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, 2010
 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 405
Pittsburgh, Pennsylvania 15205
(Address of Principal Executive Offices, including Zip Code)
    
    (724) 774-1020
(Registrants Telephone Number, Including Area Code)
 
 þ o
 þ o
  Large accelerated Filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS
 PART I  Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of September 30, 2010 (Unaudited) and December 31, 2009
    
    
    1Consolidated Statements of Operations (Unaudited) for the three and nine months ended
September 30, 2010 and 2009
    
    
    2Consolidated Statement of Stockholders Equity (Unaudited) for the nine months ended
September 30, 2010
    
    
    3Consolidated Statements of Cash Flows (Unaudited) for the nine months ended
September 30, 2010 and September 30, 2009
    
    
    4Notes to Consolidated Financial Statements (Unaudited) September 30, 2010
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II  Other InformationItem 1. Legal Proceedings
    
    
    27Item 1A Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3 Defaults Upon Senior Securities
    
    
    27Item 4 (Removed and Reserved)
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    28
  i




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##### 



CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
     ii




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##### 



PART IFINANCIAL INFORMATION
 
 Item 1. Financial Statements.
  
 CONSOLIDATED BALANCE SHEETS   (Amounts in thousands, except per share amounts)
 September 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    95,150
    
    
    $
    95,480Accounts receivable, net of allowance of $1,861 and $2,032, respectively
    
    
    55,516
    
    
    
    40,652Inventories
    
    
    43,907
    
    
    
    39,908Prepaid expenses and other current assets
    
    
    7,481
    
    
    
    25,195Deferred income taxes
    
    
    816
    
    
    
    175Total current assets
    
    
    202,870
    
    
    
    201,410Property, plant and equipment, net
    
    
    210,733
    
    
    
    191,307Other assetsIntangible assets
    
    
    13,209
    
    
    
    13,758Restricted cash
    
    
    31,322
    
    
    
    31,536Deposits and other
    
    
    317
    
    
    
    251Total other assets
    
    
    44,848
    
    
    
    45,545Total assets
    
    $
    458,451
    
    
    $
    438,262LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent maturities of long-term debt
    
    $
    10
    
    
    $
    58Accounts payable
    
    
    38,542
    
    
    
    32,313Accrued expenses
    
    
    26,862
    
    
    
    25,584Total current liabilities
    
    
    65,414
    
    
    
    57,955Long-term debt, less current maturities
    
    
    255
    
    
    
    255Other long-term liabilities
    
    
    19,753
    
    
    
    18,865Deferred income taxes
    
    
    15,810
    
    
    
    15,770Commitments and contingenciesStockholders equityCommon stock, par value $0.01 per share; 100,000 shares authorized; 43,365 and
43,334 shares issued and outstanding in 2010 and 2009, respectively
    
    
    434
    
    
    
    433Preferred stock, par value $0.01 per share; 10,000 shares authorized; no shares
issued or outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    213,247
    
    
    
    211,517Retained earnings
    
    
    139,132
    
    
    
    128,995Total Horsehead Holding Corp. stockholders equity
    
    
    352,813
    
    
    
    340,945Non-controlling interest
    
    
    4,406
    
    
    
    4,472Total stockholders equity
    
    
    357,219
    
    
    
    345,417Total liabilities and stockholders equity
    
    $
    458,451
    
    
    $
    438,262
 The accompanying notes to financial statements are an integral part of these statements.
 1




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##### 



CONSOLIDATED STATEMENTS OF OPERATIONS    (Amounts in thousands except per share amounts)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales of zinc material and other goods
    
    $
    67,092
    
    
    $
    50,895
    
    
    $
    217,201
    
    
    $
    123,919Net sales of nickel-based material and other services
    
    
    13,092
    
    
    
    
    
    
    
    38,870
    
    
    
    EAF dust service fees
    
    
    10,365
    
    
    
    9,415
    
    
    
    29,992
    
    
    
    23,811Net sales
    
    
    90,549
    
    
    
    60,310
    
    
    
    286,063
    
    
    
    147,730Cost of sales of zinc material and other goods
    
    
    71,803
    
    
    
    51,718
    
    
    
    199,816
    
    
    
    155,455Cost of sales of nickel-based material and other services
    
    
    7,799
    
    
    
    
    
    
    
    24,402
    
    
    
    Cost of EAF dust services
    
    
    5,922
    
    
    
    4,686
    
    
    
    18,286
    
    
    
