Item 1. Business:
(a) Description of Business:
The operations of Harsco Corporation (Harsco or the Company) are broadly diversified and include products serving thousands of customers engaged in steel, industrial, commercial, construction and infrastructure, and defense applications. These operations fall into three operating Groups: Industrial Services and Building Products, Engineered Products and Defense. The Company primarily serves its customers through its own salaried sales forces and independent manufacturers' representatives, commission agents and distributors. Harsco utilizes both Company-owned and leased sales offices and warehouses. There were several significant changes in products, services, and markets, but not in methods of distribution during the 1993 fiscal year.
In February 1993, the Company purchased certain assets of the Wayne Corporation, a manufacturer of school buses located in Richmond, Indiana for approximately $2.1 million. In a defense conversion activity, production of these school buses was transferred to the BMY-Wheeled Vehicles Division in Marysville, Ohio, and Wayne Wheeled Vehicles was formed. Harsco entered into six new contracts for metal reclamation and specialized steel mill services in Mexico in 1993. In addition, the Company initiated service at a steelmaking location in Canada to provide environmental recycling of steel production residual materials, which is a new service developed through the Company's research and development efforts. On August 31, the Company completed the largest acquisition in Harsco's history by purchasing all of the outstanding capital stock of MultiServ International, N.V., the leading international provider of specialized steel mill services, for a consideration of $384 million. MultiServ's operations were combined with the Company's Heckett Division, and Harsco is now the world leader in the provision of specialized steel mill services to over 130 locations in 27 countries on six continents.
Harsco acquired Electroforjados Nacionales, S.A. de C.V., a producer of steel and fiberglass grating products, with annual revenues of about $10 million, located in Queretaro, Mexico during the fourth quarter. The Company also restructured and renamed the Patent Scaffolding Division to Patent Construction Systems Division to better describe the range of products and to emphasize a wide array of services in the construction marketplace. In January 1994, Harsco and FMC Corporation formed a joint venture, United Defense, L.P., by combining the BMY-Combat Systems Division with FMC's Defense Systems Group. Harsco obtained a 40% ownership in United Defense, L.P., which expects to achieve $1 billion in revenues in 1994.
The Company's operations are conducted through 10 divisions, each of which has its own executive, supervisory and operating personnel. Each division has general responsibility for its own activities, including marketing. At the Company's headquarters, an executive management group, most of whom have been associated with the Company for many years, manages and provides leadership for business activities. This management group is responsible for establishing basic Company policy and strategic direction, especially in the areas of long-range planning, capital expenditures and finance, and, in addition, makes available to operating personnel technical assistance in a number of specialized fields.
(b) Financial Information about Industry Groups:
Financial information concerning Industry Groups is included in Note 12 to the consolidated financial statements of the 1993 Annual Report to Shareholders under Exhibit 13.
(c) Narrative Description of Business:
(1) A narrative description of the businesses by Operating Group is as follows:
Industrial Services and Building Products
The major product classes in this Group are metal reclamation and scaffolding, shoring and concrete forming equipment. Other classes include: slag abrasives, steel mill services, rental of plant equipment, roofing granules and miscellaneous.
Under metal reclamation the Company provides specialized services to steel producers worldwide which includes metal reclamation, scrap handling, cleaning of slag pits, handling of raw material and molten slag, filling and grading of specified areas and the renting of various types of plant equipment. Highly specialized recovery and cleaning equipment, installed and operated on the property of steel producers, together with standard materials handling equipment, including drag lines, cranes, bulldozers, tractors, hauling equipment, lifting magnets and buckets, are employed to reclaim metal. The customer uses this metal in lieu of steel scrap and makes periodic payments to the Company based upon the amounts of metal reclaimed. The nonmetallic residual slag is graded into various sizes at on-site Company-owned processing facilities and sold commercially. Graded slag is used as an aggregate material in asphalt paving applications, railroad ballast and building blocks. The Company also provides in-plant transportation and other specialized services.
