FORM 10-Q |
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
![]() |
Delaware | 23-1483991 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
350 Poplar Church Road, Camp Hill, Pennsylvania | 17011 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ý | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Class | Outstanding at April 30, 2015 | |
Common stock, par value $1.25 per share | 80,087,180 |
Page | ||
(In thousands) | March 31 2015 | December 31 2014 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 66,549 | $ | 62,843 | ||||
Trade accounts receivable, net | 332,005 | 325,104 | ||||||
Other receivables | 21,709 | 28,145 | ||||||
Inventories | 194,598 | 178,922 | ||||||
Assets held-for-sale | 1,328 | 1,355 | ||||||
Other current assets | 85,860 | 87,110 | ||||||
Total current assets | 702,049 | 683,479 | ||||||
Investments | 284,693 | 288,505 | ||||||
Property, plant and equipment, net | 623,364 | 663,244 | ||||||
Goodwill | 402,754 | 416,155 | ||||||
Intangible assets, net | 58,385 | 58,524 | ||||||
Other assets | 192,138 | 159,320 | ||||||
Total assets | $ | 2,263,383 | $ | 2,269,227 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 18,643 | $ | 16,748 | ||||
Current maturities of long-term debt | 24,899 | 25,188 | ||||||
Accounts payable | 143,823 | 146,506 | ||||||
Accrued compensation | 41,824 | 53,780 | ||||||
Income taxes payable | 6,732 | 1,985 | ||||||
Dividends payable | 16,418 | 16,535 | ||||||
Insurance liabilities | 12,192 | 12,415 | ||||||
Advances on contracts | 116,514 | 117,398 | ||||||
Due to unconsolidated affiliate | 8,317 | 8,142 | ||||||
Unit adjustment liability | 22,320 | 22,320 | ||||||
Other current liabilities | 145,356 | 144,543 | ||||||
Total current liabilities | 557,038 | 565,560 | ||||||
Long-term debt | 875,277 | 829,709 | ||||||
Deferred income taxes | 7,164 | 6,379 | ||||||
Insurance liabilities | 35,837 | 35,470 | ||||||
Retirement plan liabilities | 316,948 | 350,889 | ||||||
Due to unconsolidated affiliate | 20,469 | 20,169 | ||||||
Unit adjustment liability | 68,107 | 71,442 | ||||||
Other liabilities | 34,722 | 37,699 | ||||||
Total liabilities | 1,915,562 | 1,917,317 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
HARSCO CORPORATION STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock | — | — | ||||||
Common stock | 140,489 | 140,444 | ||||||
Additional paid-in capital | 166,346 | 165,666 | ||||||
Accumulated other comprehensive loss | (527,475 | ) | (532,256 | ) | ||||
Retained earnings | 1,282,465 | 1,283,549 | ||||||
Treasury stock | (760,227 | ) | (749,815 | ) | ||||
Total Harsco Corporation stockholders’ equity | 301,598 | 307,588 | ||||||
Noncontrolling interests | 46,223 | 44,322 | ||||||
Total equity | 347,821 | 351,910 | ||||||
Total liabilities and equity | $ | 2,263,383 | $ | 2,269,227 |
HARSCO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands, except per share amounts) | 2015 | 2014 | ||||||
Revenues from continuing operations: | ||||||||
Service revenues | $ | 287,428 | $ | 350,794 | ||||
Product revenues | 164,151 | 161,689 | ||||||
Total revenues | 451,579 | 512,483 | ||||||
Costs and expenses from continuing operations: | ||||||||
Cost of services sold | 245,861 | 294,308 | ||||||
Cost of products sold | 115,221 | 115,466 | ||||||
Selling, general and administrative expenses | 63,902 | 66,794 | ||||||
Research and development expenses | 919 | 2,663 | ||||||
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | — | 1,681 | ||||||
Other income | (13,205 | ) | (656 | ) | ||||
Total costs and expenses | 412,698 | 480,256 | ||||||
Operating income from continuing operations | 38,881 | 32,227 | ||||||
Interest income | 256 | 297 | ||||||
Interest expense | (11,884 | ) | (11,421 | ) | ||||
Change in fair value to the unit adjustment liability | (2,245 | ) | (2,546 | ) | ||||
Income from continuing operations before income taxes and equity income | 25,008 | 18,557 | ||||||
Income tax expense | (12,855 | ) | (5,311 | ) | ||||
Equity in income (loss) of unconsolidated entities, net | 4,083 | (1,230 | ) | |||||
Income from continuing operations | 16,236 | 12,016 | ||||||
Discontinued operations: | ||||||||
Loss on disposal of discontinued business | (646 | ) | (640 | ) | ||||
Income tax benefit related to discontinued business | 239 | 237 | ||||||
Loss from discontinued operations | (407 | ) | (403 | ) | ||||
Net income | 15,829 | 11,613 | ||||||
Less: Net income attributable to noncontrolling interests | (565 | ) | (1,402 | ) | ||||
Net income attributable to Harsco Corporation | $ | 15,264 | $ | 10,211 | ||||
Amounts attributable to Harsco Corporation common stockholders: | ||||||||
Income from continuing operations, net of tax | $ | 15,671 | $ | 10,614 | ||||
Loss from discontinued operations, net of tax | (407 | ) | (403 | ) | ||||
Net income attributable to Harsco Corporation common stockholders | $ | 15,264 | $ | 10,211 | ||||
Weighted-average shares of common stock outstanding | 80,240 | 80,816 | ||||||
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | ||||||||
Continuing operations | $ | 0.20 | $ | 0.13 | ||||
Discontinued operations | (0.01 | ) | — | |||||
Basic earnings per share attributable to Harsco Corporation common stockholders | $ | 0.19 | $ | 0.13 | ||||
Diluted weighted-average shares of common stock outstanding | 80,352 | 81,022 | ||||||
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | ||||||||
Continuing operations | $ | 0.20 | $ | 0.13 | ||||
Discontinued operations | (0.01 | ) | — | |||||
Diluted earnings per share attributable to Harsco Corporation common stockholders | $ | 0.19 | $ | 0.13 | ||||
Cash dividends declared per common share | $ | 0.205 | $ | 0.205 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Net income | $ | 15,829 | $ | 11,613 | ||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments, net of deferred income taxes of $(1,650) and $(101) in 2015 and 2014, respectively | (28,842 | ) | (1,270 | ) | ||||
Net gain (loss) on cash flow hedging instruments, net of deferred income taxes of $(1,522) and $386 in 2015 and 2014, respectively | 7,574 | (3,963 | ) | |||||
Pension liability adjustments, net of deferred income taxes of $(3,091) and $(406) in 2015 and 2014, respectively | 25,293 | 3,681 | ||||||
Unrealized loss on marketable securities, net of deferred income taxes of $4 and $3 in 2015 and 2014, respectively | (8 | ) | (5 | ) | ||||
Total other comprehensive income (loss) | 4,017 | (1,557 | ) | |||||
Total comprehensive income | 19,846 | 10,056 | ||||||
Less: Comprehensive (income) loss attributable to noncontrolling interests | 199 | (1,102 | ) | |||||
Comprehensive income attributable to Harsco Corporation | $ | 20,045 | $ | 8,954 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 15,829 | $ | 11,613 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 36,654 | 41,834 | ||||||
Amortization | 3,237 | 3,001 | ||||||
Change in fair value to the unit adjustment liability | 2,245 | 2,546 | ||||||
Deferred income tax expense | 2,526 | 2,352 | ||||||
Equity in (income) loss of unconsolidated entities, net | (4,083 | ) | 1,230 | |||||
Loss on disposal of Harsco Infrastructure Segment | — | 242 | ||||||
Other, net | (9,612 | ) | (750 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (20,151 | ) | (49,455 | ) | ||||
Inventories | (19,496 | ) | (4,273 | ) | ||||
Accounts payable | 5,775 | (6,246 | ) | |||||
Accrued interest payable | 6,828 | 8,207 | ||||||
Accrued compensation | (9,019 | ) | (3,586 | ) | ||||
Advances on contracts | 8,693 | 34,006 | ||||||
Harsco 2011/2012 Restructuring Program accrual | (188 | ) | (528 | ) | ||||
Other assets and liabilities | (8,765 | ) | (12,709 | ) | ||||
Net cash provided by operating activities | 10,473 | 27,484 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (31,630 | ) | (39,839 | ) | ||||
Proceeds from the Infrastructure Transaction | — | 3,296 | ||||||
Proceeds from sales of assets | 6,781 | 3,806 | ||||||
Purchases of businesses, net of cash acquired | (6,828 | ) | (26,046 | ) | ||||
Payment of unit adjustment liability | (5,580 | ) | (5,580 | ) | ||||
Other investing activities, net | 2,360 | (1,178 | ) | |||||
Net cash used by investing activities | (34,897 | ) | (65,541 | ) | ||||
Cash flows from financing activities: | ||||||||
Short-term borrowings, net | 4,898 | (1,721 | ) | |||||
Current maturities and long-term debt: | ||||||||
Additions | 52,039 | 65,000 | ||||||
Reductions | (5,147 | ) | (18,424 | ) | ||||
Cash dividends paid on common stock | (16,443 | ) | (16,562 | ) | ||||
Common stock acquired for treasury | (12,143 | ) | — | |||||
Other financing activities, net | (2,049 | ) | — | |||||
Net cash provided by financing activities | 21,155 | 28,293 | ||||||
Effect of exchange rate changes on cash | 6,975 | (479 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 3,706 | (10,243 | ) | |||||
Cash and cash equivalents at beginning of period | 62,843 | 93,605 | ||||||
Cash and cash equivalents at end of period | $ | 66,549 | $ | 83,362 |
Harsco Corporation Stockholders’ Equity | ||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | ||||||||||||||||||||||||
(In thousands, except share and per share amounts) | Issued | Treasury | Total | |||||||||||||||||||||||||
Balances, January 1, 2014 | $ | 140,248 | $ | (746,237 | ) | $ | 159,025 | $ | 1,372,041 | $ | (370,615 | ) | $ | 43,093 | $ | 597,555 | ||||||||||||
Net income | 10,211 | 1,402 | 11,613 | |||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||
Common @ $0.205 per share | (16,572 | ) | (16,572 | ) | ||||||||||||||||||||||||
Noncontrolling interests | (133 | ) | (133 | ) | ||||||||||||||||||||||||
Total other comprehensive loss, net of deferred income taxes of $(118) | (1,257 | ) | (300 | ) | (1,557 | ) | ||||||||||||||||||||||
Contributions from noncontrolling interests | 1,560 | 1,560 | ||||||||||||||||||||||||||
Noncontrolling interests transferred in the Infrastructure Transaction | (905 | ) | (905 | ) | ||||||||||||||||||||||||
Vesting of restricted stock units and other stock grants, net 39,941 shares | 79 | (593 | ) | 1,571 | 1,057 | |||||||||||||||||||||||
Amortization of unearned portion of stock-based compensation, net of forfeitures | 452 | 452 | ||||||||||||||||||||||||||
Balances, March 31, 2014 | $ | 140,327 | $ | (746,830 | ) | $ | 161,048 | $ | 1,365,680 | $ | (371,872 | ) | $ | 44,717 | $ | 593,070 |
Harsco Corporation Stockholders’ Equity | ||||||||||||||||||||||||||||
(In thousands, except share and per share amounts) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | |||||||||||||||||||||||
Issued | Treasury | Total | ||||||||||||||||||||||||||
Balances, January 1, 2015 | $ | 140,444 | $ | (749,815 | ) | $ | 165,666 | $ | 1,283,549 | $ | (532,256 | ) | $ | 44,322 | $ | 351,910 | ||||||||||||
Net income | 15,264 | 565 | 15,829 | |||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||
Common @ $0.205 per share | (16,348 | ) | (16,348 | ) | ||||||||||||||||||||||||
Total other comprehensive income, net of deferred income taxes of $(6,259) | 4,781 | (764 | ) | 4,017 | ||||||||||||||||||||||||
Contributions from noncontrolling interests | 2,100 | 2,100 | ||||||||||||||||||||||||||
Vesting of restricted stock units and other stock grants, net 23,962 shares | 45 | (192 | ) | (81 | ) | (228 | ) | |||||||||||||||||||||
Treasury shares repurchased, 596,632 shares | (10,220 | ) | (10,220 | ) | ||||||||||||||||||||||||
Amortization of unearned portion of stock-based compensation, net of forfeitures | 761 | 761 | ||||||||||||||||||||||||||
Balances, March 31, 2015 | $ | 140,489 | $ | (760,227 | ) | $ | 166,346 | $ | 1,282,465 | $ | (527,475 | ) | $ | 46,223 | $ | 347,821 |
December 31, 2014 | ||||||||||||
(In thousands) | As Previously Reported | Revision | As Revised | |||||||||
ASSETS | ||||||||||||
Inventories | $ | 177,265 | $ | 1,657 | $ | 178,922 | ||||||
Total current assets | 681,822 | 1,657 | 683,479 | |||||||||
Other assets | 155,551 | 3,769 | 159,320 | |||||||||
Total assets | 2,263,801 | 5,426 | 2,269,227 | |||||||||
LIABILITIES | ||||||||||||
Other liabilities | $ | 25,849 | $ | 11,850 | $ | 37,699 | ||||||
Total liabilities | 1,905,467 | 11,850 | 1,917,317 | |||||||||
HARSCO CORPORATION STOCKHOLDERS’ EQUITY | ||||||||||||
Accumulated other comprehensive loss | $ | (532,491 | ) | $ | 235 | $ | (532,256 | ) | ||||
Retained earnings | 1,290,208 | (6,659 | ) | 1,283,549 | ||||||||
Total Harsco Corporation stockholders’ equity | 314,012 | (6,424 | ) | 307,588 | ||||||||
Total equity | 358,334 | (6,424 | ) | 351,910 | ||||||||
Total liabilities and equity | 2,263,801 | 5,426 | 2,269,227 |
Three Months Ended | ||||||||||||
March 31, 2014 | ||||||||||||
(In thousands, except per share amounts) | As Previously Reported | Revision | As Revised | |||||||||
Revenues from continuing operations: | ||||||||||||
Service revenues | $ | 351,010 | $ | (216 | ) | $ | 350,794 | |||||
Total revenues | 512,699 | (216 | ) | 512,483 | ||||||||
Costs and expenses from continuing operations: | ||||||||||||
Cost of services sold | $ | 293,999 | $ | 309 | $ | 294,308 | ||||||
Research and development expenses | 2,619 | 44 | 2,663 | |||||||||
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | 2,138 | (457 | ) | 1,681 | ||||||||
Total costs and expenses | 480,360 | (104 | ) | 480,256 | ||||||||
Operating income from continuing operations | $ | 32,339 | $ | (112 | ) | $ | 32,227 | |||||
Income from continuing operations before income taxes and equity income | 18,669 | (112 | ) | 18,557 | ||||||||
Income tax expense | (4,495 | ) | (816 | ) | (5,311 | ) | ||||||
Income from continuing operations | 12,944 | (928 | ) | 12,016 | ||||||||
Net income | 12,541 | (928 | ) | 11,613 | ||||||||
Net income attributable to Harsco Corporation | 11,139 | (928 | ) | 10,211 | ||||||||
Amounts attributable to Harsco Corporation common stockholders: | ||||||||||||
Income from continuing operations, net of tax | $ | 11,542 | $ | (928 | ) | $ | 10,614 | |||||
Net income attributable to Harsco Corporation common stockholders | 11,139 | (928 | ) | 10,211 | ||||||||
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | ||||||||||||
Continuing operations | $ | 0.14 | $ | (0.01 | ) | $ | 0.13 | |||||
Basic earnings per share attributable to Harsco Corporation common stockholders | 0.14 | (0.01 | ) | 0.13 | ||||||||
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | ||||||||||||
Continuing operations | $ | 0.14 | $ | (0.01 | ) | $ | 0.13 | |||||
Diluted earnings per share attributable to Harsco Corporation common stockholders | 0.14 | (0.01 | ) | 0.13 |
Three Months Ended | ||||||||||||
March 31, 2014 | ||||||||||||
(In thousands) | As Previously Reported | Revision | As Revised | |||||||||
Net cash provided (used) by: | ||||||||||||
Operating activities | $ | 27,528 | $ | (44 | ) | $ | 27,484 | |||||
Investing activities | (65,585 | ) | 44 | (65,541 | ) |
(In thousands) | March 31 2015 | December 31 2014 | ||||||
