Horsehead Holding Corp - FORM 8-K - EX-99.1 - September 27, 2016

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Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: HORSEHEAD HOLDING CORP    Case No. 16-10287, 288, 289, 290, 291

Debtor

    Reporting Period: August 1 - 31, 2016

MONTHLY OPERATING REPORT

File with Court and submit copy to United States Trustee within 20 days after end of month

Submit copy of report to any official committee appointed in the case.

 

    REQUIRED DOCUMENTS           Form No.             Document   
  Attached   		   Explanation  
Attached  		   Affidavit/Supplement  
Attached  

Schedule of Cash Receipts and Disbursements

   MOR-1   x        

Bank Reconciliation (or copies of debtor’s bank reconciliations)

   MOR-1a       x    

Schedule of Professional Fees Paid

   MOR-1b   x        

Copies of bank statements

           x    

Cash disbursements journals

           x    

Statement of Operations

   MOR-2   x        

Balance Sheet

   MOR-3   x        

Status of Postpetition Taxes

   MOR-4   x        

Copies of IRS Form 6123 or payment receipt

       n/a        

Copies of tax returns filed during reporting period

       n/a        

Summary of Unpaid Postpetition Debts

   MOR-4   x        

Listing of aged accounts payable

   MOR-4   x        

Accounts Receivable Reconciliation and Aging

   MOR-5   x        

Debtor Questionnaire

   MOR-5   x        

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.

 

 

 

    

 

  
Signature of Debtor    

Date

  

 

    

 

  
Signature of Joint Debtor    

Date

  

/s/ Timothy D. Boates

 

    

9/23/2016        

 

  
Signature of Authorized Individual*    

Date

  

Timothy D. Boates

 

    

Chief Restructuring Officer

 

  
Printed Name of Authorized Individual    

Title of Authorized Individual

  

 

*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

 

MOR

(04/07)

In re: HORSEHEAD HOLDING CORP   MOR-1   Case No. 16-10287, 288, 289, 290, 291

Debtor

   Month-to-Date  

 

Reporting Period: August 1 - 31, 2016

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

  Amounts reported should be per the debtor’s books, not the bank statement. The beginning cash should be the ending cash from the prior month or, if this is the first report, the amount should be the balance on the date the petition was filed. The amounts reported in the “CURRENT MONTH - ACTUAL” column must equal the sum of the four bank account columns. The amounts reported in the “PROJECTED” columns should be taken from the SMALL BUSINESS INITIAL REPORT (FORM IR-1). Attach copies of the bank statements and the cash disbursements journal. The total disbursements listed in the disbursements journal must equal the total disbursements reported on this page. A bank reconciliation must be attached for each account. [See MOR-1 (CON’T)]  

 

   

 

AUGUST 1 - 31, 2016

 

    16-10287 HORSEHEAD HOLDINGS     16-10288 HORSEHEAD CORPORATION     16-10290 INMETCO     16-10291 Zochem     GRAND
    WFC -2552     PNC -3765     TOTAL     PNC -3127     WFC -9756     WFC -6331     PNC -7517     PNC -7525     WFC -1949     WFC -1931     TOTAL     WFC -4964     WFC -5018     WFC -0254     TOTAL     WFC -4972     WFC -4980     PNC -6944     PNC -6952     SB -5117     SB -0918     TOTAL     TOTAL
                 

BEGINNING BOOK BALANCE

     7,555,774        0        7,555,774        0        4,131,422        0        0        0        (21,999 )      (2,509,993 )      1,599,430        7,069,350        0        (434,982 )      6,634,368        646,230        0        0        0        711,369        1,581,158        2,938,757      18,728,329
                 

CASH RECEIPTS

                                                                

Trade Receipts

                   15,528,281                  15,528,281          2,729,142            2,729,142        (36,154 )      8,260,985            103,956        1,635,601        9,964,388      28,221,811

Other Receipts

     2,196                2,196                        1,000,000                                        1,000,000                                                                        1,099,783                1,099,783      2,101,980
    2,196        -            2,196        -            -            16,528,281        -            -            -            -            16,528,281        -            2,729,142        -            2,729,142        (36,154 )      8,260,985        -            -            1,203,739        1,635,601        11,064,172      30,323,791
                 

CASH DISBURSEMENTS

                                                                

Payroll & Taxes

                 2,627,057              93,831        14,860        2,735,748        11,654          4,421        16,075                222,995            222,995      2,974,817

Benefits

                 655,545                11,165        666,710            75        75                27,426            27,426      694,211

Purchases

                 2,607,177                437,659        3,044,836        72,670          147,017        219,686        7,774,302              4,176        1,674,764        9,453,243      12,717,766

Freight

                 2,397,237                1,551,069        3,948,306            110,274        110,274                297,176        123,958        421,133      4,479,714

Utilities

                           850,574        850,574        399,950          101,143        501,093                166,828            166,828      1,518,495

Leases

                 5,400                    5,400                            884            884      6,283

Insurance

                 319,406                23,274        342,680                                    342,680

Miscellaneous

     558            558          126,405                90,031        216,437        4,481        307        73,286        78,073        2,424              131,597        14,802        148,823      443,891

Contract Services

                 289,492                1,535,603        1,825,095            276,670        276,670                18,902        67        18,970      2,120,735

Supplies

                 30,877                1,390,201        1,421,078            305,488        305,488                182,971        104,354        287,325      2,013,891

Other Operating Costs

                 273,850                41,266        315,116            25,008        25,008                63,765        10,715        74,480      414,605

DIP Fees

                 1,135,417                    1,135,417                                    1,135,417

Professional Fees

     -            -            -            -            3,234,898        -            -            -            -            -            3,234,898        -            -            -            -            31,267        -            -            -            5,824        -            37,091      3,271,989

CapEX

                           17,287        17,287                                    17,287

Macquarie Interest

                 225,737                    225,737                                    225,737

503(b)(9) Payments

                           427,685        427,685            109,191        109,191                        536,876
                                                                                                                                                                                   
    558        -            558        -            13,928,497        -            -            -            93,831        6,390,675        20,413,004        488,754        307        1,152,572        1,641,633        7,807,993        -            -            -            1,122,546        1,928,660        10,859,200      32,914,394
                 

Net Bank Account Transfers

     (2,600,000 )      -            (2,600,000 )      -            11,141,321        (16,528,281 )      -            -            91,805        7,895,155        2,600,000        1,305,266        (2,728,835 )      1,423,569        -            8,260,985        (8,260,985 )      -            -            -            -            -          -    

DIP Facility Drawdown

 

    

 

 10,000,000

 

   

 

        

 

 10,000,000

 

   

 

                                                    

10,000,000

 

                                                                                                                                                                                   

ENDING BOOK BALANCE

     14,957,412        0        14,957,412        0        1,344,246        0        0        0        (24,025 )      (1,005,513 )      314,707        7,885,862        0        (163,985 )      7,721,877        1,063,068        0        0        0        792,562        1,288,099        3,143,729      26,137,726
                                                                                                                                                                                   

DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH ACTUAL COLUMN)

  

                          

TOTAL DISBURSEMENTS

         558                      20,413,004              1,641,633                    10,859,200      32,914,394

LESS: TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS

   

                                                    

PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES

   

                                                                    

TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES

    

     558                      20,413,004              1,641,633                    10,859,200      32,914,394

In re: HORSEHEAD HOLDING CORP   MOR-1   Case No. 16-10287, 288, 289, 290, 291

Debtor

   Case-to-Date  

 

Reporting Period: August 1 - 31, 2016

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

  Amounts reported should be per the debtor’s books, not the bank statement. The beginning cash should be the ending cash from the prior month or, if this is the first report, the amount should be the balance on the date the petition was filed. The amounts reported in the “CURRENT MONTH - ACTUAL” column must equal the sum of the four bank account columns. The amounts reported in the “PROJECTED” columns should be taken from the SMALL BUSINESS INITIAL REPORT (FORM IR-1). Attach copies of the bank statements and the cash disbursements journal. The total disbursements listed in the disbursements journal must equal the total disbursements reported on this page. A bank reconciliation must be attached for each account. [See MOR-1 (CON’T)]  