The Company obtained a significant amount of new business in 1993, including six new contracts in Mexico to provide a variety of services at mini-mills and large, integrated producers. In Germany, the Company received a new contract for in-plant transportation services and expanded the scope of services performed in Holland to include responsibility for blast furnace and steel slag products. The Heckett MultiServ Division was established, effective January 1, 1994 and is the world leader in providing specialized steel mill services to over 130 locations in 27 countries, including Brazil, China, Russia and Slovakia, spanning six continents. Heckett MultiServ locations account for some 30 percent of the world's steelmaking capacity.
Slag abrasives and roofing granules are products derived from utility coal slag and are processed at 15 locations in 12 states. Slag abrasives are used for industrial surface preparation and cleaning of bridges, ship hulls and various structures. Roofing granules are sold to roofing shingle manufacturers.
In research and development activities, the Company continued to test market a dust suppressant product, designed to improve dusting conditions during the transfer of abrasives. In another project, Harsco, in an effort to identify future alternative materials for colored roofing granules, continued extensive lab testing, including coloring and weathering exposure. Harsco anticipates that the demand for slag abrasives will strengthen in 1994 because of increased activity in the infrastructure repair and rebuild market, particularly in the Northeast.
The Group's scaffolding, shoring and concrete forming operations include steel and aluminum support systems that are leased or sold to customers through a North American network of some 35 branch offices. The Division was renamed Patent Construction Systems, effective in December, to better describe the range of products and to emphasize a wide array of services in the construction marketplace. In addition, Patent Plant Services, headquartered in New Orleans, was organized to enhance marketing efforts and long-term scaffolding service contracts to paper mills, refineries, chemical and petrochemical applications and power plants. Several large orders were received from refineries in 1993.
During the second half, the Company introduced the Pro 1000 Scaffold Hoist_, part of the motorized swinging scaffold line, which will be marketed worldwide.
For 1993, percentages of consolidated net sales of certain product classes were as follows: metal reclamation, 15%; scaffolding, shoring and concrete forming equipment, 6%; and five others, including mill services, rental of plant equipment, roofing granules, slag abrasives and miscellaneous, 7%
Engineered Products
Major product classes in this Group are gas control and containment, grating, pipe fittings, process equipment and railway maintenance equipment. Other classes include composite products, metal fabrication, wear products and miscellaneous.
Gas containment products include propane tanks, cryogenic equipment, high pressure cylinders, and composite products, while gas control products include valves and regulators serving a variety of markets. The cryogenics facility in Germany achieved ISO 9000 certification during the first quarter of 1993, which will enhance product quality and international marketing opportunities.
At the cylinder plant in Harrisburg, Pennsylvania, installation of a new high-efficiency billet furnace was underway at year-end. During the fourth quarter of 1993, Harsco formed a long-term commercial agreement with INFLEX, S.A., a manufacturer of a broad line of industrial cylinders, including NGV fuel tanks, located in Buenos Aires, Argentina. Early in 1994, the Division name was changed from Plant City Steel to Taylor-Wharton Gas Equipment to reflect the Company's broader strategic objective of continuing to grow this business through selective international acquisitions in a wide product range.
Several new proprietary products were brought to market in the gas control product class in 1993. Production was underway on the innovative new propane valve for 20-pound cylinders on gas grills in Canada during the first quarter, and the full program started in September. A disposable refrigerant valve, developed to meet evolving environmental market demands, was also introduced, as was a unique scuba mouthpiece.
The Company's product class of railroad maintenance equipment includes track machinery, which services private and government-owned railroads and urban transit systems. This machinery is classified in the categories of sleeper renewal, spike driving, Hy-Rail, rail grinding, tamping, ballast maintenance, track renewal, track geometry, utility vehicle and rail and overload line equipment.
Fairmont Tamper completed work on a Pony Track Renewal System for Japan Railways East, under a contract valued at over $5 million, which was delivered in January 1994, and will be used to upgrade railroad track in that country over a course of 140 kilometers. The Company witnessed increased demand for products in China and Mexico, which included an order for over 25 HY-RAIL units, valued at more than $5 million. At year-end, the backlog was significantly ahead of that at December 31, 1992.
