Harsco Corp. reported record fourth quarter and full-year 2005 results from continuing operations.
Fourth quarter income from continuing operations was a record $51.9 million, compared with $35.0 million last year, an increase of 48 percent. Fourth quarter sales totaled $733 million, also a record, and up 3 percent from sales of $711 million in the same period last year.
For the full year, income from continuing operations was $156.8 million, both records, compared with income from continuing operations of $113.5 million. Sales for the full year 2005 reached a record $2.77 billion, an increase of 11 percent from last year's sales of $2.50 billion.
Harsco chairman and CEO Derek Hathaway said, “Our strong fourth quarter performance completed a year in which record operating results in sales, income, and diluted EPS were achieved, reflecting the successful execution of the Company's strategies for growing its industrial services and niche manufactured products businesses on a global scale. We also expect to achieve record cash flow from operations for the year.
“All four of our major operating groups showed improved full-year results over the prior year. Our excellent earnings performance was led by our Access Services and Engineered Products and Services businesses as a result of strong end-markets, margin improvements and share gains. Our Mill Services business also turned in another positive year despite essentially flat global steel production, excluding China. The Gas Technologies group benefited throughout the year from significantly lower raw material cost of sales resulting in improved year-over-year performance.
“We were also pleased to announce in the final quarter of 2005 two strategic bolt-on acquisitions, one in our Mill Services segment on December 29 and one in our Access Services segment on November 21. Substantial progress has been made in completing required foreign governmental filings and obtaining the necessary approvals. The Access Services acquisition was accretive in its first full month of operation. Both of these acquisitions are expected to be accretive in 2006.
For the mill services division, sales in the fourth quarter decreased by 3 percent to $266 million from $274 million in last year's fourth quarter. Operating income for the quarter was down 14 percent to $26.1 million, from $30.4 million in the same period last year. The decline in operating income was principally the result of $3.4 million in pre-tax reorganization expenses coupled with a $0.6 million pre-tax negative effect from foreign currency translation. Otherwise operating results were essentially flat in the quarter compared with last year, affected slightly by lower steel production at mills served and the timing of new contract signings. Operating margins declined by 130 basis points to 9.8 percent from 11.1 percent in the fourth quarter last year. Without the reorganization expenses in the quarter, operating margins would have been comparable to the 11.1 percent in last year's fourth quarter.
Entering 2006, the company expects to benefit from gradually improving steel production at mills served, additional new contract signings, and full year accretion from the acquisition on December 29, 2005 of the Northern Hemisphere steel mill services operations of Brambles Industrial Services.