UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of
The
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported) December 7,
2007
Harsco
Corporation
(Exact
name of registrant as specified in charter)
|
Delaware
|
1-3970
|
23-1483991
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
|
|
350
Poplar Church Road, Camp Hill, PA
|
17011
|
|
|
(Address
of principal executive
offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code 717-763-7064
|
(Former
name or former address, if changed since last
report)
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the
filing obligation of the registrant under any of the following provisions
(see
General Instruction A.2.
below):
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
2.01 Completion of
Acquisition or Disposition of Assets
On
December 7, 2007, Harsco Corporation (the “Company”) completed the closing of
the previously announced sale of its Gas Technologies business group, Harsco
GasServ (“GasServ”) to Wind Point Partners, a private equity investment
firm. Included in the sale are the four complementary manufacturing
and service businesses that comprised the GasServ group:
|
·
|
Taylor-Wharton
cryogenic storage units and compressed gas
cylinders
|
|
·
|
American
Welding & Tank propane tanks
|
|
·
|
Sherwood
precision valves
|
|
·
|
Structural
Composites Industries lightweight, filament-reinforced composite
cylinders
|
The
Company received cash proceeds of approximately $300 million, subject to
post-closing purchase price adjustments. The Company expects the
transaction to generate net after-tax cash proceeds of approximately $264
million from the sale of the business. An additional $40 million is
payable in the form of an earnout, contingent on GasServ achieving certain
performance targets in 2008 or 2009. Proceeds from the sale will
provide capital to fund Harsco’s continuing organic growth initiatives and other
opportunities in its core businesses, and will be used to reduce
debt.
A
copy of
the press release announcing the completion of the sale is attached hereto
as
Exhibit 99.1.
A
copy of
the financial statements required by Item 9.01(b) of Form 8-K with respect
to
the disposition is attached hereto as Exhibit 99.2.
Item
9.01 Financial Statements
and Exhibits
|
(b)
|
Included
as Exhibit 99.2 are the following unaudited pro forma financial
statement
information giving effect to the Company’s disposition of
GasServ:
|
|
|
1.
|
Unaudited
Pro Forma Condensed Consolidated Income Statement Information
for the
years ended December 31, 2006, 2005 and
2004.
|
|
|
2.
|
Unaudited
Pro Forma Condensed Consolidated Balance Sheet Information as
of September
30, 2007.
|
|
|
3.
|
Notes
to the Pro Forma Condensed Consolidated Income Statement and
Balance Sheet
Information.
|
(d)
Exhibits
|
Exhibit
99.1
|
Press
release dated December 7, 2007.
|
|
Exhibit
99.2
|
Unaudited
Pro Forma Financial Statement
Information.
|
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
HARSCO
CORPORATION
(Registrant)
|
|
|
DATE December
13,
2007
|
/S/
Salvatore D. Fazzolari
Salvatore
D. Fazzolari
President
and Chief Financial
Officer
|
Exhibit
Index
|
Exhibit
99.1
|
Press
release dated December 7, 2007.
|
|
Exhibit
99.2
|
Unaudited
Pro Forma Financial Statement
Information.
|
-2-
EXHIBIT
99.1
 |
NEWS
RELEASE
|
|
Harsco
Corporation
Camp
Hill, PA 17011 USA
www.harsco.com
|
Media
Contact
Kenneth Julian
717.730.3683
kjulian@harsco.com
|
Investor
Contact
Eugene
M. Truett
717.975.5677
etruett@harsco.com
|
FOR
IMMEDIATE RELEASE
HARSCO
CORPORATION COMPLETES PREVIOUSLY ANNOUNCED SALE
OF
GAS TECHNOLOGIES BUSINESS GROUP
HARRISBURG,
PA (December 7, 2007). . . Worldwide industrial services company Harsco
Corporation (NYSE: HSC) announced today the closing of the previously announced
sale of its Gas Technologies business group, Harsco GasServ, to Wind
Point Partners, a private equity investment firm with offices in Chicago,
Illinois. As previously announced, terms of the sale include a total
purchase price of $340 million, including $300 million paid in cash at closing
and $40 million payable in the form of an earnout, contingent on the Gas
Technologies group achieving certain performance targets in 2008 or
2009. Proceeds from the sale will provide capital to fund Harsco’s
continuing organic growth initiatives and other opportunities in its core
businesses, as well as debt reduction.