Harsco's diverse product class of process equipment includes these product lines: heat transfer equipment, mass transfer equipment, air-cooled heat exchangers, process equipment, protective linings and wear products, including bar, plate and fabrication, and manganese products.
Demand for the Thermific boiler, first introduced in 1988, was again at a record level, paced by the institutional building and retrofit market. Two new commercial water heaters were brought to market early in the year, and the lab blender redesign program was completed near year-end. Plans were underway to achieve ISO 9000 certification for major lines, which will aid in international marketing. In wear products, the Company conducted a research and development project to achieve enhanced weld requirements for product improvement.
Harsco manufactures a varied line of industrial grating products at numerous plants in North America. The Company produces riveted, pressure-locked and welded grating in steel and aluminum, used mainly in industrial flooring applications for power, paper, chemical, refining and processing applications, among others. The Company also produces varied products for bridge and decking uses, as well as fiberglass grating used principally in the process industries.
Production operations at a facility in Canada were phased out late in 1993, although sales and service continue in that country. A state-of-the-art slitting machine, the most powerful of its type in this country, was fully operational at the facility in Channelview, Texas during the first quarter. During the fourth quarter, the Company completed the acquisition of Electroforjados Nacionales, S.A. de C.V. (ENSA), a producer of steel and fiberglass grating products located in Queretaro, Mexico. ENSA, with annual sales of about $10 million, and the Company's other grating operations were consolidated into the Queretaro facility. The Division now operates at 13 facilities in North America.
The Company is a major supplier of pipe fittings for the plumbing, industrial, hardware and energy industries and produces a variety of product lines, including forged and stainless steel fittings, conduit fittings, nipples and couplings. During the first quarter, machinery, tooling and equipment were installed at the facility in Houston for the new line of swaged nipples and bull plugs, primarily serving industrial and energy-related applications, which went on stream during the second half. Also during the same quarter, production ceased at a plant in Detroit, but service there is ongoing. The Division headquarters was relocated to another facility in the metropolitan Columbus, Ohio region.
For 1993, percentages of consolidated net sales of certain product classes were as follows: gas control and containment, 13%; grating products, 6%; pipe fittings, 6%; process equipment, 5%; railway maintenance equipment, 6%; and four others, including structural composites, specialty metal fabrications, wear products and miscellaneous, 4%.
Defense
The Defense Group had two divisions at year-end 1993, which were BMY-Combat Systems and BMY-Wheeled Vehicles. In 1993, this Group led the Company in earnings. In January 1994, Harsco and FMC Corporation completed the joint venture, first announced in December 1992, to combine the BMY-Combat Systems Division with FMC's Defense Systems Group. The new partnership, known as United Defense, L.P., was effective on January 1, 1994 and expects to achieve annual sales of about $1 billion in 1994. Harsco holds a 40 percent ownership in United Defense, L.P., and FMC will manage the business.
United Defense, L.P. produces tracked vehicles, including self-propelled howitzers, ammunition resupply units, military earthmovers and battle tank recovery vehicles for the U.S. Government and several international customers. Research and development programs are also performed, and United Defense, L.P. is a coproducer of tracked vehicles with the Republic of Korea.
Additional products of United Defense, L.P. include the Bradley Fighting Vehicle and its derivatives, the Armored Gun System, the Multiple Launch Rocket System carrier, and the M113 Armored Personnel Carrier family of vehicles. The partnership also makes naval guns and launching systems, military track for armored vehicles and provides overhaul and conversion services.
