##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 001-33658
 Horsehead Holding Corp.
  
 Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    20-0447377
(I.R.S. Employer
Identification No.)4955 Steubenville Pike, Suite 405Pittsburgh, Pennsylvania 15205
    
    (724) 774-1020(Address of Principal Executive Offices, including Zip Code)
    
    (Registrants Telephone Number, Including Area Code).
 
  þ o
  o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




---



##### 



TABLE OF CONTENTS
 PART I  Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of September 30, 2009 (Unaudited) and December 31, 2008
    
    
    1Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2009 and 2008
    
    
    2Consolidated Statement of Stockholders Equity (Unaudited) for the nine months ended September 30, 2009
    
    
    3Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2009 and September 30, 2008
    
    
    4Notes to Consolidated Financial Statements (Unaudited) September 30, 2009
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    28PART II  Other InformationItem 1. Legal Proceedings
    
    
    29Item 1A Risk Factors
    
    
    29Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3 Defaults Upon Senior Securities
    
    
    29Item 4 Submission of Matters to a Vote of Security Holders
    
    
    29Item 5. Other Information
    
    
    29Item 6. Exhibits
    
    
    29
 CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
    i




---



##### Table of Contents



ii




---



##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 
 CONSOLIDATED BALANCE SHEETS   (Amounts in thousands, except per share amounts)
 September 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    145,176
    
    
    $
    122,768Accounts receivable, net of allowance of $1,037 and $750, respectively
    
    
    27,707
    
    
    
    30,446Inventories
    
    
    28,186
    
    
    
    47,209Prepaid expenses and other current assets
    
    
    12,872
    
    
    
    15,842Deferred income taxes
    
    
    5,471
    
    
    
    4,925Total current assets
    
    
    219,412
    
    
    
    221,190Property, plant and equipment, net
    
    
    151,539
    
    
    
    136,141Other assetsIntangible
assets, net of amortization of $197
    
    
    11,507
    
    
    
    Restricted cash
    
    
    25,219
    
    
    
    Deferred financing costs, net of amortization of $1,775 and $1,200, respectively
    
    
    424
    
    
    
    999Deposits and other
    
    
    138
    
    
    
    148Total other assets
    
    
    37,288
    
    
    
    1,147Total assets
    
    $
    408,239
    
    
    $
    358,478LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent maturities of long-term debt
    
    $
    63
    
    
    $
    62Accounts payable
    
    
    23,952
    
    
    
    35,285Accrued expenses
    
    
    19,382
    
    
    
    24,931Total current liabilities
    
    
    43,397
    
    
    
    60,278Long-term debt, less current maturities
    
    
    266
    
    
    
    58Other long-term liabilities
    
    
    18,569
    
    
    
    10,257Deferred income taxes
    
    
    1,326
    
    
    
    1,326Commitments and contingenciesStockholders equityCommon stock, par value $0.01 per share; 100,000 shares authorized; 43,322 and
35,253 shares issued and outstanding in 2009 and 2008, respectively
    
    
    433
    
    
    
    352Preferred stock, par value $0.01 per share; 10,000 shares authorized; no shares
issued or outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    210,997
    
    
    
    129,741Retained earnings
    
    
    128,779
    
    
    
    156,466Total Horsehead Holding Corp. stockholders equity
    
    
    340,209
    
    
    
    286,559Non-controlling interest
    
    
    4,472
    
    
    
    Total stockholders equity
    
    
    344,681
    
    
    
    286,559Total liabilities and stockholders equity
    
    $
    408,239
    
    
    $
    358,478
 The accompanying notes to financial statements are an integral part of these statements.
 1




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS    (Amounts in thousands except per share amounts)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales of zinc material and other goods
    
    $
    50,895
    
    
    $
    96,264
    
    
    $
    123,919
    
    
    $
    313,809EAF dust service fees
    
    
    9,415
    
    
    
    12,922
    
    
    
    23,811
    
    
    
    40,348Net sales
    
    
    60,310
    
    
    
    109,186
    
    
    
    147,730
    
    
    
    354,157Cost of sales of zinc material and other
goods (excluding depreciation)
    
