Harsco Posts Upbeat Numbers for Quarter

Harsco Corp. reported record income for the second quarter of $41.8 million, a 35 percent increase from figures the same time last year.

The company also reported overall operating margins improved. From 9.3 percent last year to 10.7 percent this year. Second quarter sales were up 13 percent to a record $696 million, compared with $618 million in the same period last year. Positive foreign currency translation contributed approximately $14 million to this year's second quarter sales and $1.3 million to pre-tax income.

For the first six months, sales, income from continuing operations, and diluted earnings per share were all records. Income from continuing operations was $64.9 million, compared with income from continuing operations of $47.8 million in the first six months of 2004, an increase in income of 36 percent. Sales for the first six months were $1.34 billion, an increase of 14 percent from sales of $1.17 billion in the same period a year ago.

Derek Hathaway, Harsco chairman, president and CEO, said, ``We are very pleased with our strong second quarter and first half 2005 performance. Particularly encouraging is the balance of our three key growth platforms, Mill Services, Access Services and Engineered Products and Services, with all three reporting double-digit growth in sales and operating income. The Gas Technologies Segment performed below last year's results.

``As we enter the second half of 2005, we anticipate the continuation of our overall growth, and have raised our full-year EPS guidance accordingly. Harsco's business and geographic diversity serve our growth strategies well. Additionally, our strong cash flows will allow us to take advantage of the many opportunities we see ahead for market share growth.''

For the company’s mill services division, the company reported quarterly sales increased 12 percent to $271 million from $242 million in last year's second quarter.

Growth was responsible for $19 million of the increase, or 8 percent, and positive foreign currency translation contributed approximately $10 million, or 4 percent. Operating income for the quarter rose 34 percent to $33.4 million, up from $24.8 million in the second quarter of last year. Included in income was $2.8 million in net pre-tax income.

Operating margins rose to 12.3 percent in the second quarter, compared with 10.3 percent in the comparable quarter last year.

The overall outlook for the Mill Services segment in the second half of 2005 remains positive. The third quarter will likely see some further moderating of production levels by some customers. By the fourth quarter, the Company expects to begin to see a return to overall growth in steel production in its markets served, as well as the continued contribution from additional contract signings.

Industry sources have indicated that global steel production for the first six months of 2005 increased by 7.6 percent compared with the first six months of last year. Excluding China, steel production was essentially flat year-over-year. To maintain existing pricing levels, a much more disciplined steel industry has been modifying production levels to bring inventories in-line with current demand. Steel inventories are expected to normalize toward the end of the year.