Horsehead Holding Corp. (Nasdaq: ZINC) reported a consolidated net loss of $(12.7) million, or $(0.29) per diluted share, for the fourth quarter of 2011, compared to net income for the fourth quarter of 2010 of $14.6 million, or $0.33 per diluted share. For the full year of 2011, consolidated net income was $21.5 million, or $0.49 per diluted share compared to $24.8 million, or $0.57 per diluted share, in 2010.
The net loss for the fourth quarter of 2011 was $(4.4) million, or $(0.10) per diluted share after excluding non-cash charges related to hedges and other non-cash charges related to asset valuation adjustments for the Corporation’s Monaca, Pennsylvania site and its Zochem, Inc., subsidiary. This compares to net income for the fourth quarter of 2010 of $7.6 million, or $0.17 per diluted share after excluding the effect of hedges and insurance recoveries net of associated expenses and taxes.
Some of the major items affecting earnings before taxes for the fourth quarter of 2011 excluding these non-cash charges were:
- Increased production at the Monaca, PA smelter combined with results from Zochem, which was acquired on November 1, 2011, resulted in a 33% increase in shipment of zinc products compared to the prior year fourth quarter and an 18% increase compared to the third quarter of 2011;
- Increased melting productivity at INMETCO compared with the fourth quarter of 2010 substantially offsetting the impact of a 15 day planned annual maintenance outage taken in October 2011.
- An 18% decline in the price of zinc and a 22% decline in the price of nickel compared to the fourth quarter of 2010;
- Transaction and other charges related to the Zochem acquisition of $1.0 million.
“For the fourth quarter, zinc production at the smelter was at its highest level of the year, reversing the operational issues that affected production during the third quarter. Demand for our zinc products was very good for a fourth quarter, which is typically adversely affected by lower seasonal demand,” said Jim Hensler, President and Chief Executive Officer. “We were pleased to complete the acquisition of Zochem during the quarter, which added to our zinc production and shipments. INMETCO also contributed positively to the quarter even though an annual maintenance outage was taken in October.”