    
    51,718
    
    
    
    83,721
    
    
    
    155,455
    
    
    
    269,642Cost of EAF dust services
    
    
    4,686
    
    
    
    3,555
    
    
    
    10,266
    
    
    
    10,564Cost of sales (excluding depreciation)
    
    
    56,404
    
    
    
    87,276
    
    
    
    165,721
    
    
    
    280,206Depreciation
    
    
    3,743
    
    
    
    3,018
    
    
    
    10,956
    
    
    
    8,845Selling, general and administrative expenses
    
    
    3,683
    
    
    
    4,735
    
    
    
    11,429
    
    
    
    13,517Total costs and expenses
    
    
    63,830
    
    
    
    95,029
    
    
    
    188,106
    
    
    
    302,568Income (loss) from operations
    
    
    (3,520
    )
    
    
    14,157
    
    
    
    (40,376
    )
    
    
    51,589Other income (expense)Interest expense
    
    
    (596
    )
    
    
    (360
    )
    
    
    (1,550
    )
    
    
    (1,089
    )Interest and other income
    
    
    159
    
    
    
    808
    
    
    
    442
    
    
    
    1,957(437
    )
    
    
    448
    
    
    
    (1,108
    )
    
    
    868Income (loss) before income taxes
    
    
    (3,957
    )
    
    
    14,605
    
    
    
    (41,484
    )
    
    
    52,457Income tax provision (benefit)
    
    
    (377
    )
    
    
    5,210
    
    
    
    (13,797
    )
    
    
    19,325NET INCOME (LOSS)
    
    $
    (3,580
    )
    
    $
    9,395
    
    
    $
    (27,687
    )
    
    $
    33,132Earnings (losses) per common share:Basic
    
    $
    (0.10
    )
    
    $
    0.27
    
    
    $
    (0.78
    )
    
    $
    0.95Diluted
    
    $
    (0.10
    )
    
    $
    0.27
    
    
    $
    (0.78
    )
    
    $
    0.94Weighted average shares outstanding:Basic
    
    
    36,498
    
    
    
    35,216
    
    
    
    35,676
    
    
    
    35,033Diluted
    
    
    36,498
    
    
    
    35,332
    
    
    
    35,676
    
    
    
    35,258
 The accompanying notes to financial statements are an integral part of these statements.
 2




---



##### Table of Contents



CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY    (Amounts in thousands)
 Additional
    
    
    
    
    
    
    Non-Common Stock
    
    
    Paid-In
    
    
    Retained
    
    
    controllingShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Interest
    
    
    TotalBalance at January 1, 2009
    
    
    35,253
    
    
    $
    352
    
    
    $
    129,741
    
    
    $
    156,466
    
    
    $
    
    
    
    $
    286,559Restricted stock vesting
    
    
    19
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    Net proceeds from public
offering
    
    
    8,050
    
    
    
    80
    
    
    
    79,705
    
    
    
    
    
    
    
    
    
    
    
    79,785Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    1,609
    
    
    
    
    
    
    
    
    
    
    
    1,609Tax liability of stock vesting
    
    
    
    
    
    
    
    
    
    
    (57
    )
    
    
    
    
    
    
    
    
    
    
    (57
    )Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,687
    )
    
    
    
    
    
    
    (27,687
    )Investment by non-controlling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,472
    
    
    
    4,472Balance at September 30, 2009
    
    
    43,322
    
    
    $
    433
    
    
    $
    210,997
    
    
    $
    128,779
    
    
    $
    4,472
    
    
    $
    344,681
 The accompanying notes to financial statements are an integral part of these statements
 3




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS    (Amounts in thousands)
 2009
    
    
    2008Cash Flows from Operating Activities:Net income (loss)
    
    $
    (27,687
    )
    
    $
    33,132Adjustments to reconcile net income to net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    11,531
    
    
    
    9,345Deferred income tax (benefit)
    
    
    (546
    )
    
    
    (401
    )Loss on write down of assets
    
    
    962
    
    
    
    Losses (gains) on derivative financial instruments
    
    
    7,474
    
    
    
