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Dec 31, 2019
Harsco Q4 2019 Earnings Report
Harsco reported disappointing Q4 results but marked significant progress on strategic initiatives.
Key Takeaways
Harsco Corporation reported Q4 2019 revenues of $400 million, a 21% increase compared to the prior-year quarter. GAAP operating income was $20 million, and adjusted operating income was $31 million. Diluted EPS from continuing operations was $0.03 on a GAAP basis and $0.12 on an adjusted basis.
Q4 GAAP Operating Income of $20 Million and Adjusted Operating Income of $31 Million; Both Consistent with Market Update Provided in January
Significant Progress in 2019 on Strategic Business Transformation to Single-Thesis Environmental Solutions Company, Highlighted by Acquisition of Clean Earth, Re-Branding of Harsco Environmental and Sale of Industrial Businesses
Consolidated total revenues from continuing operations were $400 million, an increase of 21 percent compared with the prior-year quarter given the acquisition of Clean Earth in the current year.
Adjusted operating income in Rail declined year-on-year principally due to the previously disclosed operational challenges following the consolidation of Rail's North American manufacturing into a single facility in South Carolina.
Harsco
Harsco
Harsco Revenue by Segment
Revenue by Segment
Harsco Environmental Revenue
CapyFin.comClean Earth Revenue
CapyFin.comHarsco Rail Revenue
CapyFin.com Forward Guidance
The Company's 2020 guidance anticipates that each of its three business segments will realize earnings improvement during the year.
Positive Outlook
- strong backlog positions that provide forward visibility in Rail and Clean Earth
- anticipated benefits from the Company's key business initiatives
- a healthy pipeline of growth opportunities in all segments
- stable-to-improving fundamentals in relevant end markets
- Environmental adjusted EBITDA is expected to increase modestly.
Challenges Ahead
- Clean Earth's adjusted EBITDA will be impacted by a $5 million allocation of Corporate costs
- Higher services demand, benefits of services and product growth initiatives and cost improvement savings are anticipated to be only partially offset by the impacts of exited sites and higher SG&A spending.
- Clean Earth adjusted EBITDA is projected to increase due to underlying organic growth and benefits of permit modifications to process additional medical and household waste as well as synergies; partially offset by a less favorable mix of business.
- Rail adjusted EBITDA is anticipated to be significantly higher compared with 2019, as a result of increased global demand for equipment and Protran Technology products, higher contracting contributions and manufacturing improvements.
- These benefits are expected to be only partially offset by a less favorable mix of after-market parts sales and higher R&D and SG&A spending.
Revenue & Expenses
Visualization of income flow from segment revenue to net income