Discontinued Operations and Dispositions

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Dispositions

Harsco Rail Segment

The results of the Rail business were previously presented as discontinued operations. However, the held for sale criteria were no longer met beginning with March 31, 2024 as the sales process has been paused. The assets and liabilities of the Rail business, previously presented as held for sale, were reclassified to held and used in the Condensed Consolidated Balance Sheets as of December 31, 2023, and the results of the Rail business were reclassified from discontinued operations to continuing operations for all periods presented in the Condensed Consolidated Statements of Operations. The Rail business’ assets and liabilities as of March 31, 2024 were measured at the carrying amount before the assets were classified as held for sale, reduced by $10.7 million representing the depreciation and amortization expense that would have been recognized had the assets been continuously classified as held for use. The $10.7 million reduction to the carrying value of the Rail assets was reported in Remeasurement of long-lived assets in the first quarter of 2024.

The reclassification of the Rail business's balance sheet positions as of December 31, 2023 had the following impacts on the Condensed Consolidated Balance Sheets and are summarized as follows:


(in thousands)	December 31 2023
Trade accounts receivable, net	$	57,415
Other receivables	6,708
Inventories	103,077
Current portion of contract assets	56,341
Prepaid expenses	28,797
Other current assets	2,895
Property, plant and equipment, net	44,113
Right-of-use assets, net	7,050
Goodwill	13,026
Intangible assets, net	3,122
Deferred income tax assets	973

Other assets	22,792
Total assets	$	346,309

Accounts payable	$	44,703
Accrued compensation	6,056
Income taxes payable	1,434
Current portion of operating lease liabilities	3,656
Current portion of advances on contracts	32,912
Reserve for forward losses on contracts	52,725
Other current liabilities	30,550

Operating lease liabilities	3,331
Deferred tax liabilities	350
Other liabilities	494
Total liabilities	$	176,211

The reclassification of the results of the Rail business to continuing operations had the following impacts on the Consolidated Statement of Operations for the three and nine months ended September 30, 2023:


	Three Months Ended		Nine Months Ended
	September 30		September 30
(In thousands)	2023		2023
Service revenues	$	17,806	$	36,291
Product revenues	54,574		189,989
Total revenues	72,380		226,280
Cost of services sold	11,425		24,341
Cost of products sold	50,760		157,265
Total cost of sales	62,185		181,606
Selling, general and administrative expenses	9,124		29,001
Research and development expenses	631		1,494
Other expense (income), net	1,455		2,912
Total costs and expenses	73,395		215,013
Operating income (loss) from continuing operations	(1,015)		11,267
Interest income	44		96
Interest expense	(813)		(2,165)
Defined benefit pension income (expense)	6		19
Income (loss) from continuing operations before income taxes and equity income	(1,778)		9,217
Income tax benefit (expense) from continuing operations	611		(5,495)
Income (loss) from continuing operations	$	(1,167)	$	3,722

Harsco Environmental Segment

On April 1, 2024, the Company completed the sale of Performix Metallurgical Additives, LLC, a subsidiary of HE, for $17.5 million, subject to normal post-closing adjustments, and recognized a gain on the sale of $1.8 million (or approximately $1.3 million after-tax).

On August 29, 2024, the Company completed the sale of Reed Minerals, LLC, a subsidiary of HE, for $45.0 million subject to normal post-closing adjustments, and recognized a gain on sale of $8.7 million (or approximately $2.8 million after-tax). The most material classes of assets and liabilities on the date of the sale were Trade accounts receivable, net of $9.9 million, Inventories of $7.1 million, Property, plant and equipment ("PP&E") net of $10.7 million, Goodwill of $13.7 million and Accounts payable of $6.9 million.

Other

Discontinued operations include costs directly attributable to retained contingent liabilities of other previously disposed businesses.