Horsehead Holding Corp. (Nasdaq: ZINC) reported a consolidated net loss of $(1.7) million, or $(0.04) per diluted share, for the second quarter of 2012, compared to a net loss for the second quarter of 2011 of $(3.7) million, or $(0.08) per diluted share. Consolidated net earnings, excluding non-cash charges associated with hedges and a lower-of-cost-or-market (“LCM”) adjustment to inventory were $1.5 million for the second quarter of 2012, or $0.03 per diluted share. In comparison, consolidated net earnings, excluding non-cash charges associated with hedges, were $5.5 million, or $0.13 per diluted share, for the second quarter of 2011. The LME zinc price was 14% lower versus the same quarter last year, reducing earnings an estimated $0.13 per share for the quarter.
“While pleased with the operating levels at our businesses, lower commodity prices had a noticeable effect on our earnings when compared to the same quarter last year. Demand for our zinc products was strong and our zinc smelting facility and recycling plants operated at close to full capacity. When the non-cash impact of hedge write-offs, mark-to-market adjustments and LCM charges are eliminated, our operating results were positive despite much lower commodity prices compared with the prior year,” said Jim Hensler, President and Chief Executive Officer.
“At INMETCO, higher shipment volumes of nickel remelt alloy partially offset the impact of lower nickel prices, but the quarter was also adversely affected by higher maintenance repair cost due to unplanned equipment outages. The net impact was a $0.04 per share decline in earnings compared with the second quarter of 2011.
“We are also pleased that we were able to close on a $175 million senior secured notes offering on July 26, 2012 to provide additional financing for the completion of our new zinc plant project in Rutherford County, North Carolina. Construction activity on this project is accelerating and over 65% of the project spending has been committed,” Hensler said. “We continue to be on schedule for a startup in the second half of 2013.”
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