HANDY & HARMAN LTD. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - HANDY & HARMAN LTD.	Financial_Report.xls
EX-31.2 - EXHIBIT - HANDY & HARMAN LTD.	hnh6302014ex312.htm
EX-31.1 - EXHIBIT - HANDY & HARMAN LTD.	hnh6302014ex311.htm
EX-32 - EXHIBIT - HANDY & HARMAN LTD.	hnh6302014ex32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

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: 1-2394

HANDY & HARMAN LTD.

(Exact name of registrant as specified in its charter)



DELAWARE	13-3768097
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)



1133 Westchester Avenue, Suite N222 White Plains, New York	10604
(Address of principal executive offices)	(Zip Code)

914-461-1300

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer o	Accelerated filer x

Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

The number of shares of Common Stock outstanding as of July 30, 2014 was 12,915,182.

TABLE OF CONTENTS

HANDY & HARMAN LTD.



PART I - FINANCIAL INFORMATION		Page

Item 1.	Financial Statements (unaudited)	1

	Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	2

	Consolidated Income Statements for the three and six months ended June 30, 2014 and 2013	3

	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013	4

	Consolidated Statement of Changes in Stockholders' Equity for the six months ended June 30, 2014	5

	Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013	6

	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

Item 4.	Controls and Procedures	32

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 6.	Exhibits	34

SIGNATURES		35

Part I - FINANCIAL INFORMATION

Item 1. - Financial Statements (unaudited)

HANDY & HARMAN LTD.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



	June 30,			December 31,
(in thousands, except par value)	2014			2013
ASSETS
Current Assets:
Cash and cash equivalents	$	9,321		$	10,300
Trade and other receivables - net of allowance for doubtful accounts of $2,382 and $1,981, respectively	110,088			77,546
Inventories, net	83,714			65,750
Deferred income tax assets - current	20,535			20,507
Prepaid and other current assets	7,111			9,578
Assets of discontinued operations	661			651
Total current assets	231,430			184,332
Property, plant and equipment at cost, less accumulated depreciation	91,131			91,197
Goodwill	77,584			77,512
Other intangibles, net	46,052			48,336
Investment in associated company	23,349			33,983
Deferred income tax assets	55,196			59,686
Other non-current assets	14,580			14,677
Total assets	$	539,322		$	509,723
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade payables	$	54,621		$	34,823
Accrued liabilities	25,786			28,047
Accrued environmental liabilities	2,138			3,213
Short-term debt	632			304
Current portion of long-term debt	14,381			12,818
Deferred income tax liabilities - current	426			433
Liabilities of discontinued operations	13			151
Total current liabilities	97,997			79,789
Long-term debt	152,423			144,069
Accrued pension liability	138,748			143,705
Other post-retirement benefit obligations	2,484			2,501
Other liabilities	6,418			5,787
Total liabilities	398,070			375,851
Commitments and Contingencies
Stockholders' Equity:
Common stock - $.01 par value; authorized 180,000 shares; issued 13,590 and 13,444 shares, respectively	136			134
Accumulated other comprehensive loss	(182,050		)	(181,931		)
Additional paid-in capital	566,825			565,441
Treasury stock, at cost - 647 and 458 shares, respectively	(14,389		)	(9,796		)
Accumulated deficit	(229,270		)	(239,976		)
Total stockholders' equity	141,252			133,872
Total liabilities and stockholders' equity	$	539,322		$	509,723

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HANDY & HARMAN LTD.

CONSOLIDATED INCOME STATEMENTS

(Unaudited)



	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in thousands, except per share)	2014		2013			2014		2013
Net sales	$	195,491	$	182,084		$	357,339	$	331,041
Cost of goods sold	138,387		130,419			254,834		235,404
Gross profit	57,104		51,665			102,505		95,637
Selling, general and administrative expenses	32,712		32,307			67,288		63,804
Pension expense	1,136		1,394			2,272		2,668
Operating income	23,256		17,964			32,945		29,165
Other:
Interest expense	1,617		1,641			3,169		10,087
Realized and unrealized loss (gain) on derivatives	606		(1,492		)	466		(1,053		)
Other expense	66		128			115		264
Income from continuing operations before tax and equity investment	20,967		17,687			29,195		19,867
Tax provision	8,649		7,038			11,991		7,905
Loss from associated company, net of tax	1,242		438			6,540		3,275
Income from continuing operations, net of tax	11,076		10,211			10,664		8,687
Discontinued operations:
Loss from discontinued operations, net of tax	—		(803		)	—		(603		)
Gain on disposal of assets, net of tax	—		2,464			42		11,805
Net income from discontinued operations	—		1,661			42		11,202
Net income	$	11,076	$	11,872		$	10,706	$	19,889
Basic and diluted income per share of common stock
Income from continuing operations, net of tax, per share	$	0.84	$	0.76		$	0.82	$	0.66
Discontinued operations, net of tax, per share	—		0.12			—		0.84
Net income per share	$	0.84	$	0.88		$	0.82	$	1.50
Weighted-average number of common shares outstanding	13,114		13,433			13,055		13,302

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HANDY & HARMAN LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in thousands)	2014		2013			2014			2013
Net income	$	11,076	$	11,872		$	10,706		$	19,889

Other comprehensive income (loss), net of tax:
Change in market value of securities	—		—			—			7,113
Tax effect of change in market value of securities	—		—			—			(3,041		)
Changes in pension liability and other post-retirement benefit obligations	—		1,449			—			1,449
Tax effect of changes in pension liability and other post-retirement benefit obligations	—		(580		)	—			(580		)
Foreign currency translation adjustments	110		(50		)	(119		)	(708		)
Other comprehensive income (loss)	110		819			(119		)	4,233

Comprehensive income	$	11,186	$	12,691		$	10,587		$	24,122

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HANDY & HARMAN LTD.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)




	Common Stock			Accumulated Other Comprehensive			Additional Paid-In		Treasury Stock,			Accumulated			Total Stockholders'
(in thousands)	Shares	Amount		Loss			Capital		at Cost			Deficit			Equity
Balance, December 31, 2013	13,444	$	134	$	(181,931	)	$	565,441	$	(9,796	)	$	(239,976	)	$	133,872
Amortization, issuance and forfeitures of restricted stock grants	146	2		—			1,384		—			—			1,386
Foreign currency translation adjustments	—	—		(119		)	—		—			—			(119		)
Purchases of treasury stock	—	—		—			—		(4,593		)	—			(4,593		)
Net income	—	—		—			—		—			10,706			10,706
Balance, June 30, 2014	13,590	$	136	$	(182,050	)	$	566,825	$	(14,389	)	$	(229,270	)	$	141,252

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HANDY & HARMAN LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Six Months Ended
	June 30,
(in thousands)	2014			2013
Cash flows from operating activities:
Net income	$	10,706		$	19,889
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	8,794			7,850
Non-cash stock-based compensation	2,399			2,403
Non-cash loss from investment in associated company, net of tax	6,540			3,275
Amortization of debt issuance costs	414			457
Loss on early retirement of debt	—			5,662
Accrued interest not paid in cash	—			93
Deferred income taxes	8,551			17,086
Gain from asset dispositions	(49		)	(8		)
Non-cash (gain) loss from derivatives	(89		)	790
Reclassification of net cash settlements on precious metal contracts to investing activities	554			(1,843		)
Discontinued operations:
Net cash (used in) provided by operating activities	(147		)	2,370
Non-cash gain on disposal of assets	(71		)	(24,081		)
Change in operating assets and liabilities, net of acquisitions:
Trade and other receivables	(33,155		)	(26,752		)
Inventories	(18,015		)	(2,296		)
Prepaid and other current assets	2,466			(12,444		)
Other current liabilities	9,277			6,344
Other items, net	267			(2,109		)
Net cash used in operating activities	(1,558		)	(3,314		)
Cash flows from investing activities:
Additions to property, plant and equipment	(6,461		)	(6,625		)
Net cash settlements on precious metal contracts	(554		)	1,843
Acquisitions, net of cash acquired	—			(59,539		)
Proceeds from sale of assets	126			138
Proceeds from sale of discontinued operations	—			41,872
Net cash used in investing activities of discontinued operations	—			(102		)
Net cash used in investing activities	(6,889		)	(22,413		)



	Six Months Ended
	June 30,
(in thousands)	2014			2013
Cash flows from financing activities:
Proceeds from term loans - domestic	—			10,000
Proceeds from WHX CS Loan	4,500			—
Net revolver borrowings	10,350			53,800
Net borrowings (repayments) on loans - foreign	1,818			(1,739		)
Repayments of term loans	(6,409		)	(4,472		)
Repurchases of Subordinated Notes	—			(36,307		)
Deferred finance charges	(88		)	(349		)
Net change in overdrafts	1,912			1,341
Purchases of treasury stock	(4,593		)	(1,028		)
Other financing activities	(2		)	(290		)
Net cash provided by financing activities	7,488			20,956
Net change for the period	(959		)	(4,771		)
Effect of exchange rate changes on cash and cash equivalents	(20		)	(126		)
Cash and cash equivalents at beginning of period	10,300			15,301
Cash and cash equivalents at end of period	$	9,321		$	10,404

Cash paid during the period for:
Interest	$	3,299		$	4,817
Taxes	$	3,496		$	3,833

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – The Company and Nature of Operations

Handy & Harman Ltd. ("HNH") is a diversified manufacturer of engineered niche industrial products. HNH's diverse product offerings are marketed throughout the United States and internationally. HNH owns Handy & Harman Group Ltd. ("H&H Group"), which owns Handy & Harman ("H&H") and Bairnco Corporation. HNH manages its group of businesses on a decentralized basis with operations principally in North America. HNH's business units encompass the following segments: Joining Materials, Tubing, Building Materials, Arlon Electronic Materials ("Arlon") and Kasco Blades and Route Repair Services ("Kasco"). All references herein to "we," "our" or the "Company" refer to HNH together with all of its subsidiaries.

Note 2 – Basis of Presentation

The consolidated balance sheet as of December 31, 2013, which has been derived from audited financial statements, and the unaudited consolidated financial statements included herein have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted in accordance with those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. This quarterly report on Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements on Form 10-K for the year ended December 31, 2013. Certain amounts for the prior year have been reclassified to conform to the current year presentation.

In the opinion of management, the interim financial statements reflect all normal and recurring adjustments necessary to present fairly the consolidated financial position and the results of operations and changes in cash flows for the interim periods. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the operating results for the full year.

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on an organization’s operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The ASU is effective for the Company's 2015 fiscal year and is to be applied prospectively from the beginning of the fiscal year of adoption.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and the guidance defines a five step process to achieve this core principle. The ASU is effective for the Company's 2017 fiscal year and may be applied either (i) retrospectively to each prior reporting period presented with an election for certain specified practical expedients, or (ii) retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application, with additional disclosure requirements. The Company is evaluating the potential impact of this new guidance, but does not currently anticipate that the application of ASU No. 2014-09 will have a significant effect on its financial condition, results of operations or its cash flows. We have not yet determined the method by which we will adopt the standard in 2017.

Note 3 – Acquisitions

2013 Acquisitions

Wolverine Joining Technologies, LLC

On April 16, 2013, the Company and its indirect subsidiary, Lucas-Milhaupt Warwick LLC (together with the Company,

"Buyer"), entered into an asset purchase agreement ("Purchase Agreement") with Wolverine Tube, Inc. ("Wolverine") and its subsidiary, Wolverine Joining Technologies, LLC ("Wolverine Joining" and, together with Wolverine, "Seller"), pursuant to which the Buyer agreed to purchase substantially all of the assets of the Seller used in the business of Wolverine Joining, consisting of assets used for the development, manufacturing and sale of brazing, flux and soldering products, and the alloys for electrical, catalyst and other industrial specialties, other than certain leased real property, and to assume certain liabilities related to such business. By acquiring Wolverine Joining, the Company increased its capacity to produce brazing filler metals and fluxes, and broadened its platform for continued global expansion. The purchase price for the acquisition was approximately $59.7 million, reflecting a final working capital adjustment and certain other reductions totaling approximately $0.3 million as provided in the Purchase Agreement. The closing of this transaction occurred on April 26, 2013. Funding of the purchase price for the acquisition was from cash on hand and borrowings under the Company's senior secured credit facility, which was amended in connection with the acquisition.

