 Second Quarter GAAP Loss of 10 Million or 0.14 Per Share Including Anticipated Acquisition, Integration and Financing Costs; Adjusted Earnings Per Share of 0.13 Adjusted EBITDA Totaled 59 Million, Highlighting Positive Operational and Cost Performance While Facing COVID-19 Headwinds, as Well as Timing of Expenditures and Acquisition Contributions Net Cash Provided by Operating Activities of 33 Million in Q2; Free Cash Flow Totaled 18 Million Driven by Actions to Lower Capital Spending as Well as Working Capital Initiatives Company Net Leverage Ratio of 3.9x and Liquidity Position Exceeded 390 Million at Quarter-End Business Continuity Actions In Response to COVID-19 Driving Significant Cost Reductions; Company Remains Committed to Lower Capital Spending and Positive Free Cash FlowCAMP HILL, Pa., Aug. 05, 2020 GLOBE NEWSWIRE -- Harsco Corporation NYSE: HSC today reported second quarter 2020 results. On a U.S. GAAP GAAP basis, second quarter of 2020 diluted loss per share from continuing operations was 0.14, which included acquisition and integration costs as well as expenses incurred to amend the Companys credit facilities. Adjusted diluted earnings per share from continuing operations in the second quarter of 2020 were 0.13. These figures compare with second quarter of 2019 GAAP diluted loss per share from continuing operations of 0.04 and adjusted diluted earnings per share from continuing operations of 0.23.GAAP operating income from continuing operations for the second quarter of 2020 was 2 million, while adjusted EBITDA excluding unusual items totaled 59 million in the quarter. Against a challenging operating environment in the second quarter, we took further action to control costs, optimize spending and enhance our overall financial flexibility, said Chairman and CEO Nick Grasberger. Working together, we are controlling what we can control and moving the company forward with a focus on safety, cost management, and the flawless execution of operational initiatives.Despite persistent headwinds, we made significant progress in the quarter on a number of key strategic and operational initiatives. Our transformation into a pure-play environmental solutions company continued as we began the integration of ESOL with Clean Earth, and reached our first 100-days of ownership. ESOL represents a tremendous value-creating opportunity and the integration process has been running smoothly, with a focus on instilling greater process discipline within the organization and strengthening its operational and commercial effectiveness. In addition, Rails SCOR program remains on pace to achieve its objectives.While we are cautiously optimistic that business activity in our end markets troughed in the second quarter, we expect the impact from the COVID-19 pandemic and market volatility to persist. We continue to believe that our ongoing transformation efforts position Harsco to be a stronger, more resilient company, poised to capitalize on growth opportunities. I am confident that our continued focus on costs, cash flow, debt reduction and serving our customers will continue to help us navigate these uncertain times and guide us as the global economy recovers.Harsco CorporationSelected Second Quarter Results in millions, except per share amounts Q2 2020 Q2 2019 Revenues 447 351 Operating income from continuing operations - GAAP 2 18 Diluted EPS from continuing operations - GAAP 0.14 0.04 Adjusted EBITDA - excluding unusual items 59 63 Adjusted EBITDA margin - excluding unusual items 13.2 18.0 Adjusted diluted EPS from continuing operations - excluding unusual items 0.13 0.23 Note: Income statement details above and commentary below reflect that the prior Industrial segment was reclassified as Discontinued Operations in 2019. Also, 2020 details include ESOL from the date the business was acquired on April 6, 2020 and ESOL results are reported within the Clean Earth segment. 