    (24,262
    )Non-cash compensation expense
    
    
    1,609
    
    
    
    1,305Changes in operating assets and liabilities:Decrease in accounts receivable
    
    
    2,739
    
    
    
    7,405Decrease in inventories
    
    
    18,688
    
    
    
    17,294(Increase) in prepaid expenses and other current assets
    
    
    (8,491
    )
    
    
    (13,977
    )Decrease (Increase) in other assets
    
    
    209
    
    
    
    (1
    )(Decrease) in accounts payable
    
    
    (11,333
    )
    
    
    (5,735
    )(Decrease) increase in accrued expenses net of tax effect of share based compensation
    
    
    (3,353
    )
    
    
    5,822Increase (decrease) in other long-term liabilities
    
    
    1,200
    
    
    
    (1,378
    )Net cash (used in) provided by operating activities
    
    
    (6,998
    )
    
    
    28,549Cash Flows from Investing Activities:Purchase of property, plant and equipment
    
    
    (26,784
    )
    
    
    (27,184
    )Increase in restricted cash
    
    
    (25,219
    )
    
    
    Purchase of intangible assets
    
    
    (3,000
    )
    
    
    Net cash (used in) investing activities
    
    
    (55,003
    )
    
    
    (27,184
    )Cash Flows from Financing Activities:Proceeds from equity offering, net of expenses
    
    
    79,785
    
    
    
    Proceeds from exercise of options
    
    
    
    
    
    
    1,004Proceeds from non-controlling interest equity holders
    
    
    4,472
    
    
    
    Tax (liability) benefit of share based compensation
    
    
    (57
    )
    
    
    1,987Proceeds from issuance of loans payable
    
    
    255
    
    
    
    Payments on notes payable and long-term debt
    
    
    (46
    )
    
    
    (46
    )Net cash provided by financing activities
    
    
    84,409
    
    
    
    2,945Net Increase In Cash And Cash Equivalents
    
    
    22,408
    
    
    
    4,310Cash and cash equivalents at beginning of period
    
    
    122,768
    
    
    
    76,169Cash and cash equivalents at end of period
    
    $
    145,176
    
    
    $
    80,479
 The accompanying notes to financial statements are an integral part of these statements.
 4




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
 NOTE ABASIS OF PRESENTATION
   NOTE BRECENTLY ISSUED ACCOUNTING STANDARDS
      5




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
  NOTE CEQUITY OFFERING
  NOTE DACQUISITION OF BUSINESS
  Customer contracts
    
    $
    10,915Non-compete agreement
    
    
    789Total assets purchased
    
    
    11,704Purchase price
    
    $
    11,704
 NOTE ENEW MARKETS TAX CREDIT PROGRAM FINANCING
  6




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
 NOTE FASSET WRITE-DOWNS
  NOTE GCASH AND CASH EQUIVALENTS
  September 30,
    
    
    December 31,2009
    
    
    2008Cash in bank
    
    $
    25,118
    
    
    $
    82,789Government money market funds
    
    
    70,000
    
    
    
    Certificates of deposit
    
    
    50,058
    
    
    
    Commercial paper
    
    
    
    
    
    
    39,979$
    145,176
    
    
    $
    122,768
    NOTE HINVENTORIES
  September 30,
    
    
    December 31,2009
    
    
    2008Raw materials
    
    $
    6,348
    
    
    $
    15,885Work-in-process
    
    
    1,335
    
    
    
    4,394Finished goods
    
    
    9,298
    
    
    
    13,969Supplies and spare parts
    
    
    11,205
    
    
    
    12,961$
    28,186
    
    
    $
    47,209
 7




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
  NOTE IPREPAID EXPENSES AND OTHER CURRENT ASSETS
  September 30,
    
    
    December 31,2009
    
    
    2008Refundable income taxes
    
    $
    7,495
    
    
    $
    Prepaid hedge contracts
    
    
    3,514
    
    
    
    12,601Other
    
    
    1,863
    
    
    