In connection with the acquisition of Wolverine Joining, the Company incurred employee severance charges totaling approximately $0.4 million associated with the Company's integration activities, which were primarily recorded and paid in fiscal 2013 and reflected in selling, general and administrative expenses.

The following table summarizes the amounts of the assets acquired and liabilities assumed at the acquisition date (in thousands):



Trade and other receivables	$	9,491
Inventories	17,864
Prepaid and other current assets	81
Property, plant and equipment	5,549
Goodwill	14,767
Other intangibles	13,657
Total assets acquired	61,409
Trade payables	(1,167		)
Accrued liabilities	(495		)
Net assets acquired	$	59,747

The goodwill of $14.8 million arising from the acquisition consists largely of the synergies expected from combining the operations of the Buyer and Seller. All of the goodwill is assigned to the Company's Joining Materials segment and is expected to be deductible for income tax purposes. Other intangibles consist primarily of acquired trade names of $4.6 million and customer relationships of $9.0 million. These intangible assets have been assigned 20-year useful lives based on the long operating history, broad market recognition and continued demand for the associated brands, and the limited turnover and long-standing relationships Wolverine Joining has with its existing customer base. The valuation of acquired trade names was performed utilizing a relief from royalty method, and significant assumptions used in the valuation include the royalty rate assumed and the expected level of future sales. The acquired customer relationships were valued using an excess earnings approach, and significant assumptions used in the valuation include the customer attrition rate assumed and the expected level of future sales.

The amount of net sales and operating (loss) income of the acquired business included in the consolidated income statement for the three months ended June 30, 2014 and 2013 were approximately $16.5 million and $(0.3) million, and $15.2 million and $0.3 million, respectively, including $1.8 million and $0.5 million, respectively, of intercompany sales which were eliminated in consolidation. The amount of net sales and operating (loss) income of the acquired business included in the consolidated income statement for the six months ended June 30, 2014 and 2013 were approximately $30.6 million and $(0.6) million, and $15.2 million and $0.3 million, respectively, including $3.5 million and $0.5 million, respectively, of intercompany sales which were eliminated in consolidation. The results of operations of the acquired business are reported within the Company's Joining Materials segment. Pro forma net sales and net income of the combined entity had the acquisition date been January 1, 2012 are as follows:



	Six Months Ended
	June 30,
(in thousands, except per share)	2014		2013
Net sales	$	357,339	$	356,191
Net income	$	10,706	$	21,307
Net income per share	$	0.82	$	1.60
Weighted-average number of common shares outstanding	13,055		13,302

This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations or of the results that would have occurred had the acquisition taken place on January 1, 2012. The information for fiscal 2014 is unchanged from the results reported in the consolidated income statement. The information for fiscal 2013 is based on historical financial information with respect to the acquisition and does not include operational or other changes which might have been effected by the Company. The 2013 supplemental pro forma earnings reflect adjustments to exclude $0.5 million of acquisition-related costs incurred in 2013 and $0.5 million of nonrecurring expense related to the fair value adjustment to acquisition-date inventories.

PAM Fastening Technology, Inc.

On November 7, 2013, the Company, through its indirect subsidiary, OMG, Inc., acquired 100% of the stock of PAM Fastening Technology, Inc. ("PAM") for a cash purchase price of $9.2 million, net of cash acquired. PAM is a distributor of screw guns, collated screws and hot melt systems to the manufacturing and building industries in North America. The assets acquired and liabilities assumed included net working capital of trade receivables, inventories and trade payables; property, plant and equipment; and intangible assets, primarily trade names and customer relationships, valued at $2.5 million, $0.2 million and $5.0 million, respectively. This acquisition provides the Company with an add on product category to its existing fastening system product line. The amount of net sales and operating income of the acquired business included in the consolidated income statement for the three months ended June 30, 2014 was approximately $3.7 million and $0.6 million, respectively. The amount of net sales and operating income of the acquired business included in the consolidated income statement for the six months ended June 30, 2014 was approximately $6.3 million and $1.0 million, respectively. The results of operations of the acquired business are reported within the Company's Building Materials segment. In connection with the PAM acquisition, the Company has recorded goodwill totaling approximately $3.5 million, which is not expected to be deductible for income tax purposes, as well as deferred income tax liabilities associated with the acquired intangible assets of approximately $2.0 million.

Note 4 – Discontinued Operations

The following businesses are classified as discontinued operations in the accompanying consolidated financial statements.

Continental Industries

In January 2013, the Company divested substantially all of the assets and existing operations of its Continental Industries, Inc. ("Continental") business unit for a cash sales price totaling approximately $37.4 million, less transaction fees, reflecting a working capital adjustment of approximately $0.1 million paid in the third quarter of 2013. Proceeds of $3.7 million were held in escrow as of June 30, 2014 pending resolution of certain indemnification provisions contained in the sales agreement and were included in other receivables on the consolidated balance sheet. This escrow balance was released and received by the Company in July 2014. Continental manufactured plastic and steel fittings and connectors for natural gas, propane and water distribution service lines, along with exothermic welding products for electrical grounding, cathodic protection and lightning protection. It was part of the Company's Building Materials segment.

Canfield Metal Coating Corporation

In June 2013, the Company divested substantially all of the assets and existing operations of its Canfield Metal Coating Corporation ("CMCC") business unit for a cash sales price totaling approximately $9.5 million, less transaction fees, reflecting a final working capital adjustment of approximately $0.5 million. CMCC manufactured electro-galvanized and painted cold rolled sheet steel products primarily for the construction, entry door, container and appliance industries. It was part of the Company's Building Materials segment.

Indiana Tube Mexico

In July 2013, the Company divested substantially all of the equipment owned or utilized by Indiana Tube de México, S. De R.L. de C.V. ("ITM") for the manufacture of refrigeration condensers for a cash sales price totaling $3.7 million, less transaction fees. ITM's operations were part of the Company's Tubing segment.

The assets and liabilities of discontinued operations have been segregated on the accompanying consolidated balance sheets as of June 30, 2014 and December 31, 2013.



	June 30,		December 31,
(in thousands)	2014		2013
Assets of Discontinued Operations:
Prepaid and other current assets	$	638	$	587
Other non-current assets	23		64
Total	$	661	$	651

Liabilities of Discontinued Operations	$	13	$	151

The net income from discontinued operations includes the following:



	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in thousands)	2014		2013			2014		2013
Net sales	$	—	$	8,630		$	—	$	19,811
Operating loss	—		(1,182		)	—		(904		)
Interest and other expense	—		38			—		47
Income tax benefit	—		(417		)	—		(348		)
Loss from discontinued operations, net of tax	—		(803		)	—		(603		)
Gain on disposal of assets	—		3,924			71		24,081
Income tax expense	—		1,460			29		12,276
Gain on disposal of assets, net of tax	—		2,464			42		11,805
Net income from discontinued operations	$	—	$	1,661		$	42	$	11,202

Note 5 – Inventories

Inventories, net at June 30, 2014 and December 31, 2013 were comprised of:



	June 30,			December 31,
(in thousands)	2014			2013
Finished products	$	24,544		$	21,887
In-process	13,631			9,840
Raw materials	16,971			15,246
Fine and fabricated precious metals in various stages of completion	30,558			19,802
	85,704			66,775
LIFO reserve	(1,990		)	(1,025		)
Total	$	83,714		$	65,750

In order to produce certain of its products, H&H purchases, maintains and utilizes precious metal inventory. H&H records certain of its precious metal inventory at the lower of last-in, first-out ("LIFO") cost or market, with any adjustments recorded through cost of goods sold. Remaining precious metal inventory is accounted for primarily at fair value.

Certain customers and suppliers of H&H choose to do business on a "pool" basis and furnish precious metal to H&H for return in fabricated form or for purchase from or return to the supplier. When the customer metal is returned in fabricated form,

the customer is charged a fabrication charge. The value of this customer metal is not included on the Company's consolidated balance sheet. To the extent H&H is able to utilize customer precious metal in its production processes, such customer metal replaces the need for H&H to purchase its own inventory. As of June 30, 2014, H&H's customer metal consisted of 172,058 ounces of silver, 543 ounces of gold and 1,391 ounces of palladium.



Supplemental inventory information:	June 30,		December 31,
(in thousands, except per ounce)	2014		2013
Precious metals stated at LIFO cost	$	12,995	$	5,090
Precious metals stated under non-LIFO cost methods, primarily at fair value	$	15,573	$	13,687
Market value per ounce:
Silver	$	21.12	$	19.49
Gold	$	1,317.50	$	1,201.50
Palladium	$	839.00	$	711.00

Note 6 – Goodwill and Other Intangibles

The changes in the net carrying amount of goodwill by reportable segment for the six months ended June 30, 2014 were as follows (in thousands):



Segment	Balance at January 1, 2014		Foreign Currency Translation Adjustments			Additions		Adjustments		Balance at June 30, 2014		Accumulated Impairment Losses
Joining Materials	$	16,275	$	(4	)	$	—	$	—	$	16,271	$	—
Tubing	1,895		—			—		—		1,895		—
Building Materials	50,044		—			—		76		50,120		—
Arlon	9,298		—			—		—		9,298		(1,140		)
Total	$	77,512	$	(4	)	$	—	$	76	$	77,584	$	(1,140	)

Other intangible assets as of June 30, 2014 and December 31, 2013 consisted of:



(in thousands)	June 30, 2014							December 31, 2013
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Customer relationships	$	52,477	$	(17,964	)	$	34,513	$	52,565	$	(16,259	)	$	36,306
Trademarks, trade names and brand names	10,249		(2,413		)	7,836		10,231		(2,116		)	8,115
Patents and patent applications	5,231		(2,057		)	3,174		5,103		(1,870		)	3,233
Non-compete agreements	709		(657		)	52		906		(839		)	67
Other	1,800		(1,323		)	477		1,808		(1,193		)	615
Total	$	70,466	$	(24,414	)	$	46,052	$	70,613	$	(22,277	)	$	48,336

Amortization expense totaled $1.2 million and $1.0 million for the three months ended June 30, 2014 and 2013, respectively, and $2.4 million and $1.9 million for the six months ended June 30, 2014 and 2013, respectively. The increase in amortization expense during the six months ended June 30, 2014 was principally due to the Company's acquisitions of Wolverine Joining and PAM discussed in Note 3 - "Acquisitions."

Note 7 – Investments

The Company holds an investment in the common stock of a public company, ModusLink Global Solutions, Inc. ("ModusLink"), which is classified as an investment in associated company on the consolidated balance sheet. The value of this investment decreased from $34.0 million at December 31, 2013 to $23.3 million at June 30, 2014 due entirely to changes in the share price of ModusLink's common stock.

As of March 11, 2013, Steel Partners Holdings L.P. ("SPLP") and its associated companies, which include the Company, owned a combined total of 6,481,185 ModusLink common shares, which represented 14.7% of ModusLink's outstanding shares. SPLP is a majority shareholder of HNH, owning directly or indirectly through its subsidiaries in excess of 50% of HNH's common shares. The power to vote and dispose of the securities held by SPLP is controlled by Steel Partners Holdings GP Inc. ("SPH GP"). On February 11, 2013, SPLP entered into an agreement ("Investment Agreement") whereby, under certain conditions, it agreed to purchase 7,500,000 shares of ModusLink common stock at a price of $4.00 per share and receive warrants to purchase 2,000,000 additional shares of ModusLink common stock at an exercise price of $5.00 per share.

