HORSEHEAD HOLDING CORP. (ZINC, Financial) filed Quarterly Report for the period ended 2012-06-30.
Horsehead Holding Corp. has a market cap of $405.2 million; its shares were traded at around $9.49 with a P/E ratio of 132.2 and P/S ratio of 0.9.
Consolidated net sales. Consolidated net sales increased $23.9 million, or 11.6%, to $228.9 million for the six months ended June 30, 2012 compared to $205.0 million for the six months ended June 30, 2011. Net sales for the six months ended June 30, 2012 and 2011 were reduced $17.7 million and $15.2 million, respectively, from non-cash losses related to hedging activities. Excluding the net adjustments related to hedging activities, consolidated net sales increased $26.4 million, or 12.0%, to $246.6 million for the six months ended June 30, 2012 from $220.2 million for the six months ended June 30, 2011. The increase includes a $27.2 million increase in net sales for zinc products and services (Zinc) and $(0.8) million decrease in nickel products and services (Nickel). Zinc sales for 2012 include the sales of Zochem, which was acquired on November 1, 2011.
Consolidated cost of sales (excluding depreciation and amortization). Consolidated cost of sales increased $52.8 million, or 31.4%, to $220.6 million for the six months ended June 30, 2012 compared to $167.8 million for the six months ended June 30, 2011. Zinc cost of sales for the six months ended June 30, 2012, includes an impairment charge of $3.3 million related to the Monaca, Pennsylvania facility and cost of sales of $32.9 million related to the Zochem facility, which was acquired on November 1, 2011. Zinc cost of sales for the six months ended June 30, 2011 includes a net benefit of $9.3 million from business interruption and property damage insurance recoveries, net of additional cost of repairs and clean-up related to the July 2010 Monaca refinery incident. Excluding the net insurance benefit of $9.3 million associated with the refinery incident, the impairment charge of $3.3 million and the $32.9 million in Zochem related cost of sales, cost of sales for the six months ended June 30, 2012 increased $7.3 million, or 4.1%, to $184.4 million from $177.1 million for the six months ended June 30, 2011. The increase includes a $6.1 million increase in Zinc cost of sales and a $1.2 million increase in Nickel cost of sales.
Net sales. Net sales increased $24.7 million, or 14.2%, to $198.2 million for the six months ended June 30, 2012 compared to $173.4 million for the six months ended June 30, 2011. Net sales during the six months ended June 30, 2012 and the six months ended June 30, 2011 were both decreased by unfavorable non-cash adjustments of $18.1 million and $15.6 million, respectively, relating to our hedging activities. Excluding the unfavorable adjustments relating to hedges, net sales increased $27.2 million, to $216.3 million for the six months ended June 30, 2012. The increase was a result of a $52.6 million increase in sales volume primarily reflecting increased shipments of zinc oxide which included Zochem shipments, a $21.8 million decrease in price realization due to a 14.9% decrease in the average LME zinc price for the first six months of 2012 compared to the first six months of 2011 and a decrease of $3.6 million in our co-product and miscellaneous sales.
The cost of zinc material and other products sold, excluding the impairment charge of $3.3 million, cost of sales related to the Zochem facility of $32.9 million and the net insurance recoveries of $9.3 million, increased $1.5 million, or 1.0%, to $148.9 million for the six months ended June 30, 2012 compared to $147.4 million for the six months ended June 30, 2011. The increase was a result of a net $9.4 million increase in shipment volume offset by a $7.6 million decrease in the cost of products shipped due to a lower cost per ton and a $1.8 million decrease in recycling and other costs. The cost of zinc material for the six months ended June 30, 2012 includes an LCM inventory adjustment of $1.2 million due to the decline of the LME zinc price. No LCM adjustment was recorded during the six months ended June 30, 2011. An environmental reserve of $1.5 million was reversed during the six months ended June 30, 2011. Conversion costs at the Monaca, Pennsylvania facility reflect a 7.0% increase in production levels. As a result of this increase in production, conversion costs increased $6.2 million, after excluding $2.2 million in signing bonuses recognized during the six months ended June 30, 2011. As a result of this increase in production, conversion costs increased and reflect a $1.5 million increase in maintenance costs. Coke costs increased $4.4 million; however this was partially offset by a decrease of $2.7 million in electricity costs related to the power purchase agreement which we entered into in September 2011. The cost of purchased feeds we pay expressed as a percentage of the LME at the Monaca facility for the six months ended June 30, 2012 remained relatively flat compared to the six months ended June 30, 2011. Purchased feedstock costs as a percentage of its total production costs, at the Monaca facility, decreased to 18% for the six months ended June 30, 2012 from 19% for the six months ended June 30, 2011; however, the number of tons of purchased feed consumed increased 6.2%. Total purchased feedstock costs increased 1.2% for the six months ended June 2012 as compared to the six months ended June 2011. Changes in the average LME zinc price effect only the purchased feed component of our cost of sales, therefore any changes in the average LME zinc price have a smaller affect on our cost of sales than on its net sales, at the Monaca, Pennsylvania facility. Purchased feedstock costs at our Zochem facility, which comprised approximately 87% of its production costs, consisted entirely of SHG zinc metal purchased primarily from one supplier. The price of these metal blocks was based on the LME zinc price.