 

   

 

FEBRUARY 2 - AUGUST 31, 2016

 

    16-10287 HORSEHEAD HOLDINGS     16-10288 HORSEHEAD CORPORATION     16-10290 INMETCO     16-10291 Zochem     GRAND
    WFC -2552     PNC -3765   TOTAL     PNC -3127     WFC -9756     WFC -6331     PNC -7517     PNC -7525     WFC -1949     WFC -1931   TOTAL     WFC -4964     WFC -5018     WFC -0254     TOTAL     WFC -4972     WFC -4980     PNC -6944     PNC -6952     SB -5117     SB -0918     TOTAL     TOTAL
                 

BEGINNING BOOK BALANCE

     536      77,440       77,976        0        36,008        0        13        1,323,180        0      0       1,359,201        0        0        0        0        0        0        (434 )      652,850        298,010        238,283        1,188,709      2,625,886
                 

CASH RECEIPTS

                                                                

Trade Receipts

     2,686,953       2,686,953          222,520        78,873,093          21,025,311        (40,544)      100,080,380          20,253,668            20,253,668        (195,926 )      33,530,539          20,467,859        1,066,975        12,602,408        67,471,855      190,492,857

Other Receipts

     8,739      630       9,370          278        1,000,000                  1,000,278          150            150            0          6,999,409            6,999,409      8,009,208
                                                                                                                                                                           
    8,739      2,687,583       2,696,323        -            222,799        79,873,093        -            21,025,311        -          (40,544)      101,080,659        -            20,253,818        -            20,253,818        (195,926 )      33,530,539        -            20,467,859        8,066,385        12,602,408        74,471,265      198,502,065
                 

CASH DISBURSEMENTS

   

                                                              

Payroll & Taxes

     35,191      37,371       72,562        68,482        18,750,877              608,912      71,475       19,499,746        141,338        415        102,472        244,225                1,672,086            1,672,086      21,488,618

Benefits

     2,472,421            2,472,421        25,594        3,739,696            (90 )      90,856       3,856,055          75        255,668        255,743                449,691            449,691      7,033,910

Purchases

     8,081,202      889,099       8,970,301        892,071        10,110,364              2,417,756       13,420,191        286,443        85,722        1,219,454        1,591,619        35,087,560          19,758,327          120,854        9,123,337        64,090,078      88,072,189

Freight

     6,518,036      35,691       6,553,726        1,693,638        8,234,486              7,517,688       17,445,813        95,276        18,800        399,358        513,434        7,163        2,094        139,664          1,602,161        702,708        2,453,791      26,966,764

Utilities

     502,207      5,477       507,684        1,231,120            (322,102 )        3,599,367       4,508,385        2,156,782          638,256        2,795,037                1,693,769        84,049        1,777,818      9,588,924

Leases

     39,869            39,869        599,817        67,217                    667,034            782        782                4,397            4,397      712,082

Insurance

     1,227,225      206,037       1,433,262        102,673        2,533,004              119,755       2,755,432            110,462        110,462            127,266                127,266      4,426,422

Miscellaneous

     (128,133 )    4,000       (124,133 )      489,663        688,293          19,568          1,503,696       2,701,219        22,422        8,177        133,968        164,567        11,256          9,557          596,815        122,450        740,079      3,481,732

Contract Services

     2,381,075      92,742       2,473,816        1,546,783        3,168,153              6,644,651       11,359,587        305,530        14,459        1,932,147        2,252,136                127,767        1,228        128,995      16,214,534

Supplies

     925,153      50,936       976,089        1,097,177        434,910              5,746,588       7,278,676        24,684        204,040        1,901,073        2,129,797                1,010,142        813,321        1,823,463      12,208,025

Other Operating Costs

     44,684      46,059       90,743        170,410        819,475            790,065        147,727       1,927,677            421,642        421,642                487,044        249,566        736,610      3,176,673

DIP Fees

     5,151,861            5,151,861          3,265,556              82,850       3,348,406            19,500        19,500                  60,000        60,000      8,579,767

PNC Facility Repayment

                                                   18,677,793                18,677,793      18,677,793

Recycling Entity Buyout (including interest)

    

               1,078,017                    1,078,017                                    1,078,017

Professional Fees

     3,018,529      0       3,018,529        0        14,984,030        0        0        0        0      0       14,984,030        0        0        0        0        155,870        0        0        0        50,095        185,933        391,898      18,394,456

CapEX

     220,129            220,129          1,290,758              44,833       1,335,591        514,521        92,566        1,026,491        1,633,578                41,695            41,695      3,230,992

Utility Deposits

     (370,720 )          (370,720 )      212,142        3,661          781,500                997,303            5,780        5,780                        632,363

Macquarie Interest

     418,028            418,028          892,635                    892,635                                    1,310,663

503(b)(9) Payments

     237,064            237,064                  824,369       824,369        132,462          109,191        241,653                115,447            115,447      1,418,533

Critical Vendors - Freight

     922,861            922,861          1,334,643                    1,334,643        151,987              151,987        6,406          8,759          259,869            275,033      2,684,525

Critical Vendors - Material Vendors

    

               113,244                    113,244                                    113,244
                                                                                                                                                                           
    31,696,683      1,367,411       33,064,094        8,129,570        71,509,019        -            478,966        789,974        608,912      28,811,610       110,328,051        3,831,444        424,253        8,276,244        12,531,941        35,268,254        2,094        38,721,367        -            8,231,832        11,342,592        93,566,139      249,490,225
                 

Net Bank Account Transfers

     (9,177,388 )    (1,397,612)      (10,575,000 )      8,129,570        72,594,458        (79,873,094 )      478,952        (21,558,517 )      584,887      27,846,641       8,202,898        11,717,306        (19,829,565 )      8,112,259        0        36,527,248        (33,528,445 )      20,044,008        (21,120,710 )      660,000        (210,000 )      2,372,102      0

DIP Facility Drawdown

 

    

 

 55,822,207

 

   

 

        

 

 55,822,207

 

   

 

                                        

 

 18,677,793

 

   

 

            

 

 18,677,793

 

   

 

  

74,500,000

 

                                                                                                                                                                           

ENDING BOOK BALANCE

     14,957,412      0       14,957,412        0        1,344,246        (0 )      (1 )      (0 )      (24,025 )    (1,005,513)      314,707        7,885,862        0        (163,985 )      7,721,877        1,063,068        0        0        (0 )      792,563        1,288,099        3,143,730      26,137,726
                                                                                                                                                                           

DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH ACTUAL COLUMN)

                          

TOTAL DISBURSEMENTS

   

       33,064,094                      110,328,051              12,531,941                    93,566,139      249,490,225

LESS:

                                                        

PLUS:

                                                                        

TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES

     33,064,094                      110,328,051              12,531,941                    93,566,139      249,490,225

In re: HORSEHEAD HOLDING CORP    MOR-1b   Case No. 16-10287, 288, 289, 290, 291
                                    Debtor      Reporting Period: August 1 - 31, 2016

 

SCHEDULE OF PROFESSIONAL FEES AND EXPENSES PAID

This schedule is to include all retained professional payments from case inception to current month

 

         

Amount

          Check   Amount Paid     Year-To-Date      
Payee   Period Covered   Approved     Payor   Number     Date    Fees      Expenses     Fees      Expenses      

    

                                                          