At its annual meeting held on March 12, 2013, ModusLink's stockholders voted to approve the Investment Agreement with SPLP and also to elect Warren G. Lichtenstein and Glen M. Kassan to the ModusLink Board of Directors, both of whom are directors of HNH, and Mr. Lichtenstein is Executive Chairman of SPH GP. Mr. Lichtenstein was also designated Chairman of the Board of ModusLink. Also on March 12, 2013, pursuant to the terms and conditions of the Investment Agreement, SPLP purchased the 7,500,000 shares of ModusLink's common stock. As of June 30, 2014, SPLP and HNH own approximately 15.5% and 11.4% of ModusLink's common stock, respectively, for an aggregate ownership of 26.9%. The outstanding warrants to purchase 2,000,000 additional shares of ModusLink common stock held by SPLP will expire on the date that is five years following the closing of the Investment Agreement.

As a result of the board representation described above, together with SPLP's direct ownership of an additional 15.5% of ModusLink common stock, HNH has concluded that it has significant influence over the operating and financial policies of ModusLink. The Company's investment in ModusLink became subject to the equity method of accounting as of March 12, 2013. HNH has elected the option to value its investment in ModusLink using fair value effective March 12, 2013 in order to more appropriately reflect the value of this investment in its consolidated financial statements. As a result, the Company now carries its ModusLink investment on the consolidated balance sheet at fair value, with unrealized gains and losses on the investment reported in net income or loss.

HNH had historically accounted for its investment in ModusLink as an available-for-sale security in non-current assets on the consolidated balance sheet. The unrealized gain or loss associated with this security was included in accumulated other comprehensive loss on the consolidated balance sheet and also in the consolidated statement of changes in stockholders' equity, net of tax. The change in the unrealized gain or loss was included in other comprehensive income or loss. On March 12, 2013, the accumulated unrealized loss of $4.3 million related to our ModusLink investment that was recorded in accumulated other comprehensive loss, net of a tax benefit of $1.9 million, was reclassified to earnings. Prior to March 12, 2013, there had been no sales or realized gains or losses from this marketable security, and no impairments, whether other-than-temporary or not, recognized in the consolidated income statement.

ModusLink's fiscal year ends on July 31. Summarized unaudited information as to assets, liabilities and results of operations of ModusLink for the quarter ended April 30, 2014, its most recently completed fiscal quarter, and the comparable prior periods are as follows:



	April 30,			July 31,
(in thousands)	2014			2013
Current assets	$	383,627		$	291,086
Non-current assets	$	45,359		$	52,610
Current liabilities	$	167,684		$	176,431
Non-current liabilities	$	82,505		$	10,360
Stockholders' equity	$	178,797		$	156,905

	Three Months Ended						Six Months Ended
	April 30,						April 30,
(in thousands)	2014			2013			2014			2013
Net revenue	$	173,274		$	173,016		$	367,285		$	376,452
Gross profit	$	15,699		$	15,375		$	38,279		$	35,653
Loss from continuing operations	$	(9,478	)	$	(8,247	)	$	(8,415	)	$	(20,664	)
Net loss	$	(9,478	)	$	(8,306	)	$	(8,414	)	$	(20,856	)

Note 8 – Debt

Debt at June 30, 2014 and December 31, 2013 was as follows:



	June 30,		December 31,
(in thousands)	2014		2013
Short-term debt
Foreign	$	632	$	304
Long-term debt
Senior Term Loan	109,750		116,000
Revolving Facility	41,300		30,950
WHX CS Loan	4,500		—
Other H&H debt - domestic	8,119		8,279
Foreign loan facilities	3,135		1,658
Sub total	166,804		156,887
Less portion due within one year	14,381		12,818
Total long-term debt	152,423		144,069
Total debt	$	167,436	$	157,191

Senior Credit Facility

H&H Group has entered into a senior secured credit facility, as amended, consisting of a revolving credit facility ("Revolving Facility") in an aggregate principal amount not to exceed $160.0 million and a term loan ("Senior Term Loan") (collectively, "Senior Credit Facility"). The Revolving Facility provides for a commitment fee to be paid on unused borrowings, and usage under the Revolving Facility is governed by a defined Borrowing Base. The Senior Term Loan requires quarterly principal payments of $3.1 million, $3.9 million, $3.9 million and $3.9 million in 2014, 2015, 2016 and 2017, respectively.

The Senior Credit Facility will expire, with remaining outstanding balances due and payable, on November 8, 2017. The Senior Credit Facility is guaranteed by substantially all existing and thereafter acquired or created domestic and Canadian wholly-owned subsidiaries of H&H Group. The Senior Credit Facility restricts H&H Group's ability to transfer cash or other assets to HNH, subject to certain exceptions including required pension payments to the WHX Corporation Pension Plan ("WHX Pension Plan"). Borrowings under the Senior Credit Facility bear interest, at H&H Group's option, at a rate based on LIBOR or the Base Rate, as defined, plus an applicable margin as set forth in the loan agreement (2.50% and 1.50%, respectively, for LIBOR and Base Rate borrowings at June 30, 2014). The Senior Credit Facility is subject to certain mandatory prepayment provisions and restrictive and financial covenants, which include a maximum ratio limit on Total Leverage and a minimum ratio limit on Fixed Charge Coverage, as defined, as well as a minimum liquidity level. The weighted-average interest rates on the Senior Term Loan and Revolving Facility were 2.67% and 3.16%, respectively, at June 30, 2014, and the Company was in compliance with all debt covenants at June 30, 2014.

In connection with lending requirements under the Senior Credit Facility, H&H Group entered into an interest rate swap agreement in February 2013 to reduce its exposure to interest rate fluctuations. Under the interest rate swap, the Company receives one-month LIBOR in exchange for a fixed interest rate of 0.569% over the life of the agreement on an initial $56.4 million notional amount of debt, with the notional amount decreasing by $1.1 million, $1.8 million and $2.2 million per quarter in 2013, 2014 and 2015, respectively. The agreement expires in February 2016. In connection with the amendments made to the Senior Credit Facility in connection with the Wolverine Joining acquisition, H&H Group entered into a second interest rate swap agreement in June 2013, also to reduce its exposure to interest rate fluctuations. Under the interest rate swap, the Company receives one-month LIBOR in exchange for a fixed interest rate of 0.598% over the life of the agreement on an initial $5.0 million notional amount of debt, with the notional amount decreasing by $0.1 million, $0.2 million and $0.2 million per quarter in 2013, 2014 and 2015, respectively. The agreement expires in February 2016.

WHX CS Loan

On June 3, 2014, WHX CS Corp. ("WHX CS"), a wholly-owned subsidiary of the Company, entered into a credit agreement ("WHX CS Loan"), which provides for a term loan facility with borrowing availability of up to a maximum aggregate principal amount of $15.0 million. Obligations under the WHX CS Loan are collateralized by a first priority security interest in and lien

upon the Company's investment in the common stock of ModusLink (see Note 7 - "Investments"), and WHX CS's obligations under this agreement are guaranteed by H&H Group.

The amounts outstanding under the WHX CS Loan bear interest at LIBOR plus 1.25%, subject to downward adjustment based on a quarterly evaluation of the trading price of ModusLink common stock. The weighted-average interest rate on the WHX CS Loan was 1.41% at June 30, 2014. Availability under the WHX CS Loan is equal to 50% of the value of the Company's investment in ModusLink common stock. Draw-downs are available for a period of up to twelve months after closing. Amounts advanced and repaid under the agreement may not be reborrowed. At the end of the draw-down period, the principal drawn will be converted into a two year term loan with a five year amortization and associated quarterly principal payments. All amounts outstanding under the WHX CS Loan are due and payable in full on June 3, 2017. The WHX CS Loan contains certain affirmative and negative covenants, and the Company was in compliance with all debt covenants at June 30, 2014.

Subordinated Notes

On March 26, 2013, H&H Group instructed Wells Fargo Bank, National Association ("Wells Fargo"), as trustee and collateral agent, to deliver an irrevocable notice of H&H Group's election to redeem all of its outstanding 10% subordinated secured notes due 2017 ("Subordinated Notes") to the holders of the Subordinated Notes. Pursuant to the terms of that certain amended and restated indenture, dated as of December 13, 2010, as amended ("Indenture"), by and among H&H Group, the guarantors named therein and Wells Fargo, as trustee and collateral agent, H&H Group also instructed Wells Fargo to redeem, on April 25, 2013, approximately $31.8 million principal amount of Subordinated Notes, representing all of the remaining outstanding Subordinated Notes, at a redemption price equal to 112.6% of the principal amount and accrued but unpaid payment-in-kind-interest thereof, plus accrued and unpaid cash interest. The Subordinated Notes were part of a unit ("Unit"), and each Unit consisted of (i) Subordinated Notes and (ii) warrants to purchase shares of common stock of the Company ("Warrants"). The Subordinated Notes and Warrants which comprised the Unit were not detachable until October 14, 2013. Accordingly, all Units were also redeemed. On March 26, 2013, H&H Group irrevocably deposited with Wells Fargo funds totaling $36.9 million for such redemption and interest payment in order to satisfy and discharge its obligations under the Indenture from both a legal and accounting perspective. Interest expense for the three months ended March 31, 2013 included a $5.7 million loss associated with the redemption of the Subordinated Notes, including the redemption premium and the write-off of remaining deferred finance costs and unamortized debt discounts.

Note 9 – Derivative Instruments

Precious Metal and Commodity Inventories

H&H's precious metal and commodity inventories are subject to market price fluctuations. H&H enters into commodity futures and forward contracts to mitigate the impact of price fluctuations on its precious and certain non-precious metal inventories that are not subject to fixed price contracts. The Company's hedging strategy is designed to protect it against normal volatility; therefore, abnormal price increases in these commodities or markets could negatively impact H&H's earnings. H&H does not enter into derivatives or other financial instruments for trading or speculative purposes.

As of June 30, 2014, the Company had the following outstanding futures contracts with settlement dates ranging from August to September 2014. There were no forward contracts outstanding at June 30, 2014.



			Notional Value
Commodity	Amount		($ in millions)
Silver	985,000	ounces	$	20.8
Gold	1,400	ounces	$	1.8
Copper	275,000	pounds	$	0.9
Tin	60	metric tons	$	1.3

H&H accounts for these contracts as either fair value hedges or economic hedges under the guidance in Accounting Standards Codification ("ASC") 815, Derivatives and Hedging.

Fair Value Hedges. Of the total futures contracts outstanding, 610,000 ounces of silver and substantially all of the copper contracts are designated and accounted for as fair value hedges under ASC 815. The fair values of these derivatives are recognized as derivative assets and liabilities on the consolidated balance sheet. The net change in fair value of the derivative assets and liabilities, and the change in the fair value of the underlying hedged inventory, are recognized in the consolidated income statement,

and such amounts principally offset each other due to the effectiveness of the hedges. Fair value hedges are associated primarily with the Company's precious metal inventory carried at fair value.

Economic Hedges. The remaining outstanding futures contracts for silver, and all of the contracts for gold and tin, are accounted for as economic hedges. As these derivatives are not designated as accounting hedges under ASC 815, they are accounted for as derivatives with no hedge designation. The derivatives are marked to market, and both realized and unrealized gains and losses are recorded in current period earnings in the consolidated income statement. Economic hedges are associated primarily with the Company's precious metal inventory valued using the LIFO method.