Trade accounts receivable | $ | 346,241 | $ | 340,223 | ||||
Less: Allowance for doubtful accounts | (14,236 | ) | (15,119 | ) | ||||
Trade accounts receivable, net | $ | 332,005 | $ | 325,104 | ||||
Other receivables (a) | $ | 21,709 | $ | 28,145 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Provision for doubtful accounts related to trade accounts receivable | $ | 196 | $ | (19 | ) |
(In thousands) | March 31 2015 | December 31 2014 | ||||||
Finished goods | $ | 33,480 | $ | 30,525 | ||||
Work-in-process | 43,261 | 28,690 | ||||||
Raw materials and purchased parts | 85,599 | 87,985 | ||||||
Stores and supplies | 32,258 | 31,722 | ||||||
Inventories | $ | 194,598 | $ | 178,922 |
(In thousands) | Three Months Ended December 31 2014 | Period From November 27 2013 Through December 31 2013 (a) | ||||||
Summarized Statement of Operations Information of Brand: | ||||||||
Net revenues | $ | 804,199 | $ | 236,094 | ||||
Gross profit | 197,241 | 48,832 | ||||||
Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries | 14,217 | (4,245 | ) | |||||
Harsco's equity in income (loss) of Brand | 4,083 | (1,231 | ) |
(In thousands) | March 31 2015 | December 31 2014 | ||||||
Balances due from Brand | $ | 2,579 | $ | 1,860 | ||||
Balances due to Brand | 28,786 | 28,311 |
(In thousands) | March 31 2015 | December 31 2014 | ||||||
Land | $ | 14,962 | $ | 15,721 | ||||
Land improvements | 15,621 | 15,898 | ||||||
Buildings and improvements | 199,362 | 205,409 | ||||||
Machinery and equipment | 1,773,141 | 1,861,965 | ||||||
Construction in progress | 72,367 | 87,414 | ||||||
Gross property, plant and equipment | 2,075,453 | 2,186,407 | ||||||
Less: Accumulated depreciation | (1,452,089 | ) | (1,523,163 | ) | ||||
Property, plant and equipment, net | $ | 623,364 | $ | 663,244 |
(In thousands) | Harsco Metals & Minerals Segment | Harsco Industrial Segment | Harsco Rail Segment | Consolidated Totals | ||||||||||||
Balance at December 31, 2014 | $ | 400,006 | $ | 6,839 | $ | 9,310 | $ | 416,155 | ||||||||
Changes to goodwill (a) | — | — | 2,060 | 2,060 | ||||||||||||
Foreign currency translation | (15,461 | ) | — | — | (15,461 | ) | ||||||||||
Balance at March 31, 2015 | $ | 384,545 | $ | 6,839 | $ | 11,370 | $ | 402,754 |
March 31, 2015 | December 31, 2014 | |||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Customer related | $ | 154,415 | $ | 109,674 | $ | 157,530 | $ | 112,211 | ||||||||
Non-compete agreements | 1,092 | 1,032 | 1,107 | 1,039 | ||||||||||||
Patents | 6,866 | 5,369 | 6,079 | 5,399 | ||||||||||||
Technology related | 26,009 | 21,476 | 26,548 | 21,233 | ||||||||||||
Trade names | 8,314 | 3,841 | 7,745 | 3,733 | ||||||||||||
Other | 7,576 | 4,269 | 7,420 | 4,290 | ||||||||||||
Total | $ | 204,272 | $ | 145,661 | $ | 206,429 | $ | 147,905 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Amortization expense for intangible assets | $ | 2,137 | $ | 2,553 |
Full Year | ||||||||||||||||||||
(In thousands) | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||
Estimated amortization expense (b) | $ | 8,750 | $ | 8,250 | $ | 5,500 | $ | 5,250 | $ | 5,250 |
Three Months Ended | ||||||||||||||||
March 31 | ||||||||||||||||
Defined Benefit Pension Plans Net Periodic Pension Cost | U. S. Plans | International Plans | ||||||||||||||
(In thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | 722 | $ | 558 | $ | 438 | $ | 407 | ||||||||
Interest cost | 3,089 | 3,217 | 9,189 | 10,912 | ||||||||||||
Expected return on plan assets | (4,203 | ) | (4,196 | ) | (12,674 | ) | (12,588 | ) | ||||||||
Recognized prior service costs | 20 | 22 | 49 | 46 | ||||||||||||
Recognized loss | 1,230 | 838 | 4,235 | 3,553 | ||||||||||||
Defined benefit pension plans net periodic pension cost | $ | 858 | $ | 439 | $ | 1,237 | $ | 2,330 |
Three Months Ended | ||||||||
Company Contributions | March 31 | |||||||
(In thousands) | 2015 | 2014 | ||||||
Defined benefit pension plans: | ||||||||
United States | $ | 682 | $ | 566 | ||||
International | 16,066 | 17,421 | ||||||
Multiemployer pension plans | 565 | 701 | ||||||
Defined contribution pension plans | 3,806 | 4,069 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands, except per share amounts) | 2015 | 2014 | ||||||
Income from continuing operations attributable to Harsco Corporation common stockholders | $ | 15,671 | $ | 10,614 | ||||
Weighted-average shares outstanding - basic | 80,240 | 80,816 | ||||||
Dilutive effect of stock-based compensation | 112 | 206 | ||||||
Weighted-average shares outstanding - diluted | $ | 80,352 | $ | 81,022 | ||||
Earnings from continuing operations per common share, attributable to Harsco Corporation common stockholders: | ||||||||
Basic | $ | 0.20 | $ | 0.13 | ||||
Diluted | $ | 0.20 | $ | 0.13 |
Three Months Ended | ||||||
March 31 | ||||||
(In thousands) | 2015 | 2014 | ||||
Stock options | 114 | 215 | ||||
Stock appreciation rights | 864 | 15 | ||||
Performance share units | 122 | — |
Asset Derivatives | Liability Derivatives | |||||||||||
(In thousands) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
March 31, 2015 | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 902 | $ | — | |||||||
Cross-currency interest rate swaps | Other assets | 90,541 | Other liabilities | 17 | ||||||||
Total derivatives designated as hedging instruments | $ | 91,443 | $ | 17 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 5,479 | Other current liabilities | $ | 3,334 |
Asset Derivatives | Liability Derivatives | |||||||||||
(In thousands) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
December 31, 2014 | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 420 | $ | — | |||||||
Cross-currency interest rate swaps | Other assets | 52,989 | Other liabilities | 2,599 | ||||||||
Total derivatives designated as hedging instruments | $ | 53,409 | $ | 2,599 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 4,065 | Other current liabilities | $ | 4,618 |
(In thousands) | Amount of Gain (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion | Location of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion | Location of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing | Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing | ||||||||||||
Three Months Ended March 31, 2015: | |||||||||||||||||
Foreign currency forward exchange contracts | $ | 475 | Cost of services and products sold | $ | 1 | $ | — | ||||||||||
Cross-currency interest rate swaps | 8,621 | — | Cost of services and products sold | 30,742 | (a) | ||||||||||||
$ | 9,096 | $ | 1 | $ | 30,742 | ||||||||||||
Three Months Ended March 31, 2014: | |||||||||||||||||
Foreign currency forward exchange contracts | $ | 11 | Cost of services and products sold | $ | (2 | ) | $ | — | |||||||||
Cross-currency interest rate swaps | (4,360 | ) | — | Cost of services and products sold | (1,574 | ) | (a) | ||||||||||
$ | (4,349 | ) | $ | (2 | ) | $ | (1,574 | ) |
Location of Gain (Loss) Recognized in Income on Derivative | Amount of Gain (Loss) Recognized in Income on Derivative for the Three Months Ended March 31 (b) | |||||||||
(In thousands) | 2015 | 2014 | ||||||||
Foreign currency forward exchange contracts | Cost of services and products sold | $ | 4,755 | $ | 1,556 |
(In thousands) | Type | U.S. Dollar Equivalent | Maturity | Recognized Gain (Loss) | ||||||||
British pounds sterling | Sell | $ | 163 | April 2015 | $ | 4 | ||||||
British pounds sterling | Buy | 2,138 | April 2015 | (46 | ) | |||||||
Euros | Sell | 230,113 | April 2015 through August 2015 | 1,473 | ||||||||
Euros | Buy | 210,841 | April 2015 through July 2015 | 810 | ||||||||
Other currencies | Sell | 35,657 | April 2015 through December 2015 | 840 | ||||||||
Other currencies | Buy | 7,955 | April 2015 | (34 | ) | |||||||
Total | $ | 486,867 | $ | 3,047 |
(In thousands) | Type | U.S. Dollar Equivalent | Maturity | Recognized Gain (Loss) | ||||||||
British pounds sterling | Sell | $ | 37,943 | January 2015 | $ | 179 | ||||||
British pounds sterling | Buy | 2,783 | January 2015 | (4 | ) | |||||||
Euros | Sell | 193,370 | January 2015 through March 2015 | 2,993 | ||||||||
Euros | Buy | 194,084 | January 2015 through March 2015 | (3,767 | ) | |||||||
Other currencies | Sell | 12,641 | January 2015 through December 2015 | 439 | ||||||||
Other currencies | Buy | 28,001 | January 2015 through June 2015 | 27 | ||||||||
Total | $ | 468,822 | $ | (133 | ) |
Interest Rates | ||||||||
(In millions) | Contractual Amount | Receive | Pay | |||||
Maturing 2018 | $ | 250.0 | Fixed U.S. dollar rate | Fixed euro rate | ||||
Maturing 2020 | 220.0 | Fixed U.S. dollar rate | Fixed British pound sterling rate | |||||
Maturing 2016 through 2017 | 8.2 | Floating U.S. dollar rate | Fixed rupee rate |
• | Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
• | Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3—Inputs that are both significant to the fair value measurement and unobservable. |
Level 2 Fair Value Measurements (In thousands) | March 31 2015 | December 31 2014 | |||||||
Assets | |||||||||
Foreign currency forward exchange contracts | $ | 6,381 | $ | 4,485 | |||||
Cross-currency interest rate swaps | 90,541 | 52,989 | |||||||
Liabilities | |||||||||
Foreign currency forward exchange contracts | 3,334 | 4,618 | |||||||
Cross-currency interest rate swaps | 17 | 2,599 |
Level 3 Liabilities—Unit Adjustment Liability (a) for the Three Months Ended March 31 (In thousands) | Three Months Ended | ||||||||
March 31 | |||||||||
2015 | 2014 | ||||||||
Balance at beginning of period | $ | 93,762 | $ | 106,343 | |||||
Payments | (5,580 | ) | (5,580 | ) | |||||
Change in fair value to the unit adjustment liability | 2,245 | 2,546 | |||||||
Balance at end of period | $ | 90,427 | $ | 103,308 | (b) |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Revenues From Continuing Operations | ||||||||
Harsco Metals & Minerals | $ | 291,198 | $ | 352,822 | ||||
Harsco Industrial | 98,803 | 102,100 | ||||||
Harsco Rail | 61,578 | 57,561 | ||||||
Total revenues from continuing operations | $ | 451,579 | $ | 512,483 | ||||
Operating Income (Loss) From Continuing Operations | ||||||||
Harsco Metals & Minerals | $ | 10,583 | $ | 22,649 | ||||
Harsco Industrial | 17,027 | 16,571 | ||||||
Harsco Rail | 21,633 | 5,499 | ||||||
Corporate | (10,362 | ) | (12,492 | ) | ||||
Total operating income from continuing operations | $ | 38,881 | $ | 32,227 | ||||
Depreciation and Amortization | ||||||||
Harsco Metals & Minerals | $ | 34,891 | $ | 40,701 | ||||
Harsco Industrial | 1,287 | 1,202 | ||||||
Harsco Rail | 1,556 | 1,419 | ||||||
Corporate | 2,157 | 1,513 | ||||||
Total Depreciation and Amortization | $ | 39,891 | $ | 44,835 | ||||
Capital Expenditures | ||||||||
Harsco Metals & Minerals | $ | 21,828 | $ | 37,741 | ||||
Harsco Industrial | 7,221 | 643 | ||||||
Harsco Rail | 537 | 886 | ||||||
Corporate | 2,044 | 569 | ||||||
Total Capital Expenditures | $ | 31,630 | $ | 39,839 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Segment operating income | $ | 49,243 | $ | 44,719 | ||||
General Corporate expense | (10,362 | ) | (12,492 | ) | ||||
Operating income from continuing operations | 38,881 | 32,227 | ||||||
Interest income | 256 | 297 | ||||||
Interest expense | (11,884 | ) | (11,421 | ) | ||||
Change in fair value to unit adjustment liability | (2,245 | ) | (2,546 | ) | ||||
Income from continuing operations before income taxes and equity income | $ | 25,008 | $ | 18,557 |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Net gains | $ | (3,790 | ) | $ | (2,358 | ) | ||
Foreign currency gains related to Harsco Rail Segment advances on contracts | (10,940 | ) | — | |||||
Other (a) | 1,525 | 1,702 | ||||||
Other income | $ | (13,205 | ) | $ | (656 | ) |
Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax | ||||||||||||||||||||
(In thousands) | Cumulative Foreign Exchange Translation Adjustments | Effective Portion of Derivatives Designated as Hedging Instruments | Cumulative Unrecognized Actuarial Losses on Pension Obligations | Unrealized Loss on Marketable Securities | Total | |||||||||||||||
Balance at December 31, 2013 | $ | 6,110 | $ | (7,023 | ) | $ | (369,682 | ) | $ | (20 | ) | $ | (370,615 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 1,090 | (a) | (3,964 | ) | (b) | (1,051 | ) | (a) | (5 | ) | (3,930 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | — | 1 | 4,100 | — | 4,101 | |||||||||||||||
Other comprehensive income (loss) from equity method investee | (913 | ) | — | 632 | — | (281 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive loss in connection with the asset impairment loss recognized in the Infrastructure Transaction | (1,447 | ) | — | — | — | (1,447 | ) | |||||||||||||
Total other comprehensive income (loss) | (1,270 | ) | (3,963 | ) | 3,681 | (5 | ) | (1,557 | ) | |||||||||||
Less: Other comprehensive loss attributable to noncontrolling interests | 300 | — | — | — | 300 | |||||||||||||||
Other comprehensive income (loss) attributable to Harsco Corporation | (970 | ) | (3,963 | ) | 3,681 | (5 | ) | (1,257 | ) | |||||||||||
Balance at March 31, 2014 | $ | 5,140 | $ | (10,986 | ) | $ | (366,001 | ) | $ | (25 | ) | $ | (371,872 | ) |
Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax | ||||||||||||||||||||
(In thousands) | Cumulative Foreign Exchange Translation Adjustments | Effective Portion of Derivatives Designated as Hedging Instruments | Cumulative Unrecognized Actuarial Losses on Pension Obligations | Unrealized Loss on Marketable Securities | Total | |||||||||||||||
Balance at December 31, 2014 | $ | (39,938 | ) | $ | (9,025 | ) | $ | (483,278 | ) | $ | (15 | ) | $ | (532,256 | ) | |||||
Other comprehensive income (loss) before reclassifications | (23,653 | ) | (a) | 7,955 | (b) | 19,634 | (a) | (8 | ) | 3,928 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | — | 1 | 5,064 | — | 5,065 | |||||||||||||||
Other comprehensive income (loss) from equity method investee | (5,189 | ) | (382 | ) | 595 | — | (4,976 | ) | ||||||||||||
Total other comprehensive income (loss) | (28,842 | ) | 7,574 | 25,293 | (8 | ) | 4,017 | |||||||||||||
Less: Other comprehensive loss attributable to noncontrolling interests | 754 | 10 | — | — | 764 | |||||||||||||||
Other comprehensive income (loss) attributable to Harsco Corporation | (28,088 | ) | 7,584 | 25,293 | (8 | ) | 4,781 | |||||||||||||
Balance at March 31, 2015 | $ | (68,026 | ) | $ | (1,441 | ) | $ | (457,985 | ) | $ | (23 | ) | $ | (527,475 | ) |
(In thousands) | Three Months Ended | Three Months Ended | Affected Caption in the Condensed Consolidated Statements of Operations | |||||||
March 31 2015 | March 31 2014 | |||||||||
Amortization of defined benefit pension items (c): | ||||||||||
Actuarial losses (d) | $ | 3,947 | $ | 2,839 | Selling, general and administrative expenses | |||||
Actuarial losses (d) | 1,518 | 1,552 | Cost of services and products sold | |||||||
Prior-service costs (d) | 31 | 23 | Selling, general and administrative expenses | |||||||