In 1993, BMY-Combat Systems delivered 70 M109A6 Paladin Howitzers to the U.S. Government. Deliveries of this vehicle are scheduled through 1994, and the Company will continue to participate in the production of Paladin Howitzers through the defense business partnership, United Defense, L.P. In 1993, the Company continued its nine-year coproduction contract for M109 SPH vehicle kits with the Republic of Korea and delivered 110 Howitzer kits. BMY-Combat Systems delivered 57 Armored Combat Earthmover (ACE) kits in 1993 to the Republic of Korea, and deliveries are scheduled into 1995. In October, the Company received a new contract from the U.S. Government for production of these M9 ACE units, valued at about $78 million. The Company delivered 68 M88A1 Recovery Vehicles for international customers in 1993. In October, the Company leased a facility in Fayette County, Pennsylvania to expand its role in military vehicle maintenance and support activities.
BMY-Wheeled Vehicles produces various models of the five-ton truck and other commercial vehicles. In 1993, the BMY-Wheeled Vehicles Division delivered 861 five-ton trucks to the U.S. Government and international customers. The Company has produced over 25,000 of these units in various configurations and anticipates the receipt of additional orders in 1994. The Division will restart the production line in 1994 to accommodate foreign production booked as of year-end.
In February 1993, the Company acquired certain assets from the Wayne Corporation, a manufacturer of school buses, for approximately $2.1 million, and production of these buses was transferred to the Marysville facility. This is a significant defense conversion effort on the part of Harsco to use the skills of a work force in another highly-regulated industry. The Company will continue to seek additional commercial opportunities for production at that location.
For 1993, percentages of consolidated net sales of certain product classes were as follows: tracked vehicles, 24% and wheeled vehicles, 8%.
(1) (i) The products and services of Harsco can be divided into a number of classes. The product classes that contributed 10% or more as a percentage of consolidated net sales in either of the last three fiscal years are as set forth in the following table.
(1) (ii) New products and services are added from time to time; however, currently none require the investment of a material amount of the Company's assets.
(1) (iii) The manufacturing requirements of the Company's operations are such that no unusual sources of supply for raw materials are required. The raw materials used by the Company include steel and aluminum which usually are readily available.
(1) (iv) While Harsco has a number of trademarks, patents and patent applications, it does not consider that any material part of its business is dependent upon them.
(1) (v) Harsco furnishes building products and materials and a wide variety of specialized equipment for commercial, industrial, public works and residential construction which are seasonal in nature. In 1993, construction related operations accounted for 9% of total sales.
(1) (vi) The practices of the Company relating to working capital items are not unusual compared with those practices of other manufacturers servicing mainly industrial and commercial markets. Under the Defense Group, due to the nature of long-term contracts, sizable amounts of inventory are carried by the Company; however, these are partially funded through progress payments by the U.S. Government and advance payments by Foreign Governments. See Note 3 to consolidated financial statements and "Advances on long-term contracts" on the balance sheets in selected portions of the 1993 Annual Report to Shareholders under Exhibit 13.
(1) (vii) Other than in the Defense Group of the Company's business, whose principal customer has been the U.S. Government, as further described under the Defense Group, no material part of the business of the Company is dependent upon a single customer or a few customers, the loss of any one of which would have a material adverse effect upon the Company.
Sales to U.S. Government agencies in 1993, 1992 and 1991 amounted to 21%, 35% and 44% of the total sales, respectively.
(1) (viii) Backlog of orders stood at $146,751,000 and $738,978,000 as of December 31, 1993 and 1992, respectively. It is expected that approximately 22% of the total backlog at December 31, 1993, will not be filled within 1994. Excluded from the 1993 backlog is $397,939,000 contributed to United Defense, L.P. There is no significant seasonal aspect to the Company's backlog.
(1) (ix) Under the terms and regulations applicable to government contracts, the Government has the right to terminate its contracts with the Defense Group in accordance with procedures specified in the regulations and, under certain circumstances, has the right to renegotiate profits. In 1993, this group accounted for 32% of total sales.
(1) (x) The various fields in which Harsco operates are highly competitive and the Company encounters active competition in all of its activities from both larger and smaller companies who produce the same or similar products or services or who produce different products appropriate for the same uses.