The futures contracts are exchange traded contracts acquired through a third party broker. Accordingly, the Company has determined that there is minimal credit risk of default. The Company estimates the fair value of its derivative contracts through the use of market quotes or with the assistance of brokers when market information is not available. The Company maintains collateral on account with the third-party broker. Such collateral consists of both cash that varies in amount depending on the value of open futures contracts, as well as ounces of precious metal held on account by the broker.

Debt Agreements

In connection with its Senior Credit Facility, H&H Group entered into two interest rate swap agreements to reduce its exposure to interest rate fluctuations. See Note 8 - "Debt" for further discussion of the terms of these arrangements. These derivatives are not designated as accounting hedges under U.S. GAAP; they are accounted for as derivatives with no hedge designation. The Company records the gains or losses both from the mark-to-market adjustments and net settlements in interest expense in the consolidated income statement as the hedges are intended to offset interest rate movements.

The Company's Subordinated Notes had call premiums as well as Warrants associated with them. The Company treated the fair value of these features together as both a discount on the debt and a derivative liability at inception of the loan agreement. The discount was being amortized over the life of the notes as an adjustment to interest expense, and the derivative was marked to market at each balance sheet date. As discussed in Note 8 - "Debt," on March 26, 2013, the Company discharged its obligations associated with the Subordinated Notes and Warrants, and therefore, all discounts and derivative accounts related to the Subordinated Notes and Warrants are now zero.

Effect of Derivative Instruments in the Consolidated Income Statements - Income/(Expense)



(in thousands)		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivative	Income Statement Line	2014			2013			2014			2013
Commodity contracts	Cost of goods sold	$	(783	)	$	(120	)	$	(909	)	$	(120	)
	Total derivatives designated as hedging instruments	$	(783	)	$	(120	)	$	(909	)	$	(120	)
Commodity contracts	Cost of goods sold	$	(6	)	$	—		$	(27	)	$	—
Commodity contracts	Realized and unrealized (loss) gain on derivatives	(606		)	1,492			(466		)	1,846
Interest rate swap agreements	Interest expense	(80		)	173			(125		)	(104		)
Derivative features of Subordinated Notes	Realized and unrealized loss on derivatives	—			—			—			(793		)
	Total derivatives not designated as hedging instruments	$	(692	)	$	1,665		$	(618	)	$	949
	Total derivatives	$	(1,475	)	$	1,545		$	(1,527	)	$	829

Fair Value of Derivative Instruments on the Consolidated Balance Sheets - Asset/(Liability)



(in thousands)		June 30,			December 31,
Derivative	Balance Sheet Location	2014			2013
Commodity contracts	Prepaid and other current assets	$	21		$	1,778
	Total derivatives designated as hedging instruments	$	21		$	1,778
Commodity contracts	Accrued liabilities	$	(16	)	$	(158	)
Interest rate swap agreements	Other liabilities	(221		)	(214		)
	Total derivatives not designated as hedging instruments	$	(237	)	$	(372	)
	Total derivatives	$	(216	)	$	1,406

Note 10 – Pensions and Other Post-Retirement Benefits

The following table presents the components of net periodic pension expense for the Company's pension plans for the three and six months ended June 30, 2014 and 2013:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2014			2013			2014			2013
Interest cost	$	5,288		$	4,653		$	10,576		$	9,297
Expected return on plan assets	(6,067		)	(6,002		)	(12,134		)	(11,985		)
Amortization of prior service cost	—			8			—			16
Amortization of actuarial loss	1,915			2,735			3,830			5,340
Total	$	1,136		$	1,394		$	2,272		$	2,668

The actuarial loss occurred principally because the historical investment returns on the assets of the WHX Pension Plan have been lower than the actuarial assumptions. The actuarial losses are being amortized over the average future lifetime of the participants, which is expected to be approximately 20 years. The Company believes that use of the future lifetime of the participants is appropriate because the WHX Pension Plan is completely inactive.

The Company expects to have required minimum contributions to the WHX Pension Plan of $16.9 million for the remainder of 2014, $21.4 million, $16.8 million, $15.5 million, $13.7 million, and $27.2 million in 2015, 2016, 2017, 2018, and for the five years thereafter, respectively. Required future contributions are determined based upon assumptions such as discount rates on future obligations, assumed rates of return on plan assets and legislative changes. Actual future pension costs and required funding obligations will be affected by changes in the factors and assumptions described in the previous sentence, as well as other changes such as any plan termination.

In addition to its pension plans, which are included in the table above, the Company also maintains several other post-retirement benefit plans covering certain of its employees and retirees. The approximate aggregate expense for these plans was $0.6 million and $0.4 million for the three months ended June 30, 2014 and 2013, respectively, and $1.1 million and $1.0 million for the six months ended June 30, 2014 and 2013, respectively.

Note 11 – Stockholders' Equity

Common Stock Repurchase Program

On March 24, 2014, the Company's Board of Directors approved the repurchase of up to an aggregate of $10.0 million of the Company's common stock. On June 6, 2014, the Board of Directors further approved the repurchase of up to an aggregate of $3.0 million of the Company's common stock, which is in addition to the previously approved repurchase of up to an aggregate of $10.0 million of common stock. Any such repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market, in compliance with applicable laws and regulations. The repurchase program is expected to continue through the end of 2014 unless extended or shortened by the Board of Directors. As of June 30, 2014, the Company has repurchased 189,304 shares for a total purchase price of approximately $4.6 million under the 2014 repurchase program.

Accumulated Other Comprehensive Loss

Changes, net of tax, in accumulated other comprehensive loss and its components follow:



(in thousands)	Foreign Currency Translation Adjustments			Changes in Net Pension and Other Benefit Obligations			Total
Balance at December 31, 2013	$	(29	)	$	(181,902	)	$	(181,931	)
Current period loss	(119		)	—			(119		)
Balance at June 30, 2014	$	(148	)	$	(181,902	)	$	(182,050	)

Note 12 – Stock-Based Compensation

During the six months ended June 30, 2014, the Compensation Committee of the Company's Board of Directors approved the grant of an aggregate of 219,483 shares of restricted stock under the 2007 Incentive Stock Plan, as amended ("2007 Plan"), to certain employees, members of the Board of Directors and service providers. Restricted stock grants made to employees are in lieu of a long-term incentive plan component in the Company's bonus plan for those individuals who receive shares of restricted stock.

Compensation expense is measured based on the fair value of the stock-based awards on the grant date, as measured by the NASDAQ closing price for the Company's common stock. Compensation expense is recognized in the consolidated income statement on a straight-line basis over the requisite service period, which is the vesting period. The restricted stock grants made to employees and service providers in 2014 vest in approximately equal annual installments over a three year period from the grant date. The restricted stock grants to the Company's non-employee directors vest one year from the grant date.

The Company allows certain grantees to forego the issuance of shares to meet applicable income tax withholding due as a result of the vesting of restricted stock. Such shares are returned to the unissued shares of the Company's common stock. During the six months ended June 30, 2014, 48,925 shares were foregone by employees and service providers in connection with income tax withholding obligations.

Restricted stock activity under the Company's 2007 Plan was as follows for the six months ended June 30, 2014:



	Employees
	and Service
(shares)	Providers		Directors	Total
Balance, January 1, 2014	645,411		620,000	1,265,411
Granted	54,483		165,000	219,483
Forfeited	(25,446	)	—	(25,446	)
Reduced for income tax obligations	(48,925	)	—	(48,925	)
Balance, June 30, 2014	625,523		785,000	1,410,523

Vested	392,941		620,000	1,012,941
Non-vested	232,582		165,000	397,582

The Company has recognized compensation expense related to restricted shares of $1.3 million and $1.2 million for the three months ended June 30, 2014 and 2013, respectively, and $2.4 million and $2.4 million for the six months ended June 30, 2014 and 2013, respectively. Unearned compensation expense related to restricted shares at June 30, 2014 is $5.3 million, which is net of an estimated 5% forfeiture rate for employees and service providers. This amount will be recognized over the remaining vesting period of the restricted shares.

Note 13 – Income Taxes

and $7.9 million, respectively, were recorded. The effective tax rates in the six months ended June 30, 2014 and 2013 were 41.1% and 39.8%, respectively. The provision for income taxes is based on the current estimate of the annual effective tax rate, adjusted for discrete items that occurred within the respective periods. Changes in the effective tax rate arise principally from differences in the mix of income between taxable jurisdictions, including the impact of foreign sourced income.

Note 14 – Earnings Per Share

The computation of basic earnings per share of common stock is calculated by dividing net income by the weighted-average number of shares of the Company's common stock outstanding, as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share)	2014		2013		2014		2013
Income from continuing operations, net of tax	$	11,076	$	10,211	$	10,664	$	8,687
Weighted-average number of common shares outstanding	13,114		13,433		13,055		13,302
Income from continuing operations, net of tax, per share	$	0.84	$	0.76	$	0.82	$	0.66
Net income from discontinued operations	$	—	$	1,661	$	42	$	11,202
Weighted-average number of common shares outstanding	13,114		13,433		13,055		13,302
Discontinued operations, net of tax, per share	$	—	$	0.12	$	—	$	0.84
Net income	$	11,076	$	11,872	$	10,706	$	19,889
Weighted-average number of common shares outstanding	13,114		13,433		13,055		13,302
Net income per share	$	0.84	$	0.88	$	0.82	$	1.50

Diluted earnings per share gives effect to dilutive potential common shares outstanding during the reporting period. The Company had potentially dilutive common share equivalents, in the form of outstanding stock options, during the three and six months ended June 30, 2014 and 2013, although none were dilutive because the exercise price of these equivalents exceeded the market value of the Company's common stock during those periods. As of June 30, 2014, stock options for an aggregate of 38,900 shares are excluded from the calculations above.

Note 15 – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the "exit price") in an orderly transaction between market participants at the measurement date. Fair value measurements are broken down into three levels based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment ("Level 1").

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures ("Level 2").

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date ("Level 3").

The fair value of the Company's financial instruments, such as cash and cash equivalents, trade and other receivables, and trade payables, approximate carrying value due to the short-term maturities of these assets and liabilities. Carrying cost approximates fair value for the Company's long-term debt which has variable interest rates.

The fair value of the Company's investment in associated company is a Level 1 measurement because the underlying security is listed on a national securities exchange.

The precious metal and commodity inventories associated with the Company's fair value hedges (see Note 9 - "Derivative Instruments") are reported at fair value. Fair values of these inventories are based on quoted market prices on commodity exchanges and are considered Level 1 measurements. The derivative instruments that the Company purchases in connection with its precious metal and commodity inventories, specifically commodity futures and forward contracts, are also valued at fair value. The futures contracts are Level 1 measurements since they are traded on a commodity exchange. The forward contracts are entered into with a counterparty and are considered Level 2 measurements.

The Company's interest rate swap agreements associated with its Senior Credit Facility are considered Level 2 measurements as the inputs are observable at commonly quoted intervals.

The following table summarizes the Company's assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013:



	Asset (Liability) as of June 30, 2014
(in thousands)	Total			Level 1		Level 2			Level 3
Investment in associated company	$	23,349		$	23,349	$	—		$	—
Precious metal and commodity inventories recorded at fair value	$	16,550		$	16,550	$	—		$	—
Commodity contracts on precious metal and commodity inventories	$	5		$	5	$	—		$	—
Interest rate swap agreements	$	(221	)	$	—	$	(221	)	$	—



	Asset (Liability) as of December 31, 2013
(in thousands)	Total			Level 1		Level 2			Level 3
Investment in associated company	$	33,983		$	33,983	$	—		$	—
Precious metal and commodity inventories recorded at fair value	$	14,766		$	14,766	$	—		$	—
Commodity contracts on precious metal and commodity inventories	$	1,620		$	1,620	$	—		$	—
Interest rate swap agreements	$	(214	)	$	—	$	(214	)	$	—

The Company's non-financial assets and liabilities measured at fair value on a non-recurring basis include goodwill and other intangible assets, any assets and liabilities acquired in a business combination, or its long-lived assets written down to fair value. To measure fair value for such assets and liabilities, the Company uses techniques including an income approach, a market approach and/or appraisals (Level 3 inputs). Long-lived assets consisting of land and buildings used in previously operating businesses and currently unused, which total $9.3 million as of June 30, 2014, are carried at the lower of cost or fair value, and are included primarily in other non-current assets on the consolidated balance sheet. A reduction in the carrying value of such long-lived assets is recorded as an asset impairment charge in the consolidated income statement.