Prior-service costs (d) | 38 | 45 | Cost of services and products sold | |||||||
Total before tax | 5,534 | 4,459 | ||||||||
Tax benefit | (470 | ) | (359 | ) | ||||||
Total reclassification of defined benefit pension items, net of tax | $ | 5,064 | $ | 4,100 | ||||||
Amortization of cash flow hedging instruments (c): | ||||||||||
Foreign currency forward exchange contracts | $ | 1 | $ | 2 | Cost of services and products sold | |||||
Tax benefit | — | (1 | ) | |||||||
Total reclassification of cash flow hedging instruments | $ | 1 | $ | 1 |
(In thousands) | Accrual at December 31 2014 | Cash Expenditures | Foreign Currency Translation | Accrual at March 31 2015 | ||||||||||||
Harsco Metals & Minerals Segment | ||||||||||||||||
Employee termination benefit costs | $ | 7,668 | $ | (1,590 | ) | $ | (120 | ) | $ | 5,958 | ||||||
Total | $ | 7,668 | $ | (1,590 | ) | $ | (120 | ) | $ | 5,958 |
Three Months Ended | |||||||||||||||
Revenues by Segment | March 31 | ||||||||||||||
(In millions) | 2015 | 2014 | Change | % | |||||||||||
Harsco Metals & Minerals | $ | 291.2 | $ | 352.8 | $ | (61.6 | ) | (17.5 | )% | ||||||
Harsco Industrial | 98.8 | 102.1 | (3.3 | ) | (3.2 | ) | |||||||||
Harsco Rail | 61.6 | 57.6 | 4.0 | 7.0 | |||||||||||
Total revenues | $ | 451.6 | $ | 512.5 | $ | (60.9 | ) | (11.9 | )% |
Three Months Ended | |||||||||||||||
Revenues by Region | March 31 | ||||||||||||||
(In millions) | 2015 | 2014 | Change | % | |||||||||||
Western Europe | $ | 123.7 | $ | 159.5 | $ | (35.8 | ) | (22.5 | )% | ||||||
North America | 210.1 | 220.9 | (10.7 | ) | (4.9 | ) | |||||||||
Latin America (a) | 51.5 | 62.8 | (11.3 | ) | (17.9 | ) | |||||||||
Asia-Pacific | 38.4 | 34.4 | 4.0 | 11.8 | |||||||||||
Middle East and Africa | 15.8 | 19.0 | (3.2 | ) | (16.8 | ) | |||||||||
Eastern Europe | 12.0 | 16.0 | (4.0 | ) | (24.8 | ) | |||||||||
Total revenues | $ | 451.6 | $ | 512.5 | $ | (60.9 | ) | (11.9 | )% |
Three Months Ended | |||||||||||||||
Operating Income (Loss) by Segment | March 31 | ||||||||||||||
(In millions) | 2015 | 2014 | Change | % | |||||||||||
Harsco Metals & Minerals | $ | 10.6 | $ | 22.6 | $ | (12.1 | ) | (53.3 | )% | ||||||
Harsco Industrial | 17.0 | 16.6 | 0.5 | 2.8 | |||||||||||
Harsco Rail | 21.6 | 5.5 | 16.1 | 293.4 | |||||||||||
Corporate | (10.4 | ) | (12.5 | ) | 2.1 | 17.1 | |||||||||
Total operating income | $ | 38.9 | $ | 32.2 | $ | 6.7 | 20.6 | % |
Three Months Ended | ||||||
March 31 | ||||||
Operating Margin by Segment | 2015 | 2014 | ||||
Harsco Metals & Minerals | 3.6 | % | 6.4 | % | ||
Harsco Industrial | 17.2 | 16.2 | ||||
Harsco Rail | 35.1 | 9.6 | ||||
Consolidated operating margin | 8.6 | % | 6.3 | % |
• | Foreign currency gain of $10.9 million related to converting Swiss franc bank deposits to euros after the Swiss National Bank ended its policy of maintaining a stable Swiss franc exchange rate with the euro. |
• | Positive impact of $5.4 million in the Harsco Rail Segment from increased equipment volumes. |
• | Project Orion restructuring benefits of $4.8 million during the first quarter of 2015. |
• | Decreased income of $9.0 million in the Harsco Metals & Minerals Segment primarily attributable to the year over year impact of exited contracts, reduced nickel and scrap demand and higher maintenance costs. |
• | Administrative costs increased by $5.4 million primarily attributable to inflationary measures on compensation and welfare benefits and increased professional fees in the Harsco Metals & Minerals Segment. |
• | Impact of foreign currency translation of $3.6 million. |
Significant Impacts on Revenues | Three Months Ended | |||
(In millions) | March 31, 2015 | |||
Revenues — 2014 | $ | 352.8 | ||
Impact of foreign currency translation. | (39.1 | ) | ||
Net impact of new contracts and lost contracts (including exited underperforming contracts). | (18.4 | ) | ||
Net effects of price/volume changes, primarily attributable to volume changes. | (4.1 | ) | ||
Revenues — 2015 | $ | 291.2 |
• | Project Orion restructuring benefits of $4.8 million during the first quarter of 2015. |
• | Decreased global steel production and scrap metal prices, primarily in North America. Overall, steel production by customers under services contracts decreased by 4% in the first quarter of 2015 compared with the same period in the prior year. |
• | Decreased nickel prices of 3% in the first quarter of 2015 compared with the same period in the prior year. |
• | Foreign currency translation in the first quarter of 2015 decreased operating income for this segment by $3.0 million compared with the same period in the prior year. |
• | Increased costs of operations of $9.0 million during the first quarter of 2015, primarily attributable to the year over year impact of exited contracts, reduced nickel and scrap demand and higher maintenance costs. |
• | Increased administrative costs of $5.4 million during the first quarter of 2015, primarily attributable to inflationary measures on compensation and welfare benefits and increased professional fees. |
Significant Impacts on Revenues | Three Months Ended | |||
(In millions) | March 31, 2015 | |||
Revenues — 2014 | $ | 102.1 | ||
Net effects of price/volume changes, primarily attributable to volume changes. | (2.2 | ) | ||
Impact of foreign currency translation. | (1.1 | ) | ||
Revenues — 2015 | $ | 98.8 |
• | Higher gain from sale of assets of $1.5 million in the first quarter of 2015 compared with the same period in the prior year. |
• | Operating income was aided by lower selling and administrative costs as well as product mix. |
• | Foreign currency translation in the first quarter of 2015 decreased operating income for this segment by $0.5 million compared with the same period in the prior year. |
• | Increased costs associated with consolidating operating facilities for the segment's air cooled heat exchangers business. |
Significant Effects on Revenues | Three Months Ended | |||
(In millions) | March 31, 2015 | |||
Revenues — 2014 | $ | 57.6 | ||
Net impacts of price/volume changes, primarily attributable to volume changes. | 5.0 | |||
Effect of Protran Technology ("Protran") acquisition. | 0.2 | |||
Impact of foreign currency translation. | (1.2 | ) | ||
Revenues — 2015 | $ | 61.6 |
• | Foreign currency gain of $10.9 million related to converting Swiss franc bank deposits to euros after the Swiss National Bank ended its policy of maintaining a stable Swiss franc exchange rate with the euro during the first quarter of 2015. |
• | Increased equipment volume that increased operating income by $5.4 million. |
• | Decreased administrative costs and research and development costs increased operating income by $2.4 million. |
• | Decreased contract services impacted operating income by $2.8 million. |
• | The Company will focus on the goal of providing top quartile returns for its stockholders by balancing its portfolio of businesses, and by executing its strategic and operational strategies with reasonable amounts of financial leverage. |
• | The Company will focus on executing Project Orion to generate compensation and other operational savings in the Harsco Metals & Minerals Segment. |
• | The Company will continue to build and develop strong core capabilities and develop an active and lean corporate center that balances costs with value added services. |
• | Management will continue to be selective and disciplined in allocating capital by rigorously analyzing projects and utilizing a return based capital allocation process. |
• | The Company will focus on growing the Harsco Industrial and Harsco Rail Segments through disciplined organic expansion and acquisitions that improve these businesses' competitive positioning in core markets or adjacent market spaces. Management will target acquisitive growth that provides synergistic benefits to the Company, either through cost synergies from combined platforms or revenue synergies from expanded offerings and scalability. |
• | The Company expects its operational effective income tax rate to approximate 35% to 37%, excluding the tax impact on equity income (loss) related to the Brand Energy & Infrastructure Services Inc. and Subsidiaries ("Brand"). |
• | The Company will focus on improving the Harsco Metals & Minerals Segment's returns through executing Project Orion. The goals of Project Orion are improving financial returns and providing higher and more consistent levels of value added services to customers by improving the bid and contract management process, improving underperforming contracts and simplifying operational structures. The Company expects annualized, recurring benefits in the form of compensation and other operational savings of approximately $37 million from Project Orion. |
• | The Company will continue its focus on ensuring that forecasted profits for contracts meet certain established requirements and deliver returns above its cost of capital. Project Orion's focus is intended to enable the Company to address underperforming contracts more rapidly with targeted actions to improve the operational efficiencies of the business through central protocols to monitor activities, structures and systems that aid in decision making, and processes designed to identify the best strategic actions available to address underperforming contracts and its overall contract portfolio. In connection with this focus, the possibility exists that the Company may take strategic actions that result in exit costs and non-cash asset impairment charges that may have an adverse effect on the Company's results of operations and liquidity. |
• | Over the past several years, the Company has been in discussions with officials at the Supreme Council for Environment in Bahrain with regard to a processing by-product ("salt cakes") located at Hafeera. The Company is currently assessing the options available for processing or removing the salt cakes. To the extent the Company is unable to find commercially viable opportunities to market the salt cakes, it may be required to incur the cost of moving the salt cakes to another location. The impact of any such removal on the Company's results of operations, financial condition and cash flows cannot be determined at this time, but may be significant. |
• | The Company anticipates recent oil price volatility to continue to impact capital expenditures and overall spending by customers in the natural gas, natural gas processing and petrochemical industries. Accordingly, these factors may negatively impact revenue and operating income in 2015 in the Harsco Industrial Segment. |
• | The Company will continue to focus on product innovation and development to drive strategic growth in its businesses. |
• | The Company will focus on growing the Harsco Industrial Segment through disciplined organic expansion and acquisitions that improve competitive positioning in core markets or adjacent markets. |
• | The outlook for this segment continues to be favorable. The global demand for railway maintenance-of-way equipment, parts and services continues to be strong, giving positive indication of further opportunities. The Company anticipates modest organic growth in its after-market parts business and its expected deliveries of existing equipment orders. |
• | The Company secured a second contract award worth over $100 million through 2017 from SBB during 2014. The award comes as a follow-on option to the Company's previously awarded contract with SBB worth more than $100 million. The Company's capabilities to compete and deliver on large projects provides increased opportunities to build out its pipeline further, and enables the Company to continue to pursue other large projects. |
• | The Company will focus on growing the Harsco Rail Segment through disciplined organic expansion and acquisitions that improve competitive positioning in core markets or adjacent market. |
• | During the first quarter of 2015, a rail grinder manufactured by the Company and operated by a subcontractor caught fire, causing the customer to incur monetary damages. The Company is currently working with the customer and reviewing the causes of this incident. Depending on the cause of the fire and the extent of insurance coverage, there could be a charge against income in future periods. |
Three Months Ended | ||||||||
March 31 | ||||||||
(In millions, except per share amounts) | 2015 | 2014 | ||||||
Revenues from continuing operations | $ | 451.6 | $ | 512.5 | ||||
Cost of services and products sold | 361.1 | 409.8 | ||||||
Selling, general and administrative expenses | 63.9 | 66.8 | ||||||
Research and development expenses | 0.9 | 2.7 | ||||||
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | — | 1.7 | ||||||
Other (income) expenses | (13.2 | ) | (0.7 | ) | ||||
Operating income from continuing operations | 38.9 | 32.2 | ||||||
Interest income | 0.3 | 0.3 | ||||||
Interest expense | (11.9 | ) | (11.4 | ) | ||||
Change in fair value to the unit adjustment liability | (2.2 | ) | (2.5 | ) | ||||
Income tax expense from continuing operations | (12.9 | ) | (5.3 | ) | ||||
Equity in income (loss) of unconsolidated entities, net | 4.1 | (1.2 | ) | |||||
Income from continuing operations | 16.2 | 12.0 | ||||||
Diluted earnings per common share from continuing operations attributable to Harsco Corporation common stockholders | 0.20 | 0.13 | ||||||
Effective income tax rate for continuing operations | 51.4 | % | 28.6 | % |
Change in Revenues — 2015 vs. 2014 | Three Months Ended | |||
(In millions) | March 31, 2015 | |||
Impact of foreign currency translation. | (41.4 | ) | ||
Net impact of new contracts and lost contracts (including exited underperforming contracts) in the Harsco Metals & Minerals Segment. | (18.4 | ) | ||
Net effects of price/volume changes in the Harsco Metals & Minerals Segment, primarily attributable to volume changes. | (4.1 | ) | ||
Net effects of price/volume changes in the Harsco Industrial Segment, primarily attributable to volume changes. | (2.2 | ) | ||
Net increased revenues in the Harsco Rail Segment, primarily attributable to increased equipment volumes, including the effect of the Protran acquisition. | 5.2 | |||
Total change in revenues — 2015 vs. 2014 | $ | (60.9 | ) |
Change in Cost of Services and Products Sold — 2015 vs. 2014 | Three Months Ended | |||
(In millions) | March 31, 2015 | |||
Impact of foreign currency translation. | $ | (30.7 | ) | |
Decreased costs due to changes in revenues (exclusive of the effects of foreign currency translation and fluctuations in commodity costs included in selling prices). | (14.4 | ) | ||
Other. | (3.6 | ) | ||
Total change in cost of services and products sold — 2015 vs. 2014 | $ | (48.7 | ) |
Three Months Ended | ||||||||
March 31 | ||||||||
(In thousands) | 2015 | 2014 | ||||||
Net gains | $ | (3,790 | ) | $ | (2,358 | ) | ||
Foreign currency gains related to Harsco Rail Segment advances on contracts | (10,940 | ) | — | |||||