    3,241$
    12,872
    
    
    $
    15,842
 NOTE JPROPERTY, PLANT AND EQUIPMENT
  September 30,
    
    
    December 31,2009
    
    
    2008Land and land improvements
    
    $
    8,503
    
    
    $
    8,494Buildings and building improvements
    
    
    23,259
    
    
    
    23,228Machinery and equipment
    
    
    120,021
    
    
    
    113,444Construction in progress
    
    
    53,809
    
    
    
    34,878205,592
    
    
    
    180,044Less accumulated depreciation
    
    
    (54,053
    )
    
    
    (43,903
    )$
    151,539
    
    
    $
    136,141
 NOTE KINTANGIBLE ASSETS
  September 30,2009Customer contracts
    
    $
    10,915Non-compete agreement
    
    
    78911,704Less accumulated amortization
    
    
    (197
    )$
    11,507
  8




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
 NOTE LRESTRICTED CASH
  September 30,2009Letters of credit
    
    $
    15,288ESOI deferred purchase price obligation
    
    
    4,000NMTC
    
    
    5,931$
    25,219
  NOTE MNOTES PAYABLE AND LONG-TERM DEBT
      9




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
 NOTE NACCRUED EXPENSES
  September 30,
    
    
    December 31,2009
    
    
    2008Employee related costs
    
    $
    5,437
    
    
    $
    9,915EAF dust processing reserve
    
    
    4,477
    
    
    
    1,334Accrued hedge contracts
    
    
    
    
    
    
    3,987Insurance claim liabilities
    
    
    2,800
    
    
    
    2,800Other
    
    
    6,668
    
    
    
    6,895$
    19,382
    
    
    $
    24,931
 NOTE OOTHER LONG-TERM LIABILITIES
  September 30,
    
    
    December 31,2009
    
    
    2008Environmental obligations
    
    $
    2,032
    
    
    $
    2,047Insurance claim liabilities
    
    
    7,742
    
    
    
    6,964Asset retirement obligations
    
    
    1,323
    
    
    
    1,246Deferred asset purchase price obligations
    
    
    7,112
    
    
    
    Other
    
    
    360
    
    
    
    $
    18,569
    
    
    $
    10,257
 Deferred asset purchase price obligations
  NOTE PINCOME TAXES
   NOTE QSTOCK-BASED COMPENSATION
  10




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
       NOTE RACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   11




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
       Three months ended September 30,
    
    
    Nine months ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Gains (losses) included in net sales:Put options
    
    
    ($1,285
    )
    
    $
    18,080
    
    
    
    ($7,715
    )
    
    $
    32,001Swaps
    
    
    1,176
    
    
    
    (1,013
    )
    
    
    2,061
    
    
    
    1,826($109
    )
    
    $
    17,067
    
    
    
    ($5,654
    )
    
    $
    33,827
  Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
 September 30, 2009
    
    
    December 31, 2008Put options and swaps included in Prepaid expenses and other assets
    
    $
    3,514
    
    
    $
    12,601Swaps included in Accrued expenses
    
    $
    
    
    
    $
    3,987
  12




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
   NOTE SCONTINGENCIES
   NOTE TEARNINGS PER SHARE
   Three months ended September 30,
    
    
    Nine months ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Basic earnings (loss) per share:Net income (loss)
    
    $
    (3,580
    )
    
    $
    9,395
    
    
    $
    (27,687
    )
    
    $
    33,132Weighted average shares outstanding  basic
    
    
    36,498
    
    
    
    35,216
    
    
    
    35,676
    
    
    
    35,033Basic earnings (loss) per share
    
    $
    (0.10
    )
    
    $
    0.27
    
    
    $
    (0.78
    )
    
    $
    0.95Diluted earnings (loss) per share:Net income (loss)
    
    $
    (3,580
    )
    
    $
    9,395
    
    
    $
    (27,687
    )
    
    $
    33,132Weighted average shares outstanding 
diluted
    
    
    36,498
    
    
    
    35,332
    
    
    
    35,676
    
    
    
    35,258Diluted earnings (loss) per share
    
    $
    (0.10
    )
    
    $
    0.27
    
    
    $
    (0.78
    )
    
    $
    0.94Reconciliation of average shares
outstanding  basic to average shares
outstanding  diluted:Weighted average shares outstanding  basic
    