Note 16 – Commitments and Contingencies

Environmental Matters

Certain H&H Group subsidiaries have existing and contingent liabilities relating to environmental matters, including capital expenditures, costs of remediation, and potential fines and penalties relating to possible violations of national and state environmental laws. Those subsidiaries have substantial remediation expenses on an ongoing basis, although such costs are continually being readjusted based upon the emergence of new techniques and alternative methods. The Company had approximately $2.1 million accrued related to estimated environmental remediation costs as of June 30, 2014. The Company also has insurance coverage available for several of these matters and believes that excess insurance coverage may be available as well.

In addition, certain H&H Group subsidiaries have been identified as potentially responsible parties ("PRPs") under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") or similar state statutes at sites and are parties to administrative consent orders in connection with certain properties. Those subsidiaries may be subject to joint and several liabilities imposed by CERCLA on PRPs. Due to the technical and regulatory complexity of remedial activities and the difficulties attendant in identifying PRPs and allocating or determining liability among them, the subsidiaries are unable to reasonably estimate the ultimate cost of compliance with such laws.

Based upon information currently available, however, the H&H Group subsidiaries do not expect that their respective environmental costs, including the incurrence of additional fines and penalties, if any, will have a material adverse effect on them or that the resolution of these environmental matters will have a material adverse effect on the financial position, results of operations or cash flows of such subsidiaries or the Company, but there can be no such assurances. The Company anticipates that the H&H Group subsidiaries will pay any such amounts out of their respective working capital, although there is no assurance that they will have sufficient funds to pay them. In the event that the H&H Group subsidiaries are unable to fund their liabilities, claims could be made against their respective parent companies, including H&H Group and/or HNH, for payment of such liabilities.

Among the sites where certain H&H Group subsidiaries may have more substantial environmental liabilities are the following:

H&H has been working with the Connecticut Department of Environmental Protection ("CTDEP") with respect to its obligations under a 1989 consent order that applies to a property in Connecticut that H&H sold in 2003 ("Sold Parcel") and an adjacent parcel ("Adjacent Parcel") that together with the Sold Parcel comprises the site of a former H&H manufacturing facility. Remediation of all soil conditions on the Sold Parcel was completed on April 6, 2007. On September 11, 2008, the CTDEP advised H&H that it had approved H&H's December 28, 2007 Soil Remediation Action Report, as amended, thereby concluding the active remediation of the Sold Parcel. The remaining remediation and monitoring costs for the Sold Parcel are expected to approximate $0.1 million. With respect to the Adjacent Parcel, H&H has been conducting an ecological risk assessment and an environmental field investigation in order to assess viable remediation options. The total remediation costs for the Adjacent Parcel cannot be reasonably estimated at this time. Accordingly, there can be no assurance that the resolution of this matter will not be material to the financial position, results of operations or cash flows of H&H or the Company.

In 1986, Handy & Harman Electronic Materials Corporation ("HHEM"), a subsidiary of H&H, entered into an administrative consent order ("ACO") with the New Jersey Department of Environmental Protection ("NJDEP") with regard to certain property that it purchased in 1984 in New Jersey. The ACO involves investigation and remediation activities to be performed with regard to soil and groundwater contamination. Thereafter, in 1998, HHEM and H&H settled a case brought by the local municipality in regard to this site and also settled with certain of its insurance carriers. HHEM is actively remediating the property and continuing to investigate effective methods for achieving compliance with the ACO. A remedial investigation report was filed with the NJDEP in December 2007. By letter dated December 12, 2008, the NJDEP issued its approval with respect to additional investigation and remediation activities discussed in the December 2007 remedial investigation report. HHEM anticipates entering into discussions with the NJDEP to address that agency's potential natural resource damage claims, the ultimate scope and cost of which cannot be estimated at this time. Pursuant to a settlement agreement with the former owner/operator of the site, the responsibility for site investigation and remediation costs, as well as any other costs, as defined in the settlement agreement, related to or arising from environmental contamination on the property (collectively, "Costs") are contractually allocated 75% to the former owner/operator (with separate guaranties by the two joint venture partners of the former owner/operator for 37.5% each) and 25% jointly to HHEM and H&H after the first $1.0 million. The $1.0 million was paid solely by the former owner/operator. As of June 30, 2014, over and above the $1.0 million, total investigation and remediation costs of approximately $4.3 million and $1.4 million have been expended by the former owner/operator and HHEM, respectively, in accordance with the settlement agreement. Additionally, HHEM is currently being reimbursed indirectly through insurance coverage for a portion of the Costs for which HHEM is responsible. HHEM believes that there is additional excess insurance coverage, which it intends to pursue as necessary. HHEM anticipates that there will be additional remediation expenses to be incurred once a final remediation plan is agreed upon. There is no assurance that the former owner/operator or guarantors will continue to timely reimburse HHEM for expenditures and/or will be financially capable of fulfilling their obligations under the settlement agreement and the guaranties. The final Costs cannot be reasonably estimated at this time, and accordingly, there can be no assurance that the resolution of this matter will not be material to the financial position, results of operations or cash flows of HHEM or the Company.

HHEM is continuing to comply with a 1987 consent order from the Massachusetts Department of Environmental Protection ("MADEP") to investigate and remediate the soil and groundwater conditions at a commercial/industrial property in Massachusetts. On June 30, 2010, HHEM filed a Response Action Outcome report to close the site since HHEM's licensed site professional concluded that groundwater monitoring demonstrated that the groundwater conditions have stabilized or continue to improve at the site. On June 20, 2013, HHEM received the MADEP's Notice of Audit Findings and Notice of Noncompliance ("Notice"). HHEM and its consultant met with the MADEP on July 29, 2013 to resolve any differences identified in the Notice. As a result of that meeting and subsequent discussions, HHEM will conduct additional sampling, testing, site investigations and install additional off-site wells. The additional work and a follow-up response report to the MADEP are expected to be completed in the second half of 2014. The cost of this additional work is estimated at $0.2 million. Additional costs could result from these testing activities and final acceptance of the remediation plan by the MADEP, which cannot be reasonably estimated at this time.

Other Litigation

In the ordinary course of our business, we are subject to periodic lawsuits, investigations, claims and proceedings, including, but not limited to, contractual disputes, employment, environmental, health and safety matters, as well as claims associated with our historical acquisitions and divestitures. There is insurance coverage available for many of the foregoing actions. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations, claims and proceedings asserted against us, we do not believe any currently pending legal proceeding to which we are a party will have a material adverse effect on our business, prospects, financial condition, cash flows, results of operations or liquidity.

Note 17 – Related Party Transactions

As of June 30, 2014, SPLP owned directly or indirectly through its subsidiaries 7,228,735 shares of the Company's common stock, representing approximately 55.9% of outstanding shares. The power to vote and dispose of the securities held by SPLP is controlled by SPH GP. Warren G. Lichtenstein, our Chairman of the Board of Directors, is also the Executive Chairman of SPH GP. Certain other affiliates of SPH GP hold positions with the Company, including Glen M. Kassan, as former Chief Executive Officer and present Vice Chairman, Jack Howard, as Vice Chairman and Principal Executive Officer, James F. McCabe, Jr., as Chief Financial Officer and Leonard J. McGill, as Chief Legal Officer.

The Company was indebted to SPLP under H&H Group's Subordinated Notes until March 26, 2013, when it delivered an irrevocable notice of H&H Group's election to redeem all of its outstanding Subordinated Notes to the holders and irrevocably deposited funds for such redemption and interest payments in order to satisfy and discharge its obligations under the Indenture as more fully described in Note 8 - "Debt." In connection with this redemption, SPLP received proceeds of $25.0 million in connection with the redemption of $21.6 million face amount of notes held by SPLP.

The Company has entered into a Management Services Agreement, as amended ("Management Services Agreement"), with SP Corporate Services LLC ("SP Corporate"). SP Corporate is an affiliate of SPLP. Pursuant to the Management Services Agreement, SP Corporate provides the Company with certain executive and corporate services, including, without limitation, legal, tax, accounting, treasury, consulting, auditing, administrative, compliance, environmental health and safety, human resources, marketing, investor relations and other similar services rendered for the Company or its subsidiaries. The Management Services Agreement further provides that the Company pay SP Corporate a fixed annual fee of approximately $8.89 million, consisting of (a) $1.74 million in consideration of the executive services provided by SP Corporate under the Management Services Agreement and (b) $7.15 million in consideration of the corporate services provided by SP Corporate under the Management Services Agreement. During the three months ended June 30, 2014 and 2013, the Company also reimbursed SP Corporate and its affiliates approximately $0.1 million and $0.2 million, respectively, for business expenses incurred on its behalf pursuant to the Management Services Agreement. Such reimbursements totaled approximately $0.2 million and $0.3 million, respectively, during the six months ended June 30, 2014 and 2013.

The fees payable under the Management Services Agreement are subject to an annual review and such adjustments as may be agreed upon by SP Corporate and the Company. The Management Services Agreement has a term of one year and automatically renews for successive one-year periods unless and until terminated in accordance with the terms set forth therein, which include, under certain circumstances, the payment by the Company of a termination fee to SP Corporate.

In connection with the Investment Agreement discussed in Note 7 - "Investments," ModusLink agreed to reimburse SPLP's reasonably documented out-of-pocket expenses associated with the agreement up to a maximum of $0.2 million, which was principally paid by and reimbursed to the Company during the first quarter of 2013.

Note 18 – Reportable Segments

HNH is a diversified holding company whose strategic business units encompass the following segments: Joining Materials, Tubing, Building Materials, Arlon Electronic Materials and Kasco Blades and Route Repair Services. For a more complete description of the Company's segments, see "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - The Company."

Management has determined that certain operating companies should be aggregated and presented within a single segment on the basis that such segments have similar economic characteristics and share other qualitative characteristics. Management reviews net sales, gross profit and operating income to evaluate segment performance. Operating income for the segments generally includes costs directly attributable to the segment and excludes other unallocated general corporate expenses. Interest expense, other income and expense, and income taxes are not presented by segment since they are excluded from the measure of segment profitability reviewed by the Company's management.