Other (a) | 1,525 | 1,702 | ||||||
Other (income) expenses | $ | (13,205 | ) | $ | (656 | ) |
March 31, 2015 | ||||||||||||
(In millions) | Facility Limit | Outstanding Balance | Available Credit | |||||||||
Multi-year revolving credit agreement (a U.S.-based program) | $ | 500.0 | $ | 147.0 | $ | 353.0 |
Rating Agency | Long-term Notes | Watch / Outlook | ||
Standard & Poor’s (S&P) | BB | Negative Outlook | ||
Moody’s | Ba1 | Stable Outlook | ||
Fitch | BBB- | Negative Outlook |
(Dollars in millions) | March 31 2015 | December 31 2014 | Increase (Decrease) | |||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 66.5 | $ | 62.8 | $ | 3.7 | ||||||
Trade accounts receivable, net | 332.0 | 325.1 | 6.9 | |||||||||
Other receivables | 21.7 | 28.1 | (6.4 | ) | ||||||||
Inventories | 194.6 | 178.9 | 15.7 | |||||||||
Assets held-for-sale | 1.3 | 1.4 | — | |||||||||
Other current assets | 85.9 | 87.1 | (1.3 | ) | ||||||||
Total current assets | 702.0 | 683.5 | 18.6 | |||||||||
Current Liabilities | ||||||||||||
Short-term borrowings and current maturities | 43.5 | 41.9 | 1.6 | |||||||||
Accounts payable | 143.8 | 146.5 | (2.7 | ) | ||||||||
Accrued compensation | 41.8 | 53.8 | (12.0 | ) | ||||||||
Income taxes payable | 6.7 | 2.0 | 4.7 | |||||||||
Advances on contracts | 116.5 | 117.4 | (0.9 | ) | ||||||||
Due to unconsolidated affiliate | 8.3 | 8.1 | 0.2 | |||||||||
Unit adjustment liability | 22.3 | 22.3 | — | |||||||||
Other current liabilities | 174.0 | 173.5 | 0.5 | |||||||||
Total current liabilities | 557.0 | 565.6 | (8.5 | ) | ||||||||
Working Capital | $ | 145.0 | $ | 117.9 | $ | 27.1 | ||||||
Current Ratio (a) | 1.3 | :1 | 1.2 | :1 |
• | Working capital was positively affected by an increase in Inventories of $15.7 million due primarily to the long lead times associated with orders in the Harsco Rail Segment; and |
• | Working capital was positively affected by a decrease in Accrued compensation of $12.0 million due primarily to the payment of incentive compensation from 2014. |
Three Months Ended | ||||||||
March 31 | ||||||||
(In millions) | 2015 | 2014 | ||||||
Net cash provided (used) by: | ||||||||
Operating activities | $ | 10.5 | $ | 27.5 | ||||
Investing activities | (34.9 | ) | (65.5 | ) | ||||
Financing activities | 21.2 | 28.3 | ||||||
Impact of exchange rate changes on cash | 7.0 | (0.5 | ) | |||||
Net change in cash and cash equivalents | $ | 3.7 | $ | (10.2 | ) |
Three Months Ended | ||||||||
March 31 | ||||||||
(In millions) | 2015 | 2014 | ||||||
Net cash provided (used) by: | ||||||||
Change in net defined benefit pension liabilities | $ | (15.0 | ) | $ | (15.8 | ) | ||
Change in prepaid expenses | 0.4 | (1.0 | ) | |||||
Change in accrued taxes | 6.7 | (1.9 | ) | |||||
Other | (0.9 | ) | 6.0 | |||||
Total | $ | (8.8 | ) | $ | (12.7 | ) |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (a) | |||||||||
January 1, 2015 - January 31, 2015 | 596,632 | $ | 17.13 | — | 1,253,368 | ||||||||
February 1, 2015 - February 28, 2015 | — | — | — | — | |||||||||
March 1, 2015 - March 31, 2015 | — | — | — | — | |||||||||
Total | 596,632 | $ | 17.13 | — |
HARSCO CORPORATION | |||
(Registrant) |
DATE | May 7, 2015 | /s/ PETER F. MINAN | |
Peter F. Minan | |||
Chief Financial Officer | |||
(Principal Financial Officer) | |||
DATE | May 7, 2015 | /s/ CHRISTOPHER J. STUMP | |
Christopher J. Stump | |||
Corporate Controller | |||
(Principal Accounting Officer) |
Exhibit Number | Description | |
3.1 | Certificate of Amendment to the Restated Certificate of Incorporation, dated April 29, 2015. | |
10.1 | Form of Performance Share Units Agreement (effective for grants on or after April 28, 2015). | |
10.2 | Form of Restricted Stock Units Agreement (effective for grants on or after April 28, 2015). | |
10.3 | Form of Stock Appreciation Rights Agreement (effective for grants on or after April 28, 2015). | |
10.4 | Amendment No. 3, dated as of March 27, 2015, to the Amended and Restated Five-Year Credit Agreement among Harsco Corporation, as Borrower, the Lenders party thereto and Citibank, N.A., as Administrative Agent (incorporated by reference to the Company's Current Report on Form 8-K dated March 27, 2015, Commission File Number 001-03970). | |
31.1 | Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer). | |
31.2 | Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer). | |
32 | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). | |
101 | The following financial statements from Harsco Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the Securities and Exchange Commission on May 7, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; (v) the Condensed Consolidated Statements of Equity; and (vi) the Notes to Condensed Consolidated Financial Statements. |
(a) | Subject to the terms and conditions of Section 4 and Section 5 hereof and Exhibit C hereto, the Grantee’s right to receive Common Stock in settlement of the PSUs shall become nonforfeitable with respect to (i) 0% to 200% of the PSUs on the basis of the RTSR achievement during the Performance Period as set forth in the Statement of Management Objectives attached hereto as Exhibit C (the “Earned PSUs”). The Earned PSUs will be determined on the date following the end of the Performance Period on which the Committee determines the level of attainment of the Management Objectives for the Performance Period, which date must occur within 60 days after the end of the Performance Period (the “Committee Determination Date”). Except as otherwise provided herein, the Grantee’s right to receive Common Stock in settlement of the PSUs is contingent upon his or her remaining in the continuous employ of the Company or a Subsidiary until the end of the Performance Period. |
(b) | For purposes of this Agreement: |
(i) | “continuously employed” (or substantially similar term) means the absence of any interruption or termination of the Grantee’s employment with the Company or with a Subsidiary of the Company. Continuous employment shall not be considered interrupted or terminated in the case of sick leave, military leave or any other leave of absence approved by the Company or in the case of transfers between locations of the Company and its Subsidiaries; |
(ii) | “Management Objectives” means the threshold, target and maximum goals established by the Committee for the Performance Period with respect to RTSR, as described in the Statement of Management Objectives. No adjustment of the |
(iii) | “Performance Period” means the three-year period commencing January 1, 2014 and ending on December 31, 2016. |
(iv) | “Relative Total Stockholder Return” or “RTSR” has the meaning as set forth in the Statement of Management Objectives. |
(c) | Notwithstanding the other provisions of this Section 4: |
(i) | if the Grantee dies or becomes Disabled during any calendar year of the Performance Period while the Grantee is continuously employed by the Company or any of its Subsidiaries (the “Death/Disability Year”), provided that the PSUs have not previously been forfeited or become nonforfeitable at such time, then (notwithstanding anything in the Statement of Management Objectives to the contrary): (A) the Performance Period will be deemed to have ended on December 31 of the Death/Disability Year (the “Death/Disability Measurement Date”); (B) the PSUs will continue to be eligible to become nonforfeitable (and payable in accordance with Section 5 hereof) as if the Grantee continued to be employed until the end of the Death/Disability Measurement Date; (C) the Earned PSUs will be determined based on RTSR achievement from the start of the Performance Period through the Death/Disability Measurement Date based on the S&P MidCap 400® Index as constituted on the Death/Disability Measurement Date; (D) the ending stock price for Total Stockholder Return determination purposes will be based on the average closing stock price for the 30 calendar days immediately preceding the January 1st immediately following the Death/Disability Measurement Date on the principal stock exchange on which the stock then trades; and (E) the Earned PSUs will be determined on the date following the Death/Disability Measurement Date on which the Committee determines the level of attainment of the Management Objectives for the shortened Performance Period, which date must occur within 60 days after the Death/Disability Measurement Date. |
(ii) | if the Grantee retires from the Company prior to the Committee Determination Date (A) at age 62 or older while continuously employed by the Company or any of its Subsidiaries or (B) at or after such time as the Grantee’s age (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries, equals 75, provided that the PSUs have not previously been forfeited or become nonforfeitable at such time, then the PSUs will continue to be eligible to become nonforfeitable in accordance with this Section 4 (and payable in accordance with Section 5 hereof) as if the Grantee continued to be employed until the end of the Performance Period. |
(d) | (i) Notwithstanding Section 4(a) or Section 4(c) above, if at any time before the Committee Determination Date or forfeiture of the PSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, provided that the PSUs have not previously been forfeited or become nonforfeitable at such time, then (except to the extent that a Replacement Award is provided to the Grantee in accordance with Section 4(d)(ii) to continue, replace or assume the PSUs covered by this Agreement (the “Replaced Award”)) the PSUs will become nonforfeitable and payable to the Grantee in accordance with Section 5 hereof as follows (notwithstanding anything in the Statement of Management Objectives to the contrary): (A) the Performance Period will be deemed to have |
(ii) | For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g., performance-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control or is payable solely in cash, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Section 4(d)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion. |
(iii) | If, upon receiving a Replacement Award, the Grantee’s employment with the Company or a Subsidiary (or any of their successors) (as applicable, the “Successor”) is subsequently terminated by the Grantee for Good Reason or by the Successor without Cause within a period of two years after the Change in Control, 100% of the Replacement Award will become nonforfeitable and payable with respect to the performance-based restricted stock units covered by such Replacement Award. |
(iv) | A termination by the Grantee for “Good Reason” means Grantee’s termination of his or her employment with the Successor as a result of the occurrence of any of the following: (A) a change in the Grantee’s principal location of employment that is greater than 50 miles from such location as of the date of this Agreement without the Grantee’s consent; provided, however, that the Grantee hereby acknowledges that the Grantee may be required to engage in travel in connection with the performance of the Grantee’s duties and that such travel shall not constitute a change in the Grantee’s principal location of employment for purposes hereof; (B) a material diminution in the Grantee’s base compensation; (C) a change in the Grantee’s position with the Successor without the Grantee’s consent such that there is a material diminution in the Grantee’s authority, duties or responsibilities; or (D) any other action or inaction that constitutes a material breach by the Successor of the agreement, if any, under which the Grantee provides services to the Successor or its subsidiaries. Notwithstanding the foregoing, the Grantee’s termination of the |
(v) | A termination by the Successor without “Cause” means the Successor’s termination of the Grantee’s employment with the Successor under circumstances that do not involve or relate to the occurrence of any of the following: (A) an act or acts of personal dishonesty taken by the Grantee and intended to result in substantial personal enrichment of the Grantee at the expense of the Company; (B) repeated failure by the Grantee to devote reasonable attention and time during normal business hours to the business and affairs of the Company or to use the Grantee’s reasonable best efforts to perform faithfully and efficiently the responsibilities assigned to the Grantee (provided that such failure is demonstrated to be willful and deliberate on the Grantee’s part and is not remedied in a reasonable period of time after receipt of written notice from the Company); or (C) the conviction of the Grantee of a felony. |
(e) | The PSUs shall be forfeited to the extent they fail to become nonforfeitable as of the Committee Determination Date and, except as otherwise provided in this Section 4, if the Grantee ceases to be employed by the Company or a Subsidiary at any time prior to such PSUs becoming nonforfeitable, or to the extent they are forfeited under Section 16 hereof. |
(a) | Payment for the PSUs, after and to the extent they have become nonforfeitable, shall be made in the form of shares of Common Stock. Payment shall be made within 70 days following the date that the PSUs become nonforfeitable pursuant to Section 4 hereof. |
(b) | Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Stock may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement. |
(c) | The Company’s obligations to the Grantee with respect to the PSUs will be satisfied in full upon the issuance of Common Stock corresponding to such PSUs. |
(a) | The Grantee shall have no rights of ownership in the Common Stock underlying the PSUs and no right to vote the Common Stock underlying the PSUs until the date on which the shares of Common Stock underlying the PSUs are issued or transferred to the Grantee pursuant to Section 5 above. |
(b) | From and after the Date of Grant and until the earlier of (i) the time when the PSUs become nonforfeitable and are paid in accordance with Section 5 hereof or (ii) the time when the Grantee’s right to receive Common Stock in payment of the PSUs is forfeited in accordance with Section 4 hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Stock generally, the Grantee shall become entitled to receive (subject to the following sentence) a number of additional whole PSUs determined by dividing (x) the product of (1) the dollar amount of the cash dividend paid per share of Common Stock on such date and (2) the total number of PSUs (including dividend equivalents) previously credited to the Grantee as of such date, by (y) the Market Value per Share on such date. Such dividend equivalents (if any) shall be subject to the same terms and conditions and shall be paid or forfeited in the same manner and at the same time as the PSUs to which the dividend equivalents were credited. |
(c) | The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver shares of Common Stock in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement. |
