (12,802 )Advances on contracts (16,691 ) (6,686 ) 19,145 (17,067 )Operating lease (6,268 ) (4,025 ) (17,864 ) (10,919 )liabilitiesRetirement plan (4,876 ) (5,654 ) (23,902 ) (18,800 )liabilities, netIncome taxes payable -Gain on sale of (13,809 ) 102,940 (10,342 ) 102,940 discontinued businessesOther assets and 6,297 (2,044 ) 4,676 (20,339 )liabilitiesNet cash provided by 20,755 44,657 42,276 50,029 operating activitiesCash flows from investing activities:Purchases of property, (27,883 ) (55,870 ) (79,096 ) (147,071 )plant and equipmentPurchase of businesses, 9,749 (39,010 ) (432,855 ) (623,495 )net of cash acquiredProceeds from sale of ? 599,685 37,219 599,685 business, netProceeds from sales of 521 5,355 4,473 7,560 assetsExpenditures for (127 ) (721 ) (169 ) (1,246 )intangible assetsNet proceeds (payments)from settlement of (229 ) 2,144 536 1,453 foreign currency forwardexchange contractsPayments for interest ? ? ? (2,758 )rate swap terminationsOther investing (256 ) ? (197 ) ? activities, netNet cash provided (used) (18,225 ) 511,583 (470,089 ) (165,872 )by investing activitiesCash flows from financing activities:Short-term borrowings, (965 ) (1,501 ) 1,712 (1,417 )netCurrent maturities and long-term debt:Additions 52,302 41,627 580,903 781,987 Reductions (49,593 ) (601,283 ) (111,999 ) (604,616 )Dividends paid to ? (5 ) ? (3,103 )noncontrolling interestsSale of noncontrolling ? 3,150 ? 4,026 interestsCommon stock acquired ? (25,752 ) ? (25,752 )for treasuryStock-based compensation (95 ) (35 ) (4,188 ) (11,202 )- Employee taxes paidPayment of contingent (2,342 ) ? (2,342 ) ? considerationDeferred financing costs ? (1,609 ) (1,928 ) (11,073 )Other financing 3 ? (1,368 ) ? activities, netNet cash provided (used) (690 ) (585,408 ) 460,790 128,850 by financing activitiesEffect of exchange ratechanges on cash and cash 251 (1,992 ) (6,567 ) (2,234 )equivalents, includingrestricted cashNet increase (decrease)in cash and cash 2,091 (31,160 ) 26,410 10,773 equivalents, includingrestricted cashCash and cashequivalents, including 84,051 109,079 59,732 67,146 restricted cash, atbeginning of periodCash and cashequivalents, including $ 86,142 $ 77,919 $ 86,142 $ 77,919 restricted cash, at endof period

HARSCO CORPORATIONREVIEW OF OPERATIONS BY SEGMENT (Unaudited)

Three Months Ended Three Months Ended September 30, 2020 (b) September 30, 2019 (b) Operating Operating Income(In thousands) Revenues Income Revenues (Loss) (Loss)Harsco $ 222,507 $ 12,317 $ 260,883 $ 32,794 EnvironmentalHarsco Clean 194,098 8,902 87,639 11,308 Earth (a)Harsco Rail 92,793 4,059 74,633 12,115 Corporate ? (20,214 ) ? (9,472 )Consolidated $ 509,398 $ 5,064 $ 423,155 $ 46,745 Totals Nine Months Ended Nine Months Ended September 30, 2020 (b) September 30, 2019 (b) Operating Operating Income(In thousands) Revenues Income Revenues (Loss) (Loss)Harsco $ 668,057 $ 36,400 $ 791,533 $ 84,868 EnvironmentalHarsco Clean 434,489 12,945 87,639 11,308 Earth (a)Harsco Rail 252,974 19,162 224,783 26,947 Corporate ? (58,694 ) ? (38,755 )Consolidated $ 1,355,520 $ 9,813 $ 1,103,955 $ 84,368 Totals

(a) 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(b) 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 CONTINUINGOPERATIONS TO DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)

Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 Diluted earnings (loss)per share from continuing $ (0.10 ) $ 0.22 $ (0.35 ) $ 0.31 operations as reportedCorporate acquisition and 0.13 0.03 0.53 0.22 integration costs (a)Harsco EnvironmentalSegment severance costs ? ? 0.07 ? (b)Corporate contingentconsideration adjustments 0.03 ? 0.03 ? (c)Corporate unused debtcommitment and amendment ? ? 0.02 0.09 fees (d)Harsco Clean EarthSegment integration costs ? ? ? ? (e)Harsco EnvironmentalSegment provision for ? 0.01 ? 0.08 doubtful accounts (f)Harsco Rail Segmentimprovement initiative ? 0.01 ? 0.06 costs (g)Harsco EnvironmentalSegment contingent ? (0.01 ) ? (0.05 ) consideration adjustments(h)Harsco EnvironmentalSegment site exit related ? ? ? (0.03 ) (i)Harsco Clean EarthSegment severance costs ? 0.02 ? 0.02 (j)Deferred tax assetvaluation allowance ? 0.03 ? 0.03 adjustment (k)Corporate acquisition (0.04 ) ? (0.04 ) ? related tax benefit (l)Taxes on above unusual (0.03 ) ? (0.11 ) (0.04 ) items (m)Adjusted diluted earningsper share from continuingoperations, including $ ? (o) $ 0.31 $ 0.15 $ 0.67 (o)acquisition amortizationexpenseAcquisition amortization 0.08 0.06 0.22 0.10 expense, net of tax (n)Adjusted diluted earningsper share from continuing $ 0.08 $ 0.36 (o) $ 0.37 $ 0.78 0operations

Costs at Corporate associated with supporting and executing the Company's(a) growth strategy (Q3 2020 $10.6 million pre-tax; nine months 2020 $41.6 million pre-tax; Q3 2019 $2.7 million pre-tax; nine months 2019 $17.9 million pre-tax).(b) Harsco Environmental Segment severance costs (nine months 2020 $5.2 million pre-tax). Adjustment to contingent consideration related to the acquisition of Clean Earth recorded on Corporate (Q3 and nine months 2020 $2.4 million pre-tax). The Company adjusts operating income and Diluted earnings per share from(c) continuing operations to exclude the impact of the change in fair value to the acquisition-related contingent consideration liability for acquisitions 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. Costs at Corporate associated with amending the Company's existing Senior(d) Secured Credit Facilities to increase the net debt to consolidated adjusted EBITDA ratio covenant (nine months 2020 $1.9 million pre-tax) and costs at Corporate related to the unused bridge financing commitment and Term Loan B amendment (nine months 2019 $7.4 million pre-tax).(e) Costs incurred in the Harsco Clean Earth Segment related to the integration of ESOL (Q3 and nine months 2020 $0.1 million, pre-tax).(f) Harsco Environmental Segment provision for doubtful accounts related to a customer in the U.K. entering administration (Q3 2019 $0.8 million and nine months 2019 $6.2 million pre-tax).(g) Costs associated with a productivity improvement initiative in the Harsco Rail Segment (Q3 2019 $0.8 million pre-tax; nine months 2019 $4.6 million pre-tax). Fair value adjustment to contingent consideration liability related to the acquisition of Altek (Q3 2019 $0.9 million pre-tax; nine months $4.4 million pre-tax). The Company adjusts operating income and Diluted earnings(h) per share from continuing operations to exclude the impact of the change in fair value to the acquisition-related contingent consideration liability for acquisitions 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.(i) Harsco Environmental Segment site exit related (Q3 2019 $0.2 million pre-tax; nine months 2019 $2.4 million pre-tax).(j) Harsco Clean Earth Segment severance recognized (Q3 and nine month 2019 $1.3 million pre-tax). Adjustment of certain existing deferred tax asset valuation allowances as a(k) result of a site exit in a certain jurisdiction in 2019 (Q3 and nine months 2019 $2.8 million).(l) Acquisition related tax benefit recorded on Corporate assumed as part of the Clean Earth Acquisition (Q3 and nine months 2020 $2.8 million). Unusual items are tax-effected at the global effective tax rate, before(m) 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 $8.3 million pre-tax and $22.5 million(n) pre-tax for Q3 and nine months 2020, respectively; and $5.7 million pre-tax and $9.5 million pre-tax for Q3 and nine months 2019, respectively.(o) 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 June 30 2020Diluted loss per share from continuing operations as reported $ (0.14 )Corporate acquisition and integration costs (a) 0.22 Corporate unused debt commitment and amendment fees (b) 0.02 Taxes on above unusual items (c) (0.05 )Adjusted diluted earnings per share from continuing operations, $ 0.05 including acquisition amortization expenseAcquisition amortization expense, net of tax (d) 0.08 Adjusted diluted earnings per share from continuing operations $ 0.13