Included
in the sale are the four complementary manufacturing and service businesses
that
comprised the Harsco GasServ group:
|
·
|
Taylor-Wharton
cryogenic storage units and compressed gas
cylinders
|
|
·
|
American
Welding & Tank propane tanks
|
|
·
|
Sherwood
precision valves
|
|
·
|
Structural
Composites Industries lightweight, filament-reinforced composite
cylinders
|
Citigroup
Global Markets Inc. has served as exclusive financial advisor to
Harsco.
Harsco
Corporation is one of the world’s leading diversified industrial services
companies, serving major customers in the non-residential construction and
infrastructure, steel and metals, energy and railway
industries. Harsco’s common stock is a component of the S&P
MidCap 400 Index and the Russell 1000 Index. Additional information
can be found at www.harsco.com.
#
#
#
EXHIBIT
99.2
Harsco
Corporation
Pro
Forma Financial Statement Information
(Unaudited)
On
November 28, 2007, Harsco Corporation (the “Company”) agreed to sell its Gas
Technologies business group, Harsco GasServ (“GasServ”) to Wind Point Partners,
a private equity investment firm, for cash proceeds of approximately $300
million (the “GasServ Divestiture”). An additional $40 million is
payable in the form of an earnout, contingent on GasServ achieving certain
performance targets in 2008 or 2009. The sale was completed on
December 7, 2007.
The
unaudited Pro Forma Condensed Consolidated Balance Sheet Information as of
September 30, 2007 set forth below is presented after giving effect to the
GasServ Divestiture as if it occurred on September 30, 2007. The
unaudited Pro Forma Consolidated Income Statement Information for the years
ending December 31, 2006, 2005 and 2004 set forth below is presented after
giving effect to the GasServ Divestiture as if it occurred on January 1, 2004
and does not assume any interest income on cash proceeds related to the
sale. The Company has not presented unaudited Pro Forma Consolidated
Income Statement Information for any periods subsequent to December 31, 2006,
as
GasServ was reported as discontinued operations in the Company’s quarterly
report on Form 10-Q for the quarterly period ended September 30, 2007, filed
with the Securities and Exchange Commission on November 8, 2007.
The
unaudited pro forma financial statement information is derived primarily from
the historical audited consolidated financial statements of the Company included
in its Annual Reports on Form 10-K for the year ended December 31, 2006, as
well
as the unaudited condensed consolidated financial statements of the Company
included in its quarterly report on Form 10-Q for the quarterly period ended
September 30, 2007. The unaudited pro forma financial statement
information is based upon available information and assumptions that the Company
believes are reasonable under the circumstances and were prepared to illustrate
the estimated effects of the GasServ Divestiture, if it occurred on the dates
specified above.
The
unaudited pro forma financial statement information is provided for
informational purposes and should not be considered indicative of the financial
condition or results of operations that would have been achieved had the GasServ
Divestiture occurred as of the periods presented. In addition, the
unaudited pro forma financial statement information does not purport to indicate
balance sheet data or results of operations as of any future date or for any
future period. The unaudited pro forma financial statement
information, including the notes thereto, should be read in conjunction with
the
historical financial statements of the Company included in its Annual Reports
on
Form 10-K for the years ended December 31, 2006, 2005 and 2004.
