Harsco Reports Strong Numbers for Quarter, Year

Fourth quarter income from continuing operations was a record $35 million, compared with $25.7 million last year, an increase of 36 percent. Fourth quarter sales totaled $711 million, also a record, and up 26 percent from sales of $564 million in the same period last year. Positive foreign currency translation contributed $25 million to 2004's fourth quarter sales and $1.6 million to pre-tax income.

For the full year 2004, income from continuing operations was $113.5 million, compared with income from continuing operations of $87.0 million. Sales for the full year 2004 reached a record $2.5 billion, an increase of 18 percent from last year's sales of $2.1 billion. Positive foreign currency translation contributed approximately $109 million to sales in 2004 and $5.4 million to pre-tax income.

Derek Hathaway, Harsco’s chairman, president and CEO, said, ``Our strong fourth quarter performance completed a year in which record operating results in sales, income, EPS and cash flows were achieved, reflecting the successful execution of our strategies for growing our Mill Services business, and improved operating results from other business units, particularly the positive contribution of our international Access Services business and the significant turnaround of our industrial grating business. We enter 2005 having established a clear platform for Harsco's continued growth, armed with a strong balance sheet, growing cash flows and broad-based market opportunities.

In a review of its divisions, the company noted that sales in the mill services sector increased by more than 20 percent to $274 million from $227 million in last year's fourth quarter. Organic growth was responsible for $33 million of the increase, while positive foreign currency translation contributed $14 million, or approximately 6 percent. Operating income for the quarter rose 33 percent to $30.4 million, up from $22.8 million in the same period last year.

Positive foreign currency translation increased operating income by approximately $1.5 million. Operating margins improved by 110 basis points to 11.1 percent from 10.0 percent in the fourth quarter last year. Performance benefited from a combination of higher steel production at mills serviced, new contract signings, and the Company's six-sigma efficiency improvements and other ongoing cost reduction initiatives.

Entering 2005, the Company reaffirms its positive outlook for the Mill Services segment. Contract backlogs remain strong and additional new contract signings should add to this strength. The Company will continue to focus on growing this business and intends to dedicate a significant portion of its cash flows towards this strategic objective. Through its six-sigma and EVA initiatives, the Company also expects further incremental margin improvement in 2005 and beyond.