The following table presents information about the Company's reportable segments for the three and six months ended

June 30, 2014 and 2013:



Income Statement Data	Three Months Ended						Six Months Ended
(in thousands)	June 30,						June 30,
	2014			2013			2014			2013
Net sales:
Joining Materials	$	56,462		$	56,902		$	108,175		$	101,432
Tubing	21,361			23,366			42,066			45,380
Building Materials	76,301			66,733			124,833			113,372
Arlon	26,946			21,109			53,307			42,414
Kasco	14,421			13,974			28,958			28,443
Total net sales	$	195,491		$	182,084		$	357,339		$	331,041

Segment operating income:
Joining Materials	$	6,755		$	5,989		$	11,897		$	11,736
Tubing	3,806			4,736			6,874			8,488
Building Materials	11,917			9,871			14,926			13,939
Arlon	5,702			2,867			10,070			5,958
Kasco	659			838			1,385			2,129
Total segment operating income	28,839			24,301			45,152			42,250
Unallocated corporate expenses and non-operating units	(4,474		)	(4,938		)	(9,984		)	(10,425		)
Unallocated pension expense	(1,136		)	(1,394		)	(2,272		)	(2,668		)
Gain (loss) from asset dispositions	27			(5		)	49			8
Operating income	23,256			17,964			32,945			29,165
Interest expense	(1,617		)	(1,641		)	(3,169		)	(10,087		)
Realized and unrealized (loss) gain on derivatives	(606		)	1,492			(466		)	1,053
Other expense	(66		)	(128		)	(115		)	(264		)
Income from continuing operations before tax and equity investment	$	20,967		$	17,687		$	29,195		$	19,867

Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations

The Company

Handy & Harman Ltd. ("HNH") is a diversified manufacturer of engineered niche industrial products with leading market positions in many of the markets it serves. Through its wholly-owned operating subsidiaries, HNH focuses on high margin products and innovative technology and serves customers across a wide range of end markets. HNH's diverse product offerings are marketed throughout the United States and internationally. HNH owns Handy & Harman Group Ltd. ("H&H Group"), which owns Handy & Harman ("H&H") and Bairnco Corporation. HNH manages its group of businesses on a decentralized basis with operations principally in North America. HNH's business units encompass the following segments: Joining Materials, Tubing, Building Materials, Arlon Electronic Materials ("Arlon") and Kasco Blades and Route Repair Services ("Kasco"). All references herein to "we," "our" or the "Company" refer to HNH together with all of its subsidiaries.

Joining Materials segment primarily fabricates precious metals and their alloys into brazing alloys. Brazing alloys are used to join similar and dissimilar metals, as well as specialty metals and some ceramics, with strong, hermetic joints. Joining Materials segment offers these metal joining products in a wide variety of alloys, including gold, silver, palladium, copper, nickel, aluminum and tin. These brazing alloys are fabricated into a variety of engineered forms and are used in many industries, including electrical, appliance, transportation, construction and general industrial, where dissimilar material and metal joining applications are required. Operating income from precious metal products is principally derived from the "value added" of processing and fabricating and not from the direct purchase and resale of precious metals. Joining Materials segment enters into commodity futures and forward contracts to mitigate the impact of price fluctuations on its precious and certain non-precious metal inventories that are not subject to fixed price contracts. We believe that the business unit that comprises our Joining Materials segment is the North American market leader in many of the markets that it serves. The results of the Joining Materials segment include the operations of Wolverine Joining Technologies, LLC ("Wolverine Joining") from its acquisition on April 26, 2013.

Tubing segment manufactures a wide variety of steel tubing products. We believe that the Tubing segment manufactures the world's longest continuous seamless stainless steel tubing coils, in excess of 5,000 feet, serving the petrochemical infrastructure and shipbuilding markets. In addition, we believe it is the number one supplier of small diameter (less than 3 mm) coil tubing to industry leading specifications serving the aerospace, defense and semiconductor fabrication markets. This segment also manufactures welded carbon steel tubing in coiled and straight lengths with a primary focus on products for the automotive, heating, ventilation and cooling (HVAC), and oil and gas industries. In addition to producing bulk tubing, it produces value added fabrications for several of these industries.

Building Materials segment manufactures and supplies products primarily to the commercial construction and building industries. It manufactures fasteners and fastening systems for the U.S. commercial low slope roofing industry, which are sold to building and roofing material wholesalers, roofing contractors and private label roofing system manufacturers, and a line of engineered specialty fasteners for the building products industry for fastening applications in the remodeling and construction of homes, decking and landscaping. We believe that our primary business unit in the Building Materials segment is the market leader in fasteners and accessories for commercial low-slope roofing applications and that the majority of the net sales for the segment are for the commercial construction repair and replacement market. The results of the Building Materials segment include the operations of PAM Fastening Technology, Inc. ("PAM") from its acquisition on November 7, 2013.

Arlon provides high performance materials for the printed circuit board ("PCB") industry and silicone rubber-based insulation materials used in a broad range of industrial, military/aerospace, consumer and commercial markets. It also supplies high technology circuit substrate laminate materials to the PCB industry. Products are marketed principally to original equipment manufacturers, distributors and PCB manufacturers globally. Arlon also manufactures a line of market leading silicone rubber materials used in a broad range of military, consumer, industrial and commercial products.

Kasco provides meat-room blade products, repair services and resale products for the meat and deli departments of supermarkets, restaurants, meat and fish processing plants, and for distributors of electrical saws and cutting equipment, principally in North America and Europe. Kasco also provides wood cutting blade products for the pallet manufacturing, pallet recycler and portable saw mill industries in North America.

Discontinued Operations

In January 2013, the Company divested substantially all of the assets and existing operations of its Continental Industries, Inc. business unit, which manufactured plastic and steel fittings and connectors for natural gas, propane and water distribution service lines, along with exothermic welding products for electrical grounding, cathodic protection and lightning protection. It was part of the Company's Building Materials segment. In June 2013, the Company divested substantially all of the assets and existing operations of its Canfield Metal Coating Corporation ("CMCC") business unit, which manufactured electro-galvanized and painted cold rolled sheet steel products primarily for the construction, entry door, container and appliance industries. It was also part of the Company's Building Materials segment. In July 2013, the Company divested substantially all of the equipment owned or utilized by Indiana Tube de México, S. De R.L. de C.V. ("ITM") for the manufacture of refrigeration condensers. ITM's operations were part of the Company's Tubing segment. The results of these business units have been classified as discontinued operations in the Company's consolidated financial statements and are not reflected in the tables and discussion of the Company's continuing operations below.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2014 and 2013

The Company's consolidated operating results for the three and six months ended June 30, 2014 and 2013 are summarized in the following table:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2014			2013			2014			2013
Net sales	$	195,491		$	182,084		$	357,339		$	331,041
Gross profit	57,104			51,665			102,505			95,637
Gross profit margin	29.2		%	28.4		%	28.7		%	28.9		%
Selling, general and administrative expenses	32,712			32,307			67,288			63,804
Pension expense	1,136			1,394			2,272			2,668
Operating income	23,256			17,964			32,945			29,165
Other:
Interest expense	1,617			1,641			3,169			10,087
Realized and unrealized loss (gain) on derivatives	606			(1,492		)	466			(1,053		)
Other expense	66			128			115			264
Income from continuing operations before tax and equity investment	20,967			17,687			29,195			19,867
Tax provision	8,649			7,038			11,991			7,905
Loss from associated company, net of tax	1,242			438			6,540			3,275
Income from continuing operations, net of tax	$	11,076		$	10,211		$	10,664		$	8,687

Net Sales

Net sales for the three months ended June 30, 2014 increased by $13.4 million, or 7.4%, to $195.5 million, as compared to $182.1 million for the same period in 2013. The change in net sales reflects approximately $8.1 million in incremental sales associated with our recent acquisitions and a net increase from core growth of approximately $9.2 million, which were partially offset by a reduction of approximately $3.9 million in net sales due to lower average precious metal prices, principally due to silver. The acquisitions of Wolverine Joining and PAM, net of sales volume transferred to or from the acquired business unit as part of the Company’s integration activities, provided incremental net sales of approximately $4.4 million and $3.7 million, respectively, during the three months ended June 30, 2014. Excluding the impact of these acquisitions, value added sales, defined as net sales less revenue from the direct purchase and resale of precious metals, increased by approximately $9.2 million on higher volume, primarily from the Arlon and Building Materials segments, which were partially offset by lower sales volume from the Tubing segment. The average silver market price was approximately $19.64 per troy ounce in the second quarter of 2014, as compared to $23.19 per troy ounce in the same period in 2013.

Net sales for the six months ended June 30, 2014 increased by $26.3 million, or 7.9%, to $357.3 million, as compared to $331.0 million for the same period in 2013. The change in net sales reflects approximately $23.0 million in incremental sales associated with our recent acquisitions and a net increase from core growth of approximately $16.0 million, which were partially offset by a reduction of approximately $12.7 million in net sales due to lower average precious metal prices, principally due to silver. The acquisitions of Wolverine Joining and PAM, net of sales volume transferred to or from the acquired business unit as part of the Company’s integration activities, provided incremental net sales of approximately $16.7 million and $6.3 million, respectively, during the six months ended June 30, 2014. Excluding the impact of these acquisitions, value added sales increased by approximately $16.0 million on higher volume, primarily from the Arlon and Building Materials segments, which were partially offset by lower sales volume from the Tubing segment. The average silver market price was approximately $19.89 per troy ounce in the first half of 2014, as compared to $26.52 per troy ounce in the same period in 2013.

Gross Profit

Gross profit for the three months ended June 30, 2014 increased to $57.1 million, as compared to $51.7 million for the same period in 2013, and as a percentage of net sales, increased to 29.2%, as compared to 28.4% in the second quarter last year. The change in gross profit reflects approximately $1.6 million in incremental gross profit associated with our recent acquisitions and a net increase from core growth of approximately $4.1 million, which were partially offset by a reduction of approximately $0.3 million in gross profit due to lower average precious metal prices. The acquisitions of Wolverine Joining and PAM, net of sales volume transferred to or from the acquired business unit as part of the Company’s integration activities, provided incremental gross profit of approximately $0.5 million and $1.2 million, respectively, during the second quarter of 2014. Higher sales volume from the Arlon and Building Materials segments lead to the increase in gross profit from our core business. The gross profit margin increase of 0.8% was principally due to higher sales volume from the Company's Arlon segment, and associated favorable production variances, as well as favorable product mix from the Joining Materials segment, which were partially offset by unfavorable production variances in the Tubing segment due to lower sales volume.

Gross profit for the six months ended June 30, 2014 increased to $102.5 million, as compared to $95.6 million for the same period in 2013, and as a percentage of net sales was relatively flat compared to the same period of the prior year. The change in gross profit reflects approximately $3.2 million in incremental gross profit associated with our recent acquisitions and a net increase from core growth of approximately $5.0 million, which were partially offset by a reduction of approximately $1.4 million in gross profit due to lower average precious metal prices. The acquisitions of Wolverine Joining and PAM, net of sales volume transferred to or from the acquired business unit as part of the Company’s integration activities, provided incremental gross profit of approximately $1.2 million and $2.1 million, respectively, during the first half of 2014. Higher sales volume from the Arlon and Building Materials segments lead to the increase in gross profit from our core business, which was partially offset by unfavorable production variances in the Tubing segment due to lower sales volume.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") for the three months ended June 30, 2014 were $32.7 million, or 16.7% of net sales, as compared to $32.3 million, or 17.7% of net sales, for the same period a year ago. The higher SG&A in the second quarter of 2014 was primarily driven by approximately $0.9 million in incremental expenses from the Wolverine Joining and PAM acquisitions, which were partially offset by a decrease of approximately $0.5 million from our core business, primarily due to lower benefit costs during the three months ended June 30, 2014.

SG&A for the six months ended June 30, 2014 was $67.3 million, or 18.8% of net sales, as compared to $63.8 million, or 19.3% of net sales, for the same period a year ago. The higher SG&A in the first half of 2014 includes approximately $2.4 million in incremental expenses from the Wolverine Joining and PAM acquisitions, as well as an increase of approximately $1.1 million from our core business, primarily due to increases in selling and personnel costs in the Building Materials and Kasco segments during the six months ended June 30, 2014.

Pension Expense

Non-cash pension expense was $1.1 million and $2.3 million for the three and six months ended June 30, 2014, respectively, which was $0.3 million and $0.4 million lower than the three and six months ended June 30, 2013, respectively. We currently expect non-cash pension expense to be approximately $4.5 million in 2014, as compared to $5.3 million in 2013, due to an increase in the discount rate utilized to determine net periodic pension costs, based on rising interest rates, as well as strong returns on pension plan assets during 2013.

