NYSE$NVRI

Harsco Corp · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Harsco reported disappointing Q4 results but marked significant progress on strategic initiatives.

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.

Headline financials

Total Revenue

$400M

Previous: $437M-8.5%
EPS (adj)

$0.12

Previous: $0.33-63.6%
Capital Expenditures

$37.9M

Previous: $40.9M-7.3%
Free Cash Flow

-$88.1M

Previous: $56.1M-256.9%
Net Income

$40.9M

Previous: $45.9M-10.9%
Operating Income

$20M

Previous: $43.7M-54.2%
Gross Profit

$84.4M

Previous: $105M-19.7%
Cash & Equivalents

$57.3M

Previous: $64.3M-10.9%
Total Assets

$2.37B

Previous: $1.63B+45.0%

Revenue & EPS history

Harsco · Revenue · Quarterly

$400M

Q4 2019-8.5%vs Q4 2018
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Harsco · $400M total across 3 segments · Q4 2019

  • Harsco Environmental
    $243M
  • Clean Earth
    $81.9M
  • Harsco Rail
    $74.6M

Forward guidance

The Company's 2020 guidance anticipates that each of its three business segments will realize earnings improvement during the year.

Tailwinds

  • 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.

Headwinds

  • 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.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q4 2019

Historical avgQ4 2019

-1.2%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+4.9%

Avg return

30 days after

46%

31 / 68 earnings

Positive

+25.1%

Q1 2023

Best reaction

-39.1%

Q4 2015

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-2.0%+0.7%
Q4 2025-6.2%-0.9%-2.2%
Q3 2025+3.9%+9.8%+48.5%
Q1 2025+1.5%+1.3%+18.6%
Q4 2024-13.4%-19.1%-22.7%
Q3 2024-23.7%-31.5%-26.3%
Q2 2024+5.2%-6.2%+1.1%
Q1 2024-13.2%-2.2%+8.9%
Q4 2023-1.5%-0.4%+14.7%
Q3 2023+9.8%+1.5%+9.1%
Q2 2023-11.2%-19.9%-20.9%
Q1 2023+25.1%+39.9%+34.5%
Q4 2022+5.0%+3.8%-18.0%
Q3 2022+4.2%+14.6%+40.8%
Q2 2022+14.0%+33.1%+11.0%
Q1 2022-12.1%-18.4%-19.1%
Q4 2021-25.2%-22.8%-21.1%
Q3 2021-23.1%-15.0%-15.2%
Q2 2021-5.6%-6.4%-8.1%
Q1 2021+10.7%+19.8%+20.9%
Q4 2020-24.2%-21.2%-21.1%
Q3 2020-4.8%-4.8%+34.5%
Q2 2020-8.7%+2.1%-13.6%
Q1 2020+11.4%-4.6%+64.0%
Q4 2019-9.0%-23.5%-59.6%
Q3 2019+0.0%+2.8%+8.5%
Q2 2019-16.6%-19.4%-28.9%
Q1 2019+21.9%+18.1%+22.4%
Q4 2018+5.5%-0.1%-8.8%
Q3 2018+8.6%+16.7%+10.0%
Q2 2018-1.4%+2.6%+11.0%
Q1 2018+10.6%+8.9%+24.4%
Q4 2017+20.0%+25.7%+28.1%
Q3 2017-9.9%-17.6%-13.5%
Q2 2017+7.7%+11.3%+12.2%
Q1 2017+14.7%+18.1%+20.5%
Q4 2016+5.1%+6.6%-10.6%
Q3 2016+8.1%+15.6%+50.0%
Q2 2016+10.3%+9.5%+3.0%
Q1 2016-0.7%
Q4 2015-39.1%
Q3 2015-3.4%
Q2 2015-12.2%
Q1 2015+0.7%
Q4 2014-5.6%
Q3 2014-2.3%
Q2 2014-6.4%
Q1 2014+4.2%
Q4 2013+1.8%
Q3 2013-0.9%
Q2 2013-5.7%
Q1 2013+0.6%
Q4 2012-3.4%
Q3 2012-0.5%
Q2 2012-1.4%
Q1 2012+1.0%
Q4 2011-1.5%
Q3 2011+6.9%
Q2 2011-8.8%
Q1 2010-0.9%
Q1 2011-0.3%
Q4 2008+1.9%
Q4 2010+1.9%
Q3 2009+4.9%
Q3 2010+4.9%
Q2 2010-2.1%
Q4 2009-2.1%
Q2 2009-2.1%

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