    10,266Cost of sales (excluding depreciation and amortization)
    
    
    85,524
    
    
    
    56,404
    
    
    
    242,504
    
    
    
    165,721Depreciation and amortization
    
    
    4,430
    
    
    
    3,743
    
    
    
    13,212
    
    
    
    10,956Selling, general and administrative expenses
    
    
    4,616
    
    
    
    3,683
    
    
    
    14,306
    
    
    
    11,429Total costs and expenses
    
    
    94,570
    
    
    
    63,830
    
    
    
    270,022
    
    
    
    188,106Income (loss) from operations
    
    
    (4,021
    )
    
    
    (3,520
    )
    
    
    16,041
    
    
    
    (40,376
    )Other income (expense)Interest expense
    
    
    (308
    )
    
    
    (596
    )
    
    
    (920
    )
    
    
    (1,550
    )Interest and other income
    
    
    113
    
    
    
    159
    
    
    
    673
    
    
    
    442(195
    )
    
    
    (437
    )
    
    
    (247
    )
    
    
    (1,108
    )Income (loss) before income taxes
    
    
    (4,216
    )
    
    
    (3,957
    )
    
    
    15,794
    
    
    
    (41,484
    )Income tax provision (benefit)
    
    
    (1,863
    )
    
    
    (377
    )
    
    
    5,657
    
    
    
    (13,797
    )NET INCOME (LOSS)
    
    $
    (2,353
    )
    
    $
    (3,580
    )
    
    $
    10,137
    
    
    $
    (27,687
    )Earnings (losses) per common share:Basic
    
    $
    (0.05
    )
    
    $
    (0.10
    )
    
    $
    0.23
    
    
    $
    (0.78
    )Diluted
    
    $
    (0.05
    )
    
    $
    (0.10
    )
    
    $
    0.23
    
    
    $
    (0.78
    )Weighted average shares outstanding:Basic
    
    
    43,358
    
    
    
    36,498
    
    
    
    43,346
    
    
    
    35,676Diluted
    
    
    43,358
    
    
    
    36,498
    
    
    
    43,637
    
    
    
    35,676
 The accompanying notes to financial statements are an integral part of these statements.
 2




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##### 



CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 (Amounts in thousands)
 Additional
    
    
    
    
    
    
    Non-Common Stock
    
    
    Paid-In
    
    
    Retained
    
    
    controllingShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Interest
    
    
    TotalBalance at January 1, 2010
    
    
    43,334
    
    
    $
    433
    
    
    $
    211,517
    
    
    $
    128,995
    
    
    $
    4,472
    
    
    $
    345,417Restricted stock vesting
    
    
    31
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    1,751
    
    
    
    
    
    
    
    
    
    
    
    1,751Tax liability of stock vesting
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    (20
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,137
    
    
    
    
    
    
    
    10,137Distribution to
non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66
    )
    
    
    (66
    )Balance at September 30, 2010
    
    
    43,365
    
    
    $
    434
    
    
    $
    213,247
    
    
    $
    139,132
    
    
    $
    4,406
    
    
    $
    357,219
 The accompanying notes to financial statements are an integral part of these statements
 3




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##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS    (Amounts in thousands)
 2010
    
    
    2009Cash Flows from Operating Activities:Net income (loss)
    
    $
    10,137
    
    
    $
    (27,687
    )Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    13,212
    
    
    
    11,531Accretion on ESOI liabilities
    
    
    680
    
    
    
    209Deferred income tax (benefit)
    
    
    (641
    )
    
    
    (546
    )Loss on write down of assets
    
    
    
    
    
    
    962Losses (gains) on derivative financial instruments
    
    
    2,527
    
    
    
    7,474Non-cash compensation expense
    
    
    1,751
    
    
    
    1,609Changes in operating assets and liabilities:(Increase) decrease in accounts receivable
    
    
    (15,057
    )
    
    
    2,739(Increase) decrease in inventories
    
    
    (4,603
    )
    
    
    18,688Decrease (increase) in prepaid expenses and other current assets
    
    
    15,359
    
    
    
    (8,491
    )(Increase) decrease in other assets
    
    
    (79
    )
    
    
    209Increase (decrease) in accounts payable
    
    
    6,187
    
    
    
    (11,333
    )Increase (decrease) in accrued expenses net of tax effect of share based compensation
    
    
    5,846
    
    
    
    (3,353
    )Increase in other long-term liabilities
    
    
    207
    
    
    