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 also adjusted for acquisition-related amortization expense.Consolidated Second Quarter Operating ResultsConsolidated total revenues from continuing operations were 447 million, an increase of 27 percent compared with the prior-year quarter due to acquisitions Clean Earth and ESOL since mid-2019. The revenue contributions from the acquired businesses were partially offset by lower demand for products and services as a result of the COVID-19 pandemic and FX impacts. Foreign currency translation negatively impacted second quarter 2020 revenues by approximately 13 million compared with the prior-year period.GAAP operating income from continuing operations was 2 million for the second quarter of 2020, compared with 18 million in the same quarter of last year. Meanwhile, adjusted EBITDA totaled 59 million in the second quarter of 2020 versus 63 million in the second quarter of 2019. This change is attributable to lower profitability in the Harsco Environmental and Rail segments due to COVID-19, partially offset by acquisition contributions and lower adjusted Corporate spending.Second Quarter Business ReviewEnvironmental in millions Q2 2020 Q2 2019 Change Revenues 204 269 24 Operating income - GAAP 14 28 51 Adjusted EBITDA - excluding unusual items 40 58 30 Adjusted EBITDA margin - excluding unusual items 19.7 21.4 Environmental revenues totaled 204 million in the second quarter of 2020, compared with 269 million in the prior-year quarter. This change is principally attributable to lower demand for environmental services and applied products as a result of COVID-19 and foreign currency translation impacts. The segments GAAP operating income and adjusted EBITDA totaled 14 million and 40 million, respectively, in the second quarter of 2020. These figures compare with GAAP operating income of 28 million and adjusted EBITDA of 58 million in the prior-year period. The change in the segments adjusted EBITDA relative to the prior-year quarter is attributable to the above factors, partially offset by lower SGA and operating costs resulting from Company actions to mitigate the COVID-19 economic headwinds. Environmentals adjusted EBITDA margin was 19.7 percent in the second quarter of 2020.Clean Earth in millions Q2 2020 Q2 2019 Change Revenues 162 69 134 Operating income - GAAP 4 nmf Adjusted EBITDA - excluding unusual items 11.3 10.8 5 Adjusted EBITDA margin - excluding unusual items 7.0 15.6 Note: The 2019 financial information provided above and discussed below for Clean Earth is not incorporated within Harscos consolidated results and is provided only for comparison purposes. Also, these prior-year figures do not include a corporate cost allocation and do not include ESOL.Clean Earth revenues totaled 162 million in the second quarter of 2020, compared with 69 million in the prior-year quarter. Segment operating income was nominal and adjusted EBITDA totaled 11 million in the second quarter of 2020. These figures compare with 4 million and 11 million, respectively, in the prior-year period. The increase in revenues is attributable to the ESOL acquisition in April 2020, while the EBITDA comparison for the periods reflects that the positive acquisition contributions were offset by lower demand for hazardous and non-hazardous materials services as a result of COVID-19 pandemic.Rail in millions Q2 2020 Q2 2019 Change Revenues 82 82 Operating income - GAAP 8.6 9.4 9 Adjusted EBITDA - excluding unusual items 10 12 16 Adjusted EBITDA margin - excluding unusual items 12.2 14.5 Rail revenues were essentially unchanged at 82 million. The segments operating income and adjusted EBITDA totaled 9 million and 10 million, respectively, in the second quarter of 2020. These figures compare with operating income of 9 million and adjusted EBITDA of 12 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, partially offset by higher contracting contributions and lower administrative expenses. Rails adjusted EBITDA margin was 12.2 percent in the second quarter of 2020.Cash FlowNet cash provided by operating activities totaled 33 million in the second quarter of 2020, compared with net cash used by operating activities of 9 million in the prior-year period. Free cash flow was 18 million before transaction expenses in the second quarter of 2020, compared with 45 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.COVID-19 Update OutlookThe Company believes that underlying business volumes stabilized early in the second quarter. However, business conditions remain dynamic and uneven across various markets, and the pace of the recovery remains slow. In this context, Harsco continues to take the necessary steps to minimize the operational and financial impacts of the pandemic on the business, while providing critical services and products to its customers and adhering to its Global Principles, which set operating standards for current business needs as well as workplace safety and flexibility measures.Capital expenditures will remain tightly controlled for the foreseeable future and Harsco continues to defer certain tax and pension payments. These efforts will strengthen the Companys free cash flow and preserve its financial flexibility. 