##### 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 March 31, 2011
 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
  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




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##### 



TABLE OF CONTENTS
 PART I  Financial InformationItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010
    
    
    1Consolidated
Statements of Income (Unaudited) for the three months ended March 31, 2011 and 2010
    
    
    2Consolidated
Statement of Stockholders Equity (Unaudited) for the three months ended March 31, 2011
    
    
    3Consolidated
Statements of Cash Flows (Unaudited) for the three months ended March 31, 2011 and  2010
    
    
    4Notes to Consolidated Financial Statements (Unaudited)
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4.
    
    Controls and Procedures
    
    
    23PART II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    24Item 1A
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3
    
    Defaults Upon Senior Securities
    
    
    24Item 4
    
    (Removed and  Reserved)
    
    
    24Item 5.
    
    Other Information
    
    
    24Item 6.
    
    Exhibits
    
    
    24
  CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 
 CONSOLIDATED BALANCE SHEETS   (Amounts in thousands, except per share amounts)
 March 31, 2011
    
    
    December 31, 2010(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    112,925
    
    
    $
    109,557Accounts receivable, net of allowance of $1,797 and $1,741, respectively
    
    
    71,289
    
    
    
    53,075Inventories, net
    
    
    57,546
    
    
    
    50,855Prepaid expenses and other current assets
    
    
    15,422
    
    
    
    16,178Deferred income taxes
    
    
    6,010
    
    
    
    6,090Total current assets
    
    
    263,192
    
    
    
    235,755Property, plant and equipment, net
    
    
    218,580
    
    
    
    218,652Other assetsIntangible assets
    
    
    12,843
    
    
    
    13,026Restricted cash
    
    
    23,879
    
    
    
    26,399Deferred income taxes
    
    
    1,984
    
    
    
    1,984Deposits and other
    
    
    323
    
    
    
    320Total other assets
    
    
    39,029
    
    
    
    41,729Total assets
    
    $
    520,801
    
    
    $
    496,136LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    38,930
    
    
    $
    39,374Accrued expenses
    
    
    32,972
    
    
    
    26,261Total current liabilities
    
    
    71,902
    
    
    
    65,635Long-term debt, less current maturities
    
    
    255
    
    
    
    255Other long-term liabilities
    
    
    18,254
    
    
    
    17,501Deferred income taxes
    
    
    39,735
    
    
    
    39,735Commitments and contingenciesStockholders equityCommon stock, par value $0.01 per share; 100,000 shares authorized; 43,653 and
43,468 shares issued and outstanding in 2011 and 2010, respectively
    
    
    436
    
    
    
    434Preferred stock, par value $0.01 per share; 10,000 shares authorized; no shares
issued or outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    217,398
    
    
    
    214,406Retained earnings
    
    
    168,529
    
    
    
    153,765Total stockholders equity before noncontrolling interest
    
    
    386,363
    
    
    
    368,605Noncontrolling interest
    
    
    4,292
    
    
    
    4,405Total stockholders equity
    
    
    390,655
    
    
    
    373,010Total liabilities and stockholders equity
    
    $
    520,801
    
    
    $
    496,136
 The accompanying notes to financial statements are an integral part of these statements.
 1




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CONSOLIDATED STATEMENTS OF INCOME    (Amounts in thousands except per share amounts)


2011
    
    
    2010Net sales of zinc material and other goods
    
    $
    84,481
    
    
    $
    73,057Net sales of nickel-based material and other services
    
    
    15,535
    
    
    
    14,447EAF dust service fees
    
    
    9,198
    
    
    
    9,472Net sales
    
    
    109,214
    
    
    
    96,976Cost of sales of zinc material and other goods
    
    
    72,147
    
    
    
    62,327Cost of sales of nickel based material and other services
    
    
    8,822
    
    
    
    8,954Cost of EAF dust services
    
    
    6,058
    
    
    
    5,851Insurance claim income
    
    
    (10,347
    )
    
    
    Cost of sales (excluding depreciation and amortization)
    
    
    76,680
    
    
    
    77,132Depreciation and amortization
    
    
    5,262
    
    
    
    4,541Selling, general and administrative expenses
    
    
    5,187
    
    
    
    4,729Total costs and expenses
    
    
    87,129
    
    
    
    86,402Income from operations
    
    
    22,085
    
    
    
    10,574Other income (expense)Interest expense
    
    
    (302
    )
    
    
    (309
    )Interest and other income
    
    
    290
    
    
    
    317(12
    )
    
    
    8Income before income taxes
    
    
    22,073
    
    
    
    10,582Income tax provision
    
    
    7,309
    
    
    
    3,800NET INCOME
    
    $
    14,764
    
    
    $
    6,782Earnings per common share:Basic
    
    $
    0.34
    
    
    $
    0.16Diluted
    
    $
    0.33
    
    
    $
    0.16Weighted average shares outstanding:Basic
    
    
    43,530
    
    
    
    43,334Diluted
    
    
    44,181
    
    
    
    43,602


The accompanying notes to financial statements are an integral part of these statements.