Interest Expense

Interest expense for the three and six months ended June 30, 2014 was $1.6 million and $3.2 million, respectively, as compared to $1.6 million and $10.1 million for the three and six months ended June 30, 2013, respectively. Interest expense for the six months ended June 30, 2013 included a $5.7 million loss associated with the Company's redemption of its 10% subordinated secured notes due 2017 ("Subordinated Notes"), including the redemption premium and the write-off of remaining deferred finance costs and unamortized debt discounts. The Company's average interest rate was also lower for the three and the six months ended June 30, 2014, principally due to the Company's redemption of the Subordinated Notes.

Realized and Unrealized (Loss) Gain on Derivatives

Realized and unrealized (losses) gains on derivatives for the three and six months ended June 30, 2014 and 2013 were as follows:



(in thousands)	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivative	2014			2013		2014			2013
Commodity contracts (economic hedges)	$	(606	)	$	1,492	$	(466	)	$	1,846
Derivative features of Subordinated Notes	—			—		—			(793		)
Total realized and unrealized (loss) gain on derivatives	$	(606	)	$	1,492	$	(466	)	$	1,053

H&H utilizes commodity forward and futures contracts to mitigate the impact of price fluctuations on its precious metal and certain non-precious metal inventories. The factors that affect the gain or loss on these derivative instruments are changes in the price of the associated metals and the amount of ounces hedged. In addition, the Company's Subordinated Notes had embedded call premiums and warrants associated with them. The Company treated the fair value of these features together as both a discount on the debt and a derivative liability prior to the redemption of the Subordinated Notes and warrants in the first quarter of 2013. Upon redemption, the value of the derivative was removed from the balance sheet and such write-off is included in the $0.8 million loss noted above.

Tax Provision

For the three months ended June 30, 2014 and 2013, tax provisions from continuing operations of $8.6 million and $7.0 million, respectively, were recorded. The effective tax rates in the three months ended June 30, 2014 and 2013 were 41.3% and 39.8%, respectively. For the six months ended June 30, 2014 and 2013, tax provisions from continuing operations of $12.0 million and $7.9 million, respectively, were recorded. The effective tax rates in the six months ended June 30, 2014 and 2013 were 41.1% and 39.8%, respectively. The provision for income taxes is based on the current estimate of the annual effective tax rate, adjusted for discrete items that occurred within the respective periods. Changes in the effective tax rate arise principally from differences in the mix of income between taxable jurisdictions, including the impact of foreign sourced income.

Loss from Associated Company

As described in Note 7 - "Investments" to its consolidated financial statements included in "Item 1 - Financial Statements (unaudited)," the Company concluded that it gained significant influence over the operating and financial policies of ModusLink Global Solutions, Inc. ("ModusLink") during the first quarter of 2013. The $3.3 million loss from associated company, net of tax, for the six months ended June 30, 2013 includes the impact of the reclassification of the Company's historical unrealized loss associated with this investment from accumulated other comprehensive loss to earnings. HNH has elected the option to value its investment in ModusLink using fair value in order to more appropriately reflect the value of the investment in its consolidated financial statements, and the loss recorded during the six months ended June 30, 2014 is due entirely to changes in the share price of ModusLink's common stock.

Segment Analysis

Segment net sales and operating income data for the three and six months ended June 30, 2014 and 2013 are shown in the following table:



	Three Months Ended June 30,						Six Months Ended June 30,
					%						%
(in thousands)	2014		2013		Change		2014		2013		Change
Net sales:
Joining Materials	$	56,462	$	56,902	(0.8	)%	$	108,175	$	101,432	6.6	%
Tubing	21,361		23,366		(8.6	)%	42,066		45,380		(7.3	)%
Building Materials	76,301		66,733		14.3	%	124,833		113,372		10.1	%
Arlon	26,946		21,109		27.7	%	53,307		42,414		25.7	%
Kasco	14,421		13,974		3.2	%	28,958		28,443		1.8	%
Total net sales	$	195,491	$	182,084	7.4	%	$	357,339	$	331,041	7.9	%
Segment operating income:
Joining Materials	$	6,755	$	5,989	12.8	%	$	11,897	$	11,736	1.4	%
Tubing	3,806		4,736		(19.6	)%	6,874		8,488		(19.0	)%
Building Materials	11,917		9,871		20.7	%	14,926		13,939		7.1	%
Arlon	5,702		2,867		98.9	%	10,070		5,958		69.0	%
Kasco	659		838		(21.4	)%	1,385		2,129		(34.9	)%
Total segment operating income	$	28,839	$	24,301	18.7	%	$	45,152	$	42,250	6.9	%

Joining Materials

For the three months ended June 30, 2014, the Joining Materials segment net sales decreased by $0.4 million, or 0.8%, to $56.5 million, as compared to net sales of $56.9 million for the same period in 2013. The change in net sales reflects approximately $4.4 million in incremental sales associated with the acquisition of Wolverine Joining, which were partially offset by a reduction in core sales of approximately $0.9 million and a reduction of approximately $3.9 million in net sales due to lower average precious metal prices, primarily due to a $3.55 per troy ounce decline in the average market price of silver. The core sales reduction of approximately $0.9 million was primarily due to softness in the refining business and lower demand in the European market.

Segment operating income for the second quarter of 2014 increased by $0.8 million, or 12.8%, to $6.8 million, as compared to $6.0 million for the same period in 2013, as a result of improved gross margin due to favorable product mix, which was partially offset by reduced profit generated on the material portion of our products in the Joining Materials segment, due principally to lower average precious metal prices during the second quarter of 2014. The effect of lower average precious metal prices reduced operating income by approximately $0.3 million on a quarter versus prior year's quarter basis.

For the six months ended June 30, 2014, the Joining Materials segment net sales increased by $6.7 million, or 6.6%, to $108.2 million, as compared to net sales of $101.4 million for the same period in 2013. The change in net sales reflects approximately $16.7 million in incremental sales associated with the acquisition of Wolverine Joining and a net increase from core growth of approximately $2.8 million, which were partially offset by a reduction of approximately $12.7 million in net sales due to lower average precious metal prices, primarily due to a $6.63 per troy ounce decline in the average market price of silver. The core growth of approximately $2.8 million was due to overall higher sales volume, including increased sales for our distributed product and aluminum product lines.

Segment operating income for the six months ended June 30, 2014 increased by $0.2 million, or 1.4%, to $11.9 million, as compared to $11.7 million for the same period in 2013, as a result of higher sales volume and improved gross margin due to favorable product mix, which were partially offset by reduced profit generated on the material portion of our products in the Joining Materials segment, due principally to lower average precious metal prices, as well as due to higher severance and recruitment costs incurred in the six months ended June 30, 2014. The effect of lower average precious metal prices reduced operating income by approximately $1.4 million on a year-to-date versus prior year's year-to-date basis.

Tubing

For the three months ended June 30, 2014, the Tubing segment net sales decreased by $2.0 million, or 8.6%, to $21.4 million, as compared to $23.4 million in the second quarter of 2013. The decrease was primarily driven by lower sales volume of our stainless steel tubing products in the chemical processing and oil and gas markets served by the Tubing segment.

Segment operating income for the second quarter of 2014 decreased by $0.9 million, or 19.6%, to $3.8 million, as compared to $4.7 million in the second quarter of 2013. Gross profit was lower during the second quarter, as compared to the same period in 2013, driven by the lower sales volume in the quarter, as compared to the second quarter of 2013.

For the six months ended June 30, 2014, the Tubing segment net sales decreased by $3.3 million, or 7.3%, to $42.1 million, as compared to $45.4 million in same period of 2013. The decrease was primarily driven by lower sales volume of our stainless steel tubing products in the chemical processing and oil and gas markets served by the Tubing segment, partially offset by increased sales of welded carbon steel tubing for the appliance and heat exchanger markets.

Segment operating income for the six months ended June 30, 2014 decreased by $1.6 million, or 19.0%, to $6.9 million, as compared to $8.5 million for the same period in 2013. Gross profit was lower during the first half of 2014, as compared to the same period in 2013, driven by the lower sales volume, as compared to the same period in 2013.

Building Materials

For the three months ended June 30, 2014, the Building Materials segment net sales increased by $9.6 million, or 14.3%, to $76.3 million, as compared to $66.7 million for the same period in 2013. The acquisition of PAM provided incremental net sales of approximately $3.7 million within the Building Materials segment during the three months ended June 30, 2014, and sales of both our roofing and FastenMaster products were higher, as compared to the second quarter of 2013, due to recovery of our roofing business from adverse weather conditions during the first quarter of 2014, as well as strong demand from home centers and lumberyards for our FastenMaster products.

Segment operating income increased by $2.0 million, or 20.7%, to $11.9 million for the three months ended June 30, 2014, as compared to $9.9 million for the same period in 2013. Gross profit margin for the three months ended June 30, 2014 was higher, as compared to the three months ended June 30, 2013, primarily due to favorable production volume and effective cost control in the second quarter of 2014. Higher SG&A reflected increased employee headcount and sales expenses during the current year. The acquisition of PAM provided incremental operating income of approximately $0.6 million within the Building Materials segment during the three months ended June 30, 2014.

For the six months ended June 30, 2014, the Building Materials segment net sales increased by $11.5 million, or 10.1%, to $124.8 million, as compared to $113.4 million for the same period in 2013. The acquisition of PAM provided incremental net sales of approximately $6.3 million within the Building Materials segment during the six months ended June 30, 2014, and sales of both roofing and FastenMaster products were higher, as compared to the first half of 2013, due to strong demand of roofing products in all primary sales channels and FastenMaster products from home centers and lumberyards.

Segment operating income increased by $1.0 million, or 7.1%, to $14.9 million for the six months ended June 30, 2014, as compared to $13.9 million for the same period in 2013, primarily driven by higher sales volume. Gross profit margin for the six months ended June 30, 2014 was lower as compared to the six months ended June 30, 2013, primarily due to a change in sales mix. Higher SG&A reflected increased employee headcount and sales expenses during the current quarter. The acquisition of PAM provided incremental operating income of approximately $1.0 million within the Building Materials segment during the six months ended June 30, 2014.

Arlon

For the three months ended June 30, 2014, the Arlon segment net sales increased by $5.8 million, or 27.7%, to $26.9 million, as compared to $21.1 million for the second quarter of 2013. The increase in net sales resulted primarily from market share gains and higher demand for printed circuit board materials for use in telecommunications infrastructure in the United States, Asian and European markets.

Segment operating income increased by $2.8 million, or 98.9%, to $5.7 million for the three months ended June 30, 2014, as compared to $2.9 million for the same period in 2013, driven by higher gross profit during the second quarter of 2014, as compared to the second quarter of 2013, primarily due to the higher sales volume and related manufacturing efficiencies.

For the six months ended June 30, 2014, the Arlon segment net sales increased by $10.9 million, or 25.7%, to $53.3 million, as compared to $42.4 million for the same period in 2013. The increase in net sales resulted primarily from market share gains and higher demand for printed circuit board materials for use in telecommunications infrastructure in the United States, Asian and European markets. Higher demand for our thermoset circuit materials and silicon rubber-based insulation materials also contributed to the increase of net sales during the first half of 2014.

Segment operating income increased by $4.1 million, or 69.0%, to $10.1 million for the six months ended June 30, 2014, as compared to $6.0 million for the same period in 2013, driven by higher gross profit during the first half of 2014, as compared to the same period in 2013, primarily due to the higher sales volume and related manufacturing efficiencies.

Kasco

For the three months ended June 30, 2014, the Kasco segment net sales increased by $0.4 million, or 3.2%, to $14.4 million, as compared to $14.0 million for the same period in 2013, due to net sales improvements from its domestic route and distribution operations.