1. | Grant. Grantee acknowledges that Grantee has access to the confidential and proprietary trade secret information of Harsco Corporation, including its subsidiaries, joint ventures, and operating divisions (the “Company”), as further described below (“Confidential/Proprietary Trade Secret Information”). Further, Grantee acknowledges that Grantee derives significant value from the Company and from the Confidential/Proprietary Trade Secret Information provided during the term of employment with the Company, which enables Grantee to optimize the performance of the Company’s performance and Grantee’s own personal, professional, and financial benefit. In consideration of the grant described in the award agreement (the “Agreement”) to which these terms, conditions and provisions (the “Non-Competition Agreement”) are attached as an exhibit, Grantee agrees that, during Grantee's employment by the Company, and for a period of twelve (12) months after the cessation of such employment for any reason (both such periods collectively referred to as the “Restricted Period”), Grantee will not, directly or indirectly, engage in any of the following competitive activities: |
(a) | For Grantee or on behalf of any other corporation, business, partnership, individual, or other entity, directly or indirectly solicit, divert, contract with, or attempt to solicit, divert, or contract with, any customer with whom Grantee had Material Contact during the final two (2) years of Grantee’s employment with the Company concerning any products or services that are similar to those that Grantee was responsible for or were otherwise involved with during Grantee’s employment with the Company. For purposes of this Non-Competition Agreement, the Grantee will have had “Material Contact” with a customer if: (i) Grantee had business dealings with the customer on the Company’s behalf; (ii) Grantee was responsible for supervising or coordinating the dealings between the Company and the customer; or (iii) Grantee obtained Confidential/Proprietary Trade Secret Information about the customer as a result of Grantee’s association with the Company; |
(b) | Within the geographic territory where Grantee was employed by the Company, obtained knowledge of Confidential/Proprietary Trade Secret Information, or had contact with the Company's customers, become employed by or otherwise render services to (as a director, employee, contractor or consultant) or have any ownership interest in any business which is engaged in offering the same or similar products or services as, or otherwise competes with those Company, including its subsidiaries and operating unit(s) with which Grantee was employed or in any way involved during the last twelve (12) months of employment with the Company; or |
(c) | (i) induce, offer, assist, encourage or suggest that another business or enterprise offer employment to or enter into a consulting arrangement with any employee, agent or representative of the Company or (ii) induce, offer, assist, encourage or suggest that any employee, agent or representative of the Company, including its subsidiaries and joint ventures, terminate his or her employment or business affiliation with the Company or accept employment with any other business or enterprise. |
(d) | Confidential/Proprietary Trade Secret Information. |
(i) | Grantee agrees to keep secret and confidential all Confidential/Proprietary Trade Secret Information (further described below) acquired by Grantee while employed by the Company or concerning the business and affairs of the Company, its vendors, its customers, and its affiliates (whether of a business, commercial or technological nature), and further agrees that Grantee will not disclose any such Confidential/Proprietary Trade Secret Information so acquired to any individual, partner, company, firm, corporation or other person or use the same in any manner other than in connection with the business and affairs of the Company and its affiliates. Except in the performance of services for the Company, the Grantee will not, for so long as the Confidential/Proprietary Trade Secret Information remains so designated under applicable law, use, disclose, reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential/Proprietary Trade Secret Information or any portion thereof. |
(ii) | For purposes of this Non-Competition Agreement, “Confidential/Proprietary Trade Secret Information” includes all information of a confidential or proprietary nature that relates to the business, products, services, research or development of the Company, and its affiliates or their respective suppliers, distributors, customers, independent contractors or other business relations. Confidential/Proprietary Trade Secret Information also includes, but is not limited to, the following: (A) internal business information (including information relating to strategic and staffing plans and practices, business, training, financial, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and customer and supplier lists); (B) identities of, individual requirements of, specific contractual arrangements with and information about, the Company’s suppliers, distributors, customers, independent contractors or other business relations and their confidential information; (C) trade secrets, copyrightable works and other confidential information (including ideas, formulas, recipes, compositions, inventions, innovations, improvements, developments, methods, know-how, manufacturing and production processes and techniques, research and development information, compilations of data and analyses, data and databases relating thereto, techniques, systems, records, manuals, documentation, models, drawings, specifications, designs, plans, proposals, reports and all similar or related information whether patentable or unpatentable and whether or not reduced to practice); (D) other intellectual property rights of the Company, or any of its affiliates; and (E) any other information that would constitute a trade secret under the Pennsylvania Uniform Trade Secrets Act, as amended from time to time (or any successor). The term “Confidential/Proprietary Trade Secret Information” also includes any information or data described above which the Company obtains from another party and which the Company treats as proprietary or designates as trade secrets, whether or not owned or developed by the Company. |
(iii) | All documents and materials supplied to Grantee or developed by Grantee in the course of, or as a result of Grantee’s employment at the Company whether in hard copy, electronic format or otherwise shall be the sole property of the Company. Grantee will at any time upon the request of the Company and in any event promptly upon termination of Grantee’s employment or relationship with the Company, but in any event no later than five (5) business days after such termination, deliver all such materials to the Company and will not retain any originals or copies of such materials, whether in hard copy form or as computerized and/or electronic records. Except to the extent approved by the Company or required by Grantee’s bona fide job duties for the Company, the Grantee also agrees that Grantee will not copy or remove from the Company’s place of business or the place of business of a customer of the Company, property or information belonging to the Company or the customer or entrusted to the Company or the customer. In addition, the Grantee agrees that Grantee will not provide any such materials to any competitor of or entity seeking to compete with the Company unless specifically approved in writing by the Company. Notwithstanding anything in paragraph 1(d)(3) of this Non-Competition Agreement to the contrary, if the Company needs to take legal action to secure such return delivery of such materials, Grantee shall be responsible for all legal fees, costs and expenses incurred by the Company in doing so. |
2. | Subsequent Employment. |
(b) | Grantee’s Ability to Earn Livelihood. Grantee acknowledges that, in the event of a cessation of Grantee’s employment with the Company, for any reason and at any time, the provisions of paragraph 1 of this Non-Competition Agreement will not unreasonably restrict Grantee’s ability to earn a living. Grantee and the Company acknowledge that Grantee’s rights have been limited by this Non-Competition Agreement only to the extent reasonably necessary to protect the legitimate interests of the Company in its Confidential/Proprietary Trade Secret Information. |
3. | Enforcement. Grantee agrees that if Grantee violates the covenants and agreements set forth in this Non-Competition Agreement, the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetary damages. Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company will have the right to have all obligations, undertakings, agreements, covenants and other provisions of this Non-Competition Agreement specifically performed by Grantee, and the Company will have the right to obtain preliminary and permanent injunctive relief to secure specific performance, and to prevent a breach or contemplated breach, of this Non-Competition Agreement. In such event, the Company will be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Grantee or others, directly or indirectly, have realized or may realize as a result of, growing out of, or in conjunction with any violation of this Non-Competition Agreement. Such remedies will be an addition to and not in limitation of any injunctive relief or other rights or remedies to which the Company is or may be entitled at law or in equity. In the event that the Company obtains any requested relief in any action brought to enforce the terms of this Non-Competition Agreement through court proceedings, the Company will be entitled to reimbursement for all legal fees, costs and expenses incident to enforcement. |
4. | Severability. If any section, paragraph, term or provision of this Non-Competition Agreement, or the application thereof, is determined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term or provision will not be affected thereby and will be given full force and effect without regard to the invalid or unenforceable portions, and the section, paragraph, term or provision of this Non-Competition Agreement will be deemed modified to the extent necessary to render it valid and enforceable. |
5. | Miscellaneous. |
(a) | Employment. |
(i) | This Non-Competition Agreement does not constitute a guarantee of employment and termination of employment will not affect the enforceability of this Non-Competition Agreement. |
(ii) | Grantee agrees that if Grantee is transferred from the entity or division which was Grantee’s employer at the time Grantee signed this Non-Competition Agreement to employment by another division or another company that is a subsidiary or affiliate of Harsco Corporation, and Grantee has not entered into a superseding agreement with the new employer covering the subject matter of this Non-Competition Agreement, then this Non-Competition Agreement will continue in effect and the Grantee’s new employer will be termed “the Company” for all purposes hereunder and will have the right to enforce this Non-Competition Agreement as Grantee’s employer. In the event of any subsequent transfer, Grantee’s new employer will succeed to all rights under this Non-Competition Agreement so long as such employer will be Harsco Corporation or one of its subsidiaries or affiliates and so long as this Non-Competition Agreement has not been superseded. |
(b) | Headings. The headings contained in this Non-Competition Agreement are inserted for convenience of reference only, and will not be deemed to be a part of this Non-Competition Agreement for any purposes, and will not in any way define or affect the meaning, construction or scope of any of the provisions of this Non-Competition Agreement. |
(c) | Governing Law. This Non-Competition Agreement will be construed under the laws of the Commonwealth of Pennsylvania, without regard to its conflict of law provisions, and the parties consent and agree that the federal and state courts of the Commonwealth of Pennsylvania will have exclusive jurisdiction over any dispute relating to this Non-Competition Agreement. |
(d) | Supplemental Nature of this Non-Competition Agreement. The restrictions set forth in paragraph 1 of this Non-Competition Agreement will be in addition to any other such restrictive covenants agreed to through separate agreements, if any, between Grantee and the Company and will survive the exercise of the equity award evidenced by the Agreement. |
(e) | Waiver. The failure by the Company to enforce any right or remedy available to it under this Non-Competition Agreement will not be construed to be a waiver of such right or remedy with respect to any other prior, concurrent or subsequent breach or failure. No waiver of rights under this Non-Competition Agreement will be effective unless made in writing with specific reference to this Non-Competition Agreement. |
(f) | Notification. Grantee agreed that the Company may notify any third party about Grantee’s obligations under this Non-Competition Agreement until such time as Grantee has performed all of Grantee’s obligations hereunder. Upon the Company’s request, Grantee agrees to provide the Company with information, including, but not limited to, supplying details of Grantee’s subsequent employment, sufficient to verify that Grantee has not breached, or is not breaching, any covenant in this Non-Competition Agreement. |
(g) | Acknowledgments. |
(i) | Grantee acknowledges and agrees that this Non-Competition Agreement is in consideration of, (A) the grant evidenced by the Agreement, (B) access to Confidential/Proprietary Trade Secret Information, as required by Grantee's job duties, and (C) access to important customer relationships and the associated customer goodwill of the Company. |
(ii) | Grantee acknowledges that he or she has carefully read and considered the provisions of this Non-Competition Agreement, and that this Non-Competition Agreement is reasonable as to time and scope and activities prohibited, given the Company’s need to protect its interests and given the consideration provided to Grantee in the form of the grant evidenced by the Agreement. |
(iii) | Grantee acknowledges that he or she has had an opportunity to consult with an independent legal counsel of Grantee’s choosing, and accept the grant contained in the Agreement and continuing employment on the terms set forth in this Non-Competition Agreement. |
• | “Peer Group” means S&P MidCap 400® Index (as constituted on December 31, 2016). |
• | “Relative Total Stockholder Return” or “RTSR” means the percentile rank of the Company’s Total Stockholder Return among the Total Stockholder Returns of all members of the Peer Group, ranked in descending order, at the end of the Performance Period. |