(1) (xi) The expense for internal product improvement and product development activities was $5,156,000, $4,590,000 and $3,647,000 in 1993, 1992 and 1991, respectively. Customer-sponsored research and development expenditures were $23,008,000, $17,889,000 and $8,872,000, in 1993, 1992 and 1991, respectively.
(1) (xii) The Company has become subject, as have others, to more stringent air and water quality control legislation. The Clean Air Act Amendments of 1990 will impose greater costs on the Company and most other domestic manufacturers in the future but the effect on the Company's business is not yet determinable. In general, the Company has not experienced substantial difficulty in complying with these environmental regulations in the past and does not anticipate making any major capital expenditures for environmental control facilities in 1994 or 1995. While the Company expects that environmental regulations may expand, and its expenditures for air and water quality control will continue, it cannot predict the effect on its business of such expanded regulations. Additional information regarding environmental consideration is incorporated by reference to Note 1 and Note 10 to the Consolidated Financial Statements under Exhibit No. 13.
(1) (xiii) As of December 31, 1993, the Company had approximately 14,200 employees.
(d) Financial Information about Foreign and Domestic Operations and Export Sales:
Financial information concerning foreign and domestic operations and export sales is included in Note 12 to consolidated financial statements in selected portions of the 1993 Annual Report to Shareholders under Exhibit 13.
Item 2.
Item 2. Properties:
Information as to the principal plants owned and operated by Harsco is summarized in the following table:
* This property is under a lease-purchase agreement, with purchase price at a nominal amount.
Harsco also operates the following plants which are leased:
Harsco operates from a number of other plants, branches, warehouses and offices in addition to the above. In particularly, the Company has over 130 locations related to metal reclamation in twenty-seven countries, however since these facilities are on the property of the steel mill being serviced they are not listed. The Company considers all of its properties to be in satisfactory condition.
Item 3.
Item 3. Legal Proceedings:
Information regarding legal proceedings is incorporated by reference to Note 10 to the Consolidated Financial Statements, under Exhibit 13.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders:
There were no matters that were submitted during the fourth quarter of the year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.
PART II
Item 5.
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters:
Harsco common stock is traded on the New York, Pacific, Boston, and Philadelphia Stock Exchanges under the symbol HSC. At the end of 1993, there were 24,967,801 shares outstanding. In 1993, the stock traded in a range of 45-35 and closed at a year-end high of 40 5/8 . For additional information regarding Harsco common stock market price, dividends declared, and numbers of shareholders see Part II, Item 6.
Item 6. Selected Financial Data:
Five-year selected financial data is included under Exhibit 13.
Item 7.
Item 7. Management's Discussion of Financial Condition and Results of Operations:
Management's Discussion of Financial Condition and Results of Operations is included in selected portions of the 1993 Annual Report to Shareholders under Exhibit 13.
Item 8.
Item 8. Financial Statements and Supplementary Data:
The financial statements and supplementary data is included in selected portions of the 1993 Annual Report to Shareholders under Exhibit 13.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure:
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant:
(a) Identification of Directors:
Information regarding the identification of directors and positions held is incorporated by reference to the Proxy Statement dated March 25, 1994. M. W. Gambill informed the Board of Directors that he is retiring as non-executive Chairman of the Board and Director effective April 1, 1994. Upon his retirement as Chief Executive Officer on January 1, 1994, the Company entered into a Retirement and Consulting Agreement with Mr. Gambill. Under the Agreement, Mr. Gambill will receive monthly compensation at the rate of $370,000 per annum ending June 9, 1995. Mr. Gambill's age and employment background are as follows.
Name Age
M. W. Gambill 63
Principal Occupation or Employment
Served as non-executive Chairman of the Board since January 1, 1994 and is a Director. Chairman of the Board and Chief Executive Officer from May 1, 1991 to January 1, 1994. From 1987 to 1991, President and Chief Executive Officer. From 1985 to 1987 served as President and Chief Operating Officer and from 1984 to 1985 served as Executive Vice President of the Corporation and from 1975 to 1984 served as President of the Heckett Division of the Corporation. Mr. Gambill is a director of York International Corporation.