RAS Management Advisors, LLC

   Week ending February 6, 2016     $56,554.00      Horsehead Holding    WT     3/16/16       $52,950.00        $3,604.00                     
    Week ending February 13, 2016     $69,865.00      Horsehead Holding   WT     3/16/16       $63,000.00        $6,865.00                     
    Week ending February 20, 2016     $72,085.00      Horsehead Holding   WT     3/16/16       $65,125.00        $6,960.00                     
    Week ending February 27, 2016     $72,281.00      Horsehead Holding   WT     3/16/16       $66,775.00        $5,506.00                     
    Week ending March 5, 2016     $74,313.00      Horsehead Holding   WT     3/16/16       $67,450.00        $6,863.00                     
    Week ending March 12, 2016     $61,610.00      Horsehead Holding   WT     3/16/16       $58,075.00        $3,535.00        $373,375.00        $33,333.00     
    Week ending March 19, 2016     $78,345.00      Horsehead Holding   WT     3/22/16       $71,475.00        $6,870.00        $444,850.00        $40,203.00     
    Week ending March 26, 2016     $63,461.00      Horsehead Holding   WT     4/4/16       $60,175.00        $3,286.00        $505,025.00        $43,489.00     
    Week ending April 2, 2016     $66,924.00      Horsehead Holding   WT     4/8/16       $61,700.00        $5,224.00        $566,725.00        $48,713.00     
    Week ending April 9, 2016     $58,651.00      Horsehead Holding   WT     4/13/16       $55,250.00        $3,401.00        $621,975.00        $52,114.00     
    Week ending April 16, 2016     $64,189.00      Horsehead Holding   WT     4/21/16       $60,325.00        $3,864.00        $682,300.00        $55,978.00     
    Week ending April 23, 2016     $53,260.00      Horsehead Holding   WT     4/28/16       $51,425.00        $1,835.00        $733,725.00        $57,813.00     
    Week ending April 30, 2016     $63,601.00      Horsehead Holding   WT     5/5/16       $60,125.00        $3,476.00        $793,850.00        $61,289.00     
    Week ending May 7, 2016     $63,857.00      Horsehead Holding   WT     5/12/16       $60,150.00        $3,707.00        $854,000.00        $64,996.00     
    Week ending May 14, 2016     $53,547.00      Horsehead Holding   WT     5/19/16       $51,975.00        $1,572.00        $905,975.00        $66,568.00     
    Week ending May 21, 2016     $62,196.00      Horsehead Holding   WT     5/26/16       $58,575.00        $3,621.00        $964,550.00        $70,189.00     
    Week ending May 28, 2016     $57,916.00      Horsehead Holding   WT     6/2/16       $55,850.00        $2,066.00        $1,020,400.00        $72,255.00     
    Week ending June 4, 2016     $55,511.00      Horsehead Holding   WT     6/9/16       $51,300.00        $4,211.00        $1,071,700.00        $76,466.00     
    Week ending June 11, 2016     $60,589.00      Horsehead Holding   WT     6/16/16       $58,600.00        $1,989.00        $1,130,300.00        $78,455.00     
    Week ending June 18, 2016     $61,511.00      Horsehead Holding   WT     6/23/16       $57,275.00        $4,236.00        $1,187,575.00        $82,691.00     
    Week ending June 25, 2016     $53,595.00      Horsehead Holding   WT     6/29/16       $49,825.00        $3,770.00        $1,237,400.00        $86,461.00     
    Week ending July 2, 2016     $63,907.00      Horsehead Holding   WT     7/7/16       $59,925.00        $3,982.00        $1,297,325.00        $90,443.00     
    Week ending July 9, 2016     $57,667.00      Horsehead Holding   WT     7/14/16       $53,800.00        $3,867.00        $1,351,125.00        $94,310.00     
    Week ending July 16, 2016     $57,747.00      Horsehead Holding   WT     7/21/16       $55,550.00        $2,197.00        $1,406,675.00        $96,507.00     
    Week ending July 23, 2016     $66,781.00      Horsehead Holding   WT     7/28/16       $62,925.00        $3,856.00        $1,469,600.00        $100,363.00     
    Week ending July 30, 2016     $59,232.00      Horsehead Holding   WT     8/4/16       $57,525.00        $1,707.00        $1,527,125.00        $102,070.00     
    Week ending August 6, 2016     $60,298.00      Horsehead Holding   WT     8/11/16       $57,825.00        $2,473.00        $1,584,950.00        $104,543.00     
    Week ending August 13, 2016     $64,933.00      Horsehead Holding   WT     8/18/16       $61,750.00        $3,183.00        $1,646,700.00        $107,726.00     
    Week ending August 20, 2016     $60,835.00      Horsehead Holding   WT     8/25/16       $57,450.00        $3,385.00        $1,704,150.00        $111,111.00     

    

                                                          

Epiq Bankruptcy Solutions

   Month of February 2016     $95,985.25      Horsehead Holding   WT     5/18/16       $95,458.40        $526.85        $95,458.40        $526.85     
    Month of March 2016     $133,455.55      Horsehead Holding   WT     5/18/16       $132,930.07        $525.48        $228,388.47        $1,052.33     
    Month of April 2016     $130,031.00      Horsehead Holding   WT     8/24/16       $130,031.00        $0.00        $358,419.47        $1,052.33     
    Month of May 2016     $62,844.10      Horsehead Holding   WT     8/24/16       $62,844.10        $0.00        $421,263.57        $1,052.33     
    Month of June 2016     $55,146.21      Horsehead Holding   WT     8/24/16       $55,146.21        $0.00        $476,409.78        $1,052.33     
    Month of July 2016     $130,031.00      Horsehead Holding   WT     8/24/16       $130,031.00        $0.00        $606,440.78        $1,052.33     

    

                                                          

Kirkland & Ellis LLC

   Month of February 2016     $1,191,560.66      Horsehead Holding   WT     5/13/16       $1,164,569.88        $26,990.78        $1,164,569.88        $26,990.78     
    Month of March 2016     $909,229.00      Horsehead Holding   WT     6/8/16       $872,456.36        $36,772.64        $2,037,026.24        $63,763.42     
    Month of April 2016     $975,493.56      Horsehead Holding   WT     6/27/16       $957,416.52        $18,077.04        $2,994,442.76        $81,840.46     
    Month of May 2016     $649,100.45      Horsehead Holding   WT     7/19/16       $637,806.56        $11,293.89        $3,632,249.32        $93,134.35     
    Month of June 2016     $648,864.56      Horsehead Holding   WT     8/24/16       $634,447.40                $14,417.16            $4,266,696.72              $107,551.51     

    

                                                          

Lazard Middle Market LLC

   Month of February     $1,086,657.73      Horsehead Holding   WT     5/13/16       $1,080,000.00        $6,657.73        $1,080,000.00        $6,657.73     
    Month of March 2016     $104,485.36      Horsehead Holding   WT     6/10/16       $100,000.00        $4,485.36        $1,180,000.00        $11,143.09     
    Month of April 2016     $119,688.68      Horsehead Holding   WT     7/18/16       $100,000.00        $19,688.68        $1,280,000.00        $30,831.77     

    

                                                          

Paculski, Stang, Ziehl & Jones

   Month of February 2016     $153,563.30      Horsehead Holding   WT     6/14/16       $134,558.40        $19,004.90        $134,558.40        $19,004.90     
    Month of March 2016     $74,149.46      Horsehead Holding   WT     8/1/16       $67,836.00        $6,313.46        $202,394.40        $25,318.36     
    Month of April 2016     $62,964.01      Horsehead Holding   WT     8/1/16       $60,881.20        $2,082.81        $263,275.60        $27,401.17     

    

                                                          

Klehr Harrison

   Month of February/March 2016     $31,379.20      Zochem   WT    6/29/16       $31,332.20        $47.00        $31,332.20        $47.00     
    Month of April 2016     $4,362.20      Zochem   WT     6/29/16       $4,264.40        $97.80        $35,596.60        $144.80     

    

                                                          