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CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY    (Amounts in thousands)
 AdditionalCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    NoncontrollingShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Interest
    
    
    TotalBalance at January 1, 2011
    
    
    43,468
    
    
    $
    434
    
    
    $
    214,406
    
    
    $
    153,765
    
    
    $
    4,405
    
    
    $
    373,010Restricted stock vesting
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock option exercise
    
    
    182
    
    
    
    2
    
    
    
    2,358
    
    
    
    
    
    
    
    
    
    
    
    2,360Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    798
    
    
    
    
    
    
    
    
    
    
    
    798Reduction of tax benefit
of equity award exercise
    
    
    
    
    
    
    
    
    
    
    (164
    )
    
    
    
    
    
    
    
    
    
    
    (164
    )Distribution to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113
    )
    
    
    (113
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,764
    
    
    
    
    
    
    
    14,764Balance at March 31, 2011
    
    
    43,653
    
    
    $
    436
    
    
    $
    217,398
    
    
    $
    168,529
    
    
    $
    4,292
    
    
    $
    390,655
 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)
 2011
    
    
    2010Cash Flows from Operating Activities:Net income
    
    $
    14,764
    
    
    $
    6,782Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    5,262
    
    
    
    4,541Deferred income tax provision (benefit)
    
    
    80
    
    
    
    (250
    )Accretion on ESOI liabilities
    
    
    221
    
    
    
    226Losses on derivative financial instruments
    
    
    796
    
    
    
    511Non-cash compensation expense
    
    
    798
    
    
    
    606Changes in operating assets and liabilities:(Increase) in accounts receivable
    
    
    (18,214
    )
    
    
    (10,447
    )(Increase) in inventories
    
    
    (6,691
    )
    
    
    (25
    )Decrease in prepaid expenses and other current assets
    
    
    68
    
    
    
    595(Increase) in other assets
    
    
    (7
    )
    
    
    (27
    )(Decrease) increase in accounts payable
    
    
    (444
    )
    
    
    5,481Increase in accrued expenses
    
    
    6,603
    
    
    
    5,918Increase in other non-current liabilities
    
    
    532
    
    
    
    319Net cash provided by operating activities
    
    
    3,768
    
    
    
    14,230Cash Flows from Investing Activities:Purchase of property, plant and equipment
    
    
    (5,003
    )
    
    
    (11,846
    )Purchase of INMETCO
    
    
    
    
    
    
    (4,567
    )Decrease in restricted cash
    
    
    2,520
    
    
    
    64Net cash used in investing activities
    
    
    (2,483
    )
    
    
    (16,349
    )Cash Flows from Financing Activities:Distribution to noncontrolling interests
    
    
    (113
    )
    
    
    (66
    )Proceeds from exercise of options
    
    
    2,360
    
    
    
    Tax effect of share based compensation award exercise
    
    
    (164
    )
    
    
    Payments on notes payable and long-term debt
    
    
    
    
    
    
    (16
    )Net cash provided by (used in) financing activities
    
    
    2,083
    
    
    
    (82
    )Net Increase (Decrease) In Cash And Cash Equivalents
    
    
    3,368
    
    
    
    (2,201
    )Cash and cash equivalents at beginning of period
    
    
    109,557
    
    
    
    95,480Cash and cash equivalents at end of period
    
    $
    112,925
    
    
    $
    93,279
 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  ACQUISITION OF BUSINESS
  NOTE CCASH AND CASH EQUIVALENTS
  March 31,
    
    December 31,2011
    
    2010Cash in bank
    
    $
    87,917
    
    
    $
    84,549Money market demand account
    
    
    25,008
    
    
    
    25,008$
    112,925
    
    
    $
    109,557
  NOTE DINVENTORIES
  March 31,
    
    
    December 31,2011
    
    
    2010Raw materials
    
    $
    15,410
    
    
    $
    13,202Work-in-process
    
    
    5,894
    
    
    
    7,289Finished goods
    
    
    22,101
    
    
    
    17,486Supplies and spare parts
    
    
    14,141
    
    
    
    12,878$
    57,546
    
    
    $
    50,855
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NOTE E  PREPAID EXPENSES AND OTHER CURRENT ASSETS
  March 31,
    