(b) Identification of Executive Officers:
Set forth below, as of March 24, 1994, are the executive officers (this excludes certain corporate officers who are not deemed "executive officers" within the meaning of applicable Securities and Exchange Commission regulations) of the Company and certain information with respect to each of them. The executive officers were elected to their respective offices on April 27, 1994, or at various times during the year as noted. All terms expire on April 30, 1994. There are no family relationships between any of the officers.
Corporate Officers:
Name Age
D. C. Hathaway 49
Principal Occupation or Employment
President and Chief Executive Officer effective January 1, 1994, and has been elected Chairman of the Board effective April 1, 1994. Director since 1991. From May 1, 1991 to December 31, 1993, served as President and Chief Operating Officer. From 1986 to 1991 served as Senior Vice President-Operations of the Corporation. Served as Group Vice President from 1984 to 1986 and as President of the Dartmouth Division of the Corporation from 1979 until October 1984.
Name Age
W. D. Etzweiler 58
Principal Occupation or Employment
Senior Vice President and Chief Operating Officer - Commercial and Industrial Products of the Corporation effective January 25, 1994. From 1992 to January 24, 1994, served as Senior Vice President - Operations of the Corporation. Served as President of the Corporation's Patterson-Kelley Division from 1982 to 1991, Vice President Sales and Marketing of the Patterson-Kelley Division from 1979 to 1982, Vice President of Marketing for the Patterson-Kelley Division from 1971 to 1979, and various manager positions with the Patterson-Kelley Division from 1966 to 1971.
Name Age
B. W. Taussig 54
Principal Occupation or Employment
Senior Vice President and Chief Operating Officer - Defense of the Corporation effective January 25, 1994. From 1992 to January 24, 1994, served as Senior Vice President - Operations of the Corporation. Served as President of the BMY Defense Group from July 1, 1991 to year-end, as President of the BMY Combat Systems Division from 1989 to 1991, and as Vice President Business Development of the BMY Combat Systems Division from July 1989 to November 1989. From 1984 to 1989, was Vice President and General Manager of the Naval Systems Division of FMC Corporation, where he was responsible for a unit manufacturing defense products with 3,100 employees and sales of approximately $350 million per year.
Name Age
L. A. Campanaro 45
Principal Occupation or Employment
Senior Vice President-Finance and Chief Financial Officer of the Corporation effective December 1, 1992 and served as Vice President and Controller from April 1, 1992 to November 30, 1992. Served as Vice President of the BMY-Wheeled Vehicles Division from February 1, 1992 to March 31, 1992, and previously served as Vice President and Controller of the BMY-Wheeled Vehicles Division from 1988 to 1992, Vice President Cryogenics of the Plant City Steel Division from 1987 to 1988, Senior Vice President Taylor-Wharton Division from 1985 to 1987, Vice President and Controller of Taylor-Wharton from 1982 to 1985, and Director of Auditing of the Corporation from 1980 to 1982.
Name Age
P. C. Coppock 43
Principal Occupation or Employment
Senior Vice President, General Counsel, Secretary and Chief Administrative Officer of the Corporation effective January 1, 1994. Served as Vice President, General Counsel and Secretary of the Corporation from May 1, 1991 to December 31, 1993. From 1989 to 1991 served as Secretary and Corporate Counsel and as Assistant Secretary and Corporate Counsel from 1986 to 1989. Served in various Corporate Attorney positions for the Corporation since 1981.
Name Age
S. D. Fazzolari 41
Principal Occupation or Employment
Vice President and Controller of the Corporation effective January 25, 1994. Served as Controller of the Corporation from January 26, 1993 to January 24, 1994. Previously served as Director of Auditing from 1985 to January 25, 1993, and served in various auditing positions from 1980 to 1985.
Item 11.