(a) Costs at Corporate associated with supporting and executing the Company's growth strategy (Q2 2020 $17.2 million pre-tax). Costs at Corporate associated with amending the Company's existing Senior(b) Secured Credit Facilities to increase the net debt to consolidated adjusted EBITDA ratio covenant (Q2 2020 $1.4 million pre-tax). Unusual items are tax-effected at the global effective tax rate, before(c) 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.(d) Acquisition amortization expense was $8.4 million pre-tax for Q2 2020.

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 Rail Corporate Totals Earth (a) Three Months Ended September 30, 2020:Operatingincome (loss) $ 12,317 $ 8,902 $ 4,059 $ (20,214 ) $ 5,064 as reportedCorporateacquisitionand ? ? ? 10,645 10,645 integrationcostsCorporatecontingent ? ? ? 2,437 2,437 considerationadjustmentsHarsco CleanEarth Segment ? 114 ? ? 114 integrationcostsOperatingincome (loss) 12,317 9,016 4,059 (7,132 ) 18,260 excludingunusual itemsDepreciation 25,588 5,010 1,258 497 $ 32,353 Amortization 1,970 6,218 85 ? 8,273 Adjusted $ 39,875 $ 20,244 $ 5,402 $ (6,635 ) $ 58,886 EBITDARevenues as $ 222,507 $ 194,098 $ 92,793 $ 509,398 reportedAdjustedEBITDA margin 17.9 % 10.4 % 5.8 % 11.6 %(%) Three Months Ended September 30, 2019:Operatingincome (loss) $ 32,794 $ 11,308 $ 12,115 $ (9,472 ) $ 46,745 as reportedCorporateacquisitionand ? ? ? 2,743 2,743 integrationcostsHarsco CleanEarth Segment ? 1,254 ? ? 1,254 severancecostsHarscoEnvironmentalSegment (906 ) ? ? ? (906 ) contingentconsiderationadjustmentsHarsco RailSegmentimprovement ? ? 845 ? 845 initiativecostsHarscoEnvironmentalSegment 815 ? ? ? 815 provision fordoubtfulaccountsHarscoEnvironmental (156 ) ? ? ? (156 ) Segment siteexit relatedOperatingincome (loss) 32,547 12,562 12,960 (6,729 ) 51,340 excludingunusual itemsDepreciation 25,557 2,359 1,192 716 29,824 Amortization 1,751 3,834 84 ? 5,669 Adjusted $ 59,855 $ 18,755 $ 14,236 $ (6,013 ) $ 86,833 EBITDARevenues as $ 260,883 $ 87,639 $ 74,633 $ 423,155 reportedAdjustedEBITDA margin 22.9 % 21.4 % 19.1 % 20.5 %(%)

(a) 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 Rail Corporate Totals Earth (a) Nine Months Ended September 30, 2020:Operatingincome (loss) $ 36,400 $ 12,945 $ 19,162 $ (58,694 ) $ 9,813 as reportedCorporateacquisitionand ? ? ? 41,584 41,584 integrationcostsHarscoEnvironmentalSegment 5,160 ? ? ? 5,160 severancecostsCorporatecontingent ? ? ? 2,437 2,437 considerationadjustmentsHarsco CleanEarth Segment ? 114 ? ? 114 integrationcostsOperatingincome (loss) 41,560 13,059 19,162 (14,673 ) 59,108 excludingunusual itemsDepreciation 75,626 12,769 3,730 1,531 93,656 Amortization 5,827 16,463 252 ? 22,542 Adjusted $ 123,013 $ 42,291 $ 23,144 $ (13,142 ) $ 175,306 EBITDARevenues as $ 668,057 $ 434,489 $ 252,974 $ 1,355,520 reportedAdjustedEBITDA margin 18.4 % 9.7 % 9.1 % 12.9 %(%) Nine Months Ended September 30, 2019:Operatingincome (loss) $ 84,868 $ 11,308 $ 26,947 $ (38,755 ) $ 84,368 as reportedCorporateacquisitionand ? ? ? 17,872 17,872 integrationcostsHarscoEnvironmentalSegment 6,174 ? ? ? 6,174 provision fordoubtfulaccountsHarsco RailSegmentimprovement ? ? 4,645 ? 4,645 initiativecostsHarscoEnvironmentalSegment (4,416 ) ? ? ? (4,416 ) contingentconsiderationadjustmentsHarscoEnvironmental (2,427 ) ? ? ? (2,427 ) Segment siteexit relatedHarsco CleanEarth Segment ? 1,254 ? ? 1,254 severancecostsOperatingincome (loss) 84,199 12,562 31,592 (20,883 ) 107,470 excludingunusual itemsDepreciation 79,074 2,359 3,414 2,094 86,941 Amortization 5,436 3,834 238 ? 9,508 Adjusted $ 168,709 $ 18,755 $ 35,244 $ (18,789 ) $ 203,919 EBITDARevenues as $ 791,533 $ 87,639 $ 224,783 $ 1,103,955 reportedAdjustedEBITDA margin 21.3 % 21.4 % 15.7 % 18.5 %(%)