• | “Total Stockholder Return” means, with respect to the Common Stock and the common stock of each of the members of the Peer Group, a rate of return reflecting stock price appreciation, plus the reinvestment of dividends in additional shares of stock on the ex-dividend date, from the beginning of the Performance Period through the end of the Performance Period. For purposes of calculating Total Stockholder Return for each of the Company and the members of the Peer Group, the beginning stock price will be based on the average closing stock price for the 30 calendar days immediately preceding January 1, 2014 on the principal stock exchange on which the stock then traded and the ending stock price will be based on the average closing stock price for the 30 calendar days immediately preceding January 1, 2017 on the principal stock exchange on which the stock then trades. |
Performance Level | Relative Total Stockholder Return | PSUs Earned |
Below Threshold | Ranked below 25th percentile | 0% |
Threshold | Ranked at 25th percentile | 25% |
Target | Ranked at 50th percentile | 100% |
Maximum | Ranked at or above 75th percentile | 200% |
• | Below Threshold. If, upon the conclusion of the Performance Period, RTSR for the Performance Period falls below the threshold level, as set forth in the Performance Matrix, no PSUs shall become nonforfeitable. |
• | Threshold. If, upon the conclusion of the Performance Period, RTSR for the Performance Period equals the threshold level, as set forth in the Performance Matrix, 25% of the PSUs (rounded down to the nearest whole number of PSUs) shall become nonforfeitable. |
• | Between Threshold and Target. If, upon the conclusion of the Performance Period, RTSR for the Performance Period exceeds the threshold level, but is less than the target level, as set forth in the Performance Matrix, a percentage between 25% and 100% (determined on the basis of straight-line mathematical interpolation) of the PSUs (rounded down to the nearest whole number of PSUs) shall become nonforfeitable. |
• | Target. If, upon the conclusion of the Performance Period, RTSR for the Performance Period equals the target level, as set forth in the Performance Matrix, 100% of the PSUs shall become nonforfeitable. |
• | Between Target and Maximum. If, upon the conclusion of the Performance Period, RTSR for the Performance Period exceeds the target level, but is less than the maximum level, as set forth in the Performance Matrix, a percentage between 100% and 200% (determined on the basis of straight-line mathematical interpolation) of the PSUs (rounded down to the nearest whole number of PSUs) shall become nonforfeitable. |
• | Equals or Exceeds Maximum. If, upon the conclusion of the Performance Period, RTSR for the Performance Period equals or exceeds the maximum level, as set forth in the Performance Matrix, 200% of the PSUs shall become nonforfeitable. |
(a) | The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to Section 5 hereof on the third anniversary of the Date of Grant (the “Vesting Date”), conditioned upon the Grantee’s continuous employment with the Company or a Subsidiary through the Vesting Date. Any RSUs that do not so become nonforfeitable will be forfeited, including, except as provided in Section 4(b) or Section 4(d) below, if the Grantee ceases to be continuously employed by the Company or a Subsidiary prior to the Vesting Date. For purposes of this Agreement, “continuously employed” (or substantially similar term) means the absence of any interruption or termination of the Grantee’s employment with the Company or with a Subsidiary of the Company. Continuous employment shall not be considered interrupted or terminated in the case of sick leave, military leave or any other leave of absence approved by the Company or in the case of transfers between locations of the Company and its Subsidiaries. |
(b) | Notwithstanding Section 4(a) above, all of the RSUs shall become nonforfeitable and payable to the Grantee pursuant to Section 5 hereof upon the occurrence of any of the following events (each, a “Vesting Event”) at a time when the RSUs have not been forfeited (to the extent the RSUs have not previously become nonforfeitable): |
(i) | the Grantee’s death or becoming Disabled while the Grantee is continuously employed by the Company or any of its Subsidiaries; or |
(ii) | the Grantee’s retirement (A) at age 62 or older while continuously employed by the Company or any of its Subsidiaries; or (B) at or after such time as the Grantee’s age (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries, equals 75. |
(c) | For purposes of this Section 4, the Grantee shall be considered “Disabled” if the Grantee is: (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, or (ii) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. |
(d) | (i) Notwithstanding Section 4(a) above, if at any time before the Vesting Date or forfeiture of the RSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then the RSUs will become nonforfeitable and payable to the Grantee in accordance with Section 5 hereof, except to the extent that a Replacement Award is provided to the Grantee in accordance with Section 4(d)(ii) to continue, replace or assume the RSUs covered by this Agreement (the “Replaced Award”). |
(ii) | For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g., time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control or is payable solely in cash, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Section 4(d)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion. |
(iii) | If, upon receiving a Replacement Award, the Grantee’s employment with the Company or a Subsidiary (or any of their successors) (as applicable, the “Successor”) is subsequently terminated by the Grantee for Good Reason or by the Successor without Cause within a period of two years after the Change in Control, 100% of the Replacement Award will become nonforfeitable and payable with respect to the time-based restricted stock units covered by such Replacement Award. |
(iv) | A termination by the Grantee for “Good Reason” means Grantee’s termination of his or her employment with the Successor as a result of the occurrence of any of the following: (A) a change in the Grantee’s principal location of employment that is greater than 50 miles from such location as of the date of this Agreement without the Grantee’s consent; provided, however, that the Grantee hereby acknowledges that the Grantee may be required to engage in travel in connection with the |
(v) | A termination by the Successor without “Cause” means the Successor’s termination of the Grantee’s employment with the Successor under circumstances that do not involve or relate to the occurrence of any of the following: (A) an act or acts of personal dishonesty taken by the Grantee and intended to result in substantial personal enrichment of the Grantee at the expense of the Company; (B) repeated failure by the Grantee to devote reasonable attention and time during normal business hours to the business and affairs of the Company or to use the Grantee’s reasonable best efforts to perform faithfully and efficiently the responsibilities assigned to the Grantee (provided that such failure is demonstrated to be willful and deliberate on the Grantee’s part and is not remedied in a reasonable period of time after receipt of written notice from the Company); or (C) the conviction of the Grantee of a felony. |
(a) | Payment for the RSUs, after and to the extent they have become nonforfeitable, shall be made in the form of shares of Common Stock. Except as provided in Section 5(b) or 5(c), payment shall be made within 10 days following the date that the RSUs become nonforfeitable pursuant to Section 4 hereof. |
(b) | If the RSUs become nonforfeitable (i) by reason of the occurrence of a Change in Control as described in Section 4(d), and if the Change in Control does not constitute a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (ii) by reason of a termination of the Grantee’s employment by reason of retirement, and if such termination does not constitute a “separation from service” for purposes of Section 409A(a)(2)(A)(i) of the Code, then payment for the RSUs will be made upon the earliest of (v) the Grantee’s “separation from service” with the Company and its Subsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code), (w) the Vesting Date, (x) the Grantee’s death, (y) the occurrence of a Change in Control that constitutes a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (z) the Grantee’s becoming Disabled. |
(c) | If the RSUs become payable on the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code (including by reason of the Grantee’s retirement as described in Section 4(b)(ii), due to the termination of the Grantee’s employment under the conditions specified in Section 4(d)(iii) of this Agreement or by reason of Section 5(b)) and the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section |
(d) | Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Stock may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement. |
(e) | The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Common Stock corresponding to such RSUs. |
(a) | The Grantee shall have no rights of ownership in the Common Stock underlying the RSUs and no right to vote the Common Stock underlying the RSUs until the date on which the shares of Common Stock underlying the RSUs are issued or transferred to the Grantee pursuant to Section 5 above. |
(b) | From and after the Date of Grant and until the earlier of (i) the time when the RSUs become nonforfeitable and are paid in accordance with Section 5 hereof or (ii) the time when the Grantee’s right to receive Common Stock in payment of the RSUs is forfeited in accordance with Section 4 hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Stock generally, the Grantee shall be entitled to a current cash payment equal to the value of the product of (x) the dollar amount of the cash dividend paid per share of Common Stock on such date and (y) the total number of RSUs covered by this Agreement. Such dividend equivalents (if any) shall be paid in cash during the vesting period for the RSUs. |
(c) | The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver shares of Common Stock in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement. |
1. | Grant. Grantee acknowledges that Grantee has access to the confidential and proprietary trade secret information of Harsco Corporation, including its subsidiaries, joint ventures, and operating divisions (the “Company”), as further described below (“Confidential/Proprietary Trade Secret Information”). Further, Grantee acknowledges that Grantee derives significant value from the Company and from the Confidential/Proprietary Trade Secret Information provided during the term of employment with the Company, which enables Grantee to optimize the performance of the Company’s performance and Grantee’s own personal, professional, and financial benefit. In consideration of the grant described in the award agreement (the “Agreement”) to which these terms, conditions and provisions (the “Non-Competition Agreement”) are attached as an exhibit, Grantee agrees that, during Grantee's employment by the Company, and for a period of twelve (12) months after the cessation of such employment for any reason (both such periods collectively referred to as the “Restricted Period”), Grantee will not, directly or indirectly, engage in any of the following competitive activities: |
(a) | For Grantee or on behalf of any other corporation, business, partnership, individual, or other entity, directly or indirectly solicit, divert, contract with, or attempt to solicit, divert, or contract with, any customer with whom Grantee had Material Contact during the final two (2) years of Grantee’s employment with the Company concerning any products or services that are similar to those that Grantee was responsible for or were otherwise involved with during Grantee’s employment with the Company. For purposes of this Non-Competition Agreement, the Grantee will have had “Material Contact” with a customer if: (i) Grantee had business dealings with the customer on the Company’s behalf; (ii) Grantee was responsible for supervising or coordinating the dealings between the Company and the customer; or (iii) Grantee obtained Confidential/Proprietary Trade Secret Information about the customer as a result of Grantee’s association with the Company; |
(b) | Within the geographic territory where Grantee was employed by the Company, obtained knowledge of Confidential/Proprietary Trade Secret Information, or had contact with the Company's customers, become employed by or otherwise render services to (as a director, employee, contractor or consultant) or have any ownership interest in any business which is engaged in offering the same or similar products or services as, or otherwise competes with those Company, including its subsidiaries and operating unit(s) with which Grantee was employed or in any way involved during the last twelve (12) months of employment with the Company; or |
(c) | (i) induce, offer, assist, encourage or suggest that another business or enterprise offer employment to or enter into a consulting arrangement with any employee, agent or representative of the Company or (ii) induce, offer, assist, encourage or suggest that any employee, agent or representative of the Company, including its subsidiaries and joint ventures, terminate his or her employment or business affiliation with the Company or accept employment with any other business or enterprise. |
(d) | Confidential/Proprietary Trade Secret Information. |
(i) | Grantee agrees to keep secret and confidential all Confidential/Proprietary Trade Secret Information (further described below) acquired by Grantee while employed by the Company or concerning the business and affairs of the Company, its vendors, its customers, and its affiliates (whether of a business, commercial or technological nature), and further agrees that Grantee will not disclose any such Confidential/Proprietary Trade Secret Information so acquired to any individual, partner, company, firm, corporation or other person or use the same in any manner other than in connection with the business and affairs of the Company and its affiliates. Except in the performance of services for the Company, the Grantee will not, for so long as the Confidential/Proprietary Trade Secret Information remains so designated under applicable law, use, disclose, reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential/Proprietary Trade Secret Information or any portion thereof. |