    
    36,498
    
    
    
    35,216
    
    
    
    35,676
    
    
    
    35,033Effect of dilutive securities:Options
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    222Restricted stock units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Weighted average shares outstanding 
diluted
    
    
    36,498
    
    
    
    35,332
    
    
    
    35,676
    
    
    
    35,258
  13




---



##### Table of Contents



HORSEHEAD HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
 NOTE UCOMMITMENTS
  Years Ending December 31,
    
    Amounts2009
    
    $
    9942010
    
    
    3,5652011
    
    
    2,9132012
    
    
    1,7122013
    
    
    1,319Thereafter
    
    
    1,616$
    12,119
 NOTE VSUBSEQUENT EVENTS
  14




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
 General
  Overview
 Our History
   Economic Conditions and Outlook
  Factors Affecting Our Operating Results
 Market Price for Zinc
  15




---



##### Table of Contents



Demand for Zinc-Based Products
   Production/EAF Dust Processed
    
    Shipments/EAF Dust Receipts
    
    Revenue/TonNine Months Ended
    
    Year Ended
    
    Nine Months Ended
    
    Year Ended
    
    Nine Months Ended
    
    Year EndedSeptember 30,
    
    December 31,
    
    September 30,
    
    December 31,
    
    September 30,
    
    December 31,2009
    
    2008
    
    2008
    
    2007
    
    2009
    
    2008
    
    2008
    
    2007
    
    2009
    
    2008
    
    2008
    
    2007(Tons, in thousands)
    
    (Tons, in thousands)
    
    (In U.S. dollars)Product:Zinc Products
    
    
    75
    
    
    
    108
    
    
    
    137
    
    
    
    140
    
    
    
    87
    
    
    
    124
    
    
    
    154
    
    
    
    153
    
    
    $
    1,389
    
    
    $
    2,054
    
    
    $
    1,932
    
    
    $
    3,104EAF Dust
    
    
    279
    
    
    
    402
    
    
    
    519
    
    
    
    492
    
    
    
    293
    
    
    
    422
    
    
    
    507
    
    
    
    458
    
    
    $
    81
    
    
    $
    96
    
    
    $
    97
    
    
    $
    99
 Cost of Sales (excluding depreciation)
  Selling, General and Administrative Expenses
 16




---



##### Table of Contents



Trends Affecting Our Business
  
    
    LME price of zinc;
    
    changes in cost of energy and fuels;
    
    gain and loss of customers;
    
    pricing pressures from competitors, including new entrants into the EAF dust
recycling market;
    
    increases and decreases in the use of zinc products;
    
    expansions into new products and expansion of our capacity, which requires us to
incur costs prior to generating revenues;
    
    expenditures required to comply with environmental and other operational
regulations;
    
    access to credit by our customers; and
    
    our operational efficiency improvement programs.
      17




---



##### Table of Contents



Summary of Critical Accounting Policies and Estimates
  Inventories
   Financial Instruments
      Impairment
  18




---



##### Table of Contents



Recently Issued Accounting Pronouncements
       Results of Operations
  Three months ended September 30,
    

Nine months ended September 30,2009
    
    2008
    
    2009
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales (excluding depreciation)
    
    
    93.5
    
    
    
    79.9
    
    
    
    112.2
    
    
    
    79.1Depreciation
    
    
    6.2
    
    
    
    2.8
    
    
    
    7.4
    
    
    
    2.5Selling, general and administrative expenses
    
    
    6.1
    
    
    
    4.3
    
    
    
    7.7
    
    
    
    3.8Income (loss) from operations
    
    
    (5.8
    )
    
    
    13.0
    
    
    
    (27.3
    )
    
    
    14.6Interest expense
    
    
    1.0
    
    
    
    0.3
    
    
    
    1.1
    
    
    
    0.3Interest and other income
    
    
    0.3
    
    
    
    0.7
    
    
    
    0.3
    
    
    
    0.5Income (loss) before income taxes
    
    
    (6.5
    )
    
    
    13.4
    
    
    
    (28.1
    )
    