    991Net cash provided by (used in) operating activities
    
    
    35,526
    
    
    
    (6,998
    )Cash Flows from Investing Activities:Purchase of property, plant and equipment
    
    
    (31,369
    )
    
    
    (26,784
    )Purchase of INMETCO
    
    
    (4,567
    )
    
    
    Decrease (increase) in restricted cash
    
    
    214
    
    
    
    (25,219
    )Purchase of intangible assets
    
    
    
    
    
    
    (3,000
    )Net cash (used in) investing activities
    
    
    (35,722
    )
    
    
    (55,003
    )Cash Flows from Financing Activities:Proceeds from equity offering, net of expenses
    
    
    
    
    
    
    79,785Distribution to noncontrolling interest equity holders
    
    
    (66
    )
    
    
    Proceeds from non-controlling interest equity holders
    
    
    
    
    
    
    4,472Tax (liability) benefit of share based compensation
    
    
    (20
    )
    
    
    (57
    )Proceeds from issuance of loans payable
    
    
    
    
    
    
    255Payments on notes payable and long-term debt
    
    
    (48
    )
    
    
    (46
    )Net cash (used in) provided by financing activities
    
    
    (134
    )
    
    
    84,409Net (Decrease) Increase In Cash And Cash Equivalents
    
    
    (330
    )
    
    
    22,408Cash and cash equivalents at beginning of period
    
    
    95,480
    
    
    
    122,768Cash and cash equivalents at end of period
    
    $
    95,150
    
    
    $
    145,176
 The accompanying notes to financial statements are an integral part of these statements.
 4




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NOTE ABASIS OF PRESENTATION
   NOTE BRECENTLY ISSUED ACCOUNTING STANDARDS
  NOTE CACQUISITION OF BUSINESS
   Cash
    
    $
    763Accounts receivable
    
    
    8,970Inventories
    
    
    6,190Prepaid expenses and other current assets
    
    
    500Deferred income tax asset
    
    
    672Property, plant and equipment
    
    
    35,175Intangible assets
    
    
    2,400Other assets
    
    
    54Total identifiable assets purchased
    
    
    54,724Accounts payable
    
    
    2,314Accrued expenses and other current liabilities
    
    
    1,895Deferred income tax liability
    
    
    10,421Other long-term liabilities
    
    
    1,527Total liabilities assumed
    
    
    16,157Net assets purchased
    
    
    38,567Purchase price
    
    $
    38,567
 5




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##### 



NOTE DCASH AND CASH EQUIVALENTS
  September 30,
    
    
    December 31,2010
    
    
    2009Cash in bank
    
    $
    95,138
    
    
    $
    10,358Government money market fund
    
    
    
    
    
    
    35,000Money market demand account
    
    
    12
    
    
    
    30,075Certificates of deposit
    
    
    
    
    
    
    20,047$
    95,150
    
    
    $
    95,480
   NOTE EINVENTORIES
  September 30,
    
    
    December 31,2010
    
    
    2009Raw materials
    
    $
    12,733
    
    
    $
    10,413Work-in-process
    
    
    6,370
    
    
    
    1,471Finished goods
    
    
    10,807
    
    
    
    13,939Supplies and spare parts
    
    
    13,997
    
    
    
    14,085$
    43,907
    
    
    $
    39,908
  6




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##### 



NOTE FPREPAID EXPENSES AND OTHER CURRENT ASSETS
  September 30,
    
    
    December 31,2010
    
    
    2009Refundable income taxes
    
    $
    3,581
    
    
    $
    20,786Prepaid hedge contracts
    
    
    1,738
    
    
    
    1,914Other
    
    
    2,162
    
    
    
    2,495$
    7,481
    
    
    $
    25,195
 NOTE GPROPERTY, PLANT AND EQUIPMENT
  September 30,
    
    
    December 31,2010
    
    
    2009Land and land improvements
    
    $
    18,079
    
    
    $
    11,110Buildings and building improvements
    
    
    30,574
    
    
    
    27,734Machinery and equipment
    
    
    200,457
    
    
    
    169,296Construction in progress
    
    
    33,015
    
    
    
    41,906282,125
    
    
    
    250,046Less accumulated depreciation
    
    
    (71,392
    )
    