(a) 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 Clean Harsco Corporate Consolidatedthousands) Environmental Earth (a) Rail Totals Three Months Ended June 30, 2020:Operatingincome $ 13,563 $ (202 ) $ 8,631 $ (20,124 ) $ 1,868 (loss) asreportedCorporateacquisitionand ? ? ? 17,176 17,176 integrationcostsOperatingincome(loss) 13,563 (202 ) 8,631 (2,948 ) 19,044 excludingunusualitemsDepreciation 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 19.7 % 7.0 % 12.2 % 13.2 %margin (%)

(a) 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 CONSOLIDATED ADJUSTED EBITDA TO CONSOLIDATED LOSS FROMCONTINUING OPERATIONS AS REPORTED (Unaudited)

Three Months Ended September 30(In thousands) 2020Consolidated loss from continuing operations $ (6,604 ) Add back (deduct): Equity in income of unconsolidated entities, net (9 )Income tax benefit (1,654 )Defined benefit pension income (1,859 )Interest expense 15,794 Interest income (604 )Depreciation 32,353 Amortization 8,273 Unusual items: Corporate acquisition and integration costs 10,645 Corporate contingent consideration adjustments 2,437 Clean Earth Segment integration costs 114 Consolidated Adjusted EBITDA $ 58,886

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 PROJECTED CONSOLIDATED ADJUSTED EBITDA TO PROJECTEDCONSOLIDATED INCOME FROM CONTINUING OPERATIONS(Unaudited)

Projected Three Months Ending December 31 2020(In millions) Low HighConsolidated income from continuing operations $ 1 $ 3 Add back: Income tax expense 1 4 Net interest 16 16 Defined benefit pension income (2 ) (2 )Depreciation and amortization 42 42 Consolidated Adjusted EBITDA $ 58 $ 63

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 BY OPERATING ACTIVITIES (Unaudited)

Three Months Ended Nine Months Ended September 30 September 30(In thousands) 2020 2019 2020 2019Net cash provided by $ 20,755 $ 44,657 $ 42,276 $ 50,029 operating activitiesLess capital expenditures (27,883 ) (55,870 ) (79,096 ) (147,071 )Less expenditures for (127 ) (721 ) (169 ) (1,246 )intangible assetsPlus capital expenditures 603 1,461 1,967 4,831 for strategic ventures (a)Plus total proceeds from 521 5,355 4,473 7,560 sales of assets (b)Plus transaction-related 10,732 10,390 26,672 26,380 expenditures (c)Plus taxes paid on sale of 13,809 ? 14,185 ? divested businesses (d)Free cash flow $ 18,410 $ 5,272 $ 10,308 $ (59,517 )

Capital expenditures for strategic ventures represent the partner?s share(a) of capital expenditures in certain ventures consolidated in the Company?s financial statements.(b) Asset sales are a normal part of the business model, primarily for the Harsco Environmental Segment.(c) Expenditures directly related to the Company's acquisition and divestiture transactions.(d) Income taxes paid on gains on the sale of discontinued businesses.

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 Three Months Ending December 31 2020(In millions) Low HighNet cash provided by operating activities $ 50 $ 60 Less capital expenditures (31 ) (37 )Plus total proceeds from asset sales and capital 1 2 expenditures for strategic venturesFree cash flow $ 20 $ 25

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