    
    14.8Income tax provision (benefit)
    
    
    (0.6
    )
    
    
    4.8
    
    
    
    (9.4
    )
    
    
    5.4Net income (loss)
    
    
    (5.9
    )%
    
    
    8.6
    %
    
    
    (18.7
    )%
    
    
    9.4
    %
 19




---



##### Table of Contents



Put Options2008
    
    2009
    
    2010
    
    Swaps
    
    TotalFair value December 31, 2007
    
    $
    9,871
    
    
    
    
    
    
    
    
    
    
    $
    (757
    )
    
    $
    9,114Purchases
    
    
    
    
    
    
    7,008
    
    
    
    
    
    
    
    
    
    
    
    7,008Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    566
    
    
    
    566Gain (loss) on settlements of
closed positions
    
    
    (3,322
    )
    
    
    
    
    
    
    
    
    
    
    (182
    )
    
    
    (3,504
    )Mark to market adjustment on
open positions
    
    
    2,612
    
    
    
    932
    
    
    
    
    
    
    
    (1,441
    )
    
    
    2,103Fair value March 31, 2008
    
    
    9,161
    
    
    
    7,940
    
    
    
    
    
    
    
    (1,814
    )
    
    
    15,287Purchases
    
    
    
    
    
    
    7,208
    
    
    
    
    
    
    
    
    
    
    
    7,208Settlements of closed positions
    
    
    (2,267
    )
    
    
    
    
    
    
    
    
    
    
    827
    
    
    
    (1,440
    )Gain (loss) on settlements of
closed positions
    
    
    736
    
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    676Mark to market adjustment on
open positions
    
    
    5,730
    
    
    
    7,233
    
    
    
    
    
    
    
    4,522
    
    
    
    17,485Fair value June 30, 2008
    
    
    13,360
    
    
    
    22,381
    
    
    
    
    
    
    
    3,475
    
    
    
    39,216Purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements of closed positions
    
    
    (8,866
    )
    
    
    
    
    
    
    
    
    
    
    175
    
    
    
    (8,691
    )Gain (loss) on settlements of
closed positions
    
    
    2,601
    
    
    
    
    
    
    
    
    
    
    
    (358
    )
    
    
    2,243Mark to market adjustment on
open positions
    
    
    3,926
    
    
    
    11,553
    
    
    
    
    
    
    
    (655
    )
    
    
    14,824Fair value September 30, 2008
    
    
    11,021
    
    
    
    33,934
    
    
    
    
    
    
    
    2,637
    
    
    
    47,592Sales
    
    
    
    
    
    
    (33,934
    )
    
    
    
    
    
    
    
    
    
    
    (33,934
    )Purchases
    
    
    
    
    
    
    10,472
    
    
    
    
    
    
    
    
    
    
    
    10,472Settlements of closed positions
    
    
    (20,806
    )
    
    
    
    
    
    
    
    
    
    
    907
    
    
    
    (19,899
    )Gain (loss) on settlements of
closed positions
    
    
    9,785
    
    
    
    
    
    
    
    
    
    
    
    (1,086
    )
    
    
    8,699Mark to market adjustment on
open positions
    
    
    
    
    
    
    (3,626
    )
    
    
    
    
    
    
    (690
    )
    
    
    (4,316
    )Fair value December 31, 2008
    
    
    
    
    
    
    6,846
    
    
    
    
    
    
    
    1,768
    
    
    
    8,614Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    356
    
    
    
    356Gain (loss) on settlements of
closed positions
    
    
    
    
    
    
    (744
    )
    
    
    
    
    
    
    (256
    )
    
    
    (1,000
    )Mark to market adjustment on
open positions
    
    
    
    
    
    
    (3,903
    )
    
    
    
    
    
    
    284
    
    
    
    (3,619
    )Fair value March 31, 2009
    
    
    
    
    
    
    2,199
    
    
    
    
    
    
    
    2,152
    
    
    
    4,351Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (916
    )
    
    
    (916
    )Gain (loss) on settlements of
closed positions
    
    
    
    
    
    
    (217
    )
    
    
    
    
    