Page
1 of
6
HARSCO
CORPORATION
PRO
FORMA CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION
For
the Year Ended December 31, 2006
(Unaudited)
|
(In
thousands, except per share amounts)
|
As
Reported
|
GasServ
Divestiture
(a)
|
Pro
Forma
|
|||||||||
|
Revenues
from continuing operations:
|
||||||||||||
|
Service
revenue
|
$ |
2,538,068
|
$ |
—
|
$ |
2,538,068
|
||||||
|
Product
revenue
|
885,225
|
(397,680 | ) |
487,545
|
||||||||
|
Total
revenues
|
3,423,293
|
(397,680 | ) |
3,025,613
|
||||||||
|
Costs
and expenses from continuing operations:
|
||||||||||||
|
Cost
of services
sold
|
1,851,230
|
—
|
1,851,230
|
|||||||||
|
Cost
of products
sold
|
696,350
|
(344,388 | ) |
351,962
|
||||||||
|
Selling,
general and
administrative expenses
|
507,367
|
(34,577 | ) |
472,790
|
||||||||
|
Research
and development
expenses
|
3,026
|
(180 | ) |
2,846
|
||||||||
|
Other
expenses
|
6,851
|
(4,375 | ) |
2,476
|
||||||||
|
Total
costs and
expenses
|
3,064,824
|
(383,520 | ) |
2,681,304
|
||||||||
|
Operating
income from
continuing operations
|
358,469
|
(14,160 | ) |
344,309
|
||||||||
|
Equity
in income of unconsolidated entities, net
|
192
|
—
|
192
|
|||||||||
|
Interest
income
|
3,709
|
(127 | ) |
3,582
|
||||||||
|
Interest
expense
|
(60,478 | ) | (1 | ) | (60,479 | ) | ||||||
|
Income
from continuing
operations before income taxes and minority
interest
|
301,892
|
(14,288 | ) |
287,604
|
||||||||
|
Income
tax expense
|
(97,523 | ) |
4,169
|
(93,354 | ) | |||||||
|
Income
from continuing
operations before minority interest
|
204,369
|
(10,119 | ) |
194,250
|
||||||||
|
Minority
interest in net income
|
(7,860 | ) |
12
|
(7,848 | ) | |||||||
|
Income
from continuing operations
|
$ |
196,509
|
$ | (10,107 | ) | $ |
186,402
|
|||||
|
Average
shares of common stock outstanding (b)
|
83,905
|
83,905
|
||||||||||
|
Basic
earnings per common share - Continuing operations (b)
|
$ |
2.34
|
$ |
2.22
|
||||||||
|
Diluted
average shares of common stock outstanding (b)
|
84,430
|
84,430
|
||||||||||
|
Diluted
earnings per common share - Continuing operations (b)
|
$ |
2.33
|
$ |
2.21
|
||||||||
See
accompanying notes to unaudited pro forma condensed consolidated financial
statement information on page 6.
Page
2 of
6
HARSCO
CORPORATION
PRO
FORMA CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION
For
the Year Ended December 31, 2005
(Unaudited)
|
(In
thousands, except per share amounts)
|
As
Reported
|
GasServ
Divestiture
(a)
|
Pro
Forma
|
|||||||||
|
Revenues
from continuing operations:
|
||||||||||||
|
Service
revenue
|
$ |
1,928,539
|
$ |
—
|
$ |
1,928,539
|
||||||
|
Product
revenue
|
837,671
|
(370,201 | ) |
467,470
|
||||||||
|
Total
revenues
|
2,766,210
|
(370,201 | ) |
2,396,009
|
||||||||
|
Costs
and expenses from continuing operations:
|
||||||||||||
|
Cost
of services
sold
|
1,425,222
|
—
|
1,425,222
|
|||||||||
|
Cost
of products
sold
|
674,177
|
(320,202 | ) |
353,975
|
||||||||
|
Selling,
general and
administrative expenses
|
393,187
|
(31,740 | ) |
361,447
|
||||||||
|
Research
and development
expenses
|
2,676
|
(238 | ) |
2,438
|
||||||||
|
Other
expenses
|
2,000
|
(109 | ) |
1,891
|
||||||||
|
Total
costs and
expenses
|
2,497,262
|
(352,289 | ) |
2,144,973
|
||||||||
|
Operating
income from
continuing operations
|
268,948
|
(17,912 | ) |
251,036
|
||||||||
|
Equity
