Handy & Harman Ltd. (NASDAQ:HNH)

Second Quarter 2013 Results

• HNH reported net sales of $182.1 million for the quarter, as compared to $164.4 million for the same period of 2012. Income from continuing operations before tax and equity investment was $17.7 million in the second quarter of 2013, as compared to $16.5 million in the 2012 period.
• Net income for the second quarter of 2013 was $11.9 million, or $0.88 per basic and diluted common share, as compared to net income of $11.0 million, or $0.83 per basic and diluted common share for the same period in 2012.

HNH generated Adjusted EBITDA of $24.3 million for the second quarter of 2013, as compared to $23.7 million for the same period in 2012, an increase of $0.6 million, or 2.7%. For the six-month period, the Company generated Adjusted EBITDA of $41.9 million, as compared to $39.8 million for the same period in 2012, an increase of $2.2 million, or 5.4%.

The Company currently anticipates, based on current information, full-year 2013 net sales and Adjusted EBITDA in the ranges of $597 million to $730 million, and $74 million to $91 million, respectively. The Company's outlook for the third quarter of 2013 is for net sales between $155 million and $190 million, and Adjusted EBITDA between $20 million and $25 million.

First Quarter 2013 Results

• HNH reported net sales of $158.9 million for the quarter, as compared to $156.7 million for the same period of 2012.
• Income from continuing operations before tax and equity investment was $2.3 million in the first quarter of 2013, as compared to $7.8 million in the 2012 period.
• Net income for the first quarter of 2013 was $8.0 million, or $0.61 per basic and diluted common share, as compared to net income of $5.1 million, or $0.40 per basic and diluted common share for the same period in 2012.

The principal reason for the decrease in income from continuing operations before tax and equity investment was the recording of expenses totaling $6.5 million in the first quarter of 2013 associated with the Company's previously announced election to redeem all of its outstanding 10% subordinated secured notes due 2017. Net income for the first quarter of 2013 reflects net income from discontinued operations totaling $9.5 million associated with the Company's divestiture of substantially all of the assets and existing operations of its Continental Industries business unit.

HNH generated Adjusted EBITDA of $17.7 million for the first quarter of 2013, as compared to $16.7 million for the same period in 2012, an increase of $0.9 million, or 5.7%. See "Note Regarding Use of Non-GAAP Financial Measurements" below for the definition of Adjusted EBITDA.

The Company currently anticipates, based on current information, full-year 2013 net sales and Adjusted EBITDA in the ranges of $640 million to $783 million, and $78 million to $96 million, respectively. The Company's outlook for the second quarter of 2013 is for net sales between $174 million and $211 million, and Adjusted EBITDA between $20 million and $25 million. These forecasts include the expected operating results from our acquisition of substantially all of the assets of Wolverine Joining Technologies, LLC, which is further described in the Company's Current Reports on two Form 8-K filings; on April 18, 2013, and April 29, 2013.

Second Quarter 2011 Results

HNH reported net income of $16.8 million on net sales of $191.2 million for the three months ended June 30, 2011, compared with net income of $6.3 million on net sales of $160.9 million for the three months ended June 30, 2010. Basic and diluted net income per common share was $1.32 for the three months ended June 30, 2011, compared with $0.52 per share in the same period of 2010. Net income for the 2011 quarter includes an unrealized non-cash $3.7 million gain on embedded derivatives related to the Company's subordinated notes and warrants.

For the six months ended June 30, 2011, HNH reported net income of $21.6 million on net sales of $348.2 million, compared with net income of $3.6 million on net sales of $289.8 million for the six months ended June 30, 2010. Net income for the six months ended June 30, 2011 includes an unrealized non-cash $2.3 million gain on embedded derivatives related to the Company's subordinated notes and warrants, and a $6.4 million gain on disposal of assets, net of tax, from discontinued operations. Basic and diluted net income per common share was $1.73 for the six months ended June 30, 2011, compared with $0.29 per share in the same period of 2010.

"Our sales increase of $30.3 million for the second quarter of 2011 builds on the $28.2 million sales growth our businesses experienced in the first quarter of 2011. Most of the Company's segments had higher net sales in the second quarter of 2011 versus the same period in 2010, resulting in 18.8% quarter-over-prior year quarter sales growth, and 20.2% sales growth on a year-to-date basis versus 2010," said Glen Kassan, Vice Chairman of the Board and Chief Executive Officer of HNH. The Company also reported higher gross profit, and reduced selling, general and administrative expenses as a percentage of sales when compared to the second quarter of 2010 as well as for the year-to-date 2011 versus 2010.

The Company generated Adjusted EBITDA of $24.1 million for the second quarter of 2011, as compared to $20.3 million for the same period in 2010, an increase of $3.8 million, or 18.5%. For the year-to-date period of 2011, Adjusted EBITDA was $39.5 million as compared to $31.0 million for the six month period of 2010, an increase of $8.5 million, or 27.5%. See "Note Regarding Use of Non-GAAP Financial Measurements" below for the definition of Adjusted EBITDA.