Thornton Grout Finnegan

   Month of February 2016     $14,147.71      Zochem   WT     8/19/16       $14,005.69        $142.02        $14,005.69        $142.02     
    Month of March 2016     $7,384.45      Zochem   WT     8/19/16       $7,274.69        $109.76        $21,280.38        $251.78     
    Month of April 2016     $3,157.48      Zochem   WT     8/19/16       $3,135.38        $22.10        $24,415.76        $273.88     

FORM MOR-1b

(04/07)

    Month of May 2016     $2,459.73      Zochem   WT     8/19/16       $2,458.51        $1.22        $26,874.27        $275.10     

In re. HORSEHEAD HOLDING CORP.    MOR - 2                             Case No. 16-10287, 288, 289, 290, 291
Debtor    MTH                             Reporting Period: August 1 - 31, 2016

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATING STATEMENTS OF OPERATIONS

DEBTOR IN POSSESSION

For the month ended August 31, 2016 (UNAUDITED)

(Amounts in thousands, except per share amounts)

FINAL SEPTEMBER 14th                                                 
         Horsehead    
Holding
Corp.		      Horsehead
    Corporation    		              HMP                  INMETCO                Zochem                Eliminations              Consolidated      

Net sales of zinc material and other goods

      $ -           $ 11,452           $ 669           $ -           $ 10,132           $ -           $ 22,253     

Net sales of nickel based material and other services

      -           -           -           3,108          -           -           3,108     

EAF dust service fees

      -           3,168           -           -           -           (83)          3,085     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net sales

      -           14,620           669           3,108           10,132           (83)          28,446     

Cost of sales of zinc material and other goods

      -           8,727           1,798           -           9,265           -           19,790     

Cost of sales of nickel based material and other services

      -           -           -           2,550           -           (83)          2,467     

Cost of EAF dust services

      -           2,827           -           -           -           -           2,827     

Fire related costs

      -           -           -           (39)          -           -           (39)    

Insurance claim income

      -           -           -           -           -           -           -     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Cost of sales (excluding depreciation and amortization)

      -           11,554           1,798           2,511           9,265           (83)          25,045     

Depreciation and amortization

      -           1,100           425           289           199           -           2,013     

Selling, general and administrative expenses

      110           1,237           29           160           189           -           1,725     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total costs and expenses

      110           13,891           2,252           2,960           9,653           (83)          28,783     

Income from operations

      (110)          729           (1,583)          148           479           -           (337)    

Equity in income of subsidiary, net of taxes

      (1,564)          -           -           -           -           1,564           -     

Other income (expense)

                     

Interest expense

      (1,945)          (962)          -           (37)          (243)          18           (3,169)    

Interest and other income

      19           2           -           -           1           (18)          4     

Other income (expense)

      -           16           -           (63)          (14)          -           (61)    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total other income (expense)

      (1,926)          (944)          -           (100)          (256)          -           (3,226)    

REORGANIZATION ITEMS, NET

      (2,447)          -           -           -           24           -           (2,423)    

Income before income taxes

      (6,047)          (215)          (1,583)          48           247           1,564           (5,986)    

Income tax provision

      -           -           -           -           61           -           61     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

NET INCOME(LOSS)

      $ (6,047)          $ (215)          $ (1,583)          $ 48           $ 186           $ 1,564           $ (6,047)    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

NOTE: THE MARCH 31 AND JUNE 30, 2016 BALANCES MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

9/23/2016

In re. HORSEHEAD HOLDING CORP.    MOR - 2                           Case No. 16-10287, 288, 289, 290, 291
Debtor    Case to Date                           Reporting Period: August 1 - 31, 2016

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATING STATEMENTS OF OPERATIONS

DEBTOR IN POSSESSION

For the period February 2 to August 31, 2016 (UNAUDITED)

(Amounts in thousands, except per share amounts)

FINAL SEPTEMBER 14th                                          
         Horsehead     
Holding
Corp.		     Horsehead
    Corporation    		             HMP                 INMETCO             Zochem             Eliminations             Consolidated      

Net sales of zinc material and other goods

     $ -          $ 69,890          $ 8,687          $ -          $ 69,877          $ -          $ 148,454     

Net sales of nickel based material and other services

     -          -          -          19,851          -          -          19,851     

EAF dust service fees

     -          22,798          -          -          -          (633)         22,165     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net sales

     -          92,688          8,687          19,851          69,877          (633)         190,470     

Cost of sales of zinc material and other goods

     -          65,203          22,543          -          64,658          -          152,404     

Cost of sales of nickel based material and other services

     -          -          -          16,567          -          (633)         15,934     

Cost of EAF dust services

     -          17,521          -          -          -          -          17,521     

Fire related cost

     -          -          -          1,008          -          -          1,008     

Insurance claim income

     -          -          -          (1,000)         -          -          (1,000)    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales (excluding depreciation and amortization)

     -          82,724          22,543          16,575          64,658          (633)         185,867     

Depreciation and amortization

     -          8,197          2,971          1,837          1,345          -          14,350     

Selling, general and administrative expenses

     477          8,897          261          1,269          1,130          -          12,034     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total costs and expenses

     477          99,818          25,775          19,681          67,133          (633)         212,251     

Income from operations

     (477)         (7,130)         (17,088)         170          2,744          -          (21,781)    

Equity in income of subsidiary, net of taxes

     (37,188)         -          -          -          -          37,188          -     

Other income (expense)

              

Interest expense

     (12,269)         (7,272)         (37)         (262)         (1,785)         542          (21,083)    

Interest and other income

     542          10          -          -          1          (542)         11     

Other income (expense)

     -          35          -          61          (206)         -          (110)    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other income (expense)

     (11,727)         (7,227)         (37)         (201)         (1,990)         -          (21,182)    

REORGANIZATION ITEMS, NET

     (31,759)         (4,915)         -          -          (1,737)         -          (38,411)    

Income before income taxes

     (81,151)         (19,272)         (17,125)         (31)         (983)         37,188          (81,374)    

Income tax provision

     -          -          -          -          (223)         -          (223)    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NET INCOME(LOSS)

     $ (81,151)         $ (19,272)          $ (17,125)         $ (31)         $ (760)         $ 37,188          $ (81,151)    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NOTE: THE MARCH 31 AND JUNE 30, 2016 BALANCES MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

9/23/2016

In re. HORSEHEAD HOLDING CORP   MOR -2   Case No. 16-10287, 288, 289, 290, 291
Debtor   CONT   Reporting Period: August 1 - 31, 2016

INCOME (EXPENSE)

REORGANIZATION CHARGES

 

     FEBRUARY     MARCH            APRIL              MAY                JUNE             JULY            AUGUST         YTD         

 HHC

                   

 Professional Fee

      (2,544 )      (7,782 )      (4,248 )      (4,933 )      (5,288 )      (3,247 )      (2,447 )      (30,489 )    SG&A

 Interest Expense

      (1,270 )      -            -            -            -                (1,270 )    Int Exp
     (3,814 )      (7,782 )      (4,248 )      (4,933 )      (5,288 )      (3,247 )      (2,447 )      (31,759 )   

 HORSEHEAD

                   

 Hedges

      49        -            -            -            -                49      Sales

 Interest Exp

      (4,839 )      -            -            (88 )      (37 )          (4,964 )    Int Exp
     (4,790 )      -            -            (88 )      (37 )      -              (4,915 )   

 HMP

                  -           

 Other Income

      -            -            -            -            -                -          Oth Inc

 INMETCO

                   

 Hedges

      -            -            -            -            -                -          COS

 ZOCHEM

                   

 Hedges

      (49 )      -            -            -            -                (49 )    Sales

 Profess Fee/Other

      (360 )      (511 )      (693 )      (256 )      (146 )      399        24        (1,543 )    SG&A

 Interest Exp

      (145 )      -            -            -            -                (145 )    Int Exp
     (554 )      (511 )      (693 )      (256 )      (146 )      399        24        (1,737 )   