    December 31,2011
    
    2010Refundable income taxes
    
    $
    11,762
    
    
    $
    11,762Prepaid hedge contracts
    
    
    296
    
    
    
    984Other
    
    
    3,364
    
    
    
    3,432$
    15,422
    
    
    $
    16,178
 NOTE FPROPERTY, PLANT AND EQUIPMENT
  March 31,
    
    
    December 31,2011
    
    
    2010Land and land improvements
    
    $
    18,788
    
    
    $
    18,412Buildings and building improvements
    
    
    39,067
    
    
    
    38,614Machinery and equipment
    
    
    232,441
    
    
    
    229,768Construction in progress
    
    
    9,825
    
    
    
    8,326300,121
    
    
    
    295,120Less accumulated depreciation
    
    
    (81,541
    )
    
    
    (76,468
    )$
    218,580
    
    
    $
    218,652
 NOTE GRESTRICTED CASH
  March 31,
    
    December 31,2011
    
    2010Letters of credit
    
    $
    21,379
    
    
    $
    21,379ESOI deferred purchase price obligation
    
    
    2,500
    
    
    
    3,997New Market Tax Credit (NMTC)
    
    
    
    
    
    
    1,023$
    23,879
    
    
    $
    26,399
  6




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NOTE HNOTES PAYABLE AND DEBT
   NOTE IACCRUED EXPENSES
  March 31,
    
    
    December 31,2011
    
    
    2010Employee related costs
    
    $
    8,331
    
    
    $
    8,877EAF dust processing reserve
    
    
    4,621
    
    
    
    4,826Workers compensation insurance claim liabilities
    
    
    2,400
    
    
    
    2,400Unearned tolling revenue
    
    
    3,183
    
    
    
    1,872Income taxes payable
    
    
    9,467
    
    
    
    1,461Other
    
    
    4,970
    
    
    
    6,825$
    32,972
    
    
    $
    26,261
 NOTE J  OTHER LONG-TERM LIABILITIES
  March 31,
    
    December 31,2011
    
    2010Environmental obligations
    
    $
    2,141
    
    
    $
    2,141Insurance claim liabilities
    
    
    7,128
    
    
    
    6,628Asset retirement obligations
    
    
    2,910
    
    
    
    2,861Deferred purchase price obligation
    
    
    5,595
    
    
    
    5,374Other
    
    
    480
    
    
    
    497$
    18,254
    
    
    $
    17,501
 NOTE KINCOME TAXES
   7




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NOTE LSTOCK-BASED COMPENSATION
       NOTE MACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   8




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Three months ended March 31,2011
    
    2010Losses included in net sales:Put options
    
    $
    (428
    )
    
    $
    (368
    )Swaps
    
    
    (17
    )
    
    
    (177
    )$
    (445
    )
    
    $
    (545
    )(Losses) gains included in cost of sales:Swaps
    
    
    (126
    )
    
    
    262Total losses resulting from hedging activities
    
    $
    (571
    )
    
    $
    (283
    )
  Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
 March 31, 2011
    
    
    December 31, 2010Put options and swaps included in Prepaid expenses and other
assets
    
    $
    296
    
    
    $
    984Swaps included in Accrued expenses
    
    $
    108
    
    
    $
    
 9




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NOTE NCONTINGENCIES
   NOTE OEARNINGS PER SHARE
  10




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Three months ended March 31,2011
    
    
    2010Basic earnings per share:Net income
    
    $
    14,764
    
    
    $
    6,782Weighted average shares outstandingbasic
    
    
    43,530
    
    
    
    43,334Basic earnings per share
    
    $
    0.34
    
    
    $
    0.16Diluted earnings per share:Net income
    
    $
    14,764
    
    
    $
    6,782Weighted average shares outstandingdiluted
    
    
    44,181
    
    
    
    43,602Diluted earnings per share
    
    $
    0.33
    
    
    $
    0.16Reconciliation of average shares
outstanding  basic to average shares
outstandingdiluted:Weighted average shares outstandingbasic
    
    
    43,530
    
    
    
    43,334Effect of dilutive securities:Options
    
    
    336
    
    
    
    89Restricted stock units
    
    
    315
    
    
    
    179Weighted average shares outstandingdiluted
    
    
    44,181
    
    
    
    43,602
 
 Exercise price
    
    2011
    
    2010Options
    
    $
    13.00
    
    
    
    
    
    
    
    1,045
 NOTE P  SEGMENT INFORMATION
   HorseheadCorporation
    
    
    INMETCO
    
    
    Other
    
    
    TotalNet sales
    
    $
    93,939
    
    
    $
    15,535
    
    
    $
    (260
    )
    