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Horsehead Holding Corp. has a market cap of $405.2 million; its shares were traded at around $9.49 with a P/E ratio of 132.2 and P/S ratio of 0.9.
Highlight of Business Operations:
The cost of zinc material and other products sold decreased $3.9 million, after excluding Zochem related cost of sales of $16.5 million, or 5.2%, to $72.3 million for the three months ended June 30, 2012 compared to $76.2 million for the three months ended June 30, 2011. The decrease was a result of a $5.3 million decrease in the cost of products shipped due to a lower cost per ton and a $1.3 million decrease in recycling and other costs offset by a net $1.2 million increase in shipment volume. The cost of zinc material for the three months ended June 30, 2012 includes an LCM inventory adjustment of $1.2 million due to the decline of the LME zinc price. No LCM adjustment was recorded during the three months ended June 30, 2011. An environmental reserve of $1.5 million was reversed during the three months ended June 30, 2011. Conversion costs at the Monaca, Pennsylvania facility reflect a 7.7% increase in production levels. As a result of this increase in production, conversion costs increased $1.6 million, after excluding $2.2 million in signing bonuses recognized during the three months ended June 30, 2011. Coke costs increased $1.8 million; however this increase was partially offset by a decrease of $1.3 million in electricity costs related to the power purchase agreement which we entered into in September 2011. The cost of purchased feeds we pay expressed as a percentage of the LME at the Monaca facility for the three months ended June 30, 2012 remained relatively flat compared to the three months ended June 30, 2011. Purchased feedstock costs as a percentage of its total production costs, at the Monaca facility, increased to 19% for the three months ended June 30, 2012 from 18% for the three months ended June 30, 2011; however, the number of tons of purchased feed consumed decreased 6.6%. Total purchased feedstock costs increased $0.04 million for the three months ended June 2012 as compared to the three months ended June 2011. Changes in the average LME zinc price effect only the purchased feed component of our cost of sales, therefore any changes in the average LME zinc price have a smaller affect on our cost of sales than on its net sales, at the Monaca, Pennsylvania facility. Purchased feedstock costs at our Zochem facility, which comprised approximately 88% of its production costs, consisted entirely of SHG zinc metal purchased primarily from one supplier. The price of these metal blocks was based on the LME zinc price.Consolidated net sales. Consolidated net sales increased $23.9 million, or 11.6%, to $228.9 million for the six months ended June 30, 2012 compared to $205.0 million for the six months ended June 30, 2011. Net sales for the six months ended June 30, 2012 and 2011 were reduced $17.7 million and $15.2 million, respectively, from non-cash losses related to hedging activities. Excluding the net adjustments related to hedging activities, consolidated net sales increased $26.4 million, or 12.0%, to $246.6 million for the six months ended June 30, 2012 from $220.2 million for the six months ended June 30, 2011. The increase includes a $27.2 million increase in net sales for zinc products and services (Zinc) and $(0.8) million decrease in nickel products and services (Nickel). Zinc sales for 2012 include the sales of Zochem, which was acquired on November 1, 2011.