Segment operating income was $0.7 million for the three months ended June 30, 2014, which was $0.2 million lower, as compared to the same period in 2013. The reduced operating income was primarily due to higher personnel costs driven by increased headcount, as compared with the same period of the prior year.

For the six months ended June 30, 2014, the Kasco segment net sales increased by $0.5 million, or 1.8%, to $29.0 million, as compared to $28.4 million for the same period in 2013, due to net sales improvements from its domestic route and distribution operations.

Segment operating income was $1.4 million for the six months ended June 30, 2014, which was $0.7 million lower, as compared to the same period in 2013. The reduced operating income was primarily due to higher personnel costs driven by increased headcount, as compared with the same period of the prior year, and reduced route productivity in the first quarter of 2014 due to adverse weather conditions.

Discussion of Consolidated Cash Flows

Comparison of the Six Months Ended June 30, 2014 and 2013

The following table provides a summary of the Company's consolidated cash flows for the six months ended June 30, 2014 and 2013:



	Six Months Ended
	June 30,
(in thousands)	2014			2013
Net cash used in operating activities	$	(1,558	)	$	(3,314	)
Net cash used in investing activities	(6,889		)	(22,413		)
Net cash provided by financing activities	7,488			20,956
Net change for the period	$	(959	)	$	(4,771	)

Operating Activities

Operating cash flows for the six months ended June 30, 2014 were $1.8 million higher, as compared to the same period in 2013. Trade and other receivables used $33.2 million during the six month period of 2014, as compared to a use of $26.8 million for the same period in 2013. Such usage is due to higher net sales in the second quarter, as compared to the fourth quarter, of the Company's fiscal year due to year-end plant shutdowns, and also reflects higher net sales during the 2014 period. Inventories used $18.0 million during the six month period of 2014, as compared to $2.3 million for the same period in 2013. Higher inventory usage during the 2014 period was primarily driven by overall higher sales volume. The 2013 period was also favorably impacted by a significant decline in precious metal prices. Other current liabilities provided $9.3 million during the six month period of 2014, as compared to $6.3 million for the same period in 2013, reflecting higher inventory purchases, as well as due to timing of vendor payments. Other current liabilities also reflects the use of $7.2 million for pension contributions during the six months ended June 30, 2014, as compared to $5.3 million for the same period in 2013. Prepaid and other current assets provided $2.5 million during the six months ended June 30, 2014, due primarily to the collection of medical insurance recoveries payable to the Company at December 31, 2013, as well as due to a decline in balances associated with its commodity hedging activities during the first half of 2014. Prepaid and other current assets used $12.4 million during the six months ended June 30, 2013, primarily due to a restricted cash balance related to the sale of CMCC recorded at the end of the second quarter of 2013, which was released during the following quarter.

Investing Activities

Investing activities used $6.9 million of cash for the six months ended June 30, 2014 and used $22.4 million during the same period of 2013. Capital spending of $6.5 million in the 2014 period was comparable with $6.6 million in the 2013 period. Investing activities included acquisition costs of $59.5 million, primarily related to Wolverine Joining, in the first half of 2013 and also included proceeds from sale of discontinued operations of $41.9 million.

Financing Activities

For the six months ended June 30, 2014, the Company's financing activities provided $7.5 million of cash. The Company increased net borrowings on its senior secured revolving credit facility by $10.4 million, initiated $4.5 million in borrowings on its new WHX CS Loan facility and borrowed an additional $1.8 million on foreign loans, which were partially offset by repayments of $6.4 million on its domestic term loans. The Company also used $4.6 million for the repurchase of the Company's common stock during the first half of 2014.

For the six months ended June 30, 2013, the Company's financing activities provided $21.0 million of cash. The Company increased net borrowings on its senior secured revolving credit facility by $53.8 million and $10.0 million on its senior term loan, which were partially offset by $36.3 million used for the repurchase of the Company's Subordinated Notes and repayments of $4.5 million on its domestic term loans during the six months ended June 30, 2013. The Company also used $1.0 million for the repurchase of the Company's common stock during the second quarter of 2013.

Liquidity and Capital Resources

The Company's principal source of liquidity is its cash flows from operations. As of June 30, 2014, the Company's current assets totaled $231.4 million, its current liabilities totaled $98.0 million and its net working capital was $133.4 million, as compared to net working capital of $104.5 million as of December 31, 2013. The Company's debt is principally held by H&H Group, a wholly-owned subsidiary of HNH. HNH's subsidiaries borrow funds in order to finance capital expansion programs and for working capital needs. The terms of certain of those financing arrangements place restrictions on distributions of funds to HNH, the parent company, subject to certain exceptions including required pension payments to the WHX Corporation Pension Plan. The Company does not expect these restrictions to have an impact on HNH's ability to meet its cash obligations. HNH's ongoing operating cash flow requirements consist primarily of arranging for the funding of the minimum requirements of the WHX Corporation Pension Plan and paying HNH's administrative costs. The Company expects to have required minimum contributions to the WHX Corporation Pension Plan of $16.9 million for the remainder of 2014, and $21.4 million, $16.8 million, $15.5 million, $13.7 million and $27.2 million in 2015, 2016, 2017, 2018, and for the five years thereafter, respectively. Such required contributions are estimated based upon assumptions regarding such matters as discount rates on future obligations, assumed rates of return on plan assets and legislative changes. Actual future pension costs and required funding obligations will be affected by changes in the factors and assumptions described in the previous sentence, as well as other changes such as any plan termination.

The Company believes it has access to adequate resources to meet its needs for normal operating costs, capital expenditures, mandatory debt redemptions and working capital for its existing business. These resources include cash and cash equivalents, cash provided by operating activities and unused lines of credit. As of June 30, 2014, H&H Group's availability under its senior secured revolving credit facility was $56.4 million. The Company's ability to satisfy its debt service obligations, to fund planned capital expenditures and required pension payments, and to make acquisitions will depend upon its future operating performance, which will be affected by prevailing economic conditions in the markets in which it operates, as well as financial, business and other factors, some of which are beyond its control. The ability of H&H Group to draw on its senior secured revolving credit facility is limited by a borrowing base of accounts receivable and inventory. In addition, the Company's senior secured credit facility is subject to certain mandatory prepayment provisions and restrictive and financial covenants. There can be no assurances that H&H Group will continue to have access to its lines of credit if its financial performance does not satisfy the relevant borrowing base criteria and financial covenants set forth in the financing agreement. If H&H Group does not meet certain of its financial covenants or satisfy its borrowing base criteria, and if it is unable to secure necessary waivers or other amendments from the respective lenders on terms acceptable to management, its ability to access available lines of credit could be limited, its debt obligations could be accelerated by the respective lenders and liquidity could be adversely affected.

In June 2014, WHX CS Corp., a wholly-owned subsidiary of the Company, entered into a credit agreement ("WHX CS Loan"), which provides for a term loan facility with borrowing availability of up to a maximum aggregate principal amount of $15.0 million. Proceeds from borrowings under this agreement may be used for general corporate needs and investment purposes. Availability under the WHX CS Loan is equal to 50% of the value of the Company's investment in ModusLink common stock.

Draw-downs are available for a period of up to twelve months ending June 3, 2015. Amounts advanced and repaid under the agreement may not be reborrowed. At the end of the draw-down period, the principal drawn will be converted into a two year term loan with a five year amortization and associated quarterly principal payments. All amounts outstanding under the WHX CS Loan are due and payable in full on June 3, 2017. As of June 30, 2014, borrowings under the WHX CS Loan totaled $4.5 million, and the related proceeds were utilized to fund repurchases of the Company's common stock under its 2014 common stock repurchase program.

Management is utilizing the following strategies to continue to enhance liquidity: (1) continuing to implement improvements, using the HNH Business System, throughout all of the Company's operations to increase sales and operating efficiencies, (2) supporting profitable sales growth both internally and potentially through acquisitions and (3) evaluating from time to time and as appropriate, strategic alternatives with respect to its businesses and/or assets. The Company continues to examine all of its options and strategies, including acquisitions, divestitures and other corporate transactions, to increase cash flow and stockholder value.

Off-Balance Sheet Arrangements

It is not the Company's usual business practice to enter into off-balance sheet arrangements such as guarantees on loans and financial commitments, indemnification arrangements and retained interests in assets transferred to an unconsolidated entity for securitization purposes. Certain customers and suppliers of the Joining Materials segment choose to do business on a "pool" basis. Such customers or suppliers furnish precious metal to subsidiaries of H&H for return in fabricated form or for purchase from or return to the supplier. When the customer's precious metal is returned in fabricated form, the customer is charged a fabrication charge. The value of pooled precious metal is not included on the Company's consolidated balance sheet. As of June 30, 2014, H&H's customer metal consisted of 172,058 ounces of silver, 543 ounces of gold and 1,391 ounces of palladium.

*******

When used in Management's Discussion and Analysis of Financial Condition and Results of Operations, the words "anticipate," "estimate" and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, general economic conditions, the ability of the Company to develop markets and sell its products and the effects of competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate.

Item 4. - Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, the Company conducted an evaluation under the supervision and with the participation of its management, including the Principal Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Chief Financial Officer concluded that as of June 30, 2014, the Company's disclosure controls and procedures are effective in ensuring that all information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to company management, including the Principal Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

No change in internal control over financial reporting occurred during the quarter ended June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. - Legal Proceedings

Information in this Item 1 is incorporated by reference to Part I, Notes to Consolidated Financial Statements (unaudited), Note 16 - "Commitments and Contingencies," of this report.

Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds

2(c) - Issuer Purchases of Equity Securities

During the three months ended June 30, 2014, 914 shares of common stock were foregone by certain employees or service providers, at their option, for income tax obligations attributable to the vesting of certain shares of restricted stock previously granted to such individuals.

The following table provides information on the shares purchased under the Company's common stock repurchase program and shares foregone for income tax obligations attributable to vesting of restricted stock during the three months ended June 30, 2014:



Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
	(a)	(b)		(c)	(d)
April 1, 2014 to April 30, 2014	914	$	22.75	—	$	9,967,055
May 1, 2014 to May 31, 2014	—	$	—	—	$	9,967,055
June 1, 2014 to June 30, 2014	187,804	$	24.28	187,804	$	8,406,955
	188,718			187,804	$	8,406,955

Item 6. - Exhibits



Exhibit 4.1 Credit Agreement, dated as of June 3, 2014, by and among WHX CS Corp., the other entities joined as borrowers thereunder from time to time, the lenders party thereunder and PNC Bank, National Association, in its capacity as administrative agent for the lenders thereunder. ⁽¹⁾

Exhibit 4.2 Pledge Agreement, dated as of June 3, 2014, by WHX CS Corp. in favor of PNC Bank, National Association, as agent for the benefit of the lenders. ⁽²⁾

Exhibit 31.1 Certification of Principal Executive Officer pursuant to Rule 13a-15(f) or 15d-15(f) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ⁽³⁾

Exhibit 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-15(f) or 15d-15(f) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ⁽³⁾

Exhibit 32 Certification of Principal Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of Chapter 63 of Title 18 of United States Code. ⁽³⁾

Exhibit 101.INS XBRL Instance Document ⁽³⁾

Exhibit 101.SCH XBRL Taxonomy Extension Schema ⁽³⁾

Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase⁽³⁾

Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase ⁽³⁾

Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase ⁽³⁾

Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase⁽³⁾


(1)	Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed June 4, 2014.
(2)	Incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K filed June 4, 2014.
(3)	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	HANDY & HARMAN LTD.

	/s/ James F. McCabe, Jr.
	James F. McCabe, Jr. Senior Vice President and Chief Financial Officer (Principal Accounting Officer)

July 31, 2014

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