Item 11. Executive Compensation:
Information regarding compensation of executive officers and directors is incorporated by reference to the Sections entitled "Executive Compensation and Other Information", and "Directors' Compensation" of the Proxy Statement dated March 25, 1994.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management:
Information regarding security ownership of certain beneficial owners and management is incorporated by reference to the section entitled "Share Ownership of Management" of the Proxy Statement dated March 25, 1994.
Item 13.
Item 13. Certain Relationships and Related Transactions:
Information regarding certain relationships and related transactions is incorporated by reference to the section entitled "Employment Agreements with Officers of the Company" of the Proxy Statement dated March 25, 1994.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K:
The following portions of the Company's 1993 Annual Report to Shareholders are incorporated herein by reference under Exhibit 13: The consolidated financial statements and notes thereto, the related report of Coopers & Lybrand, independent accountants, Management's Discussion of Financial Condition and Results of Operations, Selected Financial Data for the years 1989 through 1993, Market for Registrant's Common Stock and Related Security Holder Matters, and the supplemental financial data, Three-Year Summary of Quarterly Results.
Exhibit
Number
(a) 1. Consolidated Financial Statements:
Consolidated Balance Sheets December 31, 1993 and 1992
Consolidated Statements of Income for the years 1993, 1992 and 1991
Consolidated Statements of Cash Flows for the years 1993, 1992 and 1991
Consolidated Statements of Changes in Shareholders' Equity for the years 1993, 1992 and 1991
Notes to Consolidated Financial Statements
Report of Independent Accountants
Management's Discussion of Financial Condition and Results of Operations
Selected Financial Data for the Years 1989 through 1993
Three-Year Summary of Quarterly Results
(a) 2. Consolidated Financial Statement Schedules:
Report of Independent Accountants on Consolidated Financial Statement Schedules
V. Property, Plant and Equipment for the years 1993, 1992 and 1991
VI. Accumulated Depreciation of Property, Plant and Equipment for the years 1993, 1992 and 1991
VIII. Valuation and Qualifying Accounts and Reserves for the years 1993, 1992 and 1991
IX. Short-Term Borrowings for the years 1993, 1992 and 1991
X. Supplementary Income Statement Information for the years 1993, 1992 and 1991
Schedules other than those listed above are omitted for the reason that they are either not applicable or not required or because the information required is contained in the financial statements or notes thereto.
Condensed financial information of the registrant is omitted since there are no substantial amounts of "restricted net assets" applicable to the Company's consolidated subsidiaries.
Financial statements of 50% or less owned associated companies are not submitted inasmuch as (1) the registrant's investment in and advances to such companies do not exceed 20% of the total consolidated assets, (2) the registrant's proportionate share of the total assets of such companies does not exceed 20% of the total consolidated assets, (3) the registrant's equity in the income before income taxes of such companies does not exceed 20% of the total consolidated income before income taxes.
Exhibits other than those listed above are omitted for the reason that they are either not applicable or not material.
The foregoing Exhibits are available from the Secretary of the Company upon receipt of a fee of $10 to cover the Company's reasonable cost of providing copies of such Exhibits.
(b) The Company filed a Report on Form 8-K dated January 8, 1993 reporting that the Company had received the decision of The Armed Services Board of Contract Appeals in case ASBCA No. 36805 concerning the Company's claim for reimbursement of after-imposed Retail Federal Excise Tax paid on sales to the United States Government of certain five-ton trucks under a 1986 contract. The decision holds that, as a result of the extension of the Federal Excise Tax law beyond its original October 1, 1988 expiration date, Harsco is entitled to payment of a price adjustment to the contract to reimburse Federal Excise Tax paid on vehicles to be delivered after October 1, 1988.
The Company filed a Report on Form 8-K dated July 8, 1993 reporting that the Company had signed a definitive purchase agreement with the shareholders representing the majority of the shares of MultiServ International, N.V. for the acquisition of all of the outstanding capital stock of MultiServ International, N.V.
