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E ngineer ed pr oducts continue to be a sizeable component of Harsco's operating pr ofile. These manufacturing-based businesses generally operate in smaller niche markets with minimal capital investment r equir ements. All ar e market leaders in their r espective sectors, and ar e expected to play a supporting part in Harsco's futur e gr owth thr ough their continued ear nings and cash flow performance. 

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z The pr olonged domestic manufacturing r ecession of 2000-2003 pr oved especially challenging for the industrial gas cylinders, tanks and valve pr oducts manufactur ed by Harsco's Gas and Fluid Contr ol Gr oup. Despite these dif ficulties, the Gr oup has maintained overall pr ofitability and continues to be a positive cash flow generator . 

z Impr oving economic conditions, both in the United States and inter nationally , ar e expected to stimulate a manufacturing r ecovery this year . This should r esult in impr oved demand for Harsco's gas and fluid contr ol pr oducts, although competitive pr essur es r emain intense. 

z Harsco's Reed Minerals and Patterson-Kelley businesses continue to be among the Company's most consistent performers. These businesses operate in stable markets, generate consistent ear nings and margin performance, and pr oduce superior r etur ns on capital and Economic V alue Added (EV A ® ). 

z Incr eased capital spending for natural gas exploration and drilling is expected to generate additional or ders for Harsco's Air -X-Changers air - cooled heat exchangers. 

z A sustainable r etur n to pr ofitability is anticipated in Harsco's IKG industrial grating business following substantial consolidation and cost r eduction actions taken in 2003. 

z Several new specialty pr oducts for 2004 ar e expected to support an impr oving sales outlook for the Company's manufacturing businesses. 

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