Harsco Provides Preliminary Second Quarter Operating Results and Updated Full Year Outlook Given Unprecedented Inflation
Second Quarter Results and Improvement Plan
For the second quarter, the Company currently expects a
Operational execution in Harsco Environmental (HE) was positive in the quarter and the business experienced sequential earnings growth; however, HE second quarter results are expected to be at the lower-end of prior implied guidance due to unfavorable foreign exchange translation impacts.
Meanwhile, Clean Earth (CE) Adjusted EBITDA for the second quarter is expected to be approximately
To mitigate the impacts of these incremental external challenges, CE recently implemented a number of additional actions to restore margins and boost second-half performance. These actions include commercial pricing initiatives, in addition to those executed directly following the first quarter. In addition, the Company is implementing a cost reduction program along with efficiency initiatives focused on reducing transportation, procurement, and container expenditures. Overall, these incremental actions are expected to deliver second-half 2022 benefits of more than
Clean Earth Non-Cash Goodwill Impairment
Due to lower earnings expectations and higher discount rates,
Full Year 2022
As a result of these factors,
Harsco Environmental is anticipated to see year-over-year growth in the second-half 2022 Adjusted EBITDA, despite foreign exchange translation headwinds versus prior guidance and some sequential weakness in steel customer volumes, particularly in
Meanwhile, Clean Earth’s 2022 Adjusted EBITDA is now anticipated to be between
Additional second quarter and Outlook details will be provided when the Company reports quarterly results in early August.
Earnings Schedule and Conference Call Details
Those who wish to listen to the conference call webcast should visit the Investor Relations section of the Company’s website at www.harsco.com. The live call also can be accessed by dialing (833) 634-5019, or (412) 902-4237 for international callers. Please ask to join the
This press release contains forward-looking statements based on management’s current expectations, estimates and projections. The nature of the Company's business and the many 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 Company's ability to negotiate, complete, and integrate strategic transactions; (13) failure to complete a divestiture of the Rail division, as announced on
A further discussion of these, along with other potential risk factors, can be found in Part II, Item 1A “Risk Factors,” of the Company’s Quarterly Report on Form 10-Q for the period ended
This press release includes estimates of Adjusted EBITDA, 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. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. Adjusted EBITDA estimates should be considered as supplements to, and not substitutes for, estimates and performance measurements calculated or derived in accordance with GAAP. The Company’s Adjusted EBITDA estimates are not necessarily comparable to other similarly-titled estimates or measurements employed by other companies. The information required to reconcile the Company’s second quarter and full year Adjusted EBITDA estimates to estimates for the most comparable GAAP financial measures calculated is not reasonably ascertainable due to the difficulty in making estimates of the necessary components of the comparable GAAP financial measures.
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Source: Harsco Corporation