(ii) | For purposes of this Non-Competition Agreement, “Confidential/Proprietary Trade Secret Information” includes all information of a confidential or proprietary nature that relates to the business, products, services, research or development of the Company, and its affiliates or their respective suppliers, distributors, customers, independent contractors or other business relations. Confidential/Proprietary Trade Secret Information also includes, but is not limited to, the following: (A) internal business information (including information relating to strategic and staffing plans and practices, business, training, financial, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and customer and supplier lists); (B) identities of, individual requirements of, specific contractual arrangements with and information about, the Company’s suppliers, distributors, customers, independent contractors or other business relations and their confidential information; (C) trade secrets, copyrightable works and other confidential information (including ideas, formulas, recipes, compositions, inventions, innovations, improvements, developments, methods, know-how, manufacturing and production processes and techniques, research and development information, compilations of data and analyses, data and databases relating thereto, techniques, systems, records, manuals, documentation, models, drawings, specifications, designs, plans, proposals, reports and all similar or related information whether patentable or unpatentable and whether or not reduced to practice); (D) other intellectual property rights of the Company, or any of its affiliates; and (E) any other information that would constitute a trade secret under the Pennsylvania Uniform Trade Secrets Act, as amended from time to time (or any successor). The term “Confidential/Proprietary Trade Secret Information” also includes any information or data described above which the Company obtains from another party and which the Company treats as proprietary or designates as trade secrets, whether or not owned or developed by the Company. |
(iii) | All documents and materials supplied to Grantee or developed by Grantee in the course of, or as a result of Grantee’s employment at the Company whether in hard copy, electronic format or otherwise shall be the sole property of the Company. Grantee will at any time upon the request of the Company and in any event promptly upon termination of Grantee’s employment or relationship with the Company, but in any event no later than five (5) business days after such termination, deliver all such materials to the Company and will not retain any originals or copies of such materials, whether in hard copy form or as computerized and/or electronic records. Except to the extent approved by the Company or required by Grantee’s bona fide job duties for the Company, the Grantee also agrees that Grantee will not copy or remove from the Company’s place of business or the place of business of a customer of the Company, property or information belonging to the Company or the customer or entrusted to the Company or the customer. In addition, the Grantee agrees that Grantee will not provide any such materials to any competitor of or entity seeking to compete with the Company unless specifically approved in writing by the Company. Notwithstanding anything in paragraph 1(d)(3) of this Non-Competition Agreement to the contrary, if the Company needs to take legal action to secure such return delivery of such materials, Grantee shall be responsible for all legal fees, costs and expenses incurred by the Company in doing so. |
2. | Subsequent Employment. |
3. | Enforcement. Grantee agrees that if Grantee violates the covenants and agreements set forth in this Non-Competition Agreement, the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetary damages. Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company will have the right to have all obligations, undertakings, agreements, covenants and other provisions of this Non-Competition Agreement specifically performed by Grantee, and the Company will have the right to obtain preliminary and permanent injunctive relief to secure specific performance, and to prevent a breach or contemplated breach, of this Non-Competition Agreement. In such event, the Company will be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Grantee or others, directly or indirectly, have realized or may realize as a result of, growing out of, or in conjunction with any violation of this Non-Competition Agreement. Such remedies will be an addition to and not in limitation of any injunctive relief or other rights or remedies to which the Company is or may be entitled at law or in equity. In the event that the Company obtains any requested relief in any action brought to enforce the terms of this Non-Competition Agreement through court proceedings, the Company will be entitled to reimbursement for all legal fees, costs and expenses incident to enforcement. |
4. | Severability. If any section, paragraph, term or provision of this Non-Competition Agreement, or the application thereof, is determined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term or provision will not be affected thereby and will be given full force and effect without regard to the invalid or unenforceable portions, and the section, paragraph, term or provision of this Non-Competition Agreement will be deemed modified to the extent necessary to render it valid and enforceable. |
5. | Miscellaneous. |
(a) | Employment. |
(i) | This Non-Competition Agreement does not constitute a guarantee of employment and termination of employment will not affect the enforceability of this Non-Competition Agreement. |
(ii) | Grantee agrees that if Grantee is transferred from the entity or division which was Grantee’s employer at the time Grantee signed this Non-Competition Agreement to employment by another division or another company that is a subsidiary or affiliate of Harsco Corporation, and Grantee has not entered into a superseding agreement with the new employer covering the subject matter of this Non-Competition Agreement, then this Non-Competition Agreement will continue in effect and the Grantee’s new employer will be termed “the Company” for all purposes hereunder and will have the right to enforce this Non-Competition Agreement as Grantee’s employer. In the event of any subsequent transfer, Grantee’s new employer will succeed to all rights under this Non-Competition Agreement so long as such employer will be Harsco Corporation or one of its subsidiaries or affiliates and so long as this Non-Competition Agreement has not been superseded. |
(b) | Headings. The headings contained in this Non-Competition Agreement are inserted for convenience of reference only, and will not be deemed to be a part of this Non-Competition Agreement for any purposes, and will not in any way define or affect the meaning, construction or scope of any of the provisions of this Non-Competition Agreement. |
(c) | Governing Law. This Non-Competition Agreement will be construed under the laws of the Commonwealth of Pennsylvania, without regard to its conflict of law provisions, and the parties consent and agree that the federal and state courts of the Commonwealth of Pennsylvania will have exclusive jurisdiction over any dispute relating to this Non-Competition Agreement. |
(d) | Supplemental Nature of this Non-Competition Agreement. The restrictions set forth in paragraph 1 of this Non-Competition Agreement will be in addition to any other such restrictive covenants agreed to through separate agreements, if any, between Grantee and the Company and will survive the exercise of the equity award evidenced by the Agreement. |
(e) | Waiver. The failure by the Company to enforce any right or remedy available to it under this Non-Competition Agreement will not be construed to be a waiver of such right or remedy with respect to any other prior, concurrent or subsequent breach or failure. No waiver of rights under this Non-Competition Agreement will be effective unless made in writing with specific reference to this Non-Competition Agreement. |
(f) | Notification. Grantee agreed that the Company may notify any third party about Grantee’s obligations under this Non-Competition Agreement until such time as Grantee has performed all of Grantee’s obligations hereunder. Upon the Company’s request, Grantee agrees to provide the Company with information, including, but not limited to, supplying details of Grantee’s subsequent employment, sufficient to verify that Grantee has not breached, or is not breaching, any covenant in this Non-Competition Agreement. |
(g) | Acknowledgments. |
(i) | Grantee acknowledges and agrees that this Non-Competition Agreement is in consideration of, (A) the grant evidenced by the Agreement, (B) access to Confidential/Proprietary Trade Secret Information, as required by Grantee's job duties, and (C) access to important customer relationships and the associated customer goodwill of the Company. |
(ii) | Grantee acknowledges that he or she has carefully read and considered the provisions of this Non-Competition Agreement, and that this Non-Competition Agreement is reasonable as to time and scope and activities prohibited, given the Company’s need to protect its interests and given the consideration provided to Grantee in the form of the grant evidenced by the Agreement. |
(iii) | Grantee acknowledges that he or she has had an opportunity to consult with an independent legal counsel of Grantee’s choosing, and accept the grant contained in the Agreement and continuing employment on the terms set forth in this Non-Competition Agreement. |
(i) | the Grantee’s death or becoming Disabled while the Grantee is continuously employed by the Company or any of its Subsidiaries; or |
(ii) | the Grantee’s retirement (A) at age 62 or older while continuously employed by the Company or any of its Subsidiaries; or (B) at or after such time as the Grantee’s age (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries, equals 75. |
1. | Grant. Grantee acknowledges that Grantee has access to the confidential and proprietary trade secret information of Harsco Corporation, including its subsidiaries, joint ventures, and operating divisions (the “Company”), as further described below (“Confidential/Proprietary Trade Secret Information”). Further, Grantee acknowledges that Grantee derives significant value from the Company and from the Confidential/Proprietary Trade Secret Information provided during the term of employment with the Company, which enables Grantee to optimize the performance of the Company’s performance and Grantee’s own personal, professional, and financial benefit. In consideration of the grant described in the award agreement (the “Agreement”) to which these terms, conditions and provisions (the “Non-Competition Agreement”) are attached as an exhibit, Grantee agrees that, during Grantee's employment by the Company, and for a period of twelve (12) months after the cessation of such employment for any reason (both such periods collectively referred to as the “Restricted Period”), Grantee will not, directly or indirectly, engage in any of the following competitive activities: |
(a) | For Grantee or on behalf of any other corporation, business, partnership, individual, or other entity, directly or indirectly solicit, divert, contract with, or attempt to solicit, divert, or contract with, any customer with whom Grantee had Material Contact during the final two (2) years of Grantee’s employment with the Company concerning any products or services that are similar to those that Grantee was responsible for or were otherwise involved with during Grantee’s employment with the Company. For purposes of this Non-Competition Agreement, the Grantee will have had “Material Contact” with a customer if: (i) Grantee had business dealings with the customer on the Company’s behalf; (ii) Grantee was responsible for supervising or coordinating the dealings between the Company and the customer; or (iii) Grantee obtained Confidential/Proprietary Trade Secret Information about the customer as a result of Grantee’s association with the Company; |
(b) | Within the geographic territory where Grantee was employed by the Company, obtained knowledge of Confidential/Proprietary Trade Secret Information, or had contact with the Company's customers, become employed by or otherwise render services to (as a director, employee, contractor or consultant) or have any ownership interest in any business which is engaged in offering the same or similar products or services as, or otherwise competes with those Company, including its subsidiaries and operating unit(s) with which Grantee was employed or in any way involved during the last twelve (12) months of employment with the Company; or |
(c) | (i) induce, offer, assist, encourage or suggest that another business or enterprise offer employment to or enter into a consulting arrangement with any employee, agent or representative of the Company or (ii) induce, offer, assist, encourage or suggest that any employee, agent or representative of the Company, including its subsidiaries and joint ventures, terminate his or her employment or business affiliation with the Company or accept employment with any other business or enterprise. |
(d) | Confidential/Proprietary Trade Secret Information. |
(i) | Grantee agrees to keep secret and confidential all Confidential/Proprietary Trade Secret Information (further described below) acquired by Grantee while employed by the Company or concerning the business and affairs of the Company, its vendors, its customers, and its affiliates (whether of a business, commercial or technological nature), and further agrees that Grantee will not disclose any such Confidential/Proprietary Trade Secret Information so acquired to any individual, partner, company, firm, corporation or other person or use the same in any manner other than in connection with the business and affairs of the Company and its affiliates. Except in the performance of services for the Company, the Grantee will not, for so long as the Confidential/Proprietary Trade Secret Information remains so designated under applicable law, use, disclose, reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential/Proprietary Trade Secret Information or any portion thereof. |
