Harsco Corporation

Good morning, my name is Misty, and I will be your conference facilitator. At this time, I would like to welcome everyone to the Harsfield Corporation second quarter release conference call. All lines have been placed on mute to avoid any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key on your telephone keypad. Also, this telephone conference presentation and accompanying webcasts made on behalf of Harsco Corporation are subject to copyright by Harsco Corporation and all rights are reserved. Harsco Corporation will be recording this teleconference. No recordings or redistributions of this telephone conference by any other party are permitted without the express written consent of Harsco Corporation. Your participation indicates your agreement. I would now like to introduce Dave Martin of Harsco Corporation. Mr. Martin, you may begin your call.

Thank you, Misty, and welcome to everyone joining us today. I'm Dave Martin, VP of Investor Relations for Harsco. With me today is Nick Rasberger, our Chairman and Chief Executive Officer, and Pete Minen, Harsco's Senior Vice President and Chief Financial Officer. This morning, we will discuss our results for the second quarter of 2021 and our outlook for the remainder of the year. We'll then take your questions. Before our presentation, however, let me mention a few items. First, our earnings release as well as a slide presentation for this call are available on our website. Second, we will make statements today that are considered forward-looking within the meaning of the federal securities laws. These statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties that may cause actual results to differ from those forward-looking statements. For a discussion of such risks and uncertainties, see the risk factors section in our most recent 10-K and 10-Q. The company undertakes no obligation to revise or update any forward-looking statement. Lastly, on this call, we may refer to adjusted financial results that are considered non-GAAP for SEC reporting purposes. A reconciliation to GAAP results is included in our earnings release as well as a slide presentation. With that said, I'll turn the call to Nick.

Good morning, everyone, and thanks for joining us. A few weeks ago, we announced the appointment of our new CFO, Anshuman Agha. He will join us later this month, and I could not be more pleased with the outcome of our search process. We look forward to introducing Anshuman to you once he has settled into the role. Again, I appreciate Pete's willingness to defer his retirement and remain with us through the transition over the next few months. I'm also very pleased with our Q2 results. We delivered our highest quarterly revenue since 2013, and our adjusted EBITDA growth and margins were strong, both year over year and sequentially versus our first quarter. Our results reflect impressive execution by our team. I'll highlight the ongoing integration of ESOL and Clean Earth, our high level of service to a booming steel industry, and advances in operational excellence in the rail business. The rail and contaminated material segments had lagged the recovery of other sectors, and we are pleased with the way in which we've met the increased demand. In short, the business momentum is now more broad-based than it was in Q1, and we are maintaining a positive outlook for the balance of the year. I would like to thank our 12,000-plus employees for their continued commitment to Harsco and to our customers. I'll comment on each of the segments, beginning with Harsco Environmental. Capacity utilization of the steel mills that we support is approaching that of the first half of 2019 before the market began to turn down. And the outlook into next year includes further volume growth. When coupled with the shift towards an improved mix of environmental services and lower capital spending, HG's outlook for 2022 is as bright as ever. From a macro perspective, the steel industry's heightened focus on sustainability fits well with our focus on ESG and the portfolio of environmental solutions in our innovation pipeline. Our business has never been better positioned as a true strategic partner to the steel industry, and we look forward to continuing the work with our customers to advance and expand their green steel initiatives. Our clean earth segment continues to perform well. we're delivering on our commitment to maximize the value from last year's ESOL acquisition while also taking advantage of the benefits of a market recovery. After realizing more than 10 million of synergies last year, we anticipate at least another 20 million this year. So, while the recovery in each of Clean Earth's end markets is firmly rooted, the business is experiencing some pressure from tightness in the labor market and with end disposal assets. We have factored these items into our outlook for the year and, where possible, are taking action to mitigate the impact. At the same time, we continue to recognize new growth opportunities in the hazardous waste industry, supporting the initial steps we have taken to transform our portfolio of businesses. The rail segment recorded its highest quarterly profit in two years, and we expect EBITDA growth to exceed 60 percent for the full year. The business has benefited from a recovery in domestic spending and also its global aftermarket platform. COVID challenges remain, particularly in Asia and Latin America, but this has been accounted for in our outlook. The team is also executing at a high level in managing our large contracts, dealing with COVID-related supply chain issues, and as noted earlier, improving key operational metrics. Finally, in May, we released our most comprehensive ESG report to date, highlighting our ESG accomplishments and providing a detailed look at our ESG strategy, as well as focus areas and the governance structure to align with our business strategy and commitment to ESG with shareholder value creation. Highlights of these are on page four of the slide deck. We are particularly proud of our safety record last year and our contributions to the circular economy. Last year, Harsco recycled or repurposed over 75% of the material that we processed, and we continue to see increases in our ESG ratings. We are reinforcing our commitment to the environment and to social and governance matters by incorporating related goals into Harsco's annual incentive plan. I'll now turn the call over to Pete.