Consolidated cost of sales (excluding depreciation and amortization). Consolidated cost of sales increased $52.8 million, or 31.4%, to $220.6 million for the six months ended June 30, 2012 compared to $167.8 million for the six months ended June 30, 2011. Zinc cost of sales for the six months ended June 30, 2012, includes an impairment charge of $3.3 million related to the Monaca, Pennsylvania facility and cost of sales of $32.9 million related to the Zochem facility, which was acquired on November 1, 2011. Zinc cost of sales for the six months ended June 30, 2011 includes a net benefit of $9.3 million from business interruption and property damage insurance recoveries, net of additional cost of repairs and clean-up related to the July 2010 Monaca refinery incident. Excluding the net insurance benefit of $9.3 million associated with the refinery incident, the impairment charge of $3.3 million and the $32.9 million in Zochem related cost of sales, cost of sales for the six months ended June 30, 2012 increased $7.3 million, or 4.1%, to $184.4 million from $177.1 million for the six months ended June 30, 2011. The increase includes a $6.1 million increase in Zinc cost of sales and a $1.2 million increase in Nickel cost of sales.
Net sales. Net sales increased $24.7 million, or 14.2%, to $198.2 million for the six months ended June 30, 2012 compared to $173.4 million for the six months ended June 30, 2011. Net sales during the six months ended June 30, 2012 and the six months ended June 30, 2011 were both decreased by unfavorable non-cash adjustments of $18.1 million and $15.6 million, respectively, relating to our hedging activities. Excluding the unfavorable adjustments relating to hedges, net sales increased $27.2 million, to $216.3 million for the six months ended June 30, 2012. The increase was a result of a $52.6 million increase in sales volume primarily reflecting increased shipments of zinc oxide which included Zochem shipments, a $21.8 million decrease in price realization due to a 14.9% decrease in the average LME zinc price for the first six months of 2012 compared to the first six months of 2011 and a decrease of $3.6 million in our co-product and miscellaneous sales.
The cost of zinc material and other products sold, excluding the impairment charge of $3.3 million, cost of sales related to the Zochem facility of $32.9 million and the net insurance recoveries of $9.3 million, increased $1.5 million, or 1.0%, to $148.9 million for the six months ended June 30, 2012 compared to $147.4 million for the six months ended June 30, 2011. The increase was a result of a net $9.4 million increase in shipment volume offset by a $7.6 million decrease in the cost of products shipped due to a lower cost per ton and a $1.8 million decrease in recycling and other costs. The cost of zinc material for the six months ended June 30, 2012 includes an LCM inventory adjustment of $1.2 million due to the decline of the LME zinc price. No LCM adjustment was recorded during the six months ended June 30, 2011. An environmental reserve of $1.5 million was reversed during the six months ended June 30, 2011. Conversion costs at the Monaca, Pennsylvania facility reflect a 7.0% increase in production levels. As a result of this increase in production, conversion costs increased $6.2 million, after excluding $2.2 million in signing bonuses recognized during the six months ended June 30, 2011. As a result of this increase in production, conversion costs increased and reflect a $1.5 million increase in maintenance costs. Coke costs increased $4.4 million; however this was partially offset by a decrease of $2.7 million in electricity costs related to the power purchase agreement which we entered into in September 2011. The cost of purchased feeds we pay expressed as a percentage of the LME at the Monaca facility for the six months ended June 30, 2012 remained relatively flat compared to the six months ended June 30, 2011. Purchased feedstock costs as a percentage of its total production costs, at the Monaca facility, decreased to 18% for the six months ended June 30, 2012 from 19% for the six months ended June 30, 2011; however, the number of tons of purchased feed consumed increased 6.2%. Total purchased feedstock costs increased 1.2% for the six months ended June 2012 as compared to the six months ended June 2011. Changes in the average LME zinc price effect only the purchased feed component of our cost of sales, therefore any changes in the average LME zinc price have a smaller affect on our cost of sales than on its net sales, at the Monaca, Pennsylvania facility. Purchased feedstock costs at our Zochem facility, which comprised approximately 87% of its production costs, consisted entirely of SHG zinc metal purchased primarily from one supplier. The price of these metal blocks was based on the LME zinc price.
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