    
    (58,739
    )$
    210,733
    
    
    $
    191,307
 NOTE HNOTES PAYABLE AND LONG-TERM DEBT
    NOTE IACCRUED EXPENSES
  September 30,
    
    
    December 31,2010
    
    
    2009Employee related costs
    
    $
    7,831
    
    
    $
    6,722EAF dust processing reserve
    
    
    4,690
    
    
    
    3,564Accrued INMETCO purchase price
    
    
    
    
    
    
    4,802Unearned tolling revenue
    
    
    3,211
    
    
    
    1,173Workers Compensation insurance claim
liabilities
    
    
    2,400
    
    
    
    2,400Other
    
    
    8,730
    
    
    
    6,923$
    26,862
    
    
    $
    25,584
 7




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##### 



NOTE JOTHER LONG-TERM LIABILITIES
  September 30,
    
    
    December 31,2010
    
    
    2009Environmental obligations
    
    $
    2,013
    
    
    $
    2,013Workers Compensation insurance claim
liabilities
    
    
    7,867
    
    
    
    7,747Asset retirement obligations
    
    
    2,813
    
    
    
    2,678Deferred asset purchase price
obligations
    
    
    6,549
    
    
    
    5,869Other
    
    
    511
    
    
    
    558$
    19,753
    
    
    $
    18,865
 NOTE KINCOME TAXES
   NOTE LSTOCK-BASED COMPENSATION
   8




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NOTE MACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
    9




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##### 



Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Gains (losses) included in net sales:Put options
    
    $
    (3,844
    )
    
    $
    (1,285
    )
    
    $
    (1,959
    )
    
    $
    (7,715
    )Swaps
    
    
    1,097
    
    
    
    1,176
    
    
    
    (130
    )
    
    
    2,061(2,747
    )
    
    
    (109
    )
    
    
    (2,089
    )
    
    
    (5,654
    )Gains (losses) included in cost of sales:Swaps
    
    
    (184
    )
    
    
    
    
    
    
    303
    
    
    
    Total losses resulting from hedging activities
    
    $
    (2,931
    )
    
    $
    (109
    )
    
    $
    (1,786
    )
    
    $
    (5,654
    )
  Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
 September 30, 2010
    
    
    December 31, 2009Put options and swaps included
in Prepaid expenses and other
assets
    
    $
    1,738
    
    
    $
    1,914Swaps included in Accrued expenses
    
    $
    182
    
    
    $
    20
  10




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##### 



NOTE NCONTINGENCIES
   NOTE OEARNINGS PER SHARE
   Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Basic earnings (loss) per share:Net income (loss)
    
    $
    (2,353
    )
    
    $
    (3,580
    )
    
    $
    10,137
    
    
    $
    (27,687
    )Weighted average shares outstanding  basic
    
    
    43,358
    
    
    
    36,498
    
    
    
    43,346
    
    
    
    35,676Basic earnings (loss) per share
    
    $
    (0.05
    )
    
    $
    (0.10
    )
    
    $
    0.23
    
    
    $
    (0.78
    )Diluted earnings (loss) per share:Net income (loss)
    
    $
    (2,353
    )
    
    $
    (3,580
    )
    
    $
    10,137
    
    
    $
    (27,687
    )Weighted average shares outstanding 
diluted
    
    
    43,358
    
    
    
    36,498
    
    
    
    43,637
    
    
    
    35,676Diluted earnings (loss) per share
    
    $
    (0.05
    )
    
    $
    (0.10
    )
    
    $
    0.23
    
    
    $
    (0.78
    )Reconciliation of average shares
outstanding  basic to average shares
outstanding  diluted:Weighted average shares outstanding  basic
    
    
    43,358
    
    
    
    36,498
    
    
    
    43,346
    
    
    
    35,676Effect of dilutive securities:Options
    
    
    
    
    
    
    
    
    
    
    88
    
    
    
    Restricted stock units
    
    
    
    
    
    
    
    
    
    
    203
    
    
    
    Weighted average shares outstanding 
diluted
    
    
    43,358
    
    
    
    36,498
    
    
    
    43,637
    
    
    
    35,676
  11




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##### 



NOTE PPRO FORMA INFORMATION
  Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2009
    
    
    September 30, 2009Pro forma consolidated resultsNet sales
    
    $
    71,285
    
    
    $
    175,469Net loss
    
    
    (2,517
    )
    
    
    (27,389
    )Basic earnings (loss) per share
    
    $
    (0.07
    )
    
    $
    (0.77
    )Diluted earnings (loss) per share
    
    $
    (0.07
    )
    