The Company filed a Report on Form 8-K dated August 31, 1993 reporting that the Company had acquired all of the outstanding capital stock of MultiServ International, N.V.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HARSCO CORPORATION
Date March 18, 1994 By /S/ Leonard A. Campanaro Leonard A. Campanaro Senior Vice President-Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
Chairman (Malcolm W. Gambill)
President & Chief Executive (Derek C. Hathaway) Officer
Senior Vice President-Finance and (Leonard A. Campanaro) Chief Financial Officer (Principal Financial Officer)
Vice President and Controller (Salvatore D. Fazzolari) (Principal Accounting Officer)
Director (Jeffrey J. Burdge)
Director (Robert L. Kirk)
Director (James E. Marley)
Director (Frank E. Masland III)
Director (Robert F. Nation)
Director (Nilon H. Prater)
Director (DeWitt C. Smith, Jr.)
Director (Roy C. Smith)
Director (Andrew J. Sordoni III)
Director (Dr. Robert C. Wilburn)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HARSCO CORPORATION
Date March 18, 1994 By /S/ Leonard A. Campanaro Leonard A. Campanaro Senior Vice President-Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
/S/ Malcolm W. Gambill Chairman March 23, 1994 (Malcolm W. Gambill)
/S/ Derek C. Hathaway President & Chief Executive March 24, 1994 (Derek C. Hathaway) Officer
/S/ Leonard A. Campanaro Senior Vice President-Finance and March 24, 1994 (Leonard A. Campanaro) Chief Financial Officer (Principal Financial Officer)
/S/ Salvatore D. Fazzolari Vice President and Controller March 25, 1994 (Salvatore D. Fazzolari) (Principal Accounting Officer)
/S/ Jeffrey J. Burdge Director March 18, 1994 (Jeffrey J. Burdge)
/S/ Robert L. Kirk Director March 18, 1994 (Robert L. Kirk)
/S/ James E. Marley Director March 18, 1994 (James E. Marley)
/S/ Frank E. Masland III Director March 18, 1994 (Frank E. Masland III)
/S/ Robert F. Nation Director March 18, 1994 (Robert F. Nation)
/S/ Nilon H. Prater Director March 18, 1994 (Nilon H. Prater)
/S/ DeWitt C. Smith, Jr. Director March 18, 1994 (DeWitt C. Smith, Jr.)
/S/ Roy C. Smith Director March 18, 1994 (Roy C. Smith)
/S/ Andrew J. Sordoni III Director March 18, 1994 (Andrew J. Sordoni III)
/S/ Dr. Robert C. Wilburn Director March 18, 1994 (Dr. Robert C. Wilburn)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of Harsco Corporation
Our report on the consolidated financial statements of Harsco Corporation and subsidiary companies, which includes explanatory paragraphs regarding (i) uncertainties concerning the Company's involvement in various disputes regarding Federal Excise Tax and other contract matters primarily relating to the five-ton truck contract and the ultimate outcome of the Company's claims against the Government relating to certain contracts and (ii) changes in the Company's method of accounting for income taxes and postretirement benefits other than pensions, has been incorporated by reference in this Form 10-K from page 56 of the 1993 Annual Report to Shareholders of Harsco Corporation. In connection with our audits of such consolidated financial statements, we have also audited the related consolidated financial statement schedules listed in the index (Item 14(a) 2.) on page 20 of this Form 10-K.
In our opinion, the consolidated financial statement schedules referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein.
COOPERS & LYBRAND
Philadelphia, Pennsylvania February 1, 1994, except as to the first and third paragraphs of Note 10, for which the dates are February 25, 1994 and March 4, 1994, respectively.
SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)
NOTE: For domestic and foreign facilities, property, plant and equipment is depreciated over the estimated useful lives of the assets using principally the straight-line method. The estimated useful lives of various classes of assets are as follows:
SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)
SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)
SCHEDULE VI. ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)
SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS (dollars in thousands)
SCHEDULE IX. SHORT-TERM BORROWINGS (dollars in thousands)
SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION (dollars in thousands)
COLUMN A COLUMN B
Item Charged to Costs and Expenses
1993 1992 1991
Maintenance and repairs $55,947 $47,670 $47,826