(ii) | For purposes of this Non-Competition Agreement, “Confidential/Proprietary Trade Secret Information” includes all information of a confidential or proprietary nature that relates to the business, products, services, research or development of the Company, and its affiliates or their respective suppliers, distributors, customers, independent contractors or other business relations. Confidential/Proprietary Trade Secret Information also includes, but is not limited to, the following: (A) internal business information (including information relating to strategic and staffing plans and practices, business, training, financial, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and customer and supplier lists); (B) identities of, individual requirements of, specific contractual arrangements with and information about, the Company’s suppliers, distributors, customers, independent contractors or other business relations and their confidential information; (C) trade secrets, copyrightable works and other confidential information (including ideas, formulas, recipes, compositions, inventions, innovations, improvements, developments, methods, know-how, manufacturing and production processes and techniques, research and development information, compilations of data and analyses, data and databases relating thereto, techniques, systems, records, manuals, documentation, models, drawings, specifications, designs, plans, proposals, reports and all similar or related information whether patentable or unpatentable and whether or not reduced to practice); (D) other intellectual property rights of the Company, or any of its affiliates; and (E) any other information that would constitute a trade secret under the Pennsylvania Uniform Trade Secrets Act, as amended from time to time (or any successor). The term “Confidential/Proprietary Trade Secret Information” also includes any information or data described above which the Company obtains from another party and which the Company treats as proprietary or designates as trade secrets, whether or not owned or developed by the Company. |
(iii) | All documents and materials supplied to Grantee or developed by Grantee in the course of, or as a result of Grantee’s employment at the Company whether in hard copy, electronic format or otherwise shall be the sole property of the Company. Grantee will at any time upon the request of the Company and in any event promptly upon termination of Grantee’s employment or relationship with the Company, but in any event no later than five (5) business days after such termination, deliver all such materials to the Company and will not retain any originals or copies of such materials, whether in hard copy form or as computerized and/or electronic records. Except to the extent approved by the Company or required by Grantee’s bona fide job duties for the Company, the Grantee also agrees that Grantee will not copy or remove from the Company’s place of business or the place of business of a customer of the Company, property or information belonging to the Company or the customer or entrusted to the Company or the customer. In addition, the Grantee agrees that Grantee will not provide any such materials to any competitor of or entity seeking to compete with the Company unless specifically approved in writing by the Company. Notwithstanding anything in paragraph 1(d)(3) of this Non-Competition Agreement to the contrary, if the Company needs to take legal action to secure such return delivery of such materials, Grantee shall be responsible for all legal fees, costs and expenses incurred by the Company in doing so. |
2. | Subsequent Employment. |
(b) | Grantee’s Ability to Earn Livelihood. Grantee acknowledges that, in the event of a cessation of Grantee’s employment with the Company, for any reason and at any time, the provisions of paragraph 1 of this Non-Competition Agreement will not unreasonably restrict Grantee’s ability to earn a living. Grantee and the Company acknowledge that Grantee’s rights have been limited by this Non-Competition Agreement only to the extent reasonably necessary to protect the legitimate interests of the Company in its Confidential/Proprietary Trade Secret Information. |
3. | Enforcement. Grantee agrees that if Grantee violates the covenants and agreements set forth in this Non-Competition Agreement, the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetary damages. Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company will have the right to have all obligations, undertakings, agreements, covenants and other provisions of this Non-Competition Agreement specifically performed by Grantee, and the Company will have the right to obtain preliminary and permanent injunctive relief to secure specific performance, and to prevent a breach or contemplated breach, of this Non-Competition Agreement. In such event, the Company will be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Grantee or others, directly or indirectly, have realized or may realize as a result of, growing out of, or in conjunction with any violation of this Non-Competition Agreement. Such remedies will be an addition to and not in limitation of any injunctive relief or other rights or remedies to which the Company is or may be entitled at law or in equity. In the event that the Company obtains any requested relief in any action brought to enforce the terms of this Non-Competition Agreement through court proceedings, the Company will be entitled to reimbursement for all legal fees, costs and expenses incident to enforcement. |
4. | Severability. If any section, paragraph, term or provision of this Non-Competition Agreement, or the application thereof, is determined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term or provision will not be affected thereby and will be given full force and effect without regard to the invalid or unenforceable portions, and the section, paragraph, term or provision of this Non-Competition Agreement will be deemed modified to the extent necessary to render it valid and enforceable. |
5. | Miscellaneous. |
(a) | Employment. |
(i) | This Non-Competition Agreement does not constitute a guarantee of employment and termination of employment will not affect the enforceability of this Non-Competition Agreement. |
(ii) | Grantee agrees that if Grantee is transferred from the entity or division which was Grantee’s employer at the time Grantee signed this Non-Competition Agreement to employment by another division or another company that is a subsidiary or affiliate of Harsco Corporation, and Grantee has not entered into a superseding agreement with the new employer covering the subject matter of this Non-Competition Agreement, then this Non-Competition Agreement will continue in effect and the Grantee’s new employer will be termed “the Company” for all purposes hereunder and will have the right to enforce this Non-Competition Agreement as Grantee’s employer. In the event of any subsequent transfer, Grantee’s new employer will succeed to all rights under this Non-Competition Agreement so long as such employer will be Harsco Corporation or one of its subsidiaries or affiliates and so long as this Non-Competition Agreement has not been superseded. |
(b) | Headings. The headings contained in this Non-Competition Agreement are inserted for convenience of reference only, and will not be deemed to be a part of this Non-Competition Agreement for any purposes, and will not in any way define or affect the meaning, construction or scope of any of the provisions of this Non-Competition Agreement. |
(c) | Governing Law. This Non-Competition Agreement will be construed under the laws of the Commonwealth of Pennsylvania, without regard to its conflict of law provisions, and the parties consent and agree that the federal and state courts of the Commonwealth of Pennsylvania will have exclusive jurisdiction over any dispute relating to this Non-Competition Agreement. |
(d) | Supplemental Nature of this Non-Competition Agreement. The restrictions set forth in paragraph 1 of this Non-Competition Agreement will be in addition to any other such restrictive covenants agreed to through separate Non-Competition Agreements, if any, between Grantee and the Company and will survive the vesting or exercise of the equity award evidenced by the Agreement. |
(e) | Waiver. The failure by the Company to enforce any right or remedy available to it under this Non-Competition Agreement will not be construed to be a waiver of such right or remedy with respect to any other prior, concurrent or subsequent breach or failure. No waiver of rights under this Non-Competition Agreement will be effective unless made in writing with specific reference to this Non-Competition Agreement. |
(f) | Notification. Grantee agreed that the Company may notify any third party about Grantee’s obligations under this Non-Competition Agreement until such time as Grantee has performed all of Grantee’s obligations hereunder. Upon the Company’s request, Grantee agrees to provide the Company with information, including, but not limited to, supplying details of Grantee’s subsequent employment, sufficient to verify that Grantee has not breached, or is not breaching, any covenant in this Non-Competition Agreement. |
(g) | Acknowledgments. |
(i) | Grantee acknowledges and agrees that this Non-Competition Agreement is in consideration of, (A) the grant evidenced by the Agreement, (B) access to Confidential/Proprietary Trade Secret Information, as required by Grantee's job duties, and (C) access to important customer relationships and the associated customer goodwill of the Company. |
(ii) | Grantee acknowledges that he or she has carefully read and considered the provisions of this Non-Competition Agreement, and that this Non-Competition Agreement is reasonable as to time and scope and activities prohibited, given the Company’s need to protect its interests and given the consideration provided to Grantee in the form of the grant evidenced by the Agreement. |
(iii) | Grantee acknowledges that he or she has had an opportunity to consult with an independent legal counsel of Grantee’s choosing, and accept the grant contained in the Agreement and continuing employment on the terms set forth in this Non-Competition Agreement. |
May 7, 2015 | |
/s/ F. NICHOLAS GRASBERGER, III | |
F. Nicholas Grasberger, III | |
President and Chief Executive Officer | |
May 7, 2015 | |
/s/ PETER F. MINAN | |
Peter F. Minan | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ F. NICHOLAS GRASBERGER, III |
F. Nicholas Grasberger, III President and Chief Executive Officer |
/s/ PETER F. MINAN |
Peter F. Minan Chief Financial Officer |
Revised Financial Statements (Narrative) (Details) (USD $)
|
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2015
|
Dec. 31, 2014
|
Dec. 31, 2013
|
Dec. 31, 2012
|
|
Out-of-period adjustment, net affect on after-tax income | $ 7,500,000 | |||
Retained earnings | 1,282,465,000 | 1,283,549,000 | ||
Out-of-period adjustment net affect on diluted earnings per share (in dollars per share) | $ 0.03 | $ 0.06 | $ 0.06 | |
Revision | ||||
Retained earnings | $ (6,659,000) |
Reconciliation of Basic and Diluted Shares (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
Earnings Per Share [Abstract] | ||
Income from continuing operations, net of tax | $ 15,671 | $ 10,614 |
Weighted-average shares outstanding - basic (in shares) | 80,240 | 80,816 |
Dilutive effect of stock-based compensation (in shares) | 112 | 206 |
Weighted-average shares outstanding - diluted (in shares) | 80,352 | 81,022 |
Earnings from continuing operations per common share, attributable to Harsco Corporation common stockholders: | ||
Basic (in dollars per share) | $ 0.20 | $ 0.13 |
Diluted (in dollars per share) | $ 0.20 | $ 0.13 |
CP0``%(0```9````>&PO=V]R:W-H965T TVY^G9J65?L:ZC[E21%
M.?H6+Y;[IBH[UK/C,`-W`29JU[P,E@%XVJX/%53`V^YU]+CQ'\DJCS(_V*Y%
M@_ZKZ*U7?GO]F=W^[*K#]ZJET&U8)[X">\:>.?3;@9M@ LZV6O3RO)?!`D3"H,$)@A\FB`BGD1!/)O_
MGRBAB0*?791@$LQC$4\?U^)A7YJ/+VF;;E:UO#JP9%!Y _NMI'SZ[]Z=&VHQZ8\/>+_F,4[=X.!OOU
MH^U9^S?!SO;AG6T0>E8$3\.'P7X7VM9FSP[RW,%X.#P?>);C]Q,+;[TUQ8AG
MA9\/N[-UX.VLR+EW7"=ZCFWU>][Z[8<'/PBM>Q>@/HVFUCJS'3\1S'O..@SV
MP39Z`^8&P7;KK&T1Y7PP'X"EZRO_X*V\:-];!P<_6O3'^4N]Y)T/FT7_O-]+
M7%X&&P#QN_\<@NBKWR3_?/&'+[X8_NO+K_[QG;WYY_>_%]_[_LO^(!L&V808
ME-M\,RPU"V\GE@>I!]=7V\`O')F,P!/VRO75_J?>#Y8+2A@Q).O`#<)>!`$%
M5^)7?,NSDT\L+=>Y#QWVL:WE.>YS\O*8O1!K(/V &(X7
MTE.XSZU^R#HLZ'T:PB3F\W""[Z7=QYRLVEA3]ZN&4.GR^3I,S#W<*AFJI!U1
M4QT8M)@JBL9HNDG.V%RRB8U:0*JX#,0`FH+F3U0[U^8^Z"K'PR$A)K&;/FD)
M"I^F0X-"*MUF100*:?637C/20>DUT!665X\8^#0QB.&@+@4[?#<"M)U!K*-;
M+3"^3I`G@/6XNP2X.GFV%MNV#8"!XT\?CP(0:W]]:!<(.I]6P+C]U1$EAKIS
M$;WO]O>T\WNHD!X1/?H!$`;M]17>P@$]+L1I51\9G/OV\+A=BBO0:Z)CYNT\
MVL^SORI*&YU",2*2W7R-WVTE3^N/U%[#*=PIHZ*Z#=A^U8K$71.*JRFIU%T;
MP#[Y*UU`())@`1M46^2V[NJ5/&@GE:MHPDN:'-CK2IMK6XUW7MR\7A_F9X,^
M9_U5>V>6,<6BW$(]2+J4[A_J-3#2D9:U,JU0-?BH6J_$)@9M&%7=>QDO>0N3
M!8[+CHIXSHL3S1`=H:MH_'&XDLGMR<]WVHYKA<6[C1B]XM8$IQ7%1+5A9^BL
M984,TC[O()8QVDNQT9_@GZR]TLSKE=H?D[R0=T\I$!9',G)_?[=*?*)0T]LF
M4;:S?*#W!,>H#;5>UXX 3P-))"KF[$YSW^LH+_%1!OENFS)R*>X
M"YCL#.I!*UJ84(E@U%O.Y`OA/>_$4D49OEM6CXNGMA^8S]HFK4B./`55HBE\
MP?'62._E+@B-3/(H--QAMO=43]%JTUYP02\I([BJ7@G.B?X=U`S8X4M-XB,>
MF2#07G_0 O1PY\8A0HAG`G:BW4(, T^$8$.RY\>>'<-/O*M"QI>
M`%'"G>8`HJ'HB$E=@![,-)SLAC9Q+@/.,Z/U8RQL"-%11#$!/LC8&]U]2"VU
MHGG2HD2N6!ZJ6*!7CH*A!I.?H7;Q7.]$^A7*^%%X"*'-:BAR=WL1Y6AF]R-5
M3BSDO**F2:S36MV8Q:+"(2EL7@H[QVA8I)=9AZ=$`TB&856(4L(/+W]A%!];
MC*2+XD LS:/?X89V8)2W]L7?PFIKO:A?BOX.([Q'(72-L:Q-2N@Z83:&N(AJ%?QPLX
M09B
M('5ND'+6X4WG/9ZO=<[+LB
M:W=!OWURKI^;/^K^N3T-JT/SI*?&UQN]TWMX407^&+NS?:?BH1OU>R?VUQ?]
M0E&CWUN(K[7XJ>O&Z0]3'O>*TOW_````__\#`%!+`P04``8`"````"$`8!3Z
M\3,#```M"0``&0```'AL+W=O<5:SD53$Y*''&;Q%EVY814]Q
M=,\&[AA&W+,X6)*;FF]YVUK$]%Y!)3-@[:UQO3?I$GH%.S*R;V'M@YWT#MC&
MCM;\*S6U4!:UO`+*9+*`D$Q
&ULY%W[;^/&$?Z]0/\'
M06F+!JA/;]NZ6`[..JL](+T&.1N.6F`(>VXI+`QO[>[N:C
MIYW+9)V]VX.[^P?M11$8/=A_VO[4ZR9ZPB/U:C^M2MY3MUR>01_M=@-P!G9?
M.=A](5>@/6WS_#8_??2Z\4\?$8-/'\M+&.331]?M97>'NSO=W3W:?]R99&>[
ML[2-G9W=SG./(&PGPK?QI&>6_
<`X:*,PH!&KX6QP%E6A:E3JM=.Q
M$QC&\N10!A#PFY88?26=:5>3(?T`8JZZA/0"!,$`<9%H0:LI]!?^W\T#<'Q^
MP.?$`17-)(@%QOF5[=VX09ZF%I*CRHC]$FL74_%!V&L<7\+/HZ.%LI[P7/-Y
M#ALJ%5J0QFI:D;V]@\A/ZB>^Y+2H_>V034`7(Z;Z?XNZ6G<%-B`3T2V==7FX
M_*D](@"V+'JM-`W:]_VGVUN/XE9MAOM/][:>
MQ$_:()>]: A%%JZ%.8V>V+@!PH)(RF-!/8!<9;S-\`H\A(D]2J0*
M(UU=1[VGMS3%4`AW-2_8IY`YX,",2MT":ZQ:+[WF1J)1THOAI(^C44YO1?(8
M"]^Q2B&ZG_$5``ED%:)_!'[,K#\PXBC=L!?M&;63E";PU67E,E.GI&=U45[Y[
M]7CR50B:B/QS_G!]8U+VV:OWBNY].T:F;2YZ6,=-/:39PMKL1$UQ9%++Q3O\
M$KJ'44+S]&1^?&&UP`?(W<`XEL^4AXDZ4:N\3%90?V-IWZ32-(`0$QD&Z3(P
MCOIZLC%X#..^IS+-P#&"R
:+6!W>M
M(UJ`9HU1VWJSL>CCU[.+QG']M?H>$+\;Z@OMF'&A!F,IT?%&LCS7[SU9:&4V
M8]JY7'[;_80)ZP(N3NCK`E-U*O5_Y-66H!]GN!Q-GWA'7BN4EJ/(=L43[XHX
M;"HIXJ[;,WE,"SZ3Y7>)2U*IN=<4]?4PS'CA!X6'.PN9-PK#[>B4:8+%#\CW
MK&%K'VRN&[=OQ$);9S8:3Q;Q]>#C1
_Y>B3>G/+H3"$YSU5\E$I2
M8%$?L64U%LDQY]J[65B-::"8UW#=E9YY3V[#TC;IZ;HQBG!>?QO?;S1NTGVS
M?/O%#PU.IR&BG(M?G*5,MKH(PT#+^AR>03,'86T-%1--@9-P14ZN!'2\%1>8
M=RQ2'QC5P834&\01V%K%R]5:M2J2@UC4B<2*9IC"OAY$:2O5)=W,3)=)_6QR
M.HH+]ZDT9=B?%G%UUT0,O+=YMD8>>M&T5<^[1ECM='5OV2+Z(@>FN/B
*-_;JW[/X*J86M_=@*\"GKANG#_)-]_SESM/_
M````__\#`%!+`P04``8`"````"$`3E>`A/,(``!S)0``&````'AL+W=O"?V?[;9P#<.GK;^/O^_;Q_'(W
M=]5U61?.V'(^>^A/Y\_;R)W/-F^G\[#_+X)&Z5,22TG@-Y/D.T1'1/@EHC'7
MM2F6KH:S?X?HB0B__]\9(>UXO?#[0V=<8+W&.J_6Y_7][7%XG\'DA8J<7M?Q
M5C`WD"P6V!4PT)MX\%,\.F(@?(+HUWMK;A=?8<0V!&D14L]G'Q")Z"Z(.&HQ
MZ^H28!0G.>$"B9,#E$YR86B^(S<>57*M3-PBI!ZG4!33Z8E$H#0IIQ3*NJ]$MY
MO,/C'QI7@F`;KT>,$81"F%09A3&J%%9208N0:E3H'#1>=0D=`IA$P;"E*53A
M`V,(C970.-X$IKZ&SG$9U`A0