    $
    (0.77
    )
 NOTE QSEGMENT INFORMATION
   Three months ended September 30, 2010
    
    
    Nine months ended September 30,2010Horsehead
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    HorseheadCorporation
    
    
    INMETCO
    
    
    Other
    
    
    Total
    
    
    Corporation
    
    
    INMETCO
    
    
    Other
    
    
    TotalNet sales
    
    $
    77,727
    
    
    $
    13,092
    
    
    $
    (270
    )
    
    $
    90,549
    
    
    $
    247,894
    
    
    $
    38,870
    
    
    $
    (701
    )
    
    $
    286,063Income (loss) before tax
    
    
    (7,836
    )
    
    
    3,620
    
    
    
    
    
    
    
    (4,216
    )
    
    
    5,865
    
    
    
    9,929
    
    
    
    
    
    
    
    15,794
 NOTE RMONACA, PENNSYLVANIA ACCIDENT INSURANCE RECOVERY
  12




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##### 



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 and Nickel
 13




---



##### 



Demand for Zinc and Nickel-Based Products
   Shipments/EAF Dust Receipts
    
    
    Revenue/TonNine Months Ended
    
    
    Year Ended
    
    
    Nine Months Ended
    
    
    Year EndedSeptember 30,
    
    
    December 31,
    
    
    September 30,
    
    
    December 31,2010
    
    
    2009
    
    
    2009
    
    
    2008
    
    
    2010
    
    
    2009
    
    
    2009
    
    
    2008(Tons, in thousands)
    
    
    (In U.S. dollars)Product:Zinc Products
    
    
    105
    
    
    
    87
    
    
    
    118
    
    
    
    154
    
    
    $
    1,957
    
    
    $
    1,389
    
    
    $
    1,529
    
    
    $
    1,932EAF Dust
    
    
    405
    
    
    
    293
    
    
    
    409
    
    
    
    507
    
    
    $
    74
    
    
    $
    81
    
    
    $
    80
    
    
    $
    97Nickel-based products
    
    
    20
    
    
    
    18
    
    
    
    25
    
    
    
    27
    
    
    $
    1,751
    
    
    $
    1,400
    
    
    $
    1,453
    
    
    $
    2,102
 Cost of Sales (excluding depreciation and amortization)
  14




---



##### 



Selling, General and Administrative Expenses
 Explosion at our Monaca, Pennsylvania facility
     Trends Affecting Our Business
  
    
    LME price of zinc and nickel;
    
    changes in cost of energy and fuels;
    
    gain and loss of customers;
    
    pricing pressures from competitors, including new entrants into the EAF dust or
nickel-bearing waste recycling market;
    
    increases and decreases in the use of zinc and nickel-based products;
 15




---



##### 




    
    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.
      16




---



##### 



Summary of Critical Accounting Policies and Estimates
  Inventories
   Financial Instruments
      Impairment
  17




---



##### 



Recently Issued Accounting Pronouncements
  Results of Operations
  Three months ended September 30,
    
    
    Nine months ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales (excluding depreciation and amortization)
    
    
    94.4
    
    
    
    93.5
    
    
    
    84.8
    
    
    
    112.2Depreciation and amortization
    
    
    4.9
    
    
    
    6.2
    
    
    
    4.6
    
    
    
    7.4Selling, general and administrative expenses
    
    
    5.1
    
    
    
    6.1
    
    
    
    5.0
    
    
    
    7.7Income (loss) from operations
    
    
    (4.4
    )
    
    
    (5.8
    )
    
    
    5.6
    
    
    
    (27.3
    )Interest expense
    
    
    0.3
    
    
    
    1.0
    
    
    
    0.3
    
    
    
    1.1Interest and other income
    
    
    0.1
    
    
    
    0.3
    
    
    
    0.2
    
    
    
    0.3Income (loss) before income taxes
    
    
    (4.6
    )
    
    
    (6.5
    )
    
    
    5.5
    
    
    
    (28.1
    )Income tax provision (benefit)
    
    
    (2.0
    )
    
    
    (0.6
    )
    
    
    2.0
    
    
    
    (9.4
    )Net income (loss)
    
    
    (2.6
    )%
    
    
    (5.9
    )%
    
    
    3.5
    %
    
    
    (18.7
    )%
  Put Options2009
    
    
    2010
    
    
    2011
    
    
    Swaps
    
    
    TotalFair 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
    
    
    
    3,514Purchases
    
    
    
    
    
