HORSEHEAD RESOURCE DEVELOPMENT REPORTS THIRD QUARTER RESULTS
PALMERTON, Pa., Nov. 13 /PRNewswire/ -- Horsehead Resource Development Co., Inc. (NASDAQ: HHRD), today reported revenues of $19.9 million for the third quarter ended Sept. 30, 1991, a 30 percent increase over 1990s third quarter revenues of $15.3 million.
The company reported a net loss of $1.1 million, or $0.03 per share, after non-cash inventory adjustments totalling $8.1 million pre-tax which reduced earnings per share by $0.13. Net income in 1990s third quarter was $6.2 million or $0.17 per share. For the nine months ended Sept. 30, 1991, the company reported revenues of $53.5 million and net income of $5.6 million or $0.16 per share compared to revenues of $39.4 million, net earnings of $14.5 million and earnings per share of $0.43 in the prior year's period.
James H. Davis, HRD's president and CEO commented as follows: "HRD continues to realize substantial increases in revenues over the comparable periods in 1990 as a result of higher service fees and increased product sales volume which more than doubled due to production from our new calcining kiln. However, EAF dust receipts remain below expectations as a result of the recession in the EAF steel industry. In addition, product pricing remains substantially behind last year with the third quarter 1991 price of zinc $0.25 below 1990s third quarter.
"Third quarter revenues also include an initial license fee of $3 million for use of our patented Flame Reactor technology for applications in Europe. This brings total 1991 Flame Reactor licensing revenues to $4 million which demonstrates the potential for this versatile technology.
"Operating costs in 1991 include a $6.4 million inventory write down resulting from the low price of zinc. Operating costs also increased due to the recognition of more costs associated with the greater volume of zinc products sold, higher unit costs resulting from late 1990 capacity additions without a commensurate increase in the volume of EAF receipts and the inclusion of Memtek.
"Joint venture results include a $1.7 million loss on our share of an inventory write down at the Bartlesville, Okla., lead fume processing facility. We believe theme adjustments reflect appropriate values in the current economic climate.
"We are cautious for the fourth quarter as the steel industry remains slow and the price of zinc continues to be a concern. Over the longer term we are well positioned to benefit from an economic recovery from both the service fee and product sales sides of our business. We continue to expand our core business beyond EAF dust by processing additional zinc-containing wastes, while broadening our involvement in the environmental service business. In particular, the outlook for our aluminum salt slag technology was enhanced by the recent decision of a major aluminum producer to advise its secondary smelting contractors to handle all aluminum salt slag as a hazardous waste."
HRD is a leader in specialized hazardous waste/resource recovery services emphasizing the recovery of zinc, lead and cadmium from electric arc furnace dust, and the recycling of these materials into useful products.
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited -- In thousands)
Periods Ended Three Months Nine Months
Sept. 30 1991 1990 1991 1990
Service fees $8,955 $6,773 $27,283 $19,808
Product sales 10,942 8,531 26,173 19,629
Total 19,897 15,304 53,456 39,437
Operating costs 18,916 4,977 36,464 12,379
GROSS PROFIT 981 10,327 16,992 27,058
Selling, general and
administrative 2,200 1,758 5,837 3,942
Research and development 555 (88) 1,727 614
Management fees 198 150 534 390
OPERATING INCOME (1,972) 8,507 8,894 22,112
Other income (expense):
Interest, net (187) (32) (428) (938)
Results of joint venture (2,263) -- (3,319) --
Technology fee 3,000 -- 4,000 --
Other, net 85 541 344 1,219
Total 635 509 597 281
INCOME BEFORE INCOME TAXES (1,337) 9,016 9,491 22,393
Provision for income taxes (229) 2,851 3,858 7,885
Net income (1,108) 6,165 5,633 14,508
Earnings per share ($0.03) $0.17 $0.16 $0.43
Average common shares
outstanding 36,237,500 35,871,875 36,237,500 33,636,310
/CONTACT: Robert L. Hoguet of Horsehead Resource Development, 212-527-3025/
(HHRD) CO: Horsehead Resource Development Co., Inc. ST: Pennsylvania IN: SU: ERN PS -- NY005 -- 3719 11/13/91 06:30 EST