in income of unconsolidated entities, net
|
74
|
—
|
74
|
|||||||||
|
Interest
income
|
3,165
|
(102 | ) |
3,063
|
||||||||
|
Interest
expense
|
(41,918 | ) |
1
|
(41,917 | ) | |||||||
|
Income
from continuing
operations before income taxes and minority
interest
|
230,269
|
(18,013 | ) |
212,256
|
||||||||
|
Income
tax expense
|
(64,771 | ) |
5,649
|
(59,122 | ) | |||||||
|
Income
from continuing
operations before minority interest
|
165,498
|
(12,364 | ) |
153,134
|
||||||||
|
Minority
interest in net income
|
(8,748 | ) |
102
|
(8,646 | ) | |||||||
|
Income
from continuing operations
|
$ |
156,750
|
$ | (12,262 | ) | $ |
144,488
|
|||||
|
Average
shares of common stock outstanding (b)
|
83,284
|
83,284
|
||||||||||
|
Basic
earnings per common share - Continuing operations (b)
|
$ |
1.88
|
$ |
1.73
|
||||||||
|
Diluted
average shares of common stock outstanding (b)
|
84,161
|
84,161
|
||||||||||
|
Diluted
earnings per common share - Continuing operations (b)
|
$ |
1.86
|
$ |
1.72
|
||||||||
See
accompanying notes to unaudited pro forma condensed consolidated financial
statement information on page 6.
Page
3 of
6
HARSCO
CORPORATION
PRO
FORMA CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION
For
the Year Ended December 31, 2004
(Unaudited)
|
(In
thousands, except per share amounts)
|
As
Reported
|
GasServ
Divestiture
(a)
|
Pro
Forma
|
|||||||||
|
Revenues
from continuing operations:
|
||||||||||||
|
Service
revenue
|
$ |
1,764,159
|
$ |
—
|
$ |
1,764,159
|
||||||
|
Product
revenue
|
737,900
|
(339,086 | ) |
398,814
|
||||||||
|
Total
revenues
|
2,502,059
|
(339,086 | ) |
2,162,973
|
||||||||
|
Costs
and expenses from continuing operations:
|
||||||||||||
|
Cost
of services
sold
|
1,313,075
|
—
|
1,313,075
|
|||||||||
|
Cost
of products
sold
|
603,309
|
(293,022 | ) |
310,287
|
||||||||
|
Selling,
general and
administrative expenses
|
368,385
|
(31,182 | ) |
337,203
|
||||||||
|
Research
and development
expenses
|
2,579
|
(262 | ) |
2,317
|
||||||||
|
Other
expenses
|
4,862
|
(227 | ) |
4,635
|
||||||||
|
Total
costs and
expenses
|
2,292,210
|
(324,693 | ) |
1,967,517
|
||||||||
|
Operating
income from
continuing operations
|
209,849
|
(14,393 | ) |
195,456
|
||||||||
|
Equity
in income of unconsolidated entities, net
|
128
|
—
|
128
|
|||||||||
|
Interest
income
|
2,319
|
(47 | ) |
2,272
|
||||||||
|
Interest
expense
|
(41,057 | ) |
2
|
(41,055 | ) | |||||||
|
Income
from continuing
operations before income taxes and minority
interest
|
171,239
|
(14,438 | ) |
156,801
|
||||||||
|
Income
tax expense
|
(49,034 | ) |
4,505
|
(44,529 | ) | |||||||
|
Income
from continuing
operations before minority interest
|
122,205
|
(9,933 | ) |
112,272
|
||||||||
|
Minority
interest in net income
|
(8,665 | ) |
433
|
(8,232 | ) | |||||||
|
Income
from continuing operations
|
$ |
113,540
|
$ | (9,500 | ) | $ |
104,040
|
|||||
|
Average
shares of common stock outstanding (b)
|
82,258
|
82,258
|
||||||||||
|
Basic
earnings per common share - Continuing operations (b)
|
$ |
1.38
|
$ |
1.26
|
||||||||
|
Diluted
average shares of common stock outstanding (b)
|
83,196
|
83,196
|
||||||||||
|
Diluted
earnings per common share - Continuing operations (b)
|
$ |
1.36
|
$ |
1.25
|
||||||||
See
accompanying notes to unaudited pro forma condensed consolidated financial
statement information on page 6.