    
    2,902
    
    
    
    
    
    
    
    
    
    
    
    2,902Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,965
    )
    
    
    (1,965
    )Gain (loss) on settlements of closed positions
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    616
    
    
    
    615Mark to market adjustment on open positions
    
    
    
    
    
    
    (3,669
    )
    
    
    
    
    
    
    497
    
    
    
    (3,172
    )Fair value December 31, 2009
    
    
    
    
    
    
    737
    
    
    
    
    
    
    
    1,157
    
    
    
    1,894
 18




---



##### 



Put Options2009
    
    
    2010
    
    
    2011
    
    
    Swaps
    
    
    TotalPurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (228
    )
    
    
    (228
    )Gain (loss) on settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34
    )
    
    
    (34
    )Mark to market adjustment on open positions
    
    
    
    
    
    
    (368
    )
    
    
    
    
    
    
    119
    
    
    
    (249
    )Fair value March 31, 2010
    
    
    
    
    
    
    369
    
    
    
    
    
    
    
    1,014
    
    
    
    1,383Purchases
    
    
    
    
    
    
    
    
    
    
    882
    
    
    
    
    
    
    
    882Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (74
    )
    
    
    (74
    )Gain (loss) on settlements of closed positions
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (209
    )
    
    
    (210
    )Mark to market adjustment on open positions
    
    
    
    
    
    
    813
    
    
    
    1,441
    
    
    
    (616
    )
    
    
    1,638Fair value June 30, 2010
    
    
    
    
    
    
    1,181
    
    
    
    2,323
    
    
    
    115
    
    
    
    3,619Purchases
    
    
    
    
    
    
    
    
    
    
    1,307
    
    
    
    
    
    
    
    1,307Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (439
    )
    
    
    (439
    )Gain (loss) on settlements of closed positions
    
    
    
    
    
    
    (214
    )
    
    
    
    
    
    
    452
    
    
    
    238Mark to market adjustment on open positions
    
    
    
    
    
    
    (962
    )
    
    
    (2,668
    )
    
    
    461
    
    
    
    (3,169
    )Fair value September 30, 2010
    
    
    
    
    
    $
    5
    
    
    $
    962
    
    
    $
    589
    
    
    $
    1,556
  2008
    
    
    2009
    
    
    2010Average 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
    
    $
    0.54
    
    
    $
    0.53
    
    
    $
    0.67
    
    
    $
    0.80
    
    
    $
    1.00
    
    
    $
    1.04
    
    
    $
    0.92
    
    
    $
    0.91Year-to-date
    
    $
    0.85
    
    
    $
    0.53
    
    
    $
    0.60
    
    
    $
    0.67
    
    
    $
    0.75
    
    
    $
    1.04
    
    
    $
    0.98
    
    
    $
    0.96
 Three Months Ended September 30, 2010 Compared with Three Months Ended September 30, 2009
 Net sales.
    19




---



##### 



Cost of sales (excluding depreciation and amortization).
   20




---



##### 



Depreciation and amortization
 Selling, general and administrative expenses.
 Interest expense.
 Income tax provision (benefit).
 Net income (loss).
 Nine Months Ended September 30, 2010 Compared with Nine Months Ended September 30, 2009
 Net sales .
  21




---



##### 



Cost of sales (excluding depreciation and amortization).
   22




---



##### 



Depreciation and amortization
 Selling, general and administrative expenses.
 Interest expense.
 Income tax provision (benefit).
 Net income.
 Liquidity and Capital Resources
 .
 23




---



##### 



September 30, 2010
  Cash Flows from Operating Activities
    Cash Flows from Investing Activities
  Off-Balance Sheet Arrangements
  Available Information
  24




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
   Commodity Price Risk
    
 Item 4. Controls and Procedures.
   25




---



##### 



26




---



##### 



PART IIOTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  Equipment or power failures, delays in deliveries or catastrophic loss at any of our facilities,
such as experienced in the explosion at our Monaca, Pennsylvania facility that occurred on July
22, 2010, could prevent us from meeting customer demand, reduce our sales, increase our costs
and/or negatively impact our results of operations.
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. (Removed and Reserved)
 
 Item 5. Other Information.
  27




---



##### 



Item 6. Exhibits.
  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.
 28




---



##### 



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, 2010James M. Hensler/s/ Robert D. Scherich
    
    Principal Financial and
    
    November 9, 2010Robert D. Scherich
    
    Accounting Officer
 29