    $
    109,214Income before income taxes
    
    
    17,014
    
    
    
    5,059
    
    
    
    
    
    
    
    22,073
  HorseheadCorporation
    
    
    INMETCO
    
    
    Other
    
    
    TotalNet sales
    
    $
    82,746
    
    
    $
    14,447
    
    
    $
    (217
    )
    
    $
    96,976Income before income taxes
    
    
    6,442
    
    
    
    4,140
    
    
    
    
    
    
    
    10,582
 NOTE QMONACA, PENNSYLVANIA ACCIDENT INSURANCE RECOVERY
     11




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Total insurance recovery at December 31, 2010
    
    $
    (19,267
    )Insurance recovery recognized during the three months ended March 31, 2011
    
    
    (10,347
    )Final insurance settlement
    
    
    (29,614
    )
 Three Months endedMarch 31, 2011Insurance recovery recognized during the three months ended March 31, 2011
    
    
    (10,347
    )Cost of clean-up and repairs included in cost of sales of zinc material
and other goods
    
    
    982Income related to insurance recovery included in cost of sales (excluding
depreciation and amortization)
    
    
    (9,365
    )Selling, general and administrative expenses
    
    
    69Income related to insurance recovery
    
    $
    (9,296
    )Costs included in finished goods inventories
    
    
    170Costs capitalized
    
    
    282Insurance proceeds receivable included in accounts receivable
    
    $
    9,114
 12




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 General
  Overview
 Our History
   Strategic Investments
  Economic Conditions and Outlook
  Factors Affecting Our Operating Results
 Market Price for Zinc and Nickel
 13




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Three months endedLME Zinc Prices
    
    2004
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    March 31, 2011Monthly AverageHigh
    
    $
    0.54
    
    
    $
    0.83
    
    
    $
    2.00
    
    
    $
    1.74
    
    
    $
    1.14
    
    
    $
    1.08
    
    
    $
    1.10
    
    
    $
    1.12Low
    
    $
    0.44
    
    
    $
    0.54
    
    
    $
    0.95
    
    
    $
    1.07
    
    
    $
    0.50
    
    
    $
    0.50
    
    
    $
    0.79
    
    
    $
    1.07Daily High
    
    $
    0.58
    
    
    $
    0.86
    
    
    $
    2.08
    
    
    $
    1.93
    
    
    $
    1.28
    
    
    $
    1.17
    
    
    $
    1.20
    
    
    $
    1.01Daily Low
    
    $
    0.43
    
    
    $
    0.53
    
    
    $
    0.87
    
    
    $
    1.00
    
    
    $
    0.47
    
    
    $
    0.48
    
    
    $
    0.72
    
    
    $
    1.15Average per year
    
    $
    0.48
    
    
    $
    0.63
    
    
    $
    1.48
    
    
    $
    1.47
    
    
    $
    0.85
    
    
    $
    0.75
    
    
    $
    0.98
    
    
    $
    1.09
   Demand for Zinc and Nickel-Based Products
  14




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Shipments/EAF Dust Receipts
    
    Revenue/TonThree Months Ended
    
    Year Ended
    
    Three Months Ended
    
    Year EndedMarch 31,
    
    December 31,
    
    March 31,
    
    December 31,2011
    
    2010
    
    2010
    
    2009
    
    2011
    
    2010
    
    2010
    
    2009(Tons, in thousands)
    
    (In U.S. dollars)Product:Zinc Products
    
    
    36
    
    
    
    33
    
    
    
    137
    
    
    
    118
    
    
    $
    2,165
    
    
    $
    2,081
    
    
    $
    1,976
    
    
    $
    1,529EAF Dust
    
    
    132
    
    
    
    135
    
    
    
    532
    
    
    
    409
    
    
    $
    69
    
    
    $
    70
    
    
    $
    74
    
    
    $
    80Nickel-based products
    
    
    7
    
    
    
    7
    
    
    
    27
    
    
    
    25
    
    
    $
    1,970
    
    
    $
    1,789
    
    
    $
    1,768
    
    
    $
    1,453
 Cost of Sales (excluding depreciation and amortization)
  Selling, General and Administrative Expenses
 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 markets;
    
    increases and decreases in the use of zinc and nickel-based 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.
 15




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Summary of Critical Accounting Policies and Estimates
  Inventories
   16




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Financial Instruments
  
    
    Cash and cash equivalents, accounts receivable, notes payable due within one
year, accounts payable and accrued expenses approximate their fair value due to the
short-term nature of these instruments.
    