Page
4 of
6
HARSCO
CORPORATION
PRO
FORMA CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
At
September 30, 2007
(Unaudited)
|
(In
thousands)
|
As
Reported
|
GasServ
Divestiture
|
Pro
Forma
|
|||||||||
|
ASSETS
|
||||||||||||
|
Current
assets:
|
||||||||||||
|
Cash
and cash
equivalents
|
$ |
102,668
|
$ | 264,000 | (c) | $ |
366,668
|
|||||
|
Accounts
receivable,
net
|
837,531
|
—
|
837,531
|
|||||||||
|
Inventories
|
269,193
|
—
|
269,193
|
|||||||||
|
Other
current
assets
|
89,433
|
—
|
89,433
|
|||||||||
|
Assets
held-for-sale
|
301,815
|
(300,234 | ) |
1,581
|
||||||||
|
Total
current
assets
|
1,600,640
|
(36,234 | ) |
1,564,406
|
||||||||
|
Property,
plant and equipment, net
|
1,478,290
|
—
|
1,478,290
|
|||||||||
|
Goodwill,
net
|
720,910
|
—
|
720,910
|
|||||||||
|
Intangible
assets, net
|
194,085
|
—
|
194,085
|
|||||||||
|
Other
assets
|
126,200
|
—
|
126,200
|
|||||||||
|
Total
assets
|
$ |
4,120,125
|
$ | (36,234 | ) | $ |
4,083,891
|
|||||
|
LIABILITIES
|
||||||||||||
|
Current
liabilities:
|
||||||||||||
|
Short-term
borrowings
|
$ |
436,907
|
$ |
—
|
$ |
436,907
|
||||||
|
Current
maturities of long-term
debt
|
5,092
|
—
|
5,092
|
|||||||||
|
Accounts
payable
|
302,066
|
—
|
302,066
|
|||||||||
|
Accrued
compensation
|
96,774
|
—
|
96,774
|
|||||||||
|
Income
taxes
payable
|
56,487
|
—
|
56,487
|
|||||||||
|
Dividends
payable
|
14,945
|
—
|
14,945
|
|||||||||
|
Insurance
liabilities
|
43,840
|
—
|
43,840
|
|||||||||
|
Other
current
liabilities
|
285,080
|
—
|
285,080
|
|||||||||
|
Liabilities
associated with
assets held-for-sale
|
56,089
|
(56,089 | ) |
—
|
||||||||
|
Total
current
liabilities
|
1,297,280
|
(56,089 | ) |
1,241,191
|
||||||||
|
Long-term
debt
|
887,587
|
—
|
887,587
|
|||||||||
|
Deferred
income taxes
|
168,091
|
(6,445 | ) |
161,646
|
||||||||
|
Insurance
liabilities
|
67,548
|
—
|
67,548
|
|||||||||
|
Retirement
plan liabilities
|
175,001
|
—
|
175,001
|
|||||||||
|
Other
liabilities
|
104,818
|
—
|
104,818
|
|||||||||
|
Total
liabilities
|
2,700,325
|
(62,534 | ) |
2,637,791
|
||||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||||||
|
STOCKHOLDERS'
EQUITY
|
||||||||||||
|
Common
stock
|
138,338
|
—
|
138,338
|
|||||||||
|
Additional
paid-in capital
|
120,889
|
—
|
120,889
|
|||||||||
|
Accumulated
other comprehensive loss
|
(65,757 | ) | (829 | ) | (66,586 | ) | ||||||
|
Retained
earnings
|
1,829,499
|
27,129
|
1,856,628
|
|||||||||
|
Treasury
stock
|
(603,169 | ) |
—
|
(603,169 | ) | |||||||
|
Total
stockholders'
equity
|
1,419,800
|
26,300
|
1,446,100
|
|||||||||
|
Total
liabilities and
stockholders' equity
|
$ |
4,120,125
|
$ | (36,234 | ) | $ |
4,083,891
|
|||||
See
accompanying notes to unaudited pro forma condensed consolidated financial
statement information on page 6.