    

  

  

 TOTAL

      (9,158 )      (8,293 )      (4,941 )      (5,277 )      (5,471 )      (2,848 )      (2,423 )      (38,411 )   

In re. HORSEHEAD HOLDING CORP    MOR-3                           Case No. 16-10287, 288, 289, 290, 291
Debtor       Reporting Period: August 1 - 31, 2016

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATING BALANCE SHEETS

DEBTOR IN POSSESSION

AUGUST 31, 2016 (UNAUDITED)

(Amounts in thousands, except per share amounts)

FINAL SEPTEMBER 14th                                                 
ASSETS    Horsehead
  Holding Corp. 		      Horsehead
  Corporation 		      HMP        Zochem         INMETCO        Eliminations       Consolidated  

Current assets

                     

Cash and cash equivalents

      $ 14,957         $ 1,270           $ -         $ 3,418         $ 7,720           $ -           $ 27,365     

Accounts receivable, net of allowance

      403           12,408           2,037           18,947           4,809           (592)          38,012     

Inventories, net

      -           6,234           5,229           12,485           4,609           -           28,557     

Prepaid expenses and other current assets

      1,354           11,562           -           911           328           (6,973)          7,182     

Deferred income taxes

      -           -           -           -           -           -           -     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total current assets

      16,714           31,474           7,266           35,761           17,466           (7,565)          101,116     

Property, plant and equipment, net

      -           108,944           86,241           23,808           32,643           -           251,636     

Other assets

                     

Intangible assets

      -           7,411           -           83           1,467           -           8,961     

Restricted cash

      -           7,939           -           -           -           -           7,939     

Deferred income taxes

      -           -           -           -           -           -           -     

Investment in and advances to subsidiary

      102,475           87,573           (743,971)          11,958           956           541,009           -     

Deposits and other

      -           247           403           872           518           -           2,040     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total other assets

      102,475           103,170           (743,568)          12,913           2,941           541,009           18,940     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total assets

      $ 119,189           $ 243,588           $ (650,061)          $ 72,482           $ 53,050           $ 533,444           $ 371,692     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
LIABILITIES AND STOCKHOLDERS’ EQUITY    Horsehead
  Holding Corp. 		      Horsehead
  Corporation 		      HMP       Zochem         INMETCO         Eliminations          Consolidated    

Current liabilities

                     

Current Maturities of long-term debt

      $ -           $ -           $ -           $ -           $ -           $ -           $ -     

Notes payable

      -           -           -           -           -           -           $ -     

DEBTOR IN POSSESSION FINANCING

      -           55,822           -           18,678           -           -           74,500     

Accounts payable

      8,179           14,045           683           1,506           2,758           (367)          26,804     

Accrued expenses

      12,555           15,534           372           725           2,342           (225)          31,303     

Income Taxes Payable

      -           4,237           -           (890)          595           (6,973)          (3,031)    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total current liabilities

      20,734           89,638           1,055           20,019           5,695           (7,565)          129,576     

LIABILITIES SUBJECT TO COMPROMISE - SECURED DEBT

      208,588           49,625           5,000           -           -           -           263,213     

LIABILITIES SUBJECT TO COMPROMISE - PRIORITY DEBT

      -           1,931           167           -           -           -           2,098     

LIABILITIES SUBJECT TO COMPROMISE - UNSECURED DEBT (AP & AL)

      142,946           27,804           28,582           7,406           4,316           -           211,054     

Long-term debt, less current maturities

      -           -           -           -           10,000           (10,000)          -     

Other long-term liabilities

      -           13,331           -           26           1,894           -           15,251     

Deferred income taxes

      -           -           -           3,112           -           -           3,112     

Commitments and contingencies

      -           -           -           -           -           -        

Stockholders’ equity

                     

Horsehead Holding Corp. stockholders’ equity:

                     

Common stock, par value $.01 per share; 100,000 shares
with voting rights authorized;

     

 

 0 

602  

   

  

     

 

 0 

-  

   

  

     

 

 0 

-  

   

  

     

 

 0 

-  

   

  

     

 

 0 

-  

   

  

     

 

 0 

-  

   

  

      602     

Preferred stock, par value $.01 per share; 10,000 shares
authorized; no shares issued or outstanding

     

 

 -  

-  

   

  

     

 

 -  

-  

   

  

     

 

 -  

-  

   

  

     

 

 -  

-  

   

  

     

 

 -  

-  

   

  

     

 

 -  

-  

   

  

      -     

Additional paid-in capital

      399,017           16,240           -           -           29,081           (45,321)          399,017     

Retained earnings

      (652,698)          45,019           (684,865)          41,919           2,064           596,330           (652,231)    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total stockholders’ equity before noncontrolling interest

      (253,079)          61,259           (684,865)          41,919           31,145           551,009           (252,612)    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Noncontrolling interest

      -           -           -           -           -           -           -     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total stockholders’ equity

      (253,079)          61,259           (684,865)          41,919           31,145           551,009           (252,612)    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total liabilities and stockholders’ equity

      $ 119,189           $ 243,588           $ (650,061)          $ 72,482           $ 53,050           $ 533,444           $ 371,692     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     -               -               -                -               -               -               -         

NOTE: THE JUNE 30, 2016 BALANCES MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

In re: HORSEHEAD HOLDING CORP   MOR - 4   Case No. 16-10287, 288, 289, 290, 291
                                     Debtor     Reporting Period: August 1 - 31, 2016

STATUS OF POSTPETITION TAXES

The beginning tax liability should be the ending liability from the prior month or, if this is the first report, the amount should be zero.

Attach photocopies of IRS Form 6123 or payment receipt to verify payment or deposit of federal payroll taxes.

Attach photocopies of any tax returns filed during the reporting period.

 

   

 

Beginning  

   Amount                   Ending    
   

 

Tax  

   Withheld or       Amount       Date       Check No.       Tax    
   

 

Liability  

   Accrued       Paid       Paid       or EFT       Liability    
     Federal                        

Withholding

   6,079       362,459       360,920       Various dates   EFT thru payroll provider   7,618

FICA-Employee

   -           168,195       168,195       Various dates   EFT thru payroll provider   -    

FICA-Employer

   81,146       168,224       168,224       Various dates   EFT thru payroll provider   81,146

Unemployment

   1,287       3,830       3,829       Various dates   EFT thru payroll provider   1,288

Income

   -           -           -                   -    

Other:                                   

   -           -           -                   -    

Total Federal Taxes

   88,512       702,708       701,168               90,052

     State and Local

            

Withholding

   -            92,215       92,215       Various dates   EFT thru payroll provider   -    

Sales

   16,206       -           1,173       Various dates   various   15,033

Excise

   -           -           -                   -    

Unemployment

   16,195       11,356       11,353       Various dates   EFT thru payroll provider   16,198

Real Property

   685,127       216,836       164,981               736,982

Personal Property

   -               -                   -    

Other:                                   

   -           -           -                   -    

Total State and Local

   717,528       320,407       269,722               768,213

Total Taxes

   806,040       1,023,115       970,890               858,265

SUMMARY OF UNPAID POSTPETITION DEBTS

Attach aged listing of accounts payable.