    Our financial swap and financial option instruments are carried at fair value.
We recognize changes in fair value within the consolidated statements of
income as they occur.
   Impairment
  Results of Operations
  Three months ended March 31,2011
    
    2010Net sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales (excluding depreciation and amortization)
    
    
    70.2
    
    
    
    79.5Depreciation and amortization
    
    
    4.8
    
    
    
    4.7Selling, general and administrative expenses
    
    
    4.8
    
    
    
    4.9Income from operations
    
    
    20.2
    
    
    
    10.9Interest expense
    
    
    0.3
    
    
    
    0.3Interest and other income
    
    
    0.3
    
    
    
    0.3Income before income taxes
    
    
    20.2
    
    
    
    10.9Income tax provision
    
    
    6.7
    
    
    
    3.9Net income
    
    
    13.5
    %
    
    
    7.0
    %
  17




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##### Table of Contents



Put OptionsSettlement Periods2010
    
    2011
    
    Swaps
    
    TotalFair value December 31, 2009
    
    $
    737
    
    
    $
    
    
    
    $
    1,157
    
    
    $
    1,894Purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    1,556Purchases
    
    
    
    
    
    
    585
    
    
    
    
    
    
    
    585Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    233Gain (loss) on settlements of closed positions
    
    
    (5
    )
    
    
    
    
    
    
    (532
    )
    
    
    (537
    )Mark to market adjustment on open positions
    
    
    
    
    
    
    (968
    )
    
    
    115
    
    
    
    (853
    )Fair value December 31, 2010
    
    
    
    
    
    
    579
    
    
    
    405
    
    
    
    984Purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements of closed positions
    
    
    
    
    
    
    
    
    
    
    (225
    )
    
    
    (225
    )Gain (loss) on settlements of closed positions
    
    
    
    
    
    
    (1
    )
    
    
    (109
    )
    
    
    (110
    )Mark to market adjustment on open positions
    
    
    
    
    
    
    (427
    )
    
    
    (34
    )
    
    
    (461
    )Fair value March 31, 2011
    
    $
    
    
    
    $
    151
    
    
    $
    37
    
    
    $
    188
  2009
    
    2010
    
    2011Average LME zinc price
    
    December 31
    
    March 31
    
    December 31
    
    March 31Quarter
    
    $
    1.00
    
    
    $
    1.04
    
    
    $
    1.05
    
    
    $
    1.09Year-to-date
    
    $
    0.75
    
    
    $
    1.04
    
    
    $
    0.98
    
    
    $
    1.09
 Three Months Ended March 31, 2011 Compared with Three Months Ended March 31, 2010
 Consolidated net sales
 Consolidated cost of sales (excluding depreciation and amortization).
 18




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##### Table of Contents



Consolidated depreciation and amortization.
 Consolidated selling, general and administrative expenses.
 Consolidated income tax provision.
 Consolidated net income.
 Business Segments
 Horsehead Corporation
 Net sales
    19




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##### Table of Contents



Cost of sales (excluding depreciation and amortization).
   Income before income taxes.
 INMETCO
 Net sales.
 20




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##### Table of Contents



Cost of sales (excluding depreciation and amortization)
 Income before income taxes.
 Liquidity and Capital Resources
 .
 March 31, 2011
  Cash Flows from Operating Activities
    Cash Flows from Investing Activities
   21




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##### Table of Contents



Cash Flows from Financing Activities
  Off-Balance Sheet Arrangements
  Available Information
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
   Commodity Price Risk
   22




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##### Table of Contents



Item 4. Controls and Procedures.
     23




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##### 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.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. (Removed and Reserved)
 
 Item 5. Other Information.
  
 Item 6. Exhibits.
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##### Table of Contents



Exhibit No.
    
    Description10.1
    
    Employment Agreement, dated as of January 3, 2011, by
and between Horsehead Corporation and James M. Hensler
III (incorporated by reference to Exhibit 10.1 of the
registrants Current Report on Form 8-K filed on January
4, 2011)10.2
    
    Employment Agreement, dated as of January 3, 2011, by
and between Horsehead Corporation and Robert D. Scherich
(incorporated by reference to Exhibit 10.2 of the
registrants Current Report on Form 8-K filed on January
4, 2011)10.3
    
    Employment Agreement, dated as of January 3, 2011, by
and between Horsehead Corporation and Ali Alavi
(incorporated by reference to Exhibit 10.3 of the
registrants Current Report on Form 8-K filed on January
4, 2011)31.1
    
    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.
 25




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##### 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

James M. Hensler
    
    Principal Executive Officer
    
    May 10, 2011/s/ Robert D. Scherich

Robert D. Scherich
    
    Principal Financial and Accounting Officer
    
    May 10, 2011
 26