Page
5 of
6
HARSCO
CORPORATION
NOTES
TO THE PRO FORMA CONDENSED CONSOLIDATED
INCOME
STATEMENTS AND BALANCE SHEETS INFORMATION
(Unaudited)
|
(a)
|
On
November 28, 2007, the Company agreed to sell its Gas Technologies
business group, Harsco GasServ (“GasServ”) to Wind Point Partners, a
private equity investment firm, for cash proceeds of approximately
$300
million (the “GasServ Divestiture”). The sale was completed on
December 7, 2007. The adjustments for the sale of GasServ give
effect to the sale as if it occurred on January 1, 2004 for the unaudited
consolidated income statement information and September 30, 2007
for the
unaudited consolidated balance sheet information. An additional
$40 million is payable in the form of an earnout, contingent on the
GasServ achieving certain performance targets in 2008 or
2009. This earnout has not been reflected in the pro forma
financial information.
|
|
(b)
|
All
historical share and per share data have been restated to reflect
the
two-for-one stock split that was effective at the close of business
on
March 26, 2007.
|
|
Effect
of Two-for-One Stock Split on
December
31, 2006
(In
thousands, except per share amounts)
|
As
Reported
|
Effect
of Stock Split
|
Adjusted
|
|||||||||
|
Average
shares of common stock outstanding
|
41,953
|
41,952
|
83,905
|
|||||||||
|
Basic
earnings per common share - Continuing operations
|
$ |
4.68
|
$ | (2.34 | ) | $ |
2.34
|
|||||
|
Diluted
average shares of common stock outstanding
|
42,215
|
42,215
|
84,430
|
|||||||||
|
Diluted
earnings per common share - Continuing operations
|
$ |
4.65
|
$ | (2.32 | ) | $ |
2.33
|
|||||
|
Effect
of Two-for-One Stock Split on
December
31, 2005
(In
thousands, except per share amounts)
|
As
Reported
|
Effect
of Stock Split
|
Adjusted
|
|||||||||
|
Average
shares of common stock outstanding
|
41,642
|
41,642
|
83,284
|
|||||||||
|
Basic
earnings per common share - Continuing operations
|
$ |
3.76
|
$ | (1.88 | ) | $ |
1.88
|
|||||
|
Diluted
average shares of common stock outstanding
|
42,080
|
42,081
|
84,161
|
|||||||||
|
Diluted
earnings per common share - Continuing operations
|
$ |
3.73
|
$ | (1.87 | ) | $ |
1.86
|
|||||
|
Effect
of Two-for-One Stock Split on
December
31, 2004
(In
thousands, except per share amounts)
|
As
Reported
|
Effect
of Stock Split
|
Adjusted
|
|||||||||
|
Average
shares of common stock outstanding
|
41,129
|
41,129
|
82,258
|
|||||||||
|
Basic
earnings per common share - Continuing operations
|
$ |
2.76
|
$ | (1.38 | ) | $ |
1.38
|
|||||
|
Diluted
average shares of common stock outstanding
|
41,598
|
41,598
|
83,196
|
|||||||||
|
Diluted
earnings per common share - Continuing operations
|
$ |
2.73
|
$ | (1.37 | ) | $ |
1.36
|
|||||
|
(c)
|
Represents
estimated net after tax proceeds received from the GasServ Divestiture
of
approximately $264 million. An additional $40 million (pre-tax)
is payable in the form of an earnout, contingent on GasServ achieving
certain performance targets in 2008 or 2009. This earnout has
not been reflected in the pro forma financial
information.
|
Page
6 of
6