 

       

 

Number of Days Past Due

    
   

 

Current

   0-30   31-60   61-90   Over 90   Total

Accounts Payable

   18,419,000       -           -           -           -           18,419,000

Wages Payable

   4,528,000       -           -           -           -           4,528,000

Taxes Payable

   858,265       -           -           -           -           858,265

Rent/Leases-Building

   -           -           -           -           -           -    

Rent/Leases-Equipment

   -           -           -           -           -           -    

Secured Debt/Adequate Protection Payments

   -           -           -           -           -           -    

Professional Fees

   8,385,000       -           -           -           -           8,385,000

Amounts Due to Insiders*

   -           -           -           -           -           -    

Other:                                                     

                        

Other:                                                     

                        

Total Postpetition Debts

   32,190,265       -           -           -           -           32,190,265

MOR-5

 

In re: HORSEHEAD HOLDING CORP    Case No. 16-10287, 288, 289, 290, 291
                                     Debtor    Reporting Period: August 1 - 31, 2016

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

 

    Accounts Receivable Reconciliation        HH Corp    HMP    Inmetco    Zochem

Total Accounts Receivable at the beginning of the reporting period

       12,367,752     1,146,606     4,231,937     17,426,112 

+ Amounts billed during the period

       14,838,528     586,512     3,364,126     10,273,809 

- Amounts collected during the period

       (14,991,906)    (536,374)    (2,729,142)    (9,964,388)

Total Accounts Receivable at the end of the reporting period

       12,214,373     1,196,743     4,866,921     17,735,532 
                     
    Accounts Receivable Aging                         

0 - 30 days old

       8,859,584     1,119,221     3,117,701     17,714,108 

31 - 60 days old

       582,269     22,073     1,502,762     22,971 

61 - 90 days old

       880,604     -         90,632     (107)

91+ days old

       1,891,916     55,450     155,825     (1,439)

Total Accounts Receivable

       12,214,373     1,196,743     4,866,921     17,735,532 

Amount considered uncollectible (Bad Debt)

       (341,387)        (70,974)    (20,000)

Accounts Receivable (Net)

       11,872,986     1,196,743     4,795,947     17,715,532 
 

 

DEBTOR QUESTIONNAIRE        

 

    
    Must be completed each month   Yes   No        
1.    Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.           x    
2.   Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.           x    
3.   Have all postpetition tax returns been timely filed? If no, provide an explanation below.       x        
4.   Are workers compensation, general liability and other necessary insurance coverages in effect? If no, provide an explanation below.       x        
5.   Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.           x    

 

 

 

FORM MOR-5

(04/07)

   

LOGO

   

4955 STEUBENVILLE PIKE

SUITE 405

PITTSBURGH, PA  15205            WWW.HORSEHEAD.NET

  

  P 724.774.1020                

  F 412.788.1812                

  
   
   

 

   

September 23, 2016

  

Office of the United States Trustee

844 King Street, Suite 2207, Lockbox 35

Wilmington, DE  19801

Attn:  Timothy J. Fox

Subject:  Declaration Regarding Bank Reconciliation and Bank Statements

Horsehead Holding Corp. and certain of its affiliates (the “Debtors”), hereby submit this declaration regarding providing bank statements in lieu of providing bank account reconciliations.

The Debtors have performed all bank account reconciliations in the ordinary course of business. Copies of bank account statements and cash disbursement journals are available for inspection upon request by the United States Trustee’s Office.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge and belief.

 

   

/s/ Timothy Boates

 

  
    Name: Timothy Boates  
    Position:  Chief Restructuring Officer  

FINANCIAL INFORMATION REPORT

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATING BALANCE SHEETS

August 31, 2016 (UNAUDITED)

 

ASSETS   HHC     Horsehead
Corporation		     Zochem     INMETCO     Eliminations     Consolidated  

Current assets

            

Cash and cash equivalents

   $ 14,957      $ 1,270      $ 3,418      $ 7,720      $ —      $ 27,365   

Accounts receivable, net of allowance

     403        14,445        18,947        4,809        (592 )      38,012   

Inventories, net

     —        11,463        12,485        4,609        —        28,557   

Prepaid expenses and other current assets

     1,354        11,562        911        328        (6,973 )      7,182   

Deferred income taxes

     —        —        —        —        —        —   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total current assets

     16,714        38,740        35,761        17,466        (7,565 )      101,116   

Property, plant and equip, net

     —            195,185        23,808        32,643        —        251,636   

Other assets

            

Intangible assets

     —        7,411        83        1,467        —        8,961   

Restricted cash

     —        7,939        —        —        —        7,939   

Investment in and advances to subs

     102,475        (656,398 )      11,958        956        541,009        —   

Deposits and other

     —        650        872        518        —        2,040   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other assets

     102,475        (640,398 )      12,913        2,941        541,009        18,940   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

   $     119,189      $ (406,473 )    $    72,482      $   53,050      $ 533,444      $ 371,692   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

LIABILITIES AND

STOCKHOLDERS’ EQUITY

   HHC     Horsehead
Corporation		     Zochem     INMETCO     Eliminations     Consolidated  

Current liabilities

            

Current maturities of long-term debt

   $ 205,000      $ 26,888      $ —      $ —      $ —      $ 231,888   

DEBTOR IN POSSESSION FINANCING

     —        55,822        18,678        —        —        74,500   

Accounts payable

     8,179        14,728        1,506        2,758        (367 )      26,804   

Accrued expenses

     16,143        23,352        725        2,342        (225 )      42,337   

Income taxes payable

     —        4,237        (890 )      595        (6,973 )      (3,031 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total current liabilities

     229,322        125,027        20,019        5,695        (7,565 )      372,498   

LIABILITIES SUBJECT TO COMPROMISE

     142,946        78,775        7,406        4,316        —        233,443   

Long-term debt, less current

     —        —        —        10,000        (10,000 )      —   

Other long-term liabilities

     —        13,331        26        1,894        —        15,251   

Deferred income taxes

     —        —        3,112        —        —        3,112   

Commitments and contingencies

            

Stockholders’ equity

            

Common Stock

     602        —        —        —        —        602   

Additional paid-in capital

     399,017        16,240        —        29,081        (45,321 )      399,017   

Retained earnings

     (652,698 )      (639,846 )      41,919        2,064        596,330        (652,231 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total stockholders’ equity

     (253,079 )      (623,606 )      41,919        31,145        551,009        (252,612 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities and SE

   $ 119,189      $ (406,473 )    $ 72,482      $ 53,050      $ 533,444      $ 371,692   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NOTE: THE JUNE 30, 2016 BALANCES MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

 

     UNAUDITED     UNAUDITED      UNAUDITED     UNAUDITED  
     Month Ended
August 31
2016		     Month ended
August 31
2015		      YTD ended
August 31
2016		     YTD ended
August 31
2015		  

Net sales of zinc material and other goods

    $ 22,253      $ 27,745       $ 169,799      $ 238,302   

Net sales of nickel based material and other services

      3,108        4,521         22,693        32,818   

EAF dust service fees

      3,085        3,012         25,331        24,611   
  

 

 

    

 

 

     

 

 

    

 

 

  

Net sales

      28,446        35,278         217,823        295,731   

Cost of sales of zinc material and other goods

      19,790        30,913         182,065        251,652   

Cost of sales of nickel based material and other services

      2,467        2,828         17,866        21,266   

Cost of EAF dust services

      2,827        2,412         19,705        19,877   

Fire related costs

      (39 )      —         1,047        —   

Insurance claim income

      —        —         (1,000 )      —   
  

 

 

    

 

 

     

 

 

    

 

 

  

Cost of sales (excluding deprec and amortiz)

      25,045        36,153         219,683        292,795   

Depreciation and amortization

      2,013        5,379         16,394        36,219   

Selling, general and administrative expenses

      1,725        2,104         13,950        17,857   
  

 

 

    

 

 

     

 

 

    

 

 

  

Total costs and expenses

      28,783        43,636         250,027        346,871   

Loss from operations

      (337 )      (8,358 )       (32,204 )      (51,140 ) 

Other income (expense)

          

Interest expense

      (3,169 )      (3,264 )       (24,601 )      (25,050 ) 

Interest and other income

      4        1         11        23   

Other income (expense)

      (61 )      189         2,863        13,410   
  

 

 

    

 

 

     

 

 

    

 

 

  

Total other income (expense)