    
    411
    
    
    
    194Mark to market adjustment on
open positions
    
    
    
    
    
    
    (1,566
    )
    
    
    
    
    
    
    446
    
    
    
    (1,120
    )Fair value June 30, 2009
    
    
    
    
    
    
    416
    
    
    
    
    
    
    
    2,093
    
    
    
    2,509Purchases
    
    
    
    
    
    
    
    
    
    $
    2,374
    
    
    
    
    
    
    
    2,374Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,260
    )
    
    
    (1,260
    )Gain (loss) on settlements of
closed positions
    
    
    
    
    
    
    (51
    )
    
    
    
    
    
    
    398
    
    
    
    347Mark to market adjustment on
open positions
    
    
    
    
    
    
    (364
    )
    
    
    (870
    )
    
    
    778
    
    
    
    (456
    )Fair value September 30, 2009
    
    $
    
    
    
    $
    1
    
    
    $
    1,504
    
    
    $
    2,009
    
    
    $
    3,514
  20




---



##### Table of Contents



2007
    
    2008
    
    2009Average LME
    

Fiscal quarter ended
    
    Fiscal quarter ended
    
    Fiscal quarter endedzinc price
    
    December 31
    
    March 31
    
    June 30
    
    September 30
    
    December 31
    
    March 31
    
    June 30
    
    September 30Quarter
    
    $
    1.19
    
    
    $
    1.10
    
    
    $
    0.96
    
    
    $
    0.80
    
    
    $
    0.54
    
    
    $
    0.53
    
    
    $
    0.67
    
    
    $
    0.80Year-to-date
    
    $
    1.47
    
    
    $
    1.10
    
    
    $
    1.03
    
    
    $
    0.95
    
    
    $
    0.85
    
    
    $
    0.53
    
    
    $
    0.60
    
    
    $
    0.67
 Three Months Ended September 30, 2009 Compared with Three Months Ended September 30, 2008
 Net sales.
      21




---



##### Table of Contents



Cost of sales (excluding depreciation).
    Depreciation
 Selling, general and administrative expenses.
 Interest expense.
 Interest and other income
 Income tax (benefit) provision.
 22




---



##### Table of Contents



Net income (loss).
 Nine Months Ended September 30, 2009 Compared with Nine Months Ended September 30, 2008
 Net sales.
      23




---



##### Table of Contents



Cost of sales (excluding depreciation).
    Depreciation
 Selling, general and administrative expenses.
 Interest expense.
 Interest and other income.
 Income tax (benefit) provision.
 24




---



##### Table of Contents



Net income.
 Liquidity and Capital Resources
  September 30, 2009
    25




---



##### Table of Contents



Cash Flows from Operating Activities
    Cash Flows from Investing Activities
  26




---



##### Table of Contents



Cash Flows from Financing Activities
   Off-Balance Sheet Arrangements
  Available Information
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
   27




---



##### Table of Contents



Interest Rate Risk
  Commodity Price Risk
    
 Item 4.
    
    Controls and Procedures.
  Changes in Internal Control over Financial Reporting
  28




---



##### Table of Contents



PART IIOTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
  
 Item 1A.
    
    Risk Factors.
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
 Change in Securities.
 a. Recent Sales of Unregistered Securities:
  
 Item 3.
    
    Defaults Upon Senior Securities.
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders.
  
 Item 5.
    
    Other Information.
  
 Item 6.
    
    Exhibits.
 29




---



##### Table of Contents



Exhibit No.
    
    Description31.1
    
    Certification by James M. Hensler, Chief Executive
Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    
    Certification of Robert D. Scherich, Chief Financial
Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
 30




---



##### Table of Contents



SIGNATURES
  HORSEHEAD HOLDING CORP./s/ James M. HenslerBy:                    James M. HenslerIts:               President and Chief Executive Officer  SIGNATURE
    
    TITLE
    
    DATE/s/ James M. Hensler
    
    Principal Executive Officer
    
    November 9, 2009James M. Hensler/s/ Robert D. Scherich
Robert D. Scherich
    
    Principal Financial and
Accounting Officer
    
    November 9, 2009
 31