      (3,226 )      (3,074 )       (21,727 )      (11,617 ) 

REORGANIZATION ITEMS, NET

      (2,423 )      —         (49,052 )      —   

Loss before income taxes

      (5,986 )      (11,432 )       (102,983 )      (62,757 ) 

Income tax benefit

      61        (4,321 )       (518 )      (23,722 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

NET LOSS

    $ (6,047 )    $ (7,111 )     $ (102,465 )    $ (39,035 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

NOTE: THE MARCH 31 AND JUNE 30, 2016 RESULTS MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATING STATEMENTS OF OPERATIONS

For the month ended August 31, 2016 (UNAUDITED)

(Amounts in thousands, except per share amounts)

 

    Horsehead
Holding
Corp.		     Horsehead
Corporation		     INMETCO     Zochem     Elims     Consolidated  

Net sales of zinc material and other goods

   $ —      $ 12,121      $ —      $     10,132      $ —      $ 22,253   

Net sales of nickel based material and other services

     —        —        3,108        —        —        3,108   

EAF dust service fees

     —        3,168        —        —        (83 )      3,085   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net sales

     —        15,289        3,108        10,132        (83 )      28,446   

Cost of sales of zinc material and other goods

     —        10,525        —        9,265        —        19,790   

Cost of sales of nickel based material and other services

     —        —        2,550        —        (83 )      2,467   

Cost of EAF dust services

     —        2,827        —        —        —        2,827   

Fire related costs

     —        —        (39 )      —        —        (39 ) 

Insurance claim income

     —        —        —        —        —        —   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales (excluding deprec and amortiz)

     —        13,352        2,511        9,265        (83 )      25,045   

Depreciation and amortization

     —        1,525        289        199        —        2,013   

Selling, general and administrative expenses

     110        1,266        160        189        —        1,725   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total costs and expenses

     110        16,143        2,960        9,653        (83 )      28,783   

(Loss) income from operations

     (110 )      (854 )      148        479        —        (337 ) 

Equity in (loss) income of subsidiary, net of taxes

     (1,564 )      —        —        —        1,564        —   

Other income (expense)

            

Interest expense

     (1,945 )      (962 )      (37 )      (243 )      18        (3,169 ) 

Interest and other income

     19        2        —        1        (18 )      4   

Other income (expense)

     —        16        (63 )      (14 )      —        (61 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other income (expense)

     (1,926 )      (944 )      (100 )      (256 )      —        (3,226 ) 

REORGANIZATION ITEMS, NET

     (2,447 )      —        —        24        —        (2,423 ) 

(Loss) income before income taxes

     (6,047 )      (1,798 )      48        247        1,564        (5,986 ) 

Income tax provision

     —        —        —        61        —        61   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NET (LOSS) INCOME

   $ (6,047 )    $ (1,798 )    $ 48      $ 186      $     1,564      $ (6,047 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NOTE: THE MARCH 31 AND JUNE 30, 2016 RESULTS MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

Horsehead Holding Corp. and Subsidiaries

CONSOLIDATING STATEMENTS OF OPERATIONS

For the eight months ended August 31, 2016 (UNAUDITED)

(Amounts in thousands, except per share amounts)

 

    Horsehead
Holding
Corp.		     Horsehead
Corporation		     INMETCO     Zochem     Elims     Consolidated  

Net sales of zinc material and other goods

   $ —      $ 90,234      $ —      $     79,463      $ 102      $ 169,799   

Net sales of nickel based material and other services

     —        —        22,693        —        —        22,693   

EAF dust service fees

     —        26,070        —        —        (739 )      25,331   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net sales

     —        116,304        22,693        79,463        (637 )      217,823   

Cost of sales of zinc material and other goods

     —        108,360        —        73,603        102        182,065   

Cost of sales of nickel based material and other services

     —        —        18,605        —        (739 )      17,866   

Cost of EAF dust services

     —        19,705        —        —        —        19,705   

Fire related costs

     —        —        1,047        —        —        1,047   

Insurance claim income

     —        —        (1,000 )      —        —        (1,000 ) 

Cost of sales (excluding deprec and amortiz)

     —        128,065        18,652        73,603        (637 )      219,683   

Depreciation and amortization

     —        12,774        2,088        1,532        —        16,394   

Selling, general and administrative expenses

               638        10,537        1,490        1,285        —        13,950   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total costs and expenses

     638        151,376        22,230        76,420        (637 )      250,027   

(Loss) income from operations

     (638 )      (35,072 )      463        3,043        —        (32,204 ) 

Equity in (loss) income of subsidiary, net of taxes

     (53,169 )      —        —        —        53,169        —   

Other income (expense)

            

Interest expense

     (15,274 )      (7,786 )      (298 )      (1,879 )      636        (24,601 ) 

Interest and other income

     636        10        —        1        (636 )      11   

Other income (expense)

     —        3,032        53        (222 )      —        2,863   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other income (expense)

     (14,638 )      (4,744 )      (245 )      (2,100 )      —        (21,727 ) 

REORGANIZATION ITEMS, NET

     (34,020 )      (12,049 )      64        (3,047 )      —        (49,052 ) 

(Loss) income before income taxes

     (102,465 )      (51,865 )      282        (2,104 )      53,169        (102,983 ) 

Income tax benefit

     —        —        —        (518 )      —        (518 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NET (LOSS) INCOME

   $ (102,465 )    $ (51,865 )    $ 282      $ (1,586 )    $     53,169      $ (102,465 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NOTE: THE MARCH 31 AND JUNE 30, 2016 RESULTS MAY BE ADJUSTED UPON COMPLETION OF THE 2016 1ST AND 2ND QTR REVIEWS AND MAY AFFECT THESE RESULTS

NON-FINANCIAL OPERATING METRICS REPORT

 

                Month ended              
Shipments               August 31, 2016              

Zinc finished product - tons (Z + HH combined)(excludes WOX/Calcine)

  

     5,613       

Finished Products Zinc-Contained tons (Z + HH combined) (excludes WOX/Calcine)

  

     4,582       

WOX/Calcine shipments combined - tons

  

     13,031       

Calcine shipments - tons

  

     9,689       

Calcine zinc-contained tons

  

     6,139       

Total Zinc-Contained tons (Finished Prod from Z + HH + calcine/WOX)

  

     12,726       

Zinc finished product - tons (HH) (excludes WOX/Calcine)

  

     458       

Total Zinc Product Zinc - Contained tons (HH) (includes WOX/Calcine)

  

     8,602       

EAF dust receipts - tons (HH)

  

     46,915       

Nickel remelt alloy shipments - tons (I)

  

     2,177       
         
Net sales realization          

Zinc finished products - per lb (Z + HH combined)

  

   $ 1.00       

Zinc finished products - per lb zinc-contained (Z + HH combined)

  

   $ 1.23       

Zinc finished products premium - per lb zinc-contained (Z + HH combined)

  

   $ 0.19       

Zinc Product Shipments - per lb zinc-contained (HH)

  

   $ 0.69       

LME average zinc price - per lb

  

   $ 1.04       

LME average nickel price - per lb

  

   $ 4.70       
         
Production          

Zinc metal production tons (Mooresboro)

  

     —       

Mooresboro conversion costs (per lb)

  

   $ —       

Recycling facility conversion costs (per lb)

  

   $ 0.41       
         
Financial (in 000’s)         UNAUDITED       

Net Zinc metal sales excl. intercompany (HH) (excludes brokered)

  

   $ —       

Brokered metal sales

  

   $ 624       

EAFD collection revenue

  

   $ 3,168       

EAFD collection costs

  

   $ 2,827       

Zochem adjusted EBITDA - R

  

   $ 695       

INMETCO adjusted EBITDA - R

  

   $ 353       
         
Segment data (3 segments + Corp, elim, other) (in 000’s)            
UNAUDITED                     Corp, Elims        
    Horsehead     Zochem     INMETCO     & Other     Consolidated  

Revenue

   $ 15,289      $ 10,132      $ 3,108      $ (83 )    $ 28,446   

Depreciation & amortization

     1,525        199        289        —        2,013   

COGS

     13,352        9,265        2,511        (83 )      25,045   

SG&A

     1,266        189        160        110        1,725   

Interest expense

     962        243        37        1,927        3,169   

(Loss) income before income taxes

   $ (1,798 )    $ 247      $ 48      $ (4,483 )    $ (5,986 ) 

Revenue excl. unrealized non-cash hedge adj and interco. sales

   $     15,206      $     10,132      $ 3,108      $ —      $ 28,446   

Capital expenditures

   $ 1,897      $ 113      $ 227      $ —      $ 2,237   

COMPLIANCE CERTIFICATE

For the Period From February 2, 2016 to August 31, 2016 (“Test Period”)

The undersigned hereby certifies that he/she is the Chief Restructuring Officer of Horsehead Corporation, a company organized under the laws of the State of Delaware (“Horsehead”), the Chief Restructuring Officer of The International Metals Reclamation Company, LLC, a limited liability company organized under the laws of the State of Delaware (“INMETCO”), the Chief Restructuring Officer of Horsehead Metal Products, LLC, a limited liability company organized under the laws of the State of North Carolina (“HMP”), the Chief Restructuring Officer of Zochem Inc., a corporation incorporated pursuant to the Canada Business Corporations Act (“Zochem”) and the Chief Restructuring Officer of Horsehead Holding Corp., a corporation organized under the laws of the State of Delaware (“Horsehead Holding” and, together with Horsehead INMETCO, HMP and Zochem, each a “Borrower” and, collectively, the “Borrowers”), and that as such he/she is authorized to execute this certificate on behalf of each Borrower. With reference to the Senior Secured Superpriority Debtor-in-Possession Credit, Security and Guaranty Agreement dated as of February 8, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrowers, the guarantors party thereto from time to time Cantor Fitzgerald Securities, as Administrative Agent and the lenders party thereto from time to time, the Borrowers represent and warrants as follows (each capitalized term used herein having the same meaning given to it in the Credit Agreement unless otherwise specified):

The representations and warranties of the Borrowers contained in Article IV of the Credit Agreement and in the Loan Documents are true and correct in all material respects at and as of the time of delivery hereof as if made on and as of the date hereof, except to the extent such representations and warranties are expressly limited to an earlier date;

No Default or Event of Default has occurred and is continuing.

Attached hereto as Schedule A is a detailed spreadsheet reflecting the calculations and computations necessary to determine whether INMETCO and Zochem are each in compliance with their respective Minimum EBITDA-R requirements, as reflected in this certificate.

There has been no change in the application of GAAP to the financial statements being delivered in connection with this Compliance Certificate since the Effective Date.

As of the last day of the Test Period the following statements, amounts, and calculations were true and correct:

Section 6.21(b)(i) - Minimum EBITDA-R for INMETCO.

 

(A)     Adjusted EBITDA-R =

    $                               4,185,000   
   

(i) + [(ii) + (iii) + (iv) + (v) + (vi) + (vii) + (viii)] Items (ii) - (iv) shall be included to the extent deducted from Consolidated Net Income. =

        

(i)     Net Income

    $           (31,000 ) 
   

(ii)    Interest Expense

    $           262,000   
   

(iii)   provision for income taxes

    $           —   
   

(iv)   depreciation, amortization

    $           1,837,000   
   
(v)    unrealized gains and losses on hedge transaction positions, non-cash compensation expenses, one-time charges to Net Income and all other non-cash charges    $           —   
   
(vi)   charges, fees, costs, commissions and expenses incurred during such period in connection with the Credit Agreement, the other Loan Documents, the Chapter 11 Cases, any reorganization plan in connection with the Chapter 11 Cases, any exit credit agreements, and any and all transactions contemplated by the foregoing, including the write-off of any receivables, the termination or settlement of executory contracts, professional and accounting costs, fees and expenses, operational restructuring costs, fees and expenses, management incentive, employee retention or similar plans (in each case to the extent such plan is approved by the Bankruptcy Court to the extent required), litigation costs and settlements, asset write-downs, income and gains recorded in connection with the corporate reorganization of such Person and its Subsidiaries ONE TIME FIRE CHARGES RELATING TO INSURANCE CLAIM    $           8,000   
   
(vii)   the charges, fees, costs and expenses in connection with, and a pro forma adjustment for actual lost revenues resulting from, a single furnace shutdown during the life of the Facility; provided that, the aggregate amount added pursuant to this clause (vii) shall not exceed $2,000,000 during the life of the Facility    $           1,983,000   
   
(viii)  any intercompany charges incurred by Horsehead for administrative services provided to Horsehead Holding and its Subsidiaries    $           126,000   
   
                   

For the applicable EBITDA- TEST PERIOD, has the minimum required EBITDA-R of INMETCO been met?     X YES     NO

Section 6.21(b)(ii) - Minimum EBITDA-R for ZOCHEM

 

(A)     Adjusted EBITDA-R =

    $                               4,080,000   
   

(i) + [(ii) + (iii) + (iv) + (v) + (vi) + (vii) + (viii)] Items (ii) - (iv) shall be included to the extent deducted from Consolidated Net Income.

        
   

(i)     Net Income

    $           (760,000 ) 
   

(ii)    Interest Expense

    $           1,785,000   
   

(iii)   provision for income taxes

    $           (223,000 ) 
   

(iv)   depreciation, amortization

    $           1,345,000   
   
(v)    unrealized gains and losses on hedge transaction positions, non-cash compensation expenses, one-time charges to Net Income and all other non-cash charges    $           (14,000 ) 
   
(vi)   charges, fees, costs, commissions and expenses incurred during such period in connection with the Credit Agreement, the other Loan Documents, the Chapter 11 Cases, any reorganization plan in connection with the Chapter 11 Cases, any exit credit agreements, and any and all transactions contemplated by the foregoing, including the write-off of any receivables, the termination or settlement of executory contracts, professional and accounting costs, fees and expenses, operational restructuring costs, fees and expenses, management incentive, employee retention or similar plans (in each case to the extent such plan is approved by the Bankruptcy Court to the extent required), litigation costs and settlements, asset write-downs, income and gains recorded in connection with the corporate reorganization of such Person and its Subsidiaries    $           1,737,000   
   
(vii)   any intercompany charges incurred by Horsehead for administrative services provided to Horsehead Holding and its Subsidiaries    $           210,000   
   
(viii)  any costs or expenses incurred in connection with the funding of the Canadian Pension Plans    $           —   
   
                   

For the applicable EBITDA- TEST PERIOD, has the minimum required EBITDA-R of ZOCHEM been met?     X YES     NO

[Signature Page Follows.]

IN WITNESS THEREOF, I have hereto signed my name to this Compliance Certificate, in my capacity as a Responsible Officer of the Borrowers and not individually, as of September 16, 2016.

 

HORSEHEAD CORPORATION
By:   /s/ Timothy Boates  
Name:   Timothy Boates  
Title:   Chief Restructuring Officer  
THE INTERNATIONAL METALS RECLAMATION COMPANY, LLC
By:   /s/ Timothy Boates  
Name:   Timothy Boates  
Title:   Chief Restructuring Officer  
HORSEHEAD METAL PRODUCTS, LLC
By:   /s/ Timothy Boates  
Name:   Timothy Boates  
Title:   Chief Restructuring Officer  
ZOCHEM INC.
By:   /s/ Timothy Boates  
Name:   Timothy Boates  
Title:   Chief Restructuring Officer  
HORSEHEAD HOLDING CORP.
By:   /s/ Timothy Boates  
Name:   Timothy Boates  
Title:   Chief Restructuring Officer  

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